Deadline for Receipt of Stockholder Proposals or Director Nominations for ~~2017~~2018 Annual Meeting

As a stockholder, you may be entitled to present proposals for action at a forthcoming meeting if you comply with the requirements of the proxy rules established by the Securities and Exchange Commission. Proposals by our stockholders intended to be presented for consideration at our ~~2017~~2018 Annual Meeting must be received by us no later than December ~~21, 2016~~●, 2017 (120 calendar days prior to the anniversary of the mailing date of this proxy statement), in order that they may be included in the proxy statement and form of proxy related to that meeting. The submission of the stockholder proposal does not guarantee that it will be included in our ~~2017~~2018 proxy statement.

The Securities and Exchange Commission rules establish a different deadline with respect to discretionary voting for stockholder proposals that are not intended to be included in a company's proxy statement. The proxy card grants the proxy holders discretionary authority to vote on any matter raised at the annual meeting. The discretionary vote deadline for our ~~2017~~2018 Annual Meeting is March ~~6, 2017,~~●, 2018, which is 45 calendar days prior to the anniversary of the mailing date of this proxy statement. If a stockholder gives notice of a proposal after the discretionary vote deadline, our proxy holders will be allowed to use their discretionary voting authority to vote against the stockholder proposal when and if the proposal is raised at our ~~2017~~2018 Annual Meeting.

In addition, our amended and restated bylaws establish an advance notice procedure with regard to specified matters, including stockholder proposals and director nominations, which are proposed to be properly brought before an annual meeting of stockholders. To be timely, a stockholder's notice shall be delivered no less than 120 days prior to the date of the annual meeting specified in the proxy statement provided to stockholders in connection with the preceding year's annual meeting, which is February ~~3, 2017~~●, 2018 in connection with our ~~2017~~2018 Annual Meeting. In the event that no annual meeting was held in the previous year or the date of the annual meeting is changed by more than 30 days from the date contemplated at the time of the previous year's proxy statement, notice by the stockholder must be received not later than the 10th business day following the day notice of the date of the meeting was mailed or public disclosure was made, whichever occurs first.

~~We recently~~In 2016, we amended our amended and restated bylaws to permit a stockholder, or group of up to 50 stockholders, owning continuously for at least three years shares of our common stock representing an aggregate of at least 3% of our outstanding shares, to nominate and include in our proxy statement director nominees constituting up to the greater of two directors or 20% of the ~~of the~~ total number of directors then serving on our Board of Directors, provided that the stockholder(s) and nominee(s) satisfy the requirements specified in our amended and restated bylaws. Notice of such “proxy access” director nominees for our ~~2017~~2018 Annual Meeting must be received no earlier than November ~~21, 2016~~●, 2017 (150 calendar days prior to the anniversary of the filing date of this definitive proxy statement) and no later than December ~~21, 2016~~●, 2017 (120 calendar days prior to the anniversary of the filing date of this definitive proxy statement).

A stockholder's notice shall include the information required by our amended and restated bylaws. A copy of the full text of our amended and restated bylaws is available in the investor relations section of our website at www.netgear.com. Proposals or nominations should be sent to our Corporate Secretary, c/o NETGEAR, Inc., 350 East Plumeria Drive, San Jose, California 95134.

Stockholder Communications to Directors

Stockholders may communicate directly with any of our directors by writing to them c/o NETGEAR, Inc., 350 East Plumeria Drive, San Jose, California 95134. Unless the communication is marked “confidential,” our Corporate Secretary will monitor these communications and provide appropriate summaries of all received messages to the Chairperson of our Nominating and Corporate Governance Committee. Any stockholder communication marked “confidential” will be logged as “received” but will not be reviewed by the Corporate Secretary. Such confidential correspondence will be immediately forwarded to the Chairperson of the Nominating and Corporate Governance Committee for appropriate action. Where the nature of a communication concerns questionable accounting or auditing matters, such communication will be directed to the Audit Committee and our Corporate Secretary will log the date of receipt of the communication as well as (for non-confidential communications) the identity of the correspondent in the Company's records.

PROPOSAL ONE

ELECTION OF DIRECTORS

Nominees

The nine (9) nominees for election at the Annual Meeting of Stockholders are Patrick C.S. Lo, Jocelyn E. Carter-Miller, Ralph E. Faison, Jef T. Graham, Gregory J. Rossmann, Barbara V. Scherer, Julie A. Shimer, Grady K. Summers and Thomas H. Waechter. If elected, they will each serve as a director until the Annual Meeting of Stockholders in ~~2017,~~2018, and until their respective successors are elected and qualified or until their earlier resignation or removal.

Unless otherwise instructed, the proxy holders will vote the proxies received by them for election of all of the director nominees, all of whom currently serve as directors. In the event the nominees are unable or decline to serve as a director at the time of the annual meeting, the proxies will be voted for any nominee who shall be designated by the present Board of Directors to fill the vacancy. We are not aware that any nominee will be unable or will decline to serve as a director. In the event that additional persons are nominated for election as directors, the proxy holders intend to vote all proxies received by them in such a manner as to assure the election of the nominees listed above.

Information Concerning the Nominees and Incumbent Directors

The ~~name and age~~names of the nominees and ~~incumbent directors~~certain biographical information about them as of April 3, ~~2016, the principal occupation of each and the period during which each has served as our director~~2017 are set forth below. Information as to the stock ownership of each of our directors and all of our current directors and executive officers as a group is set forth below under “Security Ownership of Certain Beneficial Owners and Management.”below:


Name	Age	Office	Director Since	Age	Office	Director Since
Patrick C.S. Lo	59	Chairman and Chief Executive Officer/Nominee	2000	60	Chairman and Chief Executive Officer/Nominee	2000
Jocelyn E. Carter-Miller	58	Director/Nominee	2009	59	Director/Nominee	2009
Ralph E. Faison	57	Director/Nominee	2003	58	Director/Nominee	2003
Jef T. Graham	60	Director/Nominee	2005	61	Director/Nominee	2005
Gregory J. Rossmann	54	Director/Nominee	2002	55	Director/Nominee	2002
Barbara V. Scherer	60	Director/Nominee	2011	61	Director/Nominee	2011
Julie A. Shimer	63	Director/Nominee	2007	64	Director/Nominee	2007
Grady K. Summers	39	Director/Nominee	2016	40	Director/Nominee	2016
Thomas H. Waechter	63	Director/Nominee	2014	64	Director/Nominee	2014

Patrick C.S. Lo is our co-founder and has served as our Chairman and Chief Executive Officer since March 2002. Mr. Lo founded NETGEAR with Mark G. Merrill with the singular vision of providing the appliances to enable everyone in the world to connect to the high speed internet for information, communication, business transactions, education, and entertainment. From 1983 until 1995, Mr. Lo worked at Hewlett-Packard Company, where he served in various management positions in sales, technical support, product management, and marketing in the U.S. and Asia. Mr. Lo was named the Ernst & Young National Technology Entrepreneur of the Year in 2006. Mr. Lo received a B.S. degree in electrical engineering from Brown University. Mr. Lo's experience as a founder and Chief Executive Officer of the Company gives him unique insights into the Company's challenges, opportunities and operations.

Jocelyn E. Carter-Miller has served as one of our directors since January 2009. From 2004 to the present, Ms. Carter-Miller has served as President of TechEdVentures, Inc., a consulting and management firm that develops and markets high-performance personal and community empowerment programming. From February 2002 until March 2004, Ms. Carter-Miller served as Executive Vice President and Chief Marketing Officer of Office Depot, Inc. Prior to that, she spent a decade with Motorola, initially as a Director of Marketing and Network Service Quality, Vice President and GM of International Networks Division Latin America and EMEA Operations and ultimately as Corporate Vice President and Chief Marketing Officer. She also spent eight years at Mattel in marketing, product development and strategic business planning roles. Ms. Carter-Miller is a member of the Board of Directors of the Principal Financial Group, Inc., the Interpublic Group of Companies, Inc. and a non-profit organization. Ms. Carter-Miller is a NACD Directorship 100 recipient. Ms. Carter-Miller holds a B.A. degree in Accounting from the University of Illinois and an M.B.A. from the University of Chicago. Ms. Carter-Miller provides in-depth understanding of marketing to home users and small businesses based on her extensive marketing and executive experience. Her experience on the boards of large public companies provides important perspective of governance and other practices to be applied to NETGEAR.

Ralph E. Faison has served as one of our directors since August 2003. Mr. Faison currently is a private investor. Mr. Faison served as the President and Chief Executive Officer and member of the Board of Directors of Pulse Electronics Corporation, a public company and manufacturer of electronic components, from January 2011 to July 2014, including Chairman of the Board from March 2011 to July 2014. From February 2003 to December 2007, Mr. Faison served as Chief Executive Officer of Andrew Corporation, a public company and a manufacturer of communications equipment and systems, and from June 2002 to December 2007, Mr. Faison also served as President and a director of Andrew Corporation. From June 2002 to February 2003, Mr. Faison served as Chief Operating Officer of Andrew Corporation. From June 2001 to June 2002, Mr. Faison served as President and Chief Executive Officer of Celiant Corporation, a manufacturer of power amplifiers and wireless radio frequency systems, which was acquired by Andrew Corporation in June 2002. From October 1997 to June 2001, Mr. Faison was Vice President of the New Ventures Group at Lucent Technologies, a communications service provider, and from 1995 to 1997, he was Vice President of advertising and brand management at Lucent Technologies. Prior to joining Lucent, Mr. Faison held various positions at AT&T, a voice and data communications company, including as Vice President and General Manager of AT&T's wireless business unit and manufacturing Vice President for its consumer products unit in Bangkok, Thailand. Mr. Faison received a B.A. degree in Marketing from Georgia State University and an M.S. degree in Management as a Sloan Fellow from Stanford University. Mr. Faison has extensive experience in managing a large international company. He is well versed in the complex manufacturing and distribution systems of an international company. As a recent public company chairman and chief executive officer, he advises the Company on many aspects of public company management.

Jef T. Graham has served as one of our directors since July 2005. Since September 2016, Mr. Graham ~~currently is~~has served as Chairman and Chief Executive Officer of Console Connect Inc., a provider of global direct connect solutions. From February 2015 to August 2016, Mr. Graham was a private investor. From January 2006 to January 2015, Mr. Graham served as the Chairman and Chief Executive Officer of RGB Networks, Inc., a provider of video and bandwidth management products. From July 2005 until January 2006, Mr. Graham served as the Executive Vice President, Application Products Group, of Juniper Networks, Inc., a provider of IP networking and security products. From October 2001 to July 2005, Mr. Graham served as the President and Chief Executive Officer of Peribit Networks Inc., a provider of wide area network optimization appliances, which was acquired by Juniper Networks. Before Peribit, Mr. Graham served as the Senior Vice President of the commercial and consumer business units for 3Com Corporation, where he managed networking and connectivity product offerings. From 1993 to 1995, he served as the Chief Executive Officer of Trident Systems, a document management systems integrator. Mr. Graham also worked for Hewlett-Packard Company for 15 years, including ten years in sales and marketing around the world and as general manager of both a hardware and a software division. Mr. Graham holds a B.A. with Honors in Business Studies from Sheffield Hallam University in the United Kingdom. Mr. Graham has in-depth understanding of networking technology products as well as our markets and channels. He also has rich contacts and relationships in the Silicon Valley technology community, which assists the Company in cultivating business relationships and recruiting.

Gregory J. Rossmann has served as one of our directors since February 2002. Since April 2016, Mr. Rossmann has served as a General Partner at Oak Investment Management, a late stage growth and private equity investor. From February 2009 to March 2016, Mr. Rossmann was a private investor. From November 2007 to January 2009, Mr. Rossmann served as a Managing Director of The Carlyle Group, a private equity firm. From April 2000 to November 2007, Mr. Rossmann served as a Managing Director of Pequot Capital Management, Inc., a private equity firm. From April 1994 to April 2000, Mr. Rossmann served as Managing Director and partner at Broadview International, an investment banking firm. From June 1991 to April 1994, he worked at Dynatech Corporation, a technology holding company, where he served as manager of new business development. Prior to that, he was a co-founder of Telemaster Corporation. Mr. Rossmann is a director of several private companies. Mr. Rossmann received a B.S. degree in Electrical Engineering from the University of Cincinnati and an M.B.A. from Santa Clara University. Mr. Rossmann's extensive technology, private equity, and investment banking experience allows him to provide the Company with unique perspectives and advice on global markets, corporate development, and acquisition initiatives.

Barbara V. Scherer has served as one of our directors since August 2011. Ms. Scherer currently is a private investor. Ms. Scherer was Senior Vice President, finance and administration and chief financial officer of Plantronics, Inc., a global leader in audio communication devices for businesses and consumers, from 1998 to 2012. In this position, she was responsible for all aspects of the company's financial management, as well as information technology, legal and investor relations. She was Vice President, finance and administration and chief financial officer of Plantronics from 1997 to 1998. Prior to Plantronics, Ms. Scherer held various executive management positions spanning eleven years in the disk drive industry, was an associate with The Boston Consulting Group, and was a member of the corporate finance team at ARCO in Los Angeles. Ms. Scherer currently serves on the Board of Directors of ANSYS, Inc., a publicly traded engineering simulation software and services company, as well as the Board of Directors of Ultra Clean Holdings, Inc., a publicly traded developer and supplier of systems for the semiconductor capital equipment, flat panel, medical, energy and research industries. From 2004 through 2010, she served as a director of Keithley Instruments, Inc., a publicly traded test and measurement company, until its acquisition by Danaher Corporation. ~~Effective April 2013, Ms. Scherer was appointed to the Board of Directors of ANSYS, Inc., a publicly traded engineering simulation software and services company.~~ She also has experience serving on the boards of non-profit organizations. Ms. Scherer received B.A. degrees from

the University of California at Santa Barbara and her M.B.A. from the School of Management at Yale University. With extensive hands-on experience in senior management roles with technology growth companies as well as public company board and audit committee service, Ms. Scherer provides the Company with practical and strategic insight into complex financial reporting and management issues as well as significant operational expertise.

Julie A. Shimer, Ph.D. has served as one of our directors since March 2007. Dr. Shimer currently is a private investor. Dr. Shimer was the immediate past president and Chief Executive Officer of Welch Allyn, a leading manufacturer of frontline medical products and solutions, from March 2007 to April 2012. Prior to Welch Allyn, Dr. Shimer served as president and Chief Executive Officer of Vocera Communications, a provider of wireless communications systems enabling instant voice communication among mobile workers for companies, from September 2001 through February 2007. Dr. Shimer also previously held executive positions at 3Com Corporation from January 2000 through August 2001, most recently serving as vice president and general manager of its networking products. Before joining 3Com, she held executive positions at Motorola, Inc., a wireless and broadband communications company, from 1993 through 1999, where she was vice president and general manager for the paging division, and prior to that post, vice president of its semiconductor products section. Dr. Shimer worked for AT&T Bell Laboratories and Bethlehem Steel Company before joining Motorola. Dr. Shimer is ~~Chairman~~a member of the Board of Directors of ~~EarthLink~~Windstream Holdings, Corp. and a member of the Board of Directors of Halyard Health, Inc. Dr. Shimer is also a member of the Society of Women Engineers and the Institute of Electrical and Electronics Engineers. Dr. Shimer holds a B.S. degree in Physics from Rensselaer Polytechnic Institute and Master's and Doctorate degrees in Electrical Engineering from Lehigh University. Dr. Shimer has extensive experience in the management of development and selling of technology products. She provides important perspectives in business management of these activities. As a past chief executive officer of a large private company, she provides guidance in overall business management to the Company's executives.

Grady K. Summers has served as one of our directors since January 2016. Mr. Summers is ~~Senior~~Executive Vice President and Chief Technology Officer of FireEye, Inc., a leading provider of comprehensive cybersecurity solutions for detecting, preventing and resolving advanced cyber-attacks, where he oversees the global CTO team ~~that supports R&D~~ and ~~product engineering.~~Product Management. He joined FireEye through its acquisition of Mandiant in 2014. At Mandiant, Mr. Summers served as the Vice President of Strategic Solutions and led the company’s strategic consulting and customer success divisions. Prior to Mandiant, from 2010 to 2012, Mr. Summers was a principal at Ernst & ~~Young, responsible for the firm's information security program management practice.~~Young. Before E&Y, from 1999 to 2010, he held various roles at General Electric, most recently as the Chief Information Security Officer overseeing a large global information security organization. Mr. Summers holds an MBA from Columbia University and a B.S. in computer systems from Grove City College in Pennsylvania. As a current chief technology officer of a public company, Mr. Summers provides the Company with extensive technology experience and strategic insight.

Thomas H. Waechter has served as one of our directors since December 2014. Mr. Waechter currently is a private investor. From January 2009 to August 2015, Mr. Waechter served as President, Chief Executive Officer and a member of the board of directors of JDS Uniphase Corporation (now Viavi Solutions Inc.), a leading provider of communications test and measurement solutions and optical products. He previously served as Executive Vice President and President of the Communications Test & Measurement Group of JDS Uniphase Corp. from 2007 until becoming Chief Executive Officer. Prior to that, Mr. Waechter held a wide variety of executive positions, including Chief Operating Officer at Harris Stratex Networks (now Aviat Networks, Inc.), President and Chief Executive Officer at Stratex Networks, President and Chief Executive Officer at REMEC Corporation and President and Chief Executive Officer of Spectrian Corporation. Additionally, he held a number of global executive-level positions during his 14-year career with Schlumberger Ltd. He holds a Bachelor of Business Administration from The College of William and Mary. As a recent chief executive officer of a public company and as a prior senior executive in a variety of highly relevant technology companies and international industries, Mr. Waechter provides the Company with extensive operational, strategic and executive management experience.

Vote Required and Board of Directors' Recommendation

The nine (9) nominees receiving the greatest number of votes of the shares present and entitled to vote at the annual meeting will be elected as directors. Stockholders are not entitled to cumulative voting in the election of directors. Pursuant to our corporate governance guidelines, it is our policy that any nominee for director in an uncontested election who receives a greater number of votes “withheld” from his or her election than votes “for” such election shall submit his or her offer of resignation for consideration by our Nominating and Corporate Governance Committee and our Board of Directors. The election of directors pursuant to this proposal is an uncontested election, and therefore, this majority voting policy will apply. Our Board of Directors has unanimously approved each of the director nominees listed above and recommends that stockholders vote “FOR” the election of these nominees.

Board and Committee Meetings

Our Board of Directors held a total of ~~six~~seven meetings during ~~2015.~~2016. In addition, we strongly encourage the attendance of members of our Board of Directors at the annual meeting. At the ~~2015~~2016 Annual Meeting of Stockholders, all of our then-continuing directors attended in person.

There are no family relationships between any director or executive officer. Our Board of Directors has standing Audit, Compensation, and Nominating and Corporate Governance Committees. Other than Mr. Lo, each member of our Board of Directors meets the independence standards of Rule 5602(a)(2) of the listing standards of the Marketplace Rules of the NASDAQ Stock Market and applicable independence rules of the Securities and Exchange Commission.

In ~~2015,~~2016, all of our directors attended at least ~~75%~~88% of the meetings of our Board of Directors and any applicable committee on which they served while they were members of our Board of Directors or the applicable committee.

Committee

Year of

Inception

Members at

the End of 2015

Committee Functions

Meetings

Held in 2015

Year of

Inception

Members at

the End of 2016

Committee Functions

Meetings

Held in 2016

Audit ~~(1)~~

2000

Barbara V. Scherer (Chair)

Jocelyn E. Carter-Miller

A. Timothy Godwin

Jef T. Graham

Reviews internal accounting procedures

2000

Barbara V. Scherer (Chair)

Jocelyn E. Carter-Miller

Jef T. Graham

Grady K. Summers

Reviews internal accounting procedures

Appoints independent registered public accounting firm

Reviews annual audit plan of the independent auditor, the results of the independent audit, and the report and recommendations of the independent auditor

Evaluates the adequacy of our internal financial and accounting processes and controls

Determines investment policy and oversees its implementation

Compensation

2000

Ralph E. Faison (Chair)

Jocelyn E. Carter-Miller

Gregory J. Rossmann

Thomas H. Waechter (2)

Administers our equity plans

2000

Thomas H. Waechter (Chair) (1)

Jocelyn E. Carter-Miller

Ralph E. Faison

Gregory J. Rossmann

Administers our equity plans

Reviews and approves compensation of directors and officers, and makes recommendations to the Board with respect thereto

Reviews and recommends general policies relating to compensation and benefits

Nominating and Corporate Governance

2004

Julie A. Shimer (Chair)

Ralph E. Faison

Gregory J. Rossmann

Thomas H. Waechter

Recommends nomination of Board members

2004

Julie A. Shimer (Chair)

Ralph E. Faison

Gregory J. Rossmann

Thomas H. Waechter

Recommends nomination of Board members

Assists with succession planning for executive management positions

Oversees and evaluates Board performance

Evaluates composition, organization and governance of the Board and its committees

Vote Required and Board of Directors' Recommendation

As an advisory vote, this proposal is not binding upon the Company. However, the Compensation Committee, which is responsible for designing and administering our executive compensation program, values the opinions expressed by stockholders in their vote on this proposal and will consider the outcome of the vote when making future compensation decisions for Named Executive Officers. ~~The~~Subject to the results of the stockholder advisory vote in Proposal Four, the Company ~~intends to conduct~~currently anticipates conducting an advisory vote to approve the Company's executive compensation annually. The next such vote ~~will~~would be conducted at our ~~2017~~2018 Annual Meeting of ~~Shareholders.~~

Stockholders.

The affirmative vote by a majority of shares present in person or by proxy at the annual meeting and entitled to vote is required to approve this proposal. Our Board of Directors has unanimously approved this proposal and recommends that stockholders vote “FOR” the approval of the compensation of our Named Executive Officers.

PROPOSAL FOUR

APPROVAL OF ~~NETGEAR, INC. 2016 EQUITY INCENTIVE PLAN~~

~~General~~

We are seeking stockholder approval of a new NETGEAR, Inc. 2016 Equity Incentive Plan (the “2016 Plan”) to help us achieve our goals of attracting, motivating and retaining our employees and other service providers through grants of equity awards. Our Board of Directors has adopted the 2016 Plan, subject to approval from our stockholders at the 2016 Annual Meeting of Stockholders. If approved, the 2016 Plan will replace our 2006 Long-Term Incentive Plan (the “Existing Plan”). The Existing Plan terminated on April 13, 2016 by its terms; therefore, no new awards will be granted under the Existing Plan. If stockholders do not approve the 2016 Plan, we will not have an active equity compensation plan. The Existing Plan, however, will continue to govern awards previously granted under it.

We strongly believe that the approval of the 2016 Plan is essential to our continued success. Our employees are our most valuable assets, and offering a broad-based equity compensation program is vital to attracting and retaining the most highly skilled people in our industry. We believe that employees who have a stake in the future success of our business are highly motivated to achieve our long-term business goals and increase stockholder value. The 2016 Plan is designed to assist us in recruiting, motivating and retaining talented employees who can help us achieve our business goals, including creating long-term value for stockholders. The 2016 Plan would be a significant part of our overall equity compensation strategy, and would be one of the primary programs through which our employees could achieve ownership in the Company and thereby share in the success of our Company.

The affirmative vote by a majority of shares present in person or by proxy at the 2016 Annual Meeting of Stockholders and entitled to vote is required to approve the 2016 Plan. Our executive officers and our directors have an interest in this proposal. A full copy of the 2016 Plan is attached to this proxy statement as Appendix A.

~~Considerations of the Board in Making its Recommendation~~

Our Board of Directors approved the 2016 Plan, subject to approval by our stockholders, following substantial review of, and deliberation concerning, our historical and anticipated equity grant practices and requirements, peer group industry data presented by the Company’s third-party compensation consultant and the structure of the proposed 2016 Plan. In view of the composition of NETGEAR’s stockholder base, which is largely comprised of institutional stockholders, the Board of Directors also considered the policy guidelines of the major proxy advisory firms in determining the size of the proposed share reserve for the 2016 Plan as well as the key terms and limitations of the proposed 2016 Plan. Our management also engaged in discussions with a number of our institutional stockholders to give these stockholders an opportunity to provide direct feedback on potential equity plan terms, factors they considered important in reviewing a new equity plan and other corporate governance policies and practices. Our Board of Directors took this feedback into consideration as the proposed 2016 Plan was finalized.

~~In determining the number of additional shares to reserve for issuance under the 2006 Plan, our Board of Directors considered a number of factors, including:~~

~~Historical Grant Practices.~~ Our Board of Directors considered the historical amounts of equity awards that we have granted in the past several years. Our historical “burn rate,” which we define as the number of shares subject to equity awards granted in a fiscal year divided by the weighted average common shares outstanding for that fiscal year, for the last three fiscal years has been as follows:

Fiscal Year Stock Options Granted Full Value Equity Awards Granted Total Shares Granted (Adjusted) (1) Weighted Average Shares Outstanding Adjusted Burn Rate (2) Unadjusted Burn Rate (3)
2015 296,000
524,566 1,345,132 33,161,112
4.06% 2.47%
2014 396,718
468,250 1,333,218 35,770,936
3.73% 2.42%
2013 502,560
743,975 1,990,510 38,379,154
5.19% 3.25%


~~(1)~~	The adjusted total number of shares granted is the sum of (i) the number of shares of common stock subject to option grants and (ii) the number of shares of common stock subject to restricted stock unit awards multiplied by two (consistent with the methodology used by Institutional Shareholder Services).


~~(2)~~	~~The adjusted burn rate equals the adjusted total number of shares granted divided by the weighted average shares outstanding in a given fiscal year.~~


~~(3)~~	~~The unadjusted burn rate equals the unadjusted total number of shares granted divided by the weighted average shares outstanding in a given fiscal year.~~

In particular, in 2013, we shifted our historical practice of primarily granting stock options to new and existing employees to a practice of granting either only restricted stock units or a combination of stock options and restricted stock units. One goal of this change was to reduce our burn rate over time. In addition, our burn rate in 2013 was higher than it otherwise would have been as a result of a significant increase in our headcount following our addition of approximately 160 new employees in connection with our acquisition of the AirCard business from Sierra Wireless, Inc. in early 2013. Equity award grants to these new employees were made from the Existing Plan share pool.

~~Forecasted Grant Practices~~. We expect to continue our practice of emphasizing the grant of restricted stock units over stock options for most new and existing employees, and we are focused on maintaining or reducing our historical burn rates through a variety of measures. We have recognized and responded to the potential dilutive effects of our equity award practices, as reflected by our stock buyback history described below. The Board of Directors carefully monitors our annual burn rate, dilution and equity expense to ensure that we maximize stockholders’ value by granting only the appropriate number of equity awards necessary to attract, reward and retain employees. If our stockholders approve the 2016 Plan as proposed, we will have approximately 3,199,827 shares available for grant under the 2016 Plan after our 2016 Annual Meeting, based on share data as of April 3, 2016.

~~Impact of Stock Repurchase Program~~. Our stock repurchase program has significantly offset the dilutive effect of our equity award practices, which has been one goal, among others, of this program. During fiscal 2015, we repurchased 3,770,305 shares of common stock at an average price of $31.21 per share, during fiscal 2014, we repurchased 2,826,288 shares of common stock at an average price of $32.05 per share, and during fiscal 2013, we repurchased 2,004,932 shares of common stock at an average price of $31.47 per share. Over the short-term, however, our repurchase of shares of common stock also had the effect of reducing the outstanding share base against which our burn rate is calculated, contributing to a higher burn rate for each of these years than would otherwise have been calculated. Offsetting dilution will continue to be a factor in how we decide to use our cash in the future.

~~Awards Outstanding Under Existing Grants and Available Shares~~. The following table provides information as of April 3, 2016 about our common stock that may be issued upon the exercise of options and rights granted, or in the future granted, to employees or members of our Board of Directors under all existing equity compensation plans:



		~~As of April 3, 2016~~
~~Total number of shares of common stock subject to outstanding stock options~~		~~2,647,916~~
~~Total number of shares of common stock subject to outstanding full value equity awards~~		~~1,251,090~~
~~Weighted-average exercise price of outstanding stock options~~		~~$31.31~~
~~Weighted-average remaining term of outstanding stock options (in years)~~		~~6.10~~
~~Total number of shares of common stock available for grant under all equity plans~~		~~699,827~~

~~The 2016 Plan Combines Compensation and Governance Best Practices~~NON-BINDING ADVISORY VOTE ON FREQUENCY OF ADVISORY VOTE ON EXECUTIVE COMPENSATION

As described in ~~greater detail below and~~Proposal Three above, our stockholders are being provided the opportunity to cast an advisory vote on our compensation program for Named Executive Officers. The advisory vote in Proposal Three is referred to as a “say-on-pay vote.” This Proposal Four affords stockholders the opportunity to cast an advisory vote on how often we should include a say-on-pay vote in our proxy materials for future annual stockholder meetings (or special stockholder meeting for which the Company must include executive compensation information in the ~~2016 Plan,~~associated proxy statement). Under this Proposal Four, stockholders may vote to have the ~~2016 Plan includes provisions designed~~say-on-pay vote every year, every two years or every three years.

We believe that say-on-pay votes should continue to ~~protect stockholder value~~be conducted every year, as we have done since 2011, so that stockholders may annually express their views on our compensation program for Named Executive Officers. The Compensation Committee, which administers our executive compensation program, values the opinions expressed by our stockholders and will consider the outcome of this vote in making its decisions when setting the frequency of the advisory vote on executive compensation.

You may cast your vote on your preferred voting frequency by choosing the option of one year, two years, three years, or abstain from voting when you vote in response to ~~reflect corporate governance best practices, including:~~the resolution set forth below:

~~Administration.~~ ~~The 2016 Plan~~“RESOLVED, that the option of once every one year, two years, or three years that receives the highest number of votes cast for this resolution will be ~~administered by~~determined to be the ~~Compensation Committee~~preferred frequency with which the Company is to hold a stockholder vote to approve the compensation of ~~our Board of Directors, which is comprised entirely of independent non-employee directors.~~

~~No single-trigger vesting acceleration on a change in control.~~ ~~Other than for awards to non-employee directors and awards that are not assumed or substituted upon a change in control,~~the ~~2016 Plan does not provide for automatic acceleration of award vesting on a change in control.~~

~~Repricing is not allowed.~~ The 2016 Plan prohibits repricing outstanding stock options or stock appreciation rights and canceling outstanding stock options or stock appreciation rights that have an exercise price greater than the then-current fair market value of our common stock in exchange for cash or other awards.

~~Stockholder approval is required for additional shares~~. The 2016 Plan does not contain an annual “evergreen” provision. Instead, the 2016 Plan authorizes a fixed number of shares so that stockholder approval is required to issue any additional shares, allowing our stockholders to have direct input on our equity compensation programs.

~~A fungible ratio for full value awards. Each “full value award” (as defined below) will be counted against the 2016 Plan’s share reserve~~Named Executive Officers, as ~~1.58 shares for every one share subject to such award. For these purposes, a “full value award” is any award~~disclosed pursuant to the ~~2016 Plan, other than options, stock appreciation rights or other awards based solely on an increase in value of our common stock following the grant date.~~

~~Annual limits on individual awards. The 2016 Plan limits the number of shares and amount of cash that may be granted or paid through awards to individuals for each fiscal year~~compensation disclosure rules of the ~~Company,~~Securities and Exchange Commission, including ~~specific annual award limits for our non-employee directors.~~

~~Award minimum vesting requirements.~~ ~~In general, awards will vest in full no earlier than~~ the ~~1-year anniversary of the grant date, except that, in certain limited cases, awards may fully accelerate vesting~~Compensation Discussion and up to 5% of the shares reserved for the 2016 Plan may be issued without regard to this minimum vesting requirement. Separate from the preceding minimum vesting requirement, the 2016 Plan also provides that awards subject to solely time-based vesting may fully vest no earlier than the 3-year anniversary of the grant date, except that, in certain limited cases, awards may fully accelerate vesting without regard to this minimum vesting requirement.

~~No liberal share counting. Shares used to pay the exercise price of an award and shares withheld for taxes will not be returned to the 2016 Plan’s share reserve.~~

~~No tax gross-ups.~~ ~~The 2016 Plan does not provide for tax gross-ups.~~

~~Section 162(m)~~

~~The 2016 Plan also is designed to allow us to deduct in full for federal income tax purposes~~Analysis, the compensation recognized by our executive officers in connection with certain awards granted under the 2016 Plan. Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), generally denies a corporate tax deduction for annual compensation exceeding $1 million paid to the chief executive officer and other “covered employees,” as determined under Section 162(m) of the Code and applicable guidance, (“Section 162(m)”). However, certain types of compensation, including performance-based compensation, are generally excluded from this deductibility limit. To enable compensation from stock options, stock appreciation rights and certain restricted stock, restricted stock units, performance shares and performance units awarded under the 2016 Plan to qualify as “performance-based” within the meaning of Section 162(m), the 2016 Plan imposes limits on the sizes of such awards that may be granted to any individual during any fiscal year of the Company, as further described below. By approving the 2016 Plan, stockholders will be approving, among other things, the eligibility requirements for participation in the 2016 Plan, performance measures upon which specific performance goals applicable to certain awards would be based, limits on the numbers of shares or cash compensation that could be awarded to a participant during any fiscal year,tables and the other material terms of the 2016 Plan and awards granted under it. Notwithstanding the foregoing, we will have the ability to grant equity awards under the 2016 Plan that do not qualify as “performance-based” compensation within the meaning of Section 162(m).

~~Description of the 2016 Equity Incentive Plan~~

The following is a description of the material features of the 2016 Plan and its operation. The description is qualified in its entirety by reference to the 2016 Plan, a copy of which is attached to this proxy statement as Appendix A, and which is incorporated herein by this reference.

~~General Description of the 2016 Equity Incentive Plan~~

The purposes of the 2016 Plan are to attract and retain the best available personnel; to provide additional incentive to employees, directors, and consultants of the Company and employees and consultants of any parent, subsidiary, or affiliate of the Company; and to promote the success of our Company’s business. These incentives are provided through the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance units, performance shares and other stock or cash awards as the Administrator may determine.

~~Shares Available under the 2016 Plan~~

Subject to the adjustment provisions in the 2016 Plan, stockholders are being asked to approve a number of shares of our common stock for issuance under the 2016 Plan equal to the sum of 2,500,000 shares, ~~plus~~ ~~(i) any shares that were available for grant under the Existing Plan as of immediately prior to the Existing Plan’s expiration by its terms,~~ ~~plus~~ ~~(ii) any shares subject to stock options, restricted stock units, performance shares or similar awards granted under the Existing Plan that, on or after the~~

date the 2016 Plan becomes effective, expire or otherwise terminate without having been exercised in full and shares issued pursuant to awards granted under the Existing Plan that are forfeited to or repurchased by our Company, but each share subject to such awards without an exercise price will be added to the 2016 Plan share reserve as one and fifty-eight hundredths (1.58) shares, where the maximum number of shares to be added to the 2016 Plan from the Existing Plan as a result of clause (i) above equals 699,827 shares and as a result of clause (ii) above equals 3,899,006 shares. The shares may be authorized, but unissued, or reacquired common stock.

Any shares subject to restricted stock, restricted stock units, performance units, or performance shares awarded under the 2016 Plan will be counted against the shares available for issuance under the 2016 Plan as one and fifty-eight hundredths (1.58) shares for every one share subject to such awards. If a share that counted as one and fifty-eight hundredths (1.58) shares against the shares available for issuance under the 2016 Plan is made available again for issuance under the 2016 Plan as described below, the 2016 Plan will be credited with 1.58 shares.

If any award granted under the 2016 Plan expires or becomes unexercisable without having been exercised in full, is surrendered pursuant to an exchange program, or is forfeited to or repurchased by our Company due to failure to vest, then the unpurchased, forfeited, or repurchased shares subject to such award will become available for future grant or sale under the 2016 Plan. For the exercise of stock appreciation rights, the gross shares issued pursuant to a stock appreciation right will cease to be available under the 2016 Plan. If unvested shares of restricted stock, restricted stock units, performance shares or performance units are forfeited to or repurchased by our Company, such shares will become available for future grant under the 2016 Plan. Shares used to pay the exercise price of an award or to satisfy the tax withholding obligations related to an award will not become available for future grant or sale under the 2016 Plan. Payment of cash rather than shares pursuant to an award will not reduce the number of shares available for issuance under the 2016 Plan.

In the event of any dividend or other distribution (whether in the form of cash, shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of shares or other securities or other change in the corporate structure affecting our common stock occurs, the Administrator, in order to prevent diminution or enlargement of the benefits or potential benefits intended to be made available under the 2016 Plan, will adjust the number and class of shares that may be delivered under the 2016 Plan, and/or the number, class and price of shares of stock subject to outstanding awards, and the numerical share limits set forth in the 2016 Plan.

~~Administration~~

The Board has delegated administration of the 2016 Plan to the Board’s Compensation Committee. The Board may further delegate administration of the 2016 Plan to any committee of the Board, or a committee of individuals satisfying applicable laws appointed by the Board in accordance with the terms of the 2016 Plan. For purposes of this description of the 2016 Plan, the term “Administrator” refers to the Board or any committee designated by the Board to administer the 2016 Plan. To make grants to certain officers and key employees, the members of the committee must qualify as “non-employee directors” under Rule 16b-3 of the Securities Exchange Act of 1934, as amended. In the case of awards intended to qualify for the “performance-based compensation” exemption under Section 162(m), administration must be by a committee comprised solely of two or more “outside directors” within the meaning of Section 162(m).

Subject to the terms of the 2016 Plan, the Administrator has the sole discretion to determine fair market value; to select the service providers who will receive awards and the number of shares to be covered by such awards; to determine the terms and conditions of awards; to approve forms of award agreements for use under the 2016 Plan; to modify or amend each award (subject to the exchange program prohibition, described below), including to accelerate vesting or waive forfeiture restrictions; and to interpret the provisions of the 2016 Plan and outstanding awards. The Administrator may allow a participant to defer the receipt of payment of cash or delivery of shares that otherwise would be due to such participant under an award. The Administrator may make, amend or rescind rules and regulations relating to the 2016 Plan and/or any sub-plans established for the purpose of satisfying applicable foreign laws and may make all other determinations deemed necessary or advisable for administering the 2016 Plan, provided that the Administrator may not institute an exchange program. The Administrator will issue all awards pursuant to the terms and conditions of the 2016 Plan.

~~Prohibition Against Exchange Programs~~

The Administrator will not have the authority to implement an exchange program whereby (i) outstanding awards are surrendered or cancelled in exchange for awards of the same type (which may have higher or lower exercise prices and different terms), awards of a different type, and/or cash, (ii) participants would have the opportunity to transfer any outstanding awards to a financial institution or other person or entity selected by the Administrator, and/or (iii) the exercise price of an outstanding award is increased or reduced.

~~Limitations~~

The maximum number of shares that may be issued upon the exercise of incentive stock options will equal 100% of the aggregate share number determined under clauses (i) and (ii) of the first paragraph of the “Shares Available Under the 2016 Plan” section above, plus, to the extent allowable under Section 422 of the Code, any shares that become available for issuance as described in the third paragraph of the “Shares Available Under the 2016 Plan” section.

The 2016 Plan contains annual award limits intended to satisfy Section 162(m). The maximum number of shares and/or cash that may be issued to any one individual under the 2016 Plan in any fiscal year is set forth below:



~~Award Type~~		~~Annual Number of Shares or Dollar Value~~
~~Stock Option~~		~~500,000 shares~~
~~Stock Appreciation Right~~		~~500,000 shares~~
~~Restricted Stock~~		~~250,000 shares~~
~~Restricted Stock Units~~		~~250,000 shares~~
~~Performance Units~~		~~Initial Value of $5,000,000~~
~~Performance Shares~~		~~250,000 shares~~

In addition to the Section 162(m) limits above, the 2016 Plan provides that a non-employee director may not receive cash-settled awards with a grant date fair value of greater than $500,000 or stock-settled awards with a grant date fair value of greater than $500,000, in each case, increased to $1,000,000 in the fiscal year of his or her initial service as a non-employee director. Any awards granted to a non-employee director while he or she was a consultant (but not a non-employee director) or employee of our Company or any parent, subsidiary or affiliate of our Company will not count toward these non-employee director award limitations.

~~Minimum Vesting Requirements for Awards~~

Awards will vest in full no earlier than the 1-year anniversary of the grant date, unless vesting of an award is (i) required to be accelerated under the 2016 Plan due to a change in control or, in the case of awards subject to time-based vesting only, a termination of service as a result of a participant’s retirement, death, or disability or (ii) the Administrator, in its discretion, provides that an award may accelerate vesting due to a participant’s death, disability or retirement. However, awards covering up to 5% of the shares reserved for issuance under the 2016 Plan may be granted or modified without regard to the one-year minimum vesting limitation above.

In addition, awards subject to solely time-based vesting will fully vest no earlier than the 3-year anniversary of the grant date, unless vesting of an award is required to be accelerated under the 2016 Plan due to a change in control, a participant’s termination of service as a result of retirement, disability or death or the award constitutes an annual grant to a non-employee director.

~~Eligibility~~

Awards may be granted to directors of our Company and employees and consultants of our Company or any parent, subsidiary or affiliate of our Company. Incentive stock options may be granted only to persons who as of the time of grant are employees of our Company or any parent or subsidiary corporation of our Company. As of April 3, 2016, we had approximately 939 employees (including one employee director), nine non-employee directors and six consultants.

~~Stock Options~~

Each option granted under the 2016 Plan will be evidenced by an award agreement specifying the number of shares subject to the option and the other terms and conditions of the option. The exercise price per share of each option may not be less than the fair market value of a share of our common stock on the date of grant (except if granted pursuant to a transaction described

in, and in a manner consistent with, Section 424(a) of the Code). However, any incentive stock option granted to a person who at the time of grant owns stock possessing more than 10% of the total combined voting power of all classes of stock of our Company or any parent or subsidiary corporation of our Company must have an exercise price per share equal to at least 110% of the fair market value of a share on the date of grant. The aggregate fair market value of the shares (determined on the grant date) covered by incentive stock options which first become exercisable by any participant during any calendar year also may not exceed $100,000. Generally, the fair market value of our common stock is the closing sales price of our common stock as quoted on the Nasdaq Global Select Market (or such other established stock exchange or national market system) on the date of determination, as reported in ~~The Wall Street Journal~~.

Options will be exercisable at such times and under such conditions as the Administrator determines and set forth in the award agreement. An option subject to time-based vesting will become fully vested upon termination of a participant’s service for retirement, disability or death. The 2016 Plan provides that the Administrator will determine the acceptable form(s) of consideration for exercising an option. An option will be deemed exercised when we receive the notice of exercise and full payment for the shares to be exercised, together with applicable tax withholdings.

The maximum term of an option will be specified in the award agreement, provided that options will have a maximum term of no more than ten years, and provided further that an incentive stock option granted to a ten percent stockholder must have a term not exceeding five years.

The Administrator will determine and specify in each award agreement, and solely in its discretion, the post-termination exercise period applicable to an option following a participant’s terminating service with our Company. In the absence of such a determination, a participant (or such other appropriate person) will be able to exercise the vested portion of an option for: (i) 3 months following the participant’s termination for reasons other than retirement, death or disability, and (ii) 12 months following the participant’s termination due to retirement, death or disability. In no event, however, will an option be exercisable beyond its term.

~~Stock Appreciation Rights~~

A stock appreciation right gives a participant the right to receive the appreciation in the fair market value of our common stock between the date of grant of the award and the date of its exercise. Each stock appreciation right granted under the 2016 Plan will be evidenced by an award agreement specifying the exercise price, the expiration date, the conditions of exercise, and other terms and conditions of the award. A stock appreciation right subject to time-based vesting will become fully vested upon termination of a participant’s service for retirement, death or disability.

The exercise price per share of each stock appreciation right may not be less than the fair market value of a share on the date of grant. Upon exercise of a stock appreciation right, the holder of the award will be entitled to receive a payment determined by multiplying: (i) the difference between the fair market value of a share on the date of exercise and the exercise price by (ii) the number of exercised stock appreciation rights. We may pay the appreciation in cash, in shares of equivalent value, or in some combination thereof. The term of a stock appreciation right will be no more than ten years from the date of grant. The terms and conditions relating to the period of post-termination exercise for options (described above) also apply to stock appreciation rights.

~~Restricted Stock Awards~~

Awards of restricted stock are rights to acquire or purchase shares that generally are subject to transferability and forfeitability restrictions for a specified period. Each award of restricted stock will be evidenced by an award agreement specifying the period during which the transfer of shares is subject to restriction (which, in the Administrator’s sole discretion may be based on the passage of time, the achievement of target levels of performance, or the occurrence of other events the Administrator determines), if any, the number of shares granted, and other terms and conditions of the award. Shares of restricted stock generally will be held in escrow until the end of the period of restriction applicable to such shares. A restricted stock award subject to time-based vesting will become fully vested upon termination of a participant’s service for retirement, disability or death. Notwithstanding the foregoing, if the Administrator desires that the award qualify as performance-based compensation under Section 162(m), any restrictions will be based on a specified list of performance goals and certain other requirements, as further discussed below.

Unless otherwise provided by the Administrator, a participant will forfeit any shares of restricted stock as to which the restrictions have not lapsed as of the date set forth in the award agreement. Unless the Administrator provides otherwise, participants holding shares of restricted stock will have the right to vote the shares and to receive any dividends paid with respect to such shares, except that dividends or other distributions paid in shares will be subject to the same restrictions on transferability and forfeitability as the original award. The Administrator, in its sole discretion, may accelerate the time at which any restrictions will lapse or be removed.

~~Restricted Stock Units~~

The Administrator may grant restricted stock units, which represent a right to receive cash or shares of our common stock at a future date. Each restricted stock unit granted under the 2016 Plan will be evidenced by an award agreement specifying the number of shares subject to the award, the form of payout, and other terms and conditions of the award.

Restricted stock units will result in a payment to a participant only if the performance goals or other vesting criteria the Administrator may establish are achieved or the awards otherwise vest. Restricted stock units subject to time-based vesting will become fully vested upon termination of a participant’s service for retirement, disability or death. The Administrator may set vesting criteria based upon the achievement of Company-wide, divisional, business unit or individual goals (including continued employment or service), applicable federal or state securities laws, or any other basis the Administrator determines in its discretion. Notwithstanding the foregoing, if the Administrator desires that the award qualify as performance-based compensation under Section 162(m), any restrictions will be based on a specified list of performance goals and certain other requirements, as further discussed below.

After the grant of restricted stock units, the Administrator, in its sole discretion, may reduce or waive any restrictions (including vesting criteria) with respect to such restricted stock units. A participant will forfeit any unearned restricted stock units as of the date set forth in the award agreement. Payment of earned restricted stock units will be made as soon as practicable after the date set forth in the award agreement, and, in the Administrator’s sole discretion, will be settled in cash, shares of our common stock, or in a combination of both (which will have an aggregate fair market value equal to the earned restricted stock units).

~~Performance Units and Performance Shares~~

Performance units and performance shares are awards that result in a payment to a participant only if specified performance objectives or other vesting provisions are achieved during a specified performance period. Each award of performance units or shares will be evidenced by an award agreement specifying the performance period during which achievement of applicable performance objectives or other vesting criteria will be measured and other terms and conditions of the award. Each performance unit will have an initial value established by the Administrator on or before the grant date. Each performance share will have an initial value equal to the fair market value of a share on the grant date.

The Administrator will set performance objectives or other vesting provisions, which may be based upon achieving Company-wide, divisional, business unit or individual goals (including continued employment or service), applicable federal or state securities laws, or any other basis the Administrator determines in its discretion. Notwithstanding the foregoing, if the Administrator desires that the award qualify as performance-based compensation under Section 162(m), any vesting criteria will be based on a specified list of performance goals and certain other requirements, as further discussed below.

After the applicable performance period has ended, the holder of performance units or shares will be entitled to receive a payout of the number of performance units or shares earned by the participant over the performance period. The Administrator, in its sole discretion, may reduce or waive any performance objectives or other vesting provisions for such performance units or shares. Payment of earned performance units or shares will be made as soon as practicable after the end of the applicable performance period, and, in the Administrator’s sole discretion, will be made in cash, in shares of equivalent value, or any combination of both (which will have an aggregate fair market value equal to the earned performance units or shares at the close of the applicable performance period). A participant will forfeit all performance units or shares that are unearned or unvested as of the date set forth in the award agreement.

~~Awards to Covered Employees~~

The 2016 Plan contains additional restrictions and limitations on awards intended to satisfy the performance-based compensation requirements under Section 162(m) to participants classified as “covered employees.disclosure.” The granting and/or vesting of awards of restricted stock, restricted stock units, performance shares and performance units, and other incentives under the 2016 Plan may be made subject to the attainment of performance goals relating to one or more business criteria within the meaning of Section 162(m) and may provide for a targeted level or levels of achievement, including: cash flow; cash flow from operations; total earnings; earnings per share, diluted or basic; earnings per share from continuing operations, diluted or basic; earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization; earnings from operations; net asset turnover; inventory turnover; capital expenditures; net earnings; operating earnings; gross or operating margin; profit margin, debt; working capital; return on equity; return on net assets; return on total assets; return on capital; return on investment; return on sales; net or gross sales; market share; economic value added; cost of capital; change in assets; expense reduction levels; debt reduction; productivity; new product introductions; delivery performance; safety record; stock price; and total stockholder return. Any performance goals may be used to measure the performance of the Company as a whole or, except with respect to stockholder

return metrics, to a region, business unit, affiliate or business segment, and may be measured either on an absolute basis, a per share basis or relative to a pre-established target, to a previous period’s results or to a designated comparison group, and, with respect to financial metrics, which may be determined in accordance with United States Generally Accepted Accounting Principles (“GAAP”), in accordance with accounting principles established by the International Accounting Standards Board (“IASB”) or which may be adjusted when established to either exclude any items otherwise includable under GAAP or under IASB principles or include any items otherwise excludable under GAAP or under IASB principles. The performance goals may differ from participant to participant and from award to award.

To the extent necessary to comply with the performance-based compensation provisions of Section 162(m), with respect to any award granted subject to performance goals, and within the first 25% of the performance period and no more than 90 days following the commencement of the performance period (or such other time required or permitted by Section 162(m)), the Administrator will, in writing: (i) designate one or more participants to whom an award will be made; (ii) select the performance goals applicable to the performance period; (iii) establish the performance goals, and the amounts of such awards, as applicable, which may be earned for the performance period; and (iv) specify the relationship between performance goals and the amounts of such awards, as applicable, to be earned by each participant for such performance period. Following the completion of each performance period, the Administrator will certify in writing whether the applicable performance goals have been achieved for such performance period. In determining the amounts earned by a participant, the Administrator may reduce or eliminate (but not increase) the amount payable at a given level of performance to take into account additional factors that the Administrator may deem relevant to the assessment of individual or corporate performance for the performance period. A participant will be eligible to receive payment pursuant to an award for a performance period only if the performance goals for such period are achieved.

~~Transferability of Awards~~

~~Awards generally are not transferable other than by will or by the laws of descent or distribution, and may be exercised during the lifetime of the participant, only by the participant.~~

~~Dissolution or Liquidation~~

In the event of our Company’s proposed dissolution or liquidation, the Administrator will notify each participant as soon as practicable prior to the effective date of such proposed transaction. An award will terminate immediately prior to the completion of such proposed action to the extent the award has not been previously exercised.

~~Change in Control~~

The 2016 Plan provides that, in the event of a “change in control” (as defined in the 2016 Plan), each award will be treated as the Administrator determines, including that (i) awards may be assumed or substantially equivalent awards will be substituted by the acquiring or succeeding corporation (or an affiliate thereof) with appropriate adjustments to the number and kind of shares and prices; (ii) upon written notice to a participant, that the participant’s awards will terminate upon or immediately before the completion of such change in control; (iii) outstanding awards will vest and become exercisable, realizable, or payable, or restrictions applicable to an award will lapse, in whole or in part, before or upon completion of such change in control, and, to the extent the Administrator determines, terminate upon or immediately before the effectiveness of such merger or change in control; (iv) (A) awards will be terminated in exchange for an amount of cash and/or property, if any, equal to the amount that would have been attained upon the exercise of such award or realization of the participant’s rights as of the date the transaction occurs, or (B) awards will be replaced with other rights or property the Administrator selects in its sole discretion; or (v) any combination of the foregoing. The Administrator will not be required to treat all awards similarly in the transaction.

If the successor corporation does not assume or substitute for the award, options and stock appreciation rights will become fully vested and exercisable, all restrictions on restricted stock and restricted stock units will lapse, and, for awards with performance-based vesting, all performance goals or other vesting criteria will be deemed achieved at 100% of target levels, and all other terms and conditions will be deemed met. In addition, if an option or stock appreciation right is not assumed or substituted for, the Administrator will notify the participant that the option or stock appreciation right will be exercisable for a period of time the Administrator determines in its sole discretion, and the option or stock appreciation right will terminate upon the expiration of such period.

With respect to awards granted to our non-employee directors, in the event of a change in control, the participant will fully vest in and have the right to exercise all of his or her outstanding options and stock appreciation rights, all restrictions on restricted stock and restricted stock units will lapse, and, for awards with performance-based vesting, all performance goals or other vesting criteria will be deemed achieved at 100% of target levels, and all other terms and conditions met.

~~Termination or Amendment~~

The 2016 Plan will automatically terminate ten years from the date of its adoption by the Board, unless terminated earlier by the Board. The Administrator may amend, alter, suspend or terminate the 2016 Plan at any time, provided that no amendment may be made without stockholder approval to the extent approval is necessary or desirable to comply with any applicable laws. In addition, no amendment, alteration, suspension or termination may materially impair the rights of any participant unless mutually agreed in writing otherwise between the participant and the Administrator.

~~Summary of U.S. Federal Income Tax Consequences~~

The following paragraphs are intended as a summary of the U.S. federal income tax consequences to U.S. taxpayers and the Company of equity awards granted under the 2016 Plan. The summary is based on existing U.S. laws and regulations, and there can be no assurance that those laws and regulations will not change in the future. The summary does not purport to be complete and does not discuss the tax consequences upon a participant’s death, or the provisions of the tax laws of any municipality, state or foreign country in which the participant may reside. As a result, tax consequences for any particular participant may vary based on his or her individual circumstances.

~~Incentive Stock Options~~

A participant recognizes no taxable income for federal income tax purposes as a result of the grant or exercise of an incentive stock option qualifying under Section 422 of the Code. Participants who neither dispose of their shares within two years following the date the option was granted nor within one year following the exercise of the option generally will recognize a capital gain or loss equal to the difference, if any, between the sale price and the purchase price of the shares. If a participant satisfies such holding periods upon a sale of the shares, our Company will not be entitled to a deduction for federal income tax purposes. If a participant disposes of shares within two years after the date of grant or within one year after the date of exercise (a “disqualifying disposition”), the difference between the fair market value of the shares on the exercise date and the option exercise price (not to exceed the gain realized on the sale if the disposition is a transaction with respect to which a loss, if sustained, would be recognized) will be taxed as ordinary income at the time of disposition. Any gain in excess of that amount will be a capital gain. If a loss is recognized, there will be no ordinary income, and such loss will be a capital loss. Any ordinary income recognized by the participant upon the disqualifying disposition of the shares generally should be deductible by our Company for federal income tax purposes, except to the extent such deduction is limited by applicable provisions of the Code.

The difference between the option exercise price and the fair market value of the shares on the exercise date is treated as an adjustment in computing the participant’s alternative minimum taxable income and may be subject to an alternative minimum tax if such tax exceeds the federal income tax for the year. Special rules may apply with respect to certain subsequent sales of the shares in a disqualifying disposition, certain basis adjustments for purposes of computing the alternative minimum taxable income on a subsequent sale of the shares and certain tax credits which may arise with respect to participants subject to the alternative minimum tax.

~~Nonstatutory Stock Options~~

Options not designated or qualifying as incentive stock options will be nonstatutory stock options having no special U.S. tax status. A participant generally recognizes no taxable income as the result of the grant of such an option. Upon exercise of a nonstatutory stock option, the participant normally recognizes ordinary income equal to the amount that the fair market value of the shares on such date exceeds the exercise price. If the participant is an employee, such ordinary income generally is subject to withholding of income and employment taxes. Upon the sale of stock acquired by the exercise of a nonstatutory stock option, any gain or loss, based on the difference between the sale price and the fair market value on the exercise date, will be taxed as capital gain or loss. No tax deduction is available to our Company with respect to the grant of a nonstatutory stock option or the sale of the stock acquired pursuant to such grant.

~~Stock Appreciation Rights~~

In general, no taxable income is recognized when a stock appreciation right is granted to a participant. Upon exercise, the participant generally will recognize ordinary income in an amount equal to the fair market value of any shares of our common stock received. Any additional gain or loss recognized upon any later disposition of the shares will be capital gain or loss.

~~Restricted Stock Awards~~

~~A participant acquiring restricted stock generally will recognize ordinary income equal to the fair market value of the shares~~

on the vesting date. If the participant is an employee, such ordinary income generally is subject to withholding of income and employment taxes. The participant may elect, pursuant to Section 83(b) of the Code, to accelerate the ordinary income tax event to the date of acquisition by filing an election with the Internal Revenue Service no later than 30 days after the date the shares are acquired. Upon the sale of shares acquired pursuant to a restricted stock award, any gain or loss, based on the difference between the sale price and the fair market value on the date the ordinary income tax event occurs, will be taxed as capital gain or loss.

~~Restricted Stock Unit Awards~~

There are no immediate tax consequences of receiving an award of restricted stock units. A participant who is awarded restricted stock units generally will be required to recognize ordinary income in an amount equal to the fair market value of shares issued to or cash received by such participant at the end of the applicable vesting period or, if later, the settlement date elected by the Administrator or a participant. Any additional gain or loss recognized upon any later disposition of any shares received would be capital gain or loss.

~~Performance Unit or Performance Share Awards~~

A participant generally will recognize no income upon the grant of a performance unit or share. Upon the settlement of such awards, participants normally will recognize ordinary income in the year of receipt in an amount equal to the cash received and the fair market value of unrestricted shares received. If the participant is an employee, such ordinary income generally is subject to withholding of income and employment taxes. Upon the sale of any shares received, any gain or loss, based on the difference between the sale price and the fair market value on the date the ordinary income tax event occurs, will be taxed as capital gain or loss.

~~Section 409A~~

Section 409A of the Code provides certain requirements for non-qualified deferred compensation arrangements with respect to an individual’s deferral and distribution elections and permissible distribution events. Awards granted under the 2016 Plan with a deferral feature will be subject to the requirements of Section 409A of the Code. If an award is subject to and fails to satisfy the requirements of Section 409A, the recipient of that award may recognize ordinary income on the amounts deferred under the award, to the extent vested, which may be prior to when the compensation is actually or constructively received. Also, if an award that is subject to Section 409A of the Code fails to comply with its provisions, Section 409A imposes an additional 20% federal income tax on compensation recognized as ordinary income, as well as interest on such deferred compensation.

~~Tax Effect for our Company~~

Our Company generally will be entitled to a tax deduction in connection with an award under the 2016 Plan in an amount equal to the ordinary income realized by a participant and at the time the participant recognizes such income (for example, the exercise of a nonstatutory stock option). Special rules limit the deductibility of compensation paid to our chief executive officer and other “covered employees” as determined under Section 162(m) and applicable guidance. Under Section 162(m), the annual compensation paid to any of these specified executives will be deductible only to the extent that it does not exceed $1,000,000. However, we can preserve the deductibility of certain compensation in excess of $1,000,000 if the conditions of Section 162(m) are met. These conditions include (among others) stockholder approval of the 2016 Plan and its material terms, setting limits on the number of awards that any individual may receive, and establishing performance criteria that must be met before an award will vest or be paid. The 2016 Plan has been designed to permit (but not require) the grant of awards that are intended to qualify as performance-based compensation for purposes of satisfying the conditions of Section 162(m).

THE FOREGOING IS ONLY A SUMMARY OF THE EFFECTS OF FEDERAL INCOME TAXATION UPON PARTICIPANTS AND THE COMPANY WITH RESPECT TO AWARDS UNDER THE 2016 PLAN. IT DOES NOT PURPORT TO BE COMPLETE, AND DOES NOT DISCUSS THE IMPACT OF EMPLOYMENT OR OTHER TAX REQUIREMENTS, THE TAX CONSEQUENCES OF A PARTICIPANT’S DEATH OR THE PROVISIONS OF THE TAX LAWS OF ANY MUNICIPALITY, STATE OR FOREIGN COUNTRY IN WHICH THE PARTICIPANT MAY RESIDE.

~~New Plan Benefits~~

It is not presently possible to determine the benefits that will be received by participants in the 2016 Plan in fiscal 2016 or in future years. However, set forth below are the awards that were granted under the Existing Plan during fiscal 2015.

Name of Individual or Group Option Awards (shares) Weighted Average Option Exercise Price Option Awards (1) Stock Awards (shares) Stock Awards (2)
Patrick C.S. Lo 100,000
$ 31.28
$ 1,081,130
25,000
$ 782,000
Christine M. Gorjanc 30,000
$ 31.28
$ 324,339
12,000
$ 375,360
Michael A. Werdann 18,000
$ 31.28
$ 194,603
15,000
$ 484,020
Michael F. Falcon 25,000
$ 31.28
$ 270,283
7,000
$ 218,960
Andrew W. Kim 25,000
$ 31.28
$ 270,283
7,000
$ 218,960
Executive officers as a group (10 persons) 271,000
$ 31.28
$ 2,929,862
103,400
$ 3,271,212
Non-executive director group (8 persons) —
$ —
—
51,144
$ 1,599,784
Non-executive officer employee group (657 persons) 25,000
$ 31.98
$ 275,337
370,022
$ 11,997,328

(1) The amounts included in the “Option Awards” column represent the full grant date value of option stock awards granted in 2015 calculated utilizing the provisions of the authoritative guidance for stock compensation without regard to vesting. For a discussion of the valuation assumptions, see Note 11 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2015.

(2) The amounts included in the “Stock Awards” column represent the full grant date value of non-option stock awards (restricted stock units) granted in 2015 calculated utilizing the provisions of the authoritative guidance for stock compensation without regard to vesting. For a discussion of the valuation assumptions, see Note 11 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2015.

Vote Required and Board of ~~Directors'~~Directors’ Recommendation

~~The affirmative~~As an advisory vote, ofthis proposal is not binding upon the ~~holders of a majority of~~Company. However, the ~~shares of our common stock represented~~Compensation Committee values the opinions expressed by stockholders in ~~person or by proxy and entitled to~~their vote on ~~the matter is required to approve the adoption of the 2016 Plan. Unless marked to the contrary, proxies received will be voted “FOR” approval of the 2016 Plan.~~

~~Our Board of Directors has unanimously approved~~ this proposal and ~~recommends~~will consider the outcome of the vote when making its decisions when setting the frequency of the advisory vote on executive compensation.

The option of one year, two years or three years that ~~stockholders vote “FOR” approval of Proposal Four - Approval of NETGEAR, Inc. 2016 Equity Incentive Plan.~~ ~~Our executive officers and our directors have an interest in this proposal.~~

~~PROPOSAL FIVE~~

~~APPROVAL OF AN AMENDMENT TO THE NETGEAR, INC. 2003~~

~~EMPLOYEE STOCK PURCHASE PLAN~~

~~We are asking our stockholders to approve an amendment to~~receives the NETGEAR, Inc. 2003 Employee Stock Purchase Plan, as amended (the “Purchase Plan”). Currently, a total of 1,000,000 shares of our common stock are authorized for sale under the Purchase Plan. The Purchase Plan is a significant part of our overall equity compensation strategy, especially with respect to our non-executive employees and is a significant program through which our employees may achieve ownership in the Company and thereby share in the success of our Company. Therefore, the Board has approved an amendment to the Purchase Plan to increase thehighest number of ~~shares of NETGEAR, Inc. common stock authorized for sale under the Purchase Plan~~votes cast by 1,000,000 shares to a total of 2,000,000 shares, subject to stockholder approval at the 2016 Annual Meeting of Stockholders. As of April 3, 2016, without giving effect to the proposed amendment, a total of 47,256 shares were available for sale under the Purchase Plan. The Purchase Plan is not being amended in any other material respect.

~~Summary of the Purchase Plan~~

The following is a summary of the principal features of the Purchase Plan and its operation. The summary is qualified in its entirety by reference to the Purchase Plan as set forth in Appendix B to this proxy statement.

~~General~~

~~The Purchase Plan was originally adopted by the Board in April 2003 and approved by our~~ stockholders in July 2003. The Board approved an amendment to increase the number of shares of NETGEAR, Inc. common stock authorized for sale under the Purchase Plan by 500,000 shares and stockholders approved this amendment at the 2009 Annual Meeting. The purpose of the Purchase Plan is to provide eligible employees with an opportunity to purchase shares of the Company’s common stock through payroll deductions.

~~Shares Available for Issuance~~

If our stockholders approve this proposal, a total of 2,000,000 shares of our common stock will be authorized for sale under the Purchase Plan, of which 47,256 shares were available for sale as of April 3, 2016 and an additional 1,000,000 shares would available following stockholder approval at the 2016 Annual Meeting of Stockholders.

~~Administration~~

The Board or a committee appointed by the Board (referred to herein as the “Administrator”) administers the Purchase Plan. All questions of interpretation or application of the Purchase Plan are determined by the Administrator and its decisions are final and binding upon all participants.

~~Eligibility~~

Generally, each of the Company’s (or the Company’s designated subsidiaries) common law employees whose customary employment with the Company (or one of the Company’s designated subsidiaries) is at least twenty hours per week and more than five months in a calendar year is eligible to participate in the Purchase Plan; except that no employee will be granted an option under the Purchase Plan (i) to the extent that, immediately after the grant, such employee would own or have the right to purchase 5% or more of the total combined voting power or value of all classes of the capital stock of the Company or any parent or subsidiary of the Company, or (ii) to the extent that his or her rights to purchase stock under all of the Company’s or any parent or subsidiary of the Company’s employee stock purchase plans accrues at a rate which exceeds $25,000 worth of stock (determined at the fair market value of the shares at the time such option is granted) for each calendar year in which such option is outstanding at any time. As of April 3, 2016, approximately 756 employees, including all of our executive officers, were eligible to participate in the Purchase Plan.

~~Offering Period~~

Unless the Administrator determines otherwise, each offering period under the Purchase Plan will have a duration of approximately six (6) months, commencing on the first trading day on or after February 16 and August 16 of each year and terminating on the following August 15 and February 15, or the immediately preceding trading day if August 15 or February 15 is not a trading day.

To participate in the Purchase Plan, an eligible employee must authorize payroll deductions pursuant to the Purchase Plan, which may not exceed 10% of a participant’s eligible compensation (which generally includes base straight time gross earnings, commissions, bonuses, overtime and shift premiums, but exclusive of payments for any other compensation) during the offering period, unless the Administrator provides otherwise. During an offering period, a participant may increase or decrease the rate of payroll deductions in an offering period within limits set by the Plan and the Administrator.

Once an employee becomes a participant in the Purchase Plan, the employee continues to participate in each successive offering period until the employee withdraws from the Purchase Plan or the employee’s employment with the Company or one of the Company’s designated subsidiaries terminates. On the first trading day of each offering period, each participant is granted an option to purchase shares of the Company’s common stock. The option expires at the end of the offering period, or potentially earlier in connection with an employee’s termination (described below), but is exercised on the last trading day of the offering period to the extent of the payroll deductions accumulated during such offering period.

~~Purchase Price~~

Unless and until the Administrator determines otherwise, the per share purchase price is 85% of the fair market value of a share of common stock on the first trading day or the last trading day of the offering period, whichever is lower. The fair market value of common stock on any relevant date generally will be the ~~closing sales price per share as reported on any established stock exchange or a national market system, as quoted on such exchange or system, as reported in~~ ~~The Wall Street Journal~~.

~~Payment of Purchase Price; Payroll Deductions~~

The number of whole shares of common stock that a participant may purchase in each offering period is determined by dividing the total amount of payroll deductions withheld from the participant’s compensation during that offering period by the purchase price; provided, however, that a participant may not purchase more than 10,000 shares each offering period.

~~Non-Transferability~~

Neither payroll deductions credited to a participant’s account nor any rights with regard to the exercise of an option or to receive shares under the Purchase Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of descent and distribution or by designation of a beneficiary) by the participant.

~~Withdrawal~~

Generally, a participant may withdraw all but not less than all of his or her payroll deductions for an offering period at any time by written notice prior to the last trading day of the offering period without affecting his or her eligibility to participate in future offering periods. Once a participant withdraws from an offering period, however, that participant may not participate again in the same offering period. To participate in a subsequent offering period, the participant must deliver a new subscription agreement to the Company.

~~Termination of Employment~~

Upon termination of a participant’s employment for any reason, including death or disability, he or she will be deemed to have elected to withdraw from the Purchase Plan and any payroll deductions credited to the participant’s account (to the extent not yet used to make a purchase of the Company’s common stock) will be returned to him or her or, in the case of death, to the person or persons entitled thereto as provided in the Purchase Plan, and such participant’s option will automatically be terminated.

~~Adjustments upon Changes in Capitalization, Dissolution or Liquidation, or Change of Control~~

~~Changes in Capitalization.~~ Subject to any required action by our stockholders, in the event of any stock split, reverse stock split, stock dividend, combination or reclassification of our common stock, or any other change in the number of shares of our common stock effected without receipt of consideration by the Company (provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration”), proportionate adjustments will be made to the purchase price per share and the number of shares of common stock covered by each option under the Purchase Plan (which has not yet been exercised), as well as to the number of the shares available for purchase under the Purchase Plan and the per-person numerical limits on the number of shares that may be purchased under the Purchase Plan.

~~Dissolution or Liquidation.~~ In the event of the Company’s proposed dissolution or liquidation, the offering period then in progress will be shortened by setting a new exercise date on which such offering period will end, unless provided otherwise by the Administrator. The new exercise date will be prior to the dissolution or liquidation. If the Administrator shortens any offering period then in progress, the Administrator will notify each participant in writing, at least ten business days prior to the new exercise date, that the exercise date has been changed to the new exercise date and that the participant’s option will be exercised automatically on the new exercise date, unless the participant has already withdrawn from the offering period.

~~Change of Control.~~ In the event of a “change of control,” as defined in the Purchase Plan, each option under the Purchase Plan will be assumed or an equivalent option will be substituted by the successor corporation or a parent or subsidiary of such successor corporation. In the event the successor corporation refuses to assume or substitutefrequency for the ~~options, any offering periods then in progress will be shortened~~advisory vote on executive compensation approved by setting a new exercise date on which such offering period will end. The new exercise date will be prior to the change of control. Further, the Administrator will notify each participant in writing, at least ten business days prior to the new exercise date, that the exercise date has been changed to the new exercise date and that the participant’s option will be exercised automatically on the new exercise date, unless the participant has already withdrawn from the offering period.

~~Amendment and Termination of the Purchase Plan.~~ The Administrator may, at any time and for any reason, terminate, amend or suspend the Purchase Plan, including the term of any offering period then in progress. Generally, no such termination or amendment can adversely affect options previously granted and stockholder approval will be sought for certain changes as required by applicable law.

~~Participation in Purchase Plan Benefits~~

Participation in the Purchase Plan is voluntary and is dependent on each eligible employee’s election to participate and his or her determination as to the level of payroll deductions. Accordingly, future purchases under the Purchase Plan are not determinable. Non-employee directors are not eligible to participate in the Purchase Plan. No purchases have been made under the amended Purchase Plan since its adoption by the Board. For illustrative purposes, the following table sets forth (i) the number of shares of our common stock that were purchased during fiscal 2015 under the Purchase Plan, (ii) the average price per share paid for such shares, and (iii) the fair market value at the date of purchase.

Name of Individual or Group Number of Shares Purchased Average Per Share Purchase Price Fair Market Value at Date of Purchase
Patrick C.S. Lo 752
$ 26.89
$ 31.63
Christine M. Gorjanc —
—
—
Michael A. Werdann —
—
—
Michael F. Falcon —
—
—
Andrew W. Kim —
—
—
Executive officers as a group 2,370
$ 27.05
$ 31.83
Non-executive director group —
—
—
Non-executive officer employee group 106,921
$ 27.32
$ 32.14

~~Certain Federal Income Tax Information~~

The following brief summary of the effect of federal income taxation upon the participant and the Company with respect to the shares purchased under the Purchase Plan does not purport to be complete, and does not discuss the tax consequences of a participant’s death or the income tax laws of any state or foreign country in which the participant may reside.

The Purchase Plan, and the right of participants to make purchases thereunder, is intended to qualify under the provisions of Sections 421 and 423 of the Internal Revenue Code of 1986, as amended. Under these provisions, no income will be taxable to a participant until the shares purchased under the Purchase Plan are sold or otherwise disposed of. Upon sale or other disposition of the shares, the participant will generally be subject to tax in an amount that depends upon the holding period. If the shares are sold or otherwise disposed of more than two years from the first day of the applicable offering period and more than one year from the applicable date of purchase, the participant will recognize ordinary income equal to the lesser of (a) the excess of the fair market value of the shares at the time of such sale or disposition over the purchase price, or (b) an amount equal to 15% of the fair market value of the shares as of the first day of the applicable offering period. Any additional gain will be treated as long-term capital gain. If the shares are sold or otherwise disposed of before the expiration of these holding periods, the participant will recognize ordinary income generally measured as the excess of the fair market value of the shares on the date the shares are purchased over the purchase price. Any additional gain or loss on such sale or disposition will be long-term or short-term capital gain or loss, depending on how long the shares have been held from the date of purchase. The Company generally is not entitled to a deduction for amounts taxed as ordinary income or capital gain to a participant except to the extent of ordinary income recognized by participants upon a sale or disposition of shares prior to the expiration of the holding periods described above.

THE FOREGOING IS ONLY A SUMMARY OF THE EFFECT OF FEDERAL INCOME TAXATION UPON PARTICIPANTS AND THE COMPANY UNDER THE PURCHASE PLAN. IT DOES NOT PURPORT TO BE COMPLETE, AND DOES NOT DISCUSS THE TAX CONSEQUENCES OF A PARTICIPANT’S DEATH OR THE PROVISIONS OF THE INCOME TAX LAWS OF ANY MUNICIPALITY, STATE OR FOREIGN COUNTRY IN WHICH THE PARTICIPANT MAY RESIDE.

~~Vote Required and Board of Directors’ Recommendation~~

~~The approval of this proposal requires the affirmative vote of a majority of the votes cast on this proposal at the Annual Meeting.~~stockholders. Our Board of Directors ~~has~~ unanimously ~~approved this proposal and~~ recommends that stockholders vote ~~“FOR” the approval of this proposal, which would amend the NETGEAR, Inc. 2003 Employee Stock Purchase Plan, as amended,~~ to ~~increase the number of shares of NETGEAR, Inc. common stock authorized for sale thereunder by 1,000,000 shares~~continue to ~~a total of 2,000,000 shares.~~

~~SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT~~

~~The following table sets forth certain information with respect~~hold say-on-pay votes EVERY YEAR (as opposed to ~~the beneficial ownership of our common stock as of April 3, 2016 by:~~

~~each stockholder who we know beneficially owns more than 5% of our common stock;~~

~~each of our directors and director nominees;~~

~~each of our Named Executive Officers set forth in the Summary Compensation Table; and~~

~~all of our current directors and executive officers as a group.~~

Beneficial ownership is determined in accordance with the rules and regulations of the Securities and Exchange Commission. In computing the number of shares beneficially owned by a person, and the percentage ownership of that person, shares of common stock subject to stock optionsevery two years or other rights held by that person that are currently exercisable or that will become exercisable within 60 days of April 3, 2016, are deemed outstanding. Such shares, however, are not deemed outstanding for the purpose of computing the percentage ownership of any other person.

Unless otherwise indicated below, the address of each beneficial owner listed in the table is c/o NETGEAR, Inc., 350 East Plumeria Drive, San Jose, California 95134. The percentages in the table below are based on 32,494,993 shares of our common stock outstanding as of April 3, 2016. Except as indicated in the footnotes to this table and pursuant to applicable community property laws, to our knowledge, each stockholder named in the table has sole voting and investment power with respect to the shares set forth opposite such stockholder's name. The information provided in this table is based on our records and information filed with the Securities and Exchange Commission, unless otherwise noted.

Name and Address Number of Shares of Common Stock Beneficially Owned Number of Shares Underlying Equity Awards Beneficially Owned (8) Total Shares Beneficially Owned Percentage of Total Shares Beneficially Owned
5% Stockholders:
FMR LLC (1) 3,310,747
—
3,310,747
10.2 %
BlackRock, Inc. (2) 3,204,068
—
3,204,068
9.9 %
Dimensional Fund Advisors LP (3) 2,526,805
—
2,526,805
7.8 %
The Vanguard Group, Inc. (4) 2,301,843
—
2,301,843
7.1 %
LSV Asset Management (5) 1,708,191
—
1,708,191
5.3 %
Executive Officers and Directors:
Patrick C.S. Lo (6) 345,732
801,627
1,147,359
3.4 %
Christine M. Gorjanc 37,600
120,354
157,954
*
Michael A. Werdann 10,596
49,026
59,622
*
Michael F. Falcon 11,829
67,139
78,968
*
Andrew W. Kim —
56,888
56,888
*
Jocelyn E. Carter-Miller 3,939
—
3,939
*
Ralph E. Faison 18,150
—
18,150
*
A. Timothy Godwin (7) 54,965
—
54,965
*
Jef T. Graham 14,483
—
14,483
*
Gregory J. Rossmann 24,550
1,800
26,350
*
Barbara V. Scherer 11,249
—
11,249
*
Julie A. Shimer 18,150
1,800
19,950
*
Grady K. Summers —
—
—
—
Thomas H. Waechter 966
—
966
*

All current directors and executive officers as a group (19 persons) 559,956
1,255,619
1,815,575
5.4 %

* Less than one percent of our outstanding shares of common stock

~~(1) Based on information contained in a Schedule 13G/A filed with the Securities and Exchange Commission on February 12, 2016, by FMR LLC (“FMR”)~~every three years). FMR has sole power to vote or direct the vote of 346,994 shares and sole power to dispose or to direct the disposition of 3,310,747 shares. The address of FMR is 245 Summer Street, Boston, Massachusetts 02210.

(2) Based on information contained in a Schedule 13G/A filed with the Securities and Exchange Commission on January 8, 2016, by BlackRock, Inc. (“BlackRock”). BlackRock has sole power to vote or direct the vote of 3,104,448 shares and sole power to dispose or to direct the disposition of 3,204,068 shares. The address of BlackRock is 55 East 52nd Street, New York, NY 10055.

(3) Based on information contained in a Schedule 13G filed with the Securities and Exchange Commission on February 9, 2016, by Dimensional Fund Advisors LP (“Dimensional Fund Advisors”). Dimensional Fund Advisors has sole power to vote or direct the vote of 2,441,059 shares and sole power to dispose or to direct the disposition of 2,526,805 shares. The address of Dimensional Fund Advisors is Building One, 6300 Bee Cave Road, Austin, Texas 78746.

(4) Based on information contained in a Schedule 13G/A filed with the Securities and Exchange Commission on February 10, 2016, by The Vanguard Group, Inc (“Vanguard Group”). Vanguard Group has sole power to vote or direct to vote of 40,538 shares, sole power to dispose of or to direct the disposition of 2,259,605 shares and shared power to dispose or to direct the disposition of 42,238 shares. Vanguard Fiduciary Trust Company, a wholly-owned subsidiary of Vanguard Group, is the beneficial owner of 38,738 shares as a result of its serving as investment manager of collective trust accounts. The address of Vanguard Group is 100 Vanguard Blvd, Malvern, PA 19355.

(5) Based on information contained in a Schedule 13G filed with the Securities and Exchange Commission on February 12, 2016, by LSV Asset Management. LSV Asset Management has sole power to vote or direct the vote of 676,700 shares and sole

~~power to dispose or to direct the disposition of 1,708,191 shares. The address of LSV Asset Management is 155 N. Wacker Drive, Suite 4600, Chicago, IL 60606.~~

(6) Shares beneficially owned by Mr. Lo include (1) 128,750 shares held of record by The Patrick and Emily Lo Revocable Trust dated 4-7-99, (2) 147,668 shares held of record by the education trusts of Mr. Lo's children and Mr. Lo is a co-trustee of each such trust, and (3) 69,314 shares held of record by Mr. Lo.

~~(7) Shares are held by A. Timothy Godwin Family Trust dated 3/27/95, as amended.~~

(8) The Securities and Exchange Commission deems a person to have beneficial ownership of all shares that he or she has the right to acquire within 60 days. The shares indicated represent shares underlying stock options exercisable and restricted stock units vesting within 60 days of April 3, 2016.

COMPENSATION DISCUSSION AND ANALYSIS

Executive Summary

This Compensation Discussion and Analysis provides information about our executive compensation philosophy, the principles that govern our executive compensation program, the key elements of the 2016 executive compensation program for our Named Executive Officers, or NEOs, and how and why our independent Compensation Committee determined the compensation elements that comprised our 2016 executive compensation program. Our NEOs for 2016, which include our principal executive officer, our principal financial officer and our three other most highly compensated executive officers, were:

~~NETGEAR is~~•Patrick C.S. Lo, Chairman and Chief Executive Officer;

•Christine M. Gorjanc, Chief Financial Officer;

•Michael F. Falcon, Senior Vice President of Worldwide Operations and Support;

•David J. Henry, Senior Vice President of Home Networking; and

•Andrew W. Kim, Senior Vice President of Corporate Development, General Counsel and Secretary.

Compensation Overview

Our independent Compensation Committee makes compensation decisions for our executive officers. The Compensation Committee recognizes our need to retain our NEOs and to motivate them to meet or exceed short-term goals and long-term objectives, while also creating sustainable long-term value for our stockholders. Accordingly, we designed an executive compensation program for 2016 that tied a ~~global networking company that delivers innovative products~~substantial portion of the NEOs’ compensation directly to ~~consumers, businesses and service providers. In 2015, our net revenue declined to $1.30 billion from $1.39 billion,~~achievement of rigorous performance objectives over a decrease of 6.7% compared to the prior year, as we began to execute on our plans to resize our service provider business for higher profitability. We operate our business profitably, with GAAP net income for 2015 of $48.6 million, compared to $8.8 million for 2014. In addition, our GAAP operating margin for 2015 was 6.6%, compared to 2.0% for 2014. Our earnings and operational performance helped drive a cash, cash equivalents and short-term investments balance at the end of 2015 of $278.3 million, an increase of $21.2 million over the prior year-end. In addition, during 2015 we returned approximately $117.7 million in capital to our stockholders through the repurchase of shares of our common stock.

Despite challenges in certain of our markets and customers segments during 2015, we realigned the business for improved long-term profitability and were able to make share gains in key product categories and important regions worldwide. We remain committed to pursuing growth opportunities we see in smart homes, next generation service providers, and small and medium-sized businesses. We have maintained financial discipline while continuing to drive innovation with continual investment in research and development. We have also maintained a strong balance sheet and continue to closely manage our expenses, inventory and cash.

sustained period. We believe the compensation program for our ~~Named Executive Officers~~NEOs is instrumental in driving ~~the Company's~~our focus on this long-term growth and strong financial ~~performance.~~ performance, particularly because our approach placed a significant percentage of their compensation at-risk and correspondingly rewarded them when they achieved objectives and delivered stockholder value.

The compensation of our ~~Named Executive Officers~~NEOs consists of three main elements:

•base ~~salary,~~ salary;

•annual incentive compensation, in the form of a cash bonus; and

•long-term incentive ~~compensation.~~ compensation, in the form of restricted stock units, or RSUs, and stock options.

Compensation is based on overall company performance as well as individual performance. We ~~continue to~~ seek to ~~have~~position total compensation for Named Executive Officers at or near the median for our Peer Group, as identified below. We believe all of these factors help us achieve total compensation for our Named Executive Officers that is fair, reasonable and competitive.

For 2016, our NEOs received payments under our annual cash incentive plan based on the Company’s 2016 financial results, and we also granted both option awards and restricted stock unit awards to our NEOs. The charts below depict the total target direct compensation for our Chief Executive Officer and for our other NEOs as a group, based on their 2016 base salaries, target annual cash bonuses and grant date fair value of equity awards (not value actually received), as reported in the applicable Executive Compensation Tables following this Compensation Discussion and Analysis:

2016 Financial and Operational Highlights

We are a global networking company that delivers innovative products to consumers, businesses and service providers. We remain committed to pursuing profitable growth opportunities in each of these segments, while simultaneously maintaining financial discipline and driving innovation through continual investment in research and development. We also have maintained a strong balance sheet and continue to closely manage our expenses, inventory and cash. In 2016, we achieved several notable financial and operational results:

Net revenue grew to $1.33 billion from $1.30 billion, an increase of 2.1% compared to 2015;

Combined retail and commercial business net revenues grew 19.9% year-over-year in 2016, more than making up for the expected and controlled net revenue decline of 35% in the service provider business, as we continued to shift focus to profitable opportunities;

GAAP net income of $75.9 million, compared to $48.6 million for 2015;

GAAP operating margin of 8.6% for 2016, compared to 6.6% for 2015;

GAAP net income per diluted share of $2.25, compared to $1.44 in 2015;

Cash, cash equivalents and short-term investments balance at the end of 2016 of $366.0 million, an increase of $87.7 million over the prior year-end;

Several highly successful product introductions in multiple growth categories across our product portfolio;

Significant share gain in key markets we serve by providing truly innovative solutions that set us apart from our competition; and

Total Shareholder Return for the one-year and three-year periods ending December 31, 2016 was 29.7% and 18.2%, respectively.

General Compensation Philosophy

We compete in an aggressive and dynamic industry and, as a result, we believe that ~~finding,~~hiring, motivating and retaining quality employees, particularly senior managers, sales personnel and technical personnel, are critical factors to our future success.

Our compensation programs aim to address a number of objectives, including attracting and retaining highly qualified executive officers, rewarding individual contribution, loyalty, teamwork and integrity, and motivating management to achieve returns for our stockholders. The Compensation Committee, as well as our Board of Directors, does not believe that our compensation policies encourage excessive risk taking by our executives or employees. Our programs are geared for short and long-term performance with the goal of increasing stockholder value over the long term. Our executive compensation program impacts all of our employees by setting general levels of compensation and helping to create an environment of goals, rewards and expectations. Because we believe the performance of every employee is important to our success, we are mindful of the effect executive compensation and incentive programs have on all of our employees.

We believe that the compensation of our executives should reflect their success as a management team in attaining key ~~short term~~short-term and ~~long term~~long-term operating objectives, such as growth of sales, operating margins and earnings per share, market share, ~~long term~~long-term competitive advantage and, ultimately, in attaining and sustaining an increased market price for our common stock. We believe that the performance of our executives in managing the Company, considered in light of general economic conditions, our company and industry, and competitive conditions, should be the basis for ~~determination of~~determining their overall compensation. We also believe that their compensation should not be based on the short-term performance of our stock, whether favorable or unfavorable, as we expect the price of our stock will ~~in the long-term,~~ reflect our operating performance over the long-term, and ultimately, the management of the Company by our executives.

~~In June 2015, we held~~We annually hold a stockholder advisory vote to approve the compensation of our Named Executive Officers, commonly referred to as a say-on-pay vote. Our stockholders overwhelmingly approved the compensation of our ~~Named Executive Officers,~~NEOs at our 2016 Annual Meeting, where approximately ~~93%~~91% of stockholder votes cast were in favor of our say-on-pay resolution. As we evaluated our compensation practices and talent needs throughout ~~2015,~~2016, we also were mindful of the strong support our stockholders expressed at our ~~2014 annual meeting,~~2015 Annual Meeting, where approximately 93% of stockholder votes cast also were in favor of our say-on-pay ~~resolution, for~~resolution. As discussed above under “Proposal One - Stockholder Engagement,” we greatly value regular input from our stockholders, particularly with respect to our executive compensation practices. Consistent with this commitment to engagement, communication and transparency, the Compensation Committee continues to regularly review our executive compensation program to ensure alignment between the interests of our executives and our stockholders. The Compensation Committee considered the results of these recent say-on-pay votes, investor input and current market practices. As a result, our Compensation

Committee retained our philosophy of linking compensation to our operating objectives and the enhancement of stockholder ~~value. As a result, our Compensation Committee retained~~value, and continued our general approach to executive compensation, with an emphasis on short and long-term incentive compensation that rewards our most senior executives when they help deliver on our objectives.

Designing a Competitive Compensation Package

Recruitment and retention of our Named Executive Officers and other executive management require a competitive compensation package. Our Compensation Committee has the responsibility for evaluating the executive compensation plans, policies, and programs and making such recommendations or changes as it deems appropriate. Our Compensation Committee's approach emphasizes fixing total compensation for executives, which consists of base salary and benefits, annual cash incentive and long-term incentive awards, at ~~approximately~~or near the median of our peer group (the “Peer Group”). The Peer Group was last reviewed and confirmed in the first half of 2015 by Compensation Strategies, Inc., the Compensation Committee's compensation consultant during that time, with input from our Chief Executive Officer and Compensation Committee Chairman. The Peer Group consisted of 18 U.S. publicly traded companies (including ~~two~~three that subsequently were acquired) from the computer peripheral and communications equipment industries of relatively similar annual revenue and market capitalization as compared to us:



ADTRAN, Inc.		Fortinet, Inc.
ARRIS International plc		Infinera Corp.
Aruba Networks, Inc.		Juniper Networks, Inc.
Brocade Communications Systems, Inc.		Logitech International S.A.
Ciena Corporation		NetApp, Inc.
Emulex Corp.		Plantronics, Inc.
Extreme Networks, Inc.		Polycom, Inc.
F5 Networks, Inc.		Quantum Corp.
Finisar Corp.		SanDisk Corp.

For companies within the Peer Group, the median annual ~~2014~~ revenues at the time of the last review were approximately $1.25 billion, with an average of $2.16 billion. The median market capitalization was $2.38 billion, with an average of $4.20 billion. Statistical analysis was used to adjust all market compensation data to approximate the current annual revenues of the Company given the variation in size of the companies from which compensation data is collected. Statistical regression techniques were used to remove the significant swings that can occur with individual raw data points.

Each element of compensation as well as total compensation are quantified and reviewed to determine the Company's competitiveness compared to the Peer Group. Precise comparisons of some forms of compensation are not possible due to lack of data or different valuation approaches for compensation that is contingent, of uncertain duration or not dollar or share-based. Therefore, certain comparisons are based on observations generally rather than comparison survey data. When data is not current through the most recent year, estimates are made to update values and public and private survey information was also used as a supplement to the data.

For 2016 executive compensation purposes, the Compensation Committee continued to rely on the applicable Peer Group compensation data collected in the previous year, although all amounts were increased slightly to account for general increases in the market over the prior year.

In determining the appropriate individual compensation levels for Named Executive Officers, the Compensation Committee considers the Peer Group compensation data as well as the individual's tenure, experience, skills, and individual and Company performance. Compensation levels for all Named Executive Officers, except our CEO, are developed by the Compensation Committee in consultation with our CEO and ~~Compensation Strategies, Inc.~~an independent third-party compensation consultant. The Compensation Committee engages in an active dialogue with our CEO concerning the Company's strategic objectives and performance targets. The Compensation Committee reviews the appropriateness of the financial measures used in the incentive plans and the degree of difficulty in achieving specific performance targets. The Compensation Committee also reviews with our CEO the individual responsibilities, abilities and objectives achieved in the prior year for each of the Named Executive Officers. In the case of the CEO, the Compensation Committee develops its own recommendation with the assistance of ~~Compensation Strategies, Inc.~~its independent compensation consultant in executive session without the CEO, or any other member of management, present. The Compensation Committee then independently reviews and approves the compensation for Named Executive Officers and ~~certain~~ other ~~key executives, and the Board (including all independent members of the Board) also ratifies and approves such compensation.~~executive officers.

Compensation Committee Consultant

The Compensation Committee ~~engages~~engaged Compensation Strategies, Inc., an independent ~~third party~~third-party compensation consulting firm, during 2016 to assist in ~~selecting~~confirming the Peer Group and in gathering general industry compensation data. The consultant reports directly to the Compensation Committee but ~~has been~~was authorized by the Compensation Committee to work with certain

executive officers and employees of the Company. In order to determine and confirm independence, the consultant completes an independence questionnaire provided by the Company. In addition, each director and executive officer of the Company completes an annual questionnaire which includes questions which ask about any actual or potential conflicts or relationship between such individual

and the consultant. The consultant conducts regular reviews of total compensation of the Named Executive Officers and members of the Board. The consultant also provides advice with respect to other executive and Board compensation issues that might arise during the year, but otherwise provides no other services to the Company.

Setting the Pay Mix

Total Compensation

The Compensation Committee emphasizes performance-based compensation, which includes elements dependent directly on results, for our executive team. Total cash compensation (i.e., base salary and annual cash incentive) is targeted at ~~approximately~~or near the median total cash compensation of the Peer Group for Named Executive Officers. Comparing the elements of total target compensation for ~~2015,~~2016, base salary comprises approximately ~~30%~~24%, target annual incentive compensation approximately ~~20%~~18%, and long-term incentive compensation approximately ~~50%~~58% of the pay mix. However, we do not have a formal policy allocating between cash and non-cash compensation or between each element of compensation.

For ~~2015,~~2016, our target total compensation (~~i.e.~~(i.e., base salary, annual cash incentive and long-term incentives) for Named Executive Officers as a group was ~~below~~above the median for the Peer Group by approximately ~~10%~~7%. This percentage ~~below~~above the median resulted from ~~our lower~~ long-term incentive compensation amounts for Named Executive Officers as a group ~~relative~~that were roughly equal to the targeted median of the Peer Group ~~offset by our~~and modestly higher variances in base salary and cash incentive plan amounts from the Peer Group median amounts in these categories. We continue to regularly evaluate our compensation practices and expect to continue to set target total compensation for Named Executive Officers to meet our goal of targeting the median Peer Group amounts in the future.

Base Salary

~~Fixed Compensation~~

~~Principal elements of fixed compensation consist of~~We generally target base ~~salary and benefits (e.g., 401(k) plan, health, life and disability insurance and employee stock purchase plan). We target the value of fixed compensation generally~~salaries for Named Executive Officers at or near the median of the Peer Group to facilitate a competitive recruitment and retention ~~strategy.~~

~~Base Salary.~~ ~~We generally set base salaries for Named Executive Officers at approximately the 50~~^th ~~percentile of the Peer Group,~~strategy, with individual variations based on job scope, tenure, retention risk and other factors relevant to the Compensation Committee. Increases in base salary reflect assessed performance, providing a performance link to this ~~element of~~ fixed compensation. Base salaries are generally reviewed ~~by the Compensation Committee~~ and approved by the ~~independent members of the Board of Directors~~Compensation Committee during the second quarter of the year. Accordingly, the Compensation Committee reviewed and determined base salaries for Named Executive Officers to be effective as of July 1, ~~2015,~~2016, except for Mr. ~~Werdann,~~Lo, whose salary increase was effective as of ~~March~~January 1, ~~2015:~~2017 (consistent with our prior practice). The following lists the Named Executive Officer base salary increases approved in 2016:



NEO	Updated Base Salary	Percentage Increase	Effective Date
Patrick C.S. Lo	$850,000	6.25%	January 1, 2017
Christine M. Gorjanc	$530,000	6.00%	July 1, 2016
Michael F. Falcon	$397,500	6.00%	July 1, 2016
David J. Henry	$376,000	12.07%	July 1, 2016
Andrew W. Kim	$387,000	6.03%	July 1, 2016

Each NEO received a base salary increase of approximately 6%, other than Mr. ~~Lo's salary remained~~Henry, who received a larger increase due to his recent promotion to senior vice president and an effort to align the same at $775,000, Ms. Gorjanc's salary was increased from $480,000 to $500,000, Mr. Werdann's salary was increased from $300,000 to $351,000, Mr. Falcon's salary was increased from $360,000 to $375,000, and Mr. Kim’s salary was increased from $350,000 to $365,000.base salaries of our product group heads. As a group, the base salaries for Named Executive Officers exceeded the median for the Peer Group by approximately ~~11%~~16%, and we believe this result is generally consistent with our stated goal of targeting the median metrics for the Peer Group.

Annual Incentive Compensation (Cash Bonuses)

~~Benefits.~~2016 Target Cash Bonus. We provide various employee benefit programs to our Named Executive Officers, including health, life and disability insurance, a 401(k) plan and the opportunity to purchase our common stock through payroll deductions at a discounted price through our 2003 Employee Stock Purchase Plan. In addition, we match contributions made by Named Executive Officers to their 401(k) plan up to an amount equal to $3,000 per year. These benefit programs are generally available to all our employees on substantially equal terms.

~~Incentive Compensation~~

Our executive incentive compensation is linked directly to our sales and earnings growth and long-term total return to stockholders. Our incentive compensation awards include annual cash incentives tied to the current year's performance and equity awards that generally vest over four years to retain executives and to reward long-term performance. Our incentive compensation awards in 2015 included the grant of both option awards and restricted stock unit awards to our Named Executive Officers. Our Named Executive Officers other than Mr. Werdann, also received payments under the annual cash incentive plan based on the Company's 2015 financial results. As our Senior Vice President of Worldwide Sales, Mr. Werdann received payments under a sales commission plan instead of our executive bonus plan for 2015. Certain Named Executive Officers also received an additional discretionary cash award, reflecting these officers' substantial contributions to the success of the Company's business in 2015.

~~Annual Incentive Plan (Cash). Our Named Executive Officers, other than Mr. Werdann,~~ participate under our annual bonus plan and are eligible to receive a cash bonus primarily based upon the level of annual non-GAAP operating income achieved by

the Company relative to a target established at the beginning of the calendar year. We believe that annual non-GAAP operating income is an appropriate measure, as this indicates profitable revenue growth and generally reflects achievement of some of our shorter term objectives for growth in sales, operating margins and earnings per share, and market share. Non-GAAP operating income is equal to our GAAP operating income after excluding amortization of intangible assets, stock-based compensation expense, restructuring and other charges, acquisition-related expense, impact to cost of sales from acquisition accounting adjustments to inventory, litigation reserves, goodwill impairment charges and intangibles impairment charges.

Under the ~~2015~~2016 executive bonus plan, our ~~Named Executive Officers, other than Mr. Werdann,~~NEOs were eligible to receive an incentive bonus based upon the level of annual non-GAAP operating income achieved by the Company. The target bonus amounts for our ~~Chief Executive Officer, Chief Financial Officer, Business Unit General Manager,~~CEO, CFO, product group heads and other ~~Executive Officers~~executive officers were 115%, 75%, 60%, and 50% of their respective fiscal year average base salaries. Bonus amounts for these executive officers would become eligible to be paid based upon the Company achieving a minimum threshold amount of ~~70%~~approximately 65% of the non-GAAP operating income ~~target~~plan of ~~$144.0~~$150.0 million, or ~~$101.0~~$97.0 million, for ~~2015.~~2016. If ~~2015~~2016 annual non-GAAP operating income exceeded this ~~$101.0~~$97.0 million threshold, then a bonus of 30% of an individual's target bonus would be earned, subject to other bonus plan conditions. If the Company exceeded ~~the~~a secondary target of ~~$144.0 million in~~approximately 85% of the non-GAAP operating income plan, or $127.0 million, then 50% of amounts in excess of this target would be contributed to an additional bonus pool until the bonus pool reached a sufficient level to fund the target bonus amounts for participants in the plan. If there was additional non-GAAP operating income beyond the amount required to fully fund the target bonus amounts, then 50% of such excess amount also would be contributed to the bonus pool, subject to reaching a level sufficient to pay maximum bonus amounts. The maximum bonus amount payable under the bonus plan was 150% of an individual’s target bonus amount, or 172.5%, 112.5%, 90%, and 75% of the respective fiscal year average base salaries of our ~~Chief Executive Officer, Chief Financial Officer, Business Unit General Manager,~~CEO, CFO, product group heads and other ~~Executive Officers.~~executive officers.

The table below shows the 2016 target bonus amount for each NEO as a percentage of base salary and as a corresponding cash amount:



NEO	Target Bonus as a Percentage of Salary	2016 Target Bonus as a Cash Amount
Patrick C.S. Lo	115%	$920,000
Christine M. Gorjanc	75%	$386,250
Michael F. Falcon	50%	$193,125
David J. Henry	60%	$213,450
Andrew W. Kim	50%	$188,000

We believe that ~~the target of $144.0 million in~~these non-GAAP operating income ~~and the minimum threshold amount of $101.0 million~~targets were set at appropriate levels based on market and industry expectations at that time and our ~~2015~~2016 annual operating plan reviewed and approved by our Board of Directors, and that each was achievable and not unrealistic. In addition, once the eligible bonus is determined based upon the level of annual non-GAAP operating income achieved, the Compensation Committee also has discretion to reduce such bonus based upon the executive's achievement of his or her individual annual ~~objectives.~~objectives or other factors that the Compensation Committee deems relevant. As a group, the target annual incentive cash bonus amount for the applicable Named Executive Officers was above the median for the Peer Group by approximately ~~10%~~13%. Consistent with our approach, the Peer Group market data generally results in target annual incentive cash bonus amounts being separated into three tiers, namely one for the Chief Executive Officer, one for the Chief Financial Officer and one for the other Named Executive Officers.

2016 Cash Bonus Payments. The ~~Company's~~Company reported ~~2015~~2016 annual non-GAAP operating income ~~was $123.3~~of $153.7 million. Based on this amount exceeding all required bonus plan thresholds, an executive bonus pool was preliminarily calculated in an amount that would have permitted the ~~minimum threshold annual non-GAAP operating income amount of $101.0 million, but falling below the $144.0 million target, the applicable Named Executive Officers were paid 30%~~Compensation Committee to pay our NEOs bonuses equal to approximately 149% of their target ~~bonuses. Therefore, under the terms~~bonuses, just short of the 2015 executive bonus plan, the applicable Named Executive Officers received the following bonus payments: Mr. Lo received $267,375, which is approximately 35% of his base salary; Ms. Gorjanc received $110,269, which is approximately 22% of her base salary; Mr. Falcon received $55,134, which is approximately 15% of his base salary; and Mr. Kim received $53,634, which is approximately 15% of his base salary.

As our Senior Vice President of Worldwide Sales, Mr. Werdann received payments under a sales commission plan instead of our executive bonus plan for 2015. The 2015 sales commission plan for Mr. Werdann was based upon a modified measure of profit contribution achievedmaximum allowed by the ~~Company, measured~~bonus plan. Based on ~~a quarterly basis, with a target objective derived~~input from the ~~Company’s 2015 annual operating plan approved by our~~ Board, of Directors at the beginning of 2015. Profit contribution is calculated for the worldwide retail and service provider business units under Mr. Werdann’s sales leadership and is comprised of point of sale revenue or net shipments, less related marketing spending. The aggregate profit contribution target for 2015 was over $974.0 million. The sales commission plan also provides for the ability of Mr. Werdann to earn additional commissions for overachieving above the target measure of profit contribution, calculated as up to three times the percentage by which actual achievement exceeds the target, calculated on a semi-annual basis. There also is a cap on the dollar amount of commissions that may be earned under the 2015 sales commission plan of 200% of target earnings. The amount of the earned commission is paid on a monthly basis, based on achievement to-date of quarterly targets. Mr. Werdann’s achievement against his sales commission plan ranged from 99% to 119% for the four quarterly periods in 2015. Based on the Company’s performance in 2015, Mr. Werdann earned aggregate sales commissions under this plan of $297,762.

~~Discretionary Cash Awards.~~ ~~Upon reviewing the unusual challenges faced by the Company during 2015, including important restructuring and resource realignment initiatives,~~ as well as the ~~extraordinary efforts by~~Company’s executive management team, the Compensation Committee exercised its discretion to limit all executive bonus payouts to approximately 115% of target. The Company’s management, with input from the Compensation Committee, elected to reallocate a portion of the unused executive bonus pool funds to increase the non-executive employee bonus pool to allow payment of above-target bonuses to eligible non-executive employees relating to the second half of 2016. The Compensation Committee noted that this approach addressed management’s concern with employee perception if the executive ~~officers~~bonus percentages actually paid were significantly higher than those paid to ~~lead~~employees, as well as management’s desire to share more of the ~~Company~~bonus pool among the broader employee base, in ~~key product and customer successes,~~recognition of contributions made at all levels toward a very successful year.

In recognition of the Compensation Committee’s decision to limit executives’ bonus amounts, our Board ~~of Directors determined to award certain Named Executive Officers an additional discretionary cash bonus amount. In this regard, our Board of Directors~~and Compensation Committee believed it was important for both executive retention and recognition purposes to reward our executive officers’ exemplary efforts during 2016 by making supplemental RSU grants to the executives, including the NEOs. As a non-cash expense that would provide additional longer-term retention value, these ~~officers' exemplary efforts.~~ supplemental RSUs also would contribute to one of the Company’s significant executive compensation objectives. The details of these supplemental RSUs are described below under “Recent 2017 Supplemental Equity Awards.”

As a result, pursuant to the ~~following discretionary cash~~terms of the 2016 executive bonus ~~payments were made to~~

plan and our Compensation Committee’s determination of final bonus amounts, our Named Executive Officers received bonus payments equal to approximately 115% of their target bonuses. The table below summarizes the target and total cash bonuses paid to our NEOs for ~~2015: Ms. Gorjanc received $110,269; Mr. Falcon received $55,134; and Mr. Kim received $53,634.~~2016:



NEO	Target 2016 Cash Incentive Compensation	Total 2016 Cash Incentive Compensation Paid
Patrick C.S. Lo	$920,000	$1,058,000
Christine M. Gorjanc	$386,250	$444,046
Michael F. Falcon	$193,125	$222,023
David J. Henry	$213,450	$245,315
Andrew W. Kim	$188,000	$216,131

Long-Term Incentive Compensation

2016 Equity Awards. We have provided long-term incentives through our 2003 Stock Plan, ~~(“2003 Plan”) and~~ our Amended and Restated 2006 Long-Term Incentive Plan (“2006 Plan”)~~. In the future, pending stockholder approval, we anticipate providing long-term incentives through~~ and our 2016 Equity Incentive ~~Plan.~~Plan (“2016 Plan”). Equity grants have been granted in the past under ~~the 2003 Plan and the 2006 Plan~~these plans to provide additional incentive to Named Executive Officers to maximize long-term total return to our stockholders. We generally provide an initial grant upon employment commencement and subsequent smaller annual refresh grants. We may grant a mixture of equity grants, including stock options, restricted stock and restricted stock units. Our equity awards generally vest over four years to retain executives and to reward long-term performance. We believe that equity grants are a particularly strong incentive, because they increase in value to our employees as the fair market value of our common stock increases. In the case of restricted stock and restricted stock units, which have immediate underlying value, such awards also provide a retention benefit over the vesting period of the awards. While the annual incentive plan might focus on achievement of ~~shorter term~~shorter-term objectives related to Company performance, we believe equity awards to our Named Executive Officers provide an incentive to reach some of our ~~longer term~~longer-term objectives and metrics, such as building on our long-term competitive advantages and increasing the market value of our common stock over time.

With respect to the size of the equity awards granted to our Named Executive Officers, the Compensation Committee ~~mostly~~primarily relies on input from two sources to determine the amount of equity awards to be granted: research from the Compensation ~~Strategies, Inc.~~Committee consultant and input from our Chief Executive Officer. The Compensation Committee also reviews the then-current status of equity awards available for grant under our equity plan for the current year as well as for the foreseeable future. In addition, the Compensation Committee considers relevant factors, including without limitation the executive's position, the executive's individual performance, the number of equity awards held (if any), and the extent to which those equity awards are vested. Compensation Strategies, Inc. prepares a comprehensive analysis of the equity award practices of our Peer Group. Objectively, we generally target our compensation to be at or near the median for the Peer Group. Our Chief Executive Officer also gives his input on the size of equity grants to be made to the ~~Named Executive Officers,~~NEOs, other than himself, with a review of the prior year's grants as the baseline starting point and such officer's individual performance for the year. Accordingly, by combining analysis of specific objective data (from both the Peer Group report and the status of equity awards available for grant) with subjective input from our Chief Executive Officer, the Compensation Committee determines an appropriate amount of equity awards to be granted for each Named Executive Officer for the current year.

~~The Compensation Committee makes a formal recommendation to the independent members of the Board of Directors of any proposed awards for their review and approval.~~ Equity awards for our Named Executive Officers may be granted pursuant to written consent of the ~~Board~~Compensation Committee but are typically granted during ~~a Board of Directors meeting,~~in-person meetings, which meetings are scheduled a year in advance to minimize the discretionary selection of grant dates and the appearance of granting options based on the timing of disclosure of material information to the public.

As part of the Company's annual compensation review in the first half of the year, annual equity awards were made to the Named Executive Officers during this period. The Named Executive Officers received a combination of option and restricted stock unit awards. During 2015, as a result of our organizational changes and realignment of resources, Mr. Werdann accepted additional sales team management duties and was promoted to Senior Vice President of Worldwide Sales. In connection with his promotion and increased responsibilities, Mr. Werdann received a 10,000-share restricted stock unit award, with four-year annual vesting, in addition to receiving an annual equity award at the time of our other Named Executive Officers. The Company's long-term incentive compensation for Named Executive Officers as a group was ~~below~~above the targeted median of the Peer Group by approximately ~~26%~~1%.

The numbers of shares subject to the annual stock options granted to our NEOs in 2016 were as follows:



NEO	Shares Subject to Option (#)	Grant Date Fair Value ($)
Patrick C.S. Lo	115,000	$1,412,522
Christine M. Gorjanc	35,000	$429,898
Michael F. Falcon	25,000	$307,070
David J. Henry	25,000	$307,070
Andrew W. Kim	25,000	$307,070

The above stock options vest over four years from grant, with 25% of the total award vesting on the first anniversary of the vesting commencement date and the remainder vesting in equal monthly amounts over the following three years.

The numbers of annual RSUs granted to our NEOs in 2016 were as follows:



NEO	RSUs (#)	Grant Date Fair Value ($)
Patrick C.S. Lo	30,000	$1,185,900
Christine M. Gorjanc	15,000	$592,950
Michael F. Falcon	10,000	$395,300
David J. Henry	15,000	$582,150
Andrew W. Kim	10,000	$395,300

The above RSUs vest over four years from grant, with 25% of the total award vesting on each anniversary of the vesting commencement date.

Recent 2017 Supplemental Equity Awards. As noted above, in January 2017, the Compensation Committee granted supplemental RSUs to our executive officers, in recognition of their contributions to the Company’s exceptionally strong performance in 2016, as well as the Compensation Committee’s decision to limit executive cash bonus payments to 115% of target. The size of these RSU awards was calculated formulaically for each executive by dividing (i) the dollar amount of the difference between the preliminarily calculated bonus amount of 149% of target and the 115% of target actually paid to such executive, by (ii) the closing price of the Company’s common stock on the date of grant. The numbers of supplemental RSUs granted to our NEOs in January 2017 were as follows:



NEO	RSUs (#)	Grant Date Fair Value ($)
Patrick C.S. Lo	5,486	$312,702
Christine M. Gorjanc	2,302	$131,214
Michael F. Falcon	1,151	$65,607
David J. Henry	1,272	$72,504
Andrew W. Kim	1,120	$63,840

Because of the unique circumstances behind the decision to grant these supplemental RSUs, the Compensation Committee believed it was appropriate to place a shorter, front-loaded vesting period on the RSUs. The above RSUs vest over three years from grant, with 80% of the total award vesting on the first anniversary of the vesting commencement date and 10% of the total award vesting on each of the second and third anniversaries.

Other Compensation Policies and Information

Employee Benefits and Perquisites

We provide various employee benefit programs to our Named Executive Officers, including health, life and disability insurance, flexible spending accounts, a 401(k) plan and the opportunity to purchase our common stock through payroll deductions at a discounted price through our 2003 Employee Stock Purchase Plan. In addition, we match contributions made by Named Executive Officers to their 401(k) plan up to an amount equal to $3,000 per year. These benefit programs are generally available to all our employees on substantially equal terms.

Clawback Policy

In order to minimize the risk of undue overpayment of cash bonus amounts and granting excessive option and restricted stock unit awards, the Compensation Committee and the Board of Directors in 2010 approved the addition of a clawback provision to the executive bonus plan and to award agreements which apply to the Named Executive Officers. The clawback provision may require a forfeiture of previously paid cash bonus amounts or previously awarded option or restricted stock unit awards in the event that the financial statements of the Company are subsequently restated and if such restated statements would have resulted in less of an actual cash bonus award being paid to Named Executive Officer or less of an actual option or restricted stock unit award being awarded to an Named Executive Officer, if such information had been known at the time the actual award had originally been calculated or determined. Pursuant to the clawback provision, the independent members of the Board of Directors or the Compensation Committee may require, in its discretion, that such Named Executive Officer forfeit and/or repay to the Company the amount by which an actual bonus award previously paid exceeds the lesser pro forma bonus award and the amount by which an actual award previously awarded exceeds the lesser pro forma option or restricted stock unit award, as the case may be. The policy is to put the Company in no worse position had the Compensation Committee known of the restatement of financial

statements at the time of the awards. We believe this is a fair and equitable way to address any potential windfall that may benefit a Named Executive Officer in the event that our financial statements are materially inaccurate.

Stock Ownership Guidelines

We have also adopted, effective as of January 1, 2005, stock ownership guidelines for our Named Executive Officers to own and hold common stock of the Company to further align their interests and actions with the interests of our stockholders.

Under the guidelines, our Chief Executive Officer is expected to own approximately ~~five~~six times his annual base salary. Other Named Executive Officers are expected to achieve ownership levels equal to approximately one to three times base salary. Named Executive Officers have a five-year period in which to achieve the required compliance level. Shares owned directly by the executive and unvested restricted stock units are counted toward the guidelines. As of December 31, ~~2015,~~2016, all of ~~the Named Executive Officers~~our NEOs were in compliance with the stock ownership guidelines.

Policy Against Hedging or Pledging NETGEAR Stock

Under our insider trading policy, directors and employees, including our Named Executive Officers, are prohibited from hedging or pledging of the Company's securities and from investing in derivatives of the Company's securities.

Impact of Accounting and Tax Requirements on Compensation

Our Compensation Committee takes accounting and tax considerations into account in designing compensation plans and arrangements for the members of our executive team, other employees and members of our Board of Directors. These considerations include the following:

Tax Deductibility of Executive Compensation. Section 162(m) of the Internal Revenue Code generally disallows a tax deduction to publicly held companies for compensation paid to certain executive officers, to the extent that compensation exceeds $1 million per officer in any year. The Company generally seeks to maximize the deductibility for tax purposes of all elements of compensation. Our 2006 Plan and 2016 Plan were structured so that any compensation recognized by an executive officer in connection with the exercise of his or her outstanding options under the plan could qualify as performance-based compensation and will not be subject to the $1 million limitation. In addition, our 2006 Plan and 2016 Plan permit our Compensation Committee to structure equity awards other than stock options as performance based compensation under Section 162(m). In addition, our Executive Bonus Plan allows us to structure our cash incentives that are paid thereunder to qualify for a deduction under Section 162(m). The Compensation Committee, however, periodically reviews applicable tax provisions, such as Section 162(m), and may revise compensation plans from time to time to comply with their rules and to maximize deductibility. Also, while the Compensation Committee believes that structuring compensation to be deductible under Section 162(m) generally is desirable, it may decide that foregoing a tax deduction is desirable to otherwise achieve its performance objectives.

Executive Severance and Change of Control ~~Benefits~~

Benefits. The Company does not have a formal executive severance or change in control plan. The severance and change of control benefits that each Named Executive Officer is eligible for is governed by his or her employment agreement, change of control agreement or offer letter with us. The Compensation Committee believes that these agreements and offer letters are an essential element of our Named Executive Officers' compensation packages in order to be competitive with other companies that compete with us for executive officer talent, and also to ensure that our Named Executive Officers feel that they have adequate financial security to manage any circumstances that would obligate us to pay them severance or change in control benefits. Our NEOs are not entitled to any tax “gross-up” treatment on any severance, change-of-control benefits or other benefits. For a more detailed description of these severance and change of control benefits, please see “Executive Compensation-Potential Payments Upon Termination or Change In Control.”

~~Tax Deductibility of Executive~~Accounting for Stock-Based Compensation

Section 162(m) of the Code generally disallows a tax deduction to publicly held companies for compensation paid to certain executive officers, to the extent that compensation exceeds $1 million per officer in any year. The Company generally seeks to maximize the deductibility for tax purposes of all elements of compensation. Our 2006 Plan was structured so that any compensation recognized by an executive officer in connection with the exercise of his or her outstanding options under the plan will qualify as performance-based compensation and will not be subject to the $1 million limitation. In addition, our 2006 Plan allowed our Compensation Committee to structure equity awards other than stock options as performance based compensation under Section 162(m). In addition, our Executive Bonus Plan allows us to structure our cash incentives that are paid thereunder to qualify for a deduction under Section 162(m). The Compensation Committee, however, periodically reviews applicable tax provisions, such as Section 162(m), and may revise compensation plans from time to time to comply with their rules and to maximize deductibility. Also, while the Compensation Committee believes that structuring compensation to be deductible under Section 162(m) generally is desirable, it may decide that foregoing a tax deduction is desirable to otherwise achieve its performance objectives.

~~Accounting Considerations~~

Our Compensation Committee takes accounting considerations into account in designing compensation plans and arrangements for the members of our executive team, other employees and members of our Board of Directors. These accounting considerations includeWe follow Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“ASC 718”), the standard which governs the accounting treatment of stock-based compensation awards.

ASC 718 requires us to measure the compensation expense for all share-based payment awards made to the members of our executive team, other employees and members of our Board of Directors, including options to purchase shares of our common equity securities, based on the grant date “fair value” of these awards. The application of ASC 718 involves significant judgment in the determination of inputs into the Black-Scholes-Merton valuation model that we use to determine the fair value of any options to purchase shares of our common equity securities. These inputs are based on assumptions as to the volatility of the underlying equity securities, risk free interest rates and the expected life of the options. As required by the generally accepted accounting principles in the United States, we review our valuation assumptions at each grant date, and, as a result, our valuation assumptions used to value options granted in future periods may vary from the valuation assumptions we have used previously.

ASC 718 also requires us to recognize the compensation cost of these share-based payment awards in our statements of operations over the period that an executive officer, employee or member of our Board of Directors is required to render service in exchange for the option or other award (which, generally, will correspond to the award's vesting schedule). This calculation is performed for accounting purposes and reported in the compensation tables below, even though our executive officers, employees or members of our Board of Directors may never realize any value from their stock options or other share-based payment awards.

Compensation Risk Assessment

Our Compensation Committee assesses and considers potential risks when reviewing and approving our compensation policies and practices for our executive officers and our employees. We have designed our compensation programs, including

our incentive compensation plans, with features to address potential risks while rewarding employees for achieving financial and strategic objectives through prudent business judgment and appropriate risk taking. Based upon its assessment, the Compensation Committee believes that any risks arising from our compensation programs do not create disproportionate incentives for our employees to take risks that could have a material adverse effect on us in the future.

COMPENSATION COMMITTEE REPORT

Notwithstanding any statement to the contrary in any of our previous or future filings with the Securities and Exchange Commission, this Report of the Compensation Committee of our Board of Directors shall not be deemed “filed” with the Securities and Exchange Commission or “soliciting material” under the 1934 Act, and shall not be incorporated by reference into any such filings.

The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis contained in this Proxy Statement. Based on the Compensation Committee's review of and the discussions with management with respect to the Compensation Discussion and Analysis, the Compensation Committee recommended to the Board of Directors, and the Board of Directors ratified, that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference into our Annual Report on Form 10-K for the fiscal year ended December 31, 2016.

Respectfully submitted by:

THE COMPENSATION COMMITTEE

THOMAS H. WAECHTER (CHAIR)

JOCELYN E. CARTER-MILLER

RALPH E. FAISON

GREGORY J. ROSSMANN

EXECUTIVE COMPENSATION TABLES

Summary Compensation Table

The following Summary Compensation Table sets forth certain information regarding the compensation of our principal executive officer, our principal financial officer, and our three other most highly compensated executive officers for ~~2015~~2016 (our “Named Executive Officers”) for services rendered in all capacities for the years indicated.


Name and Principal Position	Year	Salary		Stock Awards(1) (13)		Option Awards (2) (13)		Non-Equity Incentive Plan Compensation (13)			All Other Compensation			Total		Year	Salary		Stock Awards(1) (3)		Option Awards (2) (3)		Non-Equity Incentive Plan Compensation (3)				All Other Compensation			Total
Patrick C.S. Lo, Chairman and Chief Executive Officer	2015	$	775,000	$	782,000	$	1,084,698	$	267,375	(7)	$	3,000	(6)	$	2,912,073	2016	$	799,616	$	1,185,900	$	1,412,522	$	1,058,000	(4	)	$	3,000	(5)	$	4,459,038
	2014	$	762,404	$	813,000	$	1,199,146	$	—		$	3,000	(5)	$	2,777,550	2015	$	775,000	$	782,000	$	1,084,698	$	267,375			$	3,000		$	2,912,073
	2013	$	732,500	$	964,811	$	1,383,769	$	208,684	(3)	$	3,000	(4)	$	3,292,764	2014	$	762,404	$	813,000	$	1,199,146	$	—			$	3,000		$	2,777,550
Christine M. Gorjanc, Chief Financial Officer	2015	$	489,846	$	375,360	$	324,339	$	220,538	(8)	$	20,783	(9)	$	1,430,866	2016	$	514,539	$	592,950	$	429,898	$	444,046	(4	)	$	3,000	(5)	$	1,984,433
	2014	$	464,885	$	390,240	$	358,470	$	—		$	3,000	(5)	$	1,216,595	2015	$	489,846	$	375,360	$	324,339	$	220,538			$	20,783		$	1,430,866
	2013	$	445,000	$	325,400	$	381,537	$	156,513	(3)	$	3,000	(4)	$	1,311,450	2014	$	464,885	$	390,240	$	358,470	$	—			$	3,000		$	1,216,595
Michael A. Werdann, Senior Vice President of Worldwide Sales	2015	$	342,054	$	484,020	$	194,603	$	297,762	(10)	$	3,000	(6)	$	1,321,439
Michael F. Falcon, Senior Vice President of Worldwide Operations and Support	2015	$	367,385	$	218,960	$	270,282	$	110,268	(11)	$	3,000	(6)	$	969,895	2016	$	385,904	$	395,300	$	307,070	$	222,023	(4	)	$	3,000	(5)	$	1,313,297
	2014	$	347,404	$	227,640	$	298,725	$	—		$	3,000	(5)	$	876,769	2015	$	367,385	$	218,960	$	270,282	$	110,268			$	3,000		$	969,895
	2013	$	330,000	$	227,780	$	317,948	$	88,691	(3)	$	3,000	(4)	$	967,419	2014	$	347,404	$	227,640	$	298,725	$	—			$	3,000		$	876,769
David J. Henry, Senior Vice President of Home Networking																2016	$	354,658	$	582,150	$	307,070	$	245,315	(4	)	$	3,000	(5)	$	1,492,193
Andrew W. Kim, Senior Vice President of Corporate Development, General Counsel and Corporate Secretary	2015	$	357,385	$	218,960	$	270,282	$	107,268	(12)	$	3,000	(6)	$	956,895	2016	$	375,661	$	395,300	$	307,070	$	216,131	(4	)	$	3,000	(5)	$	1,297,162
	2014	$	339,923	$	227,640	$	298,725	$	—		$	3,000	(5)	$	869,288	2015	$	357,385	$	218,960	$	270,282	$	107,268			$	3,000		$	956,895
	2013	$	312,500	$	227,780	$	317,948	$	41,737	(3)	$	3,000	(4)	$	902,965	2014	$	339,923	$	227,640	$	298,725	$	—			$	3,000		$	869,288

~~(f) “Committee” means a committee appointed by the Board.~~

B-24

~~(g) “Common Stock” shall mean the common stock of the Company.~~

~~(h) “Company” shall mean NETGEAR, Inc., a Delaware corporation.~~

~~(i) “Compensation~~” shall mean all base straight time gross earnings, commissions, bonuses, overtime and shift premiums, but exclusive of payments for any other compensation. The Administrator may establish, in its discretion and on a uniform and nondiscriminatory basis, a different definition of Compensation prior to an applicable Offering Date, which definition may vary among Participants who are participating in separate Offering Periods or the Non-423(b) Component of the Plan.

~~(j) “Designated Subsidiary” shall mean any Subsidiary selected by the Administrator as eligible to participate in the Plan.~~

~~(k) “Director” shall mean a member of the Board.~~

~~(l) “Eligible Employee~~” shall mean any individual who is a common law employee of the Company or any Designated Subsidiary and whose customary employment with the Company or Designated Subsidiary is at least twenty (20) hours per week and more than five (5) months in any calendar year except for certain employees of certain Designated Subsidiaries that are participating in the Non-423(b) Component of the Plan that the Administrator may, from time to time, designate as ineligible to participate in the Plan. For purposes of the Plan, the employment relationship shall be treated as continuing intact while the individual is on sick leave or other leave of absence approved by the Company. Where the period of leave exceeds three (3) months and the individual’s right to reemployment is not guaranteed either by statute or by contract, the employment relationship shall be deemed to have terminated three (3) months and one (1) day following the commencement of such leave.

~~(m) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.~~

~~(n) “Exercise Date” shall mean February 15 and August 15 of each year, or the immediately preceding Trading Day if February 15 or August 15 is not a Trading Day.~~

~~(o) “Fair Market Value” shall mean, as of any date, the value of Common Stock determined as follows:~~

(i) If the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq Global Select Market, the Nasdaq Global Market or the Nasdaq Capital Market of the Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system on the date of determination, as reported in The Wall Street Journal or such other source as the Board deems reliable;

(ii) If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, its Fair Market Value shall be the mean of the closing bid and asked prices for the Common Stock on the date of determination, as reported in The Wall Street Journal or such other source as the Board deems reliable; or

~~(iii) In the absence of an established market for the Common Stock, the Fair Market Value thereof shall be determined in good faith by the Board.~~

~~(p) “Offering Date” shall mean the first Trading Day of each Offering Period.~~

~~(q) “Offering Periods~~” shall mean the periods of approximately six (6) months during which an option granted pursuant to the Plan may be exercised, and commencing on the first Trading Day on or after February 16 and August 16 of each year and terminating on the following August 15 and February 15, or the immediately preceding Trading Day if August 15 or February 15 is not a Trading Day. The duration and timing of Offering Periods may be changed pursuant to Section 4 of this Plan.

~~(r) “Parent” shall mean a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code.~~

~~(s) “Plan” shall mean this Employee Stock Purchase Plan, which includes a Code Section 423(b) Plan and a Non-423(b) Component.~~

~~(t) “Purchase Price~~” shall mean 85% of the Fair Market Value of a share of Common Stock on the Offering Date or on the Exercise Date, whichever is lower; provided however, that the Purchase Price may be adjusted by the Administrator pursuant to Section 20.

~~(u) “Subsidiary” shall mean a “subsidiary corporation,” whether now or hereafter existing, as defined in Section 424(f) of the Code.~~

~~(v) “Trading Day” shall mean a day on which national stock exchanges and the Nasdaq System are open for trading.~~

3. ~~Eligibility~~.

~~(a)~~ ~~Offering Periods. Any Eligible Employee on a given Offering Date shall be eligible to participate in the Plan.~~

~~(b) Limitations~~. Any provisions of the Plan to the contrary notwithstanding, no Eligible Employee shall be granted an option under the Plan (i) to the extent that, immediately after the grant, such Eligible Employee (or any other person whose stock would be attributed to such Eligible Employee pursuant to Section 424(d) of the Code) would own capital stock of the Company or any Parent or Subsidiary of the Company and/or hold outstanding options to purchase such stock possessing five percent (5%) or more of the total combined voting power or value of all classes of the capital stock of the Company or of any Parent or Subsidiary of the Company, or (ii) to the extent that his or her rights to purchase stock under all employee stock purchase plans (as defined in Section 423 of the Code) of the Company or any Parent or Subsidiary of the Company accrues at a rate which exceeds Twenty-Five Thousand Dollars ($25,000) worth of stock (determined at the Fair Market Value of the shares at the time such option is granted) for each calendar year in which such option is outstanding at any time, as determined in accordance with Section 423 of the Code and the regulations thereunder.

4. ~~Offering Periods~~. The Plan shall be implemented by consecutive Offering Periods with a new Offering Period commencing on the first Trading Day on or after February 16 and August 16 of each year, or on such other date as the Board shall determine, and continuing thereafter until terminated in accordance with Section 20 hereof. The Administrator shall have the power to change the duration of Offering Periods (including the commencement dates thereof) with respect to future offerings without shareholder approval if such change is announced prior to the scheduled beginning of the first Offering Period to be affected thereafter.

5. ~~Participation. An Eligible Employee may become a participant in the Plan by completing a subscription agreement authorizing payroll deductions in the form of~~ ~~Exhibit A~~ ~~to this Plan and filing it with the Company’s payroll office prior to the applicable Offering Date.~~

~~6. Payroll Deductions~~.

(a) At the time a participant files his or her subscription agreement, he or she shall elect to have payroll deductions made on each pay day during the Offering Period in an amount not exceeding 10% of the Compensation which he or she receives on each pay day during the Offering Period; provided, however, that should a pay day occur on an Exercise Date, a participant shall have the payroll deductions made on such day applied to his or her account under the new Offering Period. A participant’s subscription agreement shall remain in effect for successive Offering Periods unless terminated as provided in Section 10 hereof.

(b) Payroll deductions for a participant shall commence on the first payday following the Offering Date and shall end on the last payday in the Offering Period to which such authorization is applicable, unless sooner terminated by the participant as provided in Section 10 hereof.

(c) All payroll deductions made for a participant shall be credited to his or her account under the Plan and shall be withheld in whole percentages only. A participant may not make any additional payments into such account.

(d) A participant may discontinue his or her participation in the Plan as provided in Section 10 hereof, or may increase or decrease the rate of his or her payroll deductions during the Offering Period by completing or filing with the Company a new subscription agreement authorizing a change in payroll deduction rate. The Administrator may, in its discretion, limit the nature and/or number of participation rate changes during any Offering Period. The change in rate shall be effective with the first full payroll period following five (5) business days after the Company’s receipt of the new subscription agreement unless the Company elects to process a given change in participation more quickly.

(e) Notwithstanding the foregoing, to the extent necessary to comply with Section 423(b)(8) of the Code and Section 3(b) hereof, a participant’s payroll deductions may be decreased to zero percent (0%) at any time during an Offering Period. Payroll deductions shall recommence at the rate originally elected by the participant effective as of the beginning of the first Offering Period which is scheduled to end in the following calendar year, unless terminated by the participant as provided in Section 10 hereof.

(f) At the time the option is exercised, in whole or in part, or at the time some or all of the Company’s Common Stock issued under the Plan is disposed of, the participant must make adequate provision for the Company’s federal, state, or other tax liability payable to any authority, national insurance, social security or other tax withholding obligations, if any, which arise upon the exercise of the option or the disposition of the Common Stock. At any time, the Company or the employing Designated Subsidiary, as applicable, may, but shall not be obligated to, withhold from the participant’s compensation the amount necessary for the Company to meet applicable withholding obligations, including any withholding required to make available to the Company or the employing Designated Subsidiary, as applicable, any tax deductions or benefits attributable to sale or early disposition of Common Stock by the Eligible Employee.

7. ~~Grant of Option~~. On the Offering Date of each Offering Period, each Eligible Employee participating in such Offering Period shall be granted an option to purchase on each Exercise Date during such Offering Period (at the applicable Purchase Price) up to a number of shares of the Company’s Common Stock determined by dividing such Eligible Employee’s payroll deductions accumulated prior to such Exercise Date and retained in the participant’s account as of the Exercise Date by the applicable Purchase Price; provided that in no event shall an Eligible Employee be permitted to purchase during each Offering Period more than 10,000 shares of the Company’s Common Stock (subject to any adjustment pursuant to Section 19), and provided further that such purchase shall be subject to the limitations set forth in Sections 3(b) and 13 hereof. The Eligible Employee may accept the grant of such option by turning in a completed Subscription Agreement (attached hereto as ~~Exhibit A~~) to the Company on or prior to an Offering Date. The Administrator may, for future Offering Periods, increase or decrease, in its absolute discretion, the maximum number of shares of the Company’s Common Stock an Eligible Employee may purchase during each Offering Period. Exercise of the option shall occur as provided in Section 8 hereof, unless the participant has withdrawn pursuant to Section 10 hereof. The option shall expire on the last day of the Offering Period.

8. ~~Exercise of Option~~.

(a) Unless a participant withdraws from the Plan as provided in Section 10 hereof, his or her option for the purchase of shares shall be exercised automatically on the Exercise Date, and the maximum number of full shares subject to the option shall be purchased for such participant at the applicable Purchase Price with the accumulated payroll deductions in his or her account. No fractional shares shall be purchased; any payroll deductions accumulated in a participant’s account which are not sufficient to purchase a full share shall be retained in the participant’s account for the subsequent Offering Period, subject to earlier withdrawal by the participant as provided in Section 10 hereof. Any other funds left over in a participant’s account after the Exercise Date shall be returned to the participant. During a participant’s lifetime, a participant’s option to purchase shares hereunder is exercisable only by him or her.

(b) If the Administrator determines that, on a given Exercise Date, the number of shares with respect to which options are to be exercised may exceed (i) the number of shares of Common Stock that were available for sale under the Plan on the Offering Date of the applicable Offering Period, or (ii) the number of shares available for sale under the Plan on such Exercise Date, the Administrator may in its sole discretion (x) provide that the Company shall make a pro rata allocation of the shares of Common Stock available for purchase on such Offering Date or Exercise Date, as applicable, in as uniform a manner as shall be practicable and as it shall determine in its sole discretion to be equitable among all participants exercising options to purchase Common Stock on such Exercise Date, and continue all Offering Periods then in effect, or (y) provide that the Company shall make a pro rata allocation of the shares available for purchase on such Offering Date or Exercise Date, as applicable, in as uniform a manner as shall be practicable and as it shall determine in its sole discretion to be equitable among all participants exercising options to purchase Common Stock on such Exercise Date, and terminate any or all Offering Periods then in effect pursuant to Section 20 hereof. The Company may make a pro rata allocation of the shares available on the Offering Date of any applicable Offering Period pursuant to the preceding sentence, notwithstanding any authorization of additional shares for issuance under the Plan by the Company’s shareholders subsequent to such Offering Date.

9. ~~Delivery~~. As soon as reasonably practicable after each Exercise Date on which a purchase of shares occurs, the Company shall arrange the delivery to each participant the shares purchased upon exercise of his or her option in a form determined by the Administrator, including by means of electronic notice.

~~10.~~ ~~Withdrawal~~.

(a) A participant may withdraw all but not less than all the payroll deductions credited to his or her account and not yet used to exercise his or her option under the Plan at any time prior to the Exercise Date for an Offering Period by giving written notice to the Company in the form of Exhibit B to this Plan. All of the participant’s payroll deductions credited to his or her account shall be paid to such participant promptly after receipt of notice of withdrawal and such participant’s option for the Offering Period shall be automatically terminated, and no further payroll deductions for the purchase of shares shall be made for such Offering Period. If a participant withdraws from an Offering Period, payroll deductions shall not resume at the beginning of the succeeding Offering Period unless the participant delivers to the Company a new subscription agreement.

(b) A participant’s withdrawal from an Offering Period shall not have any effect upon his or her eligibility to participate in any similar plan which may hereafter be adopted by the Company or in succeeding Offering Periods which commence after the termination of the Offering Period from which the participant withdraws.

~~11.~~ ~~Termination of Employment~~. Upon a participant ceasing to be an Eligible Employee, for any reason, he or she shall be deemed to have elected to withdraw from the Plan and the payroll deductions credited to such participant’s account during the Offering Period but not yet used to purchase shares of Common Stock under the Plan shall be returned to such participant or, in the case of his or her death, to the person or persons entitled thereto under Section 15 hereof, and such participant’s option shall be automatically terminated.

~~12.~~ ~~Interest. No interest shall accrue on the payroll deductions of a participant in the Plan.~~

~~13.~~ ~~Stock~~.

(a) Subject to adjustment upon changes in capitalization of the Company as provided in Section 19 hereof, the maximum number of shares of the Company’s Common Stock which shall be made available for sale under the Plan shall be 2,000,000 shares of Common Stock.

(b) Until the shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), a participant shall only have the rights of an unsecured creditor with respect to such shares, and no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to such shares.

~~(c) Shares of Common Stock to be delivered to a participant under the Plan shall be registered in the name of the participant or in the name of the participant and his or her spouse.~~

~~14.~~ ~~Administration~~. The Administrator shall administer the Plan and shall have full and exclusive discretionary authority to construe, interpret and apply the terms of the Plan, to determine eligibility and to adjudicate all disputed claims filed under the Plan. Every finding, decision and determination made by the Administrator shall, to the full extent permitted by law, be final and binding upon all parties.

~~15.~~ ~~Designation of Beneficiary~~.

(a) A participant may file a written designation of a beneficiary who is to receive any shares and cash, if any, from the participant’s account under the Plan in the event of such participant’s death subsequent to an Exercise Date on which the option is exercised but prior to delivery to such participant of such shares and cash. In addition, a participant may file a written designation of a beneficiary who is to receive any cash from the participant’s account under the Plan in the event of such participant’s death prior to exercise of the option. If a participant is married and the designated beneficiary is not the spouse, spousal consent shall be required for such designation to be effective.

(b) Such designation of beneficiary may be changed by the participant at any time by written notice. In the event of the death of a participant and in the absence of a beneficiary validly designated under the Plan who is living at the time of such participant’s death, the Company shall deliver such shares and/or cash to the executor or administrator of the estate of the participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its discretion, may deliver such shares and/or cash to the spouse or to any one or more dependents or relatives of the participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate.

~~(c) All beneficiary designations shall be in such form and manner as the Administrator may designate from time to time.~~

~~16.~~ ~~Transferability~~. Neither payroll deductions credited to a participant’s account nor any rights with regard to the exercise of an option or to receive shares under the Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of descent and distribution or as provided in Section 15 hereof) by the participant. Any such attempt at assignment, transfer, pledge or other disposition shall be without effect, except that the Company may treat such act as an election to withdraw funds from an Offering Period in accordance with Section 10 hereof.

~~17.~~ ~~Use of Funds~~. All payroll deductions received or held by the Company under the Plan may be used by the Company for any corporate purpose, and the Company shall not be obligated to segregate such payroll deductions. Until shares are issued, participants shall only have the rights of an unsecured creditor.

~~18.~~ ~~Reports~~. Individual accounts shall be maintained for each participant in the Plan. Statements of account shall be given to participating Eligible Employees at least annually, which statements shall set forth the amounts of payroll deductions, the Purchase Price, the number of shares purchased and the remaining cash balance, if any.

~~19.~~ ~~Adjustments Upon Changes in Capitalization, Dissolution, Liquidation or Change of Control~~.

(a) Changes in Capitalization. Subject to any required action by the shareholders of the Company, the maximum number of shares of the Company’s Common Stock which shall be made available for sale under the Plan, the maximum number of shares each participant may purchase each Offering Period (pursuant to Section 7), as well as the price per share and the number of shares of Common Stock covered by each option under the Plan which has not yet been exercised shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other change in the number of shares of Common Stock effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.” Such adjustment shall be made by the Administrator, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to an option.

(b) Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, the Offering Period then in progress shall be shortened by setting a new Exercise Date (the “New Exercise Date”), and shall terminate immediately prior to the consummation of such proposed dissolution or liquidation, unless provided otherwise by the Administrator. The New Exercise Date shall be before the date of the Company’s proposed dissolution or liquidation. The Administrator shall notify each participant in writing, at least ten (10) business days prior to the New Exercise Date, that the Exercise Date for the participant’s option has been changed to the New Exercise Date and that the participant’s option shall be exercised automatically on the New Exercise Date, unless prior to such date the participant has withdrawn from the Offering Period as provided in Section 10 hereof.

(c) Change of Control. In the event of a Change of Control, each outstanding option shall be assumed or an equivalent option substituted by the successor corporation or a Parent or Subsidiary of the successor corporation. In the event that the successor corporation refuses to assume or substitute for the option, any Offering Periods then in progress shall be shortened by setting a New Exercise Date and any Offering Periods then in progress shall end on the New Exercise Date. The New Exercise Date shall occur before the date of the Company’s proposed Change of Control. The Administrator shall notify each participant in writing, at least ten (10) business days prior to the New Exercise Date, that the Exercise Date for the participant’s option has been changed to the New Exercise Date and that the participant’s option shall be exercised automatically on the New Exercise Date, unless prior to such date the participant has withdrawn from the Offering Period as provided in Section 10 hereof.

~~20.~~ ~~Amendment or Termination~~.

(a) The Administrator may at any time and for any reason terminate, amend or suspend the Plan. Except as otherwise provided in the Plan, no such termination can affect options previously granted, provided that an Offering Period may be terminated by the Administrator on any Exercise Date if the Administrator determines that the termination of the Offering Period or the Plan is in the best interests of the Company and its shareholders. Except as provided in Section 19 and this Section 20 hereof, no amendment may make any change in any option theretofore granted which adversely affects the rights of any participant. To the extent necessary to comply with Section 423 of the Code (or any

~~successor rule or provision or any other applicable law, regulation or stock exchange rule), the Company shall obtain shareholder approval in such a manner and to such a degree as required.~~

(b) Without shareholder consent and without regard to whether any participant rights may be considered to have been “adversely affected,” the Administrator shall be entitled to change the Offering Periods, limit the frequency and/or number of changes in the amount withheld during an Offering Period, establish the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars, permit payroll withholding in excess of the amount designated by a participant in order to adjust for delays or mistakes in the Company’s processing of properly completed withholding elections, establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of Common Stock for each participant properly correspond with amounts withheld from the participant’s Compensation, and establish such other limitations or procedures as the Administrator determines in its sole discretion advisable which are consistent with the Plan.

(c) In the event the Administrator determines that the ongoing operation of the Plan may result in unfavorable financial accounting consequences, the Board may, in its discretion and, to the extent necessary or desirable, modify, amend or terminate the Plan to reduce or eliminate such accounting consequence including, but not limited to:

~~(i) increasing the Purchase Price for any Offering Period including an Offering Period underway at the time of the change in Purchase Price;~~

~~(ii) shortening any Offering Period so that the Offering Period ends on a new Exercise Date, including an Offering Period underway at the time of the Board action; and~~

~~(iii) allocating shares.~~

~~Such modifications or amendments shall not require stockholder approval or the consent of any Plan participants.~~

~~21.~~ ~~Notices~~. All notices or other communications by a participant to the Company under or in connection with the Plan shall be deemed to have been duly given when received in the form and manner specified by the Company at the location, or by the person, designated by the Company for the receipt thereof.

~~22.~~ ~~Conditions Upon Issuance of Shares~~. Shares of Common Stock shall not be issued with respect to an option unless the exercise of such option and the issuance and delivery of such shares pursuant thereto shall comply with all applicable provisions of law, domestic or foreign, including, without limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules and regulations promulgated thereunder, and the requirements of any stock exchange upon which the shares may then be listed, and shall be further subject to the approval of counsel for the Company with respect to such compliance.

As a condition to the exercise of an option, the Company may require the person exercising such option to represent and warrant at the time of any such exercise that the shares are being purchased only for investment and without any present intention to sell or distribute such shares if, in the opinion of counsel for the Company, such a representation is required by any of the aforementioned applicable provisions of law.

~~23.~~ ~~Term of Plan~~. The Plan shall become effective upon the earlier to occur of its adoption by the Board of Directors or its approval by the shareholders of the Company. It shall continue in effect until terminated under Section 20 hereof.



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Name	Fees Earned In Cash ($)	Stock Awards ($) (1)	Option Awards ($) (2)	Total ($)	Fees Earned In Cash ($)	Stock Awards ($) (1)	Option Awards ($) (2)	Total ($)
Jocelyn E. Carter-Miller (3)	47,000	199,973	—	246,973	46,000	199,971	—	245,971
Ralph E. Faison (3)	51,000	199,973	—	250,973	46,000	199,971	—	245,971
A. Timothy Godwin ~~(3)~~(4)	44,667	199,973	—	244,640	19,500	—	—	19,500
Jef T. Graham (3)	41,000	199,973	—	240,973	40,000	199,971	—	239,971
Linwood A. Lacy, Jr. (4)	17,500	—	—	17,500
Gregory J. Rossmann (3)	45,000	199,973	—	244,973	43,000	199,971	—	242,971
Barbara V. Scherer (3)	57,333	199,973	—	257,306	60,000	199,971	—	259,971
Julie A. Shimer (3)	62,000	199,973	—	261,973	58,500	199,971	—	258,471
Grady K. Summers (3)					39,000	490,931	—	529,931
Thomas H. Waechter (3)	39,000	199,973	—	238,973	47,000	199,971	—	246,971


Fee Category	2015 Fees		2014 Fees		2016 Fees		2015 Fees
Audit Fees	$	1,713,175	$	1,779,130	$	1,794,075	$	1,713,175
Audit-Related Fees	5,837		7,921		—		5,837
Tax Fees	369,405		324,788		508,119		369,405
All Other Fees	3,600		3,600		3,600		3,600
Total Fees	$	2,092,017	$	2,115,439	$	2,305,794	$	2,092,017


		Option Awards					Stock Awards					Option Awards					Stock Awards
Name	Grant Date	Number of Securities Underlying Unexercised Options (#) Exercisable	Number of Securities Underlying Unexercised Options (#) Unexercisable (1)	Option Exercise Price ($)		Option Expiration Date	Number of Shares or Units of Stock That Have Not Vested (#)		Market Value of Shares or Units of Stock That Have Not Vested ($) (6)		Grant Date	Number of Securities Underlying Unexercised Options (#) Exercisable	Number of Securities Underlying Unexercised Options (#) Unexercisable (1)	Option Exercise Price ($)		Option Expiration Date	Number of Shares or Units of Stock That Have Not Vested (#)		Market Value of Shares or Units of Stock That Have Not Vested ($) (2)
Patrick C.S. Lo	5/23/2006	29,200	—	$	22.68	5/23/2016	—		$	—	1/11/2008	70,500	—	$	28.79	1/11/2018	—		$	—
	1/12/2007	100,000	—	$	29.23	1/12/2017	—		$	—	1/16/2009	90,000	—	$	11.41	1/16/2019	—		$	—
	1/11/2008	100,000	—	$	28.79	1/11/2018	—		$	—	2/2/2010	100,000	—	$	21.10	2/2/2020	—		$	—
	1/16/2009	90,000	—	$	11.41	1/16/2019	—		$	—	6/13/2010	40,000	—	$	20.80	6/13/2020	—		$	—
	2/2/2010	100,000	—	$	21.10	2/2/2020	—		$	—	2/3/2011	100,000	—	$	35.32	2/3/2021	—		$	—
	6/13/2010	40,000	—	$	20.80	6/13/2020	—		$	—	4/26/2011	40,000	—	$	33.15	4/26/2021	—		$	—
	2/3/2011	100,000	—	$	35.32	2/3/2021	—		$	—	6/6/2012	100,000	—	$	31.31	6/6/2022	—		$	—
	4/26/2011	40,000	—	$	33.15	4/26/2021	—		$	—	5/16/2013	97,206	11,304	$	32.54	5/16/2023	7,413	(3)	$	402,897
	6/6/2012	87,500	12,500	$	31.31	6/6/2022	—		$	—	6/3/2014	62,500	37,500	$	32.52	6/3/2024	12,500	(3)	$	679,375
	5/16/2013	70,079	38,431	$	32.54	5/16/2023	14,826	(2)	$	621,358	6/2/2015	37,500	62,500	$	31.28	6/2/2025	18,750	(4)	$	1,019,063
	6/3/2014	37,500	62,500	$	32.52	6/3/2024	18,750	(3)	$	785,813	3/24/2016	—	115,000	$	39.53	3/24/2026	30,000	(4)	$	1,630,500
	6/2/2015	—	100,000	$	31.28	6/2/2025	25,000	(5)	$	1,047,750
Christine M. Gorjanc	1/12/2007	5,000	—	$	29.23	1/12/2017	—		$	—	2/3/2011	10,375	—	$	35.32	2/3/2021	—		$	—
	1/11/2008	13,000	—	$	28.79	1/11/2018	—		$	—
	2/3/2011	25,000	—	$	35.32	2/3/2021	—		$	—
	4/26/2011	6,000	—	$	33.15	4/26/2021	—		$	—
	6/6/2012	21,875	3,125	$	31.31	6/6/2022	—		$	—
	5/16/2013	19,375	10,625	$	32.54	5/16/2023	5,000	(2)	$	209,550
	6/3/2014	11,250	18,750	$	32.52	6/3/2024	9,000	(3)	$	377,190
	6/2/2015	—	30,000	$	31.28	6/2/2025	12,000	(5)	$	502,920
Michael A. Werdann	2/3/2011	9,376	—	$	35.32	2/3/2021	—		$	—
	4/26/2011	300	—	$	33.15	4/26/2021	—		$	—
	5/24/2011	10,000	—	$	38.01	5/24/2021	—		$	—
	6/6/2012	4,063	1,875	$	31.31	6/6/2022	—		$	—
	5/16/2013	4,875	6,375	$	32.54	5/16/2023	2,000	(2)	$	83,820	5/16/2013	2,500	3,125	$	32.54	5/16/2023	2,500	(3)	$	135,875
	6/3/2014	6,750	11,250	$	32.52	6/3/2024	3,750	(3)	$	157,163	6/3/2014	2,500	11,250	$	32.52	6/3/2024	6,000	(3)	$	326,100
	4/21/2015	—	—	$	—	—	11,400	(4)	$	477,774	6/2/2015	2,500	18,750	$	31.28	6/2/2025	9,000	(4)	$	489,150
	6/2/2015	—	18,000	$	31.28	6/2/2025	3,600	(5)	$	150,876	3/24/2016	—	35,000	$	39.53	3/24/2026	15,000	(4)	$	815,250
Michael F. Falcon	2/2/2010	1,459	—	$	21.10	2/2/2020	—		$	—	5/16/2013	—	2,605	$	32.54	5/16/2023	1,750	(3)	$	95,113
	6/13/2010	1,595	—	$	20.80	6/13/2020	—		$	—	6/3/2014	—	9,375	$	32.52	6/3/2024	3,500	(3)	$	190,225
	2/3/2011	20,000	—	$	35.32	2/3/2021	—		$	—	6/2/2015	—	15,625	$	31.28	6/2/2025	5,250	(4)	$	285,338
											3/24/2016	—	25,000	$	39.53	3/24/2026	10,000	(4)	$	543,500
David J. Henry											4/19/2012	525	—	$	33.83	4/19/2022	—		$	—
	4/26/2011	3,400	—	$	33.15	4/26/2021	—		$	—	4/18/2013	613	175	$	27.55	4/18/2023	175	(4)	$	9,511
	6/6/2012	6,642	2,500	$	31.31	6/6/2022	—		$	—	4/22/2014	613	700	$	33.65	4/22/2024	350	(4)	$	19,023
	5/16/2013	9,376	8,855	$	32.54	5/16/2023	3,500	(2)	$	146,685	4/21/2015	—	—	—		—	8,550	(4)	$	464,693
	6/3/2014	9,375	15,625	$	32.52	6/3/2024	5,250	(3)	$	220,028	1/29/2016	—	—	—		—	5,000	(4)	$	271,750
	6/2/2015	—	25,000	$	31.28	6/2/2025	7,000	(5)	$	293,370	3/24/2016	—	25,000	$	39.53	3/34/2026	10,000	(4)	$	543,500
Andrew W. Kim	2/3/2011	15,000	—	$	35.32	2/3/2021	—		$	—	5/16/2013	—	2,605	$	32.54	5/16/2023	1,750	(3)	$	95,113
	4/26/2011	1,597	—	$	33.15	4/26/2021	—		$	—	6/3/2014	—	9,375	$	32.52	6/3/2024	3,500	(3)	$	190,225
	6/6/2012	—	1,875	$	31.31	6/6/2022	—		$	—	6/2/2015	—	15,625	$	31.28	6/2/2025	5,250	(4)	$	285,338
	5/16/2013	16,145	8,855	$	32.54	5/16/2023	3,500	(2)	$	146,685	3/24/2016	—	25,000	$	39.53	3/24/2026	10,000	(4)	$	543,500
	6/3/2014	9,375	15,625	$	32.52	6/3/2024	5,250	(3)	$	220,028
	6/2/2015	—	25,000	$	31.28	6/2/2025	7,000	(5)	$	293,370


1.	To elect nine (9) directors to serve until the next Annual Meeting of Stockholders;


2.	To ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, ~~2016;~~2017;


3.	To approve the non-binding advisory proposal regarding executive compensation;


4.	To approve the ~~adoption~~non-binding advisory proposal regarding the frequency of the ~~NETGEAR, Inc. 2016 Equity Incentive Plan;~~advisory vote on executive compensation;


5.	To approve ~~an amendment~~our board of directors' proposal to ~~the NETGEAR, Inc. 2003 Employee Stock Purchase Plan~~amend our Certificate of Incorporation and Bylaws to ~~increase the number of shares of NETGEAR, Inc. common stock authorized for sale thereunder by 1,000,000 shares; and~~allow stockholders to request special stockholder meetings;


6.	To vote on a proposal submitted by a stockholder regarding special stockholder meetings, if properly presented at the meeting; and


7.	To transact such other business as may properly come before the annual meeting, including any motion to adjourn to a later date to permit further solicitation of proxies, if necessary, or before any adjournment thereof.



	Page
GENERAL INFORMATION	1
Notice Regarding the Availability of Proxy Materials	1
Voting Procedures	1
Methods of Voting	1
Revoking Your Proxy	2
Quorum Requirement	2
Votes Required for Each Proposal	23
Abstentions	3
Broker Non-Votes	3
Proxy Solicitation Costs	34
Deadline for Receipt of Stockholder Proposals or Director Nominations for 2017 Annual Meeting	4
Stockholder Communications to Directors	45
PROPOSAL ONE - ELECTION OF DIRECTORS	56
Nominees	56
Information Concerning the Nominees and Incumbent Directors	56
Vote Required and Board of Directors' Recommendation	78
Board and Committee Meetings	89
Audit Committee	89
Compensation Committee	89
Nominating and Corporate Governance Committee	910
Policy for Director Recommendations and Nominations	910
Corporate Governance Policies and Practices	910
Related Party Transactions	11
Stockholder Engagement	12
Board Leadership Structure	1012
Lead Independent Director	1112
Director Compensation	1113
Risk Management	1113
Fiscal Year ~~2015~~2016 Director Compensation	1214
Director Stock Ownership Guidelines	1214
Compensation Committee Interlocks and Insider Participation	1214
PROPOSAL TWO - RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	1315
Audit and Related Fees	13
~~Vote Required and Board of Directors' Recommendation~~	14
~~PROPOSAL THREE - ADVISORY VOTE ON EXECUTIVE COMPENSATION~~	15
Vote Required and Board of Directors' Recommendation	16
~~PROPOSAL FOUR-APPROVAL~~REPORT OF ~~NETGEAR, INC. 2016 EQUITY INCENTIVE PLAN~~THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS	17
~~General~~	17
~~Considerations of the Board in Making its Recommendation~~	17
~~The 2016 Plan Combines Compensation and Governance Best Practices~~PROPOSAL THREE - ADVISORY VOTE ON EXECUTIVE COMPENSATION	18
~~Section 162(m)~~Vote Required and Board of Directors' Recommendation	18
PROPOSAL FOUR - APPROVAL OF NON-BINDING ADVISORY VOTE ON FREQUENCY OF ADVISORY VOTE ON EXECUTIVE COMPENSATION	19
~~Description of the 2016 Equity Incentive Plan~~	19
~~Summary of U.S. Federal Income Tax Consequences~~	25
~~New Plan Benefits~~	27
Vote Required and Board of Directors' Recommendation	27
~~PROPOSAL FIVE-APPROVAL OF AN AMENDMENT TO THE NETGEAR, INC. 2003 EMPLOYEE STOCK PURCHASE PLAN~~	28
~~Summary of the Purchase Plan~~	28
~~Participation in Purchase Plan Benefits~~	30
~~Certain Federal Income Tax Information~~	3019


~~(1)~~	In January 2016, Grady K. Summers became a fifth member of the Audit Committee. Following Mr. Godwin's retirement as of the 2016 Annual Meeting of Stockholders, the Audit Committee will again consist of four members.


~~(2)~~	~~In June 2015, Mr. Waechter was appointed as a member of the Compensation Committee, replacing retiring director Linwood A. Lacy, Jr.~~


(2)	As of December 31, ~~2015,~~2016, each Director had the following number of options outstanding: Jocelyn E. Carter-Miller, 0; Ralph E. Faison, 0; A. Timothy Godwin, ~~1,800;~~0; Jef T. Graham, ~~0; Linwood A. Lacy, Jr.,~~ 0; Gregory J. Rossmann, 1,800; Barbara V. Scherer, 0; Julie A. Shimer, ~~1,800;~~0; Grady K. Summers, 0; and Thomas H. Waechter, 0.


(3)	On June ~~2, 2015,~~3, 2016, each of these directors was issued ~~6,393~~4,394 restricted stock units, which vest entirely on the date of the ~~2016~~2017 Annual Meeting of Stockholders. Each grant of these restricted stock units had a grant date fair value of ~~$199,973.~~$199,971. There were no stock option awards made to the directors in ~~2015.~~2016.


(4)	~~Linwood~~ A. ~~Lacy, Jr.~~Timothy Godwin did not stand for re-election to the Board of Directors at our ~~2015~~2016 Annual Meeting of Stockholders.



Fiscal Year	Stock Options Granted	Full Value Equity Awards Granted	Total Shares Granted (Adjusted) (1)	Weighted Average Shares Outstanding	Adjusted Burn Rate (2)	Unadjusted Burn Rate (3)
2015	296,000	524,566	1,345,132	33,161,112	4.06%	2.47%
2014	396,718	468,250	1,333,218	35,770,936	3.73%	2.42%
2013	502,560	743,975	1,990,510	38,379,154	5.19%	3.25%



Name of Individual or Group	Option Awards (shares)	Weighted Average Option Exercise Price		Option Awards (1)		Stock Awards (shares)	Stock Awards (2)
Patrick C.S. Lo	100,000	$	31.28	$	1,081,130	25,000	$	782,000
Christine M. Gorjanc	30,000	$	31.28	$	324,339	12,000	$	375,360
Michael A. Werdann	18,000	$	31.28	$	194,603	15,000	$	484,020
Michael F. Falcon	25,000	$	31.28	$	270,283	7,000	$	218,960
Andrew W. Kim	25,000	$	31.28	$	270,283	7,000	$	218,960
Executive officers as a group (10 persons)	271,000	$	31.28	$	2,929,862	103,400	$	3,271,212
Non-executive director group (8 persons)	—	$	—	—		51,144	$	1,599,784
Non-executive officer employee group (657 persons)	25,000	$	31.98	$	275,337	370,022	$	11,997,328



Name of Individual or Group	Number of Shares Purchased	Average Per Share Purchase Price		Fair Market Value at Date of Purchase
Patrick C.S. Lo	752	$	26.89	$	31.63
Christine M. Gorjanc	—	—		—
Michael A. Werdann	—	—		—
Michael F. Falcon	—	—		—
Andrew W. Kim	—	—		—
Executive officers as a group	2,370	$	27.05	$	31.83
Non-executive director group	—	—		—
Non-executive officer employee group	106,921	$	27.32	$	32.14



Name and Address	Number of Shares of Common Stock Beneficially Owned	Number of Shares Underlying Equity Awards Beneficially Owned (8)	Total Shares Beneficially Owned	Percentage of Total Shares Beneficially Owned
5% Stockholders:
FMR LLC (1)	3,310,747	—	3,310,747	10.2	%
BlackRock, Inc. (2)	3,204,068	—	3,204,068	9.9	%
Dimensional Fund Advisors LP (3)	2,526,805	—	2,526,805	7.8	%
The Vanguard Group, Inc. (4)	2,301,843	—	2,301,843	7.1	%
LSV Asset Management (5)	1,708,191	—	1,708,191	5.3	%
Executive Officers and Directors:
Patrick C.S. Lo (6)	345,732	801,627	1,147,359	3.4	%
Christine M. Gorjanc	37,600	120,354	157,954	*
Michael A. Werdann	10,596	49,026	59,622	*
Michael F. Falcon	11,829	67,139	78,968	*
Andrew W. Kim	—	56,888	56,888	*
Jocelyn E. Carter-Miller	3,939	—	3,939	*
Ralph E. Faison	18,150	—	18,150	*
A. Timothy Godwin (7)	54,965	—	54,965	*
Jef T. Graham	14,483	—	14,483	*
Gregory J. Rossmann	24,550	1,800	26,350	*
Barbara V. Scherer	11,249	—	11,249	*
Julie A. Shimer	18,150	1,800	19,950	*
Grady K. Summers	—	—	—	—
Thomas H. Waechter	966	—	966	*

All current directors and executive officers as a group (19 persons)	559,956	1,255,619	1,815,575	5.4	%


(1)	The amounts reported in this column represent the aggregate value of the stock awards granted to the Named Executive Officers during 2016, 2015 ~~2014~~ and ~~2013,~~2014, based upon their grant date fair value, as determined in accordance with the share-based payment accounting guidance under ASC 718. As required, the amounts shown exclude the impact of estimated forfeitures.


(4)	~~Consists of matching contributions~~Represents bonus amount earned under ~~our 401(k)~~the Company's 2016 executive bonus plan ~~that were earned in 2013~~ and paid in February ~~2014.~~2017.


(5)	Consists of matching contributions under our 401(k) plan that were earned in ~~2014~~2016 and paid in February ~~2015.~~


~~(6)~~	~~Consists of matching contributions under our 401(k) plan that were earned in 2015 and paid in February 2016.~~


~~(7)~~	~~Represents bonus amount earned under the Company's 2015 executive bonus plan and paid in February 2016.~~


~~(8)~~	Includes a $110,269 bonus payment earned under the Company's 2015 executive bonus plan and a $110,269 discretionary bonus payment awarded by the board of directors for 2015 service. Both of these payments were made in February 2016.


~~(9)~~	Represents $17,783 of bonus payment earned by Ms. Gorjanc in 2015 due to length of tenure with the Company in addition to $3,000 of matching contributions under our 401(k) plan that were earned in 2015 and paid in February 2016.


~~(10)~~	~~Represents payments earned under Mr. Werdann's 2015 annual sales commission plan.~~


~~(11)~~	Includes a $55,134 bonus payment earned under the Company's 2015 executive bonus plan and a $55,134 discretionary bonus payment awarded by the board of directors for 2015 service. Both of these payments were made in February 2016.


~~(12)~~	Includes a $53,634 bonus payment earned under the Company's 2015 executive bonus plan and a $53,634 discretionary bonus payment awarded by the board of directors for 2015 service. Both of these payments were made in February 2016.


~~(13)~~	~~The amounts set forth in these columns are subject to clawback provisions.~~2017.


		Estimated Future Payouts Under Non-Equity Incentive Plan Awards						All Other Stock Awards: Number of Shares of Stock (#)	All Other Option Awards: Number of Securities Underlying Options (#)	Exercise or Base Price of Option Awards ($/Sh)		Grant Date Fair Value of Stock and Option Awards (3)			Estimated Future Payouts Under Non-Equity Incentive Plan Awards						All Other Stock Awards: Number of Shares of Stock (#)	All Other Option Awards: Number of Securities Underlying Options (#)	Exercise or Base Price of Option Awards ($/Share)		Grant Date Fair Value of Stock and Option Awards (1)
Name	Grant Date	Threshold ($)		Target ($)		Maximum ($)		All Other Stock Awards: Number of Shares of Stock (#)		Exercise or Base Price of Option Awards ($/Sh)		Grant Date Fair Value of Stock and Option Awards (3)		Grant Date	Threshold ($)		Target ($)		Maximum ($)		All Other Stock Awards: Number of Shares of Stock (#)		Exercise or Base Price of Option Awards ($/Share)		Grant Date Fair Value of Stock and Option Awards (1)
Patrick C.S. Lo	2/13/2015 (1)							—	752	$	26.89	$	3,568	3/24/2016 (2)	$	—	$	920,000	$	1,380,000
	3/25/2015 (2)	$	—	$	891,250	$	1,336,875							3/24/2016 (3)							—	115,000	$	39.53	$	1,412,522
	6/2/2015 (4)							—	100,000	$	31.28	$	1,081,130	3/24/2016 (4)							30,000	—	$	—	$	1,185,900
	6/2/2015 (5)							25,000	—	$	—	$	782,000
Christine M. Gorjanc	3/25/2015 (2)	$	—	$	367,500	$	551,250							3/24/2016 (2)	$	—	$	386,250	$	579,375
	6/2/2015 (4)							—	30,000	$	31.28	$	324,339
	6/2/2015 (5)							12,000	—	$	—	$	375,360
Michael A. Werdann	1/1/2015 (6)			$	228,359	$	1,142,082	—	—	$	—	$	—
	4/21/2015 (5)							11,400	—	$	—	$	371,412
	6/2/2015 (4)							—	18,000	$	31.28	$	194,603	3/24/2016 (3)							—	35,000	$	39.53	$	429,898
	6/2/2015 (5)							3,600	—	$	—	$	112,608	3/24/2016 (4)							15,000	—	$	—	$	592,950
Michael F. Falcon	3/25/2015 (2)	$	—	$	183,750	$	275,625							3/24/2016 (2)	$	—	$	193,125	$	289,688
	6/2/2015 (4)							—	25,000	$	31.28	$	270,283	3/24/2016 (3)							—	25,000	$	39.53	$	307,070
	6/2/2015 (5)							7,000	—	$	—	$	218,960	3/24/2016 (4)							10,000	—	$	—	$	395,300
David J. Henry														1/29/2016 (4)							5,000	—	$	—	$	186,850
														3/24/2016 (2)	$	—	$	213,450	$	320,175
														3/24/2016 (3)							—	25,000	$	39.53	$	307,070
														3/24/2016 (4)							10,000	—	$	—	$	395,300
Andrew W. Kim	3/25/2015 (2)	$	—	$	178,750	$	268,125							3/24/2016 (2)	$	—	$	188,000	$	282,000
	6/2/2015 (4)							—	25,000	$	31.28	$	270,283	3/24/2016 (3)							—	25,000	$	39.53	$	307,070
	6/2/2015 (5)							7,000	—	$	—	$	218,960	3/24/2016 (4)							10,000	—	$	—	$	395,300


~~(4)~~	25% of the shares subject to these options will vest twelve months after the grant date, and 1/48 of the total shares subject to these options shall vest each month thereafter, subject to the optionee continuing to be a service provider through such dates.