UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.     )

 

 

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Synaptics Incorporated

(Name of Registrant as Specified In Its Charter)

 

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LOGOLOGO

 

 

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

October 30, 201829, 2019

The Annual Meeting of Stockholders of Synaptics Incorporated, a Delaware corporation, will be held at 9:00 a.m., Pacific time, on Tuesday, October 30, 2018,29, 2019, via live interactive webcast on the Internet at www.virtualshareholdermeeting.com/syna2018syna2019 for the following purposes:

1.            To elect threetwo directors, each to serve for a three-year term expiring in 2021.2022.

2.            To approve, on anon-binding advisory basis, the compensation of our named executive officers for fiscal 20182019(“say-on-pay”).

3.            To ratify the appointment of KPMG LLP, an independent registered public accounting firm, as the independent auditor of our company for the fiscal year ending June 29, 2019.27, 2020.

4.            To approve an amendment toour 2019 Equity and Incentive Compensation Plan, which will replace our Amended and Restated 2010 Incentive Compensation Plan which (i) provides for an increase of 1,700,000 shares of the Company’s common stock authorized for issuance thereunder, and (ii) expressly prohibits the payout of dividends and dividend equivalents on equity awards until the underlying award has been earned or becomes vested.all new awards.

5.            To approve our 2019 Employee Stock Purchase Plan, which will replace our Amended and Restated 2010 Employee Stock Purchase Plan which provides for an increase of 100,000 shares of the Company’s common stock authorized for issuance thereunder.all new awards.

6.            To transact such other business as may properly come before the meeting or any adjournment or postponement thereof.

The foregoing items of business are more fully described in the proxy statement accompanying this notice.

Only stockholders of record at the close of business on September 4, 2018,3, 2019, are entitled to notice of and to vote at the meeting or any adjournment or postponement thereof.

All stockholders are cordially invited to attend the meeting and vote their shares electronically during the meeting via the Internet. To assure your representation at the meeting, however, you are urged to vote by proxy as soon as possible over the Internet as instructed in the Notice of Internet Availability of Proxy Materials or, if you receive paper copies of the proxy materials by mail, you can also vote by telephone or by mail by following the instructions on the proxy card. You may vote your shares electronically during the virtual meeting even if you have previously returned a proxy.

 

  

Sincerely,

  LOGOLOGO
San Jose, California  Richard A. BergmanMichael Hurlston
September 17, 201810, 2019  President and Chief Executive Officer

TABLE OF CONTENTS

 

PROXY STATEMENT

   3 

VOTING AND OTHER MATTERS

   3 

PROPOSAL ONE: ELECTION OF DIRECTORS

   6 

CORPORATE GOVERNANCE

   910 

COMPENSATION DISCUSSION AND ANALYSIS

   1214 

COMPENSATION COMMITTEE REPORT

   2831 

EXECUTIVE COMPENSATION

   2932 

SUMMARY COMPENSATION TABLE

   2932 

GRANTS OF PLAN-BASED AWARDS

   3134 

OUTSTANDING EQUITY AWARDS AT FISCALYEAR-END

   3336 

OPTION EXERCISES AND STOCK VESTING

   3639 

PAY RATIO

   3639 

DIRECTOR COMPENSATION

   4043 

REPORT OF THE AUDIT COMMITTEE

   41

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

4244 

SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS, DIRECTORS, AND OFFICERS

   4245 

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

   4447 

PROPOSAL TWO: ADVISORY VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION(“SAY-ON-(“SAY-ON-PAY”) PAY”)

   4548 

PROPOSAL THREE: RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITOR

   4649 

PROPOSAL FOUR: APPROVAL OF THE AMENDED2019 EQUITY AND RESTATED 2010 INCENTIVE COMPENSATION PLAN

   4850 

PROPOSAL FIVE: APPROVAL OF THE AMENDED AND RESTATED 20102019 EMPLOYEE STOCK PURCHASE PLAN

   5759 

DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS

   6263 

OTHER MATTERS

   6263 

APPENDIX A:NON-GAAP FINANCIAL INFORMATION

   A-1 

APPENDIX B: AMENDED2019 EQUITY AND RESTATED 2010 INCENTIVE COMPENSATION PLAN

   B-1 

APPENDIX C: AMENDED AND RESTATED 20102019 EMPLOYEE STOCK PURCHASE PLAN

   C-1 

.LOGOLOGO

SYNAPTICS INCORPORATED

1251 McKay Drive

San Jose, CA95131-1709

 

 

PROXY STATEMENT

 

 

VOTING AND OTHER MATTERS

General

The accompanying proxy is solicited on behalf of Synaptics Incorporated, a Delaware corporation, by our Board of Directors for use at our Annual Meeting of Stockholders to be held on Tuesday, October 30, 2018,29, 2019, at 9:00 a.m., Pacific time, or at any adjournment or postponement thereof, for the purposes set forth in this proxy statement and in the accompanying meeting notice. The meeting will be held via live interactive webcast on the Internet. You will be able to attend, vote and submit your questions during the meeting at www.virtualshareholdermeeting.com/syna2018.syna2019.

In accordance with rules adopted by the Securities and Exchange Commission, or the SEC, that allow companies to furnish their proxy materials over the Internet, we are mailing a Notice of Internet Availability of Proxy Materials instead of a paper copy of our proxy statement and our 20182019 Annual Report to most of our stockholders. The Notice of Internet Availability of Proxy Materials contains instructions on how to access those documents and vote over the Internet. The Notice of Internet Availability of Proxy Materials also contains instructions on how to request a paper copy of our proxy materials, including our proxy statement, our 20182019 Annual Report, and a form of proxy card. We believe this process will allowallows us to provide our stockholders with the information they need in a more timely manner, while reducing the environmental impact and lowering our costs of printing and delivering the proxy materials.

These proxy solicitation materials were first released on or about September 17, 2018,10, 2019, to all stockholders entitled to vote at the meeting.

Record Date and Outstanding Shares

Stockholders of record at the close of business on September 4, 2018,3, 2019, which we have set as the record date, are entitled to notice of and to vote at the meeting. On the record date, there were 34,881,57032,917,638 outstanding shares of our common stock, par value $0.001 per share. Each stockholder voting at the meeting, either via online attendance or by proxy, may cast one vote per share of common stock held on all matters to be voted on at the meeting.

Quorum

The presence, via online attendance or by proxy, of the holders of a majority of the total number of shares of common stock outstanding and entitled to vote constitutes a quorum for the transaction of business at the meeting. Each stockholder voting at the meeting, either via online attendance or by proxy, may cast one vote per share of common stock held on all matters to be voted on at the meeting.

Required Votes

Assuming that a quorum is present, the affirmative vote of a majority of the votes cast is required for the election of the threetwo director nominees for three-year terms expiring in 2021,2022, to ratify the appointment of KPMG LLP, an independent registered public accounting firm, as the independent auditor of our company for the fiscal year ending June 29, 2019,27, 2020, to approve the Amended2019 Equity and Restated 2010 Incentive Compensation Plan, and to approve the Amended and Restated 20102019 Employee Stock Purchase Plan. The advisory vote on the compensation of our named executive officers for fiscal 20182019(“say-on-pay”) isnon-binding, but our Board of Directors will consider the input of stockholders based on a majority of votes cast for thesay-on-pay proposal.

Our Board of Directors recommends that you vote “for” the threetwo director nominees named herein, and in favor of“for” each of the other proposals.

Voting of Proxies

When a proxy is properly executed and returned, the shares it represents will be voted at the meeting as directed. If no specification is indicated, the shares will be voted (1) “for” the election of each of the nominees for director set forth in this proxy statement, (2) “for” the advisory approval of the compensation of our named executive officers for fiscal 2018,2019, (3) “for” the proposal to ratify the appointment of KPMG LLP, an independent registered public accounting firm, as the independent auditor of our company for the fiscal year ending June 29, 2019,27, 2020, (4) “for” the proposal to amendapprove the Amended2019 Equity and Restated 2010 Incentive Compensation Plan, (5) “for” the approval ofproposal to approve the Amended and Restated 20102019 Employee Stock Purchase Plan, and (6) as the persons specified in the proxy deem advisable on such other matters as may come before the meeting.

BrokerNon-Votes and Abstentions

Brokers, banks, or other nominees that hold shares of common stock in “street name” for a beneficial owner of those shares typically have the authority to vote in their discretion if permitted by the stock exchange or other organization of which they are members. Brokers, banks, and other nominees are permitted to vote the beneficial owner’s proxy in their own discretion as to certain “routine” proposals, such as the ratification of the appointment of KPMG LLP as the independent auditor of our company for the fiscal year ending June 29, 2019,27, 2020, when they have not received instructions from the beneficial owner. If a broker, bank, or other nominee votes such “uninstructed” shares for or against a “routine” proposal, those shares will be counted towards determining whether or not a quorum is present and are considered entitled to vote on the “routine” proposals. However, when a proposal is“non-routine,” a broker, bank, or other nominee is not permitted to exercise its voting discretion on that proposal without specific instructions from the beneficial owner. Thesenon-voted shares are referred to as “brokernon-votes” when the nominee has voted on othernon-routine matters with authorization or voted on routine matters. These shares will be counted towards determining whether or not a quorum is present but will not be counted for purposes of determining the votes received on the“non-routine” proposals.

Please note that brokers, banks, or other nominees may not use discretionary authority to vote shares on the election of directors, thesay-on-pay, the approval of the Amended2019 Equity and Restated 2010 Incentive Compensation Plan, or the approval of the Amended and Restated 20102019 Employee Stock Purchase Plan proposals if they have not received specific instructions from their clients. For your vote to be counted in the above, you will need to communicate your voting decisions to your broker, bank, or other nominee before the date of the meeting.

As provided in our bylaws, a majority of the votes cast means that the number of votes cast “for” a proposal exceeds the number of votes cast “against” that proposal. Because abstentions and brokernon-votes do not represent votes cast “for” or “against” a proposal, brokernon-votes and abstentions will have no effect on the proposal to elect directors, thesay-on-pay proposal, the proposal to ratify the appointment of KPMG LLP as the independent auditor of our company for the fiscal year ending June 29, 2019,27, 2020, the proposal to approve the Amended2019 Equity and Restated 2010 Incentive Compensation Plan, or the proposal to approve the Amended and Restated 20102019 Employee Stock Purchase Plan, as each such proposal is determined by reference to the votes actually cast by the shares present or represented by proxy and entitled to vote.

In accordance with our policy, anAn incumbent candidate for director who does not receive the required votes forre-election is expected to tender their resignation to our Board of Directors. Our Board of Directors, or another duly authorized committee of our Board of Directors, will make a determination as to whether to accept or reject the tendered resignation generally within 90 days after certification of the election results of the stockholder vote. If applicable, we will publicly disclose the decision regarding any tendered resignation and the rationale behind the decision in a filing of a Current Report on Form8-K with the SEC.

Revocability of Proxies

Any stockholder giving a proxy may revoke the proxy at any time before its use by furnishing to us either a written notice of revocation or a duly executed proxy bearing a later date, or by attending the meeting via the Internet at www.virtualshareholdermeeting.com/syna2018syna2019 and voting electronically during the live webcast of the meeting. Attendance at the meeting will not cause your previously granted proxy to be revoked unless you specifically so request.

Election Inspector

Votes cast by proxy or by voting electronically during the live webcast of the meeting will be tabulated by the election inspector appointed for the meeting, who will determine whether a quorum is present. The election inspector will treat brokernon-votes and abstentions as shares that are present and entitled to vote for purposes of determining the presence of a quorum, and as described in the “BrokerNon-Votes and Abstentions” section of this proxy statement for purposes of determining the approval of any matter submitted to stockholders for a vote.

Solicitation

We will bear the cost of this solicitation. In addition, we may reimburse brokerage firms and other persons representing beneficial owners of shares for expenses incurred in forwarding solicitation materials to such beneficial owners. Proxies also may be solicited by certain of our directors and officers, personally or by telephone ore-mail, without additional compensation.

Annual Report and Other Matters

Our 20182019 Annual Report, to Stockholders, which was made available to stockholders with or preceding this proxy statement, contains financial and other information about our company, but is not incorporated into this proxy statement and is not to be considered a part of these proxy materials or subject to Regulations 14A or 14C, or to the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended, or the Exchange Act. The information contained in the “Compensation Committee Report” and the “Report of the Audit Committee” shall not be deemed “filed” with the SEC or subject to Regulations 14A or 14C, or to the liabilities of Section 18 of the Exchange Act.

Through our website,www.synaptics.com, we make available free of charge all of our SEC filings, including our proxy statements, our annual reports on Form10-K, our quarterly reports on Form10-Q, and our current reports on Form8-K, as well as Form 3, Form 4, and Form 5 reports of our directors, officers, and principal stockholders, together with amendments to these reports filed or furnished pursuant to Sections 13(a), 15(d), or 16 of the Exchange Act.We will also provide, upon written request, without charge to each stockholder of record as of the record date, a copy of our Annual Report on Form10-K for the fiscal year ended June 30, 2018, 29, 2019, as filed with the SEC.Any exhibits listed in the Form10-K report also will be furnished upon request at the actual expense we incur in furnishing such exhibits. Any such requests should be directed to our corporate secretary at our executive offices set forth in this proxy statement.

As permitted by the SEC, only one copy of the Notice of Internet Availability of Proxy Materials or the proxy materials is being delivered to stockholders residing at the same address unless such stockholders have notified us of their desire to receive multiple copies of the Notice of Internet Availability of Proxy Materials or the proxy materials. We will promptly deliver, upon written or oral request, a separate copy of the Notice of Internet Availability of Proxy Materials or the proxy materials to any stockholder residing at an address to which only one copy was mailed. Requests for additional copies should be directed to Synaptics Incorporated, 1251 McKay Drive, San Jose, California 95131-1709, Attention: Corporate Secretary, Telephone: (408)904-1100. Stockholders residing at the same address and currently receiving only one copy of the Notice of Internet Availability of Proxy Materials or the proxy materials may contact our Corporate Secretary at the address above to request multiple copies of the Notice of Internet Availability of Proxy Materials or the proxy materials in the future. Stockholders residing at the same address and currently receiving multiple copies of the Notice of Internet Availability of Proxy Materials or the proxy materials may contact the Corporate Secretary at the address above to request that only a single copy of the Notice of Internet Availability of Proxy Materials or the proxy materials be mailed to them in the future.

Our fiscal year is the52- or53-week period ending on the last Saturday in June. The fiscal periods presented in this proxy statement were the52-week periods for the fiscal years ended June 29, 2019, or fiscal 2019, and June 24, 2017, or fiscal 2017, and the53-week period for the fiscal year ended June 30, 2018, or fiscal 2018 and the52-week periods for the fiscal years ended June 24, 2017, or fiscal 2017, and June 25, 2016, or fiscal 2016.2018. Our principal executive offices are located at 1251 McKay Drive, San Jose, California95131-1709.

PROPOSAL ONE: ELECTION OF DIRECTORS

Nominees

Our Certificate of Incorporation and bylaws provide that the number of directors shall be fixed from time to time by resolution of our Board of Directors. Our Board of Directors has currently fixed the number of directors at eight.nine. The directors are divided into three classes, with one class standing for election each year for a three-year term. Our Board of Directors has nominated Jeffrey D. Buchanan, Keith B. Geeslin,Kiva A. Allgood and James L. WhimsMichael E. Hurlston for election as class 12 directors for three-year terms expiring in 20212022 or until their successors have been elected and qualified. Russell J. Knittel, a current class 2 director of Synaptics Incorporated, has decided to retire as our director and will not stand forre-election at our 2019 Annual Meeting of Stockholders. Mr. Knittel will serve out his remaining term as a director, which expires immediately prior to our 2019 Annual Meeting of Stockholders. Our Board has not nominated an additional director to fill Mr. Knittel’s seat at the 2019 Annual Meeting of Stockholders, and as such, there is expected to be one class 2 director vacancy on the Board following our 2019 Annual Meeting of Stockholders. Pursuant to our bylaws, the Board has the authority to fill that vacancy in the future.

Unless otherwise instructed, the proxy holders will vote the proxies received by them “for” the nominees named above. Messrs. Buchanan, GeeslinMs. Allgood and WhimsMr. Hurlston are currently directors of our company. In the event that Messrs. Buchanan, GeeslinMs. Allgood or Whims areMr. Hurlston is unable or declinedeclines to serve as directorsa director at the time of the meeting, the proxies will be voted for any nomineesnominee designated by our current Board of Directors to fill the vacancies.such vacancy. At this time, it is not expected that Messrs. Buchanan, GeeslinMs. Allgood and WhimsMr. Hurlston will be unable or will decline to serve as directors. In accordance with SEC rules, proxies cannot be voted for a greater number of persons than the number of nominees named in this proxy statement.

Our Board of Directors recommends a vote“for”the nominees named herein.

The following table sets forth certain information regarding our directors and the nominees for director:

 

Name

  Age  

Position

  Term Expires  Age  

Position

  Class  Term Expires

Nelson C. Chan

  57  

Executive Chairman of the Board

  3  2020

Kiva A. Allgood

  47  

Director

  2  2019

Jeffrey D. Buchanan

  62  

Director

  1  2021

Keith B. Geeslin

  65  

Director

  1  2021

Michael E. Hurlston

  52  

Director

  2  2019

Russell J. Knittel

  68  

Director

  2  2019

Francis F. Lee

  66  

Chairman of the Board

  2020  66  

Director

  3  2020

Richard A. Bergman

  54  

President, Chief Executive Officer, and Director

  2019

Jeffrey D. Buchanan

  62  

Director

  2018

Nelson C. Chan

  57  

Director

  2020

Keith B. Geeslin

  65  

Director

  2018

Russell J. Knittel

  68  

Director

  2019

Richard L. Sanquini

  83  

Director

  2020  83  

Director

  3  2020

James L. Whims

  63  

Director

  2018  63  

Director

  1  2021

Francis F. LeeNelson C. Chanhas been the Executive Chairman of theour Board of Directors of our company since October 2008March 2019 and a director of our company since December 1998.February 2007. Mr. LeeChan served as the Chairman of our Board of Directors from October 2018 to March 2019. From December 2006 until August 2008, Mr. Chan served as the Chief Executive Officer of our company from December 1998 until July 2009Magellan Corporation, a leader in the consumer, survey, GIS, and OEM GPS navigation and positioning markets. From 1992 through 2006, Mr. Chan served in various senior management positions with SanDisk Corporation, a global leader in flash memory cards, including as Executive Vice President of our company from December 1998 to July 2008. Mr. Lee was a consultant from August 1998 to November 1998. From May 1995 until July 1998, Mr. Lee served asand General Manager, of NSM, a Hong Kong-based joint venture between National Semiconductor Corporation and S. Megga.Consumer Business. From 1983 to 1992, Mr. LeeChan held a variety of executive positions for National Semiconductor from 1988 until August 1995. These positions included Vice President of Communication and Computing Group, Vice President of Quality and Reliability, Director of Standard Logic Business Unit, and various other operationsmarketing and engineering management positions.positions at Chips and Technologies, Signetics, and Delco Electronics. Mr. LeeChan is Chairman of the Board of Directors, Chair of the Compensation Committee, member of the Audit Committee and member of the Nominating and Corporate Governance Committee of Adesto Technologies, a NASDAQ Global Select Market-listed company, which develops innovative,low-power memory solutions, a member of the Board of Directors and a member of the Audit Committee of Deckers Outdoor Corporation, an NYSE-listed company, which is a footwear, apparel and accessories designer and distributor, and a member of the Board of Directors of Adesto Technologies,Twist Bioscience, a NASDAQ Global SelectMarket-listed company, which develops innovative,low-power memory solutions.manufactures synthetic DNA. Mr. LeeChan was a member of the Board of Directors, Chair of the Compensation Committee and member of the Nominating and Corporate Governance committee of Socket Mobile, a NASDAQ Global Select Market-listed company, a member of the Board of Directors of Silicon Laboratories, Inc., a NASDAQ Global Select Market-listed company, from 2007 to 2010, a member of the Board of Directors, Chairman of the Audit Committee and member of the Compensation Committee of Affymetrix, from 2010 to 2016, prior to its acquisition by Thermo Fisher, and a member of the Board of Directors from July 2011 to September 2016 and Chairman of the Board of Directors from June 2013 to September 2016 of Outerwall, a NASDAQ Global Select Market-listed company, prior to its acquisition by Apollo Global Management, a private equity firm. Mr. Chan also currently serves on the Boards of Directors of several private companies. Mr. Chan holds a Bachelor of Science degree with honors, in Electrical and Computer Engineering from the University of California at Davis.Santa Barbara and a Master’s degree in Business Administration from Santa Clara University. We

believe that Mr. Lee’s service for more than 10 yearsChan’s experience as ourthe Chief Executive Officer gives him invaluable insights into our business, our culture, our personnel, our opportunities,of Magellan, his senior management positions with other leading companies, and our challenges and provideshis service as a director of multiple companies provide the requisite qualifications, skills, perspectives, and experiences that make him well qualified to serve on our Board of Directors.

RichardKiva A. BergmanAllgoodhas been President, Chief Executive Officer, and a director of our company since September 2011. Prior to joining ourMay 2019. Ms. Allgood has been the Global Business Unit Head of IOT and Automotive for Telefonaktiebolaget LM Ericsson, a Nasdaq-listed company Mr. Bergman was Senior Vice President and General Managerthat is a global provider of Product Group at Advanced Micro Devices, Inc. or AMD, a New York Stock Exchange-listed global semiconductor company, from May 2009 to September 2011. From October 2006 to May 2009, Mr. Bergmancommunications technology, since April 2019. Ms. Allgood served as Senior Vice Presidentthe Chief Commercial Development Officer for GE Ventures, a Corporate Venture Company, from August 2017 to April 2019 and General Manageras Managing Director for Innovation Group of AMD’s Graphics Product Group. Mr. Bergman’s career at AMD began in October 2006 when AMD acquired ATI Technologies, or ATI, where heGE Corporate from November 2016 to August 2017. From June 2012 to November 2016, Ms. Allgood served as Senior Vice President, Qualcomm Intelligent Solutions, IoT and General ManagerSmart Cities, at Qualcomm Incorporated, a NASDAQ Global Select Market-listed company that is a global provider of PC Group. Prior to ATI, Mr. Bergmanfoundational technologies and products used in mobile devices and other wireless products. Earlier in her career, Ms. Allgood served as Chief Operating Officer at S3 Graphics, a division of SonicBlue Inc. Mr. Bergman has held senior level management positionsin senior-level operational roles including sales, marketing, and business development in the technology field since his early roles at Texas Instruments, Inc. and IBM. Mr. Bergman is a member of the Board of Directors, Chairman of the Compensation Committee, and a member of the Audit Committee of Maxwell Technologies, a developer and manufacturer of energy storage and power delivery solutions. Mr. Bergmanindustry. Ms. Allgood holds a Bachelor of Science degree in Electrical Engineering from the Universityand Master of Michigan and a Master’s degree in Business Administration degree, both from the University of Colorado.Northwestern University. We believe Mr. Bergman’s position as Chief Executive Officer of our company, his intimatethat Ms. Allgood’s senior management positions with other leading companies, her career at a leading venture capital firm with a focus on investments in high-technology companies, her engineering background, and her knowledge and experience with all aspectsin the Internet of the opportunities, operations,Things and challenges of our company, and his successful career at major companies before joining our companyautomotive technology sectors, provide the requisite qualifications, skills, perspectives, and experiences that make himher well qualified to serve on our Board of Directors.

Jeffrey D. Buchananhas been a director of our company since September 2005. Mr. Buchanan has been the Executive Vice President, Chief Financial Officer, and Treasurer of American Outdoor Brands Corporation, a NASDAQ Global Select Market-listed company that is aU.S.-based leader in firearm manufacturing and design, since January 2011. Mr. Buchanan became the Chief Administrative Officer of American Outdoor Brands Corporation in May 2015. Mr. Buchanan also served as Secretary of American Outdoor Brands Corporation from January 2011 until April 2012, and as a member of the Board of Directors and as the Chairman of the Audit Committee of American Outdoor Brands Corporation from November 2004 until December 2010. He was Of Counsel to the law firm of Ballard Spahr LLP from May 2010 until December 2010. Mr. Buchanan served as a Senior Managing Director of CKS Securities, LLC, a registeredbroker-dealer, from August 2009 until May 2010 and as a Senior Managing Director of Alare Capital Securities, L.L.C., a registeredbroker-dealer, from November 2006 until July 2009. From 2005 to 2006, Mr. Buchanan was principal of Echo Advisors, Inc., a corporate consulting and advisory firm focusing on mergers, acquisitions, and strategic planning. Mr. Buchanan served in various positions for Three-Five Systems, Inc., a publicly traded electronic manufacturing services company, including as Executive Vice President, Chief Financial Officer, and Treasurer, from May 1996 until February 2005. Mr. Buchanan was a business attorney for the law firm of O’Connor, Cavanagh, Anderson, Killingsworth & Beshears from 1986 until 1996 and for the law firm of Davis Wright Tremaine LLP from 1984 until 1986. He was a senior staff person at Deloitte & Touche LLP from 1982 to 1984. Mr. Buchanan holds a Bachelor of Science degree in Accounting from Arizona State University, a Juris Doctor degree from the University of Arizona, and a Master of Laws degree in Tax from the University of Florida. We believe Mr. Buchanan’s legal, accounting, and investment banking background, his roles as the chief financial officer and treasurer of public companies, and his public company board service provide the requisite qualifications, skills, perspectives, and experiences that make him well qualified to serve on our Board of Directors.

Nelson C. Chanhas been a director of our company since February 2007. From December 2006 until August 2008, Mr. Chan served as the Chief Executive Officer of Magellan Corporation, a leader in the consumer, survey, GIS, and OEM GPS navigation and positioning markets. From 1992 through 2006, Mr. Chan served in various senior management positions with SanDisk Corporation, a global leader in flash memory cards, including most recently as Executive Vice President and General Manager, Consumer Business. From 1983 to 1992, Mr. Chan held marketing and engineering positions at Chips and Technologies, Signetics, and Delco Electronics. Mr. Chan is Chairman of the Board of Directors of Adesto Technologies, a NASDAQ Global SelectMarket-listed company, which develops innovative,low-power memory solutions, a member of the Board of Directors and a member of the Audit Committee of Deckers Outdoor Corporation, a footwear, apparel and accessories designer and distributor, and a member of the Board of Directors and Chair of the Compensation Committee of Socket Mobile, a company that creates data capture and delivery solutions for enhanced productivity in retail point of sale, field service, healthcare and other mobile markets. Mr. Chan was a member of the Board of Directors of Silicon Laboratories, Inc., a NASDAQ Global Select Market-listed company, which is a fabless,analog-intensive mixed-signal semiconductor company from 2007 to 2010, and a member of the Board of Directors, Chairman of the Audit Committee and member of the Compensation Committee of Affymetrix, a company which developed, manufactured and sold products and services for genetic analysis to the life science research and clinical healthcare markets from 2010 to 2016, prior to its acquisition by Thermo Fisher. Mr. Chan was also a member of the Board of Directors from July 2011 to September 2016 and Chairman of the Board of Directors from June 2013 to September 2016 of Outerwall, a NASDAQ Global Select Market-listed company, which was a provider of automated retail solutions offering services that drove incremental traffic and revenue for retailers, prior to its acquisition by Apollo Global Management, a private equity firm. Mr. Chan also currently serves on the Boards of Directors of several private companies. Mr. Chan holds a Bachelor of Science degree in Electrical and Computer Engineering from the University of California at Santa Barbara and a Master’s degree in Business Administration from Santa Clara University. We believe that Mr. Chan’s experience as the Chief Executive Officer of Magellan, his senior management positions with other leading companies, and his service as a director of multiple companies provide the requisite qualifications, skills, perspectives, and experiences that make him well qualified to serve on our Board of Directors.

Keith B. Geeslinhas been a director of our company since 1986. Mr. Geeslin has been a General Partner of Francisco Partners, a firm specializing in structured investments in technology companies undergoing strategic, technological, and operational inflection points, since January 2004. From 2001 until October 2003, Mr. Geeslin served as Managing General Partner of the Sprout Group, a venture capital firm, with which he became associated in 1984. In addition, Mr. Geeslin served as a general or limited partner in a series of investment funds associated with the Sprout Group, a division of DLJ Capital Corporation, which is a subsidiary of Credit Suisse (USA), Inc. Mr. Geeslin is a member of the Board of Directors and Chairman of the Compensation Committee of CommVault Systems, Inc., a public company that provides data management software. Mr. Geeslin holds a Bachelor of Science degree in Electrical Engineering, a Master’s of Science degree in Engineering and Economic Systems from Stanford University, and a Master of Arts degree in Philosophy, Politics, and Economics from Oxford University. We believe Mr. Geeslin’s long career at leading private equity and venture capital firms with a focus on investments in high-technology companies, his service on multiple boards of directors, and his engineering background provide the requisite qualifications, skills, perspectives, and experiences that make him well qualified to serve on our Board of Directors.

Michael Hurlston has been the President and Chief Executive Officer of our company since August 2019. Prior to joining our company, Mr. Hurlston served as the Chief Executive Officer and a member of the Board of Directors of Finisar Corporation from January 2018 to August 2019. Prior to joining Finisar, he served as Senior Vice President and General Manager of the Mobile Connectivity Products/Wireless Communications and Connectivity Division and held senior leadership positions in sales, marketing and general management at Broadcom Limited and its predecessor corporation from November 2001 through October 2017. Prior to joining Broadcom in 2001, Mr. Hurlston held senior marketing and engineering positions at Oren Semiconductor, Inc., Avasem, Integrated Circuit Systems, Micro Power Systems, Exar and IC Works from 1991 until 2001. Mr. Hurlston is a member of the Board of Directors of Vilynx Inc, and a member of the Board of Directors and Compensation Committee of Ubiquiti Networks, Inc. Mr. Hurlston holds a Bachelor of Science and a Master of Science degree in Electrical Engineering and a Master’s degree in Business Administration from the University of California, Davis. We believe Mr. Hurlston’s position as Chief Executive Officer of our company, and his successful career at major companies before joining our company provide the requisite qualifications, skills, perspectives, and experiences that make him well qualified to serve on our Board of Directors.

Russell J. Knittelhas been a director of our company since October 2010. Mr. Knittel served as Interim President and Chief Executive Officer of our company from October 2010 through September 2011, and as Executive Vice President of our company from July 2007 to October 2010. Mr. Knittel served as Chief Financial Officer, Chief Administrative Officer, Secretary, and Treasurer of our company from November 2001 through September 2009; as Senior Vice President of our company from

November 2001 until July 2007; and as Vice President of Administration and Finance, Chief Financial Officer, and Secretary of our company from April 2000 through October 2001. Mr. Knittel is a member of the Board of Directors and a member of the Audit Committee, the Compensation Committee, and the Corporate Governance and Nominations Committee of Quest Resource Holding Corporation, a NASDAQ Global Select Market-listed company that provides waste management and recycling services programs. Mr. Knittel served as a director of Source Photonics, a privately held company that designs, manufactures and sells optical communications and data connectivity products, from March 2012 to January 2017, a director of MarineMax, Inc., a New York Stock Exchange-listed company that is the nation’s largest recreational boat dealer, from June 2009 to February 2014, and as a director of OCZ Technology Group, Inc., a former public company, that designed, manufactured, and distributedsolid-state drives and computer components, from June 2010 to August 2014. Mr. Knittel holds a Bachelor of Arts degree in Accounting from California State University at Fullerton and a Master’s degree in Business Administration from San Jose State University. We believe Mr. Knittel’s service as Interim Chief Executive Officer and Chief Financial Officer of our company and his board service at other companies provide the requisite qualifications, skills, perspectives, and experiences that make him well qualified to serve on our Board of Directors.

Francis F. Lee has been a director of our company since December 1998 and was the Chairman of the Board of Directors of our company from October 2008 to October 2018. Mr. Lee served as Chief Executive Officer of our company from December 1998 until July 2009 and as President of our company from December 1998 to July 2008. Mr. Lee was a consultant from August 1998 to November 1998. From May 1995 until July 1998, Mr. Lee served as General Manager of NSM, a Hong Kong-based joint venture between National Semiconductor Corporation and S. Megga. Mr. Lee held a variety of executive positions for National Semiconductor from 1988 until August 1995. These positions included Vice President of Communication and Computing Group, Vice President of Quality and Reliability, Director of Standard Logic Business Unit, and various other operations and engineering management positions. Mr. Lee is a member of the Board of Directors of Adesto Technologies, a NASDAQ Global Select Market-listed company, which develops innovative,low-power memory solutions. Mr. Lee holds a Bachelor of Science degree, with honors, in Electrical Engineering from the University of California at Davis. We believe Mr. Lee’s service for more than 10 years as our Chief Executive Officer gives him invaluable insights into our business, our culture, our personnel, our opportunities, and our challenges and provides the requisite qualifications, skills, perspectives, and experiences that make him well qualified to serve on our Board of Directors.

Richard L. Sanquinihas been a director of our company since 1994. Mr. Sanquini is presently a Partner at LiteCAP, a private equity firm, and has been a consultant in the semiconductor industry for more than five years. Mr. Sanquini is the former Chairman of the Board of Directors of PortalPlayer, Inc., formerly a public company that developed the silicon and operating system firmware for the Apple iPod, and was acquired by NVIDIA Corporation in January 2007. Mr. Sanquini retired from National Semiconductor in 1999 after a20-year tenure, where he managed key business units, including microprocessors and microcontrollers, served as Chief Technology Officer, managed business development and intellectual property protection, and was Chairman of the Board of Directors for two China joint ventures. Prior to National Semiconductor, he served as President and Chief Executive Officer of Information Storage Devices and in various executive positions at RCA. Mr. Sanquini is the Chairman of the Board of Directors of Pixelworks Inc., a NASDAQ Global Select Market-listed company that designs, develops, and markets video and pixel processing semiconductors and software for digital video applications, and is ona member of the Board of Directors of R2 Semiconductor, a power management company for consumer devices.devices and Kuprion, Inc., a nano-copper materials company. Mr. Sanquini previously served on the Board of Directors of Validity Sensors, Inc., which we acquired in fiscal 2014, and Keyssa.2014. Mr. Sanquini holds a Bachelor of Science degree in Electrical Engineering from the Milwaukee School of Engineering, Wisconsin. We believe that Mr. Sanquini’s long career and executive positions with numerous high-technology companies, his engineering background, his knowledge and experience in the semiconductor industry, and his service on numerous boards of directors provide the requisite qualifications, skills, perspectives, and experiences that make him well qualified to serve on our Board of Directors.

James L. Whimshas been a director of our company since October 2007. Mr. Whims has been a partner at Alsop-Louie Partners, a venture capital firm focused on identifying promising entrepreneurs, since February 2010. From 1996 to 2007, Mr. Whims was a Managing Director of Techfund Capital l, LP and Techfund Capital II, LP and since 2001, a Managing Director and Venture Partner at Techfund Capital Europe, which are venture capital firms concentrating on high-technology enterprises. Mr. Whims also serves onis a member of the Board of Directors and as a member of the Audit Committee and Compensation Committee of DigiLens, .a diffractive waveguide optical company, and a member of the Board of Directors and Compensation Committee at each of Kuprion, Inc. a nano-copper materials company, Keyssa, a wireless connectivity company, and Phizzle, an engagement automation software company. Mr. Whims was formerly a member of the Board of Directors of THQ, Inc., Portal Player, and 3DFX, all of which were NASDAQ Global Select Market-listed companies, and of Phizzle, Twitch TV, and Keyssa, which werewas a private companies.company. Mr. Whims was Executive Vice President of Sony Computer Entertainment of America from 1994 to 1996, where he was responsible for the North American launch of the Playstation and was the winner of the Brandweek/Ad Week marketing executive of the year. From 1990 to 1994, Mr. Whims was Executive Vice President of Software Toolworks. Mr. Whimsco-founded Worlds of Wonder, an American toy company that launched Teddy Ruxpin, Lazer Tag and the United States launch of Nintendo, where he was an executive from 1985

to 1988. Mr. Whims holds a Bachelor of Science degree from Northwestern University and a Master’s degree in Business Administration from the University of Arizona. We believe Mr. Whims’ senior executive positions with major companies, his experience as an investor in high-technology companies, his service as a director of multiple companies, and his expertise ine-communications and marketing provide the requisite qualifications, skills, perspectives, and experiences that make him well qualified to serve on our Board of Directors.

Election of Nominees

The election of Messrs. Buchanan, GeeslinMs. Allgood and WhimsMr. Hurlston as class 12 directors for three-year terms expiring in 20212022 or until their successors have been elected and qualified will require the affirmative vote of a majority of the votes cast, assuming that a quorum is present at the meeting.

CORPORATE GOVERNANCE

Director Independence

Our Board of Directors has determined, after considering all the relevant facts and circumstances, including information requested from and provided by each director concerning histheir background, employment and affiliation, including family relationships, that Ms. Allgood and Messrs. Buchanan, Chan, Geeslin, Lee, Knittel, Sanquini, and Whims are independent directors, as “independence” is defined by the listing standards of NASDAQ and the SEC, because they have no relationship with us that would interfere with their exercise of independent judgment. Mr. BergmanHurlston is not considered an independent director of our company because of his current position as CEO of our company. There are no family relationships among any of our directors and director nominees or executive officers.

Board Committees

Our bylaws authorize our Board of Directors to appoint, from among its members, one or more committees, each consisting of one or more directors. Our Board of Directors has established threefour standing committees: an Audit Committee, a Compensation Committee, an Executive Committee and a Nominations and Corporate Governance Committee. The members of our Audit Committee, Compensation Committee, Executive Committee and Nominations and Corporate Governance Committee consist entirely of independent directors.

The Audit Committee

The purposes of the Audit Committee include overseeing the financial and reporting processes of our company and the audits of the financial statements of our company, and providing assistance to our Board of Directors with respect to the oversight of the integrity of the financial statements of our company; our company’s compliance with legal and regulatory matters; the independent auditor’s qualifications and independence; and the performance of our company’s independent auditor. The primary responsibilities of the Audit Committee are set forth in its charter and include various matters with respect to the oversight of our company’s accounting and financial reporting processes and audits of the financial statements of our company on behalf of our Board of Directors. The Audit Committee also selects the independent auditor to conduct the annual audit of the financial statements of our company; reviews the proposed scope of such audit; reviews accounting and financial controls of our company with the independent auditor and our financial accounting staff; and reviews and approves any transactions between us and our directors, executive officers, and their affiliates.

The Audit Committee currently consists of Messrs. Buchanan, Chan, GeeslinKnittel and Knittel,Lee, each of whom is an independent director of our company under NASDAQ listing standards as well as under rules adopted by the SEC pursuant to theSarbanes- Oxley Sarbanes-Oxley Act of 2002, or Sarbanes-Oxley. Our Board of Directors has determined that each of Messrs. Buchanan, Knittel and KnittelLee (whose backgrounds are detailed above) qualify as an “audit committee financial expert” in accordance with applicable rules and regulations of the SEC. Mr. GeeslinBuchanan currently serves as the Chairman of the Audit Committee.

The Compensation Committee

The purposes of the Compensation Committee include determining, or recommending to our Board of Directors for determination, the compensation of our Chief Executive Officer and other executive officers of our company, and discharging the responsibilities of our Board of Directors relating to compensation programs of our company. The Compensation Committee currently consists of Ms. Allgood and Messrs. Chan,Geeslin, Lee, Sanquini, and Whims, each of whom is an independent director of our company under NASDAQ listing standards as well as under rules adopted by the SEC pursuant to Sarbanes-Oxley. Mr. ChanGeeslin currently serves as the Chairman of the Compensation Committee.

The Executive Committee

The purpose of the Executive Committee is to exercise from time to time, and to the fullest extent permitted by law, all powers of the Board of Directors in the management of the business and affairs of the company. The Executive Committee currently consists of Messrs. Buchanan, Chan, Geeslin, and Whims, each of whom is an independent director of our company under NASDAQ listing standards as well as under rules adopted by the SEC pursuant to Sarbanes-Oxley. Mr. Chan currently serves as Chairman of the Executive Committee.

The Nominations and Corporate Governance Committee

The purposes of the Nominations and Corporate Governance Committee include selecting, or recommending to our Board of Directors for selection, individuals to stand for election as directors at the annual meeting of stockholders or, if applicable, a special meeting of stockholders, overseeing the selection and composition of the committees of our Board of Directors, and, as applicable, overseeing the management succession planning process. The Nominations and Corporate Governance Committee currently consists of Ms. Allgood and Messrs. Buchanan, Sanquini, and Whims, each of whom is an independent director of our company under NASDAQ listing standards as well as under rules adopted by the SEC pursuant to Sarbanes-Oxley. Mr. Whims serves as the Chairman of the Nominations and Corporate Governance Committee.

The Nominations and Corporate Governance Committee will consider persons recommended by stockholders for inclusion as nominees for election to our Board of Directors if the information required by our bylaws is submitted in writing in a timely manner, and addressed and delivered to our corporate secretary at our executive offices set forth in this proxy statement. In addition to persons recommended by stockholders for inclusion as nominees for election to our Board of Directors, the Nominations and Corporate Governance Committee may also identify director candidates that come to its attention through incumbent directors,

management or third parties, and may, if it deems appropriate under the circumstances, engage athird-party search firm to assist in identifying qualified candidates. The Nominations and Corporate Governance Committee evaluates nominees for director in the same manner, regardless of whether the nominee is recommended by a stockholder or other person or entity.

In making its selection of director candidates, the Nominations and Corporate Governance Committee bears in mind that the foremost responsibility of a director is to represent the interests of our stockholders as a whole. Directors are expected to exemplify the highest standards of personal and professional integrity, and to constructively challenge management through their active participation and questioning. The Nominations and Corporate Governance Committee identifies and evaluates nominees for our Board of Directors based on these and other factors it considers appropriate, some of which may include strength of character, mature judgment, career specialization, relevant technical skills, expertise in areas relevant to the strategy and operations of our company, diversity, and the extent to which the nominee would fill a present need on our Board of Directors. The activities and associations of candidates are also reviewed for any legal impediment, conflict of interest, or other consideration that might prevent service on our Board of Directors.

Committee Charters, Corporate Governance, and Code of Ethics

Our Board of Directors has adopted charters for the Audit, Compensation, Executive and Nominations and Corporate Governance Committees describing the authority and responsibilities delegated to each committee by our Board of Directors. Our Board of Directors has also adopted Corporate Governance Guidelines, a Code of Conduct, and a Code of Ethics for the CEO and Senior Financial Officers. We post the charters of our Audit, Compensation, Executive, and Nominations and Corporate Governance Committees; our Corporate Governance Guidelines, Code of Conduct, and Code of Ethics for the CEO and Senior Financial Officers, and any amendments or waivers thereto; and any other corporate governance materials specified by SEC or NASDAQ regulations on our website at www.synaptics.com. These documents are also available in print for any stockholder requesting a copy in writing from our corporate secretary at our executive offices set forth in this proxy statement.

Board’s Role in Risk Oversight

As is the case in virtually all businesses, we face a number of risks, including operational, economic, financial, legal, regulatory, and competitive risks. Our management is responsible for theday-to-day management of the risks we face. Our Board of Directors, as a whole and through its committees, has responsibility for the oversight of risk management.

Our Board of Directors’ involvement in our business strategy and strategic plans plays a key role in its oversight of risk management, its assessment of management’s risk appetite, and its determination of the appropriate level of enterprise risk. Our Board of Directors receives updates at least quarterly from senior management and periodically from outside advisors regarding the various risks we face. Our Board of Directors also reviews the various risks we identify in our filings with the SEC, as well as risks relating to various specific developments, such as acquisitions, stock repurchases, debt and equity placements, and product introductions.

Our Board committees assist our Board of Directors in fulfilling its oversight role in certain areas of risk. Pursuant to its charter, the Audit Committee oversees the financial and reporting processes of our company and the audit of the financial statements of our company, and provides assistance to our Board of Directors with respect to the oversight and integrity of the financial statements of our company, our company’s compliance with legal and regulatory matters, the independent auditor’s qualification and independence, and the performance of our independent auditor. The Compensation Committee considers the risks that our compensation policies and practices may have in attracting, retaining, and motivating valued employees and endeavors to assure that it is not reasonably likely that our compensation policies and practices would have a material adverse effect on our company. Our Nominations and Corporate Governance Committee oversees governance-related risks, such as director independence, conflicts of interests, and management succession planning.

Board Diversity

We seek diversity in experience, viewpoint, education, skill, and other individual qualities and attributes to be represented on our Board of Directors. We believe directors should have various qualifications, including individual character and integrity; business experience and leadership ability; strategic planning skills, ability, and experience; requisite knowledge of our industry and finance, accounting, and legal matters; communications and interpersonal skills; and the ability and willingness to devote time to our company. We also believe the skill sets, backgrounds, and qualifications of our directors, taken as a whole, should provide a significant mix of diversity in personal and professional experience, background, viewpoints, perspectives, knowledge, and abilities. Nominees are not to be discriminated against on the basis of race, religion, national origin, sex, sexual orientation, disability, or any other basis proscribed by law. The assessment of directors is made in the context of the perceived needs of our Board of Directors from time to time.

All of our directors have held high-level positions in business or professional service firms and have experience in dealing with complex issues. We believe that all of our directors are individuals of high character and integrity, are able to work well with others, and have committed to devote sufficient time to the business and affairs of our company. In addition to these attributes, the description of each director’s background set forth above indicates the specific experience, qualifications, and skills necessary to conclude that each individual should continue to serve as a director of our company.

Board Leadership Structure

We believe that effective board leadership structure can dependdepends on the experience, skills, and personal interaction between persons in leadership roles as well as the needs of our company at any point in time. We currently maintain separate roles between the Chief Executive Officer and the Executive Chairman or Chairman of the Board in recognition of the differences between the two responsibilities. Our Chief Executive Officer is responsible for setting our strategic direction and forday-to-day leadership and performance of our company. Our Executive Chairman or Chairman of the Board provides input to the Chief Executive Officer, sets the agenda for Board of Directors meetings, and presides over meetings of the full Board of Directors as well as executive sessions of the Board of Directors.

We currently select, on a rotating basis, one of our independent directors to serve as Lead Director. Mr. Geeslin is currently serving as our Lead Director. In that role, Mr. Geeslin helps to facilitate communication and interaction between the Board of Directors and management.

Prohibition on Derivatives Trading and Hedging

Our Insider Trading Policy prohibits the members of our Board of Directors, and employees, including our executive officers, employees, and any family member residing in the same household of such persons from engaging in derivatives trading and hedging involving our securities without the prior approval of our Chief Financial Officer and our General Counsel.

Stock Ownership Guidelines

We maintain stock ownership guidelines that require our Chief Executive Officer to own shares of our common stock with a value equal to at least three times his annual base salary and thenon-employee members of our Board of Directors to own shares of our common stock with a value equal to at least five times their annual cash retainer. These individuals hadhave five years from fiscal 2012, when these guidelines were adopted,their date of appointment, promotion or hire into the applicable role to achieve their required ownership levels,levels. Each individual subject to these guidelines who has been with the company and each of these individualsin their position for more than five years is currently in compliance with such guidelines. We believe that these guidelines promote the alignment of thelong-term interests of our Chief Executive Officer and the members of our Board of Directors with our stockholders. Further, we believe that these guidelines help mitigate the risks associated with our executive compensation program.

Compensation Committee Interlocks and Insider Participation

Our Compensation Committee consists of Ms. Allgood and Messrs. Chan,Geeslin, Lee, Sanquini and Whims. None of these individuals was an officer or employee of the Companycompany or had any contractual or other relationships with us during the fiscal year except as directors, and none of these individuals, other than Mr. Lee, was formerly an officer of the Company.company. None of our executive officers currently serves, or in the past has served, as a member of the board of directors or as a member of the compensation committee for any entity, which has one or more of its executive officers serving on our Company’scompany’s Board of Directors or Compensation Committee.

Board and Committee Meetings

Our Board of Directors held a total of sevennine meetings during fiscal 2018.2019. During fiscal 2018,2019, the Audit Committee held five meetings; the Compensation Committee held six meetings; the Executive Committee held one meeting; and the Nominations and Corporate Governance Committee held three meetings. Each of our directors attended at least 75% of the total number of meetings held in fiscal 20182019 by our Board of Directors and each of the committees of our Board of Directors on which such person served during fiscal 2018.2019.

Executive Sessions

We regularly schedule executive sessions of our Board of Directors at whichnon-management directors meet without the presence or participation of management. The Chairman or Executive Chairman of our Board of Directors presides at such executive sessions. We also schedule meetings of the independent directors, which are presided over by our Lead Director.directors.

Annual Meeting Attendance

We encourage our directors to attend each Annual Meeting of Stockholders. To that end, and to the extent reasonably practicable, we generally schedule a meeting of our Board of Directors on the same day as our Annual Meeting of Stockholders. All of our directors attended our Annual Meeting of Stockholders last year.

Communications with Directors

Interested parties may communicate with our Board of Directors or specific members of our Board of Directors, including our independent directors and the members of the various committees of our Board of Directors, by submitting a letter addressed to the Board of Directors of Synaptics Incorporated, c/o any specified individual director or directors at our executive offices: 1251 McKay Drive, San Jose, California95131-1709. Any such letters will be forwarded to the indicated directors.

COMPENSATION DISCUSSION AND ANALYSIS

Named Executive Officers

This Compensation Discussion and Analysis provides an overview of the material components of our executive compensation program for the following executive officers:

 

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Alex Wong, our former Principal Executive Officer (“PEO”) and current Senior Vice President of Worldwide Operations;

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Kermit Nolan, our Chief Accounting Officer and Interim Chief Financial Officer;

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Richard Lu, our Senior Vice President and General Manager, Mobile and Automotive Division;

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Shawn Liu, our Senior Vice President and General Manager, PC Division;

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John McFarland, our Senior Vice President, General Counsel and Secretary;

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Richard A. Bergman, our former Chief Executive Officer & President (“former CEO”);

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Wajid Ali, our former Senior Vice President and Chief Financial Officer (“former CFO”); and

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Huibert Verhoeven, our former Senior Vice President & General Manager, Internet of Things (“IoT”) Division.

Following the departure of Mr. Bergman, our former Chief Executive Officer &and President, (our “CEO”);

Wajidin May 2019, Mr. Wong became our Principal Executive Officer until Michael E. Hurlston, our current President and Chief Executive Officer, joined the company in August 2019. Following the departure of Mr. Ali, our former Senior Vice President and Chief Financial Officer (our “CFO”);

Kevin Barber,in February 2019, Mr. Nolan was promoted to Chief Accounting Officer and Interim Financial Officer. Mr. Verhoeven, our former Senior Vice President &and General Manager Mobile Division;

Huibertof IoT, left the company in May 2019. Messrs. Ali, Bergman and Verhoeven our Senior Vice President & General Manager, Internet of Things (“IoT”) Division;are included in this Compensation Discussion and Analysis for fiscal 2019 as required by applicable SEC rules.

Alex Wong, our Senior Vice President of Worldwide Operations.

We refer to these executive officers collectively in this Compensation Discussion and Analysis and the related compensation tables as our “Named Executive Officers” or “NEOs.” Mr. Hurlston was not a NEO in our fiscal 2019 and is excluded from this Compensation Discussion and Analysis as a NEO, since his employment with the company began after the end of our fiscal 2019.

Specifically, thisThis Compensation Discussion and Analysis provides an overview of our executive compensation philosophy, the overall objectives of our executive compensation program, and each component of compensation that we provide. In addition, we explain how and why the Compensation Committee of our Board of Directors, or the Compensation Committee, arrived at the specific compensation policies and decisions involving our executive officers, including our Named Executive Officers, during fiscal 2018.2019.

Executive Summary

Our executive compensation program is designed to align executive realized compensation with company performance (both financial results and stock price performance). Both cash and equity compensation for fiscal 20182019 reflect the generally weak financial and stock price performance of the Companyour company in fiscal 2018.2019.

The following compensation practices and decisions highlight our commitment to pay for performance:

 

Excluding the impact of the voluntary temporary salary reductions in fiscal 2017, no increases were made to cash compensation for our CEO, CFO or our SVP of Worldwide Operations from fiscal 2016 through fiscal 2018 (this includes no increase to base salary or target annual cash bonus opportunities).

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At the beginning of fiscal 2019, our Compensation Committee and our former CEO chose to retain base salaries for our former CEO and NEOs at or below the market median in order to emphasize performance-based pay through their annual cash bonus opportunity and equity compensation.

 

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Annual performance-based cash bonus payouts are aligned with company performance. In fiscal 2019, bonuses for our currently-employed Named Executive Officers who did not have a guaranteed bonus were paid at approximately 50% of target, on average. Below-target payouts reflect performance relative to our operating plan.

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Equity “refresh” compensation was granted to our Named Executive Officers in a mix of 33% performance stock units (“PSUs”), 33% market stock units (“MSUs”) and 33% deferred stock units (“DSUs”). Our Compensation Committee believes that performance-based equity, in the form of both PSUs and MSUs, provides stronger alignment with the creation of stockholder value, requiring financial performance targets to be met and our stock price to perform well on an absolute and relative basis for value to be realized.

Our Compensation Committee and our CEO chose to retain base salaries for our CEO and CFO that trail the market median in order to emphasize performance-based pay through bonus opportunity and equity compensation.

Annual performance-based cash bonus payouts are aligned with company performance. In fiscal 2018, the CEO bonus was paid out at 34% of target and other NEO bonuses were paid at approximately 46% of target, on average. Below-target payouts reflect performance relative to our operating plan.

Equity compensation was granted in a mix of 29% performance stock units (“PSUs”), 37% market stock units (“MSUs”), 29% deferred stock units (“DSUs”) and 5% stock options. Our Compensation Committee believes that performance-based equity, in the form of both PSUs and MSUs, provide stronger alignment with stockholder value, requiring financial performance targets to be met and our stock price to perform well on an absolute and relative basis for value to be realized. Therefore, our Compensation Committee decided to no longer grant stock options to our executive officers starting in fiscal 2018 (the last stock option grant made in fiscal 2018 was approved in fiscal 2017. See Fiscal 2018 Long-Term Incentive Compensation Decisions in this section for additional information. The Compensation Committee’s decision to grant the majority of executive officer equity in performance-based equity also demonstrates the Compensation Committee’s commitment to performance-based compensation and alignment with stockholder value creation.

Fiscal 2018 was our sixth full fiscal year under the tenure of Mr. Bergman as our CEO. During fiscal 2018,2019, net revenue decreased from fiscal 2017,2018, andnon-GAAP operating income/(loss), net income/(loss), and net income/(loss) per diluted share declined from fiscal 2017.2018. As a result, given our emphasis onnon-GAAP operating income, or operating profit, in our annual performance-based cash bonus plan, the actual cash compensation paid to our executive officers, including our Named Executive Officers, was significantly below their target total direct cash compensation opportunities for the year.

Fiscal 20182019 Financial Results

Our performance for fiscal 2018 came in2019 was below expectations with revenue down from the prior fiscal year2018 driven by a steep decline in our mobile fingerprint and discrete display driver business, partially offset by strong growth from our acquired IoT businesses. GAAP and non-GAAP operating income/(loss) for fiscal 2018 were down $126.6 million and $42.6 million from fiscal 2017, respectively, driven primarily by higher operating expenses and costs associated with the acquired IoT businesses. GAAP operating income/(loss)loss for fiscal 2019 declined to $(6.3) million from $(61.9) million in fiscal 2018 andnon-GAAP operating income for fiscal 2019 declined to $159.7 million from $161.8 million in fiscal 2018, driven primarily by reduced revenue, partially offset by reduced operating expenses. GAAP operating loss was further negativelyfavorably impacted by incrementalreduced acquisition-related costs of $62.1$58.7 million driving lower GAAP gross margins,and a favorable product mix, whilenon-GAAP operating income benefited from improvednon-GAAP gross margin improvedof 240 basis points year-over-year. GAAP net income/(loss)loss per diluted share was down $5.00improved $2.97 year-over-year, whilenon-GAAP net income per diluted share was down $0.83$0.05 year-over-year.

For fiscal 2018,2019, we recorded the following significant financial results:

 

Net revenue was $1.63 billion, a 5% decrease from net revenue of $1.72 billion for fiscal 2017;

●

Net revenue was $1.47 billion, a 10% decrease from net revenue of $1.63 billion for fiscal 2018;

 

GAAP operating income/(loss) was $(61.9) million, compared with GAAP operating income of $64.7 million for fiscal 2017;

●

GAAP operating loss was $(6.3) million, compared with GAAP operating loss of $(61.9) million for fiscal 2018;

 

GAAP net income/(loss) was $(124.1) million, or $(3.63) per diluted share, compared with GAAP net income of $48.8 million, or $1.37 per diluted share, for fiscal 2017;

●

GAAP net loss was $(22.9) million, or $(0.66) per diluted share, compared with GAAP net loss of $(124.1) million, or $(3.63) per diluted share, for fiscal 2018;

 

Non-GAAP operating income, or operating profit, was $161.8 million, or 10.0% of net revenue, compared withnon-GAAP operating income of $204.4 million, or 11.9% of net revenue, for fiscal 2017; and

●

Non-GAAP operating income, or operating profit, was $159.7 million, or 10.8% of net revenue, compared withnon-GAAP operating income of $161.8 million, or 9.9% of net revenue, for fiscal 2018; and

 

Non-GAAP net income was $141.4 million, or $4.05 per diluted share, compared withnon-GAAP net income of $173.9 million, or $4.88 per diluted share, for fiscal 2017.

●

Non-GAAP net income was $141.2 million, or $4.00 per diluted share, compared withnon-GAAP net income of $141.4 million, or $4.05 per diluted share, for fiscal 2018.

See Appendix A to this Proxy Statement for a reconciliation of our GAAP tonon-GAAP financial results.

Pay for Performance Analysis

Our compensation philosophy emphasizes performance-oriented compensation through:

 

●

Modest base salaries, which are generally positioned at or below the peer market median;

Annual performance-based cash bonus aligned with our annual operating plan and key strategic objectives; and

Stock-based compensation provided in three components to balance performance orientation and stockholder alignment (with approximately 71% of the total fiscal 2018 equity awards granted to our NEOs as PSUs, MSUs and options), and retention hold (approximately 29% of the fiscal 2018 equity awards granted to our NEOs were in the form of DSUs).

The Company’s weak performance in fiscal 2018 and strong performance-based plan design resulted in significantlybelow-target compensation, as detailed below:

Annual cash bonus pool achievement was approximately 49% of target for fiscal 2018, with individual performance adjustments resulting in a payout at 34% of target for the CEO.

As of our record date (September 4, 2018), outstanding MSUs are tracking to target as follows:

Fiscal 2016 MSUs granted to our NEOs (with payouts through fiscal 2019) are tracking to a 0% payout for the third performance period;

Fiscal 2017 MSUs granted to our NEOs (with payouts through fiscal 2020) are tracking to a 0% payout for the second performance period; and

Fiscal 2018 MSUs granted to our NEOs (with payouts through fiscal 2021) are tracking to a 124% payout for the first performance period.

As of our record date, the exercise price of all options granted to our NEOs in fiscal 2016 and 2017 is below the closing price of our stock on such date.

In the following chart, we summarize CEO target and realizable compensation. Over the last three fiscal years, realizable compensation significantly trailed target compensation levels.

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1.

Target compensation reflects target base salary, target bonus opportunity and the grant-date fair value of equity awards based on a targeted value mix of 33/33/33 PSUs/DSUs/MSUs for fiscal 2018 and 33/33/33 options/DSUs/MSUs for fiscal 2017 and fiscal 2016.

 

 2.●

RealizableAnnual performance-based cash bonus opportunities aligned with our annual operating plan and key strategic objectives; and

●

Stock-based compensation reflectsprovided in three components to balance performance orientation and stockholder alignment (approximately 66% of the actualtotal fiscal 2019 equity refresh awards granted to our NEOs were in the form of PSUs and MSUs), and to meet our retention objectives (approximately 33% of the fiscal 2019 equity awards granted to our NEOs were in the form of DSUs).

The company’s weak performance in fiscal 2019 and strong performance-based program design resulted in significantly below-target compensation, as described below:

●

Annual performance-based cash compensation earnedbonus pool achievement was approximately 72% of target for fiscal 2019, with individual performance adjustments resulting in a payout at 50% of target for our Named Executive Officers who were not otherwise subject to severance arrangements or a guaranteed bonus arrangement.

●

As of our record date (September 3, 2019), outstanding MSUs are tracking against their target performance levels as follows:

o

Fiscal 2017 MSUs granted to our NEOs (with payouts through fiscal 2020) are tracking to a 0% payout for the third performance period;

o

Fiscal 2018 MSUs granted to our NEOs (with payouts through fiscal 2021) are tracking to a 16% payout for the second performance period; and

o

Fiscal 2019 MSUs granted to our NEOs (with payouts through fiscal 2022) are tracking to a 17% payout for the current valuefirst performance period.

●

As of equity holdings based onour record date, the exercise price of all options granted to our NEOs in fiscal 2017 and 2018 is below the closing market price of our common stock on June 29, 2018 (the last trading day of fiscal 2018), which was $50.37, and tracking of outstanding MSU awards as of June 29, 2018. (Note that as of the record date, outstanding MSUssuch date. No stock options were granted to our NEOs in fiscal 2016 and 2017 were each tracking at 0%.)

As reflected in the CEO realizable pay analysis above, the equity compensation we grant to our executive officers aligns their compensation with company performance and the creation of stockholder value. In our fiscal 2018, approximately 75% of our CEO’s target total direct compensation was delivered through equity awards; as a result, realizable compensation varies meaningfully based on stock price performance.

CEO pay is also aligned with performance on a relative basis. The following tables illustrate the alignment of our CEO’s target total direct compensation (on a “realizable pay” basis) with our financial performance (based on total stockholder return, or TSR) relative to the Company’s current compensation peer group. As demonstrated by these tables, the realizable compensation of our CEO for fiscal 2018 was well aligned with our one-year and three-year TSR, as of June 29, 2018, when compared with our current compensation peer group.

The vertical axis represents the percentile ranking of our TSR and our compensation peer group’s TSR over the indicated period. The horizontal axis represents the percentile ranking of our CEO’s realizable compensation and our compensation peer group’s chief executive officers’ realizable compensation over the indicated period.

LOGO

1.

The One-Year CEO Pay for Performance chart illustrates CEO Realizable Compensation for Mr. Bergman for fiscal 2018. The Three-Year CEO Pay for Performance chart illustrates CEO Total Realizable Pay for Mr. Bergman for fiscal years 2016 through 2018.

2.

“Realizable compensation” is defined as the sum of (i) base salary, (ii) actual bonus earned, (iii) aggregate value of time-vested and target performance-based stock and stock unit awards granted during the three most recent fiscal years, and (iv) aggregate“in-the-money” value of stock options granted during the three most recent fiscal years. “Realizable compensation” was calculated in the same manner for our CEO and the chief executive officers of the companies in our compensation peer group. Equity award values were calculated using each company’s closing stock price as of June 29, 2018.

3.

TSR reflects the percentage change in value for stockholders through stock price appreciation over the applicable period (adjusted to reflect the impact of dividends paid). TSR was calculated using each company’s closing stock price as of June 29, 2018.

4.

Microsemi is excluded from both the one-year and three-year analysis as TSR data is unavailable.2019.

We have consistently set aggressive target levels for the financial performance measures used in our annual performance-based cash bonus plan. As reflected in the followingbelow table,non-GAAP operating income declinedyear-over-year driving a reduction in the annual bonus pool achievement to 49%72% for fiscal 2018.2019. Actual bonus payment to the CEOour Named Executive Officers in fiscal 20182019 was further reduced to 34%50% based on individual performance measures.

LOGO

Executive Transition

In connection with Mr. Bergman’s departure as our President and Chief Executive Officer, Mr. Wong became our Principal Executive Officer effective as of March 2019. In connection with Mr. Ali’s departure as our Chief Financial Officer, Mr. Nolan was promoted to Chief Accounting Officer and became our Interim Chief Financial Officer as of February 2019. Mr. Wong did not receive any additional compensation in connection with his role as Principal Executive Officer. Mr. Nolan did not receive any additional compensation in connection with his role as Interim Chief Financial Officer, although Mr. Nolan did receive additional compensation in connection with his promotion to our Chief Accounting Officer. Messrs. Wong, Nolan, Lu, Liu and McFarland currently participate in our executive retention program, which was implemented to encourage each executive’s continued commitment to the support and management of the operations of the company during the transition to new executive leadership. Each executive officer who participates in our executive retention program will receivelump-sum cash award payments of 1.4 to 1.9 times such executive officer’s base salary (determined in each case by the Executive Committee) in November 2020 should they remain as full-time active employees of our company in good standing for 18 consecutive calendar months starting May 1, 2019 and fulfill certain other conditions as further described under the “Executive Retention Program” section of this Compensation Discussion and Analysis.

In August 2019, Mr. Hurlston joined the company as our President and Chief Executive Officer. Mr. Hurlston’s offer letter provides that he will receive a base salary of $700,000 and that he is eligible to receive a target cash bonus opportunity of 130% of his base salary, prorated for our fiscal 2020. Payment of his cash bonus will be based on company-wide performance, consistent with our pay for performance bonus plan, and is ultimately at the discretion of our Board of Directors. Mr. Hurlston also received an initial equity grant of 59,772 RSUs and a target amount of 154,985 MSUs granted

LOGOunder our 2019 Inducement Equity Plan (the “2019 Inducement Plan”), which was recently adopted by the company under an exception to the Nasdaq Stock Market Listing Rules’ shareholder approval requirement for the issuance of securities with regards to grants to employees of the company or its subsidiaries as an inducement material to such individuals entering into employment with the company or its subsidiaries. Mr. Hurlston’s RSUs will vest annually over four years, with vesting contingent on Mr. Hurlston’s continued service with the company. Mr. Hurlston’s MSUs will vest annually over four years, with achievement of the MSU target amount contingent on the company’s total shareholder return performance, as further described in the “Compensation Elements: Long-Term Incentive Compensation: MSU Awards” section below. In addition, Mr. Hurlston may be eligible for certain contingent equity grants (as described and defined under Proposal Four to this Proxy Statement, in the “New Plan Benefits” section of such proposal).

Mr. Hurlston’s base salary, annual target cash bonus opportunity, and initial equity grants (collectively, his “Initial Annual Compensation”) are aligned with our pay for performance philosophy, with 64% of his Initial Annual Compensation in the form of performance-based compensation.

Results of Most RecentSay-on-Pay Vote

At our 20172018 Annual Meeting of Stockholders, we conducted our seventheighth stockholder advisory vote on the compensation of our Named Executive Officers (commonly referred to as a“say-on-pay” vote). Our stockholders approved the fiscal 20172018 compensation of our Named Executive Officers, with approximately 92%67% of the votes cast in favor of oursay-on-pay proposal.

Following our 20172018 Annual Meeting of Stockholders, the Compensation Committee reviewed the results of thesay-on-pay vote and continued the process ofre-examining the executive compensation program to ensure it isperformance-based and aligns compensation levels with stockholder outcomes. Our Compensation Committee also focused further on strengthening the leadership of the company, which resulted in several leadership transitions in fiscal 2019, including the departure of our CEO. In addition to hiring a new CEO, in fiscal 2020, the company intends to reach out to our shareholders representing at least 60% of our total shares outstanding as of our record date, to solicit feedback from such shareholders on topics related to pay practices, proxy disclosures and corporate governance, and to learn about any shareholder concerns that may have affected the most recentsay-on-pay vote results. After we receive feedback from shareholders, we intend to review and adjust our compensation program as necessary in response. The following practices illustrate the Compensation Committee and management teams’ commitment to a pay for performance philosophy:

 

Challenging bonus plan design and resulting payouts that significantly trail target bonus opportunities;

Confirming its prior fiscal year decision to adjust the CEO and CFO equity pay mix for future fiscal years to a 67% performance-based equity weighting to ensure the majority of equity compensation is directly linked to performance conditions; and

Continuing to review and adopt best practice compensation policies, as deemed appropriate by the Compensation Committee, including stock ownership guidelines, hedging restrictions and a compensation recovery (“clawback”) policy.

●

Challenging annual performance-based cash bonus plan design and resulting payouts that significantly trail target bonus opportunities;

●

Equity pay mix for our NEOs with a 67% “refresh” performance-based equity weighting to ensure the majority of equity compensation is directly linked to performance conditions; and

●

Continuing to review and adopt best practice compensation policies, as deemed appropriate by the Compensation Committee, including stock ownership guidelines, hedging restrictions and a compensation recovery (“clawback”) policy.

Our Board of Directors determined that our stockholders should have the opportunity to cast an advisory vote on the compensation of our Named Executive Officers each year, consistent with the preference expressed by our stockholders at our Annual Meeting of Stockholders in October 2017.

Compensation Philosophy and Objectives

We are a leading worldwide developer and supplier of custom-designed human interface semiconductor product solutions that enable people to interact more easily and intuitively with a wide variety of mobile computing, communications, entertainment, and other electronic devices. We operate in a highly competitive business environment, which is characterized by frequent technological advances, rapidly changing market requirements, and the emergence of new market entrants. To successfully compete in this dynamic environment, we must continually develop and refine our products and services to stay ahead of customer needs and challenges. To achieve these objectives, we need a highly talented and seasoned team of engineering, sales, marketing, operations, and other business professionals.

We are headquartered in the Silicon Valley region of Northern California and compete with many of the premier global technology companies in attracting and retaining a skilled management team and key engineering talent. Our competitors for management and engineering talent usestock-based compensation as an important element of their overall compensation programs. To meet the challenges presented by our operating environment, we have embraced a compensation philosophy that seeks to achieve the following specific objectives:

●

reward the successful achievement of our financial objectives;

 

reward the successful achievement of our financial objectives;

●

drive the development of a successful and profitable business;

 

drive the development of a successful and profitable business;

●

attract, motivate, reward, and retain highly qualified executive officers who are important to our success;

 

attract, motivate, reward, and retain highly qualified executive officers who are important to our success;

●

align compensation to our interests as a whole and the interests of our stockholders, which requires an emphasis on stock-based compensation; and

 

align compensation to our interests as a whole and the interests of our stockholders, which requires an emphasis on stock-based compensation; and

recognize strong performing executive officers by offering compensation that rewards individual achievement, corporate stewardship, and fiscal responsibility, as well as contributions to our overall success.

●

recognize strong performing executive officers by offering compensation that rewards individual achievement, corporate stewardship, and fiscal responsibility, as well as contributions to our overall success.

Total compensation levels are set to reflect the role, responsibilities, and contributions of each executive officer, as well as the achievement of corporate and individual financial and operational goals. As a result of our compensation philosophy, compensation levels may vary significantly from fiscal year to fiscal year on an absolute basis and among our various executive officers.

Each year, the most important measure in assessing our corporate performance is operating profit. At the same time, the most important measure of individual performance is the achievement of each executive officer’s individual objectives that vary from year to year and position to position, but generally include financial and operating performance, product success, timely product delivery, forecasting accuracy, customer satisfaction, cost reduction, leadership, team building, and employee retention.

We expect the compensation level of our CEOChief Executive Officer (“CEO”) will be higher than that of our other executive officers, assuming relatively equal achievement of individual performance objectives, since our compensation policies establish the framework for our executive officers’ base salaries, target annual performance-based cash bonus opportunities, and stock-based compensation after reviewing those of comparable companies, which generally compensate their chief executive officers at higher levels because of their roles and their importance to overall company success.

Compensation-Setting Process

Our Board of Directors has appointed the members of the Compensation Committee, which consists solely of independent directors. The Compensation Committee is authorized to determine and approve or make recommendations to our Board of Directors for approval with respect to, the cash compensation of our executive officers, including our Named Executive Officers, and to grant, or recommend the grant of,stock-based compensation to our executive officers, including our Named Executive Officers. The Compensation Committee currently makescompensation-related decisions regarding our executive officers.

Role of the Compensation Committee

The Compensation Committee evaluates the performance of our CEO each fiscal year and determines his compensation in light of our goals and objectives for that year. The Compensation Committee, together with our CEO, assesses the performance of our other executive officers, including our other Named Executive Officers, each year. Based in part on the recommendations of our CEO, the Compensation Committee determines the compensation of our other executive officers.

Role of the Chief Executive Officer

At the request of the Compensation Committee, our CEO typically attends a portion of each Compensation Committee meeting, including meetings at which the Compensation Committee’s compensation consultant is present. This enables the Compensation Committee to review with our CEO the corporate and individual goals and objectives that he regards as important to our overall success. The Compensation Committee also requests that our CEO assess the performance of, and our goals and objectives for, our other executive officers, including our other Named Executive Officers. Although the participation of our CEO may influence the establishment of performance target levels and individual objectives, including his own, the Compensation Committee makes all determinations regarding corporate and individual performance measures, goals, and objectives, and related target levels. Our CEO does not attend any portion of the Compensation Committee meetings at which his compensation is discussed.

Role of the Compensation Consultant

The Compensation Committee also retains a compensation consultant to assist in the discharge of its responsibilities, including reviewing trends in executive compensation and identifying relevant comparable companies. The Compensation Committee makes all determinations regarding the engagement, fees, and services of the compensation consultant or other advisor, and its compensation consultant or other advisor reports directly to the Compensation Committee.

During fiscal 2018,2019, the Compensation Committee engaged Compensia, Inc. (“Compensia”), a national compensation consulting firm, to assist it in connection with its review of our fiscal 20182019 executive compensation program and its analysis of the competitive market for executive talent. Compensia provided the Compensation Committee with an analysis of the compensation practices of the companies in the compensation peer group; determined our compensation positioning relative to the compensation peer group; developedmarket-based guidelines for the structure of our fiscal 20182019 executive compensation program; reviewed the overall compensation packages;packages of our executive officers; and advised the Compensation Committee regarding the propriety of our fiscal 20182019 executive compensation program.

Compensia also provided advice to the Compensation Committee regarding the amendmentdevelopment of the 2019 Equity and restatement of our 2010 Incentive Compensation Plan and 2019 Employee Stock Purchase Plan, which isare being submitted to our stockholders for a vote as ProposalProposals Four and Five, respectively, in this Proxy Statement. Compensia attends most Compensation Committee meetings and provides additional assistance as requested on topics including Board compensation, executive severance and change in control agreements, bonus plan design and other topics, as requested by the Compensation Committee.

The Compensation Committee has considered the independence of Compensia in light of the listing standards of NASDAQ on compensation committee independence and the rules of the SEC. The Compensation Committee requested and received confirmation from Compensia concerning certain factors for determining the independence of the firm and its senior advisors working with the Compensation Committee. The Compensation Committee discussed these considerations and concluded that the work performed by Compensia did not raise any material conflict of interest.

Use of Competitive Market Data

In determining the compensation of our executive officers, including our Named Executive Officers, the Compensation Committee considers data gathered from a self-constructed group of peer companies, and published survey data for technology companies.

During the latter stages of fiscal 2017,2018, after consultation with Compensia, the Compensation Committee developed and approved a compensation peer group for use in its executive compensation decisions for fiscal 20182019 based on the following selection criteria:

 

Industry: companies that compete in the semiconductor or peripherals industries or that supply technology components to original equipment manufacturers, or OEMs.

●

Industry: companies that compete in the semiconductor or peripherals industries or that supply technology components to original equipment manufacturers, or OEMs.

 

Revenue: companies with revenue between approximately $530 million and $4.8 billion, based upon the last four quarters of reported revenue at the time of selection.

●

Revenue: companies with revenue between approximately $577 million and $5.2 billion, based upon the last four quarters of reported revenue at the time of selection.

 

Market capitalization: companies with a market capitalization of greater than $640 million at the time of selection.

●

Market capitalization: companies with a market capitalization of greater than $433 million at the time of selection.

The companies included in the compensation peer group approved by the Compensation Committee for fiscal 2019 were as follows:

 

Ambarella

            Cirrus Logic

            Cree

            Cypess Semiconductor

            Inphi

  

Integrated Device Technology

Qorvo

Analog Devices

Knowles

M/A-COM Technology Solutions

Marvell Technology

Maxim Integrated Products

  Marvell

Mellanox Technologies

Microsemi Technology

ON Semiconductor

Qorvo

Silicon Laboratories

Cavium

Maxim Integrated ProductsSkyworks Solutions

Cirrus Logic

Microchip TechnologyXilinx

Cree

Microsemi

Cypress Semiconductor

ON Semiconductor

The Compensation Committee strives to select peer companies such that our company falls near the median for revenue and market capitalization within the selected peer group. For fiscal 2019,2020, based upon recommendations from Compensia, the Compensation Committee approved changes to the compensation peer group criteria to include semiconductor companies with revenue of between approximately $577$543 million and $5.2$4.9 billion, based upon the last four quarters of reported revenue at the time of selection, and a market capitalization ofequal to or greater than $433$430 million. As a result of the new criteria, including acquisition and merger activity impacting the companies in the compensation peer group, the Compensation Committee removed Analog Devices, Cavium, MicrochipMicrosemi Technology Skyworks Solutions and Xilinx,Integrated Device Technology, and added Inphi, Knowles, MACOM Technology Solutions,Diodes and Mellanox TechnologiesSemtech to the compensation peer group for fiscal 2019.2020.

Compensation Elements

Our executive compensation program consists primarily of three elements: base salary, annual performance-based cash bonuses, and long-term incentive, or LTI, compensation in the form of stock-based awards. Our executive officers also participate in several company-wide benefit plans, including retirement and health and welfare benefit plans, which generally are available to all regularfull-time employees.

Base Salary

We seek to pay base salaries at competitive levels that enable us to attract, motivate, and retain highly qualified executive officers. Base salaries for our executive officers, including our Named Executive Officers, reflect each individual’s position, responsibilities, experience, skills, performance, and ongoing and expected future contributions. In determining base salary, the Compensation Committee also takes into account salary levels for similar positions at the companies in the compensation peer group and base salary levels relative to other positions within our company. Consistent with our compensation philosophy, we set the base salaries of our executive officers at levels that are less thanat or below the market median to reinforce our desire that our annual performance-based cash bonuses and LTI compensation, which are based on our financial performance and our executive officers’ achievement of individual performance objectives as set from time to time, represent athe most significant portion of theour executive officers’ target total direct compensation each year.

The Compensation Committee determines the annual base salary of our CEO in its sole discretion. The base salaries of our other executive officers, including our other Named Executive Officers, are determined by the Compensation Committee after considering the recommendations of our CEO as well as the factors described above.

As has been its practice, for fiscal 2018,2019, the Compensation Committee set the base salaries for our executive officers, including our Named Executive Officers, at the beginning of the fiscal year. Base salary adjustments were not made for our CEO, CFO or Senior Vice President of Worldwide Operations for fiscal 2018 based on the Compensation Committee’s review of company performance and its assessment of the competitive market. The annual base salaries for our Named Executive Officers during fiscal 20182019 were as follows:

 

Named Executive Officer

  Annualized Fiscal 2017
Base Salary (1)		   Annualized Fiscal 2018
Base Salary		   Percentage
Change		       Annualized Fiscal 2018    
Base Salary		       Annualized Fiscal 2019    
Base Salary		 Percentage
Change		 

Alex Wong

   $340,000    $350,000  2.94% 

Richard A. Bergman

  $700,000   $700,000    —      $700,000    $700,000  0.00% 

Kermit Nolan

   $265,200    $298,424 (1)  12.53% 

Wajid Ali

  $395,000   $395,000    —      $395,000    $400,000  1.27% 

Kevin Barber

  $370,000   $400,000    8.1% 

Shawn Liu

   $290,000    $330,000  13.79% 

Richard Lu

   -          $350,000       - 

John McFarland

   $340,000    $350,000  2.94% 

Huibert Verhoeven

  $340,000   $350,000    2.9%    $340,000    $370,000  8.82% 

Alex Wong

  $340,000   $340,000    —   

 

(1)

The salary reduction effective in fiscal 2017 of 20%amount reported for Mr. Bergman,Nolan reflects his prorated salary for the corresponding periods before and 10% for eachafter his promotion and corresponding salary increase to Chief Accounting Officer of our other Named Executive Officers is not reflectedcompany in this table.February 2019.

In June 2016, our Named Executive Officers requested a voluntary and temporary base salary reduction effective only for fiscal 2017 of 20% for Mr. Bergman and 10% for our other Named Executive Officers. The salary reductions were reviewed and approved by the Compensation Committee.

Annual Performance-Based Cash Bonuses

We use annual performance-based cash bonuses to motivate our executive officers, including our Named Executive Officers, to achieve our annual financial and operational objectives as set forth in our annual operating plan, while making progress towards and supporting our longer-term strategic and growth goals. The payment of these bonuses is based upon the achievement of one or more corporate performance objectives, which typically include meeting a specified target level of operating profit and individual performance goals.

At the beginning of each fiscal year, our Board of Directors approves our annual operating plan, which forms the basis for the corporate performance measures and individual performance goals for our annual performance-based cash bonuses. Further, the Compensation Committee reviews and sets the framework for the annual performance-based cash bonuses for the fiscal year, including confirming the plan participants, establishing a target annual cash bonus opportunity for

each participating executive officer, and reviewing the corporate performance measures and individual performance goals for the fiscal year.

Target Bonus Opportunities

As in prior years, the Compensation Committee determined that the target annual cash bonus opportunities for each of our Named Executive Officers for fiscal 20182019 should be based on a percentage of such Named Executive Officer’s base salary. The target annual cashpercentage bonus opportunity established for each Named Executive Officer for fiscal 2018, which2019, other than Messrs. Nolan and Lu, was maintained at its fiscal 2017 level, was as follows:

Named Executive Officer

  Annualized
Fiscal 2018
Base Salary		   Target Annual Cash
Bonus Opportunity
(as a percentage of
base salary)		  Target Annual Cash
Bonus Opportunity
(as a dollar amount)		 

Richard A. Bergman

  $700,000    145%  $1,015,000 

Wajid Ali

  $395,000    75%  $296,250 

Kevin Barber

  $400,000    75%  $300,000 

Huibert Verhoeven

  $350,000    75%  $262,500 

Alex Wong

  $340,000    75%  $255,000 

2018 levels.

In setting these target annual cash bonus opportunities for our Named Executive Officers, the Compensation Committee exercised its judgment and considered several factors, including our overall financial and operational results for the prior fiscal year, the prior performance of each individual Named Executive Officer, the Named Executive Officer’s potential to contribute to ourlong-term strategic success, the Named Executive Officer’s role and responsibilities, the Named Executive Officer’s individual experience and skills, market practices for annual bonuses, and, for our other Named Executive Officers, the recommendations of our CEO.Mr. Bergman.

Corporate Performance Measures

For fiscal 2018,2019, our Board of Directors selectednon-GAAP operating profit as the primary corporate performance measure, representing 75% of the target annual cash bonus opportunity, together with selected strategic and individual performance goals, representing the remaining 25% of the target annual cash bonus opportunity, as the criterioncriteria that best supported our annual operating plan and enhanced long-term value creation for purposes of funding our bonus pool. As determined by the Compensation Committee, our executive officers, including our Named Executive Officers, were eligible to earn cash bonus payments based on our actual performance against thenon-GAAP operating profit target set forth in our fiscal 20182019 annual operating plan. Fiscal 2018non-GAAP operating profit was determined by adjusting GAAP operating profit for acquisition and integration related costs, which includes amortization of purchased intangible assets and inventory fair value adjustments associated with acquisitions;share-based compensation costs; restructuring costs; and arbitration costs (for more information on hownon-GAAP operating profit is calculated, see Appendix A of this Proxy Statement).

For fiscal 2018, the target level for thenon-GAAP operating profit performance measure was $194 million and we achieved $162 million. The operating profit achievement and assessment of strategic goal attainment resulted in a bonus pool funded at approximately 49% for our fiscal 2018. Our Board of Directors set this target level to be aggressive, yet achievable, with diligent effort during the fiscal year.

Individual Performance Objectives

Consistent with our compensation philosophy of rewarding individual performance, our CEOat the start of fiscal 2019, Mr. Bergman developed and recommended to the Compensation Committee a series of individual performance goals for our executive officers, including our other Named Executive Officers, which he deemed to be integral to the achievement of our annual operating plan. These objectives were approved by the Compensation Committee. The Compensation Committee determined the individual performance goals that should be used to assess the performance of our CEO.Mr. Bergman.

For purposes of the fiscal 20182019 annual performance-based cash bonuses, the individual performance goals for each of our Named Executive Officers were as follows:

 

Mr. Bergman – Achieve our fiscal 2018 annual operating plan, support our business growth objectives, evaluate and drive long-term corporate growth strategies and market opportunities, and foster an environment of high integrity and ethics.

●

Mr. Wong – Focus on achieving fiscal 2019 annual operating plan by having the necessary supply chain, inventory and service levels to fulfill customer demand, along with responsibility of product quality by developing, directing and implementing quality strategies in support of overall business goals.

 

Mr. Ali – Support our business growth objectives with appropriate processes and controls, monitor and review our corporate and financial structure, set future financial strategy, and foster an environment of high integrity, ethics, and regulatory compliance.

●

Mr. Bergman – Achieve our fiscal 2019 annual operating plan, support our business growth objectives, evaluate and drive long-term corporate growth strategies and market opportunities, and foster an environment of high integrity and ethics.

 

Mr. Barber – Expand position within strategic customers, drive market share within strategic markets, establish long-term focus and strategy for identified Mobile market strategies, and support the overall achievement of our fiscal 2018 annual operating plan.

●

Mr. Nolan – Support our business growth objectives with appropriate processes and controls, monitor and review our corporate and financial structure, set future financial and tax strategy, and foster an environment of high integrity, ethics, and regulatory compliance.

 

Mr. Verhoeven – Expand and develop our IoT position within strategic customers, identify and drive market share within strategic markets with existing products, establishlong-term focus for IoT market strategies based on the integration efforts of the two acquisitions that are focused on the expansion of our IoT market position, and support the achievement of our fiscal 2018 annual operating plan.

●

Mr. Ali – Support our business growth objectives with appropriate processes and controls, monitor and review our corporate and financial structure, set future financial strategy, and foster an environment of high integrity, ethics, and regulatory compliance.

 

●

Mr. Liu – Expand position within strategic customers, drive market share within strategic markets, establish long-term focus and strategy for identified personal computer, or PC, market strategies, and support the overall achievement of our fiscal 2019 annual operating plan.

●

Mr. Lu – Expand position within strategic customers, drive market share within strategic markets, establish focus and strategy for identified Mobile and Automotive market strategies, and support the overall achievement of our fiscal 2019 annual operating plan.

●

Mr. McFarland - Manage internal and external legal expenses within budget with no loss in responsiveness or increase in risk, manage ongoing litigation and claims to conclusion within acceptable cost/benefit limits, emphasize return on investment for our intellectual property, and foster an environment of high integrity, ethics, and regulatory compliance.

Mr. Wong – Focus on achieving fiscal 2018 annual operating plan by having the necessary supply chain, inventory and service levels to fulfill customer demand, along with responsibility of product quality by developing, directing and implementing quality strategies in support of overall business goals.

●

Mr. Verhoeven – Expand and develop our IoT position within strategic customers, identify and drive market share within strategic markets with existing products, establish long-term focus for IoT market strategies based on the integration efforts of the two acquisitions that are focused on the expansion of our IoT market position, and support the achievement of our fiscal 2019 annual operating plan.

After the end of the fiscal year, our CEOthe Compensation Committee evaluated each executive officer’s progress, including the progress of our PEO, towards the achievement of their individual performance objectives. In the case of our CEO, the Compensation Committee evaluated his progress towards the achievement of his individual performance goals.

Fiscal 20182019 Bonus Decisions

For fiscal 2018,2019, annual performance-based cash bonus payments were determined after the end of the fiscal year by the Compensation Committee. The Compensation Committee’s determination of the annual performance-based cash bonuses involved a multi-step process. First, the Compensation Committee established the annual target cash bonus pool for fiscal 20182019 based on the aggregate target annual cash bonus opportunities for all of our employees, including our executive officers. The portion of the bonus pool that was subject to the actual level of achievement of thepre-establishedpre-establishednon-GAAP non-GAAP operating profit target level for the fiscal year was adjusteddetermined based on our performance relative to thenon-GAAP operating profit target level as approved by our Board of Directors at the beginning of the year. Second, the portion of the bonus pool that was subject to the actual level of achievement of thepre-established strategic goals for the fiscal year, was adjusteddetermined based on our performance relative to thepre-established strategic goals as approved by our Board of Directors at the beginning of the year.

For fiscal 2019, the target level for thenon-GAAP operating profit performance measure was $208 million and we achieved $160 million. Fiscal 2019non-GAAP operating profit was determined by adjusting GAAP operating profit for acquisition and integration related costs; share-based compensation costs; restructuring costs; CEO severance costs; retention program costs; and costs associated with a loss on a supply agreement (for more information on hownon-GAAP operating profit was calculated, see Appendix A of this Proxy Statement). Based on the actual level of operating profit achievement and an assessment of strategic goal attainment, our bonus pool for all employees was funded at approximately 72% and at 50% for currently-employed NEOs who were not guaranteed a bonus for our fiscal 2019.

The Compensation Committee then determined the cash bonus payment, if any, to be received from the available bonus pool by an executive officer by evaluating the executive officer’s position and responsibility level within our company, as well as performing a subjective assessment of each executive officer’s actual performance as measured against eachsuch executive officer’s individual performance objectives (in the case of our other Named Executive Officers, after considering the recommendations of our CEO).objectives. Further, the Compensation Committee exercised its discretion in determining each executive officer’s bonus payment based upon the sizeachievement of the available pool.individual goals.

Based on this criteria, the following bonus payments were made to our Named Executive Officers for fiscal 2018:2019:

 

      Target   Actual 
    

 

 

    

 

 

 

Named Executive Officer

  Target Annual
Cash Bonus
Opportunity		   Actual Total Cash
Bonus Payout
(as a dollar amount)		   Actual Cash
Bonus Payment
(as a percentage
of fiscal 2018
Target  Annual
Cash Bonus
Opportunity)		 Actual Cash Bonus
Payment (as a
percentage of base
salary earned in
fiscal 2018)		   Annualized
Fiscal 2019
Base Salary		   Target Annual
Cash Bonus
Opportunity		   Target Annual Cash
Bonus Opportunity
(as a percentage of
base salary)		   Actual Total Cash
Bonus Payout
(as a dollar amount)		   Actual Cash Bonus
Payment (as a
percentage of base
salary earned in
fiscal 2019)		   

Actual Cash
Bonus Payment
(as a percentage

of fiscal 2019
Target Annual
Cash Bonus
Opportunity)

 

    

 

    

 

 

 

Alex Wong

   $350,000    $262,500    75.0%     $131,250     37.5%    50.0% 

Richard A. Bergman

  $1,015,000   $345,303    34.0%  49.3%    $700,000    $1,015,000    145.0%     $167,475  (2)    23.9%    16.5% 

Kermit Nolan

   $298,424    $132,903    44.5%  (1)    $66,452     22.3%    50.0% 

Wajid Ali

  $296,250   $143,978    48.6%  36.5%    $400,000    $300,000    75.0%     $99,000  (3)    24.8%    33.0% 

Kevin Barber

  $300,000   $116,640    38.9%  29.2% 

Shawn Liu

   $330,000    $247,500    75.0%     $123,750     37.5%    50.0% 

Richard Lu

   $350,000    $262,500    75.0%     $262,500  (4)    75.0%    100.0% 

John McFarland

   $350,000    $210,000    60.0%     $105,000     30.0%    50.0% 

Huibert Verhoeven

  $262,500   $127,575    48.6%  36.5%    $370,000    $277,500    75.0%     $82,418  (2)    22.3%    29.7% 

Alex Wong

  $255,000   $117,734    46.2%  34.6% 

 

(1)

Mr. Nolan’s bonus percentage is prorated for the corresponding periods before and after his promotion to Chief Accounting Officer of our company in February 2019.

(2)

Messrs. Bergman and Verhoeven received a prorated portion of their target bonus opportunity in connection with their respective severance arrangements.

(3)

Reflects the first half fiscal 2019 bonus earned and paid out to Mr. Ali prior to his departure from our company.

(4)

Pursuant to the terms of his offer letter, Mr. Lu received a guaranteed target bonus for fiscal 2019 and a $250,000sign-on bonus, which is not included in this table.

For fiscal 20182019 as a whole, our employees achieved an average payout level of approximately 49%72% of their target bonuses, while our currently-employed Named Executive Officers who were not guaranteed a bonus achieved a payout level of approximately 43%50% of their target bonuses as a result of not achieving the target level for thenon-GAAP operating profit performance measure and exceeding the target level for the selected strategic goals measure. The portion of the bonus pool established by the Compensation Committee for our Named Executive Officers represented approximately 0.5%0.6% of our fiscal 20182019non-GAAP operating profit.

Long-Term Incentive Compensation

As a technology company that encounters significant competition for qualified personnel,long-term incentive, or LTI, compensation plays a critical role in our ability to attract, hire, motivate, and retain qualified and experienced executive officers. The use of equity compensation is necessary for us to compete for qualified executive officers without significantly increasing cash compensation and is the most important component of our executive compensation program. We use LTI compensation in the form of equity awards to motivate our executive officers, including our Named Executive Officers, forlong-term corporate performance based on the value of our common stock and thereby, further align their interests with those of our stockholders. Our LTI compensation consistsgranted in fiscal 2019 consisted of stock options, performance-based MSU and PSU awards andtime-based DSU awards, the purposes for which are described below:

 

Type of Equity

Purpose
Market Stock Units (“MSUs”)  

Purpose

Stock OptionsProvide an appropriate long—term incentive for our executive officers because they are rewarded only to the extent that, following the grant date of the stock options, our stock price grows and our stockholders see the value of their investment grow. Starting in fiscal 2018, we no longer grant stock options to our executive officers, and instead, grant the majority of LTI compensation to our executive officers in the form of performance-based equity.

Market Stock

Units (“MSUs”)

Enable our executive officers to earn shares of our common stock based on our performance relative to the S&P Semiconductor Select Industry Index, or SPSISC Index, or the Philadelphia Semiconductor Index, or SOX Index, over performance periods of up to three years. We believe that MSU awards serve as a source of motivation to our executive officers even in a down-market environment, while also providing upside potential if we outperform the SPSISC Index or SOX Index, as applicable, over the relevant performance periods. In addition, MSU awards provide a direct link between compensation and stockholder return, thereby motivating our executive officers to focus on and strive to achieve both our annual and long-term financial and strategic objectives.

Performance

Stock Units

(“PSUs”)

  

Enable our executive officers to earn shares of our common stock based on ournon-GAAP Earnings Per Share (EPS) performance over aone-year performance period. We believe that PSU awards serve as a source of motivation to our executive officers to drive financial performance. In addition, PSU awards provide a direct link between compensation and stockholder return, thereby motivating our executive officers to focus on and strive to achieve both our annual and long-term financial and strategic objectives. Therefore, our Compensation Committee decided to start granting PSUs in fiscal 2018 in lieu of options.

Deferred Stock Units (“DSUs”)  Enable our executive officers to earn shares of our common stock only when they have satisfied multi-year service-based vesting conditions, helphelping us to achieve our retention objectives and further alignaligning the interests of our executive officers with those of our stockholders.

Fiscal 20182019 Long-Term Incentive Compensation Decisions

For new grantsequity “refresh” awards approved in fiscal 2018,2019, we generally granted NEO equity compensation in a target value mix of 33% DSUs, 33% PSUs and 33% MSUs. The Compensation Committee determined that an LTI award consisting of a combination of DSU awards, PSU awards and MSU awards would provide our executive officers with a competitive equity compensation package, while further aligning their compensation with our long-term businessfinancial, operational and financialstrategic objectives and promoting the creation of stockholder value. The final tranche of stock option grants approved by our Compensation Committee in fiscal 2017 was granted to our NEOs in August 2017.

For fiscal 2018,2019, the fair value of the equity awards granted to our NEOs as part of our annual “refresh” program were on average, 5% in the form of a stock option award, approximately 29%33% in the form of a DSU award, 29%33% in the form of a PSU award and 37%33% in the form of an MSU award. The actual grant date fair values of the awards granted to our NEOs varies from the target mix due to the accounting valuation methodology for MSUs.

The equity awards granted to our Named Executive Officers in fiscal 20182019 were as follows.follows:

 

Named Executive Officer

  Options(1)   DS Us   PS Us   MS Us   Grant Date
Fair Value		   Intrinsic
Value(3)		  

  DSUs  

 

  PSUs  

 

  MSUs  

 

      Grant Date      

Fair Value

 

      Intrinsic      

Value(1)

Alex Wong

 9,566 9,566 9,566 $1,123,498 $602,107

Richard A. Bergman

   17,925    45,711    45,711    45,711   $5,921,151   $7,803,773  46,561 46,561 46,561 $5,468,450 $2,930,661

Kermit Nolan

 22,023 -     -     $851,673 $641,750

Wajid Ali

   6,875    17,478    17,478    17,478   $2,264,386   $2,983,948  14,784 14,784 14,784 $1,736,336 $930,540

Kevin Barber

   5,150    12,996    12,996    12,996   $1,684,402   $2,218,946 

Shawn Liu

 10,001 10,001 10,001 $1,174,587 $629,487

Richard Lu

 22,107 -     11,054 $1,416,054 $695,736

John McFarland

 9,566 9,566 9,566 $1,123,498 $602,107

Huibert Verhoeven

   4,575    12,100    12,100    12,100   $1,564,303   $2,064,852  10,871 10,871 10,871 $1,276,766 $684,247

Alex Wong

   5,150    11,652    11,652    11,652   $1,519,814   $1,992,160 

 

(1)

This includes one-quarter of the stock options comprising each executive officer’s fiscal 2017 award, which was granted during fiscal 2018. One-quarter of the total number of shares of our common stock underlying the stock option portion of each Named Executive Officer’s fiscal 2017 award was granted on August 4, 2017.

(1) Intrinsic value is based on the Company’s closing stock price on June 28, 2019 (the last trading day in fiscal 2019), which was $29.14. The MSU intrinsic value is further adjusted for performance, which was tracking to a 16% payout as of the end of fiscal 2019.

(2)

We granted PSUs to each of our executive officer beginning in fiscal 2018.

(3)

Intrinsic value is based on the Company’s closing stock price on June 29, 2018 (the last trading day in fiscal 2018), which was $50.37. The MSU intrinsic value is further adjusted for performance, which was tracking to a 135% payout as of the end of fiscal 2018.

The size of these LTI compensation awards were determined by the Compensation Committee based on its assessment of our financial results for fiscal 2017,2018, its evaluation of each executive officer’sNamed Executive Officer’s performance during fiscal 2017,2018, and the following additional factors: each executive officer’sNamed Executive Officer’s position within our company; an assessment of the equity award practices of the companies in our compensation peer group; and an assessment of the outstanding equity awards then-held by each executive officer.Named Executive Officer. In making its award decisions, the Compensation Committee exercised its judgment to set the size of each award at a level it considered appropriate to create a meaningful opportunity for reward predicated on the creation of long-term stockholder value.

DSU Awards and Stock Options

Once the size of the LTI compensation awards for our Named Executive Officers were determined, the Compensation Committee decided that the portion of the award to be delivered in the form of DSU awards would vest as follows: for current executives, DSUs generally vest over three years, with 1/3rd3rd of the total number of shares of our common stock subject to the DSU award vesting annually in the quarter the award was granted until fully vested; for newly hired executives, DSUs generally vest over four years, with 1/4th of the total number of shares of our common stock subject to the DSU award vesting annually in the quarter the award was granted until fully vested.

Beginning in fiscal 2018, our Named Executive Officers no longer receive stock options as part of their equity compensation. For stock option awards approved in fiscal 2017, the stock option awards were granted quarterly in four equal installments beginning in October 2016, which is in the second quarter of our fiscal 2017, through the first quarter of fiscal 2018, with an exercise price equal to the fair market value of our common stock on each grant date.

PSU Awards

As established by the Compensation Committee, each PSU award consists of the right to receive a specified number of shares of our common stock if the award’s performance conditions are satisfied.

The PSUs granted to our executive officers are designed tohave a specificone-year performance period, where performance is measured based on the achievement of a specified level ofnon-GAAP earnings per share. The earned PSUs shall vest in three tranches with the target quantity for each tranche equal toone-third of the total PSU grant. The grants have a specific one-year performance period and vesting occurstranches over threeone-year service periods with the final service period ending approximately three years from the grant date. Performance is measured based on the achievement of a specified level of non-GAAP earnings per share. The potential payout ranges from 0% to 200% of the target number of shares subject to the award for each tranche and is adjusteddetermined on a linear basis with a payout triggering if ournon-non-GAAP GAAP earnings per share equalsis equal to or greater than 65% of the target with a maximum payout achieved at 135% of target. PSUs grantedearned in fiscal 2018 to2019 by our executive officers arewere based on our performance in calendar year 2018.fiscal 2019.

Delivery of shares earned, if any, will take place on the dates provided in the applicable PSU grant agreement, assuming the granteeexecutive officer is still an employee of our company at the end of the applicable service period. On the delivery date, we withhold shares to cover statutory tax withholding requirements and deliver a net quantity of shares to the executive officer after such withholding. Until delivery of shares, the granteeexecutive officer has no rights as a stockholder with respect to any shares underlying the PSU award.

In limited circumstances, including in the event of a change of control of our company and termination of employment of an executive officer, acceleration of vesting may occur; such acceleration, if any, will occur pursuant to the equity agreement underlying such equityaward and anythen-in-effect Change of Control policy covering such executive officer.

PSUs earned in fiscal 2019 were based on achievement of anon-GAAP earnings per share target of $4.95 for the fiscal 2019one-year performance period. Our actualnon-GAAP earnings per share for fiscal 2019 was $4.00, which resulted in a negative performance adjustment of 55%. Accordingly, our NEOs will receive 45% of their target PSUs for fiscal 2019 if employed through the end of the required service periods.

The below chart represents the PSUs earned as a percentage of target in fiscal 2018 and 2019. No PSUs were granted in fiscal 2017.

LOGO

MSU Awards

As established by the Compensation Committee, each MSU award granted to our executive officers consists of the right to receive a specified number of shares of our common stock if the award’s performance conditions are satisfied. The shares of our common stock subject to such MSU awards will be earned, if at all, based on our total stockholder return, or TSR, compared to that of the S&P Semiconductor Select Industry Index, or SPSISC Index TSR, for awards granted to our executive officers beginning in fiscal 2018, and compared to that of the Philadelphia Semiconductor Index TSR, or the SOX Index TSR, for awards granted to our executive officers prior to fiscal 2018, over aone-year, atwo-year, and a three-year performance period. In other words, the actual number of shares of our common stock that may be earned under the MSU awards will vary based on over- or under-performance of our TSR compared to that of the SPSISC Index TSR or SOX

Index TSR, as applicable, over the specified performance periods. Pursuant to the terms of the fiscal 20182019 MSU awards granted on October 30, 2017:November 13, 2018:

 

The target number of shares of our common stock subject to each MSU award will be earned if our TSR equals that of the SPSISC Index TSR or SOX Index TSR as measured over the one-year, the two-year, and the three-year performance periods (as determined on September 30, 2018, September 30, 2019, and September 30, 2020).

●

The target number of shares of our common stock subject to each MSU award will be earned if our TSR equals that of the SPSISC Index TSR as measured over theone-year, thetwo-year, and the three-year performance periods (as determined on September 30, 2019, September 30, 2020, and September 30, 2021).

 

Payouts are scaled such thatbelow-target performance will result in a reduction in the number of shares of our common stock earned using atwo-to-one ratio, while above-target performance will result in a payout of 100% of the target number of shares of our common stock for the one-year and two-year performance periods and an increase in the number of shares of our common stock earned using atwo-to-one ratio for the three-year performance period less any shares that were delivered for the one-year and two-year performance periods (subject to a cap of 200% of the target number of shares of our common stock subject to the MSU awards if our TSR is 50 percentage points or more above the SPSISC Index TSR or SOX Index TSR, as applicable).

●

Payouts are scaled such that below-target performance will result in a reduction in the number of shares of our common stock earned using atwo-to-one ratio, while above-target performance will result in a payout of 100% of the target number of shares of our common stock for theone-year andtwo-year performance periods with any additional payout deferred until delivery of shares based on the performance of the three-year performance period, where an increase in the number of shares of our common stock earned using atwo-to-one ratio for the three-year performance period less any shares that were delivered for theone-year andtwo-year performance periods (subject to a cap of 200% of the target number of shares of our common stock subject to the MSU awards if our TSR is 50 percentage points or more above the SPSISC Index TSR, as applicable) will be delivered to the executive officer. Our MSU awards are long-term awards with partial payouts based on performance for each of the initial performance periods with a performancetrue-up based on the performance of the final performance period.

 

One-third of the target award is tied to each performance period (one-year, two-year and three-year periods). For the one-year and two-year measurement periods, executive officers can only earn up to target for the portion of the award tied to each performance period. All above-target payouts for the award are tied to the full three-year performance period and require that the executive officer remains employed through the end of the three-year period.

●

One-third of the target award is tied to each performance period(one-year,two-year and three-year periods). For theone-year andtwo-year measurement periods, executive officers can only earn up to target for the portion of the award tied to each performance period. All above-target payouts for the award are tied to the full three-year performance period and require that the executive officer remains employed through the end of the three-year period.

Any shares of our common stock earned under an MSU award will vest and be delivered to an executive officer within 30 days of the end of theone-year,two-year, and three-year performance periods. In limited circumstances, including in the event of a change of control of our company and termination of employment of an executive officer, an acceleration of vesting may occur; such acceleration, if any, will occur pursuant to the equity agreement underlying such equity and anythen-in-effect Change of Control policy covering such executive officer.

In fiscal 2019, our NEOs received the following payouts in connection with their MSUs:

o

Fiscal 2016 MSUs granted to our NEOs were paid out at 0% for the third performance period;

o

Fiscal 2017 MSUs granted to our NEOs were paid out at 0% for the second performance period; and

o

Fiscal 2018 MSUs granted to our NEOs were paid out at 100% for the first performance period.

As of our record date, the outstanding MSU awards held by our NEOs are currently tracking to pay out against their target as follows:follows, and as represented in the below chart:

 

o

Fiscal 2017 MSUs granted to our NEOs (with payouts through fiscal 2020) are tracking to a 0% payout for the third performance period;

o

Fiscal 2018 MSUs granted to our NEOs (with payouts through fiscal 2021) are tracking to a 16% payout for the second performance period; and

o

Fiscal 2019 MSUs granted to our NEOs (with payouts through fiscal 2022) are tracking to a 17% payout for the first performance period.

Fiscal 2016The below chart represents MSUs earned or expected to be earned by our NEOs for MSUs granted to our NEOs (with payouts throughin fiscal 2019) are tracking to a 0% payout for the third performance period;2017, 2018 and 2019.

 

Fiscal 2017 MSUs granted to our NEOs (with payouts through fiscal 2020) are tracking to a 0% payout for the second performance period; andLOGO

Fiscal 2018 MSUs granted to our NEOs (with payouts through fiscal 2021) are tracking to a 124% payout for the first performance period.

Stock Ownership Guidelines and Hedging Prohibition

We maintain stock ownership guidelines that require our CEO to own shares of our common stock with a value equal to at least three times his annual base salary. Our CEO had five years from fiscal 2012 to achieve this required ownership level and currently has met this ownership guideline. We believe that these guidelines further promote the alignment of the long-term interests of our CEO with our stockholders. We also believe that these guidelines help mitigateOur CEO has five years from the risks associated with our executive compensation program.date of his appointment to achieve the required ownership levels. In addition, our Insider Trading Policy prohibits our executive officers, and any family member residing in the same household, from engaging in derivatives trading and hedging involving our securities without the prior approval of our Chief Financial Officer and our General Counsel.

Compensation Recovery Policy

Our 2010 Incentive Compensation Plan and our 2019 Equity and Incentive Compensation Plan, approved by our Board of Directors on July 30, 2019 and included as Proposal Four to this Proxy Statement, each contain a clawback provision that applies to all awards held by the company’s executive officers (as defined by the Securities Exchange Act of 1934). Pursuant to both the 2010 Incentive Compensation Plan and our 2019 Equity and Incentive Compensation Plan, all awards (cash and equity) held by an executive officer will be subject to clawback, recoupment or forfeiture, (i) to the extent that such executive officer is determined to have engaged in fraud or intentional illegal conduct that caused the company’s materialnon-compliance with any applicable financial reporting requirements and resulted in a financial restatement, the result of which is that the amount received from such award would have been lower had it been calculated on the basis of such restated results, or (ii) as required by applicable laws, rules, regulations or listing requirements. Such clawback, recoupment or forfeiture, in addition to any other remedies available under applicable law, will occur through the cancellation of the excess awards and, in the case of equity awards, the recoupment of any gains realized with respect to the excess awards. Our executive officers may not claim the operation of the clawback as the basis for a “good reason” to resign and receive severance payments and benefits.

Equity Award Grant Policy

Our Board of Directors or the Compensation Committee, as applicable, approves equity awards at its regularly scheduled meetings each year. Generally, in the case of equity awards granted to newly hired executive officers, we set the price of such awards at the closing market price of our common stock as reported on the NASDAQ Global Select Market on

the date such grant is approved by our Board of Directors, the Compensation Committee or their delegate. Generally, in the case of a DSU award granted to our existing executive officers, we provide for effective dates on the first business day after the applicable quarterly financial earnings release. In the case of a stock option granted to our existing executive officers, the exercise price of such awards is equal to the fair market value of our common stock as reported on the NASDAQ Global Select Market on each grant date, which is generally the first business day after the applicable quarterly financial earnings release. In the case of MSU and PSU awards granted to our existing executive officers, we provide for an effective date at the October Compensation Committee meeting. For more information on our MSU and PSU awards, refer to the “Long-Term Incentive Compensation” section in this Compensation Discussion and Analysis.

Employment Arrangements

While we do not have employment agreements with any of our executive officers, the initial terms and conditions of employment for each of our Named Executive Officers have been set forth in a written employment offer letter. Each of these arrangements was approved on our behalf by the Compensation Committee or, in certain instances, by our Board of Directors.

In filling our executive positions, our Board of Directors or the Compensation Committee, as applicable, recognized that it would need to develop competitive compensation packages to attract qualified candidates in a dynamic labor market. At the same time, our Board of Directors and the Compensation Committee were sensitive to the need to integrate new executive officers into the executive compensation structure that we were seeking to develop, balancing both competitive and internal equity considerations.

Each of these employment offer letters provides for “at will” employment and sets forth the initial compensation arrangements for the executive officer, including an initial base salary, an annual performance-based cash bonus opportunity, and a recommendation for a stock-based compensation award in the form of either an option to purchase shares of our common stock and DSU awards that wasfor executives hired prior to fiscal 2018, or in the form of DSU, PSU and/or MSU awards for executives hired in fiscal 2018 and subsequent years. Such stock-based compensation award is submitted to our Compensation Committee for approval.

Perquisites and Other Personal Benefits

We do not view perquisites or other personal benefits as a significant component of our executive compensation program. From time to time, we may provide perquisites or other personal benefits in limited circumstances, such as when we believe it is appropriate to assist an individual executive officer in the performance of the executive officer’s duties, to make our executive officers more efficient and effective, and for recruitment, motivation, or retention purposes. All future practices with respect to perquisites or other personal benefits will be approved and subject to periodic review by the Compensation Committee.

Nonqualified Deferred Compensation

We do not provide any nonqualified deferred compensation arrangements for any of our employees.

Retirement and Other Benefits

We have established a Section 401(k) retirement savings plan for our executive officers, including our Named Executive Officers, on the same basis as for all of our other employees who satisfy certain eligibility requirements. Under this plan, participants may elect to makepre-tax contributions of up to 30% of their current compensation, not to exceed the applicable statutory income tax limitation. Currently, we match 25% of the contributions made by participants in the plan, up to a maximum of $4,500$4,750 per participant on abeginning with calendar year basis.2019. We intend for the plan to qualify under Section 401(a) of the Internal Revenue Code, or the Code, so that contributions by participants or by us to the plan, and income earned on plan contributions, are not taxable to participants until withdrawn from the plan.

Additional benefits received by our executive officers, including our Named Executive Officers, include medical, dental, vision, life, and disability insurance benefits and participation in our employee stock purchase plan. These benefits are provided to our executive officers on the same basis as to all of our regular full-time employees.

Severance Policy

In October 2011, our Board of Directors adopted the amended Severance Policy for Principal Executive Officers, or the Severance Policy, which was further amended and approved by the Compensation Committee on October 30, 2017 and whichon June 28, 2019. The Severance Policy applies to certain executive officers designated by our Board of Directors. All of our Named Executive Officers are covered by the Severance Policy. Under the Severance Policy, we will pay a pro rata amount of (i) 100% of the base salary in the case of our CEO over a period of one year and 50% of the base salary in the case of our other designated executive officers over a period of six months; (ii) 100% of the target bonus in the case of our CEO, the greater of 50% of the target bonus or a pro rata amount of the target bonus in the case of our CFO,Chief Financial Officer, and a pro rata amount of the target bonus in the case of our other designated executive officers, in each case for the fiscal year

during which sucha termination occurs, and (iii) pay the COBRA premium for coverage under our medical plan for the designated executive officer and the executive officer’s dependents following a termination of employment by us without “good cause” or by the executive officer for “good reason,” each as defined in the Severance Policy, for one year in the case of our CEO and six months in the case of our other designated executive officers. All outstanding and unvested stock options and DSU awardsequity incentives held by our CEO or our other designated executive officers will cease to vest on such executive officer’s date of employment termination, and such executive officer’s outstanding and vested stock option awards will be exercisable for 90 days after such executive officer’s date of employment termination, but not beyond their original term. The foregoing payments and benefits are contingent upon the designated executive officer resigning from all directorships held by that executive at our company or any of our subsidiaries and affiliates and executing and not revoking a release of all claims that he or she may have against us. The Severance Policy will terminate upon a “change of control” of our company as defined in the Severance Policy.

Change of Control Severance Policy

In July 2014, we enacted a Change of Control Severance Policy for Principal Executive Officers, or the CoC Severance Policy, which was further amended and approved by the Compensation Committee on October 30, 2017.2017 and June 28, 2019. The CoC Severance Policy applies to certain executive officers who have been designated by our Board of Directors. All of our Named Executive Officers are covered by the CoC Severance Policy. The CoC Severance Policy replaced individual Change of Control Severance Agreements entered into with our CEO and several of our executive officers. The CoC Severance Policy wasis designed by the Compensation Committee to meet current market expectations and was modeled after the practices of the companies in our then-current compensation peer group. The CoC Severance Policy provides for specified payments and benefits only upon a qualifying termination of employment following a “change of control” of our company as defined in the policy (a “double trigger” arrangement), meaning that both a change of control of our company and a termination of employment must occur before the designated executive officer is eligible to receive any payments or benefits.

The CoC Severance Policy provides that, in the event of a termination of employment by our company without “good cause” or by the designated executive officer with “good reason,” each as defined in the policy, within three months prior to a change of control or 18 months following a change of control of our company, such designated executive officer will be eligible to receive the following:

 

An amount equal to 200% of base salary and target annual cash bonus in the case of our CEO, and 150% of base salary and target annual cash bonus for the other designated executive officers, in each case for the fiscal year in which such termination of employment occurs;

●

An amount equal to 200% of base salary and target annual cash bonus in the case of our CEO, and 150% of base salary and target annual cash bonus for the other designated executive officers, in each case for the fiscal year in which such termination of employment occurs;

 

Continuation of health insurance coverage for the designated executive officer and the executive officer’s dependents for a period of 18 months; and

●

Continuation of health insurance coverage for the designated executive officer and the executive officer’s dependents for a period of 18 months; and

 

Continuation of life insurance coverage for the designated executive officer for a period of 18 months.

●

Continuation of life insurance coverage for the designated executive officer for a period of 18 months.

The foregoing payments and benefits are contingent upon the designated executive officer resigning from all directorships held by that executive at our company or any of our subsidiaries and affiliates and executing and not revoking a release of all claims that he or she may have against us.

The CoC Severance Policy also provides that, in the event of a change of control of our company, all outstanding and unvested stock options and DSU awardsequity incentives (but not including any outstanding MSU awards) will immediately vest in full if the employment of the designated executive officer is terminated by our company without “good cause” or by the designated executive officer with “good reason,” within three months prior to a change of control or 18 months following a change of control of our company, each as defined in the policy. SuchAny outstanding stock options will be exercisable for 90 days after such executive officer’s date of employment termination, but not beyond their original term.

All outstanding and unearned MSU and PSU awards will continue to be earned in accordance with the terms of the MSU or PSU grant agreement.

We implemented the CoC Severance Policy to mitigate a potential disincentive for these executive officers when they are evaluating a potential acquisition of our company, particularly when their services may not be required by the acquiring entity. The CoC Severance Policy has been designed to provide each of our executive officers, including the Named Executive Officers, with consistent treatment and to avoid the inadvertent incurrence of an excise tax under Section 409A of the Code.

Executive Retention Program

On May 6, 2019, the Executive Committee instituted a retention program applicable to certain of Synaptics’ executive officers (the “Retention Program”). The Retention Program applies to certain executive officers who have been designated by our Board of Directors. All of our currently-employed Named Executive Officers are covered by the Retention Program.

The retention program provides that the participating executive officers will receivelump-sum cash award payments (determined in each case by the Executive Committee) in November 2020 (a “Retention Award”) should they remain as full-time active employees of Synaptics in good standing for 18 consecutive calendar months starting May 1, 2019 (the “Retention Period”). Certain voluntary and unpaid leaves will result in a termination of the applicable Retention Award. No Retention Award will be paid to any executive who resigns without “good reason” or who is terminated for “good cause” (each as defined in the Severance Policy) prior to the end of the Retention Period. If a participating executive’s employment is terminated without “good cause”, or if such executive resigns for “good reason” prior to the end of the Retention Period, such executive will receive(i) two-thirds of his or her eligible Retention Award if the termination occurs during the first twelve months of the Retention Period, and (ii) a portion of such executive’s eligible Retention Award prorated for the actual number of consecutive full calendar months completed as a full-time employee of Synaptics if the termination occurs between the twelfth and eighteenth month of the Retention Period, provided that such executive resigns from all Synaptics and Synaptics’ affiliate director and officer positions and executes a separation agreement and release in a form acceptable to Synaptics.

We implemented the Retention Program to encourage each participant’s continued commitment to the support and management of the operations of the company during the transition to new executive leadership.

Except as described herein or under “Potential Payments Upon Termination or Change of Control” below, we do not offer our executive officers, including our Named Executive Officers, any other severance payments or benefits upon their termination of employment with our company, whether or not in connection with a change of control of our company.

Tax and Accounting Considerations

Deductibility of Executive Compensation

We take into account the tax effects of executive compensation on us and our executive officers. Section 162(m) of the Code (“Section 162(m)”) limits the deductibility, for federal income tax purposes, of remuneration in excess of $1 million paid to certain executives of any publicly held corporation in any taxable year. Thus, we are able to deduct certain types of remuneration paid to any of these individuals only to the extent that such remuneration during any taxable year does not exceed $1 million. Historically, remuneration in excess of $1 million could be deducted if it qualified as“performance-based “performance-based compensation” within the meaning of Section 162(m) or satisfied the condition of another exemption from the deductibility limit. This performance-based exception has been repealed, effective for taxable years beginning after December 31, 2017. However, certain arrangements in place as of November 2, 2017 may be eligible for transition relief under the Code. Our Amended and Restated 2010 Incentive Compensation Plan (as more fully described in Proposal 4) retains certain legacy provisions that were originally included in the plan so that outstanding awards that may qualify for transition relief under the Code are not impacted.

While the Compensation Committee is mindful of the benefit of being able to fully deduct the compensation paid to our Named Executive Officers, it believes that we should retain the flexibility to provide compensation to our Named Executive Officers that is not fully tax deductible when it believes that such payments are appropriate to attract and retain executive talent or meet other business objectives. Thus, the Compensation Committee may, in its judgment, authorize compensation payments that are not deductible by reason of the application of 162(m) when it believes that such payments are appropriate to attract and retain executive talent and isare in our best interests and the best interests of our stockholders.

Taxation of “Parachute” Payments

Sections 280G and 4999 of the Code provide that executive officers and directors, who hold significant equity interests, and certain other service providers may be subject to significant additional taxes if they receive payments or benefits that exceed certain prescribed limits in connection with a change of control of a company, and that the company (or a successor) may forfeit a deduction on the amounts subject to this additional tax. We did not provide any executive officer, including any Named Executive Officer, with a“gross-up” or other reimbursement payment for any tax liability that he or she might owe as a result of the application of Sections 280G and 4999 of the Code during fiscal 2018,2019, and we have not agreed and are not otherwise obligated to provide any executive officer with such a “gross-up”“gross-up” or other reimbursement.

Accounting for Stock-Based Compensation

We account for stock-based compensation arrangements in accordance with the provisions of Financial Accounting Standards Board Accounting Standards Codification Topic 718 “Compensation – Stock Compensation,” or ASC Topic 718. ASC Topic 718 requires companies to measure the compensation expense for all stock-based payment awards made to employees and directors, including stock options, PSU, DSU and MSU awards, based on the grant date “fair value” of these awards. This calculation is performed for accounting purposes and reported in the compensation tables below, even though

our Named Executive Officers may never realize any value from their awards. ASC Topic 718 also requires companies to recognize the compensation cost of theirstock-based compensation awards in their income statements over the period that an employee or director is required to render service in exchange for the stock option or other award. In determining stock-based compensation, the Compensation Committee considers the potential expense of these awards under ASC Topic 718 and other accounting implications such awards may have on us.

Compensation Recovery Policy

On October 12, 2016, our Board of Directors approved an amendment and restatement of the Company’s 2010 Incentive Compensation Plan, which now contains a clawback provision that applies to all awards held by the Company’s executive officers (as defined by the Securities Exchange Act of 1934). All awards (cash and equity) held by an executive officer will be subject to clawback, recoupment or forfeiture, (i) to the extent that such executive officer is determined to have engaged in fraud or intentional illegal conduct that caused the Company’s materialnon-compliance with any applicable financial reporting requirements and resulted in a financial restatement, the result of which is that the amount received from such award would have been lower had it been calculated on the basis of such restated results, or (ii) as required by applicable laws, rules, regulations or listing requirements. Such clawback, recoupment or forfeiture, in addition to any other remedies available under applicable law, will occur through the cancellation of the excess awards and the recoupment of any gains realized with respect to the excess awards. The executive officers may not claim the operation of the clawback as the basis for “good reason” to resign and receive severance benefits.

COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed and discussed with management the “Compensation Discussion and Analysis” included in this Proxy Statement and, based on such review and discussion, the Compensation Committee recommended to our Board of Directors that the “Compensation Discussion and Analysis” be included in this Proxy Statement.

 

Respectfully submitted,
Nelson C. Chan,Keith B. Geeslin, Chairman
Kiva A. Allgood
Francis F. Lee
Richard L. Sanquini
James L. Whims

EXECUTIVE COMPENSATION

Fiscal 20182019 Summary Compensation Table

The following table sets forth information regarding compensation for services in all capacities to us and our subsidiaries received by our Named Executive Officers for the fiscal years 2019, 2018, 2017, and 2016.2017.

 

Name and Principal Position(1)  Fiscal
Year		   

Bonus

($)

   

Salary

($ )(2)

   

Stock
Awards

($)(3)

   

Option
Awards

($)(4)

   Non-Equity
Incentive Plan
Compensation
($)(5)		   All
Other
Comp
($)(6)		   

Total

($)

 
  

 

 

    

 

   

 

   

 

   

 

   

 

    

 

 
     Stock Option Non-Equity
Incentive Plan		 All Other   

Alex Wong

   2019    -         $348,333    $1,123,498    -        $131,250    $8,314     $1,611,395 

Principal Executive Officer and Senior

   2018    -         $340,000    $1,426,903    $92,911    $117,734    $24,240     $2,001,788 

Vice President of Worldwide

   2017    -         $306,000    $984,656    $415,665    $165,699    $4,500     $1,876,520 

Operations

                        
 Fiscal Salary Awards Awards Compensation Comp Total 

Name and Principal Position

 Year ($)(1) ($)(2) ($)(3) ($)(4) ($)(5) ($) 

Rick Bergman

 2018  $700,000  $5,597,768  $323,383  $345,303  $45,568  $7,012,022    2019    -         $495,833    $5,468,450    -        $167,475    $761,374  (7)    $6,893,132 

Chief Executive Officer & President

 2017  $560,000  $3,422,280  $1,446,337  $439,698  $3,942  $5,872,257    2018    -         $700,000    $5,597,768    $323,383    $345,303    $45,568     $7,012,022 
 2016  $700,000  $4,536,630  $1,746,138  $812,000  $4,500  $7,799,268    2017    -         $560,000    $3,422,280    $1,446,337    $439,698    $3,942     $5,872,257 

Kermit Nolan

   2019    -         $298,096    $851,673    -        $66,452    $8,335     $1,224,556 

Chief Accounting Officer &

   2018    -         $279,333    $417,869    -        $51,554    $7,212     $755,968 

Interim Chief Financial Officer

   2017    -         $234,000    $657,251    $21,669    $115,088    $6,332     $1,034,340 

Wajid Ali

 2018  $395,000  $2,140,355  $124,031  $143,978  $21,028  $2,824,392    2019    -         $241,591    $1,736,336    -        $99,000    $506     $2,077,433 

Senior Vice President and Chief

 2017  $355,500  $1,308,872  $441,939  $213,893   —    $2,320,204    2018    -         $395,000    $2,140,355    $124,031    $143,978    $21,028     $2,824,392 

Financial Officer

 2016  $395,000  $1,001,246   —    $267,217  $137,379 (6)   $1,800,842    2017    -         $355,500    $1,308,872    $441,939    $213,893    -         $2,320,204 

Kevin D. Barber

 2018  $395,000  $1,591,491  $92,911  $116,640  $24,515  $2,220,557 

Shawn Liu

   2019    -         $323,333    $1,174,587    -        $123,750    $7,447     $1,629,117 

Senior Vice President & General

   2018    -         $286,226    $766,677    -        $47,850    $17,480     $1,118,233 

Manager, PC Division

   2017    -         $266,939    $455,039    $14,549    -        $4,531     $741,058 

Richard Lu

   2019    $512,500  (8)    $204,167    $1,416,054    -        -        $2,498     $1,622,719 

Senior Vice President & General

 2017  $333,000  $984,656  $415,665  $220,390  $4,163  $1,957,874                   

Manager, Mobile Division

 2016  $368,333  $1,296,180  $479,225  $204,795  $4,069  $2,352,602                   

John McFarland

   2019    -         $348,333    $1,123,498    -        $105,000    $2,113     $1,578,944 

Senior Vice President, General

   2018    -         $338,333    $1,152,471    $64,496    $67,320    $21,205     $1,643,825 

Counsel & Secretary

   2017    -         $297,000    $684,456    $286,045    $65,340    $1,985     $1,334,826 

Huibert Verhoeven

 2018  $348,333  $1,481,766  $82,537  $127,575  $24,948  $2,065,159    2019    -         $296,591    $1,276,766    -        $82,418    $148,063  (7)    $1,803,838 

Senior Vice President & General

 2017  $306,000  $876,584  $365,805  $174,904  $5,745  $1,729,038    2018    -         $348,333    $1,481,766    $82,537    $127,575    $24,948     $2,065,159 

Manager, Internet of Things Division

 2016  $338,333  $1,101,753  $295,059  $198,645  $4,575  $1,938,365    2017    -         $306,000    $876,584    $365,805    $174,904    $5,745     $1,729,038 

Alex Wong

 2018  $340,000  $1,426,903  $92,911  $117,734  $24,240  $2,001,788 

Senior Vice President of Worldwide

 2017  $306,000  $984,656  $415,665  $165,699  $4,500  $1,876,520 

Operations

 2016  $338,333  $1,296,180  $443,156  $261,375  $4,500  $2,343,544 

 

(1)

All positions reflected in this table represent the individual executive’s position with the company as of the end of our fiscal year 2019, or in the case of Messrs. Bergman, Ali and Verhoeven, their position with the company as of the day immediately preceding their departure from the company.

(2)

The base salaries set forth in this column reflect salary increases or decreases, if applicable, for each of our Named Executive Officers effective as of the first day of Septemberour fiscal year for our 2016 and 20182017 fiscal years,year, and effective as of the first day of our fiscal yearSeptember for our 20172018 and 2019 fiscal year.years, except for Mr. Nolan, whose salary increase became effective in February 2019 at the time of his promotion to Chief Accounting Officer of our company. Due to standard payroll practices, all base salaries reported represent actual base salaries paid for the twelve month periods ended June 30, 2018,2019, June 30, 2017,2018, and June 30, 2016. In June 2016, our Named Executive Officers requested a voluntary and temporary base salary reduction for fiscal year 2017 of 20% for Mr. Bergman and 10% for our other Named Executive Officers. The salary reductions were reviewed and approved by the Compensation Committee.2017.

(2)(3)

The amounts set forth in this column represent the grant date fair value of PSU, MSU and DSU awards determined in accordance with ASC Topic 718, excluding the effects of forfeitures. We determine the grant date fair value of each DSU and PSU award using the closing price of our common stock on the date of grant. We determine the grant date fair value of each MSU award using the Monte Carlo simulation model. The assumptions used in determining the grant date fair value of MSU awards are set forth in Note 10 to our consolidated financial statements included in our Annual Report on Form10-K filed with the SEC for the fiscal year ended June 30, 2018.29, 2019. If the MSU awards achieve the maximum payout level in the third performance period, then the value of the award, based on our fiscal 2018 ending stock price of $50.37,the grant date fair value, would be $4,604,926, $1,760,734, $1,309,217, $1,218,954,$676,890, $707,670, $900,017 and $1,173,822$676,890 for Messrs. Wong, Liu, Lu and McFarland, respectively. The MSU awards granted to Messrs. Bergman, Ali Barber,and Verhoeven and Wong, respectively.were cancelled as of the date of their termination. If the PSU awards achieve the maximum payout level, then the value of the award, based on our fiscal 2018 ending stock price of $50.37,the grant date fair value, would be $4,604,926, $1,760,734, $1,309,217, $1,218,954,$676,890, $707,670, and $1,173,822$676,890 for Messrs. Wong, Liu, and McFarland, respectively. The PSU awards granted to Messrs. Bergman, Ali Barber, and

Verhoeven and Wong, respectively.were cancelled as of the date of their termination. Each Named Executive Officer forfeits the unvested portion, if any, of the executive officer’s PSU, MSU and DSU awards if the officer’s service to our company is terminated, for any reason, except as may otherwise be determined by the plan committee appointed by our Board of Directors as the administrator of our 2010 Incentive Compensation Plan. The vesting on any PSU, MSU and DSU awards will accelerate if the Named Executive Officer’s service to our company is terminated by us without good cause or by him or her with good reason during the18-month period following a change of control of our company. For further information on these awards, see the “Fiscal 20182019 Grants of Plan-Based Awards” table of this Proxy Statement.

(3)(4)

The amounts set forth in this column reflect the grant date fair value of stock option awards made in fiscal years 2017 and 2018 and were determined in accordance with ASC Topic 718, excluding the effects of forfeitures. The assumptions used in determining the grant date fair value of stock option awards are set forth in Note 109 to our consolidated financial statements included in our Annual Report on Form10-K filed with the SEC for the fiscal year ended June 30, 2018.29, 2019. Each Named Executive Officer forfeits the unvested portion, if any, of the executive officer’s stock option awards if the officer’s service to our company is terminated for any reason, except as may otherwise be determined by the plan committee appointed by our Board of Directors as the administrator of our Amended and Restated 2010 Incentive

Compensation Plan. The vesting on any stock options will accelerate if the Named Executive Officer’s service to our company is terminated by us without good cause or by him or her with good reason during the18-month period following a change of control of our company. For further information on these awards, see the “Fiscal 2018 Grants ofPlan-Based Awards” table of this Proxy Statement.

(4)(5)

The amounts set forth in this column constitute amounts earned under our fiscal 2019, 2018, 2017, and 20162017 annual performance-based cash bonus plan, which include amounts that were calculated, approved, and paid or will be paid, in fiscal 2020, 2019, and 2018, and 2017, respectively. See “Compensation Discussion and Analysis – Fiscal 2017 Bonus Decisions — Performance-Based Bonuses” for more information.

(5)(6)

Except as otherwise indicated, the amounts set forth in this column consist of matching contributions to our company’s Section 401(k) plan or the employee’s health savings account, and, for fiscal 2018, also include the payout of earned vacation pay resulting from a change to the Company’scompany’s vacation policy.

(6)(7)

In connection with their departure from the company, Messrs. Bergman and Verhoeven received $757,542 and $142,957, respectively, in severance payments in fiscal 2019.

(8)

In connection with his acceptance of our employment offer we providedto join the company, Mr. Ali with relocation benefits. The total relocation benefit to Mr. Ali was $487,379, which includesLu received a tax“gross-up”sign-on bonus of $258,227. Of the total relocation benefits, $137,379 is included in the table as accrued in$250,000 and a guaranteed incentive bonus for fiscal 2016.2019 of $262,500.

Fiscal 20182019 Grants of Plan-Based Awards Table

The following table sets forth certain information with respect to grants of plan-based awards to our Named Executive Officers for the fiscal year ended June 30, 2018.29, 2019.

 

                 All Other All Other                                      

All Other

Stock

Awards:

Number of

Shares of

Stock or

Units

(#)(5)

   

Grant Date

Fair Value

of Stock

Awards
($)(6)

 
                 Stock Option                                     
     Estimated Future Payouts Estimated Future Payouts Awards: Awards: Exercise Grant Date           Estimated Future Payouts   Estimated Future Payouts 
     UnderNon-Equity Under Equity Number of Number of or Base Fair Value           Under Non-Equity   Under Equity 
     Incentive Plan Awards(2) Incentive Plan Awards Shares of Securities Price of of Stock           Incentive Plan Awards(2)   Incentive Plan Awards 
   Committee             Stock or Underlying Options and Options       

 

 

   

 

 

 
   Approval Threshold Target Maximum Threshold Target Maximum Units Options Awards Awards                                 

Name

 Grant Date Date(1) ($) ($) ($) ($) ($) ($) (#)(5) (#)(6) ($/Sh) ($)(7)   Grant Date   Approval
Date(1)		   

Threshold

($)

   

Target

($)

   Maximum
($)		   Threshold
($)		   Target
($)		   Maximum
($)		 

   

 

   

 

   

 

   

 

   

 

   

 

  

 

   

 

 

Alex Wong

       -        $262,500    -        -        -        -       -        -     
   11/13/2018    11/13/2018    -        -        -        -        9,566    19,132 (3)   -        $446,608 
   11/13/2018    11/13/2018    -        -        -        -        9,566    19,132 (4)   -        $338,445 
   11/13/2018    11/13/2018    -        -        -        -        -        -      9,566    $338,445 

Richard A.

    —    $1,015,000   —     —     —     —     —     —     —     —          -        $1,015,000    -        -        -        -       -        -     

Bergman

 8/4/2017  10/25/2016   —     —     —     —     —     —     —    17,925  $45.32  $323,383    11/13/2018    11/13/2018    -        -        -        -        46,561    93,122 (3)   -        $2,173,794 
 10/31/2017  10/30/2017   —     —     —     —    45,711  91,422 (3)    —     —     —    $2,204,184    11/13/2018    11/13/2018    -        -        -        -        46,561    93,122 (4)   -        $1,647,328 
   11/13/2018    11/13/2018    -        -        -        -        -        -      46,561    $1,647,328 

Kermit Nolan

       -        $132,903    -        -        -        -       -        -     
 10/31/2017  10/30/2017   —     —     —     —    45,711  91,422 (4)    —     —     —    $1,696,792    11/14/2018    11/13/2018    -        -        -        -        -        -      9,523    $340,923 
 10/31/2017  10/30/2017   —     —     —     —      45,711   —     —    $1,696,792    2/7/2019    2/5/2019    -        -        -        -        -        -      12,500    $510,750 

Wajid Ali

    —    $296,250   —     —     —     —     —     —     —     —          -        $300,000    -        -        -        -       -        -     
 8/4/2017  10/25/2016   —     —     —     —     —     —     —    6,875  $45.32  $124,031    11/13/2018    11/13/2018    -        -        -        -        14,784    29,568 (3)   -        $690,220 
 10/31/2017  10/30/2017   —     —     —     —    17,478  34,956 (3)    —     —     —    $842,789    11/13/2018    11/13/2018    -        -        -        -        14,784    29,568 (4)   -        $523,058 
 10/31/2017  10/30/2017   —     —     —     —    17,478  34,956 (4)    —     —     —    $648,783    11/13/2018    11/13/2018    -        -        -        -        -        -      14,784    $523,058 
 10/31/2017  10/30/2017   —     —     —     —      17,478   —     —    $648,783 

Shawn Liu

       -        $247,500    -        -        -        -       -        -     
   11/13/2018    11/13/2018    -        -        -        -        10,001    20,002 (3)   -        $466,917 

Kevin D.

    —    $296,250   —     —     —     —     —     —     —     —   

Barber

 8/4/2017  10/25/2016   —     —     —     —     —     —     —    5,150  $45.32  $92,911 
   11/13/2018    11/13/2018    -        -        -        -        10,001    20,002 (4)   -        $353,835 
   11/13/2018    11/13/2018    -        -        -        -        -        -      10,001    $353,835 

Richard Lu

       -        $262,500    -        -        -        -       -        -     
   12/3/2018    12/3/2018    -        -        -        -        11,054    22,108 (3)   -        $516,078 
   12/3/2018    12/3/2018    -        -        -        -        -        -      22,107    $899,976 

John McFarland

       -        $210,000    -        -        -        -       -        -     
 10/31/2017  10/30/2017   —     —     —     —    12,996  25,992 (3)    —     —     —    $626,667    11/13/2018    11/13/2018    -        -        -        -        9,566    19,132 (3)   -        $446,608 
 10/31/2017  10/30/2017   —     —     —     —    12,996  25,992 (4)    —     —     —    $482,412    11/13/2018    11/13/2018    -        -        -        -        9,566    19,132 (4)   -        $338,445 
 10/31/2017  10/30/2017   —     —     —     —     —     —    12,996   —     —    $482,412    11/13/2018    11/13/2018    -        -        -        -        -        -      9,566    $338,445 

Huibert

    —    $261,250   —     —     —     —     —     —     —     —          -        $277,500    -        -        -        -       -        -     

Verhoeven

 8/4/2017  10/25/2016   —     —     —     —     —     —     —    4,575  $45.32  $82,537    11/13/2018    11/13/2018    -        -        -        -        10,871    21,742 (3)   -        $507,534 
 10/31/2017  10/30/2017   —     —     —     —    12,100  24,200 (3)    —     —     —    $583,462    11/13/2018    11/13/2018    -        -        -        -        10,871    21,742 (4)   -        $384,616 
 10/31/2017  10/30/2017   —     —     —     —    12,100  24,200 (4)    —     —     —    $449,152    11/13/2018    11/13/2018    -        -        -        -        -        -      10,871    $384,616 
 10/31/2017  10/30/2017   —     —     —     —     —     —    12,100   —     —    $449,152 

Alex Wong

    —    $255,000   —     —     —     —     —     —     —     —   
 8/4/2017  10/25/2016   —     —     —     —     —     —     —    5,150  $45.32  $92,911 
 10/31/2017  10/30/2017   —     —     —     —    11,652  23,304 (3)    —     —     —    $561,859 
 10/31/2017  10/30/2017   —     —     —     —    11,652  23,304 (4)    —     —     —    $432,522 
 10/31/2017  10/30/2017   —     —     —     —     —     —    11,652   —     —    $432,522 

 

(1)

The “Committee Approval Date” refers to the date on which the Compensation Committee or the Board of Directors approved the award. See “Compensation Discussion and Analysis – Equity Award Grant Policy.”

(2)

Our fiscal 20182019 annual performance-based cash bonus plan had no threshold or maximums. The reported amounts reflect the applicable target annual cash bonus award opportunity for our Named Executive Officers under our fiscal 20182019 annual performance-based cash bonus plan. All such awards have been paid, and the actual amounts paid are set forth under“Non-Equity “Non-Equity Incentive Plan Compensation” in the Fiscal 20182019 Summary Compensation Table. Our fiscal 20182019 annual performance-based cash bonus plan is discussed under “Compensation Discussion and Analysis — Fiscal 2018 Bonus Decisions.Annual Performance-Based Cash Bonuses.”

(3)

These MSU awards were granted under our Amended and Restated 2010 Incentive Compensation Plan. Each MSU award consists of the right to receive a specified number of shares of our common stock if the award’s performance conditions are satisfied. The shares of our common stock subject to such MSU awards will be earned, if at all, based on our TSR compared to that of the SPSISC Index TSR or SOX Index TSR over aone-year, atwo-year, and a two-year, and athree-year performance period. In other words, the actual number of shares of our common stock that may be earned under the MSU awards will vary based on over-orover- or under-performance of our TSR compared to that of the SPSISC Index TSR or SOX Index TSR over the specified performance periods. The target number of shares of our common stock subject to each MSU award will be earned if our TSR equals that of the SPSISC Index TSR or SOX Index TSR as measured over theone-year, thetwo-year, and the three-year performance periods (as determined on September 30, 2018,2019, September 30, 2019,2020, and September 30, 2020)2021). Payouts are scaled such thatbelow-target performance will result in a reduction in the number of shares of our common stock earned using atwo-to-one ratio, while above-target performance will result in a payout of 100% of the target number of shares of our common stock for theone-year andtwo-year performance periods andwith any additional payout deferred until delivery of shares based on the performance of the three-year performance period, where an increase in the number of shares of our common stock earned using atwo-to-one ratio for the three-year performance period less any shares that were delivered for theone-year andtwo-year performance periods (subject to a cap of 200% of the target number of shares subject to the MSU awards if our TSR is 50 percentage points or more above the SPSISC Index TSR or SOX Index TSR). will be delivered to the executive officer. Our MSU awards are long-term awards with partial payouts based on performance for each of the initial performance periods with a performance true up based on the performance of the final performance period.

(4)

These PSU awards were granted under our Amended and Restated 2010 Incentive Compensation Plan. Each PSU award is designed to vest in three tranches with the target quantity for each tranche equal toone-third of the total PSU grant. The PSU awards have a specificone-year performance period and vesting occurs over three annual service periods. Performance is measured based on the achievement of a specified level ofnon-GAAP earnings per share. The potential payout ranges from 0% to 200% of the grant target quantity and is adjusted on a linear basis with a payout triggering if ournon-GAAP earnings per share equals greater than 65% of the target with a maximum payout achieved at 135% of target. Delivery of shares earned, if any, will take place on the dates provided in the applicable PSU grant agreement, assuming the grantee is still an employee of our company at the end of the applicable service period. Notwithstanding the foregoing, the vesting of any PSU award will accelerate if the executive officer is terminated by us without good cause or by him or her with good reason during the18-month period following a change of control of our company. Notwithstanding the foregoing, if the executive officer is terminated by us without good cause or by the executive officer with good reason during the3-month period before or18-month period following a change of control of our company, (i) the performance condition of the PSU is deemed satisfied upon the change of control, and (ii) the service condition is deemed fulfilled, and the target number of PSUs will be delivered, upon the later of termination or the change of control.

(5)

These DSU awards were granted under our Amended and Restated 2010 Incentive Compensation Plan and will vest as follows: 1/3rd3rd of the total number of shares of common stock subject to the award vest in the calendar quarter one year from the vesting start date and each year thereafter until the award is fully vested. Each Named Executive Officer forfeits the unvested portion, if any, of the executive officer’s DSU award if the executive officer’s service to our company is terminated for any reason except as may otherwise be determined by the plan committee approved by our Board of Directors, as the administrator of our Amended and Restated 2010 Incentive Compensation Plan. Notwithstanding the foregoing, the vesting of any DSU award will accelerate if the executive officer is terminated by us without good cause or by him or her with good reason during the18-month period following a change of control of our company.

(6)

These stock option awards were granted under our Amended and Restated 2010 Incentive Compensation Plan and will vest as follows: 1/3rd of the total number of shares of our common stock subject to the stock option vest one year from the vesting start date, with the remaining 1/12th of the shares vesting each quarter until the stock option is fully vested. Each Named Executive Officer forfeits the unvested portion, if any, of the executive officer’s stock options if the executive officer’s service to our company is terminated for any reason except as may otherwise be determined by the plan committee approved by our Board of Directors, as the administrator of our Amended and Restated 2010 Incentive Compensation Plan. Notwithstanding the foregoing, the vesting on any stock option will accelerate if the executive officer is terminated by us without good cause or by him or her with good reason during the18-month period following a change of control of our company.

(7)

The amounts set forth in this column represent the grant date fair value for stock options, DSU awards, PSU awards and MSU awards granted to our Named Executive Officers calculated in accordance with ASC Topic 718, excluding the effects of forfeitures. We determine the grant date fair value of each DSU and PSU award using the closing price of our common stock on the date of grant. We determine the grant date fair value of each MSU award using the Monte Carlo simulation model. The assumptions used in determining the grant date fair value of stock option awards and MSU awards are set forth in Note 10 to our consolidated financial statements included in our Annual Report on Form10-K filed with the SEC for the fiscal year ended June 30, 2018.29, 2019.

Fiscal 20182019 Outstanding Equity Awards at FiscalYear-End Table

The following table sets forth information with respect to outstanding equity-based awards held by our Named Executive Officers as of June 30, 2018.29, 2019.

 

     Option Awards(1)  Stock Awards(2) 
           Equity                 Equity Incentive 
           Incentive              Equity Incentive  Plan Awards: 
           Plan Awards:           Market  Plan Awards:  Market or 
     Number of  Number of  Number of        Number of  Value of  Number of  Payout Value of 
     Securities  Securities  Securities        Shares or  Shares or  Unearned  Unearned 
     Underlying  Underlying  Underlying        Units of  Units of  Shares, Units or  Shares, Units or 
     Unexercised  Unexercised  Unexercised  Options     Stock That  Stock That  Other Rights  Other Rights 
     Options  Options  Unearned  Exercise  Option  Have Not  Have Not  That Have Not  That Have Not 
  Grant  (#)  (#)  Options  Price  Expiration  Vested  Vested  Vested  Vested 

Name

 Date  Exercisable  Unexercisable  (#)  ($)  Date  (#)  ($)  (#)  ($) 

(a)     

    (b)  (c)  (d)  (e)  (f)  (g)  (h)  (i)  (j) 

Richard A.

  09/28/11(3)    20,000   —     —    $23.25   09/28/18   —     —     —     —   

Bergman

  10/31/12(4)    18,750   —     —    $23.16   10/31/19   —     —     —     —   
  01/28/13(4)    18,750   —     —    $35.76   01/28/20   —     —     —     —   
  04/29/13(4)    18,750   —     —    $42.57   04/29/20   —     —     —     —   
  08/05/13(4)    18,750   —     —    $39.80   08/05/20   —     —     —     —   
  10/28/13   23,750   —     —    $46.50   10/28/20   —     —     —     —   
  01/27/14   23,750   —     —    $60.22   01/27/21   —     —     —     —   
  04/28/14   23,750   —     —    $61.40   04/28/21   —     —     —     —   
  08/01/14   23,750   —     —    $78.11   08/01/21   —     —     —     —   
  10/24/14   19,325   —     —    $62.10   10/24/21   —     —     —     —   
  01/30/15   19,325   —     —    $76.81   01/30/22   —     —     —     —   
  04/24/15   19,325   —     —    $85.69   04/24/22   —     —     —     —   
  07/31/15   17,714   1,611   —    $79.38   07/31/22   —     —     —     —   
  10/23/15   11,875   2,375   —    $89.29   10/23/22   —     —     —     —   
  01/29/16   10,687   3,563   —    $73.31   01/29/23   —     —     —     —   
  04/29/16   9,500   4,750   —    $71.55   04/29/23   —     —     —     —   
  07/29/16   8,312   5,938   —    $51.95   07/29/23     
  10/28/16(5)    8,962   8,963   —    $52.57   10/28/23   —     —     —     —   
  01/27/17(5)    7,468   10,457   —    $54.36   01/27/24   —     —     —     —   
  04/28/17(5)    5,975   11,950   —    $54.77   04/28/24   —     —     —     —   
  08/04/17(5)    —     17,925   —    $45.32   08/04/24   —     —     —     —   
  10/23/15(6)    —     —     —     —     —     6,999  $352,540   —     —   
  10/28/16(6)    —     —     —     —     —     18,998  $956,929   —     —   
  10/31/17(6)    —     —     —     —     —     45,711  $2,302,463   —     —   
  10/23/15(7)    —     —     —     —     —     —     —     7,000  $352,590 
  10/28/16(7)    —     —     —     —     —     —     —     19,000  $957,030 
  10/31/17(7)    —     —     —     —     —     —     —     45,711  $2,302,463 
  10/31/17(8)    —     —     —     —     —     —     —     45,711  $2,302,463 

Wajid Ali

  05/11/15(5)    40,000   —     —    $88.66   05/11/22   —     —     —     —   
  10/28/16(5)    3,437   3,438   —    $52.57   10/28/23   —     —     —     —   
  01/27/17(5)    2,864   4,011   —    $54.36   01/27/24   —     —     —     —   
  04/28/17(5)    2,292   4,583   —    $54.77   04/28/24   —     —     —     —   
  08/04/17(5)    —     6,875   —    $45.32   08/04/24   —     —     —     —   
  10/28/16(6)    —     —     —     —     —     7,265  $365,938   —     —   
  10/31/17(6)    —     —     —     —     —     17,478  $880,367   —     —   
  10/23/15(7)    —     —     —     —     —     —     —     2,633  $132,624 
  10/28/16(7)    —     —     —     —     —     —     —     7,266  $365,988 
  10/31/17(7)    —     —     —     —     —     —     —     17,478  $880,367 
  10/31/17(8)    —     —     —     —     —     —     —     17,478  $880,367 

Kevin D.

  01/27/14   3,363   —     —    $60.22   01/27/21   —     —     —     —   

Barber

  04/28/14   3,923   —     —    $61.40   04/28/21   —     —     —     —   
  08/01/14   6,726   —     —    $78.11   08/01/21   —     —     —     —   
  10/24/14   3,544   —     —    $62.10   10/24/21   —     —     —     —   
  01/30/15   4,725   —     —    $76.81   01/30/22   —     —     —     —   
  04/24/15   4,725   —     —    $85.69   04/24/22   —     —     —     —   
  07/31/15   4,331   394   —    $79.38   07/31/22   —     —     —     —   
  10/23/15   3,416   684   —    $89.29   10/23/22   —     —     —     —   
  01/29/16   3,075   1,025   —    $73.31   01/29/23   —     —     —     —   
  04/29/16   2,733   1,367   —    $71.55   04/29/23   —     —     —     —   
  07/29/16   2,391   1,709   —    $51.95   07/29/23     
  10/28/16(5)    2,575   2,575   —    $52.57   10/28/23   —     —     —     —   
  01/27/17(5)    2,146   3,004   —    $54.36   01/27/24   —     —     —     —   
  04/28/17(5)    1,717   3,433   —    $54.77   04/28/24   —     —     —     —   
  08/04/17(5)    —     5,150   —    $45.32   08/04/24   —     —     —     —   
  10/23/15(6)    —     —     —     —     —     1,999  $100,690   —     —   
  10/28/16(6)    —     —     —     —     —     5,466  $275,322   —     —   
  10/31/17(6)    —     —     —     —     —     12,996  $654,609   —     —   
  10/23/15(7)    —     —     —     —     —     —     —     2,000  $100,740 
  10/28/16(7)    —     —     —     —     —     —     —     5,466  $275,322 
  10/31/17(7)    —     —     —     —     —     —     —     12,996  $654,609 
  10/31/17(8)    —     —     —     —     —     —     —     12,996  $654,609 
      Option Awards(2)   Stock Awards(3) 
             Equity Incentive               Market   Equity Incentive     
      Number of   Number of  Plan Awards:           Number of   Value of   Plan Awards:   Equity Incentive Plan 
      Securities   Securities  Number of           Shares or   Shares or   Number of   Awards: Market or 
      Underlying   Underlying  Securities           Units of   Units of   Unearned Shares,   Payout Value of 
      Unexercised   Unexercised  Underlying   Option       Stock That   Stock That   Units or Other   Unearned Shares, Units 
      Options   Options  Unexercised   Exercise   Option   Have Not   Have Not   Rights That Have   or Other Rights That 
   Grant  (#)   (#)  Unearned Options   Price   Expiration   Vested   Vested   Not Vested   Have Not Vested 

Name (1)

  

Date

  Exercisable   Unexercisable  (#)   ($)   Date   (#)   ($)   (#)   ($) 

(a)

  

 

  (b)   (c)  (d)   (e)   (f)   (g)   (h)   (i)   (j) 

Alex Wong

  10/31/12(4)   1,300   -   -        $23.16    10/31/19    -        -        -        -     
  01/28/13(4)   1,700   -   -        $35.76    01/28/20    -        -        -        -     
  04/29/13(4)   5,000   -   -        $42.57    04/29/20    -        -        -        -     
  08/05/13(4)   5,000   -   -        $39.80    08/05/20    -        -        -        -     
  10/28/13   5,240   -   -        $46.50    10/28/20    -        -        -        -     
  01/27/14   5,241   -   -        $60.22    01/27/21    -        -        -        -     
  04/28/14   5,240   -   -        $61.40    04/28/21    -        -        -        -     
  08/01/14   5,241   -   -        $78.11    08/01/21    -        -        -        -     
  10/24/14   3,425   -   -        $62.10    10/24/21    -        -        -        -     
  01/30/15   3,425   -   -        $76.81    01/30/22    -        -        -        -     
  04/24/15   3,425   -   -        $85.69    04/24/22    -        -        -        -     
  07/31/15   3,425   -   -        $79.38    07/31/22    -        -        -        -     
  10/23/15   4,100   -   -        $89.29    10/23/22    -        -        -        -     
  01/29/16   4,100   -   -        $73.31    01/29/23    -        -        -        -     
  04/29/16   4,100   -   -        $71.55    04/29/23    -        -        -        -     
  07/29/16   3,758   342   -        $51.95    07/29/23         
  10/28/16(5)   4,291   859   -        $52.57    10/28/23    -        -        -        -     
  01/27/17(5)   3,862   1,288   -        $54.36    01/27/24    -        -        -        -     
  04/28/17(5)   3,433   1,717   -        $54.77    04/28/24    -        -        -        -     
  08/04/17(5)   3,004   2,146   -        $45.32    08/04/24    -        -        -        -     
  10/28/16(6)   -       -   -        -        -        2,733    $79,640    -        -     
  10/31/17(6)   -       -   -        -        -        7,768    $226,360    -        -     
  11/13/18(6)   -       -   -        -        -        9,566    $278,753    -        -     
  10/31/17(7)   -       -   -        -        -        -        -        7,768    $226,360 
  11/13/18(7)   -       -   -        -        -        -        -        9,566    $278,753 
  10/28/16(8)   -       -   -        -        -        -        -        2,733    $79,640 
  10/31/17(8)   -       -   -        -        -        -        -        7,767    $226,330 
  11/13/18(8)   -       -   -        -        -        -        -        9,566    $278,753 

Richard A.

  10/31/12(4)   18,750   -   -        $23.16    10/31/19    -        -        -        -     

Bergman

  01/28/13(4)   18,750   -   -        $35.76    01/28/20    -        -        -        -     
  04/29/13(4)   18,750   -   -        $42.57    04/29/20    -        -        -        -     
  08/05/13(4)   18,750   -   -        $39.80    08/05/20    -        -        -        -     
  10/28/13   23,750   -   -        $46.50    10/28/20    -        -        -        -     
  01/27/14   23,750   -   -        $60.22    01/27/21    -        -        -        -     
  04/28/14   23,750   -   -        $61.40    04/28/21    -        -        -        -     
  08/01/14   23,750   -   -        $78.11    08/01/21    -        -        -        -     
  10/24/14   19,325   -   -        $62.10    10/24/21    -        -        -        -     
  01/30/15   19,325   -   -        $76.81    01/30/22    -        -        -        -     
  04/24/15   19,325   -   -        $85.69    04/24/22    -        -        -        -     
  07/31/15   19,325   -   -        $79.38    07/31/22    -        -        -        -     
  10/23/15   14,250   -   -        $89.29    10/23/22    -        -        -        -     
  01/29/16   14,250   -   -        $73.31    01/29/23    -        -        -        -     
  04/29/16   14,250   -   -        $71.55    04/29/23    -        -        -        -     
  07/29/16   13,062   -   -        $51.95    07/29/23         
  10/28/16(5)   14,937   -   -        $52.57    10/28/23    -        -        -        -     
  01/27/17(5)   13,443   -   -        $54.36    01/27/24    -        -        -        -     
  04/28/17(5)   11,950   -   -        $54.77    04/28/24    -        -        -        -     
  08/04/17(5)   10,456   -   -        $45.32    08/04/24    -        -        -        -     

Kermit Nolan

  08/02/10(9)   9,792   -   -        $31.73    08/02/20    -        -        -        -     
  01/28/13(4)   1,000   -   -        $35.76    01/28/20    -        -        -        -     
  04/29/13(4)   1,000   -   -        $42.57    04/29/20    -        -        -        -     
  08/05/13(4)   1,000   -   -        $39.80    08/05/20    -        -        -        -     
  10/28/13   744   -   -        $46.50    10/28/20    -        -        -        -     
  01/27/14   744   -   -        $60.22    01/27/21    -        -        -        -     

Huibert

  10/24/14(5)   23,742   —     —    $62.10  10/24/21   —     —     —     —   

Verhoeven

  10/23/15  2,895  580   —    $89.29  10/23/22   —     —     —     —   

Kermit Nolan (cont’d)

  04/28/14     744     -     -          $61.40      04/28/21      -          -          -          -     
  01/29/16  2,606  869   —    $73.31  01/29/23   —     —     —     —     08/01/14     745     -     -          $78.11      08/01/21      -          -          -          -     
  04/29/16  2,316  1,159   —    $71.55  04/29/23   —     —     —     —     10/24/14     408     -     -          $62.10      10/24/21      -          -          -          -     
  07/29/16  2,027  1,448   —    $51.95  07/29/23   —     —     —     —     01/30/15     408     -     -          $76.81      01/30/22      -          -          -          -     
  10/28/16(5)   2,287  2,288   —    $52.57  10/28/23   —     —     —     —     04/24/15     408     -     -          $85.69      04/24/22      -          -          -          -     
  01/27/17(5)   1,906  2,669   —    $54.36  01/27/24   —     —     —     —     07/31/15     408     -     -          $79.38      07/31/22      -          -          -          -     
  04/28/17(5)   1,525  3,050   —    $54.77  04/28/24   —     —     —     —     10/23/15     1,049     -     -          $89.29      10/23/22      -          -          -          -     
  08/04/17(5)    —    4,575   —    $45.32  08/04/24   —     —     —     —     01/29/16     1,050     -     -          $73.31      01/29/23      -          -          -          -     
  10/23/15(6)    —     —     —     —     —    1,699  $85,579   —     —     04/29/16     1,049     -     -          $71.55      04/29/23      -          -          -          -     
  10/28/16(6)    —     —     —     —     —    4,866  $245,100   —     —     07/29/16     962     88     -          $51.95      07/29/23      -          -          -          -     
  10/31/17(6)    —     —     —     —     —    12,100  $609,477   —     —     10/12/16(6)     -     -     -          -          -          2,425      $70,665      -          -     
  10/23/15(7)    —     —     —     —     —     —     —    1,700  $85,629   06/22/17(6)     -     -     -          -          -          999      $29,111      -          -     
  10/28/16(7)    —     —     —     —     —     —     —    4,866  $245,100   11/22/17(6)     -     -     -          -          -          3,584      $104,438      -          -     
  10/31/17(7)    —     —     —     —     —     —     —    12,100  $609,477   11/14/18(6)     -     -     -          -          -          9,523      $277,500      -          -     
  10/31/17(8)    —     —     —     —     —     —     —    12,100  $609,477   02/07/19(6)     -     -     -          -          -          12,500      $364,250      -          -     
  12/13/17(7)     -     -     -          -          -          -          -          1,344      $39,164 

Alex Wong

  10/31/12(4)   1,300   —     —    $23.16  10/31/19   —     —     —     —   
  12/13/17(8)     -     -     -          -          -          -          -          1,344      $39,164 

Shawn Liu

  01/28/13(10)     5,780     -     -          $35.76      01/28/20      -          -          -          -     
  01/28/13(4)   1,700   —     —    $35.76  01/28/20   —     —     —     —     10/28/13     287     -     -          $46.50      10/28/20      -          -          -          -     
  04/29/13(4)   5,000   —     —    $42.57  04/29/20   —     —     —     —     01/27/14     335     -     -          $60.22      01/27/21      -          -          -          -     
  08/05/13(4)   5,000   —     —    $39.80  08/05/20   —     —     —     —     04/28/14     382     -     -          $61.40      04/28/21      -          -          -          -     
  10/28/13  5,240   —     —    $46.50  10/28/20   —     —     —     —     08/01/14     431     -     -          $78.11      08/01/21      -          -          -          -     
  01/27/14  5,241   —     —    $60.22  01/27/21   —     —     —     —     10/24/14     269     -     -          $62.10      10/24/21      -          -          -          -     
  04/28/14  5,240   —     —    $61.40  04/28/21   —     —     —     —     01/30/15     296     -     -          $76.81      01/30/22      -          -          -          -     
  08/01/14  5,241   —     —    $78.11  08/01/21   —     —     —     —     04/24/15     322     -     -          $85.69      04/24/22      -          -          -          -     
  10/24/14  3,425   —     —    $62.10  10/24/21   —     —     —     —     07/31/15     322     -     -          $79.38      07/31/22      -          -          -          -     
  01/30/15  3,425   —     —    $76.81  01/30/22   —     —     —     —     10/23/15     704     -     -          $89.29      10/23/22      -          -          -          -     
  04/24/15  3,425   —     —    $85.69  04/24/22   —     —     —     —     01/29/16     705     -     -          $73.31      01/29/23      -          -          -          -     
  07/31/15  3,139  286   —    $79.38  07/31/22   —     —     —     —     04/29/16     705     -     -          $71.55      04/29/23      -          -          -          -     
  10/23/15  3,416  684   —    $89.29  10/23/22   —     —     —     —     07/29/16     646     59     -          $51.95      07/29/23              -          -     
  01/29/16  3,075  1,025   —    $73.31  01/29/23   —     —     —     —     10/12/16(6)     -     -     -          -          -          1,400      $40,796      -          -     
  04/29/16  2,733  1,367   —    $71.55  04/29/23   —     —     —     —     06/22/17(6)     -     -     -          -          -          999      $29,111      -          -     
  07/29/16  2,391  1,709   —    $51.95  07/29/23       10/31/17(6)     -     -     -          -          -          2,779      $80,980      -          -     
  10/28/16(5)   2,575  2,575   —    $52.57  10/28/23   —     —     —     —     11/13/18(6)     -     -     -          -          -          10,001      $291,429      -          -     
  01/27/17(5)   2,146  3,004   —    $54.36  01/27/24   —     —     —     —     10/31/17(7)     -     -     -          -          -          -          -          4,780      $139,289 
  04/28/17(5)   1,717  3,433   —    $54.77  04/28/24   —     —     —     —     11/13/18(7)     -     -     -          -          -          -          -          10,001      $291,429 
  08/04/17(5)    —    5,150   —    $45.32  08/04/24   —     —     —     —     10/31/17(8)     -     -     -          -          -          -          -          4,780      $139,289 
  10/23/15(6)    —     —     —     —     —    1,999  $100,690   —     —     11/13/18(8)     -     -     -          -          -          -          -          10,001      $291,429 
  10/28/16(6)    —     —     —     —     —    5,466  $275,322   —     —   

Richard Lu

  12/03/18(6)     -     -     -          -          -          22,107      $644,198      -          -     
  12/03/18(8)     -     -     -          -          -          -          -          11,054      $322,114 

John

  11/04/13(10)     279     -     -          $46.08      11/04/20      -          -          -          -     

McFarland

  05/14/14     5,000     -     -          $59.34      05/14/21      -          -          -          -     
  10/31/17(6)    —     —     —     —     —    11,652  $586,911   —     —     10/24/14     3,000     -     -          $62.10      10/24/21      -          -          -          -     
  10/23/15(7)    —     —     —     —     —     —     —    2,000  $100,740   01/30/15     3,000     -     -          $76.81      01/30/22      -          -          -          -     
  10/28/16(7)    —     —     —     —     —     —     —    5,466  $275,322   04/24/15     3,000     -     -          $85.69      04/24/22      -          -          -          -     
  10/31/17(7)    —     —     —     —     —     —     —    11,652  $586,911   07/31/15     3,000     -     -          $79.38      07/31/22      -          -          -          -     
  10/31/17(8)    —     —     —     —     —     —     —    11,652  $586,911   10/23/15     2,725     -     -          $89.29      10/23/22      -          -          -          -     
  01/29/16     2,725     -     -          $73.31      01/29/23      -          -          -          -     
  04/29/16     2,725     -     -          $71.55      04/29/23      -          -          -          -     
  07/29/16     2,497     228     -          $51.95      07/29/23                 
  10/28/16(5)     2,979     596     -          $52.57      10/28/23      -          -          -          -     
  01/27/17(5)     2,681     894     -          $54.36      01/27/24      -          -          -          -     
  04/28/17(5)     2,383     1,192     -          $54.77      04/28/24      -          -          -          -     
  08/04/17(5)     2,085     1,490     -          $45.32      08/04/24      -          -          -          -     
  10/28/16(6)     -     -     -          -          -          1,899      $55,337      -          -     
  10/31/17(6)     -     -     -          -          -          6,273      $182,795      -          -     
  10/31/17(6)     -     -     -          -          -          9,566      $278,753      -          -     
  10/31/17(7)     -     -     -          -          -          -          -          6,274      $182,824 
  11/13/18(7)     -     -     -          -          -          -          -          9,566      $278,753 
  10/28/16(8)     -     -     -          -          -          -          -          1,900      $55,366 
  10/31/17(8)     -     -     -          -          -          -          -          6,274      $182,824 
  11/13/18(8)     -     -     -          -          -          -          -          9,566      $278,753 

Huibert

  10/24/14(5)     23,742     -     -          $62.10      10/24/21      -          -          -          -     

Verhoeven

  10/23/15     3,475     -     -          $89.29      10/23/22      -          -          -          -     
  01/29/16     3,475     -     -          $73.31      01/29/23      -          -          -          -     
  04/29/16     3,185     -     -          $71.55      04/29/23      -          -          -          -     
  07/29/16     2,895     -     -          $51.95      07/29/23      -          -          -          -     
  10/28/16(5)     3,431     -     -          $52.57      10/28/23      -          -          -          -     
  01/27/17(5)     3,050     -     -          $54.36      01/27/24      -          -          -          -     
  04/28/17(5)     2,668     -     -          $54.77      04/28/24      -          -          -          -     
  08/04/17(5)     2,287     -     -          $45.32      08/04/24      -          -          -          -     

 

(1)

Mr. Ali is not included in this table as he currently has no outstanding equity awards with the company.

(2)

Unless otherwise noted, 1/12th of the total shares underlying each stock option award will vest each quarter following the vesting startgrant date until fully vested. The vesting of any stock option award will accelerate if the Named Executive Officer is terminated by us without good cause or by the executive officer with good reason during the18-month period following a change of control of our company.

(2)(3)

Stock awards were valued using the closing price of our common stock as of June 29, 201828, 2019 (the last trading day of our fiscal 2018)2019), which was $50.37.

(3)

1/4th of the total shares underlying this stock option award will vest one year from the vesting start date and 1/48th of the total shares underlying this stock option award will vest each month thereafter until fully vested.$29.14.

(4)

1/36th of the total shares underlying this stock option award will vest each month following the vesting startgrant date until fully vested.vested, except the 10/31/12 grants to Messrs. Wong and Bergman which began vesting on 10/29/12.

(5)

1/3rd of the total shares underlying this stock option award will vest one year from the vesting startgrant date and 1/12th of the total shares underlying this stock option award will vest each quarter thereafter until fully vested.vested, except the 10/24/14 grant to Mr. Verhoeven which began vesting on 8/25/14.

(6)

1/3rd of the total shares underlying this DSU award will vest in the calendar quarter one year from the vesting startgrant date and each year thereafter until fully vested.vested, except the 10/12/16 and 6/22/17 grants to Mr. Liu which began vesting on 10/31/16 and 4/30/17, respectively; the 12/3/18 grant to Mr. Lu which began vesting on 10/31/18; and the 10/12/16, 6/22/17, 11/22/17, 11/14/18 and 2/7/19 grants to Mr. Nolan which began vesting on 10/31/16, 4/30/17, 10/31/17, 10/31/18, and 1/31/19, respectively. The vesting of this DSU award will accelerate if the Named Executive Officer is terminated by us without good cause or by him or her with good reason during the18-month period following a change of control of our company.

(7)

These MSU awards, which are reported at their target levels as of the end of fiscal 2018,2019, consist of the right to receive a specified number of shares of our common stock if the award’s performance conditions are satisfied. The shares of our common stock subject to such MSU awards will be earned, if at all, based on our TSR compared to that of the SOX Index TSR for awards made prior to fiscal 2018, and compared to the SPSISC Index TSR for awards made in fiscal 2018 and thereafter, over aone-year, atwo-year, and a three-year performance period. In other words, the actual number of shares of our common stock that may be earned under the MSU awards will vary based on over- or under-performance of our TSR compared to that of the SPSISC Index TSR or SOX Index TSR, as applicable, over the specified performance periods. The target number of shares of our common stock subject to each MSU award will be earned if our TSR equals that of the SPSISC Index TSR or SOX Index TSR as measured over aone-year, atwo-year,

and a three-year performance period (as determined on September 30, 2016, September 30, 2017, and September 30, 2018 for grants made in fiscal year 2016, as determined on September 30, 2017, September 30, 2018, and September 30, 2019 for grants made in fiscal year 2017, and2017; as determined on September 30, 2018, September 30, 2019, and September 30, 2020 for grants made in fiscal year 2018)2018; and as determined on September 30, 2019, September 30, 2020, and September 30, 2021 for grants made in fiscal year 2019). Payouts are scaled such thatbelow-target performance will result in a reduction in the number of shares of our common stock earned using atwo-to-one ratio. Above-target performance will result in a payout of 100% of the target number of shares of our common stock for theone-year andtwo-year performance periods andwith any additional payout deferred until delivery of shares based on the performance of the three-year performance period, where an increase in the number of shares of our common stock earned using atwo-to-one ratio for the three-year performance period less any shares that were delivered for theone-year andtwo-year performance periods (subject to a cap of 200% of the target number of shares subject to the MSU awards if our TSR is 50 percentage points or more above the SPSISC Index TSR or SOX Index TSR, as applicable). will be delivered to the executive officer. Our MSU awards are long-term awards with partial payouts based on performance for each of the initial performance periods with a performance true up based on the performance of the final performance period.

(8)

These PSU awards, which are reported at their target levels as of the end of fiscal 2018,2019, consist of the right to receive a specified number of shares of our common stock if the award’s performance conditions are satisfied. The shares of our common stock subject to such PSU awards will be earned, if at all, based on the achievement of a specified level ofnon-GAAP earnings per share over aone-year performance period. The potential payout ranges from 0% to 200% of the grant target quantity and is adjusted on a linear basis with a payout triggering if ournon-GAAP earnings per share equals greater than 65% of the target with a maximum payout achieved at 135% of target.One-third of the total number of shares earned, if any, will be delivered in annual installments over three service periods, assuming the grantee is still an employee of our company at the end of the applicable service period.

(9)

1/48th of the total shares underlying this stock option award will vest each month following the grant date until fully vested.

(10)

1/3rd of the total shares underlying this stock option award will vest one year from the grant date and 1/36th of the total shares underlying this stock option award will vest each month thereafter until fully vested, except the 1/28/13 grant to Mr. Liu which began vesting on 11/12/12.

Fiscal 20182019 Option Exercises and Vested Stock Table

The following table sets forth the number of shares of our common stock acquired by our Named Executive Officers upon the exercise of stock options and vesting of stock awards and the value realized thereby, during the fiscal year ended June 30, 2018.29, 2019.

 

  Option Awards   Stock Awards   Option Awards  Stock Awards
  Number of Shares   Value Realized   Number of Shares   Value Realized   

 

Number of Shares

      Value Realized      Number of Shares      Value Realized    
  Acquired on Exercise   on Exercise   Acquired on Vesting   on Vesting       Acquired on Exercise      on Exercise      Acquired on Vesting      on Vesting

Named Executive Officer

  (#)   ($)   (#)   ($)   (#)  ($)  (#)  ($)

Alex Wong

   -        -        16,431    $625,702 

Richard A. Bergman

   37,500   $1,061,750    16,501   $612,517    20,000    $502,090    62,395    $2,377,155 

Kermit Nolan

   9,317    $62,015    7,607    $287,236 

Wajid Ali

   —      —      8,635   $355,668    -        -        21,182    $808,495 

Kevin Barber

   —      —      4,734   $175,726 

Shawn Liu

   -        -        9,294    $354,491 

Richard Lu

   -        -        -        -     

John McFarland

   -        -        12,682    $483,256 

Huibert Verhoeven

   —      —      5,723   $224,736    -        -        16,283    $620,489 

Alex Wong

   2,300   $41,917    4,734   $175,726 

For stock options, the value realized is computed as the difference between the closing market price of our common stock on the date of exercise and the exercise price, multiplied by the number of shares of our common stock acquired upon exercise. For stock awards, the value realized is computed as the closing market price of our common stock on the later of the date the restrictions lapse or the delivery date, multiplied by the number of vested shares.

Pay Ratio

For the fiscal year ending June 30, 2018,29, 2019, due to the departure of Mr. Bergman, our former CEO, we combined the total compensation provided to each of Mr. Bergman and Mr. Wong, for the time each served as our principal executive officer in fiscal 2019 to calculate the pay ratio.

The ratio of the annual total compensation of Mr. Bergman, our former Chief Executive Officer and Mr. Wong, our PEO, (“CEOPEO Compensation”), to the median of the annual total compensation of all of our employees other than our Chief Executive OfficerMr. Bergman and Mr. Wong (“Median Annual Compensation”) was 77:79:1. This ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of RegulationS-K using the data and assumptions summarized below. In this summary, we refer to the employee who received such Median Annual Compensation as the “Median Employee.” For purposes of this disclosure, the date used to identify the Median Employee was June 30, 201829, 2019 (the “Determination Date”).

Our CEOPEO Compensation represents the total compensation paid to Mr. Bergman in connection with his service as our former Chief Executive Officer ($6,893,132) and a prorated portion of the total compensation reported for Mr. Bergman underWong representing the “Fiscal 2018 Summary Compensation Table,” set forth in this Proxy Statement,time Mr. Wong served as our Principal Executive Officer ($490,777), which was $7,012,022totaled $7,383,909 for fiscal 2018.2019. For purposes of this disclosure, Median Annual Compensation was $91,641,$93,079, and was calculated by totaling, for our Median Employee, annual total compensation using the same methodology we use to calculate the amount reported for our Named Executive Officers in the “Total” column of the Fiscal 20182019 Summary Compensation Table, set forth in this proxy statement for fiscal 2018,2019, which was also in accordance with Item 402(c)(2)(x) of RegulationS-K.

To identify the Median Employee, we first determined our employee population as of the Determination Date. We had 2,1401,861 employees, representing all full-time, part-time, seasonal and temporary employees of us and our consolidated subsidiaries as of the Determination Date. This number does not include Mr. Bergman, Mr. Wong, or any independent contractors or “leased” workers, as permitted by the applicable SEC rules. We then measured compensation for the period beginning on June 25, 2017July 1, 2018 and ending on June 30, 201829, 2019 for these employees. This compensation measurement was calculated by totaling, for each employee, salary or wages plus overtime paid, any earned cash incentive compensation, and the grant date fair value of equity award grants for fiscal 2018.2019. For employees paid other than in U.S. dollars, we converted their compensation to U.S. dollars using exchange rates in effect on the Determination Date. A portion of our employee workforce worked for less than the full fiscal year due to commencing employment after the beginning of the fiscal year. In determining the Median Employee, we annualized the compensation for such individuals.

Of the 2,1401,861 employees, 4546 employees (or approximately 2.1%2.5%) are employed in Hong Kong, 20 employees (or approximately 0.9%1.1%) are employed in Armenia, 5 employees (or approximately 0.2%0.3%) are employed in Canada, 57 employees (or approximately 0.2%0.4%) are employed in Switzerland, 2 employees (or approximately 0.1%) are employed in France, 2 employees (or

(or approximately 0.1%) are employed in Thailand, 2 employees1 employee (or approximatelyless than 0.1%) areis employed in Vietnam,Denmark, and 1 employee (or less than 0.1%) is employed in Denmark.Singapore. We have chosen to exclude these 8284 employees (or approximately 3.8%4.5% of our total employees) based outside of the U.S. in determining our Median Employee as permitted under the de minimis exemption to Item 402(u) of RegulationS-K, which allows us to exclude up to 5% of our total employees who arenon-U.S. employees. We used our number of total employees excluding Mr. Bergman (2,140)and Mr. Wong (1,861) in making our de minimis calculation. Neither our Compensation Committee nor our management used the ratio of our CEO Compensation to our Median Annual Compensation in making compensation decisions.

Potential Payments Upon Termination or Change of Control

The following table sets forth certain information regarding potential payments and other benefits that would be payable to the Named Executive Officers upon termination of employment or a change of control of our Company,company, assuming the termination or change of control event took place on June 30, 2018.29, 2019.

 

  Change in Control   Termination Without Good Cause or               Change in Control  Termination Without Good Cause or         
  (Not in Connection   with Good Reason (Not in   Termination Without Good Cause or   (Not in Connection  with Good Reason (Not in  Termination Without Good Cause or
  with a Qualifying   Connection with a Qualifying Change   with Good Reason Following a   with a Qualifying  Connection with a Qualifying Change  with Good Reason Following a
  Termination)   in Control)   Qualifying Change in Control   Termination)  in Control) (2)   Qualifying Change in Control
      Cash-   Care and       Cash-   Care and   Equity
Treatment(2)		      Cash-  Care and     Cash-  Care and   
      Based   Welfare   Equity   Based   Welfare      Based  Welfare  Equity  Based  Welfare  Equity

Name

  Equity Treatment(1)    Severance   Benefits   Treatment   Severance   Benefits     Equity Treatment(1)      Severance      Benefits      Treatment      Severance      Benefits     Treatment (3) 

Alex Wong

  $45,197   $755,108    $12,732    -    $1,322,983    $56,893    $1,017,817 

Richard A. Bergman

  $1,424,649   $1,715,000   $18,124    —     $3,430,000   $27,186   $9,113,241   -   $2,140,400    $46,309    -    -    -    - 

Wajid Ali

  $544,727   $345,625   $12,662    —     $1,036,875   $37,987   $3,349,886 

Kevin D. Barber

  $405,039    350,000    12,090    —     $1,050,000   $36,271   $2,594,958 

Kermit Nolan

  $4,284   $587,222    $8,095    -    $1,029,556    $35,121    $891,472 

Shawn Liu

  $36,606   $737,726    $13,487    -    $1,273,151    $47,479    $781,942 

Richard Lu

  $23,622   $880,784    $13,469    -    $1,362,034    $42,238    $695,736 

John McFarland

  $40,438   $706,807    $12,714    -    $1,231,107    $43,387    $899,367 

Huibert Verhoeven

  $377,114    306,250    12,070    —     $918,750   $36,210   $2,395,531   -   $323,750    $11,435    -    -    -    - 

Alex Wong

  $363,151    297,500    18,594    —     $892,500   $55,781   $2,368,172 

 

(1)

The amounts set forth herein represent the prorated value of the MSUs which would have become automatically vested upon a change in control of the Company,company, calculated using the closing market price of our common stock as of June 30, 201829, 2019 (the last trading day of fiscal 2018)2019), which was $50.37.$29.14.

(2)

The amounts herein include $404,233, $320,201, $406,901, $443,284, and $391,107 for Messrs. Wong, Nolan, Liu, Lu and McFarland, respectively, which is the amount such NEO would have received in connection with the Retention Program, should they have been terminated as of June 29, 2019 without “good cause” or with “good reason”, each as defined in our Severance Policy. The amounts herein for Messrs. Bergman and Verhoeven represent the actual amount of severance each was or will be paid in connection with his departure from the company. Mr. Ali did not receive any severance payments in connection with his departure from the company and therefore, has been excluded from this table. With respect to Messrs. Wong, Nolan, Liu, Lu and McFarland, such amounts are net of the portion of 2019 target bonus achievement payments already made prior to the end of the fiscal year.

(3)

The amounts set forth herein represent the market value, as calculated using the closing market price of our common stock as of June 30, 201829, 2019 (the last trading day of fiscal 2018)2019), of unvested stock options, DSUs, PSUs and MSUs that would become fully vested upon termination of employment without good cause or with good reason following a qualifying change in control of the Company.company.

Severance Policies

Each of our Named Executive Officers participates in our CoC Severance Policy and Severance Policy. Please see “Compensation Discussion and Analysis — Severance Policy” and “Compensation Discussion and Analysis — CoC Severance Policy” for further information about the payments and benefits that may be received by our Named Executive Officers under these policies.

Treatment of MSUs upon a Change in Control

Upon a change of control of the Companycompany (as defined in the Amended and Restated 2010 Incentive Compensation Plan), the number of MSUs for any performance tranches that are ongoing as of a change of control (the “CoC MSUs”) will be determined based on actual achievement of the applicable performance criteria as of the day immediately prior to such change in control. A prorated portion of such CoC MSUs (based on the amount of time elapsed in the applicable performance tranche through the change in control) will become vested as of the change of control based on the level of

achievement of the applicable performance criteria as of the date immediately preceding the date of the change of control. The remaining portion of such CoC MSUs (the“Non-Vested CoC MSUs”) will remain outstanding after the change in control and will vest on the applicable vesting dates for such performance tranches, subject to the awardholder’s continued service.service to the company. However, any Non- VestedNon-Vested CoC MSU that is not assumed or substituted by a successor or acquiring entity will become fully vested, effective as of, and contingent upon, a change of control.control of the company.

Indemnification Under Our Certificate of Incorporation, Bylaws and Indemnification Agreements

Our Certificate of Incorporation provides that no director will be personally liable to our company or our stockholders for monetary damages for breach of a fiduciary duty as a director, except to the extent such exemption or limitation of liability is not permitted under the Delaware General Corporation Law, or the DGCL. The effect of this provision in our Certificate of Incorporation is to eliminate the rights of our company and our stockholders, either directly or through stockholders’ derivative suits brought on behalf of our company, to recover monetary damages from a director for breach of the fiduciary duty of care as a director, except in those instances described under the DGCL. In addition, we have adopted provisions in our bylaws and entered into indemnification agreements that require us to indemnify our directors, officers, and certain other representatives of our company against expenses and certain other liabilities arising out of their conduct on behalf of our company to the maximum extent and under all circumstances permitted by law. Indemnification may not apply in certain circumstances related to actions arising under the federal securities laws.

Stock-Based Compensation Plan Information

The following table sets forth information, as of June 30, 2018,29, 2019, with respect to shares of our common stock that may be issued under both stockholder approved and unapproved stock-based compensation plans upon delivery of shares for MSU, awardsDSU and DSUPSU awards, exercise of outstanding stock options, the weighted average exercise price of outstanding stock options, and the number of securities available for future issuance under our various stock-based compensation plans.

 

       Number of Securities Remaining            Number of Securities Remaining
       Available for Future Issuance   Number of Securities        Available for Future Issuance
 Number of Securities     Under Stock-Based   to Be Issued Upon        Under Stock-Based
 to Be Issued Upon Number of Securities to Be   Compensation Plans (Excluding   Delivery of Shares for  Number of Securities to Be     Compensation Plans (Excluding
 Delivery of Shares for Issued Upon Exercise of Weighted-Average Exercise Securities Reflected in Columns   DSU, MSU, and  Issued Upon Exercise of  Weighted-Average Exercise  Securities Reflected in Columns
 DSU and MSU awards Outstanding Options Price of Outstanding Options (a) and (b))   PSU awards  Outstanding Options  Price of Outstanding Options  (a) and (b))

Plan Category

 (a) (b) (c) (d)   (a)  (b)  (c)  (d)

Stock-Based Compensation Plans Approved by Stockholders

 2,502,825  1,618,209  $57.14  2,210,217   2,282,203  1,191,929  $59.07  2,891,466

Stock-Based Compensation Plans Not Approved by Stockholders

  —     —     —     —     -  -  -  -
 

 

  

 

  

 

  

 

   

 

  

 

  

 

  

 

Total

 2,502,825  1,618,209  $57.14  2,210,217   2,282,203  1,191,929  $59.07  2,891,466

2001 Incentive Compensation Plan

Our 2001 Incentive Compensation Plan, as amended, or the 2001 Plan, was designed to attract, motivate, retain, and reward our executive officers, employees, directors, and independent contractors, by providing such persons with annual and long-term performance incentives to expend their maximum efforts in the creation of stockholder value. The 2001 Plan was adopted by our Board of Directors in March 2001 and approved by our stockholders in November 2001. Our 2010 Incentive Compensation Plan, upon approval by our stockholders in October 2010, replaced our 2001 Plan. No new grants have been made under our 2001 Plan since our 2010 Plan was approved by stockholders. As of June 30, 2018,2019, stock options to purchase 177,013100,003 shares of our common stock and zero DSUs were outstanding under the 2001 Plan. During fiscal year 2018, 505,1662019, 77,010 shares of our common stock were issued upon exercise of outstanding options, and zero net shares of our common stock were delivered upon vesting of DSUs.

Amended and Restated 2010 Incentive Compensation Plan

Our Amended and Restated 2010 Incentive Compensation Plan, or the 2010 Plan, is designed to attract, motivate, retain, and reward our executive officers, employees, directors, and consultants by providing such persons with annual and long-term performance incentives to expend their maximum efforts in the creation of stockholder value. The 2010 Plan was originally adopted by our Board of Directors in August 2010 and approved by our stockholders in October 2010. At our 2017 Annual Stockholders Meeting, our stockholders approved an amendment and restatement of the 2010 Plan to increase the number of shares of common stock available for future awards by 2,000,000 shares. In JulyAt our 2018 the Compensation CommitteeAnnual Stockholders Meeting, our stockholders approved an Amendedamendment and Restatedrestatement of the 2010 Incentive Compensation Plan to, among other things, increase the

number of shares of common stock available for future awards by 1,700,000 shares, subject to stockholder1,400,000 shares. Upon approval at the upcoming Annual Meeting of Stockholders. Please see “Proposal Four: Approvalby our stockholders of the Amended2019 Equity and Restated 2010 Incentive Compensation Plan (“2019 Incentive Plan” for further information.), included as Proposal Four in this Proxy Statement, outstanding awards under the 2010 Plan will continue unaffected until issued or cancelled but no new grants will be permitted to be made under our 2010 Plan. If the 2019 Incentive Plan is not approved by our stockholders, no awards will be made under the 2019 Incentive Plan, and the 2010 Plan will remain in effect.

Under the 2010 Plan and as of the end of fiscal 2018,2019, an aggregate of 1,969,9262,891,466 shares of our common stock may be issued pursuant to the granting of stock options to acquire common stock, the direct granting of restricted common stock, DSUs, PSUs and MSUs, the granting of stock appreciation rights, or the granting of dividend equivalents. As of June 30, 2018,2019, stock options to purchase 1,441,1961,191,929 shares of our common stock and 2,502,8252,282,203 DSUs, PSUs and MSUs were outstanding under the 2010 Plan. During fiscal year 2018, 185,1442019, 177,823 shares of our common stock were issued upon exercise of outstanding stock options, and 406,529914,236 net shares of our common stock were delivered upon vesting of DSUs, PSUs and MSUs.

2019 Equity and Incentive Compensation Plan

Our 2019 Equity and Incentive Compensation Plan, or the 2019 Incentive Plan, is designed to attract, motivate, retain, and reward our executive officers, employees, directors, and consultants by providing such persons with annual and long-term performance incentives to expend their maximum efforts in the creation of stockholder value. In July 2019, our Board approved the 2019 Incentive Plan, subject to stockholder approval at the upcoming Annual Meeting of Stockholders. Please see “Proposal Four: Approval of the 2019 Equity and Incentive Compensation Plan” for further information.

If the 2019 Incentive Plan is approved by our stockholders, an initial amount of 1,660,000 shares of our common stock will be reserved for issuance under the 2019 Incentive Plan. We will continue to grant equity and cash-based incentives in the ordinary course of business under the 2010 Plan until the 2019 Incentive Plan is approved by our stockholders.

Amended and Restated 2010 Employee Stock Purchase Plan

Our 2010 Employee Stock Purchase Plan, or the 2010 ESPP, is designed to provide our employees with an opportunity to acquire a proprietary interest in our company and thereby, align their interests with the interests of our stockholders and give them an additional incentive to use their best efforts to strive for the long-term success of our company. The 2010 ESPP was adopted by our Board of Directors in August 2010 and approved by our stockholders in October 2010. We initially reserved for issuance 650,000 shares of our common stock under the 2010 ESPP. An automatic annual increase will be made on the first day of each of our fiscal years beginning in 2012 and ending in 2019, equal to the lesser of 500,000 shares, 1% of all shares of our common stock outstanding, or a lesser amount as determined by our Board

of Directors. In SeptemberAt our 2018 Annual Stockholders Meeting, our Board of Directorsstockholders approved an Amendedamendment and Restatedrestatement of the 2010 Employee Stock Purchase PlanESPP to increase the number of shares of common stock available for future awards by 100,000 shares (while maintaining other existing plan provisions and limitations on issuance), subject to stockholder approval at the upcoming Annual Meeting of Stockholders. Please see “Proposal Five: Approval of the Amended and Restated 2010 Employee Stock Purchase Plan” for further information.shares.

The cumulative shares authorized under the 2010 ESPP (including as amended and restated) will be less than 10% of our shares outstanding from time to time, unless a greater number of shares of our common stock are authorized by our stockholders. As of the end of fiscal 2018,2019, there were 240,291147,903 shares of our common stock reserved for issuance under the 2010 ESPP. During fiscal 2018, 486,2632019, 544,886 shares of our common stock were issued under the 2010 ESPP. Current offerings under the 2010 ESPP will remain in effect until the last purchase date of November 15, 2019; no further offerings will be made after this last purchase date, as further described below.

2019 Employee Stock Purchase Plan

Our 2019 Employee Stock Purchase Plan, or the 2019 ESPP, is designed to provide our employees with an opportunity to acquire a proprietary interest in our company and thereby, align their interests with the interests of our stockholders and give them an additional incentive to use their best efforts to strive for the long-term success of our company. In July 2019, our Board approved the 2019 ESPP, subject to stockholder approval at the upcoming Annual Meeting of Stockholders. Please see “Proposal Five: Approval of the 2019 Employee Stock Purchase Plan” for further information.

If the 2019 ESPP is approved by our stockholders, an initial amount of 1,500,000 shares of our common stock will be reserved for issuance under the 2019 ESPP.

DIRECTOR COMPENSATION

We pay eachnon-employee director an annual retainer of $60,000 in cash or shares of our common stock at the director’s election, and weelection. We pay the Executive Chairman of our Board of Directors an additional annual retainer of $300,000 in cash, and should we have a Chairman of our Board of Directors rather than an Executive Chairman, we pay the Chairman an additional annual retainer of $70,000 in cash. We also pay ournon-employee directors an annual retainer for committee service in cash or shares of our common stock at the director’s election as follows:

 

  Committee Chairman    Committee Member    
  Committee Chairman   Committee Member 

Audit Committee

  $25,000   $10,000    $25,000    $10,000 

Compensation Committee

  $20,000   $7,500    $20,000    $7,500 

Nominations and Corporate Governance Committee

  $10,000   $5,000    $10,000    $5,000 

Annual retainers for service on our Board of Directors and committees are paid in quarterly installments.

Starting in fiscal 2018, ournon-employee directors are eligible to receive the total value of their equity compensation in the form of DSUs, for a total estimated value of approximately $200,000. Per the terms of our Amended and Restated 2010 Incentive Compensation Plan, ournon-employee directors are not eligible to receive compensatory equity awards exceeding an aggregate grant date fair value of $750,000 in any fiscal year. The total equity value was calculated using the average closing price of our common stock for the one month ended October 31, 20172018 and differs from the accounting value which is based on grant date fair value determined in accordance with ASC Topic 718. We also reimburse ournon-employee directors for expenses incurred to attend Board of Directors and committee meetings. Under the 2019 Incentive Plan, the $750,000 compensation limit fornon-employee director compensation is an aggregate limit on all compensation paid to a director, including both cash and equity awards, in a calendar year.

FISCAL 20182019 DIRECTOR COMPENSATION TABLE

DSU awards to continuingnon-employee directors generally vest quarterly over the period from the vesting start date through the subsequent Annual Meeting of Stockholders. Starting in fiscal 2018, weWe no longer grant stock option awards to our directors. Stock option awards to continuing non-employee directors granted in prior years generally vested monthly over the period from the grant date through the subsequent Annual Meeting of Stockholders. The following table sets forth the compensation for ournon-employee directors for the fiscal year ended June 30, 2018.29, 2019. Employee directors do not receive any additional compensation for service on our Board of Directors.

 

    Fees Earned or Paid   Stock           Total         

Director Name

  Fees Earned or Paid
in Cash(1)($)		 Stock
Awards(2)($)		   Total
($)		   in Cash(1) ($)   Awards(2) ($)     ($) 

Francis F. Lee

  $120,000  $199,631   $319,631 

Nelson C. Chan(3)

   $128,253  $184,613    $312,866 

Kiva A. Allgood(4)

   $6,042  $57,264    $63,306 

Jeffrey D. Buchanan

  $75,000  $199,631   $274,631    $82,500  $184,613    $267,113 

Nelson C. Chan(3)

  $87,500  $199,631   $287,131 

Keith B. Geeslin

  $85,000  $199,631   $284,631    $82,500  $184,613    $267,113 

Russell J. Knittel

  $70,000  $199,631   $269,631    $70,000  $184,613    $254,613 

Francis F. Lee

   $103,750  $184,613    $288,363 

Richard L. Sanquini

  $72,426(3)   $199,631   $272,057    $72,537 (5)  $184,613    $257,150 

James L. Whims

  $77,500  $199,631   $277,131    $77,500  $184,613    $262,113 

 

(1)

Effective January 1, 2018, the annual retainer for the Chairman of the Board of Directors and the Chairman of the Compensation Committee increased from $50,000 to $70,000 and from $15,000 to $20,000, respectively, resulting in pro rata payments to certain of our directors.

(2)

The amounts shown in this column reflect the grant date fair value of DSU awards determined in accordance with ASC Topic 718, excluding the effects of forfeitures. We determine the grant date fair value of each DSU award using the closing price of our common stock on the date of grant. Each director forfeits the unvested portion, if any, of the director’s DSU award if the director’s service to our comp any is terminated for any reason, except as may otherwise be determined by the plan committee appointed by our Board of Directors as the administrator of our 2010 Plan. There were no forfeitures of DSUs by our directors in fiscal 2018. As of June 30, 2018, each of the non-employee directors had 2,688 shares underlying DSU awards outstanding.

(3)

(1) The Board of Directors appointed members to each of our Board committees in October 2018, resulting in pro rata payments to certain directors, based on the number of quarters such director served on the committee to which they were appointed.

(2) The amounts shown in this column reflect the grant date fair value of DSU awards determined in accordance with ASC Topic 718, excluding the effects of forfeitures. We determine the grant date fair value of each DSU award using the closing price of our common stock on the date of grant. Each director forfeits the unvested portion, if any, of the director’s DSU award if the director’s service to our company is terminated for any reason, except as may otherwise be determined by the plan committee appointed by our Board of Directors as the administrator of our 2010 Plan. There were no forfeitures of DSUs by our directors in fiscal 2018. As of June 29, 2019, each of the non-employee directors had 1,304 shares underlying DSU awards outstanding, except for Ms. Allgood who had 861 shares underlying an outstanding DSU award.

(3) Mr. Chan received a pro rata payment for his service as the Executive Chairman of our Board from March 2019 through the end of our fiscal year.

(4) Ms. Allgood received a pro rata amount of director fees and DSUs in connection with her appointment to our Board in May 2019.

(5) Represents the value of our common stock paid to Mr. Sanquini as his annual retainer for Board and committee services as Mr. Sanquini elected to receive his annual retainer in shares of our common stock.

REPORT OF THE AUDIT COMMITTEE

Our Board of Directors has appointed an Audit Committee consisting of fourthree directors. The current members of the Audit Committee are Jeffrey D. Buchanan, Nelson C. Chan, Keith B. Geeslin and Russell J. Knittel.Knittel, and Francis F. Lee. Each of the Audit Committee members is “independent” of our company and management, as that term is defined under applicable NASDAQ listing standards and SEC rules.

The primary responsibility of the committee is to assist our Board of Directors in fulfilling its responsibility to oversee management’s conduct of our company’s financial reporting process, including overseeing the financial reports and other financial information provided by our company to governmental or regulatory bodies (such as the SEC), the public, and other users thereof; our company’s systems of internal accounting and financial controls; and the annual independent audit of our company’s financial statements.

Management has the primary responsibility for the financial statements and the reporting process, including the systems of internal controls. The independent auditor is responsible for auditing the financial statements and expressing an opinion on the conformity of those audited financial statements with GAAP.

In fulfilling its oversight responsibilities, the committee reviewed and discussed the audited financial statements with management and the independent auditor. The committee discussed with the independent auditor the matters required to be discussed by Auditing Standards No. 1301, “Communications with Audit Committees.” This included a discussionthe applicable requirements of the auditor’s judgments as to the quality – not just the acceptability – of our company’s accounting principles and such other matters as are required to be discussed with the committee under generally accepted auditing standards.Public Company Accounting Oversight Board. In addition, the committee received from the independent auditor written disclosures and the letter required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent auditor’s communications with the committee concerning independence. The committee also discussed with the independent auditor the auditor’s independence from management and our company, including the matters covered by the written disclosures and letter provided by the independent auditor, and considered the compatibility ofnon-audit services with auditor independence.

The committee discussed with the independent auditor the overall scope and plans for its audits. The committee met with the independent auditor, with and without management present, to discuss the results of its audit, its consideration of our company’s internal controls, and the overall quality of the financial reporting. The committee held five meetings with management of our company, all of which were attended by our independent auditor, with respect to our company’s financial statements and audit or quarterly review procedures.

Based on the reviews and discussions referred to above, the committee recommended to our Board of Directors, and our Board of Directors approved that the audited financial statements be included in our company’s Annual Report on Form10-K for the fiscal year ended June 30, 201829, 2019 for filing with the SEC. The committee also has appointed our company’s independent auditor.

This report has been furnished by the Audit Committee of the Board of Directors.

Respectfully submitted,

Keith B. Geeslin, Chairman

Jeffrey D. Buchanan

Nelson C. Chan

Respectfully submitted,

Jeffrey D. Buchanan, Chairman

Russell J. Knittel

Francis F. Lee

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires our directors, executive officers, and persons that own more than 10% of a registered class of our company’s equity securities to file reports of ownership and changes in ownership with the SEC. Directors, officers, and greater than 10% stockholders are required by SEC regulations to furnish our company with copies of all Section 16(a) forms they file. Our administrative staff typically assists our executive officers and directors in preparing initial ownership reports and reporting ownership changes, and typically causes those reports to be filed on their behalf.

Based solely upon our review of the copies of such forms received by us during the fiscal year ended June 30, 2018, and written representations from our directors and executive officers that no other reports were required, we believe that each person who, at any time during such fiscal year, was a director, officer, or beneficial owner of more than 10% of our common stock complied with all Section 16(a) filing requirements during such fiscal year.

SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS, DIRECTORS, AND OFFICERS

The following table sets forth certain information regarding the beneficial ownership of our common stock as of August 17, 201819, 2019 by (1) each director; (2) the Named Executive Officers listed in the Fiscal 20182019 Summary Compensation Table; (3) all directors and current executive officers as a group; and (4) each person or entity known by us to beneficially own or to exercise voting or dispositive control over more than 5% of our common stock.

 

   Shares Beneficially Owned 

Name of Beneficial Owner

  Number(1)   Percent(2) 

Directors and Named Executive Officers:

    

Richard A. Bergman(3)

   382,537    1.1% 

Wajid Ali(4)

   54,018    * 

Kevin D. Barber(5)

   58,255    * 

Jeffrey D. Buchanan(6)

   19,540    * 

Nelson C. Chan(7)

   63,739    * 

Keith B. Geeslin(8)

   34,489    * 

Russell J. Knittel(9)

   27,923    * 

Francis F. Lee(10)

   59,207    * 

Richard L. Sanquini(11)

   25,347    * 

Huibert Verhoeven(12)

   54,441    * 

James L. Whims(13)

   50,177    * 

Alex Wong(14)

   98,642    * 

All directors and current executive officers as a group (14 persons)(15)

   981,616    2.7% 

5% Stockholders

    

Ameriprise Financial, Inc.(16)

   4,631,342    13.1% 

The Vanguard Group(17)

   3,652,913    10.3% 

Blackrock, Inc.(18)

   3,509,397    9.9% 

   

Shares Beneficially Owned  

Name of Beneficial Owner

  

Number(1)

   

Percent(2)

Directors and Named Executive Officers:

    

Michael E. Hurlston

   -   *

Richard A. Bergman(3)

   441,112   1.3%

Kermit Nolan(4)

   60,562   *

Wajid Ali

   12,256   *

Kiva A. Allgood

   861   *

Jeffrey D. Buchanan(5)

   24,798   *

Nelson C. Chan(6)

   62,997   *

Keith B. Geeslin(7)

   39,747   *

Russell J. Knittel(8)

   33,181   *

Francis F. Lee(9)

   64,465   *

Shawn Liu(10)

   27,209   *

Richard Lu

   -   *

John McFarland(11)

   46,099   *

Richard L. Sanquini(12)

   32,582   *

Huibert Verhoeven

   22,330   *

James L. Whims(13)

   55,435   *

Alex Wong(14)

   120,433   *

All directors and current executive officers as a group (15 persons)(15)

   576,181   1.7%

 5% Stockholders

    

 Ameriprise Financial, Inc.(16)

   4,556,275   13.8%

 The Vanguard Group(17)

   4,193,989   12.7%

 Blackrock, Inc.(18)

   4,115,885   12.5%

 Franklin Mutual Advisors, LLC(19)

   2,116,501   6.4%

 Dimensional Fund Advisors LP(20)

   1,741,214   5.3%

                                                                                                                                                                                                                                                                                       

    
*

Less than 1%

(1)

Except as otherwise indicated, each person named in the table has sole voting and investment power with respect to all common stock beneficially owned, subject to applicable community property laws. Except as otherwise indicated, each person may be reached at 1251 McKay Drive, San Jose, California95131-1709. The numbers and percentages shown include the shares of common stock actually owned as of August 17, 2018,19, 2019, and the shares of common stock that the identified person or group had the right to acquire within 60 days of such date to the extent known by us.

(2)

The percentages shown are calculated based on 35,362,49632,910,891 shares of common stock outstanding on August 17, 2018.19, 2019. In calculating the percentage of ownership, all shares of common stock that the identified person or group had the right to acquire within 60 days of August 17, 2018,19, 2019, upon the exercise of stock options or the vesting of DSU awards, are deemed to be outstanding for the purpose of computing the percentage of the shares of common stock owned by that person or group, but are not deemed to be outstanding for the purpose of computing the percentage of the shares of common stock owned by any other person.

(3)

Includes 325,285353,898 shares issuable upon exercise of vested stock options. Mr. Bergman has shared voting power and no investment power with respect to a portion of the shares.

(4)

Includes 52,60321,599 shares issuable upon exercise of vested stock options.

(5)

Includes 54,155 shares issuable upon exercise of vested stock options.

(6)(5)

Includes 10,215 shares issuable upon exercise of vested stock options.

(7)(6)

Includes 42,85230,852 shares issuable upon exercise of vested stock options.

(8)(7)

Includes 18,102 shares issuable upon exercise of vested stock options.

(9)(8)

Includes 20,92126,179 shares held by Russell J. Knittel and Veronica Knittel asCo-Trustees of The Knittel Revocable Living Trust and 7,002 shares issuable upon exercise of vested stock options.

(10)(9)

Includes 26,274 shares held by the EF Lee Family 2012 Irrevocable Trust and 18,10212,102 shares issuable upon exercise of vested stock options.

(10)

Includes 11,243 shares issuable upon exercise of vested stock options.

(11)

Includes 39,499 shares issuable upon exercise of vested stock options.

(12)

Includes 717 shares held by Richard L. Sanquini as trustee of the Sanquini 2002 Living Trust dated January 22, 2002 and 8,727 shares issuable upon exercise of vested stock options.

(12)(13)

Includes 43,13018,102 shares issuable upon exercise of vested stock options.

(13)(14)

Includes 24,10280,368 shares issuable upon exercise of vested stock options.

(14)(15)

Includes 70,086257,811 shares issuable upon exercise of vested stock options.

(15)

Includes 981,616 shares issuable upon exercise of vested stock options.

(16)

The information is as reported on Amendment No. 67 to Schedule 13G/A as filed on February 14, 2018.2019. Ameriprise Financial, Inc., or AFI, has shared power to direct the disposition of 4,631,3424,556,275 shares and shared power to vote 4,554,2534,439,480 shares. AFI is the parent holding company of Columbia Management Investment Advisors, LLC, or CMIA, which has shared power to direct the disposition of 4,613,9204,542,021 shares and shared power to vote 4,554,2534,439,480 shares. CMIA is the investment advisor to Columbia Seligman Communications & Information Fund, or the Fund, an investment company, which has the shared power to direct the disposition of 3,168,2982,921,045 shares and sole power to vote 3,168,2982,921,045 shares. Both AFI and CMIA disclaim beneficial ownership of any shares reported on this Schedule 13G/A. The principal address of AFI is 145 Ameriprise Financial Center, Minneapolis, MN 55474 and the principal address of CMIA and the Fund is 225 Franklin Street, Boston, MA 02110.

(17)

The information is as reported on Amendment No. 78 to Schedule 13G/A as filed on February 9, 2018.13, 2019. The Vanguard Group, Inc., has sole power to direct the disposition of 3,584,2834,154,889 shares, shared power to direct the disposition of 68,63039,100 shares, sole power to vote 66,69238,107 shares, and shared power to vote 4,390 shares. Vanguard Fiduciary Trust Company, a wholly owned subsidiary of The Vanguard Group, Inc., is the beneficial owner of 64,24034,710 shares as a result of its serving as investment manager of collective trust accounts. Vanguard Investments Australia, Ltd., a wholly owned subsidiary of The Vanguard Group, Inc., is the beneficial owner of 6,8427,787 shares as a result of its serving as investment manager of Australian investment offerings. The principal address of The Vanguard Group, Inc. is 100 Vanguard Blvd., Malvern, PA 19355.

(18)

The information is as reported on Amendment No. 910 to Schedule 13G/A as filed on January 23, 2018.February 11, 2019. BlackRock, Inc. has sole power to direct the disposition of 3,509,3974,115,885 shares and sole power to vote 3,428,3693,998,894 shares. The principal address of BlackRock, Inc. is 55 East 52nd Street, New York, NY 10055.

(19)

The information is as reported on Schedule 13G as filed on January 30, 2019. Franklin Mutual Advisors, LLC (“FMA”), an indirect wholly-owned subsidiary of Franklin Resources, Inc. (“FRI”), has sole power to direct the disposition of 2,116,501 shares and sole power to vote 1,949,079 shares independently of FRI and in connection with investment management contract(s) which delegate to FMA such power. Charles B. Johnson and Rupert H. Johnson, Jr. each own 10% or more of the outstanding common stock of FRI and are thus, the principal shareholders of FRI (the “Principal Shareholders”). Since FMA exercises voting and investment powers independently of FRI, beneficial ownership of the securities reported by FMA is not attributed to the Principal Shareholders. FMA also disclaims beneficial ownership of any shares reported on this Schedule 13G/A. The principal address of FMA is 101 John F. Kennedy Parkway, Short Hills, NJ 07078.

(20)

The information is as reported on Schedule 13G as filed on February 8, 2019. Dimensional Fund Advisors LP, in its role as investment advisor,sub-advisor and/or manager to certain investment companies, commingled funds, group trusts and separate accounts (collectively, the “Funds”), has sole power to direct the disposition of 1,741,214 shares and sole power to vote 1,690,530 shares. Dimensional Fund Advisors, LP disclaims beneficial ownership of any shares reported on this Schedule 13G/A as all securities reported on this Schedule are owned by the Funds. The principal address of Dimensional Fund Advisors, LP is Building One, 6300 Bee Cave Road, Austin, TX 78746.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Unless delegated to the Compensation Committee by our Board of Directors, the Audit Committee charter requires that the Audit Committee review and approve all related party transactions and review and make recommendations to the full Board of Directors, or approve, any contracts or other transactions with current or former executive officers of our company, including consulting arrangements, employment agreements, change of control agreements, termination arrangements, and loans to employees made or guaranteed by our company. Our Audit Committee and our Board of Directors will only approve those related party transactions that, in light of known circumstances, are in, or are not inconsistent with, our best interests.

There were no transactions or series of similar transactions since the beginning of fiscal 20182019 to which we were or are a party that involved an amount exceeding $120,000, and in which any of our directors, nominees for director, executive officers, holders of more than 5% of any class of our voting securities, or any member of the immediate family of any of the foregoing persons, had or will have a direct or indirect material interest.

Our company has entered into indemnification agreements with each of our directors and executive officers. These agreements require us to indemnify such individuals to the fullest extent permitted by Delaware law for certain liabilities to which they may become subject as a result of their affiliation with our company.

PROPOSAL TWO:

ADVISORY VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION(“SAY-ON-PAY”)

Summary

In accordance with Section 14A(a)(1) of the Exchange Act, we are asking our stockholders to provide advisory approval of the compensation of our Named Executive Officers, as such compensation is described in the Compensation Discussion and Analysis, the tabular disclosure regarding such compensation, and the accompanying narrative disclosure set forth in this Proxy Statement, beginning on page 13.14. Our executive compensation program is designed to enable us to attract, motivate, and retain highly qualified executive officers. The program links cash incentive compensation to the achievement ofpre-established corporate financial performance and personalindividual performance objectives, and provides long-termstock-based incentive compensation that focuses our executive officer’s efforts on building stockholder value by aligning their interests with those of our stockholders. We urge our stockholders to review the Compensation Discussion and Analysis and Executive Compensation sections of this Proxy Statement and the related tabular and narrative disclosure for more information.

Proposed Resolution and Vote Required

Advisory approval of this proposal will require the affirmative vote of a majority of the votes cast on the proposal, assuming that a quorum is present at the Annual Meeting of Stockholders.

The following resolution is submitted for a stockholder vote at the Annual Meeting of Stockholders:

RESOLVED,that the stockholders of the company approve, on an advisory basis, the compensation of the company’s Named Executive Officers, as disclosed in the Compensation Discussion and Analysis and the related tabular and narrative disclosure as set forth in this Proxy Statement.

This proposal is advisory, and therefore not binding on our company, our Compensation Committee, or our Board of Directors. Althoughnon-binding, the vote will provide information to our Compensation Committee and our Board of Directors regarding investor sentiment about our executive compensation philosophy, policies, and practices, which our Compensation Committee and our Board of Directors will be able to consider when making future executive compensation decisions.

We currently conduct annual advisory votes on named executive officerNamed Executive Officer compensation, and we expect to conduct the next advisory vote at our 20192020 Annual Meeting of Stockholders.

Board Recommendation

Our Board of Directors believes that the information provided above and within the Compensation Discussion and Analysis and Executive Compensation sections of this Proxy Statement demonstrates that our executive compensation program is designed appropriately and is working to ensure that our executive officers’ interests are aligned with our stockholders’ interests to support long-term value creation.

OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” ADOPTION OF THE RESOLUTION APPROVING THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS, AS DESCRIBED IN THE COMPENSATION DISCUSSION AND ANALYSIS AND THE RELATED TABULAR AND NARRATIVE DISCLOSURE SET FORTH IN THIS PROXY STATEMENT.

PROPOSAL THREE:

RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITOR

KPMG LLP, an independent registered public accounting firm, was the auditor for our fiscal year ended June 30, 2018.29, 2019. Our Audit Committee has appointed KPMG LLP to audit the consolidated financial statements of our company for our fiscal year ending June 29, 2019,27, 2020, and recommends a vote“for”the ratification of such appointment. In the event of a negative vote on such ratification, the Audit Committee will reconsider its selection. A representative of KPMG LLP is expected to attend the Annual Meeting of Stockholders, andStockholders. Such representative will have the opportunity to make a statement and will be available to respond to appropriate questions from stockholders.

The Audit Committee has considered whether the provision ofnon-audit services by KPMG LLP is compatible with maintaining KPMG LLP’s independence.

Fees

The aggregate fees billed to our company by KPMG LLP, for the fiscal years ended June 30, 201829, 2019 and June 24, 2017,30, 2018, were as follows:

 

   2018   2017 

Audit Fees

  $3,134,000   $2,452,000 

Audit-Related Fees(1)

   —      229,227 

Tax Fees(2)

   569,801    642,012 

All Other Fees(3)

   38,135    —   
  

 

 

   

 

 

 

Total Fees

  $3,741,936   $3,323,239 
  

 

 

   

 

 

 
   2019    2018

Audit Fees

  $2,590,000     $3,134,000 

Tax Fees(1)

   477,730      569,801 

All Other Fees(2)

   7,958      38,135 
  

 

 

 

    

 

 

 

Total Fees

  $    3,075,688     $    3,741,936 
  

 

 

 

    

 

 

 

(1)

Includes certain fees for acquisition diligence support for fiscal 2017.

(2)(1)

Includes fees for professional services rendered by KPMG LLP with respect to tax preparation and compliance, and tax due diligence for acquisition and tax consultation. The fees for tax due diligence support for fiscal 2017 were $149,876. The fees for tax consultation services were $295,983$261,271 and $123,970$295,983 for fiscal 20182019 and fiscal 2017,2018, respectively.

(3)(2)

Includes fees for professional services rendered by KPMG LLP with respect to evaluation and compliance with the European Union General Data Protection Regulation.

Audit CommitteePre-Approval Policies

The charter of our Audit Committee provides that the duties and responsibilities of our Audit Committee include thepre-approval of all audit, audit-related, tax, and other services permitted by law or applicable SEC regulations (including fee and cost ranges) to be performed by our independent auditor. Anypre-approved services that will involve fees or costs exceedingpre-approved levels will also require specificpre-approval by the Audit Committee. Unless otherwise specified by the Audit Committee inpre-approving a service, thepre-approval will be effective for the12-month period followingpre-approval. The Audit Committee will not approve anynon-audit services prohibited by applicable SEC regulations or any services in connection with a transaction initially recommended by the independent auditor, the purpose of which may be tax avoidance and the tax treatment of which may not be supported by the Code and related regulations.

To the extent deemed appropriate, the Audit Committee may delegatepre-approval authority to the Chairman of the Audit Committee or any one or more other members of the Audit Committee, provided that any member of the Audit Committee who has exercised any such delegation must report any suchpre-approval decision to the Audit Committee at its next scheduled meeting. The Audit Committee will not delegate to management thepre-approval of services to be performed by the independent auditor.

Our Audit Committee requires that our independent auditor, in conjunction with our Chief Financial Officer, be responsible for seekingpre-approval for providing services to us and that any request forpre-approval must provide information to the Audit Committee about each service to be provided, and the details of such service.

All of the services provided by KPMG LLP described above under the captions “Audit Fees,”“Audit-Related “Audit-Related Fees,” “Tax Fees,” and “All Other Fees” were approved by our Audit Committee pursuant to our Audit Committee’spre-approval policies.

Ratification by Stockholders of the Appointment of our Independent Auditor

Ratification of the appointment of KPMG LLP to audit the consolidated financial statements of our company for the fiscal year ending June 29, 2019,27, 2020, will require the affirmative vote of a majority of the votes cast on the proposal, assuming that a quorum is present at the Annual Meeting of Stockholders.

PROPOSAL FOUR:

APPROVAL OF THE AMENDED2019 EQUITY AND RESTATED 2010 INCENTIVE COMPENSATION PLAN

We are askingAt the annual meeting, our stockholders will be asked to consideradopt and approve an amendmentthe Synaptics Incorporated 2019 Equity and restatement ofIncentive Compensation Plan (the “2019 Incentive Plan”), which will replace the Company’sSynaptics Incorporated Amended and Restated 2010 Incentive Compensation Plan, (such amendmentas amended (the “2010 Plan”, which together with the Synaptics Incorporated Amended and restatement,Restated 2001 Incentive Compensation Plan (the “2001 Plan”), we refer to as the “Amended 2010 PlanPredecessor Plans”). Our Compensation CommitteeThe Board approved the Amended 20102019 Incentive Plan inon July 2018,30, 2019, subject to approval by our stockholders at the Annual Meeting of Stockholders.Meeting. If this Proposal Fourthe 2019 Incentive Plan is approved by our stockholders, it will be effective as of the Amendeddate of such approval, and no further grants will be made on or after such date under the 2010 Plan. Outstanding awards under the 2010 Plan, however, will continue in effect in accordance with their terms. If the 2019 Incentive Plan is not approved by our stockholders, no awards will be made under the 2019 Incentive Plan, and the 2010 Plan will become effective uponremain in effect.

Our Board of Directors believes Synaptics’ interests will be best advanced by stimulating the dateefforts of employees, officers,non-employee directors, and certain consultants of Synaptics and its subsidiaries, in each case, who are selected to be participants, by heightening the desire of such persons to continue working toward and contributing to the success and progress of Synaptics. The 2019 Incentive Plan allows for the grant of stock options (including options intended to qualify as incentive stock options (“incentive stock options”) under Section 422 of the Annual MeetingInternal Revenue Code of Stockholders. In1986, as amended (the “Code”) and options not intended to qualify as incentive stock options (“nonqualified stock options” and together with incentive stock options, “options”), appreciation rights (“SARs”), restricted stock, restricted stock units (“RSUs”), cash incentive awards, performance shares, performance units and other stock-based awards (collectively, “awards”), any of which may have vesting or other restrictions contingent on the eventachievement of management objectives (as described below). Our Board of Directors believes that our stockholders do not approve this Proposal Four, the Amended 20102019 Incentive Plan will not become effective andpermit Synaptics to use stock-based compensation to further align the existing 2010interests of 2019 Incentive Compensation Plan (the “2010 Plan”) will continue in its current form.

The Amended 2010 Plan will afford us the continued ability to design compensatory awards that are intended to advanceparticipants with those of our interests and long-term success by encouraging stock ownership among our officers, other employees, consultants andnon-employee directors. In addition to requesting an additional 1,700,000 number of shares of common stock available for future awards, the Amended 2010 Plan expressly prohibits the payout of dividends and dividend equivalents on equity awards until the underlying award has been earned or becomes vested.stockholders.

Why We Believe You Should Vote for Proposal Four

As of August 17, 2018, 3,936,013 shares of common stock subject to outstanding awards were outstanding under the 2010 Plan and 2,098,440 shares remained available for issuance under the 2010 Plan.

We believe that our future success depends in part on our ability to attract, hire, motivate and retain high quality employees, consultantsdirectors and directorsconsultants and that the ability to provide equity awards under the 20102019 Incentive Plan is critical to achieving this success. We would be at a severe disadvantage if we could not use equity-based awards covering a meaningful number of shares to recruit and secure or retain key talent in the current competitive market for highly skilled and qualified employees. In addition, we use annual refresh grants to encourage workers to remain with us over a number of years, which provides continuity of institutional knowledge and minimizes the distractions and inefficiencies caused by employee turnover.

We also believe that our future success depends in part on our ability to align the interests of our employees, consultantsdirectors and directorsconsultants with those of our stockholders, and that equity compensation is a key way to foster this alignment. Alignment comes in two key ways. First, the value our workers can realize from their equity compensation is based on our stock price performance. Second, we can useperformance-based vesting to focus our workers on achieving specific goals that we believe are important to our success.

We believe that equity compensation can help limit the cost to stockholders of our compensation programs, and can preserve cash for other uses in growing our business or returning value to our stockholders. If the Amended 20102019 Incentive Plan is not approved, we may need to replace the lost compensation value with larger cash awards, which would increase our cash compensation expense. That cash that might be better utilized if reinvested in our business or returned to our stockholders.

To help our stockholders better understand our historical equity compensation practices, currently anticipated needs, and an estimate of the potential cost of dilution from our request for additional shares, we note that, as of August 17, 2018:19, 2019:

 

We have 35,362,496 shares of our common stock issued and outstanding;

We have 2,376,035 shares (6.7% of our issued and outstanding common stock) subject to outstanding unvested full value awards;

We have 1,559,978 shares (4.4% of our issued and outstanding common stock) subject to outstanding stock options and stock appreciation rights (167,846 of which were granted under our 2001 Incentive Compensation Plan), with a weighted average exercise price of $57.92 and an average remaining term of 3.3 years;

We have 2,098,440 shares available for future grant under the 2010 Plan;

The total number of shares of common stock subject to outstanding awards under the 2001 Plan and 2010 Plan (3,936,013 shares), plus the total number of shares available for future awards under the 2010 Plan (2,098,440 shares), represents a current overhang percentage of 17.1% (in other words, the potential dilution of our stockholders represented by the 2010 Plan, when viewed against our shares of common stock currently issued and outstanding, including shares of restricted stock);

We are asking for an additional 1,700,000 shares of common stock for future issuance under the Amended 2010 Plan (which number is reduced to 876,288 shares after taking into account the fungible share ratio of 1.94) – this represents 2.5% of our issued and outstanding common stock if all shares are awarded as full value shares;

The total available pool, including the 2010 Plan (2,098,440 shares), plus the proposed additional shares available for future issuance under the Amended 2010 Plan (1,700,000 shares), results in total potential new dilution of 8.4%, assuming all available awards are granted as full value shares with 1.94 fungible share ratio;

●

We have 32,910,891 shares of our common stock issued and outstanding;

●

We have 2,306,871 shares (7.0% of our issued and outstanding common stock) subject to outstanding unvested full value awards (214,757 of which were granted under the 2019 Inducement Plan);

●

We have 1,087,918 shares (3.3% of our issued and outstanding common stock) subject to outstanding stock options (76,625 of which were granted under the 2001 Plan), with a weighted average exercise price of $60.14 and an average remaining term of 1.7 years;

●

We have 3,026,331 shares available for future grant under the 2010 Plan, which number is reduced to 1,559,964 shares for full value awards after taking into account the 2010 Plan’s fungible share ratio of 1.94:1 (however, as noted above, no further grants will be made under the 2010 Plan upon the effective date of the

The total potential dilution following the share increase including shares available for future issuance under the Amended 2010 Plan and currently outstanding awards under the 2001 Plan and 2010 Plan (3,936,013 shares) reflects a total potential dilution of 19.5% (assuming all available awards are granted as full value shares with 1.94 fungible share ratio); and

Based on the closing price of our common stock on the NASDAQ Global Select Market on August 17, 2018 of $45.04 per share, the aggregate market value as of that date of the 1,700,000 additional shares of common stock requested for issuance under the Amended 2010 Plan was $76.6 million.

2019 Incentive Plan, so any of these shares then remaining will no longer be available for future awards upon the effectiveness of the 2019 Incentive Plan) and there are no shares available for future grant under the 2001 Plan. We will continue to grant equity and cash-based incentives in the ordinary course of business under the 2010 Plan until the 2019 Incentive Plan is approved by our stockholders;

●

The total number of shares of common stock subject to outstanding awards under the Predecessor Plans and the 2019 Inducement Plan (3,394,789 shares in total), plus the total number of shares available for future full value awards under the 2010 Plan (1,559,964 shares), represents a current overhang percentage of 15.1% (in other words, the potential dilution of our stockholders represented by the Predecessor Plans, when viewed against our shares of common stock currently issued and outstanding, including shares of restricted stock), however, as noted above, no grants will be made under the 2010 Plan after effectiveness of the 2019 Incentive Plan and any shares remaining available for grant under the 2010 Plan as of such date will no longer be available for awards under either plan;

●

We are asking for 1,660,000 shares of common stock available for awards under the 2019 Incentive Plan – this represents 5.0% of our issued and outstanding common stock, which percentage reflects the simple dilution of our stockholders that would occur if the 2019 Incentive Plan is approved;

●

The total shares of common stock subject to outstanding awards as of August 19, 2019 (3,394,789 shares), plus the proposed shares of common stock available for future issuance under the 2019 Incentive Plan (1,660,000 shares), represents potential dilution of 5,054,789 shares (approximately 15.4%); and

●

Based on the closing price of our common stock on the NASDAQ Global Select Market on August 19, 2019 of $34.68 per share, the aggregate market value as of that date of the 1,660,000 shares of common stock requested for issuance under the 2019 Incentive Plan was $57,568,800.

We recognize that our stockholders want to know about our recent grant practices, including our recent “burn rate,” when considering how to vote on our proposal to approve the Amended 20102019 Incentive Plan. Burn rate or run rate (measuring a company’s annual usage of shares) is generally calculated as the number of shares granted divided by the weighted average number of shares outstanding and is used to demonstrate how quickly a company uses available shares. The table below provides our average aggregate three-year burn rate under the 2010 Plan and its predecessor plans. We note that for Russell 3000 companies in our GICS group (Semiconductor & Semi Equipment), the ISS benchmark burn rate as of December 14, 2017 is 6.32%.Plan.

 

Fiscal Year

  Options
Granted		   Restricted Stock
Awards/Units Granted
(excluding
Performance-Based)		   Performance-Based
Restricted Stock
Awards/Units Earned		   Total
Adjusted
Shares
Granted		   Weighted
Average
Shares at End
of Fiscal Year		   Adjusted Burn
Rate		 

2016

   440,362    704,225    103,199    2,055,210    36,600,000    5.61% 

2017

   356,107    922,784    10,339    2,222,353    34,800,000    6.39% 

2018

   61,825    1,331,073    —      2,723,971    34,200,000    7.96% 
Average Three-Year Burn Rate (2016-2018)

 

   6.65% 

Fiscal

Year

  Options
Granted		  Restricted Stock
Awards/Units
Granted (excluding
Performance-Based)		  Performance-Based
Restricted Stock
Awards/Units
Earned		  Total Shares
Granted		  Weighted Average
Shares at End of
Fiscal Year		  Burn Rate  

2017

  356,107  922,784  10,339  1,289,230  34,800,000  3.70%

2018

  61,825  1,331,073  -  1,392,898  34,200,000  4.07%

2019

  -  1,263,966  184,672  1,448,638  34,600,000  4.19%

Average Three-Year Burn Rate (2017-2019)                

  3.99%

In determining the number of shares to request for approval under the Amended 20102019 Incentive Plan, our Compensation Committee consulted Compensia to review current market practices in the use of equity compensation. The Compensation Committee also considered other material factors, including our recent share usage, anticipated hiring needs in the next two years, the potential dilution (as noted in the figures above), our current focus on granting full value awards, (and therefore, the importanceelimination of the fungible share ratio),ratio from our 2019 Incentive Plan, our current stock price, recent experiences in the equity awards expected by new hire candidates, and general guidance from institutional proxy advisory firms such as ISS that our stockholders might consider in evaluating the Amended 20102019 Incentive Plan. After reviewing this information, our Compensation Committee decided to request that our stockholders approve an additional 1,700,0001,660,000 shares to be added toas the Amended 20102019 Incentive Plan’s share reserve.

We currently anticipate that the shares requested, when combined with reserves currently available reserves,until effectiveness of the 2019 Incentive Plan, will provide for grants in the ordinary course of business for approximately two years. However, the proposed share reserve could last for a shorter or longer period of time, such as might be the case if equity compensation practices within our peer group changed and required us to alter our current grant practices to remain competitive, or if our stock price changes materially. As noted in “Summary of the Amended 2010 Plan” below, and consistent with the terms of the 2010 Plan and market practices, our Compensation Committee will retain full discretion under the Amended 2010 Plan to determine the form, terms, number and size of awards to be granted under the Plan, and future benefits that may be received by participants under the Amended 2010 Plan are not determinable at this time.

Responsible Plan Features

When considering howOur Board of Directors believes the use of stock-based incentive awards promotes best practices in corporate governance by incentivizing the creation of stockholder value. By providing participants in the 2019 Incentive Plan with a stake in Synaptics’ success, the interests of the participants are further aligned with those of our stockholders. Specific features of the 2019 Incentive Plan that are consistent with commonly viewed good corporate governance practices include, but are not limited to:

●

The 2019 Incentive Plan will be administered by the Compensation Committee of the Board, consisting entirely of independent directors;

●

Except for substitute awards in connection with a corporate transaction, options and SARs under the 2019 Incentive Plan may not be granted with exercise or base prices lower than the fair market value of the underlying shares on the grant date;

●

Except in connection with a corporate transaction or change in control, the 2019 Incentive Plan prohibits the repricing of options and SARs without stockholder approval, including no cancellation and replacement of any outstanding option or SAR with a new option, SAR, other award or cash or amendment or modification that reduces the exercise price of an option or base price of a SAR;

●

The 2019 Incentive Plan prohibits the grant of dividend equivalents with respect to options and SARs and subjects all dividends and dividend equivalents paid with respect to other awards to the same vesting conditions as the underlying shares subject to the awards;

●

The 2019 Incentive Plan prohibits “liberal share recycling” - meaning that shares used to pay the exercise price or withholding taxes relating to an award under the 2019 Incentive Plan will not be recycled back into the 2019 Incentive Plan for future grants;

●

The 2019 Incentive Plan prohibits, with certain limited exceptions, the vesting of awards earlier than after aone-year vesting or performance period, as applicable;

●��

The 2019 Incentive Plan does not contain an evergreen feature;

●

The 2019 Incentive Plan does not contain a liberal change in control definition; and

●

Non-employee directors may not be awarded compensation for their service as a director having an aggregate maximum value on the grant date that exceeds an amount provided in the 2019 Incentive Plan during any calendar year.

Plan Summary

The following summary of the material terms of the 2019 Incentive Plan are qualified in their entirety by reference to votea copy of the 2019 Incentive Plan, which is set forth in Appendix B to this proxy statement. The 2019 Incentive Plan will become effective on this Proposal Four, we thinkthe date that it is approved by our stockholders should(the “Effective Date”). Following the Effective Date, no grants will be awaremade under the 2010 Plan; however, outstanding awards under the 2010 Plan and 2001 Plan will remain outstanding.

Purpose.The purpose of the following2019 Incentive Plan is to provide a means through which Synaptics may attract and retain key provisionsnon-employee directors, officers, employees and certain consultants of Synaptics and its subsidiaries, and to provide to such persons incentives and rewards for service and/or performance.

Eligibility.Non-employee directors, officers, employees, and consultants of Synaptics and its subsidiaries will be eligible for awards, as selected by the Committee (as defined below);provided,that, incentive stock options may be granted only to employees. As of August 19, 2019, we had eightnon-employee directors, 386 consultants and 1,834 employees who would be eligible to participate in the 2019 Incentive Plan, if selected by the Compensation Committee of the Amended 2010 Plan.

All awardsBoard of Directors or such other committee designated by the Board of Directors (the “Committee”) or its delegate. A written agreement between Synaptics and each participant will evidence the terms of each award granted under the Amended 20102019 Incentive Plan.

Number of Shares Authorized and Award Limit. Pursuant to the 2019 Incentive Plan, areSynaptics has reserved an aggregate of 1,660,000 shares of common stock for issuance of awards of options or SARs, restricted stock, RSUs, performance shares or performance units, other awards permitted under the 2019 Incentive Plan, or dividend equivalents paid with respect to such awards, to be granted under the 2019 Incentive Plan.

If any award granted under the 2019 Incentive Plan expires unexercised, is canceled, forfeited, settled in cash or unearned (in whole or in part), shares of our common stock subject to such award will again be made available for future grants under the 2019 Incentive Plan. Further, if any award granted under the Predecessor Plans expires unexercised, is canceled, forfeited, settled in cash or unearned (in whole or in part), shares of our common stock subject to such award will again be made available for future grants under the 2019 Incentive Plan. Use of shares of our common stock to pay the required exercise price, use of shares of our common stock with respect to havefull value awards, options or SARs to pay tax obligations, or shares not issued in connection with settlement of an option or SAR, or reacquired by Synaptics on the open market or otherwise using cash proceeds from the exercise of an option, will not be available again for other awards under the 2019 Incentive Plan. If a minimum one yearparticipant elects to give up the right to receive compensation in exchange for shares of common stock based on fair market value, such shares of common stock will not count against the aggregate limit of shares authorized under the 2019 Incentive Plan.

Minimum Vesting Requirements and Individual Director Limit.In general, and subject to certain limitations, no award granted under the 2019 Incentive Plan may vest earlier than after aone-year vesting period except thator aone-year performance period, as applicable. However, up to 5% of the Amended 2010sum of (i) the aggregate number of shares available for issuance as described above, and (ii) the number of shares returned to the 2019 Incentive Plan share reserveas a result of awards that are cancelled or forfeited, settled in cash, or unearned, may be subject togranted in the form of awards that do not meet suchone-year vesting requirements.limitation.

Non-employee directors may not be granted compensation (including cash compensation) having an aggregate maximum value at the date of grant that exceeds $750,000 per calendar year.

Administration. The Committee will administer the 2019 Incentive Plan. Among other responsibilities, the Committee will select participants and determine the type of awards to be granted to participants, the number of shares of common stock to be covered by awards and the terms and conditions of awards, interpret the 2019 Incentive Plan and awards granted thereunder, and make any other determination and take any other action that it deems necessary or desirable to administer the 2019 Incentive Plan. The Committee may delegate to its members, officers of Synaptics, or to agents or advisors, such administrative duties or powers as the Committee deems advisable, and the Committee, the subcommittee, or any other such person to whom duties or powers have been delegated, may employ persons to render advice with respect to a responsibility of the Committee. The Committee may also, by resolution, authorize officers of Synaptics to designate employees to be recipients of awards and determine the size of such awards; provided, however, that (A) the Committee will not delegate such responsibilities to any such officer for awards granted to an employee who is an officer, director, or more than 10% “beneficial owner” (as defined in Rule13d-3 under the Securities Exchange Act of 1934, as amended, or the “Exchange Act”) of any class of Synaptics’ equity securities that is registered pursuant to Section 12 of the Exchange Act, determined by the Committee in accordance with Section 16 of the Exchange Act; (B) the resolution providing for such authorization will set forth the total number of common shares the officer may grant; and (C) the officer(s) will periodically report to the Committee regarding the nature and scope of such awards granted.

Amendment or Termination. Unless earlier terminated, the expiration date of the 2019 Incentive Plan will be the tenth (10th) anniversary of the Effective Date;provided,however, that such expiration will not affect awards then outstanding, and the terms and conditions of the 2019 Incentive Plan will continue to apply to such awards. The Board of Directors may amend or terminate the 2019 Incentive Plan at any time;provided,that, an amendment will be subject to stockholder approval, and will not be effective without stockholder approval if, as determined by the Board of Directors, an amendment to the plan, for purposes of applicable stock exchange rules: 1) would materially increase the benefits accruing to participants; 2) would increase the number of securities which may be issued under the 2019 Incentive Plan; 3) would materially modify requirements for participation in the 2019 Incentive Plan; or 4) otherwise requires stockholder approval under applicable law or the rules of the applicable national securities exchange. Further, any such amendment that would impair the rights of any participant or any holder or beneficiary of any award granted under the 2019 Incentive Plan will not to that extent be effective without the consent of the affected participant, holder or beneficiary. Except in connection with a corporate transaction or change in control, none of the following actions can be taken under the 2019 Incentive Plan without approval of our stockholders: (i) amendment or modification to reduce the exercise price of any option or the base price of any SAR; (ii) cancel any outstanding option or SAR and replace it with a new option or SAR, other award or cash; or (iii) any other action that is considered a “repricing” for purposes of the stockholder approval rules of the NASDAQ Global Select Market.

Options. The Committee may, in its discretion, grant incentive stock options and nonqualified stock options to participants.Non-employee directors, officers, employees, and consultants of Synaptics and its subsidiaries may be granted nonqualified stock options, but only employees of Synaptics and its subsidiaries may be granted incentive stock options. The Committee will determine the exercise price of options granted under the 2019 Incentive Plan. Subject to certain exceptions in connection with a corporate transaction, the exercise price of an incentive or nonqualified stock option will be at least 100% of the fair market value of the common stock subject to the option on the date the option is granted. The Committee will determine, in its sole discretion, the terms of each option. Options may not be exercisable for more than ten years from the date they are granted and will not provide for any dividends or dividend equivalents thereon. Acceptable consideration for the purchase of the common stock issued upon the exercise of an option will be specified in the award agreement and may include cash, check, cash equivalents and/or shares of common stock, a reduction in the number of shares deliverable upon exercise and such other forms of consideration that the Committee may accept.

SARs. The Committee may, in its discretion, grant SARs to participants in the 2019 Incentive Plan. Generally, SARs permit a participant to exercise the right and receive a payment equal to the value of the common stock’s appreciation over a period of time in excess of the fair market value (the “base price”) of a share of the common stock on the date of grant of the SAR. Synaptics may settle such amount in cash, in shares of our common stock valued at fair market value, or any combination thereof, as determined by the Committee and specified in the award agreement. SARs granted under the 2019 Incentive Plan will become exercisable and will expire in such manner and on such date(s) as

determined by the Committee, with the term of the SAR not to exceed ten years from the grant date. The Amended 2010Committee will determine, in its sole discretion, the terms of each SAR. SARs granted under the 2019 Incentive Plan establisheswill not provide for any dividends or dividend equivalents thereon.

Restricted Stock.The Committee may, in its discretion, grant restricted stock to participants in the 2019 Incentive Plan. The Committee will determine, in its sole discretion, the terms of each grant of restricted stock. Subject to the terms of the award, the recipients of restricted stock generally will have the rights and privileges of a fungible share ratiostockholder with respect to the restricted stock, including the right to vote the stock, on the grant date. Dividends, if any, paid by Synaptics with respect to awards of 1.94restricted stock prior to the time all restrictions and vesting conditions on the restricted stock have lapsed will be withheld by the Committee and distributed to the participant in cash or shares forof common stock upon the release of the restrictions applicable to the underlying shares of restricted stock.

RSUs. The Committee may, in its discretion, grant RSUs to participants. An RSU is the right to receive shares of our common stock (or to the extent provided in the award agreement, cash or a combination of cash and common stock) following achievement of all full valuevesting conditions and the lapse of all restrictions. The Committee will determine, in its sole discretion, the terms of each award of RSUs. Recipients of RSUs will not have the rights and privileges of a stockholder with respect to the common stock underlying such RSUs, including the right to vote the stock, until common stock in respect of the RSUs is actually issued to the participant following satisfaction of all vesting conditions. Dividends, if any, paid by Synaptics with respect to common stock underlying an award of RSUs prior to the time all restrictions and vesting conditions on the RSU have lapsed will be withheld by the Committee and distributed to the participant in cash or shares of common stock upon the release of the restrictions and vesting conditions applicable to the shares subject to the award. RSUs may be settled in shares of our common stock, cash or a combination thereof in the discretion of the Committee.

Other Stock-Based Awards.The Committee, in its discretion, may award unrestricted shares of our common stock, or other awards denominated in shares of our common stock, to participants either alone or in tandem with other awards granted under the Amended 20102019 Incentive Plan. The Committee will determine, in its sole discretion, the terms of each other stock-based award.

Cash Incentive Awards, Performance Shares, and Performance Units.The Committee may, in its discretion, also grant performance shares, performance units and cash incentive awards to participants under the 2019 Incentive Plan. Each full value award share returninggrant will specify the number or amount of performance shares or performance units, or the amount payable with respect to cash incentive awards, which number or amount may be subject to adjustment to reflect changes in compensation or other factors. These awards, when granted under the 2019 Incentive Plan, become payable to participants upon the achievement of specified management objectives and upon such terms and conditions as the Committee determines at the time of grant. Each grant may specify, with respect to the reserve aftermanagement objectives, a minimum acceptable level of achievement and may set forth a formula for determining the effectivenumber of performance shares or performance units, or the amount payable with respect to cash incentive awards, that will be earned if performance is at or above the minimum or threshold level, or is at or above the target level but falls short of maximum achievement. Each grant will specify the time and manner of payment of cash incentive awards, performance shares or performance units that have been earned, and any grant may further specify that any such amount may be paid or settled in cash, shares of common stock, restricted stock, restricted stock units or any combination thereof. Any grant of performance shares may provide for the payment of dividend equivalents in cash or in additional shares of common stock, subject to deferral and payment on a contingent basis based on the participant’s earning of the performance shares with respect to which such dividend equivalents are paid. Each grant of performance shares, performance units or cash incentive awards will be evidenced by an award agreement which specifies the applicable terms and conditions of such award, including any vesting and forfeiture provisions. The performance period with respect to a cash incentive award, performance share, or performance unit will be a period of time determined by the Committee on the grant date. The performance period may be subject to earlier lapse or modification, including in the event of retirement, death or disability of the participant.

Management Objectives.Management objectives are measurable performance objectives established under the 2019 Incentive Plan for participants who have received grants of performance shares, performance units or cash incentive awards or, when so determined by the Committee, options, SARs, restricted stock, RSUs, dividend equivalents or other awards granted under the 2019 Incentive Plan. If the Committee determines that a change in the business, operations, corporate structure or capital structure of Synaptics, or the manner in which it conducts its business, or other events or circumstances render the management objectives unsuitable, the Committee may in its discretion modify such management objectives or the acceptable levels of achievement, in whole or in part, as the Committee deems appropriate.

Adjustments in Capitalization.In general, in the event of (1) any extraordinary cash dividend, stock dividend, stock split, combination of common stock, recapitalization or other change in the capital structure of Synaptics, (2) any merger, consolidation,spin-off,split-off,spin-out,split-up, reorganization, partial or complete liquidation or other distribution of assets, issuance of rights or warrants to purchase securities or (3) any other corporate transaction or event having an effect similar to any of the forgoing, necessary or appropriate equitable adjustments (as determined by the

Committee) will be made, including, but not limited to, the number of shares of common stock or other securities of Synaptics (or number and kind of other securities, consideration or other property) that may be delivered in respect of awards or with respect to which awards may be granted under the 2019 Incentive Plan. In addition, in the event of a Change in Control (as defined within the 2019 Incentive Plan), the Committee may provide in substitution for any or all awards outstanding under the 2019 Incentive Plan such alternative consideration (including cash), if any, it in good faith may determine to be equitable in the circumstances and shall require in connection therewith the surrender of all awards so replaced. In connection with any of the foregoing events, the Committee may in its sole discretion elect to cancel outstanding options or SARs with an exercise price or base price that is equal to or less than the then current fair market value of our common stock without any consideration to the participant therefor.

Change in Control.A Change in Control is defined in the 2019 Incentive Plan as the occurrence of any of the following events:

●

A change in control of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Exchange Act;

●

The following individuals no longer constitute a majority of the members of the Board of Directors: (1) the individuals who, as of the Effective Date, constitute the Board of Directors (the “Current Directors”); (2) the individuals who thereafter are elected to the Board of Directors and whose election, or nomination for election, to the Board of Directors was approved by a vote of a majority of all of the Current Directors then still in office (such directors becoming “Additional Directors” immediately following their election); and (3) the individuals who are elected to the Board of Directors and whose election, or nomination for election, to the Board of Directors was approved by a vote of a majority of all of the Current Directors and Additional Directors then still in office;

●

A tender offer or exchange offer is made whereby the effect of such offer is to take over and control Synaptics, and such offer is consummated for the equity securities of Synaptics representing more than 50% of the combined voting power of Synaptics’ then outstanding voting securities;

●

Following approval by the stockholders of Synaptics, Synaptics closes a reorganization, merger, consolidation or recapitalization of Synaptics, a reverse stock split of outstanding voting securities, or consummation of any such transaction if stockholder approval is not obtained, other than any such transaction that would result in more than 50% of the total voting power represented by the voting securities of the surviving entity outstanding immediately after such transaction being beneficially owned by the holders of outstanding voting securities of Synaptics immediately prior to the transaction, with the voting power of each such continuing holder relative to other such continuing holders not substantially altered in the transaction;

●

The consummation of a transaction approved by our stockholders of a plan of complete liquidation of Synaptics or an agreement for the sale or disposition by Synaptics of all or a substantial portion of Synaptics’ assets to another person, which is not a wholly owned subsidiary of Synaptics; or

●

Any “person” (as that term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule13d-3 of the Exchange Act), directly or indirectly of more than 50% of the total voting power represented by Synaptics’ then outstanding voting securities.

In the event of a Change in Control: (i) unvested options and SARs will immediately vest, except to the extent that a replacement award (as such term is defined within the 2019 Incentive Plan) is provided; (ii) any restrictions, deferral of settlement and forfeiture conditions applicable to restricted stock, RSUs, or other awards that vest solely based on continued service (and not based on the achievement of management objectives) will lapse and be deemed fully vested, except to the extent that a replacement award is provided; (iii) with respect to cash incentive awards, performance shares, performance units, and other awards that are subject to the achievement of management objectives (other than with respect to awards described as “Market Stock Units”), the management objectives will be deemed satisfied at target, the applicable performance period will be deemed completed, and if no replacement award is provided, remaining restrictions, deferral of settlement and forfeiture conditions will lapse and the award will be deemed fully vested; and (iv) with respect to RSUs with management objectives described as “Market Stock Units,” a prorated portion of such units will vest based on the actual performance of the management objectives through the date of the Amended 2010 Plan also counts as 1.94 shares.

The Amended 2010 Plan establishes a $750,000 limit onChange in Control, while the aggregate grant date fair value of compensatory equity awards that may be granted to anynon-employee directorremainder of the CompanyMarket Stock Units will vest in any fiscal year.accordance with their regular vesting schedule if a replacement award is provided, or if not, the remaining restrictions, deferral of settlement and forfeiture conditions will lapse and the Market Stock Units will be deemed fully vested.

The Amended 2010Clawback/Repayment. All awards granted under the 2019 Incentive Plan contains a clawback provision on performance-based awardsand held by each of the Company’sSynaptics’ executive officers that applieswill be subject to performance-based cash and equity compensationclawback, recoupment or forfeiture (i) to the extent that such executive officer is determined to have engagedengages in fraud or intentional illegal conduct that caused the Company’s materialresulted in Synaptics materiallynon-compliancenon-complying with any applicable financial reporting requirements and resulted in a financial restatement,misstatement; or (ii) to the result of which is that the amount received from such performance-based award would have been lower had it been calculated on the basis of such restated results. The clawback provision also provides for recovery of performance-based cash and equity compensationextent required by applicable laws, rules, regulations

or listing requirements. Additionally, all awards granted under the Amended 20102019 Incentive Plan asare subject to recoupment to the extent necessary to comply with any clawback policy that Synaptics is required to adopt pursuant to applicable law or the listing standards of the applicable national securities exchange.

Transferability. Awards under applicablethe 2019 Incentive Plan will generally not be transferable except by will or the laws rules, regulations or listing requirements.

of descent and distribution.

No Right to Continued Employment.The Amended 20102019 Incentive Plan does not require automatic acceleration ongive any participant any right to be retained in the employ or service of Synaptics or any of its subsidiaries. Synaptics and its subsidiaries (as applicable) may at any time dismiss a changeparticipant from employment or discontinue any consulting relationship, free from any liability or any claim under the 2019 Incentive Plan.

U.S. Federal Income Tax Consequences.The following is a brief summary of control. Instead,certain United States federal income tax consequences generally arising with respect to awards under the Board has the authority to negotiate in a transaction whether awards should be assumed, replaced, cancelled, cashed out or accelerated. The Amended 2010 Plan2019 Incentive Plan. This discussion does not contain a liberal changeaddress all aspects of control definition.

The Amended 2010the United States federal income tax consequences of participating in the 2019 Incentive Plan provides that may be relevant to participants in light of their personal investment or tax circumstances and does not discuss any state, local ornon-United States tax consequences of participating in the exercise price2019 Incentive Plan. Each participant is advised to consult his or her personal tax advisor concerning the application of the United States federal income tax laws to such participant’s particular situation, as well as the applicability and effect of any state, local ornon-United States tax laws before taking any actions with respect to any awards.

Incentive Stock Options. A participant who is granted an incentive stock optionsoption will not have federal income tax liability upon the grant of an incentive stock option and SARs generally must be no less thanwill not recognize regular taxable income when the incentive stock option is exercised. However, the participant will recognize alternative minimum taxable income equal to the excess of the fair market value of ourthe purchased shares at the time of exercise over the exercise price paid for those shares, if the participant is subject to the alternative minimum tax in the taxable year of the exercise. A participant generally will recognize income in the year in which the participant disposes of the shares purchased under such incentive stock option. If the participant makes a “qualifying disposition,” the participant will recognize a long-term capital gain equal to the excess of (i) the amount realized upon the sale or disposition over (ii) the exercise price paid for the shares and Synaptics cannot take an income tax deduction with respect to those shares. A qualifying disposition occurs when the participant’s sale or other disposition of the shares takes place (a) more than two (2) years after the grant date of the incentive stock option and (b) more than one (1) year after the date the option was exercised for the particular shares involved in the disposition. In contrast, a disqualifying disposition is any sale or other disposition made before both of these minimum holding periods are satisfied. Normally, when shares purchased under an incentive stock option are subject to a disqualifying disposition, the participant will recognize ordinary income at the time of the disposition in an amount equal to the excess of the lesser of (1) the amount realized upon that disposition and (2) the excess of the fair market value of the shares on the exercise date over the exercise price paid for those shares and Synaptics is entitled to an income tax deduction equal to the amount of ordinary income that the participant recognizes in connection with the disposition, subject to any applicable limitations under Section 162(m) of the Code.

Nonqualified Stock Options. A participant who is granted a nonqualified stock option will not have federal income tax liability upon the grant of the nonqualified stock option, but will recognize ordinary income in the year in which the participant exercises the option in an amount equal to the excess of (i) the fair market value of the purchased shares on the exercise date over (ii) the exercise price paid for those shares and Synaptics will be entitled to an income tax deduction equal to the amount of ordinary income that the participant recognizes, subject to any applicable limitations under Section 162(m) of the Code. A participant will later also recognize a capital gain to the extent that the amount realized from the subsequent sale of the shares exceeds the participant’s basis in the shares.

Appreciation Rights (SARs). A participant who is granted a SAR will not have federal income tax liability upon the grant of the SAR, but will recognize ordinary income in the year in which the participant exercises the SAR in an amount equal to the amount of the cash or the value of the stock that is transferred to the participant upon exercise of the SAR and Synaptics will be entitled to an income tax deduction equal to the amount of ordinary income that the participant recognizes, subject to any applicable limitations under Section 162(m) of the Code.

Restricted Stock. A participant who is granted an award of restricted stock will recognize taxable income when the substantial risk of forfeiture of the shares lapses, i.e., at the time of “vesting,” unless the participant makes an election to be taxed at the time of grant. Assuming such an election is not made, the taxable income will be equal to the fair market value of the shares of restricted stock when they vest over the amount, if any, paid for those shares and Synaptics will be entitled to an income tax deduction equal to the amount of ordinary income that the participant recognizes, subject to any applicable limitations under Section 162(m) of the Code. The participant may elect under Section 83(b) of the Code to include as ordinary income in the year of the award an amount equal to the fair market value of the shares on the transfer date, less the amount, if any, paid for those shares. If the participant makes a Section 83(b) election, the participant will

not recognize any additional income when the shares vest. If a Section 83(b) election is made, any appreciation in the value of the shares of restricted stock after the award is granted is not taxed as compensation but instead is taxed as a capital gain when the restricted shares are later sold or transferred. If the participant makes a Section 83(b) election and the restricted stock is later forfeited, the participant is not entitled to a tax deduction or a refund of the tax already paid. The Section 83(b) election must be filed with the Internal Revenue Service within thirty (30) days after the shares are awarded to the participant.

Restricted Stock Units (RSUs). A participant who is granted a RSU generally will not recognize income when the RSU is granted or vested, but only when the RSU is settled. The participant will recognize ordinary income equal to the amount of the cash or the fair market value of the stock that the participant receives on settlement and Synaptics will be entitled to an income tax deduction equal to the amount of ordinary income that the participant recognizes, subject to any applicable limitations under Section 162(m) of the Code.

Cash Incentive Awards, Performance Shares and Performance Units. No income generally will be recognized upon the grant of cash incentive awards, performance shares or performance units. Upon payment or settlement of cash incentive awards, performance shares or performance units, the recipient generally will be required to include as taxable ordinary income in the year of receipt an amount equal to the amount of cash received and the fair market value of anynon-restricted shares of common stock received and Synaptics will be entitled to an income tax deduction equal to the amount of ordinary income that the participant recognizes, subject to any applicable limitations under Section 162(m) of the Code.

Section 162(m). Section 162(m) of the Code generally limits a public company’s ability to deduct compensation paid in excess of $1 million during any taxable year to certain “covered employees”, which includes a company’s chief executive officer, chief financial officer and each of its other named executive officers. If an individual is determined to be a covered employee for any year beginning after December 31, 2016, then that individual will continue to be a covered employee for future years, regardless of changes in the individual’s compensation or position.

Withholding Taxes.To the extent Synaptics is required to withhold federal, state, local or foreign taxes in connection with any payment made or benefit realized by a participant or other person under the 2019 Incentive Plan, and the amounts available to Synaptics for such withholding are insufficient, it will be a condition to the receipt of such payment or the realization of such benefit that the participant or such other person make arrangements satisfactory to Synaptics for payment of the balance of such taxes required to be withheld, which arrangements, in the discretion of the Committee, may include relinquishment of a portion of such benefit. If a participant’s benefit is to be received in the form of shares of common stock, then, unless otherwise determined by the Committee, Synaptics will withhold, from the shares required to be delivered to the participant, shares of our common stock having a value equal to the amount required to be withheld under applicable law. In no event will the market value of the shares of our common stock to be withheld or delivered to Synaptics in order to satisfy applicable withholding taxes exceed the minimum amount of taxes required to be withheld unless: (i) an additional amount can be withheld and not result in adverse accounting consequences; (ii) such additional withholding amount is authorized by the Committee; and (iii) the total amount withheld does not exceed the participant’s estimated tax obligations attributable to the applicable transaction. The shares used for tax withholding will be valued at an amount equal to the market value of our common stock on the date the benefit is to be included in the participant’s income.

New Plan Benefits.

Other than the awards that may be granted under the 2019 Incentive Plan to our current President and CEO, Michael Hurlston, pursuant to his offer letter, the benefits that will be awarded or paid under the 2019 Incentive Plan are not currently determinable. Such awards are within the discretion of the Committee, and, other than with respect to Mr. Hurlston, the Committee has not determined future awards or who might receive them.

Pursuant to Mr. Hurlston’s offer letter, he may be entitled to the following equity grants under either the 2010 Plan or the 2019 Incentive Plan, whichever is then in effect upon the applicable grant (as adjusted fordate:

Refresh equity grant: Effective October 31, 2019, Mr. Hurlston will receive an amount of RSUs corresponding to a $1,500,000 equity value, a target amount of MSUs corresponding to a $1,500,000 equity value, and a target amount of PSUs corresponding to a $1,500,000 equity value (the “FY20 Refresh Grant”). The FY20 Refresh Grant will vest annually over three years subject to Mr. Hurlston’s continued employment with the Company through each vesting date and achievement of any changesapplicable performance conditions.

Contingent equity grant: Effective as of that certain date upon which the acquisition of Finisar Corporation byII-VI Incorporated (the “Acquisition”) has closed, and if and only if the Acquisition has closed on or prior to November 9, 2019, Mr. Hurlston will receive an amount of RSUs corresponding to a $5,000,000 equity value and a target amount of

MSUs corresponding to a $1,000,000 equity value (such grants, the “Contingent Equity Grant”). The Contingent Equity Grant will vest annually over four years subject to Mr. Hurlston’s continued employment with the Company through each vesting date and achievement of any applicable performance conditions.

The dollar value and the approximate number of units in capitalization).the “all current executive officers as a group” row of the table below include both the FY20 Refresh Grant and Contingent Equity Grant described above, in each case assuming a stock price of $34.68, which was the closing market price of our common stock on the NASDAQ Global Select Market on August 19, 2019, to calculate the approximate number of units.

 

The Amended 2010 Plan prohibits the Board from undertaking a repricing of underwater options and stock appreciation rights (including cancelling for cash or exchanging for other awards) without stockholder approval.

The Amended 2010 Plan does not provide for tax gross ups.

There are no options with “reload” rights outstanding under the Amended 2010 Plan.

The Amended 2010 Plan provides that the payment of dividends or dividend equivalents on equity awards is contingent upon the earning or vesting of the underlying awards.

Name and Position  Dollar Value ($)         Number of        

    Units

Alex Wong, former Principal Executive Officer and current Senior Vice President of Worldwide Operations  N/A N/A
Kermit Nolan, Chief Accounting Officer and Interim Chief Financial Officer  N/A N/A
Richard Lu, Senior Vice President and General Manager, Mobile and Automotive Division  N/A N/A
Shawn Liu, Senior Vice President and General Manager, PC Division  N/A N/A
John McFarland, Senior Vice President, General Counsel and Secretary  N/A N/A
Richard A. Bergman, former Chief Executive Officer and President  N/A N/A
Wajid Ali, former Senior Vice President and Chief Financial Officer  N/A N/A
Huibert Verhoeven, former Senior Vice President & General Manager, Internet of Things Division  N/A N/A
All current executive officers as a group  $10,500,000 302,768
All currentnon-employee directors as a group  N/A N/A
All employees as a group, excluding executive officers  N/A N/A

Vote Required and Board Recommendation

At the Annual Meeting, our stockholders will be requested to consider and approve the Amended 20102019 Incentive Plan described in this Proposal Four. The affirmative vote of a majority of the votes cast on this Proposal Four at the Annual Meeting is required for the adoption and approval of the Synaptics Incorporated 2019 Equity and Incentive Compensation Plan. Abstentions and brokernon-votes are not considered to be votes cast and, accordingly, will be required to approvehave no effect on the outcome of this Proposal Four.vote.

OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT OUR STOCKHOLDERS VOTE FOR ADOPTION AND APPROVAL OF THE AMENDMENT TO THE AMENDEDSYNAPTICS INCORPORATED 2019 EQUITY AND RESTATED 2010 INCENTIVE COMPENSATION PLAN.

Summary of the Amended 2010 Plan

The material features of the Amended 2010 Plan are outlined below. This summary is qualified in its entirety by reference to the complete text of the Amended 2010 Plan. Stockholders are urged to read the actual text of the Amended 2010 Plan, which is appended to these proxy materials as Appendix B and may be accessed from the SEC’s website atwww.sec.gov.

Broad Based Plan

The Amended 2010 Plan is designed to attract, motivate, retain, and reward our employees, directors, and consultants by providing such persons with cash and equity-based incentives to expend their maximum efforts in the creation of stockholder value. Under the Amended 2010 Plan, we may grant stock options, stock appreciation rights, deferred stock units, restricted stock, bonus stock, dividend equivalents, otherstock-related awards, and performance awards that may be settled in cash, stock, or other property. As of August 17, 2018, approximately 2,000 employees (including officers), seven non-employee directors and zero consultants were determined to be eligible for grants under the Amended 2010 Plan.

Shares Available for Awards

A total of 2,098,440 shares of our Common Stock remain authorized for issuance under the 2010 Plan as of August 17, 2018. We are asking for an additional 1,700,000 shares of common stock for future issuance under the Amended 2010 Plan. As of August 17, 2018:

There were a total of 35,362,496 shares of our common stock outstanding and the closing price per share on the NASDAQ Global Select Market was $45.04, for an aggregate market capitalization of $1.6 billion.

There were 2,098,440 shares immediately available for future grants under the 2010 Plan. 1,392,132 shares were subject to outstanding stock option awards, which options had an average exercise price of $61.43 and average remaining term of 3.5 years. 1,732,144 shares were subject to outstanding full value awards, of which 643,891 shares were subject to performance-based full value awards.

If any shares covered by an award granted under the Amended 2010 Plan are forfeited, or if an award expires, terminates or is cancelled (other than by reason of exercise or vesting), then the shares covered by the award will again be available for grant under the Amended 2010 Plan. Full value awards granted under the Amended 2010 Plan will count as 1.94 shares for purposes of the share reserve, and shares subject to full value awards that are forfeited will be returned to the reserve as 1.94 shares.

Capitalization Adjustments

In the event that any dividend or other distribution, recapitalization, forward or reverse split, reorganization, merger, consolidation, spinoff, combination, repurchase, share exchange, liquidation, dissolution, or other similar corporate transaction or event affects our common stock, then the committee (as defined below) will substitute, exchange, or adjust any or all of the following in such manner as it deems equitable: (1) the kind and number of shares available under the Amended 2010 Plan, (2) the kind and number of shares subject to limitations on awards described in the Amended 2010 Plan (e.g., limitations imposed for compliance with Sections 162(m) and 421 of the Internal Revenue Code), (3) the kind and number of shares subject to all outstanding awards, (4) the exercise price, grant price, or purchase price relating to any award, and (5) any other affected terms of awards.

Administration

The Amended 2010 Plan may be administered by the Board of Directors or a committee approved by our Board of Directors. Subject to the terms of the Amended 2010 Plan, the plan administrator is authorized to select eligible persons to receive awards, determine the type and number of awards to be granted and the number of shares of our common stock to which awards will relate, specify times at which awards will be exercisable or may be settled (including performance conditions that may be required as a condition thereof), set other terms and conditions of awards, prescribe forms of award agreements, interpret and specify rules and regulations relating to the Amended 2010 Plan, and make all other determinations that may be necessary or advisable for the administration of the Amended 2010 Plan. The plan administrator may amend the terms of outstanding awards, in its discretion, subject, if necessary, to the consent of the recipient.

Stock Options and Stock Appreciation Rights

The plan administrator is authorized to grant stock options, including both incentive stock options andnon-qualified stock options. Under U.S. tax law, incentive stock options may be granted only to our employees. Under the Amended 2010 Plan, the maximum number of shares that may be issued on the exercise of incentive stock options is the lesser of the total share reserve

and 15,000,000 shares. In addition, the plan administrator is authorized to grant stock appreciation rights, which entitle the participant to receive the appreciation of our common stock between the grant date and the exercise date of the stock appreciation right. The plan administrator determines the exercise price per share subject to an option and the grant price of a stock appreciation right. In general, theper-share exercise price of an option or stock appreciation right must not be less than the fair market value of a share of our common stock on the grant date. The maximum term of each option or stock appreciation right may not exceed seven years. Options may be exercised by payment of the exercise price in any form of legal consideration specified by the plan administrator, including cash, shares (including net share settlement), outstanding awards, or other property having a fair market value equal to the exercise price. Options may also be exercisable in connection with a broker-assisted sales transaction (a “cashless” exercise) as determined by the plan administrator. The plan administrator determines the other terms of options and stock appreciation rights.

Restricted Stock and Deferred Stock Units

The plan administrator is authorized to grant restricted stock and restricted or deferred stock units. Restricted stock is a grant of shares of our common stock, which may not be sold or disposed of and which may be forfeited if the recipient’s service terminates or if he or she otherwise fails to vest in the shares. A participant granted restricted stock generally has all of the rights of one of our stockholders, unless otherwise determined by the plan administrator. An award of restricted or deferred stock units confers on a participant the right to receive shares of our common stock at the end of a specified period or upon achievement of performance goals. Prior to settlement, an award of stock units carries no voting or dividend rights or other rights associated with share ownership, although dividend equivalents may be granted. Stock units may be subject to vesting and may be forfeited if the recipient’s service terminates or if he or she otherwise fails to vest in the shares.

Dividend Equivalents

The plan administrator is authorized to grant dividend equivalents conferring on participants the right to receive, currently or on a deferred basis, cash, shares of our common stock, other awards, or other property equal in value to dividends paid on a specific number of shares of our common stock or other periodic payments. Dividend equivalents may be granted alone or in connection with another award, may be paid currently or on a deferred basis and, if deferred, may be deemed to have been reinvested in additional shares of our common stock, awards, or otherwise as specified by the plan administrator.

Bonus Stock and Awards in Lieu of Cash Obligations

The plan administrator is authorized to grant shares of our common stock as a bonus free of restrictions for services performed for us or to grant shares of our common stock or other awards in lieu of our obligations to pay cash under the Amended 2010 Plan or other plans or compensatory arrangements, subject to such terms as the plan administrator may specify.

Performance Awards

The plan administrator may grant, pay or deliver performance awards, which represent a conditional right to receive cash, shares of our common stock, or other awards upon achievement of certain pre-established performance goals and subjective individual goals during a specified period generally related to our fiscal year or years. The plan administrator may, in its discretion, determine that the amount payable as a performance award will be reduced from the amount of any potential award. Partial achievement of the specified criteria may result in the payment or vesting corresponding to the degree of achievement as specified in the award agreement or the written terms of a performance award. In setting the performance goals, the plan administrator will specify whether the performance goal will be set on a GAAP ornon-GAAP basis (if applicable). Nothing in the Amended 2010 Plan requires the Company to grant awards that qualify as performance-based compensation for purposes of Section 162(m), and the Company has historically reserved the right to grant compensation that was not eligible for the exemption from the $1 million limitation imposed under Section 162(m). We believed it was in the best interest of the Company to have the flexibility to grant awards that qualified as performance-based compensation for purposes of Section 162(m). As noted in the Compensation Discussion and Analysis above, this performance-based exception has been repealed, effective for taxable years beginning after December 31, 2017. However, certain arrangements in place as of November 2, 2017 may be eligible for transition relief under the Code. Our Amended and Restated 2010 Incentive Compensation Plan retains certain legacy provisions that were originally included in the plan so that outstanding awards that may qualify for transition relief under the Code are not impacted.

Performance awards may include one or more of the following performance criteria: (1) total stockholder return, (2) such total stockholder return as compared to total return (on a comparable basis) of a publicly available index such as, but not limited to, the Standard & Poor’s 500 Stock Index, the S&P Specialty Retailer Index or the Philadelphia Semiconductor Index, (3) net income, (4) pretax earnings, (5) earnings before interest expense, taxes, depreciation and amortization, (6) pretax operating earnings after interest expense and before bonuses, service fees, and extraordinary or special items, (7) operating margin, (8) earnings per share, (9) return on equity, (10) return on capital, (11) return on investment, (12) operating earnings, (13) working capital or inventory, (14) operating earnings before the expense for share based awards and (15) ratio of debt to stockholders’ equity.

Other Stock Based Awards

The plan administrator is authorized to grant awards that are denominated or payable in, valued by reference to, or otherwise based on or related to shares of our common stock. Such awards might include convertible or exchangeable debt securities, other rights convertible or exchangeable into shares of our common stock, purchase rights for shares of our common stock, awards with value and payment contingent upon our performance or any other factors designated by the plan administrator, and awards valued by reference to the book value of shares of our common stock or the value of securities underlying our common stock or the performance of specified subsidiaries or business units.

Other Terms of Awards

Awards may be settled in the form of cash, shares of our common stock, other awards, or other property in the discretion of the plan administrator. Awards under the Amended 2010 Plan are generally granted without a requirement that the participant pay consideration in the form of cash or property for the grant (as distinguished from an exercise pursuant to a grant of stock options), except to the extent required by law. The plan administrator may require or permit participants to defer the settlement of all or part of an award in accordance with such terms and conditions as the plan administrator may establish, including payment or crediting of interest or dividend equivalents on deferred amounts, and the crediting of earnings, gains, and losses based on deemed investment of deferred amounts in specified investment vehicles. The plan administrator is authorized to place cash, shares of our common stock, or other property in trusts or make other arrangements to provide for payment of our obligations under the Amended 2010 Plan. The plan administrator may condition any payment relating to an award on the withholding of taxes and may provide that a portion of any shares of our common stock or other property to be distributed will be withheld (or previously acquired shares of our common stock or other property be surrendered by the participant) to satisfy withholding and other tax obligations. Awards granted under the Amended 2010 Plan generally may not be pledged or otherwise encumbered and are not transferable except by will or by the laws of descent and distribution, or to a designated beneficiary upon the participant’s death, except that the plan administrator may, in its discretion, permit transfers of awards subject to any applicable legal restrictions.

Acceleration of Vesting; Change of Control

The Amended 2010 Plan does not require automatic acceleration on a change of control transaction. We may require an acquiring or successor entity to assume or provide replacement awards for awards outstanding at the time of a transaction. Generally, if an award is not assumed or a replacement award granted, the underlying award will become fully vested, effective as of, and contingent upon, a change in control. With respect tomarket-based stock units (“MSUs”), the number of MSUs for any performance tranches that are ongoing as of the change in control (the “CIC MSUs”) will be determined based on actual achievement of the applicable performance criteria as of the day immediately prior to such change in control. A prorated portion of such CIC MSUs (based on the amount of time elapsed in the applicable performance tranche through the change in control) will become vested as of the change in control. The remaining portion of such CIC MSUs (the“Non-Vested CIC MSUs”) will remain outstanding after the change in control and will vest on the applicable vesting dates for such performance tranches, subject to the awardholder’s continued service. However, anyNon-Vested CIC MSU that is not assumed or substituted by a successor or acquiring entity will become fully vested, effective as of, and contingent upon, a change in control.

The plan administrator, in its discretion, may accelerate the vesting, exercisability, lapsing of restrictions, or expiration of deferral of any award, including in the event we undergo a change of control. In addition, the plan administrator may provide that the performance goals relating to any performance-based award will be deemed to have been met upon the occurrence of any change of control. The award agreement may provide for the vesting of an award upon a change of control, including vesting if a participant is terminated by us or our successor without “cause” or terminates for “good reason,” as is defined in the Amended 2010 Plan or in an agreement with the individual recipient, including as defined in our Change of Control Severance Policy for Principal Executive Officers and our Severance Policy for Principal Executive Officers.

No Repricing

The Amended 2010 Plan prohibits our Board from undertaking actions that would be considered a repricing of underwater stock options and stock appreciation rights without the consent of our stockholders.

Dividends and Dividend Equivalents

The Amended 2010 Plan states that no award granted thereunder will provide for dividend equivalents or otherwise provide for participation in any distributions made with respect to the common stock underlying such award unless the right to receive such dividend equivalents or distributions is contingent upon the earning or vesting of the underlying award.

Minimum Vesting Requirements

Under the Amended 2010 Plan, the Board generally must impose a minimum one year vesting period for stock awards. However, the Board may grant stock awards covering up to 5% of the sum of (i) the number of shares available for issuance under the Amended 2010 Plan’s share reserve, plus (ii) the number of shares that are returned to the share reserve from time to time that do not meet such vesting requirements. Nothing in the Amended 2010 Plan limits the Company’s ability to grant awards that contain rights to accelerated vesting on a termination of employment or service, or limit the Company’s powers at make adjustments to outstanding awards in the event of corporation transactions, including in connection with a change of control of the Company. In addition, if we acquire another entity, the Board may assume the compensatory equity awards of such entity, or grant substitute awards in respect of the target company’s awards, and as a result such assumed or substituted awards may not satisfy the minimum vesting criteria.

Limitations on Awards

The Amended 2010 Plan has the following award limits:

An eligible person may not be granted awards relating to more than 1,000,000 shares of stock per fiscal year, subject to capitalization adjustment.

The maximum amount that may be earned pursuant to an annual incentive award or other cash award granted under the Amended 2010 Plan in any fiscal year by any one participant is $2,000,000.

The maximum amount that may be earned as a performance award granted under the Amended 2010 Plan in respect of a performance period by any one participant is $5,000,000.

Nonon-employee directors of the Board may be granted compensatory equity awards (under the Amended 2010 Plan or any other stock plan of the Company) that have an aggregate grant date fair value that exceed $750,000 in any fiscal year.

Clawback Policy

All performance-based awards (cash and equity) held by the Company’s executive officers will be subject to clawback, recoupment or forfeiture (i) to the extent that such executive officer is determined to have engaged in fraud or intentional illegal conduct that caused the Company’s material non-compliance with any applicable financial reporting requirements and resulted in a financial restatement, the result of which is that the amount received from such performance-based award would have been lower had it been calculated on the basis of such restated results, or (ii) as required by applicable laws, rules, regulations or listing requirements. Such clawback, recoupment or forfeiture, in addition to any other remedies available under applicable law, may require the cancellation of outstanding awards and the recoupment of any gains realized with respect to awards. An executive officer may not claim the operation of the clawback as the basis for “good reason” to resign and receive severance benefits.

Amendment and Termination

Our Board of Directors may amend, alter, suspend, discontinue, or terminate the Amended 2010 Plan or the committee’s authority to grant awards without further stockholder approval. We will seek stockholder approval of any material amendment of the Amended 2010 Plan to the extent required by law or otherwise deemed necessary or desirable by our Board of Directors. Unless earlier terminated by our Board of Directors, the Amended 2010 Plan will terminate on August 18, 2020, which is the tenth anniversary of the adoption by our Board of Directors of the Company’s 2010 Incentive Compensation Plan.

Federal Income Tax Consequences of Awards

The information set forth below is a summary only and does not purport to be complete. The information is based upon current federal income tax rules and therefore is subject to change if or when those rules change. Moreover, because the tax consequences to any recipient may depend on the recipient’s particular situation, each recipient should consult their own tax adviser regarding the federal, state, local, and other tax consequences of the grant or exercise of an award or the disposition of stock acquired as the result of an award. The Amended 2010 Plan is not qualified under the provisions of Section 401(a) of the Code and is not subject to any of the provisions of the Employee Retirement Income Security Act of 1974. Subject to the requirement of reasonableness, the provisions of Section 162(m), and the satisfaction of a tax reporting obligation, we will generally be entitled to a tax deduction equal to the taxable ordinary income realized by a recipient on awards issued under the Amended 2010 Plan. If the recipient of an award is our employee or an employee of one of our affiliates, any income recognized will be subject to employment taxes and withholding tax.

Nonqualified Stock Options

Generally, there is no taxation upon the grant of a nonqualified stock option if the option is granted with an exercise price per share equal to the fair market value of the underlying stock on the grant date. On exercise (including upon abroker-assisted or “cashless” exercise), an optionee will recognize ordinary income equal to the excess, if any, of the fair market value on the date of exercise of the stock received over the exercise price paid. If the optionee is our employee or an employee of one of our affiliates, that income will be subject to employment taxes and withholding tax.

Incentive Stock Options

An optionee generally is not subject to ordinary income tax upon the grant or exercise of an “incentive stock option” as defined in Section 422 of the Code. However, the exercise of an incentive stock option may result in alternative minimum tax liability. In addition, if the optionee holds a share received on exercise of an incentive stock option for at least two years from the date the option was granted and at least one year from the date the option was exercised (the “Required Holding Period”), the difference, if any, between the amount realized on a sale or other taxable disposition of that share and the holder’s tax basis in that share will be taxed as along-term capital gain or loss.

If, however, an optionee disposes of a share acquired on exercise of an incentive stock option before the end of the Required Holding Period (a “Disqualifying Disposition”), the optionee generally will recognize ordinary income in the year of the Disqualifying Disposition equal to the excess, if any, of the fair market value of the share on the date the incentive stock option was exercised over the exercise price. However, if the sales proceeds are less than the fair market value of the share on the date of exercise of the option, the amount of ordinary income recognized by the optionee will not exceed the gain, if any, realized on the sale. If the amount realized on a Disqualifying Disposition exceeds the fair market value of the share on the date of exercise of the option, that excess will be short-term or long-term capital gain, depending on whether the holding period for the share exceeds one year.

Stock Awards

Generally, the recipient of a stock award will recognize ordinary income at the time the stock is received equal to the excess, if any, of the fair market value of the stock received over any amount paid by the recipient in exchange for the stock. Where no amount is paid for the stock, then the full fair market value of the stock received is ordinary income to the recipient. If, however, the stock is not vested when it is received (for example, if the stock is restricted stock and the employee is required to work for a period of time in order to have the right to sell the stock), the recipient generally will not recognize income until the stock becomes vested, at which time the recipient will recognize ordinary income equal to the excess, if any, of the fair market value of the stock on the date it becomes vested over any amount paid by the recipient in exchange for the stock. A recipient may, however, file an election with the Internal Revenue Service, within 30 days of the executive officer’s receipt of the stock award, to recognize ordinary income, as of the date the recipient receives the award, equal to the excess, if any, of the fair market value of the stock on the date the award is granted over any amount paid by the recipient in exchange for the stock.

Stock Appreciation Rights

Generally, there is no taxation upon the grant of a stock appreciation right if the right is granted with an exercise price equal to the fair market value of the underlying stock on the grant date. On exercise, the recipient will recognize ordinary income equal to the excess, if any, of the fair market value of the stock on the day the right is exercised over the strike price.

Deferred Stock Units

Generally, the recipient of deferred stock units will not recognize any income at grant and will recognize ordinary income at the time the stock is delivered equal to the excess, if any, of the fair market value of the shares of our common stock received over any amount paid by the recipient in exchange for the shares of our common stock.

New Plan Benefits

It is not possible to determine specific amounts and types of awards that may be awarded in the future under the Amended 2010 Plan because the grant and actual pay-out of awards under the Amended 2010 Plan are discretionary. The Amended 2010 Plan does not mandate set benefits or amounts, and no awards have been granted under the Amended 2010 Plan that are contingent on stockholder approval.

The following table shows, as to each Named Executive Officer and the various indicated groups, the number of shares of our common stock subject to stock options that have been granted (even if not currently outstanding) under the 2010 Plan since its initial approval by our stockholders in 2010 through August 17, 2018.

Name

Number of
Stock Options Granted

Named Executive Officers:

Richard A. Bergman, Chief Executive Officer & President

806,000

Wajid Ali, Senior Vice President and Chief Financial Officer

67,500

Kevin Barber, Senior Vice President & General Manager, Mobile Division

233,801

Huibert Verhoeven, Senior Vice President & General Manager, Internet of Things Division

55,942

Alex Wong, Senior Vice President, Worldwide Operations

109,162

All current executive officers as a group

1,354,505

All currentnon-employee directors as a group

722,227

Each nominee for election as a director:

Jeffrey D. Buchanan, Director

25,215

Keith B. Geeslin, Director

28,602

James L. Whims, Director

30,102

Each associate of any of the foregoing

—  

Each other person who received at least 5% of all options granted

—  

All employees, excluding current executive officers

2,908,145

Equity Compensation Plan Information

For additional information on our equity compensation plans, including information about shares of our common stock that may be issued on exercise of options and warrants under all of our equity compensation plans as of June 30, 2018,2019, please refer to the “Stock-Based Compensation Plan Information” section of this Proxy Statement. The Amended 2010 Plan does not contain an evergreen provision.

PROPOSAL FIVE:

APPROVAL OF THE AMENDED AND RESTATED 20102019 EMPLOYEE STOCK PURCHASE PLAN

We are asking our stockholders to consider and approve an amendment and restatementThe Board of Directors of Synaptics Incorporated (“Synaptics”) adopted the Company’s 2010Synaptics Incorporated 2019 Employee Stock Purchase Plan (such amendment and restatement, the(the “Amended 20102019 ESPP”). Our Board of Directors approved the Amended 2010 ESPP in September 2018, on July 30, 2019, subject to stockholder approval by ouron or before the 12 month anniversary of such date. Our stockholders atare now being asked to approve the Annual Meeting2019 ESPP, including the reservation of Stockholders. shares for issuance thereunder. The principal features and purpose of the 2019 ESPP are summarized below.

If this Proposal Fivethe 2019 ESPP is approved by our stockholders, the Amended 2010 ESPPit will become effective upon the date of the Annual Meeting of Stockholders. In the event thatreplace our stockholders do not approve this Proposal Five, the Amended 2010 ESPP will not become effective and the existing 2010 Employee Stock Purchase Plan (the “2010 ESPP”). Current offerings under the 2010 ESPP will continueremain in its current form.

The principal features and purposeeffect until the purchase date, but no further offerings will be made under the 2010 ESPP after approval by our stockholders of the Amended 2010 ESPP are summarized below. 2019 ESPP.

The following summary of the Amended 20102019 ESPP does not purport to be a complete description of all of the provisions of the Amended 20102019 ESPP and is qualified in its entirety by reference to the complete text of the Amended 2010 ESPP. Stockholders are urged to read the actual text of the Amended 20102019 ESPP, in its entirety, which is appendedset forth in Appendix C to this proxy statement as Appendix C and may be accessed from the SEC’s website atwww.sec.gov.statement. Any stockholder who wishes to obtain a copy of the Amended 20102019 ESPP may do so upon written request to the Secretary at our principal executive offices.

The Amended 2010 ESPP, if approved, would increase the number of shares of common stock available for issuance thereunder by 100,000 shares, while maintaining the other plan provisions and limitations on issuance, including the cumulative cap of 10% of shares outstanding from time to time and the 500,000 share limit on the annual increase amount. Other than the additional 100,000 shares, no substantive changes have been made under the Amended 2010 ESPP. These additional 100,000 shares plus the anticipated final annual increase of shares in July 2019 (per the termsSummary of the original 2010 ESPP) are anticipated to be sufficient for purchases under the Amended 20102019 ESPP through November 2019. If the additional 100,000 shares under the Amended 2010 ESPP are not approved, we may not have sufficient shares to cover purchases beyond November 2018.

Based on the closing price on the NASDAQ Global Select Market for our common stock on August 17, 2018 of $45.04 per share, the aggregate market value as of that datePurpose. The purpose of the additional 100,000 shares of common stock requested under the Amended 2010 ESPP was $4,504,000. This increase is 0.3% of our outstanding common stock as of August 17, 2018. With the addition of 100,000 shares reserved for issuance, cumulative shares reserved for issuance under the 2010 ESPP will be 3,206,798 shares, or approximately 9.1% of shares outstanding, as of August 17, 2018, and remains under the cumulative cap of 10% of shares outstanding under the 2010 ESPP.

The Amended 20102019 ESPP is a broad-based employee equity plan designed to qualify for favorable income tax treatment under Section 423enable eligible employees of the Code and is intended to offer financial incentives for our employees to purchase our common stock. The Amended 2010 ESPP is administered by a Plan Committee (as defined below) appointed by the BoardSynaptics (and certain of Directors.

We believe that the adoption of the Amended 2010 ESPP promotes our interests and those of our stockholders by assisting us in attracting, retaining, and stimulating the performance of our employees. The Amended 2010 ESPP provides our employees with an opportunityits subsidiaries and/or parents) to acquire a proprietary interest in our company and thereby align their interests with the interestsfuture of our other stockholders and give them an additional incentive to use their best efforts for the long-term success of our company.

Vote Required and Board Recommendation

At the Annual Meeting, our stockholders will be requested to consider and approve the Amended and Restated 2010 Employee Stock Purchase Plan described in this Proposal Five. The affirmative vote of a majority of the votes cast at the Annual Meeting will be required to approve this Proposal Five.

OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT OUR STOCKHOLDERS VOTE FOR APPROVAL OF THE AMENDED AND RESTATED 2010 EMPLOYEE STOCK PURCHASE PLAN.

General Terms of the Amended 2010 ESPP; Shares Available for Issuance.

The Amended 2010 ESPP is intended to provide a method whereby our employees will have an opportunity to acquire a proprietary interest in our company through the purchase of shares of our common stock through accumulated voluntary payroll deductions. We intendof Synaptics (“Common Stock”). The 2019 ESPP is intended to havesatisfy the Amended 2010 ESPP qualify asrequirements of an “employee stock purchase plan” under Section 423 of the Code.U.S. Internal Revenue Code of 1986 (the “Code” and such section, “Section 423”), although it provides for both Section 423 andnon-Section 423 components.

Plan Administration. The Amended 20102019 ESPP permits eligible employeesprovides that the 2019 ESPP shall be administered by the Compensation Committee of the Board of Directors of Synaptics (the “Board of Directors”) or such other committee or subcommittee of the Board of Directors duly appointed to authorize payroll deductions thatadminister the 2019 ESPP (the “Committee”), whose administration, interpretation and application of the 2019 ESPP and its terms will be utilizedfinal, conclusive and binding on all participants unless fraudulent or made in bad faith. The Committee may adopt one or moresub-plans applicable to purchaseparticular subsidiaries of Synaptics or locations.

Securities Subject to Plan. The 2019 ESPP provides for up to 1,500,000 shares of Common Stock (the “2019 ESPP Shares”) to be reserved for issuance pursuant to purchases made under the 2019 ESPP, subject to adjustment as provided for in the 2019 ESPP. These shares will be made available from Synaptics’ authorized but unissued or reacquired shares of Common Stock, shares of Common Stock purchased on the open market, or any combination thereof. If an outstanding purchase right for any reason expires or is terminated or canceled, the shares of Common Stock allocable to the unexercised portion of that purchase right shall again be available for issuance under the 2019 ESPP. The 2019 ESPP Shares represent approximately 4.6% of the total number of shares of Common Stock outstanding of 32,910,891 shares as of August 19, 2019. In establishing the 2019 ESPP Shares, our common stock during a seriesBoard of consecutive24-month offering periods, with four six-month purchaseDirectors considered the potential dilutive impact to stockholders, the projected participation rate, and equity plan guidelines established by certain proxy advisory firms.

Eligibility and Participation. Employees of Synaptics and certain of its subsidiaries or exercise periods withinparents are eligible to participate in the offering periods (except2019 ESPP if they have been employed by Synaptics (or by any subsidiary or parent designated for participation) for at least 1 month as of the first offering period, which is a 221/2-month offering period and the first exercise date is 4 1/2 months after the beginning of that offering period). Employees may purchase shares of common stock pursuant to the Amended 2010 ESPP at a purchase price equal to the lower of (i) 85% of the greater of (A) the fair market value of a share of our common stock on the first trading day of the offering period or (B) the fair market value of a share of our common stock on the entry date on which an employee becomes a participant within the offering period, or (ii) 85% of the fair market value of our common stock on the last trading day of the applicable purchase period. The fair market value of a share of our common stock on a given date is determined by the Plan Committee, provided that as long as there is a public market for our common stock, the fair market value will either be (i) the closing price of our common stock on such date (or, if our common stock is not traded on such date, the immediately preceding trading date) as reported by the NASDAQ Global Select Market; (ii) if such price is not reported, the average of the bid and asked prices for our common stock on such date (or, if not traded on such date, the immediately preceding trading date) as reported by the NASDAQ Global Select Market; (iii) in the event our common stock is listed on a stock exchange, the closing price of our common stock on such exchange on such date (or, if not traded on such date, the immediately preceding trading date), as reported in the Wall Street Journal; or (iv) if no such quotations are available for a date within a reasonable time prior to the valuation date, the value of our common stock as determined by the Plan Committee using any reasonable means. Any funds (otherthey customarily work more than an amount which is insufficient to purchase a full share of our common stock) remaining in the participant’s bookkeeping account after the end of an offering period will be returned to the participant. No interest is paid on funds withheld, and those funds are used by our company for general operating purposes.

The shares of our common stock reserved under the Amended 2010 ESPP will include (i) any number of shares available for issuance under the 2010 ESPP on the first offering date (not to exceed 650,000 shares), (ii) on the first day of each of our fiscal years beginning in 2012 and ending in 2019, an annual increase in the number of shares available under the Amended 2010 ESPP equal to the lesser of 500,000 shares, 1% of all shares of common stock outstanding, or a lesser amount determined by the Board of Directors and (iii) 100,000 shares. The cumulative shares authorized under the Amended 2010 ESPP will be less than 10% of our shares outstanding from time to time, unless a greater number of shares is authorized by our stockholders. If any change is made in the stock subject to the Amended 2010 ESPP or subject to any outstanding options under the Amended 2010 ESPP (through reorganization, restructuring, recapitalization, reclassification, stock split, reverse stock split, stock dividend, stock repurchase, or similar transaction), equitable and proportionate adjustments will be made by the Plan Committee in the number and kind of shares, and the per-share option price thereof, which may be issued in the aggregate and to any participant upon exercise of the options granted under the Amended 2010 ESPP.

Eligibility and Administration

All employees of our company or of those subsidiaries designated by the Board of Directors who are regularly scheduled to work at least 20 hours per week for more than five5 months per calendar yearyear. As of August 19, 2019, approximately 1,834 employees are eligible to participate after completing three monthsin the 2019 ESPP, including seven officers of employment. Any employee who meets the eligibility requirements during an offering period may elect to participate as of the first day of any of the purchase periods that begin on or after the employee becomes eligible. Synaptics.

An employee will not be grantedeligible to participate in the 2019 ESPP during an option underoffering period to the Amended 2010 ESPP if (i)extent that immediately after the grant suchof a purchase right, the employee (or any other person whose stock would be attributed to the employee under Section 424(d) of the Code) would own common stock includingand/or hold outstanding optionspurchase rights to purchase common stock under the Amended 2010 ESPP,of Synaptics or any parent or subsidiary possessing 5% or more of the total combined voting power or value of our commonall classes of stock or (ii) participationof such corporation as determined in accordance with Section 423(b)(3) of the Code. Eligible employees become participants in the Amended 20102019 ESPP would permit such employee’s rightsby delivering to purchase our common stock under allthe Company, prior to the applicable offering date, a subscription agreement. At the end of our employee stock purchase plans to exceed $25,000each offering period, each participant in fair market value (determinedthe offering period will be automatically enrolled in the next succeeding offering period at the timesame withholding percentage unless the option is granted) of our common stock for each calendar year in which such option is outstanding. As of August 17, 2018, approximately 2,100 employees (including officers), wereparticipant changes his or her elections, withdraws from the 2019 ESPP, or terminates employment or otherwise ceases to be an eligible for grants under the 2010 ESPP. The 2010 ESPP currently has 1,416 participants.employee.

Our Board of Directors has appointed a committee to administer the Amended 2010 ESPP, the “Plan Committee.” The Plan Committee will have the authority to (a) interpret and construe any provision of the Amended 2010 ESPP, (b) adopt rules and regulations for administering the 2010 ESPP, and (c) make all other determinations deemed necessary or advisable for administering the 2010 ESPP.

Offering Periods and Employee Participation

The Amended 2010 ESPPDates. Shares of Common Stock will be implemented inoffered for purchase through a series of successiveconsecutive offering periods, each with a maximumof which will generally be twelve months in duration, of 24 months. Ifunless otherwise determined by the fair market value per share of our common stock on any purchase date is less than the fair market value per share on the start date of a24-month offering period, thenCommittee; provided, however, that no offering period will automatically terminate, andhave a new 24-monthduration exceeding 27 months. Unless otherwise adjusted pursuant to the 2019 ESPP, each offering period willshall begin on the next business day. Each offering period will begin on the MayMarch 16 or NovemberSeptember 16, as applicable, immediately following the end of the previous offering period.period and ending on March 15 or September 15, as applicable. Each new offering period will commence, and

Under the Amended 2010old offering period will terminate, on the first business day after a purchase date if the fair market value of a share of Common Stock is less than the fair market value of a share of Common Stock on the offering date of the offering period. For each offering period in which an employee participates, he or she will be granted a right to purchase Common Stock.

Payroll Deductions. The purchase price of the shares is accumulated by payroll deductions from the employee’s compensation for the offering period. Each employee participating in the 2019 ESPP eligible employees may elect to have up to 15% of regular cash compensation (subject to other limitations described in the 2019 ESPP) deducted on anafter-tax basis and credited to that employee’s account under the 2019 ESPP. An employee’s regular cash compensation generally includes base wages or salary, overtime, shift differentials, payments for paid time off and payment in lieu of notice. Except as otherwise determined by the Committee, cash compensation excludes variable compensation such as moving allowances, automobile allowances, payments pursuant to a severance agreement, termination pay, relocation payments, bonuses, commissions, finder’s fee, compensation deferred under any program or plan (including, without limitation, pursuant to Section 401(k) or Section 125 of the Code), any amounts directly or indirectly paid pursuant to the 2019 ESPP or any other stock purchase, stock option or other stock-based compensation plan, amounts paid pursuant to a pension plan or fringe benefit program by Synaptics or certain of its subsidiaries and/or parents, or any other extraordinary compensation not included above. Each employee participating in the 2019 ESPP may change the payroll deduction election one time during a purchase period, unless otherwise determined by the Committee.

Payroll deductions will be credited to an account established in the employee’s name, shall be held as general assets of Synaptics and shall not accrue interest unless otherwise required by applicable law. To the extent that an employee’s payroll deductions exceed the amount required to purchase shares subject to purchase rights, the excess shall be carried forward to apply to the next purchase date if the employee’s participation in the 2019 ESPP continues and the excess is less than the amount that would have been necessary to purchase an additional whole share; otherwise, it will be refunded promptly after the purchase date to the employee without interest.

Purchase of Common Stock; Exercise of Purchase Right. By electing to participate in the Amended 20102019 ESPP, on May 16 or November 16 of each year, the “entry date.” Subject to certain limitations determined in accordance with calculations set forth in the Amended 2010 ESPP, a participating employee is in effect granted thea right to purchase shares of our commonCommon Stock using payroll deductions accumulated as of each of the purchase dates for any offering period. However, no participant may (i) accrue rights to purchase stock with a value in excess of $25,000 (determined on the last business day on or before each May 15 and November 15 during which the employee is a participant in the Amended 2010 ESPP, the “purchase date” or “exercise date.” Upon enrollment in the Amended 2010 ESPP, the participant authorizes a payroll deduction, on anafter-taxbasis in an amount of not less than 1% and not more than 15% of the participant’s compensation on each payroll date. Unless the participant withdraws from the Amended 2010 ESPP, the participant’s option for the purchase of shares will be exercised automatically on each exercise date, and the maximum number of full shares subject to the option will be purchased for the participant at the applicable exercise price with the accumulated plan contributions then credited to the participant’s account under the Amended 2010 ESPP. The option exercise price per share will equal 85% of the lower of the fair market value of the Common Stock on the first daystart date of the offering periodperiod) in any calendar year; or (ii) purchase shares of Common Stock in excess of either the dollar limit (to the extent provided by the Committee) or the fair market valueshare limit applicable to an offering period. The share limit is 650 shares of Common Stock per6-month purchase period. The share limit may be adjusted by the Committee prior to the start of an offering period. If the total number of shares for which purchase rights are to be exercised on any purchase date exceeds the number of shares at the time available for issuance under the 2019 ESPP, then the Committee will prorate the available shares. An employee’s purchase right will be exercised by applying the amount credited to the employee’s account to the purchase of whole shares of Common Stock on each purchase date. If a balance remains in an employee’s account because it is less than the price of one whole share, it will be carried over to the next offering period, if the employee’s participation continues.

Purchase Price of Common Stock;Taxes on the exerciseAcquisition or Disposition of Stock. On any particular purchase date unlessunder the participant’s entry date is2019 ESPP, the purchase price per share will be established by the Committee; provided, however, that such purchase price shall not the first day of the offering period, in which case the exercise price will equalbe less than 85% of the lower of (i) the greater of the fair market value on the first day of the offering period or the fair market value of our common stocka share of Common Stock on the entry datefirst business day in such offering period or (ii) the fair market value of a share of Common Stock on the exercise date.last business day in such offering period. On August 19, 2019, the closing market price of Common Stock was $34.68, as reported by the NASDAQ Global Select Market.

AtIn general, the time an employee becomesfair market value per share on any relevant date under the 2019 ESPP will be equal to: (i) if, on such date, Common Stock is listed on a participantnational or regional securities exchange system, the closing price for the last preceding date quoted for such date by the principal exchange or trading market on which Common Stock is traded (as reported in the Amended 2010 ESPP,Wall Street Journal or such other source as Synaptics deems reliable); (ii) if, on such date, Common Stock is not then listed on a national or regional securities exchange or quotation system, the employee may elect payroll deductions of up to 15% of such employee’s compensation for each pay period during an offering. For purposesaverage of the Amended 2010 ESPP, compensation consistsbid and asked prices per share of base salary and overtime paid by us to employees that participate in the Amended 2010 ESPP. CompensationCommon Stock for purposes of the Amended 2010 ESPP excludes bonuses, commissions, our contributions to pension plans, automobile or relocation allowances, starting bonuses or finder’s fees, amounts realized from stock options or incentive awards, our payments for any welfare or fringe benefits, and other similar forms of extraordinary compensation. Participants may discontinue, reduce, or increase future payroll deductions during an offering period, however, participants may change the rate or amount of payroll deductions only once in any purchase period. A participant’s payroll deductions will continue at the same rate or amount for subsequent offering periods unless the participant elects otherwise before the beginning of the offering periods. To the extent necessary to comply with Section 423 of the Code, the Plan Committee may reduce a participant’s payroll deduction percentage to 0% at such time during any purchase period scheduled to end during the current calendar year when the participant’s aggregate payroll deductions for the calendar year exceeds $25,000 multipliedday (as determined by the applicable percentage (i.e.Committee), 85%). All payroll deductions made by each participant will be credited to a bookkeeping account set up for that participant underor, if it was not traded on such date, on the 2010 ESPP.

Grants and Exercises of Options

On a participant’s entryimmediately preceding day on which Common Stock was traded; or (iii) if, on such date, the participant willshare of Common Stock cannot be granted an optionvalued pursuant to purchase, on each subsequent purchase date during the offering period in which the entry date occurs, up to a number of shares of our common stock determined by dividingeither (i) the amount of such participant’s payroll deductions accumulated prior to the purchase date and retained in the participant’s account as of the exercise date byor (ii) the option exercise price. The option exercise price is an amount equal to 85% of the lower of (a) the greater of, the fair market value of our common stock at the beginninga share of the offering period or the fair market value of our common stock on the participant’s entry date, or (b) the fair market value of our common stock at the end of the exercise period. The participant’s optionCommon Stock will be deemed todetermined in good faith by the Committee, consistent with applicable legal requirements.

The participating employee shall be responsible for all taxes and generally all other withholdings required in connection with the acquisition or disposition of stock purchased under the 2019 ESPP. See “U.S. Federal Income Tax Information,” below. The participating employee shall not have been exercised automatically on the last day of the exercise period. The maximum number of shares that a participant may purchase during any exercise period is 650 shares. A participant will have noan interest or voting right in any shares covered under the 2019 ESPP prior to purchase.

Ability of our common stock coveredthe Committee to Amend or Terminate the 2019 ESPP. The Committee may amend or terminate the 2019 ESPP, or any purchase right granted thereunder, at any time, except that no such amendment or termination will affect purchase rights previously granted under the 2019 ESPP unless expressly provided for by the participant’s optionCommittee and no such amendment or termination may materially adversely affect a purchase right without the consent of a participant (unless permitted by the 2019

ESPP or as required by applicable law or to qualify the 2019 ESPP pursuant to Section 423 of the Code). Certain amendments may require the approval of Synaptics’ stockholders. Unless the 2019 ESPP is earlier terminated, it will continue until such optionthe earlier of (i) the issuance of all Common Stock available for issuance under the 2019 ESPP or (ii) July 29, 2029. If the 2019 ESPP is terminated before an employee’s right to purchase shares has been exercised.exercised under the 2019 ESPP, any funds deducted from the employee’s compensation and credited to the employee’s account under the 2019 ESPP shall be refunded.

Reclassifications and MergersWithdrawal. An employee may withdraw from the 2019 ESPP by delivering a cancellation notice to the company in accordance with the procedures prescribed by the company. Such cancellation notice must be delivered not later than 10 business days prior to the applicable purchase date to apply to that offering. An employee’s withdrawal from an offering does not affect the employee’s eligibility to participate in subsequent offerings under the 2019 ESPP.

The Amended 2010 ESPP providesTermination of Employment. Termination of a participant’s continuous status as an employee for adjustment of the number of shares for which options may be granted, the number of shares subject to outstanding options, and the exercise price of outstanding optionsany reason, including retirement, death or disability, cancels his or her participation in the 2019 ESPP immediately. In such event, the payroll deductions credited to the employee’s account will be returned to the employee or, in the case of death, to the person or persons entitled thereto as specified by the employee in the written designation of beneficiary.

Capital Changes. In the event any change is made in the capitalization of Synaptics, such as a merger, stock split, stock dividend, or any other material increase or decrease in the shares of Synaptics stock without the company’s receipt or payment of consideration, appropriate adjustments will be made to (i) the maximum number and class of securities issuable under the 2019 ESPP, (ii) the maximum number of issuedsecurities purchasable per participant during an offering and (iii) the number and class of securities and the price per share in effect under each outstanding shares as a resultpurchase right. Such adjustments will prevent any dilution or enlargement of one or more reorganizations, restructurings, recapitalizations, reclassifications, stock splits, reverse stock splits, or stock dividends. If our company dissolves or liquidates, the offering period will terminate immediately prior to the consummationrights and benefits of that action, unless otherwise provided by the Plan Committee. plan participants.

In the event of a mergerchange in control of Synaptics, the Board of Directors (or the Committee) may provide for any of, or a salecombination of, all or substantially allany of our company’s assets,the following: (i) each option under the Amended 2010 ESPPpurchase right will be assumed or an equivalent optionpurchase right will be substituted by the successor corporation, unlesssurviving entity; (ii) a date selected by the Plan Committee, in its sole discretion, acceleratesBoard of Directors (or the Committee) on or before the date of consummation of the change in control will be treated as a purchase date and all outstanding purchase rights will be exercised on whichsuch date; (iii) all outstanding purchase rights will terminate and the options mayaccumulated payroll deductions will be exercised.

Participation in the Amended 2010 ESPP

Participation in the Amended 2010 ESPP is voluntary and depends onrefunded to each eligible employee’s election to participate and hisparticipant upon or her determination asimmediately prior to the level of payroll deductions. Accordingly, future purchases under the Amended 2010 ESPP are not determinable.

change in control; or (d) outstanding purchase rights will continue unchanged.

Withdrawal; Termination; Leave Of Absence

A participant in the Amended 2010 ESPP may withdraw, at any time, from the Amended 2010 ESPP by giving us written notice. AllNonassignability. No rights or accumulated payroll deductions credited to such participant’s account and not yet invested in our common stock will be returned to the participant. If a participant withdraws from an offering period, he or she may not participate again in that offering but may participate in any succeeding offering under the Amended 2010 ESPP or in any similar plan that we may adopt.

Upon termination of a participant’s employment for any reason, including retirement or death, the payroll deductions credited to such participant’s account, and not yet invested in our common stock, will be returned to the participant or the participant’s beneficiary and the unexercised portion of any option granted to an employee under the Amended 2010 ESPP shall be automatically terminated.

A participant on an approved leave of absence will be deemed to be an employee during the first 90 days of the leave of absence and may continue to be a participant in the Amended 2010 ESPP during that 90-day period. A participant who has been on leave of absence for more than 90 days will be deemed to have been terminated as an employee and will not be entitled to participate in the Amended 2010 ESPP commencing after the 90th day of such leave of absence. The payroll deductions credited to such participant’s account, and not yet invested in our common stock, will be returned to the participant and the unexercised portion of any option granted to an employee under the Amended 2010 ESPP shall be automatically terminated.

Transferability

Neither the payroll deductions credited to a participant’s account nor any rights with respect to an option granted under the Amended 20102019 ESPP may be pledged, assigned or transferred pledged, or otherwise disposed of by the participant, other than by will or the laws of descentfor any reason, and distribution. Any such attempted assignment, transfer, pledge, or other disposition will be ineffective and we may treat any such actattempt may be treated by Synaptics as an election to withdraw from participationthe 2019 ESPP.

Reports. Individual accounts are maintained for each participant in the Amended 20102019 ESPP.

Duration and Modification

The Amended 2010 ESPP After each purchase date, the participant’s broker account will remain in effect untilupdate with the earliest of (a) the exercise date that participants become entitled to purchase a number of shares greater thanpurchased on behalf of the numberparticipant and the purchase price paid per share. The participant will also receive an annual statement of reservedhis or her plan account.

Compliance with Securities Law. The issuance of shares available for purchase under the Amended 20102019 ESPP or (b) such date as is determined by the Boardshall be subject to compliance with all applicable requirements of Directors in its discretion. The 2010 ESPP’s “effective date” means January 1, 2011,federal, state and the Amended 2010 ESPP will become effective upon stockholder approval.

The Board of Directors or the Plan Committee may amend the Amended 2010 ESPP at any time, provided that such amendment may not adversely affect the rights of any participantforeign law with respect to previously granted optionssuch securities and the Amended 2010 ESPPrequirements of any stock exchange upon which the shares may notthen be amended iflisted and will be further subject to the approval of counsel for Synaptics with respect to such amendment would in any way cause rights issued under the Amended 2010 ESPP to fail to meet the requirements for employee stock purchase plans as defined in Section 423 of the Code. To the extent necessary to comply with Rule16b-3 under the Exchange Act, Section 423 of the Code, or any other applicable law or regulation, the Board of Directors will obtain stockholder approval for an amendment.compliance.

U.S. Federal Income Tax Consequences

Information.The Amended 20102019 ESPP and the right of participants to make purchases thereunder, is intended to qualify under the provisions of Sections 421 and 423 of the Code. Under these provisions, no income will be taxable to a participant untilat the time of grant of the right to purchase, or the actual purchase of, shares. However, upon the employee’s disposition of shares purchased under the 20102019 ESPP, are sold or otherwise disposed of. Upon sale or other disposition of the shares, the participant will generally be subject to tax and the amount of the tax will depend upon the holding period. Iftax. Upon disposition, if the shares are sold or otherwise disposed ofhave been held by the participant for more than (a) two years fromafter the first day of the offering period and (b) more than one year fromafter the purchase date of transfer of the shares, to the participant, then the participant will recognize taxable ordinary income measured asequal to the lesser of (i) the excess of the fair market value of the shares at the time of such sale orthe disposition over the purchase price of the shares, or (ii) an amount equal to the excess15% of the fair market value of the shares as ofon the first day of the applicable offering period over the option price (determined as if the option had been exercisedperiod. Any additional taxable gain on the first trading day of the offering period).disposition will be treated as a long-term capital gain. If the shares are sold or otherwise disposed of before the expiration of thesethe holding periods the participant will recognize ordinary income generally measured asdescribed above, the excess of the fair market value of the shares on the purchase date the shares are purchased over the purchase price at which the participant purchased the shares under the Amended 2010 ESPP.

Any additionalwill be taxable as ordinary income, and any gain or loss on such sale or disposition will belong-term orshort-term treated as a capital gain or loss, depending on the holding period. We willloss. The company is not be entitled to a deduction for amounts taxed as ordinary income or capital gaintaxable to a participant, except to the extent of ordinary income is recognizedreported by participants as a result of a sale orthe participant on disposition of shares prior tobefore the expiration of the holding periods described above.

The foregoing is only a summary of the United States federal income tax consequences of the 2019 ESPP to participants and does not purport to be complete. Reference should be made to the applicable provisions of the Code. In addition, the summary does not discuss the income tax consequences of a participant’s death or the income tax laws of any municipality, state or foreign country in which the participant may reside, and to which the participant may be subject.

Restriction on Resale. Certain officers and directors of Synaptics may be deemed to be “affiliates” of the company, as that term is defined under the Securities Act of 1933. Common Stock acquired under the 2019 ESPP by an affiliate may only be reoffered or resold pursuant to an effective registration statement or pursuant to Rule 144 under the Securities Act or another exemption from the registration requirements of the Securities Act of 1933.

New Plan Benefits. Because benefits under the 2019 ESPP will depend on employees’ elections to participate and the fair market value of Common Stock at various future dates, it is not possible to determine the benefits that will be received by executive officers and other employees if the 2019 ESPP is approved by the stockholders.Non-employee directors are not eligible to participate in the 2019 ESPP.

All employeesVote Required and Board Recommendation

At the Annual Meeting, our stockholders will be requested to consider and approve the 2019 Employee Stock Purchase Plan described in this Proposal Five. The 2019 Employee Stock Purchase Plan will be approved if it receives the affirmative vote of a majority of the Company who satisfytotal votes cast in this Proposal Five at the eligibility requirements set forth inannual meeting. Abstentions and brokernon-votes are not considered to be votes cast and, accordingly, will have no effect on the Amended 2010 ESPP may each year purchase Company common stock as described in the Amended 2010 ESPP. The following table sets forth the numberoutcome of shares purchased by the specified individuals or groups during our fiscal year ended June 30, 2018:this vote.

OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT OUR STOCKHOLDERS VOTE FOR APPROVAL OF THE 2019 EMPLOYEE STOCK PURCHASE PLAN.

Name

Number of
Shares

Named Executive Officers:

Richard A. Bergman, Chief Executive Officer & President

653

Wajid Ali, Senior Vice President and Chief Financial Officer

781

Kevin Barber, Senior Vice President & General Manager, Mobile Division

708

Huibert Verhoeven, Senior Vice President & General Manager, Internet of Things Division

698

Alex Wong, Senior Vice President, Worldwide Operations

659

All current executive officers as a group

4,245

All currentnon-employee directors as a group

N/A

Each nominee for election as a director:

Jeffrey D. Buchanan, Director

N/A

Keith B. Geeslin, Director

N/A

James L. Whims, Director

N/A

Each associate of any of the foregoing

—  

All employees, excluding current executive officers

482,018

Aggregate Past Grants Under the 2010 ESPP

The following table sets forth summary information with respect to the number of shares of our common stock purchased under the 2010 ESPP to the Company’s named executive officers, all current executive officers as a group, directors, associates of such executive officer, directors and nominees, and all employees (other than executive officers) as a group as of August 17, 2018.

Name

Number of
Shares

Named Executive Officers:

Richard A. Bergman, Chief Executive Officer & President

4,792

Wajid Ali, Senior Vice President and Chief Financial Officer

819

Kevin Barber, Senior Vice President & General Manager, Mobile Division

2,713

Huibert Verhoeven, Senior Vice President & General Manager, Internet of Things Division

1,810

Alex Wong, Senior Vice President, Worldwide Operations

5,621

All current executive officers as a group

18,737

All currentnon-employee directors as a group

N/A

Each nominee for election as a director:

Jeffrey D. Buchanan, Director

N/A

Keith B. Geeslin, Director

N/A

James L. Whims, Director

N/A

Each associate of any of the foregoing

—  

All employees, excluding current executive officers

2,495,272

Equity Compensation Plan Information

For additional information on our equity compensation plans, including information about shares of our common stock that may be issued on exercise of options and warrants under all of our equity compensation plans as of June 30, 2018,2019, please refer to the “Stock-Based Compensation Plan Information” section of this Proxy Statement.

DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS

Stockholder proposals that are intended to be considered for inclusion in our Proxy Statement and form of proxy relating to our Annual Meeting of Stockholders for the fiscal year ending June 29, 2019,27, 2020, pursuant to Rule14a-8 under the Exchange Act (“Rule14a-8”) must be received by us at our executive offices set forth in this Proxy Statement no later than May 20, 2019,13, 2020, and must otherwise comply with Rule14a-8.

Any stockholder proposals received outside of the Rule14a-8 procedure for consideration at our Annual Meeting of Stockholders for the fiscal year ending June 29, 2019,27, 2020, must be received by us at our executive offices set forth in this Proxy Statement no earlier than July 2, 2019,1, 2020, and no later than August 1, 2019.July 31, 2020.

In addition to the timely notice requirements, stockholder proposals (including proposals for nominees for directors) must include the information required by our bylaws and comply with the other applicable procedures described therein. Furthermore, stockholder proposals must comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder.

The time limits noted above also apply in determining whether notice is timely for purposes of rules adopted by the SEC relating to the exercise of discretionary voting authority.

OTHER MATTERS

We know of no other matters to be submitted to the 20182019 Annual Meeting of Stockholders. If any other matters properly come before the meeting, it is the intention of the persons named in the enclosed proxy card to vote the shares they represent as our Board of Directors may recommend.

Dated: September 17, 201810, 2019

APPENDIX A

NON-GAAP FINANCIAL INFORMATION

In evaluating our business, we consider and use (i) operating income/(loss) excluding certain non-cash or non-recurring items such as acquisition and integration related costs (including changes in contingent consideration, amortization of certain acquired intangible assets and legal and consulting costs), share-based compensation charges, litigation settlement charges, restructuring costs, impairment of intangible assets, foreign currency adjustments, and other items, net (including arbitration costs and acquisition related severance costs), ornon-GAAP operating income, (ii) operating margin/(loss) excluding certainnon-cash ornon-recurring items such as acquisition and integration related costs (including changes in contingent consideration, amortization of certain acquired intangible assets and legal and consulting costs),share-based compensationloss on supply commitment charges, litigation settlement charges,charge, restructuring costs, impairment of intangible assets, foreign currency adjustments, and other items, net (including arbitrationretention costs, and acquisition relatedCEO severance costs), as a percentage of total revenue, or non-GAAP operating margin, (iii) net income/(loss) excluding certain acquisition and integration related costs (including changes in contingent consideration, amortization of certain acquired intangible assets and legal and consulting costs), share-based compensation, litigation settlement charges, restructuring costs, impairment of intangible assets, foreign currency adjustments,non-cash interest on convertible debt, other items, net (includingnon-cash interest, net, arbitration costs, equity investment loss, acquisition related severance costs and impairment recovery on investments), and tax adjustments as a supplemental measure of operating performance, ornon-GAAP operating income, (ii) operating margin/(loss) excluding certain recurring ornon-recurring items such as acquisition and integration related costs (including changes in contingent consideration, amortization of certain acquired intangible assets and legal and consulting costs), share-based compensation charges, loss on supply commitment charges, litigation settlement charge, restructuring costs, retention costs, impairment of intangible assets, foreign currency adjustments, and other items, net income,(includingnon-cash interest, net, arbitration costs, equity investment loss, acquisition related severance costs and (iv)impairment recovery on investments) , as a percentage of total revenue, ornon-GAAP operating margin, (iii) net income/(loss) per share diluted excluding certain acquisition and integration related costs (including changes in contingent consideration, amortization of certain acquired intangible assets and legal and consulting costs), share-based compensation, loss on supply commitment charges, litigation settlement charges,charge, restructuring costs, retention costs, CEO severance costs, impairment of intangible assets, foreign currency adjustments,non-cash interest on convertible debt, other items, net (includingnon-cash interest, net, arbitration costs, equity investment loss, acquisition related severance costs and impairment recovery on investments), and tax adjustments as a supplemental measure of operating performance, ornon-GAAP net income, and (iv) net income/(loss) per diluted share excluding certain acquisition and integration related costs (including changes in contingent consideration, amortization of certain acquired intangible assets and legal and consulting costs), share-based compensation charges, loss on supply commitment charges, litigation settlement charge, restructuring costs, retention costs, CEO severance costs, impairment of intangible assets, foreign currency adjustments,non-cash interest on convertible debt, other items, net (includingnon-cash interest, net, arbitration costs, equity investment loss, acquisition related severance costs and impairment recovery on investments), and tax adjustments as a supplemental measure of operating performance, ornon-GAAP net income per diluted share, diluted, as supplemental measures of operating performance, including the use ofnon-GAAP operating income for purposes of the financial performance measures used in our annual performance-based cash bonus plan.Non-GAAP operating income,non-GAAP operating margin,non-GAAP net income, andnon-GAAP net income per share are not measurements of our financial performance under GAAP and should not be considered as an alternative to GAAP operating income/(loss), GAAP operating margin/(loss), GAAP net income/(loss), and GAAP net income/(loss) per share, respectively. We presentnon-GAAP operating income,non-GAAP operating margin,non-GAAP net income, andnon-GAAP net income per share because we consider them an important supplemental measure of our performance. We believe these measures facilitate operating performance comparisons from period to period by eliminating potential differences in operating income/(loss), operating margin/(loss), net income/(loss), and net income/(loss) per share caused by the existence and timing of certain non-cashrecurring ornon-recurring items such as certain acquisition and integration related costs (including changes in contingent consideration, amortization of certain acquired intangible assets and legal and consulting costs),share-based compensation charges, loss on supply commitment charges, litigation settlement charges,charge, restructuring costs, retention costs, CEO severance costs, impairment of intangible assets, foreign currency adjustments,non-cash interest on convertible debt, other items, net (includingnon-cash interest, net, arbitration costs, equity investment loss, acquisition related severance costs and impairment recovery on investments), and tax adjustments.Non-GAAP operating income,non-GAAP operating margin,non-GAAP net income, andnon-GAAP net income per share have limitations as analytical tools and should not be considered in isolation or as substitutes for our GAAP operating income/(loss), GAAP operating margin/(loss), GAAP net income/(loss), or GAAP net income/(loss) per share. The principal limitations of these measures are that they do not reflect our actual expenses and may thus have the effect of inflating our GAAP operating income/(loss), GAAP operating margin/(loss), GAAP net income/(loss), and GAAP net income/(loss) per share.

The following is a reconciliation of the differences between GAAP andnon-GAAP operating income/(loss), operating margin/(loss), net income/(loss), and net income/(loss) per share for the periods indicated:

   Fiscal Years Ended June 30, 
   2014  2015  2016  2017  2018 
   (in millions, except per share amounts) 

GAAP Operating income /(loss)

  $72.5  $162.2  $75.2  $64.7  $(61.9) 

GAAP operating margin/(loss)

   7.6%   9.5%   4.5%   3.8%   -3.8% 

Acquisition and integration related costs(1)

   83.6   78.6   72.5   60.6   136.0 

Share-based compensation charge

   32.9   44.1   56.8   61.8   71.3 

Litigation settlement charge

   —     —     —     10.0   —   

Restructuring costs

   —     —     8.6   7.3   12.0 

Impairment of intangible assets

   —     —     6.7   —     —   

Foreign currency adjustments(2)

   —     (15.4)   —     —     —   

Other items, net(3)

   —     —     —     —     4.4 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Non-GAAP operating income

  $189.0  $269.5  $219.8  $204.4  $161.8 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Non-GAAP operating margin

   19.9%   15.8%   13.2%   11.9%   9.9% 

GAAP net income/(loss)

  $46.7  $110.4  $72.2  $48.8  $(124.1) 

Acquisition and integration related costs(1)

   83.6   78.6   72.5   60.6   136.0 

Share-based compensation

   32.9   44.1   56.8   61.8   71.3 

Litigation settlement charge

   —     —     —     10.0   —   

Restructuring costs

   —     —     8.6   7.3   12.0 

Impairment of intangible assets

   —     —     6.7   —     —   

Foreign currency adjustments(2)

   —     (15.4)   —     —     —   

Non-cash interest on convertible debt

   —     —     —     —     17.4 

Other items, net(4)

   (1.1)   (0.9)   (2.7)   (0.8)   7.6 

Tax adjustments

   (4.5)   4.5   (33.6)   (13.8)   21.2 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Non-GAAP net income

  $157.6  $221.3  $180.5  $173.9  $141.4 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

GAAP net income/(loss) per share - diluted

  $1.26  $2.84  $1.91  $1.37  $(3.63) 

Acquisition and integration related costs(1)

   2.25   2.02   1.91   1.70   3.98 

Share-based compensation

   0.89   1.13   1.50   1.74   2.07 

Litigation settlement charge

   —     —     —     0.28   —   

Restructuring costs

   —     —     0.23   0.21   0.34 

Impairment of intangible assets

   —     —     0.18   —     —   

Foreign currency adjustments(2)

   —     (0.40)   —     —     —   

Non-cash interest on convertible debt

   —     —     —     —     0.51 

Other items, net(4)

   (0.03)   (0.02)   (0.07)   (0.03)   0.14 

Tax adjustments

   (0.12)   0.12   (0.90)   (0.39)   0.64 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Non-GAAP net income per share - diluted

  $4.25  $5.69  $4.76  $4.88  $4.05 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
   Fiscal Years Ended June 30, 
   2015   2016   2017   2018   2019 
   (in millions, except per share amounts) 

GAAP Operating income /(loss)

    $            162.2       $            75.2     $            64.7       $            (61.9)      $            (6.3)  

GAAP operating margin/(loss)

   9.5%      4.5%      3.8%      -3.8%      -0.4%   

Acquisition and integration related costs(1)

   78.6      72.5      60.6      136.0      77.3   

Share-based compensation charge

   44.1      56.8      61.8      71.3      59.0   

Loss on supply commitment

   -          -          -          -          9.0   

Litigation settlement charge

   -          -          10.0      -          -       

Restructuring costs

   -          8.6      7.3      12.0      17.7   

Retention costs

   -          -          -          -          2.5   

Impairment of intangible assets

   -          6.7      -          -          -       

Foreign currency adjustments(2)

   (15.4)     -          -          -          -       

Other items, net(3)

   -          -          -          4.4      (1.7)  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP operating income

    $269.5       $219.8     $204.4       $161.8       $159.7   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP operating margin

   15.8%      13.2%      11.9%      9.9%      10.8%   

GAAP net income/(loss)

    $110.4       $72.2     $48.8       $(124.1)      $(22.9)  

Acquisition and integration related costs(1)

   78.6      72.5      60.6      136.0      77.3   

Share-based compensation

   44.1      56.8      61.8      71.3      59.0   

Loss on supply commitment

   -          -          -          -          9.0   

Litigation settlement charge

   -          -          10.0      -          -       

Restructuring costs

   -          8.6      7.3      12.0      17.7   

Retention costs

   -          -          -          -          2.5   

CEO severance

   -          -          -          -          2.2   

Impairment of intangible assets

   -          6.7      -          -          -       

Foreign currency adjustments(2)

   (15.4)     -          -          -          -       

Non-cash interest on convertible debt

   -          -          -          17.4      17.6   

Other items, net(4)

   (0.9)     (2.7)     (0.8)     7.6      (2.3)  

Tax adjustments

   4.5      (33.6)     (13.8)     21.2      (18.9)  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net income

    $221.3       $180.5     $173.9       $141.4       $141.2   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

GAAP net income/(loss) per share - diluted

    $2.84       $1.91     $1.37       $(3.63)      $(0.66)  

Acquisition and integration related costs(1)

   2.02      1.91      1.70      3.98      2.23   

Share-based compensation

   1.13      1.50      1.74      2.07      1.71   

Loss on supply commitment

   -          -          -          -          0.26   

Litigation settlement charge

   -          -          0.28      -          -       

Restructuring costs

   -          0.23      0.21      0.34      0.51   

Retention costs

   -          -          -          -          0.07   

CEO severance

   -          -          -          -          0.06   

Impairment of intangible assets

   -          0.18      -          -          -       

Foreign currency adjustments(2)

   (0.40)     -          -          -          -       

Non-cash interest on convertible debt

   -          -          -          0.51      0.50   

Other items, net(4)

   (0.02)     (0.07)     (0.03)     0.14      (0.14)  

Tax adjustments

   0.12      (0.90)     (0.39)     0.64      (0.54)  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net income per share - diluted

    $5.69       $4.76       $4.88       $4.05       $4.00   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)

Acquisition and integration related costs consists of items related to either completed or announced acquisitions, including changes in contingent consideration, amortization associated with certain acquired intangible assets, and legal and consulting costs.

(2)

Foreign currency adjustments consists of currency remeasurement adjustments related to acquisition related liabilities.

(3)

Other items, net, within operating income GAAP toNon-GAAP adjustments includes arbitration costs and acquisition related severance.

(4)

Other items, net, within net income GAAP toNon-GAAP adjustments includes arbitration costs, equity investment loss, acquisition related severance and amortization of debt issuance costs.

APPENDIX B

AMENDED2019 EQUITY AND RESTATED 2010 INCENTIVE COMPENSATION PLAN

1.            PurposePurpose.. The purpose of this AMENDED AND RESTATED 2010 INCENTIVE COMPENSATION PLAN (the “Plan”) is to assist SYNAPTICS INCORPORATED, a Delaware corporation (the “attract and retainnon-employee Directors, officers and other employeesof the Company”) and its Related Entities in attracting, motivating, retainingSubsidiaries, and rewardinghigh-quality executivescertain consultants to the Company and other Employees, officers, Directorsits Subsidiaries, and Consultants by enablingto provide to such persons incentives and rewards for service and/or performance.

2.            Definitions.As used in this Plan:

(a)        “Appreciation Right” means a right granted pursuant to acquire or increase a proprietary interest inSection 5 of this Plan.

(b)        “Base Price” means the Company in orderprice to strengthenbe used as the mutualitybasis for determining the Spread upon the exercise of interests between such persons andan Appreciation Right.

(c)        “Board” means the Company’s stockholders, and providing such persons with annual and long term performance incentives to expend their maximum efforts in the creationBoard of stockholder value. The Plan is intended to qualify certain compensation awarded under the Plan for tax deductibility under Section 162(m)Directors of the Code (as hereafter defined) to the extent deemed appropriate by the Committee.Company.

2.    Definitions. For purposes of the Plan, the following terms shall be defined as set forth below, in addition to such terms defined in Section 1 hereof.

(a)    “2016 Effective Date” means the date the Plan is approved by the Company’s stockholders at the annual meeting of the Company’s stockholders held in October 2016.

(b)    “2018 Effective Date” means the date the Plan is approved by the Company’s stockholders at the annual meeting of the Company’s stockholders held in October 2018.

(c)    “Annual(d)        “Cash Incentive Award”Award” means a conditional rightcash award granted pursuant to a Participant under Section 7(c) hereof to receive a cash payment, Stock or other Award, unless otherwise determined by the Committee, after the end8 of a specified fiscal year.

(d)    “Award” means any Option, Stock Appreciation Right, Restricted Stock, Deferred Stock Unit, Stock granted as a bonus or in lieu of another award, Dividend Equivalent, OtherStock-Based Award, Performance Award or Annual Incentive Award, together with any other right or interest, granted to a Participant under thethis Plan.

(e)        “Beneficiary” means the person, persons, trust or trusts which have been designated by a Participant in his or her most recent written beneficiary designation filed with the Committee to receive the benefits specified under the Plan upon such Participant’s death or to which Awards or other rights are transferred if and to the extent permitted under Section 10(b) hereof. If, upon a Participant’s death, there is no designated Beneficiary or surviving designated Beneficiary, then the term Beneficiary means the person, persons, trust or trusts entitled by will or the laws of descent and distribution to receive such benefits.

(f)    “Beneficial Owner”, “Beneficially Owning” and “Beneficial Ownership” shall have the meanings ascribed to such terms in Rule13d-3 under the Exchange Act and any successor to such Rule.

(g)    “Board” means the Company’s Board of Directors.

(h)    “Cause”“Cause” shall, with respect to any Participant, have the equivalent meaning (or the same meaning as “cause” or “for cause”) set forth in any employment, consulting, change in control or other agreement for the performance of services between the Participant and the Company or a Related EntitySubsidiary or, in the absence of any such agreement or any such definition in such agreement, such term shall mean (i) the failure by the Participant to perform his or her duties as assigned by the Company (or a Related Entity) in a reasonable manner, (ii)Participant’s willful, material, and irreparable breach of any violation or breach by the Participant of his or her employment, consulting, or other similarchange in control agreement withbetween the Participant and the Company (oror a Related Entity), ifSubsidiary, (ii) the Participant’s gross negligence in the performance or intentional nonperformance (continuing for thirty (30) days after receipt of written notice of need to cure) of any (iii) any violation or breach byof the Participant of his or hernon-competition and/ornon-disclosure agreement withParticipant’s material duties and responsibilities to the Company, (or a Related Entity), if any, (iv) any act by(iii) the Participant ofParticipant’s willful dishonesty, fraud, or bad faithmisconduct with respect to the business or affairs of the Company, (or a Related Entity), (v) chronic addiction to alcohol, drugswhich materially and adversely affects the operations or other similar substances affectingreputation of the Company, (iv) the Participant’s work performance,indictment for, conviction of, or (vi) the commission by the Participant of any act, misdemeanor,guilty plea to a felony crime involving dishonesty or crime reflecting unfavorably upon the Participantmoral turpitude whether or not relating to the Company, or any Related Entity.(v) a confirmed positive illegal drug test. The good faith determination by the Committee of whether the Participant’s Continuous Serviceemployment or service was terminated by the Company (or a Subsidiary) for “Cause” shall be final and binding for all purposes hereunder.

(i)    “Change(f)        “Change in Control” means a Change in Control as defined with related termsControl” has the meaning set forth in Section 912 of thethis Plan.

(j)    “Code”(g)        “Code” means the Internal Revenue Code of 1986, as amended from time to time, including regulations thereunder and successor provisions and regulations thereto.

time.

(k)    “Committee”(h)        “Committee” means athe Compensation Committee of the Board (or its successor(s)), or any other committee of the Board designated by the Board to administer this Plan pursuant to Section 10 of this Plan, and to the Plan; provided, however, thatextent of any delegation by the Committee shall consistto a subcommittee pursuant to Section 10 of at least two directors, and each member of which shall be this Plan, such subcommittee.

(i)        a“non-employee director” within the meaning of Rule16b-3 under the Exchange Act, unless administration of the Plan by “non-employee directors” is not then required in order for exemptions under Rule 16b-3 to apply to transactions under the Plan, and (ii) an “outside director” within the meaning of Section 162(m) of the Code, unless administration of the Plan by “outside directors” is not then required in order to qualify for tax deductibility under Section 162(m) of the Code.

(l)    “Common Stock”“Common Stock” means the common stock, of the Company, par value $0.001 per share.

(m)    “Company” has the meaning set forth in Section 1.

(n)    “Consultant” means any person (other than an Employee or a Director, solely with respect to rendering services in such person’s capacity as a director) who is engaged byshare, of the Company or any Related Entitysecurity into which such common stock may be changed by reason of any transaction or event of the type referred to render consultingin Section 11 of this Plan.

(j)        “Company” means Synaptics Incorporated, a Delaware corporation, and its successors.

(k)        “Date of Grant” means the date provided for by the Committee on which a grant of Option Rights, Appreciation Rights, Performance Shares, Performance Units, Cash Incentive Awards, or advisory servicesother awards contemplated by Section 9 of this Plan, or a grant or sale of Restricted Stock, Restricted Stock Units, or other awards contemplated by Section 9 of this Plan, will become effective (which date will not be earlier than the date on which the Committee takes action with respect thereto).

(l)        “Director” means a member of the Board.

(m)        “Disability” means, unless otherwise defined in the applicable Evidence of Award, (i) the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) the Participant is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected

to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Company or, such Related Entity.if applicable, any Subsidiary.

(n)        “Effective Date” means the date this Plan is approved by the Stockholders.

(o)        “Continuous Service”“Evidence of Award” means uninterrupted provisionan agreement, certificate, resolution or other type or form of serviceswriting or other evidence approved by the Committee that sets forth the terms and conditions of the awards granted under this Plan. An Evidence of Award may be in an electronic medium, may be limited to notation on the books and records of the Company in any capacity of Employee, Director, or Consultant. Continuous Service shalland, unless otherwise determined by the Committee, need not be considered to be interrupted in the case of (i) any approved leave of absence, (ii) transfers among the Company, any Related Entities, or any successor entities, in any capacity of Employee Director, or Consultant, or (iii) any change in status as long as the individual remains in the servicesigned by a representative of the Company or a Related Entity in any capacity of Employee, Director, or Consultant (except as otherwise provided in the Option Agreement). An approved leave of absence shall include sick leave, military leave, or any other authorized personal leave. A leave of absence will be treated as Continuous Service for purposes of determining the continued vesting of an Award (as differentiated from the use of Continuous Service as a trigger for the termination or forfeiture of the Award) only to the extent provided in the Company’s leave of absence policy, in the written terms of any leave of absence agreement applicable to the Participant, or as otherwise required by law.Participant.

(p)        “Controlling Interest” has the meaning set forth in Section 9(b)(iii).

(q)    “Covered Employee” means an Eligible Person who is a Covered Employee as specified in Section 7(e) of the Plan.

(r)    “Deferred Stock Unit” means a right, granted to a Participant under Section 6(e) hereof, to receive Stock, cash or a combination thereof at the end of a specified deferral period.

(s)    “Director” means a member of the Board or the board of directors of any Related Entity.

(t)    “Director Compensation Limit” has the meaning set forth in Section 5(c).

(u)    “Disability” means a permanent and total disability (within the meaning of Section 22(e) of the Code), as determined by a medical doctor satisfactory to the Committee.

(v)    “Dividend Equivalent” means a right, granted to a Participant, to receive cash, Stock, other Awards or other property equal in value to dividends paid with respect to a specified number of shares of Stock, or other periodic payments.

(w)    “Effective Date” means October 19, 2010, which was the date of the 2010 Annual Meeting of Stockholders of the Company at which this Plan was approved by the Company’s stockholders.

(x)    “Eligible Person” means each Executive Officer of the Company (as defined under the Exchange Act) and other officers, Directors and Employees of the Company or of any Related Entity, and Consultants with the Company or any Related Entity. The foregoing notwithstanding, only employees of the Company, the Parent, or any Subsidiary shall be Eligible Persons for purposes of receiving any Incentive Stock Options. An Employee on leave of absence may be considered as still in the employ of the Company or a Related Entity for purposes of eligibility for participation in the Plan.

(y)    “Employee” means any person, including an officer or Director, who is an employee of the Company or any Related Entity. The Payment of a director’s fee by the Company or a Related Entity shall not be sufficient to constitute “employment” by the Company.

(z)    “Exchange Act”“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder, as such law, rules and regulations may be amended from time to time, including rules thereunder and successor provisions and rules thereto.time.

(aa)    “Executive Officer”(q)        “Executive Officer” means an executive officer of the Company as defined under the Exchange Act.

(bb)    “Exercise Price” has the meaning set forth in Section 6(b)(iii).

(cc)    “Fair Market Value”(r)        “Incentive Stock Option” means the fair market value of Stock, Awards or other property as determined by the Committee. Unless otherwise determined by the Committee, the Fair Market Value of Stock as of any given date shall be the closing sale price per share reported on a consolidated basis for stock listed on the principal stock exchange or market on which Stockan Option Right that is traded on the date as of which such value is being determined or, if there is no sale on that date, then on the last previous day on which a sale was reported.

(dd)    “Full Value Award” shall mean a Stock Award that does not require, for issuance of the underlying share, the payment by the Participant of an exercise or strike price (beyond payment of par value, as applicable), i.e., a Stock Award the value of which is measured by something other than the appreciation of the share of Stock above the Fair Market Value per share of Stock determined on the date of grant of the Award.

(ee)    “Good Reason” shall, with respect to any Participant, have the equivalent meaning (or the same meaning as “good reason” or “for good reason”) set forth in any employment, consulting, change in control or other agreement for the performance of services between the Participant and the Company or a Related Entity. In the absence of any such agreement, such term shall mean (i) the assignment to the Participant of any duties inconsistent in any respect with the Participant’s position (including status, offices, titles and reporting requirements), authority, duties or responsibilities as assigned by the Company (or a Related Entity), or any other action by the Company (or a Related Entity) which results in a diminution in such position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company (or a Related Entity) promptly after receipt of notice thereof given by the Participant; (ii) any failure by the Company (or a Related Entity) to comply with its obligations to the Participant as agreed upon, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company (or a Related Entity) promptly after receipt of notice thereof given by the Participant; (iii) the Company’s (or Related Entity’s) requiring the Participant to be based at any office or location outside of fifty miles from the location of employment as of the date of Award, except for travel reasonably required in the performance of the Participant’s responsibilities; (iv) any purported termination by the Company (or a Related Entity) of the Participant’s Continuous Service otherwise than for Cause as defined in Section 2(g), or by reason of the Participant’s Disability as defined in Section 2(v); provided, however, that to resign for Good Reason, a Participant must provide written notice of the conditions giving rise to Good Reason within 90 days following the date on which the condition arises, allow the Company at least 30 days to cure such condition, and, if not so cured, resign from all positions then held with the Company within 90 days after the expiration of the cure period. For purposes of this Section 2(gg), any good faith determination of “Good Reason” made by the Committee shall be conclusive.

(ff)    “Immediate Family” has the meaning set forth in Section 10(b)(ii).

(gg)    “Incentive Stock Option” means any Option intended to be designatedqualify as an incentive“incentive stock option within the meaning ofoption” under Section 422 of the Code or any successor provision thereto.provision.

(hh)     “Incumbent Board” has(s)        “Management Objectives” means the meaningmeasurable performance objective or objectives established pursuant to this Plan for Participants who have received grants of Performance Shares, Performance Units or Cash Incentive Awards or, when so determined by the Committee, Option Rights, Appreciation Rights, Restricted Stock, Restricted Stock Units, dividend equivalents or other awards pursuant to this Plan. If the Committee determines that a change in the business, operations, corporate structure or capital structure of the Company, or the manner in which it conducts its business, or other events or circumstances render the Management Objectives unsuitable, the Committee may in its discretion modify such Management Objectives or the acceptable levels of achievement, in whole or in part, as the Committee deems appropriate and equitable.

(t)        “Market Value per Share” means, as of any particular date, the closing price of a share of Common Stock as reported for that date on the Nasdaq Stock Market or, if the shares of Common Stock are not then listed on the Nasdaq Stock Market, on any other national securities exchange on which the shares of Common Stock are listed, or if there are no sales on such date, on the next preceding trading day during which a sale occurred. If there is no regular public trading market for the shares of Common Stock, then the Market Value per Share shall be the fair market value as determined in good faith by the Committee. The Committee is authorized to adopt another fair market value pricing method provided such method is stated in the applicable Evidence of Award and is in compliance with the fair market value pricing rules set forth in Section 9(b)(ii).409A of the Code.

(ii)    “Independent Director”(u)        “Optionee” means the optionee named in an Evidence of Award evidencing an outstanding Option Right.

(v)        “Option Price” means the purchase price payable on exercise of an Option Right.

(w)        “Option Right” means the right to purchase shares of Common Stock upon exercise of an award granted pursuant to Section 4 of this Plan.

(x)        “Participant” means a member of the Boardperson who is notselected by the Committee to receive benefits under this Plan and who is at the time (i) anon-employee Director, (ii) an officer or other employee of the Company or its Subsidiaries.

(jj)    “Option” means a right granted to a Participant under Section 6(b) hereof, to purchase Stock or other Awards at a specified price during specified time periods.

(kk)    “Optionee” means a person to whom an Option is granted under this Plan or any person who succeeds to the rights of such person under this Plan.

(ll)    “Other Stock-Based Awards” means Awards granted to a Participant under Section 6(h) hereof.

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

(nn)    “Participant” meansSubsidiary, including a person who has been granted an Award underagreed to commence serving in such capacity within 90 days of the Plan which remains outstanding,Date of Grant, or (iii) a person, including a consultant, who provides services to the Company or any Subsidiary that are equivalent to those typically provided by an employee (provided that such person who is no longersatisfies the FormS-8 definition of an Eligible Person.“employee”).

(oo)    “(y)        “Performance Period” means, in respect of a Cash Incentive Award, Performance Share or Performance Unit, a period of time established pursuant to Section 8 of this Plan within which the Management Objectives relating to such Cash Incentive Award,” Performance Share or Performance Unit are to be achieved.

(z)        “Performance Share” means a right, grantedbookkeeping entry that records the equivalent of one share of Common Stock awarded pursuant to an Eligible Person under Section 7 hereof,8 of this Plan.

(aa)        “Performance Unit” means a bookkeeping entry awarded pursuant to receive Awards based upon performance criteria specifiedSection 8 of this Plan that records a unit equivalent to $1.00 or such other value as is determined by the Committee.

(bb)        “Plan” means this Synaptics Incorporated 2019 Equity and Incentive Compensation Plan, as amended or amended and restated from time to time.

(pp)    “Person” shall have(cc)        “Predecessor Plans” means the meaning ascribed to such term in Section 3(a)(9)Synaptics Incorporated Amended and Restated 2010 Incentive Compensation Plan and the Synaptics Incorporated Amended and Restated 2001 Incentive Compensation Plan, as amended.

(dd)        “Replacement Award” means an award (i) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, and shall includesame type (e.g., time-based restricted stock units) as the replaced award, (ii) that has a “group” as defined in Section 13(d) thereof.

(qq)    “Plan” hasvalue at least equal to the meaning set forth in Section 1.

(rr)    “Related Entity” means any Parent, Subsidiary, and any business, corporation, partnership, limited liability company, or other entity designated byvalue of the Committee in whichreplaced award, (iii) that relates to publicly traded equity securities of the Company a Parent, or a Subsidiary, directlyits successor in the Change in Control or indirectly, holds a substantial ownership interest.

(ss)    “Restricted Stock” means Stock granted to aanother entity that is affiliated with the Company or its successor following the Change in Control, (iv) if the Participant under Section 6(d) hereof, thatholding the replaced award is subject to certain restrictions andU.S. federal income tax under the Code, the tax consequences of which to a risk of forfeiture.

(tt)    “Rule16b-3” and “Rule16a-1(c)(3)” means Rule16b-3 and Rule16a-1(c)(3), as from timesuch Participant under the Code are not less favorable to time in effect and applicable tosuch Participant than the Plan and Participants, promulgated by the Securities and Exchange Commission under Section 16tax consequences of the Exchange Act.

(uu)    “Share Reserve” hasreplaced award, and (v) the meaning set forth in Section 4(a).

(vv)    “Stock” means the Company’s Common Stock, and such other securities as may be substituted (or resubstituted) for Stock pursuant to Section 10(c) hereof.

(ww)    “Stock Appreciation Right” means a right granted to a Participant under Section 6(c) hereof.

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

3.    Administration.

(a)    Authority of the Committee. The Plan shall be administered by the Committee. The Committee shall have full and final authority, in each case subject to and consistent with the provisions of the Plan, to select Eligible Persons to become Participants, grant Awards, determine the type, number and other terms and conditions of which are not less favorable to the Participant holding the replaced award than the terms and all other matters relating to, Awards, prescribe Award agreements (which need not be identical for each Participant) and rules and regulations for the administrationconditions of the Plan, construe and interpretreplaced award (including the Plan andprovisions that would apply in the event of a subsequent Change in Control). A Replacement Award agreements and correct defects, supply omissionsmay be granted only to the extent it does not result in the replaced award or reconcile inconsistencies therein, andReplacement Award failing to make all other decisions and determinations as the Committee may deem necessarycomply with or advisable for the administrationbe exempt from Section 409A of the Plan. In exercising any discretion granted toCode. Without limiting the Committee under the Plan or pursuant to any Award, the Committee shall not be required to follow past practices, act in a manner consistent with past practices, or treat any Eligible Person in a manner consistent with the treatment of other Eligible Persons.

(b)    Manner of Exercise of Committee Authority. Any actiongenerality of the Committee shallforegoing, the Replacement Award may take the form of a continuation of the replaced award if the requirements of the two preceding sentences are satisfied. The determination of whether these conditions are satisfied will be final, conclusive and binding on all persons, including the Company, its Related Entities, Participants, Beneficiaries, transferees under Section 10(b) hereof or other persons claiming rights from or through a Participant, and stockholders. The express grant of any specific power to the Committee, and the taking of any actionmade by the Committee, shall not be construed as limiting any powerconstituted immediately before the Change in Control, in its sole discretion.

(ee)        “Restricted Stock” means shares of Common Stock granted or authoritysold pursuant to Section 6 of this Plan as to which neither the substantial risk of forfeiture nor the prohibition on transfers has expired.

(ff)        “Restricted Stock Units” means an award made pursuant to Section 7 of this Plan of the Committee. The Committeeright to receive shares of Common Stock, cash or a combination thereof at the end of the applicable Restriction Period.

(gg)        “Restriction Period” means the period of time during which Restricted Stock Units are subject to restrictions, as provided in Section 7 of this Plan.

(hh)        “Spread” means the excess of the Market Value per Share on the date when an Appreciation Right is exercised over the Base Price provided for with respect to the Appreciation Right.

(ii)        “Stockholder” means an individual or entity that owns one or more shares of Common Stock.

(jj)        “Subsidiary” means a corporation, company or other entity (i) more than 50% of whose outstanding shares or securities (representing the right to vote for the election of directors or other managing authority) are, or (ii) which does not have outstanding shares or securities (as may delegatebe the case in a partnership, joint venture, limited liability company, unincorporated association or other similar entity), but more than 50% of whose ownership interest representing the right generally to officersmake decisions for such other entity is, now or managershereafter, owned or controlled, directly or indirectly, by the Company;provided,however, that for purposes of determining whether any person may be a Participant for purposes of any grant of Incentive Stock Options, “Subsidiary” means any corporation in which the Company at the time owns or controls, directly or indirectly, more than 50% of the total combined Voting Power represented by all classes of stock issued by such corporation.

(kk)        “Voting Power” means, at any time, the combined voting power of the then-outstanding securities entitled to vote generally in the election of Directors in the case of the Company or any Related Entity, or committees thereof, the authority, subject to such terms as the Committee shall determine, (i) to perform administrative functions, (ii) with respect to Participants not subject to Section 16members of the Exchange Act, to perform such other functions as the Committee may determine, and (iii) with respect to Participants subject to Section 16, to perform such other functionsboard of the Committee as the Committee may determine to the extent performance of such functions will not resultdirectors or similar body in the losscase of an exemption under Rule16b-3 otherwise available for transactions by such persons, in each case to the extent permitted under applicable law and subject to the requirements set forth in Section 7(d). The Committee may appoint agents to assist it in administering the Plan.another entity.

(c)3.            Limitation of LiabilityShares Available Under this Plan.

(a)        Maximum Shares Available Under this Plan. The Committee, and each member thereof, shall be entitled to, in good faith, rely or act upon any report or other information furnished to him or her by any Executive Officer, other officer or Employee, the Company’s independent auditors, Consultants or any other agents assisting in the administration of the Plan. Members of the Committee, and any officer or Employee acting at the direction or on behalf of the Committee, shall not be personally liable for any action or determination taken or made in good faith with respect to the Plan, and shall, to the extent permitted by law, be fully indemnified and protected by the Company with respect to any such action or determination.

  (i)

Subject to adjustment as provided in Section 11 of this Plan and the share counting rules set forth in Section 3(b) of this Plan, the number of shares of Common Stock available under this Plan for awards of (A) Option Rights or Appreciation Rights, (B) Restricted Stock, (C) Restricted Stock Units, (D) Performance Shares or Performance Units, (E) awards contemplated by Section 9 of this Plan, or (F) dividend equivalents paid with respect to awards made under this Plan will not exceed in the aggregate 1,660,000 shares of Common Stock. Such shares may be shares of original issuance or treasury shares or a combination of the foregoing.

  (ii)

The aggregate number of shares of Common Stock available under Section 3(a)(i) of this Plan will be reduced by one share of Common Stock for every one share of Common Stock subject to each award granted under this Plan.

4.    Stock Subject to Plan(b)        Share Counting Rules.

(a)    Limitation

  (i)

Except as provided in Section 22 of this Plan, if any award granted under this Plan is cancelled or forfeited, expires, is settled for cash (in whole or in part), or is unearned (in whole or in part), the shares of Common Stock subject to such award will, to the extent of such cancellation, forfeiture, expiration, cash settlement, or unearned amount, again be available under Section 3(a)(i) above.

  (ii)

If, after the Effective Date, any shares of Common Stock subject to an award granted under the Predecessor Plans are forfeited, or an award granted under the Predecessor Plans is cancelled or forfeited, expires, is settled for cash (in whole or in part), or is unearned (in whole or in part), the shares of Common Stock subject to such award will, to the extent of such cancellation, forfeiture, expiration, cash settlement, or unearned amount, be available for awards under this Plan.

  (iii)

Notwithstanding anything to the contrary contained in this Plan: (A) shares of Common Stock withheld by the Company, tendered or otherwise used in payment of the Option Price of an Option Right will not be added (or added back, as applicable) to the aggregate number of shares of Common Stock available under Section 3(a)(i) of this Plan; (B) shares of Common Stock withheld by the Company, tendered or otherwise used to satisfy tax withholding with respect to awards will not be added (or added back, as applicable) to the aggregate number of shares of Common Stock available under Section 3(a)(i) of this Plan; (C) shares of Common Stock subject to an Appreciation Right that are not actually issued in connection with the settlement of such Appreciation Right on the exercise thereof will not be added back to the aggregate number of shares of Common Stock available under Section 3(a)(i) of this Plan; and (D) shares of Common Stock reacquired by the Company on the open market or otherwise using cash proceeds from the exercise of Option Rights will not be added (or added back, as applicable) to the aggregate number of shares of Common Stock available under Section 3(a)(i) of this Plan.

  (iv)

If, under this Plan, a Participant has elected to give up the right to receive compensation in exchange for shares of Common Stock based on fair market value, such shares of Common Stock will not count against the aggregate limit under Section 3(a)(i) of this Plan.

(c)        Limit on Overall Number of Shares Subject to Awards. Subject to adjustment as provided in Section 10(c) hereof, the total number of shares ofIncentive Stock reserved and available for delivery in connection with Awards under the Plan shall equal 14,799,415 shares of Stock (the “Share Reserve”). Any shares of Stock delivered under the Plan may consist, in whole or in part, of authorized and unissued shares or treasury shares. Full Value Awards granted under the Plan on or after the 2016 Effective Date shall count as 1.94 shares of Stock for purposes of the share limits under the Plan. If any shares of Stock covered by an Award granted under the Plan, or to which such an Award relates, are forfeited, or if an Award has expired, terminated or been canceled for any reason whatsoever (other than by reason of exercise or vesting), then the shares of Stock covered by such Award shall again be, or shall become, shares of Stock with respect to which Awards may be granted hereunder (and for the avoidance of doubt, after the 2016 Effective Date, any shares of Stock covered by Full Value Awards shall be returned to the Plan as 1.94 Shares for purposes of the share limits under the Plan).

(b)    Availability of Shares Not Issued pursuant to Full Value Awards. In the event that any withholding tax liabilities arising from a Full Value Award are satisfied by the withholding of shares of Stock from the Full Value Award by the Company, then only the number of shares of Stock issued net of the shares of Stock withheld shall be counted as issued for purposes of determining the maximum number of shares of Stock available for grant under the Plan.Options. Notwithstanding anything to the contrary contained in this Plan: (i) shares of Stock withheld by the Company, tenderedSection 3 or otherwise usedelsewhere in payment of the exercise price of an Option will not be added (or added back, as applicable) to the maximum number of shares of Stock available under the Plan; (ii) shares of Stock withheld by the Company, tendered or otherwise used to satisfy a tax withholding obligation with respect to Optionsthis Plan, and Stock Appreciation Rights will not be added (or added back, as applicable) to the maximum number of shares of Stock available under the Plan; (iii) shares of Stock subject to a Stock Appreciation Right that are not actually issuedadjustment as provided in connection with the settlement in sharesSection 11 of Stock of such Stock Appreciation Right on the exercise thereof, will not be added back to the maximum number of shares of Stock available under the Plan; and (iv) shares of Stock reacquired by the Company on the open market or otherwise using cash proceeds from the exercise of an Option will not be added tothis Plan, the aggregate number of shares of Common Stock available underactually issued or transferred by the Plan.

(c)    Limitation on NumberCompany upon the exercise of Incentive Stock Option Shares. Subject to adjustment as provided in Section 10(c) hereof, the number ofOptions will not exceed 1,660,000 shares of Stock which may be issued pursuant to Incentive Stock Options shall be the lesser of (i) the number of shares of Stock that may be subject to Awards under Section 4(a), or (ii) 15,000,000.Common Stock.

(d)        Minimum Vesting Requirements.Requirements. In general, no Awardaward granted on or after the 2016 Effective Date may vest, in the ordinary course, prior to the first anniversary of the date of grant of the Award.earlier than after aone-year vesting period or aone-year performance period, as applicable. However, up to 5% of the sum of (i) the number of shares available for issuance under the Share Reserveaggregate limit under Section 3(a)(i) of this Plan as of the 2016 Effective Date plus (ii) the number of shares that are returned to the Share Reserveaggregate number of shares of Common Stock available under Section 3(a)(i) of this Plan from time to time pursuant to Awardsawards that are cancelled or forfeited, expire, are settled for cash (in whole or have expired, terminatedin part), or been canceled for any reason whatsoever (other than by reason of exerciseare unearned (in whole or vesting)in part), including shares of Common Stock that are returned to the Share Reserveaggregate number of shares of Common stock available under Section 3(a)(i) from Awardsawards outstanding on the 2016 Effective Date, or from Full Value Awards in satisfaction of withholding tax liabilities, may be granted on or after the 2016 Effective Date in the form of Awardsawards that do not meet such vesting requirements. Nothing in this Section 4(d)3(d) shall limit the Company’s ability to grant Awardsawards that contain rights to accelerated vesting on a termination of employment or service, or limit the Company’s powers under Section 10(c).11 or Section 18(c) of this Plan. In addition, the minimum vesting criteria set forth in this Section 4(d)3(d) shall not apply to Awardsawards granted pursuant to an assumption of or substitution for another stock award (which stock award was granted by another Person)person) in connection with a Change in Control or acquisition by the Company of the other Person.person.

(e)        Application of LimitationsNon-Employee Director Compensation Limit. The limitationsNotwithstanding anything contained in this Section 4 shall apply only3, or elsewhere in this Plan, to Awards that are settled by the delivery of shares of Stock. The Committee may adopt reasonable counting procedures to ensure appropriate counting, avoid double counting (as, for example, in the case of tandem or substitute awards)contrary and make adjustments if the number of shares of Stock actually delivered differs from the number of shares previously counted in connection with an Award.

5.    Eligibility; Per-Person Award Limitations.

(a)    Eligibility. Awards may be granted under the Plan only to Eligible Persons.

(b)    Per-Person Limitations. In each fiscal year during any part of which the Plan is in effect, (i) an Eligible Person may not be granted Awards relating to more than 1,000,000 shares of Stock, subject to adjustment as provided in Section 10(c), under each11 of Sections 6(b), 6(c), 6(d), 6(e), 6(f), 6(g), 6(h), 7(b) and 7(c); (ii) the maximum amount that may be earned as an Annual Incentive Award or other cash Award (but excluding Performance Awards)this Plan, in no event will anynon-employee Director in any fiscalcalendar year by any one Participant shall be $2,000,000, and (iii) the maximum amount that may be earned as a Performance Award in respect of a performance period by any one Participant shall be $5,000,000. If a Performance Award could (but is not required to) be paid out in cash, it will count only against the share limit under clause (i) above.

(c)    Limitation on Awards for Independent Directors. In addition to any other limitations set forth this Section 5, in any fiscal year, no Independent Director will be granted compensatory equitycompensation (including, without limitation, cash compensation) for such service having an aggregate maximum value (measured at the Date of Grant as applicable, and calculating the value of any awards (under this Plan or any other stock plan ofbased on the Company) that have an aggregate grant date fair value (as determined by the Company for financial reporting purposes) that, during such fiscal year, exceed $750,000 for such fiscal year (the “Director Compensation Limit”). If the Company determines that the value of such equity awards with respect to an Independent Director exceed the Director Compensation Limit, the affected Independent Director shall return the excess compensation to the Company within 30 days after receiving written notice of such overpayment, with such reimbursement made from the number of shares of Stock granted to the Independent Director that had a grant date fair value in excess of the Director Compensation Limit.$750,000. For the avoidance of doubt, in a year in which an Independentanon-employee Director serves as an employee or consultant (including as an interim officer), the Director Compensation Limitsuch limit shall not apply to compensatory equity awards grantedcompensation approved to be paid to suchnon-employee Director by the other Independent Directors to him or hernon-employee directors in respect of such service as an employee or consultant.consultant

6.

4.            Specific Terms of AwardsOption Rights..

(a)    General. AwardsThe Committee may, be granted on thefrom time to time and upon such terms and conditions set forth in this Section 6. In addition,as it may determine, authorize the Committeegranting to Participants of Option Rights. Each such grant may impose onutilize any Award or the exercise thereof, at the date of grant or thereafter (subject to Section 10(f)), such additional terms and conditions, not inconsistent with the provisionsall of the Plan, as the Committee shall determine, including terms requiring forfeiture of Awards in the event of termination of Continuous Service by the Participantauthorizations, and terms permitting a Participant to make elections relating to his or her Award. The Committee shall retain full power and discretion to accelerate, waive or modify, at any time, any term or condition of an Award that is not mandatory under the Plan. Except in cases in which the Committee is authorized to require other forms of consideration under the Plan, or to the extent other forms of consideration must be paid to satisfy the requirements of Delaware law, no consideration other than services may be required for the grant (but not the exercise) of any Award.

(b)    Options. The Committee is authorized to grant Options to Participants on the following terms and conditions:

(i)    Stock Option Agreement. Each grant of an Option under the Plan shall be evidenced by a Stock Option Agreement. Such Stock Option Agreement shallwill be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions which are not inconsistent withrequirements, contained in the Plan and which the Committee deems appropriate for inclusion in a Stock Option Agreement. The provisions of the various Stock Option Agreements entered into under the Plan need not be identical.following provisions:

(ii)    Number of Shares.(a)        Each Stock Option Agreement shallgrant will specify the number of shares of Common Stock that areto which it pertains subject to the limitations set forth in Section 3 of this Plan.

(b)        Each grant will specify an Option and shall provide for the adjustment of such number in accordance with Section 10(c) hereof. The Stock Option Agreement shall also specify whether the Option is an Incentive Stock Option or aNon-Qualified Stock Option, and in the absence of such designation, the Option shall be aNon-Qualified Stock Option.

(iii)    Exercise Price.

(A)    In General. Each Stock Option Agreement shall state the price at which shares of Stock subject to the Option may be purchased (the “Exercise Price”), which shall be not less than 100% of the Fair Market Value of the Stock on the date of grant.

(B)    Ten Percent Stockholder. If an individual owns or is deemed to own (by reason of the attribution rules applicable under Section 424(d) of the Code) more than 10% of the combined voting power of all classes of stock of the Company or any Related Entity, the Exercise Price of an Incentive Stock Option must be at least 110% of the Fair Market Value of aper share of Common Stock, on the date of grant and such Incentive Stockwhich Option by its terms is not exercisable after the expiration of five years from the date of grant.

(iv)    Time and Method of Exercise. The Committee shall determine the time or times at which or the circumstances under which an Option may be exercised in whole or in part (including based on achievement of performance goals and/or future service requirements). The Committee may also determine the time or times at which Options shall cease to be or become exercisable following termination of Continuous Service or upon other conditions. The Committee may determine the methods by which such exercise price may be paid or deemed to be paid (including in the discretion of the Committee a cashless exercise procedure), the form of such payment, including, without limitation, cash, Stock, other Awards or awards granted under other plans of the Company or a Related Entity, or other property (including notes or other contractual obligations of Participants to make payment on a deferred basis), and the methods by or forms in which Stock will be delivered or deemed to be delivered to Participants.

(v)    Incentive Stock Options. The terms of any Incentive Stock Option granted under the Plan shall comply in all respects with the provisions of Section 422 of the Code. Anything in the Plan to the contrary notwithstanding, no term of the Plan relating to Incentive Stock Options (including any Stock Appreciation Rights in tandem therewith) shall be interpreted, amended or altered, nor shall any discretion or authority granted under the Plan be exercised, so as to disqualify either the Plan or any Incentive Stock Option under Section 422 of the Code, unless the Participant has first requested the change that will result in such disqualification or except as permitted under Section 9 and Section 10(c). Thus, if and to the extent required to comply with Section 422 of the Code, Options granted as Incentive Stock Options shall be subject to the following special terms and conditions:

(A)    the Option shall not be exercisable more than seven years after the date such Incentive Stock Option is granted; provided, however, that if a Participant owns or is deemed to own (by reason of the attribution rules of Section 424(d) of the Code) more than 10% of the combined voting power of all classes of stock of the Company or any Parent Corporation and the Incentive Stock Option is granted to such Participant, the term of the Incentive Stock Option shall be (to the extent required by the Code at the time of the grant) for no more than five years from the date of grant; and

(B)    The aggregate Fair Market Value (determined as of the date the Incentive Stock Option is granted) of the shares of stockPrice (except with respect to which Incentive Stock Options grantedawards under the Plan and all other option plansSection 22 of the Company or its Parent Corporation during any calendar year are exercisable for the first time by the Participant during any calendar year shall not (to the extent required by the Code at the time of the grant) exceed $100,000.

(vi)    Repurchase Rights. The Committee shall have the discretion to grant Options which are exercisable for unvested shares of Common Stock. Should the Optionee’s Continuous Service cease while holding such unvested shares, the Company shall have the right to repurchase, at the exercise price paid per share, any or all of those unvested shares. The terms upon which such repurchase right shall be exercisable (including the period and procedure for exercise and the appropriate vesting schedule for the purchased shares) shall be established by the Committee and set forth in the document evidencing such repurchase right.

(c)    Stock Appreciation Rights. The Committee is authorized to grant Stock Appreciation Rights to Participants on the following terms and conditions:

(i)    Right to Payment. A Stock Appreciation Right shall confer on the Participant to whom it is granted a right to receive, upon exercise thereof, the excess of (A) the Fair Market Value of one share of stock on the date of exercise, over (B) the grant price of the Stock Appreciation Right as determined by the Committee. The grant price of a Stock Appreciation Right shallthis Plan) may not be less than the Fair Market Value of a share of Stockper Share on the dateDate of grant.Grant.

(c)        Each grant will specify whether the Option Price will be payable (i) in cash, by check acceptable to the Company or by wire transfer of immediately available funds, (ii) Other Terms. The Committee shall determineby the actual or constructive transfer to the Company of shares of Common Stock owned by the Optionee having a value at the datetime of grantexercise equal to the total Option Price, (iii) subject to any conditions or thereafter,limitations established by the timeCommittee, by the withholding of shares of Common Stock otherwise issuable upon exercise of an Option Right pursuant to a “net exercise” arrangement (it being understood that, solely for purposes of determining the number of treasury shares held by the Company, the shares of Common Stock so withheld will not be treated as issued and acquired by the Company upon such exercise), (iv) by a combination of such methods of payment, or times at which and the circumstances under which a Stock Appreciation Right(v) by such other methods as may be exercised in wholeapproved by the Committee.

(d)        To the extent permitted by law, any grant may provide for deferred payment of the Option Price from the proceeds of sale through a bank or in part (including basedbroker on achievementa date satisfactory to the Company of performance goals and/some or future service requirements),all of the time or times atshares of Common Stock to which Stock Appreciation Rights shall ceasesuch exercise relates.

(e)        Successive grants may be made to be or become exercisable following termination of Continuous Service or upon other conditions, the method of exercise, method of settlement, form of consideration payable in settlement, method by or forms in which Stock will be delivered or deemed to be delivered to Participants,same Participant whether or not any Option Rights previously granted to such Participant remain unexercised.

(f)        Each grant will specify the period or periods of continuous service by the Optionee with the Company or any Subsidiary, if any, that is necessary before any Option Rights or installments thereof will become exercisable. Option Rights may provide for continued vesting or the earlier exercise of such Option Rights, including in the event of the retirement, death or Disability of a Participant.

(g)        Any grant of Option Rights may specify Management Objectives that must be achieved as a condition to the exercise of such rights.

(h)        Option Rights granted under this Plan may be (i) options, including Incentive Stock AppreciationOptions, that are intended to qualify under particular provisions of the Code, (ii) options that are not intended to so qualify, or (iii) combinations of the foregoing. Incentive Stock Options may only be granted to Participants who meet the definition of “employees” under Section 3401(c) of the Code.

(i)        No Option Right shallwill be exercisable more than 10 years from the Date of Grant. The Committee may provide in tandem or in combination with any otherEvidence of Award and any otherfor the automatic exercise of an Option Right upon such terms and conditions as established by the Committee.

(j)        Option Rights granted under this Plan may not provide for any dividends or dividend equivalents thereon.

(k)        Each grant of Option Rights will be evidenced by an Evidence of Award. Each Evidence of Award will be subject to this Plan and will contain such terms and provisions, consistent with this Plan, as the Committee may approve.

5.            Appreciation Rights.

(a)        The Committee may, from time to time and upon such terms and conditions as it may determine, authorize the granting to any StockParticipant of Appreciation Right. StockRights. An Appreciation Right will be the right of the Participant to receive from the Company an amount determined by the Committee, which will be expressed as a percentage of the Spread (not exceeding 100%) at the time of exercise.

(b)        Each grant of Appreciation Rights may utilize any or all of the authorizations, and will be either freestanding orsubject to all of the requirements, contained in tandem with other Awards.the following provisions:

(d)

(i)

Each grant may specify that the amount payable on exercise of an Appreciation Right will be paid by the Company in cash, shares of Common Stock or any combination thereof.

(ii)

Any grant may specify that the amount payable on exercise of an Appreciation Right may not exceed a maximum specified by the Committee on the Date of Grant.

(iii)

Any grant may specify waiting periods before exercise and permissible exercise dates or periods.

(iv)

Each grant will specify the period or periods of continuous service by the Participant with the Company or any Subsidiary, if any, that is necessary before the Appreciation Rights or installments thereof will become exercisable. Appreciation Rights may provide for continued vesting or the earlier exercise of such Appreciation Rights, including in the event of the retirement, death or Disability of a Participant.

(v)

Any grant of Appreciation Rights may specify Management Objectives that must be achieved as a condition of the exercise of such Appreciation Rights.

(vi)

Appreciation Rights granted under this Plan may not provide for any dividends or dividend equivalents thereon.

(vii)

Successive grants of Appreciation Rights may be made to the same Participant regardless of whether any Appreciation Rights previously granted to the Participant remain unexercised.

(viii)

Each grant of Appreciation Rights will be evidenced by an Evidence of Award. Each Evidence of Award will be subject to this Plan and will contain such terms and provisions, consistent with this Plan, as the Committee may approve.

(c)        Also, regarding Appreciation Rights:

(i)

Each grant will specify in respect of each Appreciation Right a Base Price, which (except with respect to awards underSection 22 of this Plan) may not be less than the Market Value per Share on the Date of Grant; and

(ii)

No Appreciation Right granted under this Plan may be exercised more than 10 years from the Date of Grant. The Committee may provide in any Evidence of Award for the automatic exercise of an Appreciation Right upon such terms and conditions as established by the Committee.

6.            Restricted StockStock.. The Committee is authorizedmay, from time to time and upon such terms and conditions as it may determine, authorize the grant or sale of Restricted Stock to Participants onParticipants. Each such grant or sale may utilize any or all of the following termsauthorizations, and conditions:

(i)    Grant and Restrictions. Restricted Stock shallwill be subject to all of the requirements, contained in the following provisions:

(a)        Each such restrictions on transferability,grant or sale will constitute an immediate transfer of the ownership of shares of Common Stock to the Participant in consideration of the performance of services, entitling such Participant to voting, dividend and other ownership rights, but subject to the substantial risk of forfeiture and other restrictions if any, ason transfer hereinafter described.

(b)        Each such grant or sale may be made without additional consideration or in consideration of a payment by such Participant that is less than the Market Value per Share on the Date of Grant.

(c)        Each such grant or sale will provide that the Restricted Stock covered by such grant or sale will be subject to a “substantial risk of forfeiture” within the meaning of Section 83 of the Code for a period to be determined by the Committee may impose,on the Date of Grant or as otherwise provided in this Plan. Subject to Section 4(c), the restrictions may lapse separately or in combination at such times, under such circumstances (including based onuntil achievement of performance goals and/or future service requirements),Management Objectives referred to in Section 6(e) of this Plan.

(d)        Each such installments or otherwise, as the Committee may determine at the date of grant or thereafter. Exceptsale will provide that during or after the period for which such substantial risk of forfeiture is to continue, the transferability of the Restricted Stock will be prohibited or restricted in the manner and to the extent restricted underprescribed by the termsCommittee on the Date of Grant (which restrictions may include rights of repurchase or first refusal of the Plan and any Award agreement relating toCompany or provisions subjecting the Restricted Stock to a Participant grantedcontinuing substantial risk of forfeiture while held by any transferee).

(e)        Any grant of Restricted Stock shall have allmay specify Management Objectives that, if achieved, will result in termination or early termination of the rightsrestrictions applicable to such Restricted Stock.

(f)        Notwithstanding anything to the contrary contained in this Plan, Restricted Stock may provide for continued vesting or the earlier termination of restrictions on such Restricted Stock, including in the event of the retirement, death or Disability of a stockholder, including the right to vote theParticipant.

(g)        Any such grant or sale of Restricted Stock will require that any and the right to receiveall dividends thereon (subject to any mandatory reinvestment or other requirement imposed bydistributions paid thereon during the Committee). Notwithstandingperiod of such restrictions be automatically deferred and/or reinvested in additional Restricted Stock, which will be subject to the foregoing, followingsame restrictions as the 2018 Effective Date,underlying award. For the avoidance of doubt, any such dividends or other distributions on Restricted Stock will be deferred until, and paid contingent upon, the earning or vesting of the underlyingsuch Restricted Stock.

(h)        Each grant or sale of Restricted Stock will be evidenced by an Evidence of Award. Each Evidence of Award will be subject to this Plan and will contain such terms and provisions, consistent with this Plan, as the Committee may approve. Unless otherwise directed by the Committee, (i) all certificates representing Restricted Stock will be held in custody by the Company until all restrictions thereon will have lapsed, together with a stock power or powers executed by the Participant in whose name such certificates are registered, endorsed in blank and covering such shares or (ii) all Restricted Stock will be held at the Company’s transfer agent in book entry form with appropriate restrictions relating to the transfer of such Restricted Stock.

7.            Restricted Stock Units. The Committee may, from time to time and upon such terms and conditions as it may determine, authorize the granting or sale of Restricted Stock Units to Participants. Each such grant or sale may utilize any or all of the authorizations, and will be subject to all of the requirements, contained in the following provisions:

(a)        Each such grant or sale will constitute the agreement by the Company to deliver shares of Common Stock or cash, or a combination thereof, to the Participant in the future in consideration of the performance of services, but subject to the fulfillment of such conditions (which may include the achievement of Management Objectives) during the Restriction Period as the Committee may specify.

(b)        Each such grant or sale may be made without additional consideration or in consideration of a payment by such Participant that is less than the Market Value per Share on the Date of Grant.

(c)        Notwithstanding anything to the contrary contained in this Plan, Restricted Stock Units may provide for continued vesting or the earlier lapse or other modification of the Restriction Period, including in the event of the retirement, death or Disability of a Participant.

(d)        During the restricted period applicableRestriction Period, the Participant will have no right to transfer any rights under his or her award and will have no rights of ownership in the shares of Common Stock deliverable upon payment of the Restricted Stock subjectUnits and will have no right to Section 10(b) below,vote them, but the Committee may, at or after the Date of Grant, authorize the payment of dividend equivalents on such Restricted Stock Units on a deferred and contingent basis, either in cash or in additional shares of Common Stock;provided,however, that dividend equivalents or other distributions on shares of Common Stock underlying Restricted Stock Units will be deferred until and paid contingent upon the vesting of such Restricted Stock Units.

(e)        Each grant or sale of Restricted Stock Units will specify the time and manner of payment of the Restricted Stock may notUnits that have been earned. Each grant or sale will specify that the amount payable with respect thereto will be sold, transferred, pledged, hypothecated, margined or otherwise encumberedpaid by the Participant.Company in shares of Common Stock or cash, or a combination thereof.

(ii)(f)        Each grant or sale of Restricted Stock Units will be evidenced by an Evidence of Award. Each Evidence of Award will be subject to this Plan and will contain such terms and provisions, consistent with this Plan, as the Committee may approve.

8.            ForfeitureCash Incentive Awards, Performance Shares and Performance Units.. Except The Committee may, from time to time and upon such terms and conditions as otherwiseit may determine, authorize the granting of Cash Incentive Awards, Performance Shares and Performance Units. Each such grant may utilize any or all of the authorizations, and will be subject to all of the requirements, contained in the following provisions:

(a)        Each grant will specify the number or amount of Performance Shares or Performance Units, or amount payable with respect to a Cash Incentive Award, to which it pertains, which number or amount may be subject to adjustment to reflect changes in compensation or other factors.

(b)        The Performance Period with respect to each Cash Incentive Award or grant of Performance Shares or Performance Units will be such period of time as will be determined by the Committee, at the time of the Award, upon termination of a Participant’s Continuous Service during the applicable restriction period, the Participant’s Restricted Stock

that is at that timewhich may be subject to restrictions shall be forfeited (or, in accordance with Section 6(b)(vi), reacquired by the Company); provided that the Committee may provide, by rulecontinued vesting or regulationearlier lapse or in any Award agreement, or may determine in any individual case, that restrictions or forfeiture conditions relating to Restricted Stock shall be waived in whole or in partother modification, including in the event of terminations resulting fromthe retirement, death or Disability of a Participant.

(c)        Each grant of a Cash Incentive Award, Performance Shares or Performance Units will specify Management Objectives which, if achieved, will result in payment or early payment of the award, and each grant may specify in respect of such specified causes,Management Objectives a minimum acceptable level or levels of achievement and may set forth a formula for determining the number of Performance Shares or Performance Units, or amount payable with respect to a Cash Incentive Award, that will be earned if performance is at or above the minimum or threshold level or levels, or is at or above the target level or levels, but falls short of maximum achievement of the specified Management Objectives.

(d)        Each grant will specify the time and manner of payment of a Cash Incentive Award, Performance Shares or Performance Units that have been earned. Any grant may specify that the amount payable with respect thereto may be paid by the Company in cash, in shares of Common Stock, in Restricted Stock or Restricted Stock Units or in any combination thereof.

(e)        Any grant of a Cash Incentive Award, Performance Shares or Performance Units may specify that the amount payable or the number of shares of Common Stock, Restricted Stock or Restricted Stock Units payable with respect thereto may not exceed a maximum specified by the Committee may in other cases waive in whole or in parton the forfeitureDate of Restricted Stock.Grant.

(iii)    Certificates for Stock. Restricted Stock granted under the Plan may be evidenced in such manner as the Committee shall determine. If certificates representing Restricted Stock are registered in the name of the Participant, the(f)        The Committee may, require that such certificates bear an appropriate legend referringon the Date of Grant of Performance Shares or Performance Units, provide for the payment of dividend equivalents to the terms, conditions and restrictions applicable to such Restricted Stock, that the Company retain physical possession of the certificates, and that the Participant deliver a stock power to the Company, endorsedholder thereof either in blank, relating to the Restricted Stock.

(iv)    Dividends and Splits. As a condition to the grant of an Award of Restricted Stock, the Committee may require that any cash dividends paid on a share of Restricted Stock be automatically reinvestedor in additional shares of RestrictedCommon Stock, subject in all cases to deferral and payment on a contingent basis based on the Participant’s earning of the Performance Shares or applied to the purchase of additional Awards under the Plan. Unless otherwise determined by the Committee, Stock distributed in connection with a Stock split or Stock dividend, and other property distributedPerformance Units, as a dividend, shall be subject to restrictions and a risk of forfeiture to the same extent as the Restricted Stockapplicable, with respect to which such Stock or other property has been distributed.dividend equivalents are paid.

(e)    Deferred Stock Units. The Committee is authorized to(g)        Each grant Deferred Stock Units to Participants, which are rights to receive Stock, cash, or a combination thereof at the end of a specified time period, subject to the following terms and conditions:

(i)    Cash Incentive Award, and Restrictions. SatisfactionPerformance Shares or Performance Units will be evidenced by an Evidence of anAward. Each Evidence of Award of Deferred Stock Units shall occur upon expiration of the time specified for such Deferred Stock Units by the Committee (or, if permitted by the Committee, as elected by the Participant). In addition, subject to Section 4(c), Deferred Stock Units shallwill be subject to this Plan and will contain such restrictions (which may include a risk of forfeiture)terms and provisions, consistent with this Plan, as the Committee may impose, if any, which restrictions may lapse atapprove.

9.            Other Awards.

(a)        Subject to applicable law and the expirationapplicable limits set forth in Section 3 of the time period or at earlier specified times (including based on achievement of performance goals and/or future service requirements), separately or in combination, in installments or otherwise, asthis Plan, the Committee may determine. The terms of an Award of Deferred Stock Units shall be set forth in a written Award Agreement that shall contain provisions determined byauthorize the Committee and not inconsistent with the Plan. Deferred Stock Units may be satisfied by delivery of Stock, cash equalgrant to the Fair Market Value of the specified numberany Participant of shares of Stock covered by the Deferred Stock Units, or a combination thereof, as determined by the Committee at the date of grant or thereafter. Prior to satisfaction of an Award of Deferred Stock Units, an Award of Deferred Stock Units carries no voting or dividend or other rights associated with share ownership.

(ii)    Forfeiture. Except as otherwise determined by the Committee, upon termination of a Participant’s Continuous Service during the applicable time period thereof to which forfeiture conditions apply (as provided in the Award agreement evidencing the Deferred Stock Units), the Participant’s Deferred Stock Units (other than those Deferred Stock Units subject to deferral at the election of the Participant) shall be forfeited; provided that the Committee may provide, by rule or regulation or in any Award agreement, or may determine in any individual case, that restrictions or forfeiture conditions relating to Deferred Stock Units shall be waived in whole or in part in the event of terminations resulting from specified causes, and the Committee may in other cases waive in whole or in part the forfeiture of Deferred Stock Units.

(iii)    Dividend Equivalents. Unless otherwise determined by the Committee at date of grant, any Dividend Equivalents that are granted with respect to any Award of Deferred Stock Units shall be either (A) paid with respect to such Deferred Stock Units at the dividend payment date in cash or in shares of unrestricted Stock having a Fair Market Value equal to the amount of such dividends, or (B) deferred with respect to such Deferred Stock Units and the amount or value thereof automatically deemed reinvested in additional Deferred Stock Units, other Awards or other investment vehicles, as the Committee shall determine or permit the Participant to elect. Unless otherwise determined by the Committee, for any Award granted prior to the 2018 Effective Date, Stock distributed in connection with a Stock split or Stock dividend, and other cash or property distributed as a dividend, shall be subject to restrictions and a risk of forfeiture to the same extent as the Deferred Stock Unit with respect to which suchCommon Stock or other property has been distributed.

(f)    Bonus Stock and Awards in Lieu of Obligations. The Committee is authorized to grant Stock as a bonus, or to grant Stock or other Awards in lieu of Company obligations to pay cash or deliver other property under the Plan or under other plans, provided that, in the case of Participants subject to Section 16 of the Exchange Act, the amount of such grants remains within the discretion of the Committee to the extent necessary to ensure that acquisitions of Stock or other Awards are exempt from liability under Section 16(b) of the Exchange Act. Stock or Awards granted hereunder shall be subject to such other terms as shall be determined by the Committee.

(g)    Dividend Equivalents. The Committee is authorized to grant Dividend Equivalents to a Participant entitling the Participant to receive cash, Stock, other Awards, or other property equal in value to dividends paid with respect to a specified number of shares of Stock, or other periodic payments. Dividend Equivalents may be awarded on a free-standing basis or in connection with another Award. The Committee may provide that Dividend Equivalents shall be paid or distributed when accrued or shall be deemed to have been reinvested in additional Stock, Awards, or other investment vehicles, and subject to such restrictions on transferability and risks of forfeiture, as the Committee may specify. Unless otherwise determined by the Committee, for any Award granted prior to the 2018 Effective Date, Stock distributed in connection with a Stock split or Stock dividend, and other cash or property distributed as a dividend, shall be subject to restrictions and a risk of forfeiture to the same extent as the underlying Dividend Equivalents.

(h)    OtherStock-Based Awards. The Committee is authorized, subject to limitations under applicable law, to grant to Participants such other Awardsawards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, shares of Common Stock as deemed byor factors that may influence the Committee to be consistent with the purposesvalue of the Plan,such shares, including, without limitation, convertible or exchangeable debt securities, other rights convertible or exchangeable into shares of Common Stock, purchase rights for shares of Common Stock, Awardsawards with value and payment contingent upon performance of the Company or specified Subsidiaries, affiliates or other business units thereof or any other factors designated by the Committee, and Awardsawards valued by reference to the book value of the shares of Common Stock or the value of securities of, or the performance of specified Related EntitiesSubsidiaries or affiliates or other business units.units of the Company. The Committee shallwill determine the terms and conditions of such Awards.awards. Shares of Common Stock delivered pursuant to an Awardaward in the nature of a purchase right granted under this Section 6(h) shall9 will be purchased for such consideration, (including without limitation loans from the Company or a Related Entity), paid for at such times,time, by such methods, and in such forms, including, without limitation, cash,shares of Common Stock, other Awardsawards, notes or other property, as the Committee shall determine. The Committee shall have the discretion to grant such other Awards which are exercisable for unvested shares of Common Stock. Should the Optionee’s Continuous Service cease while holding such unvested shares, the Company shall have the right to repurchase, at the exercise price paid per share, any or all of those unvested shares. The terms upon which such repurchase right shall be exercisable (including the period and procedure for exercise and the appropriate vesting schedule for the purchased shares) shall be established by the Committee and set forth in the document evidencing such repurchase right.determines.

(b)        Cash awards, as an element of or supplement to any other Awardaward granted under thethis Plan, may also be granted pursuant to this Section 6(h).9.

7.    Performance and Annual Incentive Awards.

(a)    Performance Conditions.(c)        The rightCommittee may authorize the grant of shares of Common Stock as a Participantbonus, or may authorize the grant of other awards in lieu of obligations of the Company or a Subsidiary to exercisepay cash or receive a grantdeliver other property under this Plan or settlement of any Award, and the timing thereof, may beunder other plans or compensatory arrangements, subject to such performance conditionsterms as will be determined by the Committee in a manner that complies with Section 409A of the Code.

(d)        The Committee may, at or after the Date of Grant, authorize the payment of dividends or dividend equivalents on awards granted under this Section 9 on a deferred and contingent basis, either in cash or in additional shares of Common Stock; provided, however, that dividend equivalents or other distributions on shares of Common Stock underlying awards granted under this Section 9 will be specifieddeferred until and paid contingent upon the earning of such awards.

(e)        Notwithstanding anything to the contrary contained in this Plan, awards under this Section 9 may provide for the earning or vesting of, or earlier elimination of restrictions applicable to, such award, including in the event of the retirement, death or Disability of a Participant.

10.            Administration of this Plan.

(a)        This Plan will be administered by the Committee. The Committee may usefrom time to time delegate all or any part of its authority under this Plan to a subcommittee thereof. To the extent of any such business criteriadelegation, references in this Plan to the Committee will be deemed to be references to such subcommittee.

(b)        The interpretation and construction by the Committee of any provision of this Plan or of any Evidence of Award (or related documents) and any determination by the Committee pursuant to any provision of this Plan or of any such agreement, notification or document will be final and conclusive. No member of the Committee shall be liable for any such action or determination made in good faith. In addition, the Committee is authorized to take any action it determines in its sole discretion to be appropriate subject only to the express limitations contained in this Plan, and no authorization in any Plan section or other measuresprovision of performancethis Plan is intended or may be deemed to constitute a limitation on the authority of the Committee.

(c)        To the extent permitted by law, the Committee may delegate to one or more of its members, to one or more officers of the Company, or to one or more agents or advisors, such administrative duties or powers as it may deem appropriate in establishing any performance conditions,advisable, and may exercise its discretion to reduce the amounts payable under any Award subject to performance conditions, except as limited under Sections 7(b) and 7(c) hereof in the case of a Performance Award or Annual Incentive Award intended to qualify under Code Section 162(m).

(b)    Performance Awards Granted to Designated Covered Employees. If and to the extent that the Committee, determinesthe subcommittee, or any person to whom duties or powers have been delegated as aforesaid, may employ one or more persons to render advice with respect to any responsibility the Committee, the subcommittee or such person may have under this Plan. The Committee may, by resolution, authorize one or more officers of the Company to do one or both of the following on the same basis as the Committee: (i) designate employees to be recipients of awards under this Plan; and (ii) determine the size of any such awards;provided,however, that a Performance Award(A) the Committee will not delegate such responsibilities to beany such officer for awards granted to an Eligible Personemployee who is designated by the Committee as likely to be a Covered Employee should qualify as “performance-based compensation” for purposes of Code Section 162(m), the grant, exercise and/or settlement of such Performance Award shall be contingent upon achievement ofpre-established performance goals and other terms set forth in this Section 7(b).

(i)    Performance Goals Generally. The performance goals for such Performance Awards shall consist of onean officer, Director, or more business criteria and a targeted level or levels of performance with respect to each ofthan 10% “beneficial owner” (as such criteria, as specified byterm is defined in Rule13d-3 promulgated under the Committee consistent with this Section 7(b). Performance goals shall be objective and shall otherwise meet the requirements of Code Section 162(m) and regulations thereunder including the requirement that the level or levels of performance targeted by the Committee result in the achievement of performance goals being “substantially uncertain.” The Committee may determine that such Performance Awards shall be granted, exercised and/or settled upon achievementExchange Act) of any one performance goal or that two or moreclass of the performance goals must be achieved as a conditionCompany’s equity securities that is registered pursuant to grant, exercise and/or settlement of such Performance Awards. Performance goals may differ for Performance Awards granted to any one Participant or to different Participants.

(ii)    Business Criteria. One or moreSection 12 of the following business criteria for the Company, on a consolidated basis, and/or specified Related Entities or business units of the Company (except with respect to the total stockholder return and earnings per share criteria), shall be used exclusively by the Committee in establishing performance goals for such Performance Awards: (1) total stockholder return; (2) such total stockholder returnExchange Act, as compared to total return (on a comparable basis) of a publicly available index such as, but not limited to, the Standard & Poor’s 500 Stock Index, the S&P Specialty Retailer Index or the Philadelphia Semiconductor Index; (3) net income; (4) pretax earnings; (5) earnings before interest expense, taxes, depreciation and amortization; (6) pretax operating earnings after interest expense and before bonuses, service fees, and extraordinary or special items; (7) operating margin; (8) earnings per share; (9) return on equity; (10) return on capital; (11) return on investment; (12) operating earnings; (13) working capital or inventory; (14) operating earnings before the expense for share based awards; and (15) ratio of debt to stockholders’ equity. One or more of the foregoing business criteria shall also be exclusively used in establishing performance goals for Annual Incentive Awards granted to a Covered Employee under Section 7(c) hereof that are intended to qualify as “performance-based compensation under Code Section 162(m).

(iii)    Performance Period; Timing For Establishing Performance Goals. Achievement of performance goals in respect of such Performance Awards shall be measured over a performance period of up to seven years, as specified by the Committee. Performance goals shall be established not later than 90 days after the beginning of any performance period applicable to such Performance Awards, or at such other date as may be required or permitted for “performance-based compensation” under Code Section 162(m).

(iv)    Performance Award Pool. The Committee may establish a Performance Award pool, which shall be an unfunded pool, for purposes of measuring Company performance in connection with Performance Awards. The amount of such Performance Award pool shall be based upon the achievement of a performance goal or goals based on one or more of the business criteria set forth in Section 7(b)(ii) hereof during the given performance period, as specifieddetermined by the Committee in accordance with Section 7(b)(iii) hereof.16 of the Exchange Act; (B) the resolution providing for such authorization shall set forth the total number of shares of Common Stock such officer(s) may grant; and (C) the officer(s) will report periodically to the Committee regarding the nature and scope of the awards granted pursuant to the authority delegated.

11.            Adjustments. The Committee may specifyshall make or provide for such adjustments in the amountnumber of and kind of shares of Common Stock covered by outstanding Option Rights, Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Shares and Performance Units granted hereunder and, if applicable, in the number of and kind of shares of Common Stock covered by other awards granted pursuant to Section 9 of this Plan, in the Option Price and Base Price provided in outstanding Option Rights and Appreciation Rights, respectively, in Cash Incentive Awards, and in other award terms, as the Committee, in its sole discretion, exercised in good faith, determines is equitably required to prevent dilution or enlargement of the Performance Award pool as a percentagerights of Participants that otherwise would result from (a) any extraordinary cash dividend, stock dividend, stock split, combination of shares, recapitalization or other change in the capital structure of the Company, (b) any merger, consolidation,spin-off,split-off,spin-out,split-up, reorganization, partial or complete liquidation or other distribution of assets, issuance of rights or warrants to purchase securities, or (c) any other corporate transaction or event having an effect similar to any of the foregoing. Moreover, in the event of any of such business criteria, a percentage thereoftransaction or event or in excessthe event of a threshold amount,Change in Control, the Committee may provide in substitution for any or all outstanding awards under this Plan such alternative consideration (including cash), if any, as another amount which need not bear a strictly mathematical relationshipit, in good faith, may determine to such business criteria.

(v)    Settlement of Performance Awards; Other Terms. Settlement of such Performance Awards shall be in cash, Stock, other Awards or other property,equitable in the discretioncircumstances and shall require in connection therewith the surrender of all awards so replaced in a manner that complies with Section 409A of the Committee. TheCode. In addition, for each Option Right or Appreciation Right with an Option Price or Base Price, respectively, greater than the consideration offered in connection with any such transaction or event or Change in Control, the Committee may in its discretion reduceelect to cancel such Option Right or Appreciation Right without any payment to the amount of a settlement otherwise to be made in connection withperson holding such Performance Awards.Option Right or Appreciation Right. The Committee shall specify the circumstances in whichalso make or provide for such Performance Awards shall be paid or forfeitedadjustments in the number of shares of Common Stock specified in Section 3 of this Plan as the Committee in its sole discretion, exercised in good faith, determines is appropriate to reflect any transaction or event of termination of Continuous Service by the Participant prior to the end of a performance period or settlement of Performance Awards.

(c)    Annual Incentive Awards Granted to Designated Covered Employees. The Committee may, within its discretion, grant one or more Annual Incentive Awards to any Eligible Person, subject to the terms and conditions set forthdescribed in this Section 7(c).

(i)    Annual Incentive Award Pool. The Committee may establish an Annual Incentive Award pool, which shall be an unfunded pool, for purposes of measuring Company performance in connection with Annual Incentive Awards. In11; provided, however, that any such adjustment to the case of Annual Incentive Awards intended to qualify as “performance-based compensation” for purposes of Code Section 162(m), the amount of such Annual Incentive Award pool shall be based upon the achievement of a performance goal or goals based on one or more of the business criteria set forthnumber specified in Section 7(b)(ii) hereof during the given performance period, as specified by the Committee in accordance with Section 7(b)(iii) hereof. The Committee may specify the amount3(c) of the Annual Incentive Award pool as a percentage of any such business criteria, a percentage thereof in excess of a threshold amount, or as another amount which need not bear a strictly mathematical relationship to such business criteria.

(ii)    Potential Annual Incentive Awards. Not later than the end of the 90th day of each fiscal year, or at such other date as may be required or permitted in the case of Awards intended to be “performance-based compensation” under Code Section 162(m), the Committee shall determine the Eligible Persons whothis Plan will potentially receive Annual Incentive Awards, and the amounts potentially payable thereunder, for that fiscal year, either out of an Annual Incentive Award pool established by such date under Section 7(c)(i) hereof or as individual Annual Incentive Awards. In the case of individual Annual Incentive Awards intended to qualify under Code Section 162(m), the amount potentially payable shall be based upon the achievement of a performance goal or goals based on one or more of the business criteria set forth in Section 7(b)(ii) hereof in the given performance year, as specified by the Committee; in other cases, such amount shall be based on such criteria as shall be established by the Committee. In all cases, the maximum Annual Incentive Award of any Participant shall be subject to the limitation set forth in Section 5 hereof.

(iii)    Payout of Annual Incentive Awards. After the end of each fiscal year, the Committee shall determine the amount, if any, of (A) the Annual Incentive Award pool, and the maximum amount of potential Annual Incentive Award payable to each Participant in the Annual Incentive Award pool, or (B) the amount of potential Annual Incentive Award otherwise payable to each Participant. The Committee shall specify the circumstances in which an Annual Incentive Award shall be paid or forfeited in the event of termination of Continuous Service by the Participant prior to the end of a fiscal year or settlement of such Annual Incentive Award.

(d)    Written Determinations. All determinations by the Committee as to the establishment of performance goals, the amount of any Performance Award pool or potential individual Performance Awards and as to the achievement of performance goals relating to Performance Awards under Section 7(b), and the amount of any Annual Incentive Award pool or potential individual Annual Incentive Awards and the amount of final Annual Incentive Awards under Section 7(c), shall be made in writing in the case of any Award intended to qualify under Code Section 162(m). The Committee may not delegate any responsibility relating to such Performance Awards or Annual Incentive Awardsonly if and to the extent that such adjustment would not cause any Option Right intended to qualify as an Incentive Stock Option to fail to so qualify.

12.            Definition and Effect of a Change in Control.

(a)        For purposes of this Plan, except as may be otherwise prescribed by the Committee in an Evidence of Award made under this Plan, a “Change in Control” will be deemed to have occurred upon the occurrence (after the Effective Date) of any of the following events:

(i)

a change in control of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Exchange Act, or if Item 6(e) is no longer in effect, any regulations issued by the Securities and Exchange Commission pursuant to the Exchange Act which serve similar purposes;

(ii)

the following individuals no longer constitute a majority of the members of the Board: (1) the individuals who, as of the Effective Date, constitute the Board (the “Current Directors”); (2) the individuals who thereafter are elected to the Board and whose election, or nomination for election, to the Board was approved by a vote of a majority of all of the Current Directors then still in office (such directors becoming “Additional Directors” immediately following their election); and (3) the individuals who are elected to the Board and whose election, or nomination for election, to the Board was approved by a vote of a majority of all of the Current Directors and Additional Directors then still in office (such directors also becoming “Additional Directors” immediately following their election);

(iii)

a tender offer or exchange offer is made whereby the effect of such offer is to take over and control the Company, and such offer is consummated for the equity securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding voting securities;

(iv)

the consummation of a transaction approved by the Stockholders of a merger, consolidation, recapitalization, or reorganization of the Company, a reverse stock split of outstanding voting securities, or consummation of any such transaction if Stockholder approval is not obtained, other than any such transaction that would result in more than 50% of the total voting power represented by the voting securities of the surviving entity outstanding immediately after such transaction being beneficially owned by the holders of outstanding voting securities of the Company immediately prior to the transaction, with the voting power of each such continuing holder relative to other such continuing holders not substantially altered in the transaction;

(v)

the consummation of a transaction approved by the Stockholders of a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or a substantial portion of the Company’s assets to another person, which is not a wholly owned subsidiary of the Company (i.e., 50% or more of the total assets of the Company); or

(vi)

any “person” (as that term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule13d-3 of the Exchange Act), directly or indirectly of more than 50% of the total voting power represented by the Company’s then outstanding voting securities.

(b)        Unless otherwise provided in an Evidence of Award or another written agreement between a Participant and the Company and notwithstanding the Plan’s minimum vesting requirements, if a Change in Control occurs, then:

(i)

Option Rights and Appreciation Rights issued that are not yet fully vested and exercisable as of the time of the Change in Control shall immediately become vested and exercisable in full, except to the extent that a Replacement Award is provided to the Participant in accordance with the terms described herein;

(ii)

Any restrictions, deferral of settlement and forfeiture conditions applicable to Restricted Stock, Restricted Stock Units, or other awards granted under Section 9 that vest solely based on continued service (and not based on the achievement of Management Objectives) shall lapse and such awards shall be deemed fully vested as of immediately prior to the Change in Control, except to the extent that a Replacement Award is provided to the Participant in accordance with the terms described herein;

(iii)

With respect to Cash Incentive Awards, Performance Shares, Performance Units, and other awards granted under the Plan that are subject to the achievement of Management Objectives (other than the awards described in Section 12(b)(iv) below), the Management Objectives applicable thereto shall be deemed satisfied at target and the applicable performance period shall be deemed completed as of immediately prior to the Change in Control. Such awards will remain outstanding and will vest thereafter pursuant to the service-based vesting schedule set forth in the applicable Evidence of Award unless the successor or acquiring entity in the Change in Control does not provide a Replacement Award. If such Replacement Award is not provided, then any remaining restrictions,

deferral of settlement and forfeiture conditions applicable to such award shall lapse and such award shall be deemed fully vested as of immediately prior to the Change in Control; and

(iv)

With respect to Restricted Stock Units granted with Management Objectives that the Company describes as “Market Stock Units,” a prorated portion of such Market Stock Units shall vest based on actual performance of the Management Objectives through the date of the Change in Control. The remainder of the Market Stock Units (that did not vest in accordance with the immediately preceding sentence) will vest in accordance with their regular vesting schedule as set forth in the Evidence of Award unless the successor or acquiring entity in the Change in Control does not provide a Replacement Award for such remaining Market Stock Units. If such Replacement Award is not provided, then any remaining restrictions, deferral of settlement and forfeiture conditions applicable to such Market Stock Units shall lapse and such Market Stock Units shall be deemed fully vested as of immediately prior to the Change in Control.

13.            Clawback/Recovery.All awards (cash and equity) held by the Company’s Executive Officers shall be subject to clawback, recoupment or forfeiture (a) to the extent that such Executive Officer is determined to have engaged in fraud or intentional illegal conduct that caused the Company’s materialnon-compliance with any applicable financial reporting requirements and resulted in a financial restatement, the result of which is that the amount received from such award would have been lower had it been calculated on the basis of such restated results, or (b) required by applicable laws, rules, regulations or listing requirements. Such clawback, recoupment or forfeiture, in addition to any other remedies available under applicable laws, rules, regulations or listing requirements, shall occur through the cancellation of such awards (to the extent then-outstanding), the recoupment of any gains realized with respect to such awards, or a combination of the foregoing, to the extent of the overpayment. All awards granted under the Plan will also be subject to recoupment in accordance with any clawback policy that the Company is required to adopt pursuant to the listing standards of any national securities exchange or association on which the Company’s securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law. The implementation of any clawback policy will not be deemed a triggering event for purposes of any definition of “good reason” for resignation or any “constructive termination.”

14.            Non-U.S. Participants. In order to facilitate the making of any grant or combination of grants under this Plan, the Committee may provide for such special terms for awards to Participants who are foreign nationals or who are employed by the Company or any Subsidiary outside of the United States of America or who provide services to the Company or any Subsidiary under an agreement with a foreign nation or agency, as the Committee may consider necessary or appropriate to accommodate differences in local law, tax policy or custom. Moreover, the Committee may approve such supplements to or amendments, restatements or alternative versions of this Plan (includingsub-plans) as it may consider necessary or appropriate for such purposes, without thereby affecting the terms of this Plan as in effect for any other purpose, and the secretary or other appropriate officer of the Company may certify any such document as having been approved and adopted in the same manner as this Plan. No such special terms, supplements, amendments or restatements, however, will include any provisions that are inconsistent with the terms of this Plan as then in effect unless this Plan could have been amended to eliminate such inconsistency without further approval by the Stockholders.

15.            Transferability.

(a)        Except as otherwise determined by the Committee, no Option Right, Appreciation Right, Restricted Stock, Restricted Stock Unit, Performance Share, Performance Unit, Cash Incentive Award, award contemplated by Section 9 of this Plan or dividend equivalents paid with respect to awards made under this Plan will be transferable by the Participant except by will or the laws of descent and distribution. In no event will any such award granted under this Plan be transferred for value. Except as otherwise determined by the Committee, Option Rights and Appreciation Rights will be exercisable during the Participant’s lifetime only by him or her or, in the event of the Participant’s legal incapacity to do so, by his or her guardian or legal representative acting on behalf of the Participant in a fiduciary capacity under state law or court supervision.

(b)        The Committee may specify on the Date of Grant that part or all of the shares of Common Stock that are (i) to be issued or transferred by the Company upon the exercise of Option Rights or Appreciation Rights, upon the termination of the Restriction Period applicable to Restricted Stock Units or upon payment under any grant of Performance Shares or Performance Units or (ii) no longer subject to the substantial risk of forfeiture and restrictions on transfer referred to in Section 6 of this Plan, will be subject to further restrictions on transfer.

16.            Withholding Taxes. To the extent that the Company is required to withhold federal, state, local or foreign taxes in connection with any payment made or benefit realized by a Participant or other person under this Plan, and the amounts available to the Company for such withholding are insufficient, it will be a condition to the receipt of such payment or the realization of such benefit that the Participant or such other person make arrangements satisfactory to the Company for payment of the balance

of such taxes required to be withheld, which arrangements (in the discretion of the Committee) may include relinquishment of a portion of such benefit. If a Participant’s benefit is to be received in the form of Common Stock, then, unless otherwise determined by the Committee, the Company will withhold from the shares required to be delivered to the Participant, shares of Common Stock having a value equal to the amount required to be withheld under applicable income and employment tax laws. The shares used for tax withholding will be valued at an amount equal to the market value of such shares of Common Stock on the date the benefit is to be included in the Participant’s income. In no event will the market value of the shares of Common Stock to be withheld and delivered pursuant to this Section to satisfy applicable withholding obligations exceed the minimum amount required to be withheld, unless (i) an additional amount can be withheld and not result in adverse accounting consequences, (ii) such additional withholding amount is authorized by the Committee, and (iii) the total amount withheld does not exceed the Participant’s estimated tax obligations attributable to the applicable transaction. Participants will also make such arrangements as the Committee may require for the payment of any withholding obligation that may arise in connection with the disposition of shares of Common Stock acquired upon the exercise of Option Rights.

17.            Compliance with Section 409A of the Code.

(a)        To the extent applicable, it is intended that this Plan and any grants made hereunder comply with the provisions of Section 409A of the Code, so that the income inclusion provisions of Section 409A(a)(1) of the Code do not apply to the Participants. This Plan and any grants made hereunder will be administered in a manner consistent with this intent. Any reference in this Plan to Section 409A of the Code will also include any regulations or any other formal guidance promulgated with respect to such section by the U.S. Department of the Treasury or the Internal Revenue Service.

(b)        Neither a Participant nor any of a Participant’s creditors or beneficiaries will have the right to subject any deferred compensation (within the meaning of Section 409A of the Code) payable under this Plan and grants hereunder to any anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment. Except as permitted under Section 409A of the Code, any deferred compensation (within the meaning of Section 409A of the Code) payable to a Participant or for a Participant’s benefit under this Plan and grants hereunder may not be reduced by, or offset against, any amount owed by a Participant to the Company or any of its Subsidiaries.

(c)        If, at the time of a Participant’s separation from service (within the meaning of Section 409A of the Code), (i) the Participant will be a specified employee (within the meaning of Section 409A of the Code and using the identification methodology selected by the Company from time to time) and (ii) the Company makes a good faith determination that an amount payable hereunder constitutes deferred compensation (within the meaning of Section 409A of the Code) the payment of which is required to be delayed pursuant to thesix-month delay rule set forth in Section 409A of the Code in order to avoid taxes or penalties under Section 409A of the Code, then the Company will not pay such amount on the otherwise scheduled payment date but will instead pay it, without interest, on the fifth business day of the seventh month after such separation from service.

(d)        Solely with respect to any award that constitutes nonqualified deferred compensation subject to Section 409A of the Code and that is payable on account of a Change in Control (including any installments or stream of payments that are accelerated on account of a Change in Control), a Change in Control shall occur only if such event also constitutes a “change in the ownership,” “change in effective control,” and/or a “change in the ownership of a substantial portion of assets” of the Company as those terms are defined under Treasury Regulation§1.409A-3(i)(5), but only to the extent necessary to establish a time and form of payment that complies with Section 409A of the Code, without altering the definition of Change in Control for any purpose in respect of such award.

(e)        Notwithstanding any provision of this Plan and grants hereunder to the contrary, in light of the uncertainty with respect to the proper application of Section 409A of the Code, the Company reserves the right to make amendments to this Plan and grants hereunder as the Company deems necessary or desirable to avoid the imposition of taxes or penalties under Section 409A of the Code. In any case, a Participant will be solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on a Participant or for a Participant’s account in connection with this Plan and grants hereunder (including any taxes and penalties under Section 409A of the Code), and neither the Company nor any of its affiliates will have any obligation to indemnify or otherwise hold a Participant harmless from any or all of such taxes or penalties.

18.            Amendments.

(a)        The Board may at any time and from time to time amend this Plan in whole or in part;provided,however, that if an amendment to this Plan, for purposes of applicable stock exchange rules and except as permitted under Section 11 of this Plan, (i) would materially increase the benefits accruing to Participants under this Plan, (ii) would materially increase the number of securities which may be issued under this Plan, (iii) would materially modify the requirements for participation in this Plan, or (iv) must otherwise be approved by the Stockholders in order to comply with applicable law or the rules of the Nasdaq Stock Market, or, if the shares of Common Stock are not traded on the Nasdaq Stock Market, the principal national securities

exchange upon which the shares of Common Stock are traded or quoted, all as determined by the Board, then, such amendment will be subject to Stockholder approval and will not be effective unless and until such approval has been obtained.

(b)        Except in connection with a corporate transaction or event described in Section 11 of this Plan or in connection with a Change in Control, the terms of outstanding awards may not be amended to reduce the Option Price of outstanding Option Rights or the Base Price of outstanding Appreciation Rights, or cancel outstanding “underwater” Option Rights or Appreciation Rights in exchange for cash, other awards or Option Rights or Appreciation Rights with an Option Price or Base Price, as applicable, that is less than the Option Price of the original Option Rights or Base Price of the original Appreciation Rights, as applicable, without Stockholder approval. This Section 18(b) is intended to prohibit the repricing of “underwater” Option Rights and Appreciation Rights and will not be construed to prohibit the adjustments provided for in Section 11 of this Plan. Notwithstanding any provision of this Plan to the contrary, this Section 18(b) may not be amended without approval by the Stockholders.

(c)        If permitted by Section 409A of the Code, but subject to the paragraph that follows, including in the case of termination of employment or service, or in the case of unforeseeable emergency or other circumstances or in the event of a Change in Control, to the extent a Participant holds an Option Right or Appreciation Right not immediately exercisable in full, or any Restricted Stock as to which the substantial risk of forfeiture or the prohibition or restriction on transfer has not lapsed, or any Restricted Stock Units as to which the Restriction Period has not been completed, or any Cash Incentive Awards, Performance Shares or Performance Units which have not been fully earned, or any dividend equivalents or other awards made pursuant to Section 162(m).9 of this Plan subject to any vesting schedule or transfer restriction, or who holds shares of Common Stock subject to any transfer restriction imposed pursuant to Section 15(b) of this Plan, the Committee may, in its sole discretion, provide for continued vesting or accelerate the time at which such Option Right, Appreciation Right or other award may be exercised or the time at which such substantial risk of forfeiture or prohibition or restriction on transfer will lapse or the time when such Restriction Period will end or the time at which such Cash Incentive Awards, Performance Shares or Performance Units will be deemed to have been fully earned or the time when such transfer restriction will terminate or may waive any other limitation or requirement under any such award.

(d)        Subject to Section 18(b) of this Plan, the Committee may amend the terms of any award theretofore granted under this Plan prospectively or retroactively. Except for adjustments made pursuant to Section 11 of this Plan, no such amendment will impair the rights of any Participant without his or her consent. The Board may, in its discretion, terminate this Plan at any time. Termination of this Plan will not affect the rights of Participants or their successors under any awards outstanding hereunder and not exercised in full on the date of termination.

19.            Governing Law. This Plan and all grants and awards and actions taken hereunder will be governed by and construed in accordance with the internal substantive laws of the State of Delaware.

20.            Effective Date/Termination. This Plan will be effective as of the Effective Date. No grants will be made on or after the Effective Date under the Predecessor Plans, provided that outstanding awards granted under the Predecessor Plans will continue unaffected following the Effective Date. No grant will be made under this Plan on or after the tenth anniversary of the Effective Date, but all grants made prior to such date will continue in effect thereafter subject to the terms thereof and of this Plan. For clarification purposes, the terms and conditions of this Plan shall not apply to or otherwise impact previously granted and outstanding awards under the Predecessor Plans, as applicable.

21.            Miscellaneous Provisions.

(a)        The Company will not be required to issue any fractional shares of Common Stock pursuant to this Plan. The Committee may provide for the elimination of fractions or for the settlement of fractions in cash.

(b)        This Plan will not confer upon any Participant any right with respect to continuance of employment or other service with the Company or any Subsidiary, nor will it interfere in any way with any right the Company or any Subsidiary would otherwise have to terminate such Participant’s employment or other service at any time.

(c)        Except with respect to Section 21(e) of this Plan, to the extent that any provision of this Plan would prevent any Option Right that was intended to qualify as an Incentive Stock Option from qualifying as such, that provision will be null and void with respect to such Option Right. Such provision, however, will remain in effect for other Option Rights and there will be no further effect on any provision of this Plan.

(d)        No award under this Plan may be exercised by the holder thereof if such exercise, and the receipt of cash or stock thereunder, would be, in the opinion of counsel selected by the Company, contrary to law or the regulations of any duly constituted authority having jurisdiction over this Plan.

(e)        Status of Section 7(b) and Section 7(c) Awards Under Code Section 162(m). It is the intentAbsence on leave approved by a duly constituted officer of the Company that Performance Awards and Annual Incentive Awards under Section 7(b) and 7(c) hereofor any of its Subsidiaries will not be considered interruption or termination of service of any employee for any purposes of this Plan or awards granted to persons who are designated by the Committee as likely to be Covered Employees within the meaning of Code Section 162(m) and regulations thereunder shall, if so designated by the Committee, constitute “qualifiedperformance-based compensation” within the meaning of Code Section 162(m) and regulations thereunder. Accordingly, the terms of Sections 7(b), (c), (d) and (e), including the definitions of Covered Employee and other terms used therein, shall be interpreted in a manner consistent with Code Section 162(m) and regulations thereunder. The foregoing notwithstanding, because the Committee cannot determine with certainty whether a givenhereunder.

(f)        No Participant will behave any rights as a Covered EmployeeStockholder with respect to a fiscal year that has not yet been completed,any shares of Common Stock subject to awards granted to him or her under this Plan prior to the term Covered Employeedate as used herein shall mean only a person designatedof which he or she is actually recorded as the holder of such shares of Common Stock upon the stock records of the Company.

(g)        The Committee may condition the grant of any award or combination of awards authorized under this Plan on the surrender or deferral by the Committee, at the timeParticipant of grant of Performance Awardshis or an Annual Incentive Award, as likelyher right to bereceive a Covered Employee with respect to that fiscal year. If any provision of the Plancash bonus or any agreement relating to such Performance Awards or Annual Incentive Awards does not comply or is inconsistent with the requirements of Code Section 162(m) or regulations thereunder, such provision shall be construed or deemed amended to the extent necessary to conform to such requirements.

8.    Certain Provisions Applicable to Awards or Sales.

(a)    Stand-Alone, Additional, Tandem, and Substitute Awards. Awards granted under the Plan may, in the discretion of the Committee, be granted either alone or in addition to, in tandem with, or in substitution or exchange for, any other Award or any award granted under another plan of the Company, any Related Entity, or any business entity to be acquiredcompensation otherwise payable by the Company or a Related Entity, or any other right of a ParticipantSubsidiary to receive payment from the Company or any Related Entity. Such additional, tandem,Participant.

(h)        Except with respect to Option Rights and substitute or exchange Awards may be granted at any time. If an Award is granted in substitution or exchange for another Award or award,Appreciation Rights, the Committee shall requiremay permit Participants to elect to defer the surrenderissuance of shares of Common Stock under this Plan pursuant to such other Awardrules, procedures or award in considerationprograms as it may establish for purposes of this Plan and which are intended to comply with the grantrequirements of Section 409A of the new Award. In addition, AwardsCode. The Committee also may be granted in lieu of cash compensation, including in lieu of cash amounts payable under other plans ofprovide that deferred issuances and settlements include the Company or any Related Entity in which the value of Stock subject to the Award is equivalent in value to the cash compensation.

(b)    Term of Awards. The term of each Award shall be for such period as may be determined by the Committee or the Board; provided that in no event shall the term of any Option or Stock Appreciation Right exceed a period of seven years (or such shorter term as may be required in respect of an Incentive Stock Option under Section 422 of the Code).

(c)    Form and Timing of Payment Under Awards; Deferrals. Subject to the terms of the Plan and any applicable Award agreement, payments to be made by the Company or a Related Entity upon the exercise of an Option or other Award or settlement of an Award may be made in such forms as the Committee shall determine, including, without limitation, cash, other Awards or other property, and may be made in a single payment or transfer, in installments, or on a deferred basis. The settlement of any Award may be accelerated, and cash paid in lieu of Stock in connection with such settlement, in the discretion of the Committee or upon occurrence of one or more specified events (in addition to a Change in Control). Installment or deferred payments may be required by the Committee (subject to Section 10(f) of the Plan) or permitted at the election of the Participant on terms and conditions established by the Committee. Payments may include, without limitation, provisions for the payment or crediting of a reasonabledividend equivalents or interest rate on installment or deferred payments or the grant or crediting of Dividend Equivalents or other amounts in respect of installment or deferred payments denominated in Stock.deferral amounts.

(d)    Exemptions from Section 16(b) Liability. It is the intent of the Company that this Plan comply in all respects with applicable provisions of Rule16b-3 or Rule 16a-1(c)(3) to the extent necessary to ensure that neither the grant of any Awards to nor other transaction by a Participant who is subject to Section 16 of the Exchange Act is subject to liability under Section 16(b) thereof (except for transactions acknowledged in writing to benon-exempt by such Participant). Accordingly, if(i)        If any provision of this Plan is or becomes invalid or unenforceable in any jurisdiction, or would disqualify this Plan or any Award agreement does not comply withaward under any law deemed applicable by the requirements of Rule16b-3 or Rule16a-1(c)(3) as then applicable to any such transaction,Committee, such provision will be construed or deemed amended to the extent necessaryor limited in scope to conform to applicable laws or, in the applicable requirementsdiscretion of Rule16b-3the Committee, it will be stricken and the remainder of this Plan will remain in full force and effect. Notwithstanding anything in this Plan or Rule16a-1(c)(3) so that suchan Evidence of Award to the contrary, nothing in this Plan or in an Evidence of Award prevents a Participant shall avoid liabilityfrom providing, without prior notice to the Company, information to governmental authorities regarding possible legal violations or otherwise testifying or participating in any investigation or proceeding by any governmental authorities regarding possible legal violations, and for purpose of clarity a Participant is not prohibited from providing information voluntarily to the Securities and Exchange Commission pursuant to Section 21F of the Exchange Act.

22.            Stock-Based Awards in Substitution for Awards Granted by Another Company. Notwithstanding anything in this Plan to the contrary:

(a)        Awards may be granted under Section 16(b).

(e)    Code Section 409A. Ifthis Plan in substitution for or in conversion of, or in connection with an assumption of, stock options, stock appreciation rights, restricted stock, restricted stock units or other stock or stock-based awards held by awardees of an entity engaging in a corporate acquisition or merger transaction with the Company or any Subsidiary. Any conversion, substitution or assumption will be effective as of the close of the merger or acquisition, and, to the extent applicable, will be conducted in a manner that the Committee believes that any Awards may constitute a “nonqualified deferred compensation plan” undercomplies with Section 409A of the Code,Code. The awards so granted may reflect the original terms of the awards being assumed or substituted or converted for and need not comply with other specific terms of this Plan, and may account for shares of Common Stock substituted for the securities covered by the original awards and the number of shares subject to the original awards, as well as any exercise or purchase prices applicable to the original awards, adjusted to account for differences in stock prices in connection with the transaction.

(b)        In the event that a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary merges has shares available under apre-existing plan previously approved by stockholders and not adopted in contemplation of such acquisition or merger, the shares available for grant pursuant to the terms of such plan (as adjusted, to the extent appropriate, to reflect such acquisition or merger) may be used for awards made after such acquisition or merger under this Plan;provided,however, that awards using such available shares may not be made after the date awards or grants could have been made under the terms of thepre-existing plan absent the acquisition or merger, and conditions set forthmay only be made to individuals who were not employees or directors of the Company or any Subsidiary prior to such acquisition or merger.

(c)        Any shares of Common Stock that are issued or transferred by, or that are subject to any awards that are granted by, or become obligations of, the Company under Sections 22(a) or 22(b) of this Plan will not reduce the shares of Common Stock available for issuance or transfer under this Plan or otherwise count against the limits contained in the Award Agreement for that Award shall be drafted in a mannerSection 3 of this Plan. In addition, no shares of Common Stock subject to an award that is intended to comply with, and shall be interpreted in a manner consistent with, the applicable requirements of Section 409Agranted by, or becomes an obligation of, the Code, unless otherwise agreedCompany under Sections 22(a) or 22(b) of this Plan will be added to the aggregate limit contained in writing by the Participant and the Company.Section 3(a)(i) of this Plan

(f)    No Option Repricing. Other than pursuant to Section 10(c), without approval of the Company’s stockholders, the Committee shall not be permitted to (A) lower the exercise price per share of Stock of an Option or Stock Appreciation Right after it is granted, (B) cancel an Option or Stock Appreciation Right when the exercise price per share of Stock exceeds the Fair Market Value of the underlying share of Stock in exchange for another Award or cash, or (C) take any other action with respect to an Option or Stock Appreciation Right that may be treated as a repricing.

(g)    DividendsAPPENDIX C

2019 EMPLOYEE STOCK PURCHASE PLAN

2019 Employee Stock Purchase Plan

1.            Establishment, Purpose and Dividend EquivalentsTerm of Plan.. Following

(a)        Establishment. The Board adopted the 2018Synaptics Incorporated 2019 Employee Stock Purchase Plan (the “Plan”) on July 30, 2019 (the “Effective Date”), subject to stockholder approval on or before the twelve (12) month anniversary of the Effective Date,Date. If stockholder approval is not received by such date, the Plan will have no Award grantedeffect and any balance in a Participant’s Plan account will be returned to the Participant, without interest, as soon as administratively practicable thereafter.

(b)        Purpose. The purpose of the Plan is to provide Eligible Employees with an opportunity to acquire a proprietary interest in the future of the Company through the purchase of Stock. The Company intends that the Plan qualify as an “employee stock purchase plan” under Section 423 of the Code (including any amendments to such section) (“Section 423”), and the Plan shall providebe so construed. The Plan provides for Dividend Equivalents or otherwise provideboth Section 423 andnon-Section 423 components.

(c)        Term of Plan. The Plan shall continue in effect until the earliest of (i) its termination by the Committee, (ii) the issuance of all Stock available for participation in any distributions made with respect to the Common Stock underlying such Award (“Distributions”) unless the right to receive such Distributions is contingent upon the earning or vesting of the underlying Award.

9.    Change in Control.

(a)    Effect of “Change in Control.” If and to the extent provided in the Award, in the event of a “Change in Control,” as defined in Section 9(b):

(i)    The Committee may, within its discretion, accelerate the vesting and exercisability of any Award carrying a right to exercise that was not previously vested and exercisable as of the time of the Change in Control, subject to applicable restrictions set forth in Section 10(a) hereof;

(ii)    The Committee may, within its discretion, accelerate the exercisability of any Stock Appreciation Rights and provide for the settlement of such Stock Appreciation Rights for amounts, in cash;

(iii)    The Committee may, within its discretion, lapse the restrictions, deferral of settlement, and forfeiture conditions applicable to any other Award grantedissuance under the Plan and such Awards may be deemed fully vested as(iii) the day before the ten (10) year anniversary of the timeEffective Date.

2.            Definitions and Construction.

(a)        Definitions. Any term not expressly defined in the Plan but defined for purposes of Section 423 shall have the same definition herein. Whenever used herein, the following terms shall have their respective meanings set forth below:

(i)        “Administrator” means the Committee or officer or employee of the Change in Control, exceptCompany to whom the Committee has delegated its authority under the Plan, to the extent permitted by applicable law.

(ii)        “Board” means the Board of any waiver by the Participant and subject to applicable restrictions set forth in Section 10(a) hereof; and

(iv)    With respect to any such outstanding Award subject to achievement of performance goals and conditions under the Plan, the Committee may, within its discretion, deem such performance goals and other conditions as having been met asDirectors of the date ofCompany.

(iii)        “Business Day” means any day on which the Change in Control.national stock exchange on which the Stock is traded is available and open for trading.

(b)    Definition of(iv)        “Change in Control.” A “Change in Control” shall be deemed to have occurred upon:means the occurrence of any of the following events:

(i)    Upon(A)        the consummation of a transaction approved by the stockholders of the Company of a reorganization, merger, consolidation or other form of corporate transaction or series of transactions, in each case, with respect to which persons who were the stockholders of the Company immediately prior to such reorganization, merger or consolidation or other transaction do not, immediately thereafter, own more than 50% of the combined voting power entitled to vote generally in the election of directors of the reorganized, merged or consolidated company’s then outstanding voting securities, or a liquidation or dissolution of the Company or the sale of all or substantially all of the assets of the Company;

(ii)(B)        Individuals who, as of the date on which the Awardan award is granted, constitute the Board (the “Incumbent Board”“Incumbent Board”) cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director subsequent to the date on which the Awardaward was granted whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the Directorsdirectors of the Company) shall be, for purposes of this Agreement,agreement, considered as though such person were a member of the Incumbent Board; or

(iii)(C)        the acquisition (other than from the Company) by any person, entity or “group”,“group,” within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act, of more than 50% of either the then outstanding shares of the Company’s Common Stock or the combined voting power of the Company’s then outstanding voting securities entitled to vote generally in the election of directors (hereinafter referred to as the ownership of a “Controlling Interest”) excluding, for this purpose, any acquisitions by (1)(I) the Company or a Related Entity, (2)an affiliate, (II) any person, entity or “group” that as of the date on which the Awardaward is granted

owns beneficial ownership (within the meaning of Rule13d-3 promulgated under the Securities Exchange Act) of a Controlling Interest or (3)(III) any employee benefit plan of the Company or a Related Entity.an affiliate.

The Committee shall have full and final authority, which shall be exercised in its discretion, to determine conclusively whether a Change in Control has occurred pursuant to the above definition, and the date of the occurrence of such Change in Control and any incidental matters relating thereto. If required for compliance with Section 409A of the Code, in no event will a Change in Control be deemed to have occurred if such transaction is not also a “change in the ownership or effective control of” the Company or “a change in the ownership of a substantial portion of the assets of” the Company as determined under Treasury RegulationSection 1.409A-3(i)(5) (without regard to any alternative definition thereunder).

10.    General Provisions.

(a)    Compliance With Legal and Other Requirements. The Company may, to the extent deemed necessary or advisable by the Committee, postpone the issuance or delivery of Stock or payment of other benefits under any Award until completion of such registration or qualification of such Stock or other required action under any federal or state law, rule or regulation, listing or other required action with respect to any stock exchange or automated quotation system upon which the Stock or other Company securities are listed or quoted, or compliance with any other obligation of the Company, as the Committee, may consider appropriate, and may require any Participant to make such representations, furnish such information and comply with or be subject to such other conditions as it may consider appropriate in connection with the issuance or delivery of Stock or payment of other benefits in compliance with applicable laws, rules, and regulations, listing requirements, or other obligations. The foregoing notwithstanding, in connection with a Change in Control, the Company shall take or cause to be taken no action, and shall undertake or permit to arise no legal or contractual obligation, that results or would result in any postponement of the issuance or delivery of Stock or payment of benefits under any Award or the imposition of any other conditions on such issuance, delivery or payment, to the extent that such postponement or other condition would represent a greater burden on a Participant than existed on the 90th day preceding the Change in Control.

(b)    Limits on Transferability; Beneficiaries.

(i)    General. Except as provided herein, a Participant may not assign, sell, transfer, or otherwise encumber or subject to any lien any Award or other right or interest granted under this Plan, in whole or in part, including any Award or right which constitutes a derivative security as generally defined in Rule16a-1(c) under the Exchange Act, other than by will or by operation of the laws of descent and distribution, and such Awards or rights that may be exercisable shall be exercised during the lifetime of the Participant only by the Participant or his or her guardian or legal representative.

(ii)    Permitted Transfer of Option. The Committee, in its sole discretion, may permit the transfer of an Option (but not an Incentive Stock Option, or any other right to purchase Stock other than an Option) as follows: (A) by gift to a member of the Participant’s Immediate Family or (B) by transfer by instrument to a trust providing that the Option is to be passed to beneficiaries upon death of the Optionee. For purposes of this Section 10(b)(ii), (v)        “Immediate Family” shall mean the Optionee’s spouse (including a former spouse subject to terms of a domestic relations order); child, stepchild, grandchild,child-in-law; parent, stepparent, grandparent,parent-in-law; sibling and sibling-in-law, and shall include adoptive relationships. If a determination is made by counsel for the Company that the restrictions contained in this Section 10(b)(ii) are not required by applicable federal or state securities laws under the circumstances, then the Committee, in its sole discretion, may permit the transfer of Awards (other than Incentive Stock Options and Stock Appreciation Rights in tandem therewith) to one or more Beneficiaries or other transferees during the lifetime of the Participant, which may be exercised by such transferees in accordance with the terms of such Award, but only if and to the extent permitted by the Committee pursuant to the express terms of an Award agreement (subject to any terms and conditions which the Committee may impose thereon, and further subject to any prohibitions and restrictions on such transfers pursuant to Rule 16b-3). A Beneficiary, transferee, or other person claiming any rights under the Plan from or through any Participant shall be subject to all terms and conditions of the Plan and any Award agreement applicable to such Participant, except as otherwise determined by the Committee, and to any additional terms and conditions deemed necessary or appropriate by the Committee.

(c)    Adjustments.

(i)    Adjustments to Awards. In the event that any dividend or other distribution (whether in the form of cash, Stock, or other property), recapitalization, forward or reverse split, reorganization, merger, consolidation, spinoff, combination, repurchase, share exchange, liquidation, dissolution or other similar corporate transaction or event affects the Stock and/or such other securities of the Company or any other issuer such that a substitution, exchange, or adjustment is determined by the Committee to be appropriate, then the Committee shall, in such manner as it deems equitable, substitute, exchange, or adjust any or all of (A) the number and kind of shares of Stock which may be delivered in connection with Awards granted thereafter, (B) the number and kind of shares of Stock by which Plan limitations are measured (including but not limited to limitations established for purposes of Code Sections 162(m) and 421 as well as per Person award limits), (C) the number and kind of shares of Stock subject to or deliverable in respect of outstanding Awards, (E) the exercise price, grant price or purchase price relating to any Award and/or “make provision for payment of cash or other property” in respect of any outstanding Award, and (F) any other aspect of any Award that the Committee determines to be appropriate.

(ii)    Adjustments in Case of a Change in Control.In the event of a Change in Control in which the Company is not the surviving corporation, or in which the shares of Stock are exchanged for or converted into securities issued by another entity, then the successor or acquiring entity or an affiliate thereof may, with the consent of the Committee, assume each outstanding Award or substitute an equivalent option or right. If the successor or acquiring entity or an affiliate thereof, does not cause such an assumption or substitution, then each Award shall terminate upon the consummation of such Change in Control. The Committee shall give written notice of any proposed transaction referred to in this Section 10(c)(ii) a reasonable period of time prior to the closing date for such transaction (which notice may be given either before or after the approval of such

transaction), in order that Optionees may have a reasonable period of time prior to the closing date of such transaction within which to exercise any Options that are then exercisable (including any Options that may become exercisable upon the closing date of such transaction). An Optionee may condition his exercise of any Option upon the consummation of the transaction.

(iii)    Other Adjustments. In addition, the Committee is authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards (including Performance Awards and performance goals, and Annual Incentive Awards and any Annual Incentive Award pool or performance goals relating thereto) in recognition of unusual or nonrecurring events (including, without limitation, acquisitions and dispositions of businesses and assets) affecting the Company, any Related Entity or any business unit, or the financial statements of the Company or any Related Entity, or in response to changes in applicable laws, regulations, accounting principles, tax rates and regulations or business conditions or in view of the Committee’s assessment of the business strategy of the Company, any Related Entity or business unit thereof, performance of comparable organizations, economic and business conditions, and any other circumstances deemed relevant; provided that without the consent of an affected Participant, no such Board action may materially and adversely affect the rights of such Participant under any previously granted and outstanding Award. In addition, no such adjustment shall be authorized or made if and to the extent that such authority or the making of such adjustment would cause Options, Stock Appreciation Rights, Performance Awards granted under Section 8(b) hereof or Annual Incentive Awards granted under Section 8(c) hereof to Participants designated by the Committee as Covered Employees and intended to qualify as “performance-based compensation” under Code Section 162(m) and the regulations thereunder to otherwise fail to qualify as “performance-based compensation” under Code Section 162(m) and regulations thereunder.

(d)    Clawback/Recovery. All Awards (cash and equity) held by the Company’s Executive Officers shall be subject to clawback, recoupment or forfeiture (i) to the extent that such Executive Officer is determined to have engaged in fraud or intentional illegal conduct that caused the Company’s material non-compliance with any applicable financial reporting requirements and resulted in a financial restatement, the result of which is that the amount received from such Award would have been lower had it been calculated on the basis of such restated results, or (ii) required by applicable laws, rules, regulations or listing requirements. Such clawback, recoupment or forfeiture, in addition to any other remedies available under applicable laws, rules, regulations or listing requirements, shall occur through the cancellation of such Awards (to the extentthen-outstanding), the recoupment of any gains realized with respect to such Awards, or a combination of the foregoing, to the extent of the overpayment. The implementation of any clawback policy will not be deemed a triggering event for purposes of any definition of “good reason” for resignation or any “constructive termination.”

(e)    Taxes. The Company and any Related Entity are authorized to withhold from any Award granted, any payment relating to an Award under the Plan, including from a distribution of Stock, or any payroll or other payment to a Participant, amounts of withholding and other taxes due or potentially payable in connection with any transaction involving an Award, and to take such other action as the Committee may deem advisable to enable the Company and Participants to satisfy obligations for the payment of withholding taxes and other tax obligations relating to any Award. This authority shall include authority to withhold or receive Stock or other property and to make cash payments in respect thereof in satisfaction of a Participant’s tax obligations; either on a mandatory or elective basis in the discretion of the Committee.

(f)    Changes to the Plan and Awards. The Board may amend, alter, suspend, discontinue or terminate the Plan, or the Committee’s authority to grant Awards under the Plan, without the consent of stockholders or Participants, except that any amendment or alteration to the Plan shall be subject to the approval of the Company’s stockholders not later than the annual meeting next following such Board action if (i) such stockholder approval is required by any federal or state law or regulation (including, without limitation, Rule16b-3 or Code Section 162(m)) or the rules of any stock exchange or automated quotation system on which the Stock may then be listed or quoted, or (ii) the amendment or alternation to the Plan materially increases the benefits accruing to the participants under the Plan, materially increases the number of securities that may be issued under the Plan, or materially modifies the requirements for participant in the Plan, and the Board may otherwise, in its discretion, determine to submit other such changes to the Plan to stockholders for approval; provided that, without the consent of an affected Participant, no such Board action may materially and adversely affect the rights of such Participant under any previously granted and outstanding Award. The Committee may waive any conditions or rights under, or amend, alter, suspend, discontinue or terminate any Award theretofore granted and any Award agreement relating thereto, except as otherwise provided in the Plan; provided that, without the consent of an affected Participant, no such Committee action may materially and adversely affect the rights of such Participant under such Award.

(g)    Change in Time Commitment. If a Participant’s regular level of time commitment in the performance of his or her services for the Company and any of the Related Entities is reduced (for example, and without limitation, if the Participant is an Employee of the Company and the Employee has a change in status from afull-time Employee to a part-time Employee) after the date of grant of any Award to the Participant, the Committee has the right in its sole discretion (and without the need to seek or obtain the consent of the affected Participant) to (i) make a corresponding reduction in the number of shares or cash amount subject to any portion of such Award that is scheduled to vest or become payable after the date of such change in time commitment, and (ii) in lieu of or in combination with such a reduction, extend the vesting or payment schedule applicable to such Award (but in no event will such extension extend the term of an Option or Stock Appreciation Right). In the event of any such reduction, the Participant will have no right with respect to any portion of the Award that is so reduced or extended.

(h)    Limitation on Rights Conferred Under Plan. Neither the Plan nor any action taken hereunder shall be construed as (i) giving any Eligible Person or Participant the right to continue as an Eligible Person or Participant or in the employ of the Company or a Related Entity; (ii) interfering in any way with the right of the Company or a Related Entity to terminate any Eligible Person’s or Participant’s Continuous Service at any time, (iii) giving an Eligible Person or Participant any claim to be granted any Award under the Plan or to be treated uniformly with other Participants and Employees, or (iv) conferring on a Participant any of the rights of a stockholder of the Company unless and until the Participant is duly issued or transferred shares of Stock in accordance with the terms of an Award.

(i)    Unfunded Status of Awards; Creation of Trusts. The Plan is intended to constitute an “unfunded” plan for incentive and deferred compensation. With respect to any payments not yet made to a Participant or obligation to deliver Stock pursuant to an Award, nothing contained in the Plan or any Award shall give any such Participant any rights that are greater than those of a general creditor of the Company; provided that the Committee may authorize the creation of trusts and deposit therein cash, Stock, other Awards or other property, or make other arrangements to meet the Company’s obligations under the Plan. Such trusts or other arrangements shall be consistent with the “unfunded” status of the Plan unless the Committee otherwise determines with the consent of each affected Participant. The trustee of such trusts may be authorized to dispose of trust assets and reinvest the proceeds in alternative investments, subject to such terms and conditions as the Committee may specify and in accordance with applicable law.

(j)    Nonexclusivity of the Plan. Neither the adoption of the Plan by the Board nor its submission to the stockholders of the Company for approval shall be construed as creating any limitations on the power of the Board or a committee thereof to adopt such other incentive arrangements as it may deem desirable including incentive arrangements and awards which do not qualify under Code Section 162(m).

(k)    Payments in the Event of Forfeitures; Fractional Shares. Unless otherwise determined by the Committee, in the event of a forfeiture of an Award with respect to which a Participant paid cash or other consideration, the Participant shall be repaid the amount of such cash or other consideration. No fractional shares of Stock shall be issued or delivered pursuant to the Plan or any Award. The Committee shall determine whether cash, other Awards or other property shall be issued or paid in lieu of such fractional shares or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated.

(l)    Governing Law. The validity, construction and effect of the Plan, any rules and regulations under the Plan, and any Award agreement shall be determined in accordance with the laws of the State of Delaware without giving effect to principles of conflicts of laws, and applicable federal law.

(m)    Plan Effective Date and Stockholder Approval; Termination of Plan. The Plan became effective on the Effective Date. The Plan shall terminate on August 18, 2020, which is the tenth anniversary of the date the Plan was originally adopted by the Board.

PLAN APPROVAL HISTORY:

Board or Stockholder Action

Approval Date

Adopted by the Board

August 18, 2010

Approved by the Stockholders

October 19, 2010

Amended and Restated by the Board

September 6, 2013

Approved by the Stockholders

October 22, 2013

Amended and Restated by the Compensation Committee

January 27, 2015

162(m) Provisions Approved by the Stockholders

October 20, 2015

Amended and Restated by the Compensation Committee

August 12, 2016

Amended and Restated by the Board

October 12, 2016

Approved by the Stockholders

October 25, 2016

Amended and Restated by the Compensation Committee

July 24, 2017

Approved by the Stockholders

October 31, 2017

Amended and Restated by the Compensation Committee

July 31, 2018

APPENDIX C

AMENDED AND RESTATED 2010 EMPLOYEE STOCK PURCHASE PLAN

1.Purpose. The purpose of the Plan is to provide incentive for present and future employees of the Company and any Designated Subsidiary to acquire a proprietary interest (or increase an existing proprietary interest) in the Company through the purchase of Common Stock. It is the Company’s intention that the Plan qualify as an “employee stock purchase plan” under Section 423 of the Code. Accordingly, the provisions of the Plan shall be administered, interpreted and construed in a manner consistent with the requirements of that section of the Code.

2.Definitions.

(a) “Applicable Percentage”Code” means the percentage specified in Section 8, subject to adjustment by the Committee as provided in Section 8.

(b) “Board” means the Board of Directors of the Company.

(c) “Code” means theU.S. Internal Revenue Code of 1986, as amended and in effect from time to time, includingor any successor thereto, together with rules, regulations, thereunder, and successor provisions and regulations thereto.interpretations promulgated thereunder.

(d) “Committee”(vi)        “Committee” means the committee appointed byCompensation Committee of the Board or such other committee or subcommittee of the Board, if any, duly appointed to administer the Plan and having such powers in each instance as described in Section 13shall be specified by the Board. If, at any time, there is no committee of the Board then authorized or properly constituted to administer the Plan, the Board shall exercise all of the powers of the Committee granted herein, and, in any event, the Board may in its discretion exercise any or if noall of such Committee is appointed, the Board.powers.

(e) “Common Stock” means the Company’s common stock, par value $.001 per share. (f) “Company”(vii)        “Company” means Synaptics Incorporated, a Delaware corporation.corporation, or any successor corporation thereto.

(g) “Compensation”(viii)        “Compensation” means, with respect to each Participantany Offering Period, base wages or salary, overtime, shift differentials, payments for each pay period,paid time off, and payments in lieu of notice. Compensation shall be limited to amounts actually payable in cash during the full base salary and overtime paid to such Participant by the Company or a Designated Subsidiary.Offering Period. Except as otherwise determined by the Committee, “Compensation” doesCompensation shall not include: (i)include moving allowances, automobile allowances, payments pursuant to a severance agreement, termination pay, relocation payments, bonuses, commissions, finder’s fee, compensation deferred under any program or commissions; (ii)plan, including, without limitation, pursuant to Section 401(k) or Section 125 of the Code, any amounts contributeddirectly or indirectly paid pursuant to the Plan or any other stock purchase, stock option or other stock-based compensation plan, amounts paid to a pension plan or fringe benefit program by the Company or a Designated Subsidiary to any pension plan; (iii) any automobile or relocation allowances (or reimbursement for any such expenses); (iv) any amounts paid as a starting bonus or finder’s fee; (v) any amounts realized from the exercise of any stock options or incentive awards; (vi) any amounts paid by theParticipating Company, or any other extraordinary compensation not included above.

(ix)        “Eligible Employee” means an Employee who meets the eligibility requirements set forth in Section 5 of the Plan.

(x)        “Employee” means a Designated Subsidiary for other fringe benefits, such as health and welfare, hospitalization and group life insurance benefits, or perquisites, or paid in lieu of such benefits, or; (vii) other similar forms of extraordinary compensation.

(h) “Continuous Statusperson treated as an Employee” means the absenceemployee of any interruption ora Participating Company for purposes of Section 423. A Participant shall be deemed to have ceased to be an Employee either upon an actual termination of service asemployment or upon the corporation employing the Participant ceasing to be a Participating Company. For purposes of the Plan, an Employee. Continuous Status as an Employeeindividual shall not be considered interrupted in the case of adeemed to have ceased to be an Employee while on any military leave, sick leave, or other bona fide leave of absence agreed to in writingapproved by the Company or the Designated Subsidiary that employs the Employee, provided that such leave is for a period of not more than 90 days or reemployment upon the expiration of such leave is guaranteed by contract or statute.Company.

(i) “Designated Subsidiaries” means the Subsidiaries that have been designated by the Board from time to time in its sole discretion as eligible to participate in the Plan.

(j) “Employee” means any person, including an Officer, whose customary employment with the Company or one of its Designated Subsidiaries is at least twenty (20) hours per week and more than five (5) months in any calendar year.

(k) “Entry Date” means the first day of each Exercise Period.

(l) “Exchange Act”(xi)        “Exchange Act” means the Securities Exchange Act of 1934, as amended.amended and in effect from time to time, or any successor thereto, together with rules, regulations, and interpretations promulgated thereunder.

(m) “Exercise Date”(xii)        “Fair Market Value” means, as of any date:

(A)         If, on such date, the Stock is listed or quoted on a national or regional securities exchange or quotation system (including the Nasdaq Global Market), the Fair Market Value of a share of Stock shall be the closing price per share of Stock for the last Trading Day endingpreceding date as reported for such day by the principal exchange or trading market on which Stock is traded (as reported in The Wall Street Journal or before November 15such other source as the Company deems reliable) or, if Stock was not traded on such date, on the immediately followingpreceding day on which Stock was traded;

(B)        If, on such date, the FirstStock is not then listed on a national or regional securities exchange or quotation system, the Fair Market Value of a share of Stock shall be the average of the bid and asked prices per share of Stock for such day (as determined by the Committee), or, if Stock was not traded on such date, on the immediately preceding day on which Stock was traded; or

(C)        If, on such date, the Stock cannot be valued pursuant to either clause (A) or (B), the Fair Market Value of a share of Stock shall be determined in good faith by the Committee, consistent with applicable legal requirements (including, if applicable, the requirements of Section 409A of the Code).

(xiii)        “Non-United States Offering” means a separate Offering Date,covering Eligible Employees of one or more Participating Companies, as described in Sections 3(c), 3(d), and 11(a)(ii).

(xiv)        “Offering” means an offering of Stock pursuant to the last Trading Day ending on or before each May 15 and November 15 thereafter.Plan, as provided in Section 6. More than one Offering may run concurrently, the terms of which need not be the same, as permitted under Section 423.

(n) “Exercise Period”(xv)        “Offering Date” means, for any Offering Period, each period commencing on the first day of such Offering Date and on the day after each Exercise Date, and terminating on the immediately following Exercise Date.

(o) “Exercise Price” means the price per share of Common Stock offered in a given Offering Period determined as provided in Section 8.Period.

(p) “Fair Market Value”(xvi)        “Offering Period” means with respect to a share of Common Stock,period established by the Fair Market Value as determined under Section 7(b).

(q) “First Offering Date” means January 1, 2011.

(r) “Offering Date” means the first Trading Day of each Offering Period; provided, that in the case of an individual who becomes eligible to become a Participant under Section 3 after the first Trading Day ofCommittee during which an Offering Period, the term “Offering Date” shall mean the first Trading Day of the Exercise Period coinciding with or next succeeding the day onis outstanding and which, that individual becomes eligible to become a Participant. Options granted after the first day of an Offering Period will be subject to the same terms as the options granted on the first Trading Day of such Offering Period except that they will have a different grant date (thus, potentially, a different exercise price) and, because they expire at the same time as the options granted on the first Trading Day of such Offering Period, a shorter term.

(s) “Offering Period” means, subject to adjustment as provided in Section 4, (i) with respect to the first Offering Period,6, is the period beginning on the First Offering Date and ending on November 15, which is 22 1/2 months thereafter, and (ii) with respect to each Offering Period thereafter, the period beginning on MayMarch 16 or NovemberSeptember 16, as applicable, immediately following the end of the previous Offering Period and ending on MayMarch 15 or NovemberSeptember 15, as applicable, which is 2412 months thereafter.

(t) “Officer”(xvii)        “Officer” means aany person who isdesignated by the Board as an officer of the Company.

(xviii)         “Parent” means any present or future “parent corporation” of the Company, as defined in Section 424(e) of the Code.

(xix)        “Participant” means an Eligible Employee who has become a participant in an Offering Period in accordance with Section 7 and remains a participant in accordance with the Plan.

(xx)        “Participating Company” means the Company and any Parent or Subsidiary designated by the Committee as a corporation the Employees of which may, if Eligible Employees, participate in the Plan. The Committee shall have the discretion to determine from time to time which Parents or Subsidiaries shall be Participating Companies.

(xxi)        “Participating Company Group” means, at any point in time, the Company and all other corporations collectively which are then Participating Companies.

(xxii)         “Purchase Date” means, for any Offering Period, the last day of such Offering Period, or, if so determined by the Committee, the last day of each Purchase Period occurring within such Offering Period.

(xxiii)        “Purchase Period” means a period, established by the Committee in accordance with Section 6, included within an Offering Period and on the final date of which outstanding Purchase Rights are exercised.

(xxiv)        “Purchase Price” means the price at which a share of Stock may be purchased under the Plan, as determined in accordance with Section 9.

(xxv)        “Purchase Right” means an option granted to a Participant pursuant to the Plan to purchase such shares of Stock as provided in Section 8, which the Participant may or may not exercise during the Offering Period in which such option is outstanding. Such option arises from the right of a Participant to withdraw any payroll deductions or other funds accumulated on behalf of the Participant and not previously applied to the purchase of Stock under the Plan, and to terminate participation in the Plan at any time during an Offering Period.

(xxvi)        “Securities Act” means the U.S. Securities Act of 1933, as amended.

(xxvii)         “Stock” means the common stock, par value $0.001 per share, of the Company, as adjusted from time to time in accordance with Section 4(b).

(xxviii)         “Subscription Agreement” means a written or electronic agreement, in such form as is specified by the Company, stating an Employee’s election to participate in the Plan and authorizing payroll deductions under the Plan from the Employee’s Compensation or other method of payment authorized by the Committee pursuant to Section 11(a)(ii).

(xxix)        “Subscription Date” means the last Business Day prior to the Offering Date of an Offering Period or such earlier date as the Company shall establish.

(xxx)        “Subsidiary” means any present or future “subsidiary corporation” of the Company, as defined in Section 424(f) of the Code.

(b)        Construction. Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision of the Plan. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular. Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise.

3.            Administration.

(a)        Administration by the Committee. The Plan shall be administered by the Committee. All questions of interpretation of the Plan, of any form of agreement or other document employed by the Company in the administration of the Plan, or of any Purchase Right shall be determined by the Committee, and such determinations shall be final, binding and conclusive upon all

persons having an interest in the Plan or the Purchase Right, unless fraudulent or made in bad faith. Subject to the provisions of the Plan, the Committee shall determine all of the relevant terms and conditions of Purchase Rights; provided, however, that all Participants granted Purchase Rights pursuant to an Offering shall have the same rights and privileges within the meaning of Section 16423(b)(5) of the Code. Any and all actions, decisions and determinations taken or made by the Committee in the exercise of its discretion pursuant to the Plan or any agreement thereunder (other than determining questions of interpretation pursuant to the second sentence of this Section 3(a)) shall be final, binding and conclusive upon all persons having an interest therein. All expenses reasonably incurred by the Company in the administration of the Plan shall be paid by the Company.

(b)        Authority of Officers. Any Officer shall have the authority to act on behalf of the Company with respect to any matter, right, obligation, determination or election that is the responsibility of or that is allocated to the Company herein, provided that the Officer has actual authority with respect to such matter, right, obligation, determination or election.

(c)        Power to AdoptSub-Plans or Varying Terms with Respect toNon-U.S. Employees. The Committee shall have the power, in its discretion, to adopt one or moresub-plans of the Plan as the Committee deems necessary or desirable to comply with the laws or regulations, tax policy, accounting principles or custom of foreign jurisdictions applicable to employees of a subsidiary business entity of the Company, provided that any suchsub-plan shall not be within the scope of an “employee stock purchase plan” within the meaning of Section 423. Except as superseded by the provisions of asub-plan, the provisions of this Plan shall govern suchsub-plan. Alternatively and in order to comply with the laws of a foreign jurisdiction, the Committee shall have the power, in its discretion, to grant Purchase Rights in an Offering to citizens or residents of anon-U.S. jurisdiction (without regard to whether they are also citizens of the United States or resident aliens) that provide terms which are less favorable than or different from the terms of Purchase Rights granted under the Exchange Actsame Offering to Employees resident in the United States.

(d)        Power to Establish Separate Offerings with Varying Terms. The Committee shall have the power, in its discretion, to establish separate, simultaneous or overlapping Offerings having different terms and conditions and to designate the Participating Company or Companies that may participate in a particular Offering, provided that each Offering shall individually comply with the terms of the Plan and the requirements of Section 423(b)(5) of the Code that all Participants granted Purchase Rights pursuant to such Offering shall have the same rights and privileges within the meaning of such section.

(e)        Policies and Procedures Established by the Company. Without regard to whether any Participant’s Purchase Right may be considered adversely affected, the Company may, from time to time, consistent with the Plan and the requirements of Section 423, establish, change or terminate such rules, guidelines, policies, procedures, limitations, or adjustments as deemed advisable by the Company, in its discretion, for the proper administration of the Plan, including, without limitation, (i) a minimum payroll deduction amount required for participation in an Offering, (ii) a limitation on the frequency or number of changes permitted in the rate of payroll deduction during an Offering, (iii) an exchange ratio applicable to amounts withheld or paid in a currency other than United States dollars, (iv) a payroll deduction greater than or less than the amount designated by a Participant in order to adjust for the Company’s delay or mistake in processing a Subscription Agreement or in otherwise effecting a Participant’s election under the Plan or as advisable to comply with the requirements of Section 423, and (v) determination of the date and manner by which the Fair Market Value of a share of Stock is determined for purposes of administration of the Plan. All such actions by the Company shall be taken consistent with the requirements under Section 423(b)(5) of the Code that all Participants granted Purchase Rights pursuant to an Offering shall have the same rights and privileges within the meaning of such section, except as otherwise permitted by Section 3(c) and the regulations promulgated thereunder.under Section 423.

(u) “(f)        Indemnification. In addition to such other rights of indemnification as they may have as members of the Board or the Committee or as officers or employees of the Participating Company Group, to the extent permitted by applicable law, members of the Board or the Committee and any officers or employees of the Participating Company Group to whom authority to act for the Board, the Committee or the Company is delegated shall be indemnified by the Company against all reasonable expenses, including attorneys’ fees, actually and necessarily incurred in connection with the defense of any action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with the Plan, or any right granted hereunder, and against all amounts paid by them in settlement thereof (provided such settlement is approved by independent legal counsel selected by the Company) or paid by them in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such person is liable for gross negligence, bad faith or intentional misconduct in duties; provided, however, that within sixty (60) days after the institution of such action, suit or proceeding, such person shall offer to the Company, in writing, the opportunity at its own expense to handle and defend the same.

4.            Shares Subject to Plan.

(a)        Maximum Number of Shares Issuable. Subject to adjustment as provided in Section 4(b), the maximum aggregate number of shares of Stock that may be issued under the Plan shall be 1,500,000 and shall consist of authorized but unissued or reacquired shares of Stock, shares of Stock purchased on the open market, or any combination thereof. If an outstanding Purchase Right for any reason expires or is terminated or canceled, the shares of Stock allocable to the unexercised portion of that Purchase Right shall again be available for issuance under the Plan.

(b)        Adjustments for Changes in Capital Structure. Subject to any required action by the stockholders of the Company and the requirements of Section 424 of the Code to the extent applicable, in the event of any change in the Stock effected without receipt of consideration by the Company, whether through merger, consolidation, reorganization, reincorporation, recapitalization, reclassification, stock dividend, stock split, reverse stock split,split-up,split-off,spin-off, combination of shares, exchange of shares, or similar change in the capital structure of the Company, or in the event of payment of a dividend or distribution to the stockholders of the Company in a form other than Stock (excepting regular, periodic cash dividends) that has a material effect on the Fair Market Value of shares of Stock, appropriate and proportionate adjustments shall be made in the number and kind of shares subject to the Plan, the limit on the shares which may be purchased by any Participant during an Offering (as described in Sections 8(a) and 8(b)) and each Purchase Right, and in the Purchase Price in order to prevent dilution or enlargement of Participants’ rights under the Plan. For purposes of the foregoing, conversion of any convertible securities of the Company shall not be treated as “effected without receipt of consideration by the Company.” meansIf a majority of the shares which are of the same class as the shares that are subject to outstanding Purchase Rights are exchanged for, converted into, or otherwise become (whether or not pursuant to a Change in Control) shares of another corporation (the“New Shares”), the Committee may unilaterally amend the outstanding Purchase Rights to provide that such Purchase Rights are for New Shares. In the event of any such amendment, the number of shares subject to, and the exercise price per share of, the outstanding Purchase Rights shall be adjusted in a fair and equitable manner as determined by the Committee, in its discretion. Any fractional share resulting from an adjustment pursuant to this Section shall be rounded down to the nearest whole number, and in no event may the Purchase Price be decreased to an amount less than the par value, if any, of the stock subject to the Purchase Right. The adjustments determined by the Committee pursuant to this Section 4(b) shall be final, binding and conclusive.

5.            Eligibility.

(a)        Employees Eligible to Participate.Each Employee who has electedof a Participating Company is eligible to participate in the Plan by filingand shall be deemed an enrollment agreement withEligible Employee, except the Company as provided in Section 5 of the Plan.following:

(v) “Plan” shall mean this Amended and Restated 2010 Employee Stock Purchase Plan.

(w) “Plan Contributions” means, with respect to each Participant, the after-tax payroll deductions withheld from the Compensation of the Participant and contributed to the Plan for the Participant as provided in Section 6 of the Plan and any other amounts contributed to the Plan for the Participant in accordance with the terms of the Plan.

(x) “Subsidiary” shall mean any corporation, domestic or foreign, of which the Company owns, directly or indirectly, 50% or more of the total combined voting power of all classes of stock, and that otherwise qualifies as a “subsidiary corporation” within the meaning of Section 424(f) of the Code.

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

3.Eligibility.

(a)(i)        Any Employee who has completed at least three (3) monthsbeen employed by the Participating Company Group for a period of employment with the Company or any Designated Subsidiary and who is an Employee asless than one monthas of the first day of an Offering Date of a given Offering Period shall be eligible to become a Participant as of any Entry Date within that Offering Period under the Plan, subject to the requirements of Section 5(a) and the limitations imposed by Section 423(b) of the Code; provided, however, that anyPeriod;

(ii)        Any Employee who is ancustomarily employed by the Participating Company Group for twenty (20) hours or less per week; or

(iii)        Any Employee aswho is customarily employed by the Participating Company Group for not more than five (5) months in any calendar year.

(b)        Exclusion of the First Offering Date shall be eligible to become a Participant as of such First Offering Date.

(b)Certain Stockholders. Notwithstanding any provision of the Plan to the contrary, no ParticipantEmployee shall be treated as an Eligible Employee and granted an optiona Purchase Right under the Plan (i) to the extent that if, immediately after such grant, the grant, such Employee (or any other person whose stock would be attributed to such Employee pursuant to Section 424(d) of the Code) would own, stock and/or hold outstanding options to purchase, stock of the Company or of any Parent or Subsidiary possessing 5%five percent (5%) or more of the total combined voting power or value of all classes of stock of such corporation, as determined in accordance with Section 423(b)(3) of the Code. For purposes of this Section 5(b), the attribution rules of Section 424(d) of the Code shall apply in determining the stock ownership of such Employee.

(c)        Determination by Company. The Company shall determine in good faith and in the exercise of its discretion whether an individual has become or has ceased to be an Employee or an Eligible Employee and the effective date of such individual’s attainment or termination of such status, as the case may be. For purposes of an individual’s participation in or other rights, if any, under the Plan as of the time of the Company’s determination of whether or not the individual is an Employee, all such determinations by the Company shall be final, binding and conclusive as to such rights, if any, notwithstanding that the Company or any court of any Subsidiary oflaw or governmental agency subsequently makes a contrary determination as to such individual’s status as an Employee. In addition, the Company, or (ii) to the extent that his or her rights to purchase stock under all employee stock purchase plans of the Company and its Subsidiaries intended to qualify under Section 423 of the Code to accrue at a rate which exceeds $25,000 of fair market value of stock (determined at the time such option is granted)Administrator may, for each calendar year in which such option is outstanding at any time.

4.Offering Periods that have not yet commenced, establish additional eligibility requirements not inconsistent with Section 423.

6.            Offerings..

The Plan shall generally be implemented by a seriessequential Offerings of Offering Periods. The first Offering Period commenced onapproximately twelve (12) months duration or such other duration as the First Offering Date and ended on November 15, 2012, which was 22 1/2 months thereafter, and succeedingCommittee shall determine. Offering Periods shall commence on May 16 or November 16, as applicable, immediately following the end of the previous Offering Period and end on May 15dates determined by the Administrator. Notwithstanding the foregoing, the Committee may establish additional or November 15,alternative concurrent, sequential or overlapping Offering Periods, a different duration for one or more Offering Periods or different commencing or ending dates for such Offering Periods;provided,however, that no Offering Period may have a duration exceeding twenty-seven (27) months. If the Committee shall so determine in its discretion, each Offering Period may consist of two (2) or more consecutive Purchase Periods having such duration as applicable, whichthe Committee shall specify, and the last day of each such Purchase Period shall be a Purchase Date. If the first or last day of an Offering Period or a Purchase Period is 24 months thereafter. If, however,not a Business Day, the Company shall specify the Business Day that will be deemed the first or last day, as the case may be, of the Offering Period or Purchase Period.

A new Offering Period shall commence, and the old Offering Period shall terminate, on the first Business Day after a Purchase Date (other than the last Purchase Date of an Offering Period) if the Fair Market Value of a share of Common Stock on any Exercise Date (except the final scheduled Exercise Date of any Offering Period) is lowerless than the Fair Market Value of a share of Common Stock on the Offering Date thenof the Offering Period.

7.            Participation in the Plan.

(a)        Initial Participation. An Eligible Employee may become a Participant in an Offering Period in progress shall end immediately followingby delivering a properly completed written or electronic Subscription Agreement to the Company office or representative designated by the Company (including the Administrator) not later than the close of tradingbusiness on such Exercisethe date established by the Company for that Offering Period. An Eligible Employee who does not deliver a properly completed Subscription Agreement in the manner permitted or required on or before the Subscription Date and a newfor an Offering Period shall begin on the next subsequent May 16 or November 16, as applicable, and shall extend for a 24 month period ending on November 15 or May 15,

as applicable. Subsequent Offering Periods shall commence on the May 16 or November 16, as applicable, immediately following the end of the previous Offering Period and shall extend for a 24 month period ending on November 15 or May 15, as applicable. The Committee shall have the power to make other changes to the duration and/or the frequency of Offering Periods with respect to future offerings if such change is announced at least five (5) days prior to the scheduled beginning of the first Offering Period to be affected and the Offering Period does not exceed 24 months.

5.Election to Participate.

(a) An eligible Employee may elect to participate in the Plan commencing onfor that Offering Period or for any Entry Date by completing an enrollment agreement on the form provided by the Company and filing the enrollment agreement with the Company on or prior to such Entry Date, unless a later time for filing the enrollment agreement is set by the Committee for all eligible Employees with respect to a given offering. The enrollment agreement shall set forth the percentage of the Participant’s Compensation that is to be withheld by payroll deduction pursuant to the Plan.

(b) Except as otherwise determined by the Committee under rules applicable to all Participants, payroll deductions for a Participant shall commence on the first payroll date following the Entry Date on which the Participant elects to participate in accordance with Section 5(a) and shall end on the last payroll date in thesubsequent Offering Period unless sooner terminated by the Participant as provided in Section 11.

(c) UnlessEligible Employee subsequently delivers a Participant elects otherwise priorproperly completed Subscription Agreement to the last Exerciseappropriate Company office or representative on or before the Subscription Date for such subsequent Offering Period. An Employee who becomes an Eligible Employee after the Offering Date of an Offering Period including the last Exercise Date prior to termination in the case of an Offering Period terminated by operation of the rule contained in Section 4 hereof, such Participant shall not be deemed (i) to have electedeligible to participate in the immediately succeedingthat Offering Period (and, for purposesbut may participate in any subsequent Offering Period provided the Employee is still an Eligible Employee as of the Offering Date of such Offering Period such Participant’s “Entry Date” shall be deemed to be the first day of such Offering Period) and (ii) to have authorized the same payroll deduction for such immediately succeeding Offering Period as was in effect for such Participant immediately prior to the commencement of such succeedingsubsequent Offering Period.

6.(b)        Continued Participation.A Participant Contributions.

(a) Except as otherwise authorized byshall automatically participate in the Committeenext Offering Period commencing immediately after the final Purchase Date of each Offering Period in which the Participant participates provided that the Participant remains an Eligible Employee on the Offering Date of the new Offering Period and has not either (i) withdrawn from the Plan pursuant to Section 6(d) below, all Participant contributions to the Plan shall be made only by payroll deductions. At the time a Participant files the enrollment agreement with respect to an Offering Period, the Participant may authorize payroll deductions12(a), or (ii) terminated employment or otherwise ceased to be made on each payroll date during the portion of the Offering Period that he or she is a Participant in an amount not less than 1% and not more than 15% of the Participant’s Compensation on each payroll date during the portion of the Offering Period that he or she is a Participant (or subsequent Offering PeriodsEligible Employee as provided in Section 5(c))13. A Participant who may automatically participate in a subsequent Offering Period, as provided in this Section, is not required to deliver any additional Subscription Agreement for the subsequent Offering Period in order to continue participation in the Plan. However, a Participant may deliver a new Subscription Agreement for a subsequent Offering Period in accordance with the procedures set forth in Section 7(a) if the Participant desires to change any of the elections contained in the Participant’s then effective Subscription Agreement.

8.            Right to Purchase Shares.

(a)        Grant of Purchase Right. Except as otherwise provided below, on the Offering Date of each Offering Period, each Participant in such Offering Period shall be granted automatically a Purchase Right consisting of an option to purchase the lesser of (i) that number of whole shares of Stock determined by dividing the Dollar Limit (to the extent provided by the Committee) by the Fair Market Value of a share of Stock on such Offering Date or (ii) the Share Limit (determined as provided below). The amountCommittee may, in its discretion and prior to the Offering Date of payroll deductionsany Offering Period, (A) change the method of, or any of the foregoing factors in, determining the number of shares of Stock subject to Purchase Rights to be granted on such Offering Date, or (B) specify a maximum aggregate number of shares that may be purchased by all Participants in an Offering or on any Purchase Date within an Offering Period. No Purchase Right shall be a whole percentage (i.e., 1%, 2%, 3%, etc.)granted on an Offering Date to any person who is not, on such Offering Date, an Eligible Employee. For the purposes of this Section, the“Share Limit” shall be 650 shares of Stock per 6 month Purchase Period. The Share Limit may be adjusted by the Committee prior to the start of an Offering Period.

(b)        Calendar Year Purchase Limitation. Notwithstanding any provision of the Participant’s Compensation.

(b) APlan to the contrary, no Participant may discontinueshall be granted a Purchase Right which permits his or her participation inright to purchase shares of Stock under the Plan to accrue at a rate which, when aggregated with such Participant’s rights to purchase shares under all other employee stock purchase plans of a Participating Company intended to meet the requirements of Section 423, exceeds $25,000 in Fair Market Value (or such other limit, if any, as providedmay be imposed by the Code) for each calendar year in Section 11, or may decrease or increasewhich such Purchase Right is outstanding at any time. For purposes of the rate or amountpreceding sentence, the Fair Market Value of his or her payroll deductionsshares purchased during a given Offering Period shall be determined as of the Offering Date for such Offering Period (within the limitations of Section 6(a) above) by completing and filing with the Company a new enrollment agreement authorizing a change in the rate or amount of payroll deductions; provided, that a Participant may not change the rate or amount of his or her payroll deductions more than once in any Exercise Period. The changelimitation described in rate or amountthis Section shall be effective with the first full payroll period following ten (10) business days after the Company’s receipt of the new enrollment agreement.

(c) Notwithstanding the foregoing, to the extent necessary to complyapplied in conformance with Section 423(b)(8) of the Code and the regulations thereunder.

9.            Purchase Price.

The Purchase Price at which each share of Stock may be acquired in an Offering Period upon the exercise of all or any portion of a Purchase Right shall be established by the Committee;provided,however, that the Purchase Price on each Purchase Date shall not be less thaneighty-five percent (85%) of the lesser of (a) the Fair Market Value of a share of Stock on the Offering Date of the Offering Period or (b) the Fair Market Value of a share of Stock on the Purchase Date.

10.            Accumulation of Purchase Price through Payroll Deduction.

Except as provided in Section 3(b) hereof,11(a)(ii) with respect to aNon-United States Offering, shares of Stock acquired pursuant to the exercise of all or any portion of a Purchase Right may be paid for only by means of payroll deductions from the Participant’s Compensation accumulated for the Offering Period for which such Purchase Right was granted, subject to the following:

(a)        Amount of Payroll Deductions. Except as otherwise provided herein, the amount to be deducted under the Plan from a Participant’s Compensation on each pay day shall be determined by the Participant’s Subscription Agreement in accordance with procedures established by the Administrator. ForNon-United States Offerings, a Participant’s payroll deduction from his or her Compensation will be in the applicable local currency and will be converted into United States dollars based upon the exchange rate as determined by the Company consistent with its accounting practices on the Purchase Date. The Subscription Agreement shall set forth the percentage or dollar amount of the Participant’s Compensation to be deducted on anafter-tax basis on each pay day in whole percentages or dollars equivalent to not less than one percent (1%) (except as a result of an election pursuant to Section 10(c) to stop payroll deductions effective following the first pay day during an Offering) or more than fifteen percent (15%). Notwithstanding the foregoing, a Participant’s payroll deductions for each calendar year may be decreased to 0% at suchnot exceed the limitations in Section 8. The Committee may change the foregoing limits on payroll deductions effective as of any Offering Date. Participants may change the payroll deduction election one time during any Exercisea Purchase Period, which is scheduledunless otherwise determined by the Committee.

(b)        Commencement of Payroll Deductions. Payroll deductions shall commence on the first applicable pay day for the Offering Period and shall continue to the end duringof the current calendar year thatOffering Period unless sooner cancelled or terminated as provided herein.

(c)        Election Stop Payroll Deductions. During an Offering Period, a Participant may elect to stop deductions from his or her Compensation by delivering to the aggregate of all payroll deductions accumulatedCompany office or representative designated by the Company (including the Administrator) a cancellation notice in accordance with the procedures prescribed by, and in a form acceptable to, the Company. To be effective with respect to an upcoming Purchase Date, such Exercise Period and any other Exercise Period ending withincancellation notice must be delivered not later than ten (10) Business Days prior to such Purchase Date. Upon such cancellation, the samebalance in the Participant’s Plan account will be returned to the Participant, without interest, as soon as administratively practicable thereafter.

(d)        Administrative Suspension of Payroll Deductions. The Company may, in its discretion, suspend a Participant’s payroll deductions under the Plan as the Company deems advisable to avoid accumulating payroll deductions in excess of the amount that could reasonably be anticipated to purchase the maximum number of shares of Stock permitted (i) under the Participant’s Purchase Right, or (ii) during a calendar year are equalunder the limit set forth in Section 8(b). Unless the Participant has either withdrawn from the Plan as provided in Section 12(a) or has ceased to the product of $25,000 multiplied by the Applicable Percentage for the calendar year. Payrollbe an Eligible Employee, suspended payroll deductions shall recommencebe resumed at the rate providedspecified in the Participant’s enrollment agreementthen effective Subscription Agreement either (A) at the beginning of the following Exercisenext Offering Period which is scheduled to endif the reason for suspension was clause (i) in the followingpreceding sentence, or (B) at the beginning of the next Offering Period having a first Purchase Date that falls within the subsequent calendar year unless terminated byif the Participant as provided in Section 11.

(d) Notwithstanding anything to the contraryreason for suspension was clause (ii) in the foregoing, but subjectpreceding sentence.

(e)        Participant Accounts. Individual bookkeeping accounts shall be maintained for each Participant. All payroll deductions from a Participant’s Compensation (and other amounts received from anon-United States Participant pursuant to the limitations set forth in Section 3(b), the Committee may permit Participants to make after-tax contributions to the Plan at such times and subject11(a)(ii)) shall be credited to such terms and conditions as the Committee may in its discretion determine. All such additional contributions shall be made in a manner consistent with the provisions of Section 423 of the Code or any successor thereto, and shall be held in Participants’ accounts and applied to the purchase of shares of Common Stock pursuant to options granted under thisParticipant’s Plan in the same manner as payroll deductions contributed to the Plan as provided above.

(e) All Plan Contributions made for a Participant shall be deposited in the Company’s general corporate account and shall be credited todeposited with the Participant’s account undergeneral funds of the Plan. No interest shall accrue or be credited with respect to a Participant’s Plan Contributions.Company unless otherwise required by applicable law. All Plan Contributionssuch amounts received or held by the Company may be used by the Company for any corporate purpose, and the Companypurpose.

(f)        No Interest Paid. Interest shall not be obligatedpaid on sums deducted from a Participant’s Compensation pursuant to segregatethe Plan or otherwise set apartcredited to the Participant’s Plan account unless otherwise required by applicable law.

11.            Purchase of Shares.

(a)        Exercise of Purchase Right.

  (i)        Generally. Except as provided in Section 11(a)(ii), on each Purchase Date of an Offering Period, each Participant who has not withdrawn from the Plan and whose participation in the Offering has not otherwise terminated before such Purchase Date shall automatically acquire pursuant to the exercise of the Participant’s Purchase Right the number of whole shares of Stock determined by dividing (a) the total amount of the Participant’s payroll deductions accumulated in the Participant’s Plan Contributions from any other corporate funds.account for the Offering Period and not previously applied toward the purchase of Stock by (b) the Purchase Price. However, in no event shall the number of shares purchased by the Participant during an Offering Period exceed the number of shares subject to the Participant’s Purchase Right. No shares of Stock shall be purchased on a Purchase Date on behalf of a Participant whose participation in the Offering or the Plan has terminated before such Purchase Date.

7.  (ii)        GrantPurchase byNon-United States Participants for Whom Payroll Deductions Are Prohibited by Applicable Law. Notwithstanding Section 11(a)(i), where payroll deductions on behalf of Option.

(a) OnParticipants who are citizens or residents of countries other than the United States (without regard to whether they are also citizens of the United States or resident aliens) are prohibited by applicable law, the Committee may establish a Participant’s Entry Date,separate Offering (a“Non-United States Offering”) covering all Eligible Employees of one or more Participating Companies subject to such prohibition on payroll deductions. TheNon-United States Offering shall provide another method for payment of the limitations set forth in Sections 3(b)Purchase Price with such terms and 12(a), the Participantconditions as shall be granted an optionadministratively convenient and comply with applicable law. On each Purchase Date of the Offering Period applicable to purchase onaNon-United States Offering, each subsequent ExerciseParticipant who has not withdrawn from the Plan and whose participation in such Offering Period has not otherwise terminated before such Purchase Date shall automatically acquire pursuant to the exercise of the Participant’s Purchase Right a number of whole shares of Stock determined in accordance with Section 11(a)(i) to the extent of the total amount of the Participant’s Plan account balance accumulated during the Offering Period in whichaccordance with the method established by the Committee and not previously applied toward the purchase of Stock. However, in no event shall the number of shares purchased by a Participant during such Entry Date occurs (atOffering Period exceed the Exercisenumber of shares subject to the Participant’s Purchase Right. The Company shall refund to a Participant in aNon-United States Offering in accordance with Section 11(d) any excess Purchase Price determined as provided in Section 8 below) up to apayment received from such Participant.

(b)        Pro Rata Allocation of Shares. If the number of shares of Common Stock determinedwhich might be purchased by dividing such Participant’s Plan Contributions accumulated prior to such Exerciseall Participants on a Purchase Date and retained inexceeds the Participant’s account as of such Exercise Date by the Exercise Price; provided, that the maximum number of shares an Employee may purchase during any Exercise Period shall be Six Hundred Fifty (650) shares. The Fair Market Value of a share of Common Stock shall be determined as providedavailable in Section 7(b).

(b) The Fair Market Value of a share of Common Stock on a given date shall be determined by the Committee in its discretion; provided, that if there is a public market for the Common Stock, the Fair Market Value per share shall be either (i) the closing price of the Common Stock on such date (or, in the event that the Common Stock is not traded on such date, on the immediately preceding trading date), as reported by the National Association of Securities Dealers Automated Quotation (Nasdaq) National Market System, (ii) if such price is not reported, the average of the bid and asked prices for the Common Stock on such date (or, in the event that the Common Stock is not traded on such date, on the immediately preceding trading date), as reported by Nasdaq, (iii) in the event the Common Stock is listed on a stock exchange, the closing price of the Common Stock on such exchange on such date (or, in the event that the Common Stock is not traded on such date, on the immediately preceding trading date), as reported in The Wall Street Journal, or (iv) if no such quotations are available for a date within a reasonable time prior to the valuation date, the value of the Common Stock as determined by the Committee using any reasonable means.

8.Exercise Price. The Exercise Price per share of Common Stock offered to each Participant in a given Offering Period shall be the lower of: (i) the Applicable Percentage of the greater of (A) the Fair Market Value of a share of Common Stock on the Offering Date or (B) the Fair Market Value of a share of Common Stock on the Entry Date on which the Employee elects to become a Participant within the Offering Period or (ii) the Applicable Percentage of the Fair Market Value of a share of Common Stock on the Exercise Date. The Applicable Percentage with respect to each Offering Period shall be 85%, unless and until such Applicable Percentage is increased by the Committee, in its sole discretion, provided that any such increase in the Applicable Percentage with respect to a given Offering Period must be established not less than fifteen (15) days prior to the Offering Date thereof.

9.Exercise of Options. Unless the Participant withdraws from the Plan as provided in Section 11,4(a) or the Participant’s option for the purchasemaximum aggregate number of shares willof Stock that may be exercised automaticallypurchased on each Exercisesuch Purchase Date pursuant to a limit established by the Committee pursuant to Section 8(a), the Company shall make a pro rata allocation of the shares available in as uniform a manner as practicable and as the maximum number of full shares subjectCompany determines to be equitable. Any fractional share resulting from such optionpro rata allocation to any Participant shall be purchased for the Participant at the applicable Exercise Price with the accumulated Plan Contributions then crediteddisregarded.

(c)        Delivery of Title to the Participant’s account under the Plan. During a Participant’s lifetime, a Participant’s optionShares. Subject to purchase shares hereunder is exercisable only by the Participant.

10.Delivery. As promptlyany governing rules or regulations, as soon as practicable after each ExercisePurchase Date, the Company shall arrange for the deliveryissue or cause to each Participant (or the Participant’s beneficiary), as appropriate,be issued to or to a custodial account for the benefit of each Participant (or the Participant’s beneficiary) as appropriate, of a certificate representing the shares purchased upon exercise of Stock acquired by the Participant on such Participant’s option. Any amount remainingPurchase Date by means of one or more of the following: (i) by delivering to the creditParticipant evidence of book entry shares of Stock credited to the account of the Participant, (ii) by depositing such shares of Stock for the benefit of the Participant with any broker with which the Participant has an account relationship, or (iii) by delivering such shares of Stock to the Participant in certificate form.

(d)        Return of Plan Account Balance. Any cash balance remaining in a Participant’s Plan account after an Offering Period (other than an amount which is insufficient to purchase a full share of common stock)following any Purchase Date shall be returnedrefunded to the Participant as soon as administratively practicable after such Purchase Date. However, if the cash balance to be returned to a Participant pursuant to the preceding sentence is less than the amount that would have been necessary to purchase an additional whole share of Stock on such Purchase Date, the Company may retain the cash balance in the Participant’s Plan account to be applied toward the purchase of shares of Stock in the subsequent Purchase Period or Offering Period.

(e)        Tax Withholding. At the time a Participant’s Purchase Right is exercised, in whole or in part, or at the time a Participant disposes of some or all of the shares of Stock he or she acquires under the Plan, the Participant shall make adequate provision for the federal, state, local and foreign taxes (including social insurance), if any, required to be withheld by any Participating Company upon exercise of the Purchase Right or upon such disposition of shares, respectively. A Participating Company may, but shall not be obligated to, withhold from the Participant’s compensation the amount necessary to meet such withholding obligations.

(f)        Expiration of Purchase Right. Any portion of a Participant’s Purchase Right remaining unexercised after the end of the Offering Period to which the Purchase Right relates shall expire immediately upon the end of the Offering Period.

11.(g)        Withdrawal; TerminationProvision of EmploymentReports and Stockholder Information to Participants. Each Participant who has exercised all or part of his or her Purchase Right shall receive, as soon as practicable after the Purchase Date, a report of such Participant’s Plan account setting forth the total amount credited to his or her Plan account prior to such exercise, the number of shares of Stock purchased, the Purchase Price for such shares, the date of purchase and the cash balance, if any, remaining immediately after such purchase that is to be refunded or retained in the Participant’s Plan account pursuant to Section 11(d). The report required by this Section may be delivered in such form and by such means, including by electronic transmission, as the Company may determine. In addition, each Participant shall be provided information concerning the Company equivalent to that information provided generally to the Company’s common stockholders.

12.            Withdrawal from Plan.

(a)Voluntary Withdrawal from the Plan. A Participant may withdraw from the Plan by signing and delivering to the Company office or representative designated by the Company (including the Administrator) a written or electronic notice of withdrawal on a form provided by the Company for this purpose. Such withdrawal may be elected at any time by giving written noticeprior to the Company. Allend of an Offering Period; provided, however, that if a Participant withdraws from the Plan after a Purchase Date, the withdrawal shall not affect shares of Stock acquired by the Participant on such Purchase Date. A Participant who voluntarily withdraws from the Plan

is prohibited from resuming participation in the Plan in the same Offering from which he or she withdrew, but may participate in any subsequent Offering by again satisfying the requirements of Sections 5 and 7(a). The Company may impose, from time to time, a requirement that the notice of withdrawal from the Plan be on file with the Company office or representative designated by the Company for a reasonable period prior to the effectiveness of the Participant’s withdrawal.

(b)        Return of Plan Contributions creditedAccount Balance. Upon a Participant’s voluntary withdrawal from the Plan pursuant to Section 12(a), the Participant’s accumulated Plan account andbalance which has not yet invested in Commonbeen applied toward the purchase of shares of Stock willshall be paidrefunded to the Participant as soon as administratively practicable after receiptthe withdrawal, without the payment of any interest (unless otherwise required by applicable law), and the Participant’s notice of withdrawal, the Participant’s option to purchase shares pursuant tointerest in the Plan automatically willand the Offering shall terminate. Such amounts to be terminated, and no further payroll deductions for the purchase of shares will be made for the Participant’s account. Payroll deductions will not resume on behalf of a Participant who has withdrawn from the Plan (a “Former Participant”) unless the Former Participant enrolls in a subsequent Offering Periodrefunded in accordance with this Section 5(a).may not be applied to any other Offering under the Plan.

(b) 13.            Termination of Employment or Eligibility.

Upon terminationa Participant’s ceasing, prior to a Purchase Date, to be an Employee of the Participant’s Continuous Status as an Employee prior to any Exercise DateParticipating Company Group for any reason, including retirement, disability or death, or upon the failure of a Participant to remain an Eligible Employee, the Participant’s participation in the Plan Contributions credited toshall terminate immediately. In such event, the Participant’s Plan account andbalance which has not yet invested in Commonbeen applied toward the purchase of shares of Stock willshall, as soon as practicable, be returned to the Participant or, in the case of the Participant’s death, to the Participant’s beneficiary as determined pursuant todesignated in accordance with Section 14,20, if any, or legal representative, and all of the Participant’s option to purchase shares under the Plan will automatically terminate.

(c) A Participant’s withdrawal from an Offering Period will not have any effect upon the Participant’s eligibility to participate in succeeding Offering Periods or in any similar plan which may hereafter be adopted by the Company.

12.Stock.

(a) Subject to adjustment as provided in Section 17, the maximum number of shares of the Company’s Common Stock that shall be made available for salerights under the Plan shall be equal to the sum of (i) any shares available for issuance under the Company’s 2001 Employee Stock Purchase Plan, as amended (the “Prior Plan”) on the First Offering Date (and such shares shall no longer be available for issuance under the Prior Plan) but not to exceed 650,000 shares, (ii) an automatic annual increase on the first day of each of the Company’s fiscal years beginning in 2012 and ending in 2019 equal to the lesser of (A) Five Hundred Thousand (500,000) shares, (B) 1% of all shares of Common Stock outstanding on the last day of the immediately preceding fiscal year, or (C) a lesser amount determined by the Board, and (iii) 100,000 shares. The cumulative shares authorized under the Plan shall be less than 10% of shares outstanding from time to time, unless a greater number of shares is authorized by stockholders. Shares of Common Stock subject to the Plan may be newly issued shares or shares reacquired in private transactions or open market purchases. If and to the extent that any right to purchase reserved sharesterminate. Interest shall not be exercisedpaid on sums returned pursuant to this Section 13 unless otherwise required by anyapplicable law. A Participant for any reason or if such right to purchase shall terminate as provided herein, shares that have notwhose participation has been so purchased hereunder shallterminated may again become available for the purpose of the Plan unless the Plan shall have been terminated, but all shares sold under the Plan, regardless of source, shall be counted against the limitation set forth above.

(b) A Participant will have no interest or voting righteligible to participate in shares covered by his option until such option has been exercised.

(c) Shares to be delivered to a Participant under the Plan will be registered in the name of the Participant or in the name of the Participant and his or her spouse, as requested by the Participant.

13.Administration.

(a) The Plan shall be administered by the Committee. The Committee shall have the authority to interpret the Plan, to prescribe, amend and rescind rules and regulations relating to the Plan, and to make all other determinations necessary or advisable for the administration of the Plan. The administration, interpretation, or application of the Plan by satisfying the Committee shall be final, conclusive and binding upon all persons.

(b) Notwithstanding the provisions of Subsection (a) of this Section 13, in the event that Rule16b-3 promulgated under the Exchange Act or any successor provision thereto (“Rule 16b-3”) provides specific requirements for the administrators of plans of this type, the Plan shall only be administered by such body and in such a manner as shall comply with the applicable requirements of Rule 16b-3. Unless permitted by Rule 16b-3, no discretion concerning decisions regarding the Plan shall be afforded to any person that is not “disinterested” as that term is usedSections 5 and 7(a).

14.            Effect of Change in Rule 16b-3.Control on Purchase Rights.

14.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 the Participant’s death subsequent to an Exercise Date on which the Participant’s option hereunder is exercised but prior to delivery to the 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 the Participant’s death prior to the exercise of the option.

(b) A Participant’s beneficiary designation may be changed by the Participant at any time by written notice. In the event of a Change in Control, the deathBoard (or the Committee) may, provide for any of, or a Participant and incombination of any of, the absence of a beneficiary validly designated underfollowing: (a) each Purchase Right shall be assumed or an equivalent purchase right shall be substituted by the Plan who is living at the timesuccessor entity or parent or subsidiary of such Participant’s death,successor entity, (b) a date selected by the CompanyBoard (or the Committee) on or before the date of consummation of such Change in Control shall deliverbe treated as a Purchase Date and all outstanding Purchase Rights shall be exercised on such shares and/date, (c) all outstanding Purchase Rights shall terminate and the accumulated payroll deductions will be refunded to each Participant upon or cashimmediately prior to the executorChange in Control, or administrator(d) outstanding Purchase Rights shall continue unchanged.

15.            Nontransferability of the estate of the Participant,Purchase Rights.

Neither payroll deductions 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.

15.Transferability. Neither Plan Contributionsamounts credited to a Participant’s Plan account nor any rights to exercise any option or receive shares of Common Stock under the Plana Participant’s Purchase Right may be assigned, transferred, pledged or otherwise disposed of in any way (othermanner other than as provided by the Plan or by will or the laws of descent and distribution, ordistribution. (A beneficiary designation pursuant to Section 20 shall not be treated as provided in Section 14).a disposition for this purpose.) Any such attempted assignment, transfer, pledge or other distributiondisposition shall be without effect, except that the Company may treat such act as an election to withdraw funds in accordance with Section 11.

16.Participant Accounts. Individual accounts will be maintained for each Participant in the Plan to account for the balance of his Plan Contributions and options issued and shares purchased under the Plan. Statements of account will be given to Participantssemi-annually in due course following each Exercise Date, which statements will set forth the amounts of payroll deductions, the per share purchase price, the number of shares purchased and the remaining cash balance, if any.

17.Adjustments Upon Changes in Capitalization; Corporate Transactions.

(a) If the outstanding shares of Common Stock are increased or decreased, or are changed into or are exchanged for a different number or kind of shares, as a result of one or more reorganizations, restructurings, recapitalizations, reclassifications, stock splits, reverse stock splits, stock dividends stock repurchases, or the like, equitable and proportionate adjustments shall be made by the Committee in the number and/or kind of shares, and theper-share option price thereof, which may be issued in the aggregate and to any Participant upon exercise of options granted under the Plan.

(b) In the event of the proposed dissolution or liquidation of the Company, the Offering Period will terminate immediately prior to the consummation of such proposed action, unless otherwise provided by the Committee. In the event of a proposed sale of all or substantially all of the Company’s assets, or the merger of the Company with or into another corporation (each, a “Sale Transaction”), each option under the Plan shall be assumed or an equivalent option shall be substituted by such successor corporation or a parent or subsidiary of such successor corporation, unless the Committee determines, in the exercise of its sole discretion and in lieu of such assumption or substitution, to shorten the Exercise Period then in progress by setting a new Exercise Date (the “New Exercise Date”). If the Committee shortens the Exercise Period then in progress in lieu of assumption or substitution in the event of a Sale Transaction, the Committee shall notify each Participant in writing, at least ten (10) days prior to the New Exercise Date, that the exercise date for such Participant’s option has been changed to the New Exercise Date and that such Participant’s option will be exercised automatically on the New Exercise Date, unless prior to such date the Participant has withdrawn from the Plan as provided in Section 11. For purposes12(a). A Purchase Right shall be exercisable during the lifetime of this Section 17(b), an option grantedthe Participant only by the Participant.

16.            Compliance with Securities Law.

The issuance of shares under the Plan shall be subject to compliance with all applicable requirements of federal, state and foreign law with respect to such securities. A Purchase Right may not be exercised if the issuance of shares upon such exercise would constitute a violation of any applicable federal, state or foreign securities laws or other law or regulations or the requirements of any securities exchange or market system upon which the Stock may then be listed. In addition, no Purchase Right may be exercised unless (a) a registration statement under the Securities Act shall at the time of exercise of the Purchase Right be in effect with respect to the shares issuable upon exercise of the Purchase Right, or (b) in the opinion of legal counsel to the Company, the shares issuable upon exercise of the Purchase Right may be issued in accordance with the terms of an applicable exemption from the registration requirements of the Securities Act. The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance and sale of any shares under the Plan shall relieve the Company of any liability in respect of the failure to issue or sell such shares as to which such requisite authority shall not have been assumed if, following the Sale Transaction, the option confers the right to purchase, for each share of option stock subjectobtained. As a condition to the option immediatelyexercise of a Purchase Right, the Company may require the Participant to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation, and to make any representation or warranty with respect thereto as may be requested by the Company.

17.            Rights as a Stockholder and Employee.

A Participant shall have no rights as a stockholder by virtue of the Participant’s participation in the Plan until the date of the issuance of the shares of Stock purchased pursuant to the exercise of the Participant’s Purchase Right (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). No adjustment shall be made

for dividends, distributions or other rights for which the record date is prior to the Sale Transaction,date such shares are issued, except as provided in Section 4(b). Nothing herein shall confer upon a Participant any right to continue in the consideration (whether stock,employ of the Participating Company Group or interfere in any way with any right of the Participating Company Group to terminate the Participant’s employment at any time.

18.            Notification of Disposition of Shares.

The Company may require the Participant to give the Company prompt notice of any disposition of shares of Stock acquired by exercise of a Purchase Right. The Company may require that until such time as a Participant disposes of shares of Stock acquired upon exercise of a Purchase Right, the Participant shall hold all such shares in the Participant’s name until the later of two years after the date of grant of such Purchase Right or one year after the date of exercise of such Purchase Right. The Company may direct that the certificates evidencing shares of Stock acquired by exercise of a Purchase Right refer to such requirement to give prompt notice of disposition.

19.            Legends.

The Company may at any time place legends or other identifying symbols referencing any applicable federal, state or foreign securities law restrictions or any provision convenient in the administration of the Plan on some or all of the certificates representing shares of Stock issued under the Plan. The Participant shall, at the request of the Company, promptly present to the Company any and all certificates representing shares acquired pursuant to a Purchase Right in the possession of the Participant in order to carry out the provisions of this Section. Unless otherwise specified by the Company, legends placed on such certificates may include, but shall not be limited to the following:

“THE SHARES EVIDENCED BY THIS CERTIFICATE WERE ISSUED BY THE CORPORATION TO THE REGISTERED HOLDER UPON THE PURCHASE OF SHARES UNDER AN EMPLOYEE STOCK PURCHASE PLAN AS DEFINED IN SECTION 423 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. THE TRANSFER AGENT FOR THE SHARES EVIDENCED HEREBY SHALL NOTIFY THE CORPORATION IMMEDIATELY OF ANY TRANSFER OF THE SHARES BY THE REGISTERED HOLDER HEREOF. THE REGISTERED HOLDER SHALL HOLD ALL SHARES PURCHASED UNDER THE PLAN IN THE REGISTERED HOLDER’S NAME (AND NOT IN THE NAME OF ANY NOMINEE).”

20.            Designation of Beneficiary.

(a)        Designation Procedure. Subject to local laws and procedures, a Participant may file a written designation of a beneficiary who is to receive (i) shares and cash, if any, from the Participant’s Plan account if the Participant dies subsequent to a Purchase Date but prior to delivery to the Participant of such shares and cash, or other securities or property) received in(ii) cash, if any, from the Sale Transaction by holders of Common Stock for each share of Common Stock held onParticipant’s Plan account if the effective dateParticipant dies prior to the exercise of the Sale Transaction (and ifParticipant’s Purchase Right. If a married Participant designates a beneficiary other than the Participant’s spouse, the effectiveness of such holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares of Common Stock); provided, that if the consideration received in the Sale Transaction was not solely common stock of the successor corporation or its parent (as defined in Section 424(e) of the Code), the Committeedesignation may withbe subject to the consent of the successor corporation and theParticipant’s spouse. A Participant provide for the consideration to be received upon exercise of the option to be solely common stock of the successor corporationmay change his or its parent equal in fair market value to the per share consideration received by the holders of Common Stock in the Sale Transaction.

(c) In all cases, the Committee shall have sole discretion to exercise any of the powers and authority provided under this Section 17, and the Committee’s actions hereunder shall be final and binding on all Participants. No fractional shares of stock shall be issued under the Plan pursuant to any adjustment authorized under the provisions of this Section 17.

18.Amendment of the Plan. The Board or the Committee mayher beneficiary designation at any time or fromby written notice to the Company.

(b)        Absence of Beneficiary Designation. If a Participant dies without an effective designation pursuant to Section 20(a) of a beneficiary who is living at the time to time, amend the Plan in any respect; provided, that (i) no such amendment may make any change in any option theretofore granted which adversely affects the rights of any Participant and (ii) the Plan may not be amended in any way that will cause rights issued under the Plan to fail to meet the requirements for employee stock purchase plans as defined in Section 423 of the Code or any successor thereto. To the extent necessary to comply with Rule16b-3 under the Exchange Act, Section 423 of the Code, or any other applicable law or regulation),Participant’s death, the Company shall obtain stockholder approval ofdeliver any such amendment.shares or cash credited to the Participant’s Plan account to the Participant’s legal representative or as otherwise required by applicable law.

19.21.            Termination of the PlanNotices.. The Plan and all rights of Employees hereunder shall terminate on the earliest of:

(a) the Exercise Date that Participants become entitled to purchase a number of shares greater than the number of reserved shares remaining available for purchase under the Plan; or

(b) such date as is determined by the Board in its discretion.

In the event that the Plan terminates under circumstances described in Section 19(a) above, reserved shares remaining as of the termination date shall be sold to Participants on a pro rata basis.

20.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 specified by the Company at the location, or by the person, designated by the Company for the receipt thereof.

21.22.            Effective Date. The effective date of the Plan prior to its amendment and restatement was the First Offering Date. The Board shall submit the Plan to the stockholders of the Company for approval within twelve months after the date the Plan is adopted by the Board, and the Plan (as amended and restated) shall become effective upon such stockholder approval.

22.Conditions Upon Issuance of SharesGoverning law.

(a) The Plan the grantwill be governed by and exercise of options to purchase shares under the Plan, and the Company’s obligation to sell and deliver shares upon the exercise of options to purchase shares shall be subject to compliance with all applicable federal, state and foreign laws, rules and regulations and the requirements of any stock exchange on which the shares may then be listed.

(b) The Company may make such provisions as it deems appropriate for withholding by the Company pursuant to federal or state tax laws of such amounts as the Company determines it is required to withhold in connectioninterpreted consistently with the purchase or sale by a Participant of any Common Stock acquired pursuant to the Plan. The Company may require a Participant to satisfy any relevant tax requirements before authorizing any issuance of Common Stock to such Participant.

23.Expenses of the Plan. All costs and expenses incurred in administering the Plan shall be paid by the Company, except that any stamp duties or transfer taxes applicable to participation in the Plan may be charged to the account of such Participant by the Company.

24.No Employment Rights. The Plan does not, directly or indirectly, create any right for the benefit of any employee or class of employees to purchase any shares under the Plan, or create in any employee or class of employees any right with respect to continuation of employment by the Company, and it shall not be deemed to interfere in any way with the Company’s right to terminate, or otherwise modify, an employee’s employment at any time.

25.Applicable Law. The laws of the State of Delaware, except as may be necessary to comply with applicable requirements of federal law.

23.            Amendment and Termination of the Plan.

The Committee may at any time amend, suspend or terminate the Plan, except that (a) no such amendment, suspension or termination shall govern all matter relating to thisaffect Purchase Rights previously granted under the Plan unless expressly provided by the Committee, and (b) no such amendment, suspension or termination may materially adversely affect a Purchase Right previously granted under the Plan without the consent of the Participant, except to the extent (if any) supersededpermitted by the laws of the United States.

26.Additional Restrictions of Rule16b-3. The terms and conditions of options granted hereunder to, and the purchase of shares by, persons subject to Section 16 of the Exchange Act shall comply with the applicable provisions of Rule 16b-3. This Plan shall be deemed to contain, and such options shall contain, and the shares issued upon exercise thereof shall be subject to, such additional conditions and restrictionsor as may be required by Rule16b-3necessary to qualify for the maximum exemption from Section 16 of the Exchange Act with respect to Plan transactions.

LOGOqualify the Plan as an employee stock purchase plan pursuant to Section 423 or to comply with any applicable law, regulation or rule. In addition, an amendment to the Plan must be approved by the stockholders of the Company within twelve (12) months of the adoption of such amendment if such amendment would authorize the sale of more shares than are then authorized for issuance under the Plan or would change the definition of the corporations that may be designated by the Committee as Participating Companies. Notwithstanding the foregoing, in the event that the Committee determines that continuation of the Plan or an Offering would result in unfavorable financial accounting consequences to the Company, the Committee may, in its discretion and without the consent of any Participant, including with respect to an Offering Period then in progress: (i) terminate the Plan or any Offering Period, (ii) accelerate the Purchase Date of any Offering Period, (iii) reduce the discount or the method of determining the Purchase Price in any Offering Period (e.g., by determining the Purchase Price solely on the basis of the Fair Market Value on the Purchase Date), (iv) reduce the maximum number of shares of Stock that may be purchased in any Offering Period, or (v) take any combination of the foregoing actions.

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VOTE BY INTERNET Before The Meeting - Meeting—Go to www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery SYNAPTICS INCORPORATED of information up until 11:59 P.M. Eastern Time the day before thecut-off date 1251 MCKAY DRIVE or meeting date. Have your proxy card in hand when you access the web site SAN JOSE, CA 95131 and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting—Go to www.virtualshareholdermeeting.com/syna2018syna2019 You may attend the Meeting via the Internet and vote during the Meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BYPHONE—1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before thecut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: E50826-P12387 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLYSYNAPTICS INCORPORATED 1251 MCKAY DRIVE SAN JOSE, CA 95131 E84281-P28199 SYNAPTICS INCORPORATED The Board of Directors recommends you vote FOR the following: 1. Election of Directors Nominees: For Against Abstain Nominees: ! ! ! 1a. Jeffrey D. BuchananKiva A. Allgood ! ! ! 1b. Keith B. GeeslinMichael E. Hurlston Against For Against Abstain 1c. James L. Whims 4. Proposal to approve an amendment to the Amended and Restated 2010 Incentive Compensation Plan, which (i) provides for an increase of 1,700,000 shares of the The Board of Directors recommends you vote FOR Company’s common stock authorized for issuance proposals 2, 3, 4 and 5. thereunder, and (ii) expressly prohibits the payout of! ! ! 2. Proposal to approve, on anon-binding advisory basis, dividends and dividend equivalents on equity awards the compensation of the Company’s Named Executive until the underlying award has been earned or becomes Officers for fiscal 20182019(“say-on-pay”). vested. 5. Proposal to approve an amendment to the 2010 Employee Stock Purchase Plan, which provides for an increase! ! ! 3. Proposal to ratify the appointment of KPMG LLP, an of 100,000 shares of the Company’s common stock independent registered public accounting firm, as the authorized for issuance thereunder. Company’s independent auditor for the fiscal year ending June 27, 2020. ! ! ! 4. Proposal to approve the Company’s 2019 Equity and Incentive Compensation Plan, which will replace the Company’s Amended and Restated 2010 Incentive Compensation Plan for all new awards. ! ! ! 5. Proposal to approve the Company’s 2019 Employee Stock Purchase Plan, which will replace the Company’s Amended and Restated 2010 Employee Stock Purchase Plan for all new awards. NOTE: Such other business as may properly come before the June 29, 2019. meeting or any adjournment or postponement thereof. ! For address changes and/or comments, please check this box and write them on the back where indicated. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date

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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com. E50827-P12387E84282-P28199 SYNAPTICS INCORPORATED Annual Meeting of Stockholders October 30, 201829, 2019 9:00 AM, Pacific Time This proxy is solicited by the Board of Directors The stockholder(s) hereby appoint(s) Francis F. LeeKermit Nolan and Richard A. Bergman,John McFarland, or either of them, as proxies, each with the power to appoint his substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Common Stock of SYNAPTICS INCORPORATED that the stockholder(s) is/are entitled to vote at the AnnualtheAnnual Meeting of Stockholders to be held at 9:00 AM, Pacific Time on October 30, 2018,29, 2019, via live interactive webcast on the Internet at www.virtualshareholdermeeting.com/syna2018,syna2019, and any adjournment or postponement thereof. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors’ recommendations. Address Changes/Comments: (If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.) Continued and to be signed on reverse side