(1) | Except as otherwise indicated, each person named in the tablestock; (ii) each director and director nominee and each named executive officer named in the Summary Compensation Table; and (iii) the current directors and executive officers of the Company as a group. Except as indicated below, all shares of common stock are owned directly, and the indicated person or entity has sole voting and investment power with respect to all of the shares of common stock beneficially owned by such person or entity other than restricted stock, as to which a person has sole voting power but no dispositive power. In preparing this table, the Company has relied upon information supplied by its officers, directors and certain stockholders, in addition to information contained in filings with the SEC.
| | | | | Name of Beneficial Owner | | Number of
Shares of Common Stock Beneficially Owned(1) | | Percentage of
Outstanding Shares of Common Stock(1) | More than 5% Stockholders: | FMR, LLC(2) | | 5,182,890 | | 13.3% | Ameriprise Financial, lnc.(3) | | 4,487,454 | | 11.5% | Blackrock, Inc.(4) | | 4,097,778 | | 10.5% | The Vanguard Group(5) | | 4,016,809 | | 10.3% | Directors and NEOs: | | | | | Michael Hurlston(6) | | 156,705 | | * | Dean Butler | | 4,795 | | * | Saleel Awsare | | 17,106 | | * | John McFarland | | 5,382 | | * | Nelson Chan | | 33,594 | | * | Kiva Allgood | | 7,410 | | * | Jeffrey Buchanan(7) | | 14,734 | | * | Keith Geeslin(8) | | 37,849 | | * | Susan Hardman | | 3,339 | | * | Patricia Kummrow(9) | | 0 | | * | James Whims(10) | | 27,815 | | * | All Current Directors and Executive Officers as a Group (12):(11) | | 312,650 | | * |
| * | Represents less than 1.0% of the outstanding shares of our common stock. |
| | | | | | SYNAPTICS INCORPORATED | | PROXY STATEMENT | | 79 |
| (1) | The number of shares of 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.by a stockholder is based on SEC regulations regarding the beneficial ownership of securities. The numbers and percentages shown include thenumber of shares of common stock actuallybeneficially owned asby a person includes any stock options of such person that are vested or will vest within 60 days of August 17, 2018, and the20, 2021. The percentage of outstanding shares of common stock that the identifiedbeneficially owned by a 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 calculatedis based on 35,362,49639,098,526 shares of common stock outstanding onas of August 17, 2018. In calculating20, 2021. Unless otherwise indicated, the percentage of ownership, alloutstanding shares of common stock beneficially owned by a person also assumes that the identified person or group had the rightno options to acquire shares of common stock held by other persons are exercised within 60 days of August 17, 2018, 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.20, 2021.
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(3) | Includes 325,285 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.
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(4) | Includes 52,603 shares issuable upon exercise of vested stock options.
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(5) | Includes 54,155 shares issuable upon exercise of vested stock options.
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(6) | Includes 10,215 shares issuable upon exercise of vested stock options.
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(7) | Includes 42,852 shares issuable upon exercise of vested stock options.
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(8) | Includes 18,102 shares issuable upon exercise of vested stock options.
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(9) | Includes 20,921 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.
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(10) | Includes 26,274 shares held by the EF Lee Family 2012 Irrevocable Trust and 18,102 shares issuable upon exercise of vested stock options.
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(11) | 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.
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(12) | Includes 43,130 shares issuable upon exercise of vested stock options.
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(13) | Includes 24,102 shares issuable upon exercise of vested stock options.
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(14) | Includes 70,086 shares issuable upon exercise of vested stock options.
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(15) | Includes 981,616 shares issuable upon exercise of vested stock options.
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(16)(2) | The information is as reported on Amendment No. 61 to Schedule 13G/A as filed on February 14, 2018.8, 2021. FMR, LLC (“FMR”) has sole power to direct the disposition of 5,182,890 shares and sole power to vote 834,420 shares. Abigail P. Johnson is a Director, the Chair and the Chief Executive Officer of FMR. Members of the Johnson family, including Abigail P. Johnson, are the predominant owners, directly or through trusts, of Series B voting common shares of FMR, representing 49% of the voting power of FMR. The Johnson family group and all other Series B shareholders have entered into a shareholders’ voting agreement under which all Series B voting common shares will be voted in accordance with the majority vote of Series B voting common shares. Accordingly, through their ownership of voting common shares and the execution of the shareholders’ voting agreement, members of the Johnson family may be deemed, under the Investment Company Act of 1940, to form a controlling group with respect to FMR. Neither FMR nor Abigail P. Johnson has the sole power to vote or direct the voting of the shares owned directly by the various investment companies registered under the Investment Company Act (“Fidelity Funds”) advised by Fidelity Management & Research Company LLC (“FMR Co. LLC”), a wholly owned subsidiary of FMR, which power resides with the Fidelity Funds’ Boards of Trustees. FMR Co. LLC carries out the voting of the shares under written guidelines established by the Fidelity Funds’ Boards of Trustees. The principal address of FMR is 245 Summer Street, Boston, MA 02210. |
| (3) | The information is as reported on Amendment No. 9 to Schedule 13G/A as filed on February 12, 2021. Ameriprise Financial, Inc., or (“AFI”) has shared power to direct the disposition of 4,631,3424,487,454 shares and shared power to vote 4,554,2534,369,975 shares. AFI is the parent holding company of Columbia Management Investment Advisors, LLC or (“CMIA”) which has shared power to direct the disposition of 4,613,9204,463,876 shares and shared power to vote 4,554,2534,369,975 shares. CMIA is the investment advisor to Columbia Seligman Communications & Information Fund or the (the “Fund”), an investment company, which has the shared power to direct the disposition of 3,168,2982,766,029 shares and sole power to vote 3,168,2982,766,029 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) | (4) | The information is as reported on Amendment No. 712 to Schedule 13G/A as filed on January 27, 2021. BlackRock, Inc. has sole power to direct the disposition of 4,097,778 shares and sole power to vote 4,018,433 shares. The principal address of BlackRock, Inc. is 55 East 52nd Street, New York, NY 10055. |
| (5) | The information is as reported on Amendment No. 10 to Schedule 13G/A as filed on February 9, 2018.10, 2021. The Vanguard Group, Inc., has sole power to direct the disposition of 3,584,2834,016,809 shares, shared power to direct the disposition of 68,630 shares, sole power to vote 66,692104,595 shares, and shared power to vote 4,39076,884 shares. Vanguard Fiduciary Trust Company, a wholly owned subsidiary of The Vanguard Group, Inc., is the beneficial owner of 64,240 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 6,842 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) | (6) | The information is as reportedIncludes (a) 32,810 RSUs, which were scheduled to vest on Amendment No. 9September 24, 2021; and (b) 7,749 MSUs, which were scheduled to Schedule 13G/A as filedvest on January 23, 2018. BlackRock, Inc. has sole powerSeptember 24, 2021.
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| (7) | Includes 5,202 shares issuable upon exercise of vested stock options. |
| (8) | Includes 5,202 shares issuable upon exercise of vested stock options. |
| (9) | Patricia Kummrow was appointed to direct the dispositionBoard on July 27, 2021. |
| (10) | Includes 5,202 shares issuable upon exercise of 3,509,397vested stock options. |
| (11) | Includes (a) 15,606 shares issuable upon exercise of vested stock options; (b) 35,274 RSUs, which are scheduled to vest in September 2021; and sole power(c) 7,749 MSUs, which are schedule to vote 3,428,369 shares. The principal address of BlackRock, Inc. is 55 East 52nd Street, New York, NY 10055.vest in September 2021. |
| | | | | | SYNAPTICS INCORPORATED | | PROXY STATEMENT | | 80 |
OTHER MATTERS 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 20182021 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 hasWe have 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:PROPOSALS AND NOMINATIONS FOR 2022 ANNUAL MEETING OF STOCKHOLDERS
ADVISORY VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION (“SAY-ON-PAY”)Stockholder Proposals and Nomination of Director Candidates Not Intended for Inclusion in Proxy Materials. A stockholder seeking to present a proposal or nominate a director for election to our Board at the 2022 annual meeting of stockholders but not intending for such proposal or nomination to be included in the proxy statement for the meeting must comply with the advance notice requirements set forth in our Bylaws. The Company’s Bylaws require a stockholder desiring to present a proposal or nominate a director for the 2022 annual meeting of stockholders to provide written notice to the Company’s Secretary at the Company’s principal executive offices (i) not later than the close of business on July 28, 2022, 90 days prior to the one-year anniversary of the Annual Meeting, and not earlier than June 28, 2022, 120 days prior to such one-year anniversary, or (ii) if the date of the 2022 annual meeting of stockholders is more than 30 days before or more than 70 days after the one-year anniversary of the Annual Meeting, not later than the 120th day prior to such annual meeting of stockholders and not later than the close of business on the later of the 90th day prior to such annual meeting or the 10th day following the date on which public announcement of the date of such meeting is first made. Other specifics regarding the notice procedures, including the required content of the notice, can be found in Section 2.3 of Article II of our Bylaws.
Summary
Proposals for Inclusion in Proxy Materials. A stockholder seeking to have a proposal included in the Company’s proxy statement for the 2022 annual meeting of stockholders must comply with Rule 14a-8 under the Exchange Act, which sets forth the requirements for including stockholder proposals in Company-sponsored proxy materials. In accordance with Section 14A(a)(1)Rule 14a-8, any such proposal must be received by the Company’s Secretary at the Company’s principal executive offices by May 10, 2022, which is 120 days prior to the one-year anniversary 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 indate this Proxy Statement beginning on page 13. Our executive compensation program is designedwas first mailed or made available to enable usstockholders. However, if the date of the 2022 annual meeting of stockholders changes by more than 30 days from the one-year anniversary of the date of the Annual Meeting, then such proposals must be received a reasonable time before the Company begins to attract, motivate,print and retain highly qualified executive officers. The program links cash incentive compensationsend its proxy materials for the 2022 annual meeting of stockholders. Stockholder proposals or director nominations submitted to the achievementCompany’s Secretary that do not comply with the above requirements may be excluded from the Company’s proxy statement and/or may not be brought before the 2022 annual meeting ofpre-established corporate financial performance and personal objectives, and provides long-termstock-based incentive compensation that focuses stockholders, as applicable. | | | | | | SYNAPTICS INCORPORATED | | PROXY STATEMENT | | 81 |
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING PROCEDURES Why did I receive a notice in the mail regarding Internet availability of the proxy materials instead of a paper copy of the proxy materials? Pursuant to SEC rules, we have elected to provide access to our executive officer’s efforts on building stockholder value by aligning their interests with thoseproxy materials over the Internet. Accordingly, we are sending a Notice of our stockholders. We urgeInternet Availability of Proxy Materials (the “Notice”) to our stockholders of record, while brokers, banks and other nominees who hold shares on behalf of beneficial owners will be sending their own similar Notice to review the Compensation Discussionbeneficial owners. All stockholders will have the ability to access the proxy materials, including this Proxy Statement and Analysisour 2021 Annual Report, on the website referred to in the Notice or to request to receive a printed copy of the proxy materials. Instructions on how to request a printed copy by mail or electronically, including an option to request paper copies on an ongoing basis, may be found in the Notice and Executive Compensation sectionson the website referred to in the Notice. If a stockholder properly requests paper copies of this Proxy Statement, andwe intend to mail the related tabular and narrative disclosure for more information.Proxy Statement, together with a proxy card, to such stockholder promptly within their request. Proposed Resolution and Vote Required
Advisory approval of this proposal will requireWhat is the affirmative vote of a majoritypurpose of the votes cast on the proposal, assuming that a quorum is present atAnnual Meeting?
At the Annual Meeting, of Stockholders.stockholders will be asked to consider and vote on the following matters, as well as any other business properly brought before the Annual Meeting: The following resolution is submitted
Proposal 1: Elect as directors the three nominees named in the attached Proxy Statement, each to serve for a stockholder vote at the Annual Meeting of Stockholders:three-year term expiring in 2024. RESOLVED,Proposal 2:that the stockholders of the company approve, Approve, on an advisory basis, the compensation of the company’sour Named Executive Officers,Officers.
Proposal 3: Ratify the appointment of KPMG as disclosedour independent auditor for the fiscal year ending June 25, 2022. Proposal 4: Approve the amended and restated 2019 Incentive Plan. What are the Board’s recommendations on each of the proposals? The Board recommends that stockholders vote: | 1. | “FOR” each of the Board’s three nominees for election to the Board: Jeffrey Buchanan, Keith Geeslin, and James Whims. |
| 2. | “FOR” approval, on an advisory basis, of the compensation of our Named Executive Officers. |
| 3. | “FOR” ratification of the appointment of KPMG as our independent auditor for the fiscal year ending June 25, 2022. |
| 4. | “FOR” approval of the amended and restated 2019 Incentive Plan. |
Who is entitled to vote? Only the holders of record of the shares of our common stock at the close of business on September 1, 2021 (the “Record Date”) are entitled to notice of and to vote at the Annual 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 Annual Meeting. As of the Record Date, 39,103,159 shares of common stock were outstanding. | | | | | | SYNAPTICS INCORPORATED | | PROXY STATEMENT | | 82 |
May I attend the Annual Meeting? We will be hosting the Annual Meeting live via the Internet. You will not be able to attend the Annual Meeting in person. Any stockholder can listen to and participate in the Compensation DiscussionAnnual Meeting live via the Internet at www.virtualshareholdermeeting.com/syna2021. Our Board annually considers the appropriate format of our annual meeting. Our virtual annual meeting allows stockholders to submit questions and Analysiscomments before and during the meeting. After the Annual Meeting, we will spend up to 15 minutes answering in real-time stockholder questions that comply with the meeting rules of conduct; the rules of conduct will be posted on the virtual meeting web portal. To the extent time doesn’t allow us to answer all of the appropriately submitted questions, we will answer them in writing on our investor relations website, at http://www.synaptics.com, soon after the meeting. If we receive substantially similar questions, we will group such questions together and provide a single response to avoid repetition. The Annual Meeting webcast will begin promptly at 9:00 a.m., Pacific Time. We encourage you to access the Annual Meeting webcast prior to the start time. Online check-in will begin, and stockholders may begin submitting written questions, at 8:45 a.m., Pacific Time, and you should allow ample time for the check-in procedures. What do I need in order to be able to participate in the Annual Meeting? You will need the control number included on your Notice or your proxy card or voting instruction form (if you received a printed copy of the proxy materials) or included in the email to you (if you received your proxy material by email) in order to be able to vote your shares or submit questions during the Annual Meeting. Instructions on how to connect to the Annual Meeting and participate via the Internet, are posted at www.virtualshareholdermeeting.com/syna2021.If you do not have your control number, you will be able to access and listen to the Annual Meeting but you will not be able to vote your shares or submit questions during the Annual Meeting. We will have technicians ready to assist you with any technical difficulties you may have accessing the virtual meeting or submitting questions. If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the Virtual Shareholder Meeting log in page. Why is the Company holding the Annual Meeting virtually? We are embracing technology to provide expanded access, improved communication, reduced environmental impact and cost savings for our stockholders and the related tabularCompany. Hosting a virtual meeting enables increased stockholder attendance and narrative disclosureparticipation since stockholders can participate and ask questions from any location around the world and provides us an opportunity to give thoughtful responses. In addition, we intend that the virtual meeting format provide stockholders a similar level of transparency to the traditional in-person meeting format and we take steps to ensure such an experience. Our stockholders will be afforded the same opportunities to participate at the virtual Annual Meeting as set forththey would at an in-person annual meeting of stockholders, including the ability to address management and/or the Board directly. How do I vote? You may vote by submitting a proxy or voting instructions prior to the Annual Meeting or you may vote while participating in the Annual Meeting live via the Internet. Submitting a Proxy for Shares Registered Directly in the Name of the Stockholder. If you hold your shares of common stock as a record holder and you are viewing this Proxy Statement.Statement on the Internet, you may vote by submitting a proxy over the Internet by following the instructions on the website referred to in the Notice previously mailed to you. If you hold your shares of common stock as a record holder and you are reviewing a printed copy of this Proxy Statement, you may vote your shares by completing, dating and signing the proxy card that was included with this Proxy Statement and promptly returning it in the preaddressed, postage paid envelope provided to you, or by submitting a proxy over the Internet or by telephone by following the instructions on the proxy card. If you vote by Internet or telephone, then you need not return a written proxy card by mail. Submitting Voting Instructions for Shares Registered in Street Name. If you hold your shares of common stock in street name, which means your shares are held of record by a broker, bank or nominee, you will receive instructions from your broker, bank or other nominee on how to vote your shares. Your broker, bank or other nominee will allow you to deliver your voting instructions over the Internet and may also permit you to vote by telephone. In addition, if you received a printed copy of this Proxy Statement, you may submit your voting instructions by completing, dating and signing the voting instruction form that was included with this Proxy Statement and promptly returning it in the preaddressed, postage paid envelope provided to you. If you vote by Internet or telephone, then you need not return a written voting instruction form by mail. Vote During the Annual Meeting. Instructions on how to vote while participating in the Annual Meeting live via the Internet are posted at www.virtualshareholdermeeting.com/syna2021. | | | | | | SYNAPTICS INCORPORATED | | PROXY STATEMENT | | 83 |
What is the deadline for voting my shares if I do not attend the Annual Meeting? If you are a stockholder of record, your proxy must be received by telephone or the Internet by 11:59 p.m. Eastern time on October 25, 2021 in order for your shares to be voted at the Annual Meeting. If you are a stockholder of record and you received a printed set of proxy materials, you also have the option of completing, signing, dating and returning the proxy card enclosed with the proxy materials before the Annual Meeting in order for your shares to be voted at the meeting. If you are a beneficial owner of shares of our common stock, please comply with the deadlines included in the voting instructions provided by the bank, broker or other nominee that holds your shares. Can I revoke or change my vote after I submit my proxy or voting instructions? A stockholder of record may revoke a previously submitted proxy at any time before it is exercised by (i) delivering a later dated proxy card or by submitting another proxy by telephone or the Internet (your latest telephone or Internet voting instructions will be followed); (ii) delivering to the Corporate Secretary of the Company a written notice of revocation prior to the voting of the proxy at the Annual Meeting; or (iii) by voting live during the Annual Meeting. Simply participating in the Annual Meeting will not revoke your proxy. If your shares are held in “street name,” you must contact your broker, bank or other nominee to find out how to change or revoke your voting instructions. Any change to your proxy that is provided by telephone or the Internet must be submitted by 11:59 p.m. Eastern time on October 25, 2021. How will my shares be voted on the proposals at the Annual Meeting? The shares of common stock represented by all properly submitted proxies will be voted at the Annual Meeting as instructed or, if no instruction is given, will be voted “FOR” each of the director nominees named in Proposal 1, “FOR” Proposal 2, “FOR” Proposal 3, and “FOR” Proposal 4. If you hold your shares of common stock in street name through a brokerage account and you do not submit voting instructions to your broker, your broker may generally vote your shares in its discretion on routine matters. However, a broker cannot vote shares held in street name on non-routine matters unless the broker receives voting instructions from the street name holder. Proposal 3 (the ratification of the appointment of KPMG as our independent auditor for the fiscal year ending June 25, 2022) is considered routine under applicable rules, while each of the other proposals to be submitted for a vote of stockholders at the Annual Meeting is considered non-routine. Accordingly, if you hold your shares of common stock in street name through a brokerage account and you do not submit voting instructions to your broker, your broker may exercise its discretion to vote on Proposal 3 at the Annual Meeting, but will not be permitted to vote your shares on any of the other proposals at the Annual Meeting. If your broker exercises this discretion, your shares will be counted as present for determining the presence of a quorum at the Annual Meeting and will be voted on Proposal 3 in the manner directed by your broker, but your shares will constitute “broker non-votes” on each of the other items at the Annual Meeting. How will voting on any other business be conducted? As to any other business that may properly come before the Annual Meeting, all properly submitted proxies will be voted by the proxyholders named in the proxy card, in their discretion. We do not presently know of any other business that may come before the Annual Meeting. What constitutes a quorum? A majority in voting power of all outstanding shares of stock entitled to vote at the Annual Meeting, present in person or represented by proxy, will constitute a quorum for the transaction of business at the Annual Meeting. Shares represented by proxies that reflect abstentions or “broker non-votes” will be counted as shares that are present and entitled to vote for purposes of determining the presence of a quorum. What vote is required to approve each proposal? Proposal 1 — Election of Directors. Each director nominee will be elected at the Annual Meeting if such nominee receives a majority of the votes cast with respect to such nominee’s election (that is, the number of votes cast “FOR” the nominee must exceed the number of votes cast “AGAINST” the nominee). This proposalmajority voting standard is discussed further under “Proposal 1 — Election of Directors — Vote Required.” Proposal 2 — Advisory Approval of Compensation of our Named Executive Officers. The affirmative vote of a majority of votes cast at the Annual Meeting will be required for the Say-on-Pay vote. The Say-on-Pay vote is advisory only, and therefore not binding on our company, ourthe Company, the Compensation Committee or our Board of Directors.Board. Althoughnon-binding, our Board values the voteopinions that our stockholders express with their votes and the votes will provide information to ourthe Compensation Committee and our Board of Directors regarding investor sentiment about our executive compensation philosophy, policies and practices, which ourthe Compensation Committee and our Board of Directors will be able to consider when making futuredetermining executive compensation decisions. We currently conduct annual advisory votes on named executive officer compensation, and we expect to conductin the next advisory vote at our 2019 Annual Meeting of Stockholders.future.
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. Our Audit Committee has appointed KPMG LLP to audit the consolidated financial statements of our company for our fiscal year ending June 29, 2019, 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, and 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, 2018 and June 24, 2017, 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 | | | | | | | | | | |
(1) | Includes certain fees for acquisition diligence support for fiscal 2017.
| | | | | SYNAPTICS INCORPORATED | | PROXY STATEMENT | | 84 |
(2) | 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 and $123,970 for fiscal 2018 and fiscal 2017, respectively.
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(3) | Includes fees for professional services rendered by KPMG LLP with respect to evaluation and compliance with the European Union General Data Protection Regulation.
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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 exceeding pre-approved levels will also require specific pre-approval by the Audit Committee. Unless otherwise specified by the Audit Committee inpre-approving a service, thepre-approval will be effective for the 12-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 the pre-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 seeking pre-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 Fees,” “Tax Fees,” and “All Other Fees” were approved by our Audit Committee pursuant to our Audit Committee’s pre-approval policies.
Proposal 3 — Ratification by Stockholders of the Appointment of KPMG as 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, 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:Auditor.
APPROVAL OF THE AMENDED AND RESTATED 2010 INCENTIVE COMPENSATION PLAN
We are asking our stockholders to consider and approve an amendment and restatement of the Company’s 2010 Incentive Compensation Plan (such amendment and restatement, the “Amended 2010 Plan”). Our Compensation Committee approved the Amended 2010 Plan in July 2018, subject to approval by our stockholders at the Annual Meeting of Stockholders. If this Proposal Four is approved by our stockholders, the Amended 2010 Plan will become effective upon the date of the Annual Meeting of Stockholders. In the event that our stockholders do not approve this Proposal Four, the Amended 2010 Plan will not become effective and the existing 2010 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 advance 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.
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, consultants and directors and that the ability to provide equity awards under the 2010 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, consultants and directors 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 2010 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:
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;
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.
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 2010 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%.
| | | | | | | | | | | | | | | | | | | | | | | | | 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 | % |
In determining the number of shares to request for approval under the Amended 2010 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 importance of the fungible share ratio), 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 2010 Plan. After reviewing this information, our Compensation Committee decided to request that our stockholders approve an additional 1,700,000 shares to be added to the Amended 2010 Plan’s share reserve.
We currently anticipate that the shares requested, when combined with currently available reserves, 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 how to vote on this Proposal Four, we think our stockholders should be aware of the following key provisions of the Amended 2010 Plan.
All awards granted under the Amended 2010 Plan are required to have a minimum one year vesting period, except that up to 5% of the Amended 2010 Plan share reserve may be subject to awards that do not meet such vesting requirements.
The Amended 2010 Plan establishes a fungible share ratio of 1.94 shares for all full value awards granted under the Amended 2010 Plan. Each full value award share returning to the reserve after the effective date of the Amended 2010 Plan also counts as 1.94 shares.
The Amended 2010 Plan establishes a $750,000 limit on the aggregate grant date fair value of compensatory equity awards that may be granted to anynon-employee director of the Company in any fiscal year.
The Amended 2010 Plan contains a clawback provision on performance-based awards held by each of the Company’s executive officers that applies to performance-based cash and equity compensation to the extent 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 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 compensation granted under the Amended 2010 Plan as required under applicable laws, rules, regulations or listing requirements.
The Amended 2010 Plan does not require automatic acceleration on a change of control. Instead, the Board has the authority to negotiate in a transaction whether awards should be assumed, replaced, cancelled, cashed out or accelerated. The Amended 2010 Plan does not contain a liberal change of control definition.
The Amended 2010 Plan provides that the exercise price of stock options and SARs generally must be no less than the fair market value of our shares of common stock on the date of grant (as adjusted for any changes in capitalization).
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.
Vote Required and Board Recommendation
At the Annual Meeting, our stockholders will be requested to consider and approve the Amended 2010 Plan described in this Proposal Four. The affirmative vote of a majority of the votes cast at the Annual Meeting will be required to approve this Proposal Four.
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT OUR STOCKHOLDERS VOTE FOR APPROVAL OF THE AMENDMENT TO THE AMENDED AND RESTATED 2010 INCENTIVE COMPENSATION PLAN.
Summaryfor the approval of the Amended 2010 Plan
The material featuresratification of the appointment of KPMG as our independent auditor for the fiscal year ending June 25, 2022.
Proposal 4 — Approval of Amended 2010 Plan are outlined below. This summary is qualified in its entirety by reference toand Restated 2019 Incentive Plan. The affirmative vote of a majority of votes cast at the complete textAnnual Meeting will be required for the approval of the Amended 2010 Plan. Stockholders are urged to read the actual textamendment and restatement of the Amended 2010 Plan, which is appended to these proxy materials2019 Incentive Plan. Note on “Abstentions” and “Broker Non-Votes.” For purposes of determining the number of votes cast for Proposal 1, Proposal 2, Proposal 3 and Proposal 4, only shares voted “FOR” or “AGAINST” are counted. Abstentions and broker non-votes are not treated as Appendix Bvotes cast on Proposal 1, Proposal 2, Proposal 3 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. WeProposal 4, although they 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 sharescounted 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 ordetermining whether a committee approved by our Board of Directors. Subject to the terms of the Amended 2010 Plan, the plan administratorquorum 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 stockpresent 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.Annual Meeting.
| | | | | Name
SYNAPTICS INCORPORATED | | Number of
Stock Options Granted | | Named Executive Officers:
PROXY STATEMENT | | | | | 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 | 85 |
Equity Compensation Plan Information
For
GENERAL INFORMATION PROXY SOLICITATION EXPENSES The cost of soliciting proxies will be borne by the Company. These costs will include reimbursements paid to brokerage firms and others for their expenses incurred in forwarding solicitation material regarding the Annual Meeting to beneficial owners of the Company’s common stock. Proxies may be solicited by directors, officers and employees of the Company in person or by mail, telephone, email or facsimile transmission, but such persons will not be specifically compensated therefor. AVAILABLE INFORMATION The Company is subject to the informational requirements of the Exchange Act and, in accordance therewith, files reports, proxy statements and other information with the SEC. Reports, proxy statements and other information electronically filed by the Company with the SEC are available without charge on the SEC’s website at http://www.sec.gov. These materials are also available free of charge in the Investors section of the Company’s website at http://www.synaptics.com as soon as reasonably practicable after they are filed or furnished with the SEC. The Company will provide without charge to each person solicited hereby, upon the written or oral request of any such persons, copies of the Company’s Annual Report on Form 10-K for the year ended June 26, 2021. Any exhibits listed in the Annual Report on Form 10-K report also will be furnished upon request at the actual expense we incur in furnishing such exhibits. Requests for such copies should be addressed to the following: Synaptics Incorporated, 1251 McKay Drive, San Jose, California 95131, Attn: Corporate Secretary; telephone (408) 904-1100. You may also access additional information about the Company at our Internet address, http://www.synaptics.com. References to our website throughout this Proxy Statement are provided for convenience only and the content 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, please refer to the “Stock-Based Compensation Plan Information” sectionwebsite does not constitute a part of this Proxy Statement. The Amended 2010 Plan does not contain an evergreen provision. PROPOSAL FIVE:OTHER MATTERS
APPROVAL OF THE AMENDED AND RESTATED 2010 EMPLOYEE STOCK PURCHASE PLAN
We are asking our stockholders to consider and approve an amendment and restatementdo not know of any other matter that will be brought before the Company’s 2010 Employee Stock Purchase Plan (such amendment and restatement, the “Amended 2010 ESPP”). Our Board of Directors approved the Amended 2010 ESPP in September 2018, subject to approval by our stockholders atAnnual Meeting. However, if any other matter properly comes before the Annual Meeting of Stockholders. If this Proposal Five is approved by our stockholders, the Amended 2010 ESPP will become effectiveor any adjournment(s) or postponement(s) thereof, which may properly be acted upon, the dateproxies solicited hereby will be voted at the discretion of the Annual Meetingnamed proxy holders. As permitted by the Exchange Act, only one copy of Stockholders. Inour proxy materials is being delivered to stockholders of record residing at the event thatsame address and who did not receive a Notice of Internet Availability or otherwise receive their proxy materials electronically, unless such stockholders have notified us of their desire to receive multiple copies of our stockholders do not approve this Proposal Five, the Amended 2010 ESPPproxy materials. This is known as householding. We will not become effective and the existing 2010 Employee Stock Purchase Plan (the “2010 ESPP”) will continue in its current form. The principal features and purpose of the Amended 2010 ESPP are summarized below. The following summary of the Amended 2010 ESPP does not purport to bepromptly deliver, upon oral or written request, a complete description of all of the provisions of the Amended 2010 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 2010 ESPP in its entirety, which is appended to this proxy statement as Appendix C and may be accessed from the SEC’s website atwww.sec.gov. Any stockholder who wishes to obtain aseparate copy of the Amended 2010 ESPP may do so upon writtenproxy materials to any stockholder residing at an address to which only one copy was mailed. Stockholders who currently receive multiple copies of proxy materials at their address and would like to request householding of their communications should contact us. Requests for additional copies or requests for householding for this year or future years should be directed in writing to the Secretary at our principal executive offices.offices at 1251 McKay Drive, San Jose, California 95131, Attn: Corporate Secretary or by telephone at (408) 904-1100.
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 limitYou may vote on the annual increase amount. Other thanInternet, or if you are receiving a paper copy of this Proxy Statement, by telephone (if available), or by completing and mailing a proxy card or voting instruction form in the additional 100,000preaddressed, postage paid envelope provided to you. Voting over the Internet, by telephone or by written proxy will ensure your 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 terms of the original 2010 ESPP) are anticipated to be sufficient for purchases under the Amended 2010 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 date 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 2010 ESPP is a broad-based employee equity plan designed to qualify for favorable income tax treatment under Section 423 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 Board 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 opportunity to acquire a proprietary interest in our company and thereby align their interests with the interests 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 castrepresented at the Annual Meeting will be required to approve this Proposal Five.meeting.
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT OUR STOCKHOLDERSWE URGE YOU TO SUBMIT YOUR PROXY OR VOTING INSTRUCTIONS AS SOON AS POSSIBLE WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING AND VOTE FOR APPROVAL OFIN PERSON. IF YOU ATTEND THE AMENDEDANNUAL MEETING 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 intend to have the Amended 2010 ESPP qualify as an “employee stock purchase plan” under Section 423 of the Code. The Amended 2010 ESPP permits eligible employees to authorize payroll deductions that will be utilized to purchase shares of our common stock during a series of consecutive24-month offering periods, with four six-month purchase or exercise periods within the offering periods (except for 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 (other 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 five months per calendar year are eligible to participate after completing three months 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. An employee will not be granted an option under the Amended 2010 ESPP if (i) immediately after the grant, such employee would own common stock, including outstanding options to purchase common stock under the Amended 2010 ESPP, possessing 5% or more of the total combined voting power or value of our common stock, or (ii) participation in the Amended 2010 ESPP would permit such employee’s rights to purchase our common stock under all of our employee stock purchase plans to exceed $25,000 in fair market value (determined at the time 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), were eligible for grants under the 2010 ESPP. The 2010 ESPP currently has 1,416 participants.
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 ESPP will be implemented in a series of successive offering periods, each with a maximum duration of 24 months. If 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, then that offering period will automatically terminate, and a new 24-month offering period will begin on the next business day. Each offering period will begin on the May 16 or November 16, as applicable, immediately following the end of the previous offering period.
Under the Amended 2010 ESPP, eligible employees may elect to participate in the Amended 2010 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 granted the right to purchase shares of our common stock 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-tax basis, 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 on the first day of the offering period or the fair market value on the exercise date, unless the participant’s entry date is not the first day of the offering period, in which case the exercise price will equal 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 stock on the entry date or (ii) the fair market value on the exercise date.
At the time an employee becomes a participant in the Amended 2010 ESPP, the employee may elect payroll deductions of up to 15% of such employee’s compensation for each pay period during an offering. For purposes of the Amended 2010 ESPP, compensation consists of base salary and overtime paid by us to employees that participate in the Amended 2010 ESPP. Compensation 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 multiplied by the applicable percentage (i.e., 85%). All payroll deductions made by each participant will be credited to a bookkeeping account set up for that participant under the 2010 ESPP.
Grants and Exercises of Options
On a participant’s entry date, the participant will be granted an option 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 dividing (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 by (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 beginning 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 option will be deemed to 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 no interest or voting right in shares of our common stock covered by the participant’s option until such option has been exercised.
Reclassifications and Mergers
The Amended 2010 ESPP provides 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 options in the event of any increase or decrease in the number of issued and outstanding shares as a result 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 consummation of that action, unless otherwise provided by the Plan Committee. In the event of a merger or a sale of all or substantially all of our company’s assets, each option under the Amended 2010 ESPP will be assumed or an equivalent option substituted by the successor corporation, unless the Plan Committee, in its sole discretion, accelerates the date on which the options may be exercised.
Participation in the Amended 2010 ESPP
Participation in the Amended 2010 ESPP is voluntary and depends on each eligible employee’s election to participate and his or her determination as to the level of payroll deductions. Accordingly, future purchases under the Amended 2010 ESPP are not determinable.
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. All 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 2010 ESPP may be assigned, transferred, pledged, or otherwise disposed of by the participant, other than by will or the laws of descent and distribution. Any such attempted assignment, transfer, pledge, or other disposition will be ineffective and we may treat any such act as an election to withdraw from participation in the Amended 2010 ESPP.
Duration and Modification
The Amended 2010 ESPP will remain in effect until the earliest of (a) the exercise date that participants become entitled to purchase a number of shares greater than the number of reserved shares available for purchase under the Amended 2010 ESPP or (b) such date as is determined by the Board of Directors in its discretion. The 2010 ESPP’s “effective date” means January 1, 2011, 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 participant with respect to previously granted options and the Amended 2010 ESPP may not be amended if 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.
Federal Income Tax Consequences
The Amended 2010 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 until the shares purchased under the 2010 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. If the shares are sold or otherwise disposed of more than (a) two years from the first day of the offering period and (b) more than one year from the date of transfer of the shares to the participant, then the participant will recognize ordinary income measured as the lesser of (i) the excess of the fair market value of the shares at the time of such sale or disposition over the purchase price, or (ii) an amount equal to the excess of the fair market value of the shares as of the first day of the offering period over the option price (determined as if the option had been exercised on the first trading day of the offering period). If the shares are sold or otherwise disposed of before the expiration of these holding periods, the participant will recognize ordinary income generally measured as the excess of the fair market value of the shares on the date the shares are purchased over the price at which the participant purchased the shares under the Amended 2010 ESPP.
Any additional gain or loss on such sale or disposition will belong-term orshort-term capital gain or loss, depending on the holding period. We will not be entitled to a deduction for amounts taxed as ordinary income or capital gain to a participant except to the extent ordinary income is recognized by participants as a result of a sale or disposition of shares prior to the expiration of the holding periods described above.
New Plan Benefits
All employees of the Company who satisfy the eligibility requirements set forth in the Amended 2010 ESPP may each year purchase Company common stock as described in the Amended 2010 ESPP. The following table sets forth the number of shares purchased by the specified individuals or groups during our fiscal year ended June 30, 2018:VOTE IN PERSON, YOUR PROXY WILL NOT BE USED.
| | | | | Name
SYNAPTICS INCORPORATED | | Number of
Shares | | Named Executive Officers:
PROXY STATEMENT | | | | | 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 | 86 |
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, 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, 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, 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, must be received by us at our executive offices set forth in this Proxy Statement no earlier than July 2, 2019, and no later than August 1, 2019.
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 2018 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, 2018
APPENDIX A – DEFINITIONS AND RECONCILIATIONS OF NON-GAAP FINANCIAL INFORMATIONMEASURES In evaluating our business, we consider and use (i)gross margin, gross margin percentage, operating income/(loss), operating margin/(loss) percentage, net income/(loss) and net income/(loss) per share excluding certain non-cash or non-recurring items such as acquisitionacquisition/divestiture and integration related costs (including changes in contingent consideration,primarily amortization of certain acquired intangible assets, inventory fair value adjustments, integration costs, 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/(recovery) on supply commitment charges, litigation settlement charges,charge, restructuring costs, impairment of intangible assets, foreign currency adjustments,retention costs, in-process research and other items, net (including arbitrationdevelopment charges, CEO severance costs, and acquisition related 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, amortization prepaid development costs, gain on sale of audio technology assets, gain on sale of assets, other items, net (includingnon-cash interest, net, arbitration costs, equity investment loss acquisition related severance costs and impairment recovery on investments), and tax adjustments ornon-GAAPas a supplemental measure of operating performance. These adjustments to gross margin, gross margin percentage, operating income/(loss), operating margin/(loss) percentage, net income,income/(loss) and (iv) net income/(loss) per share diluted excluding certain acquisition and integration related costs (including changes in contingent consideration, amortizationeliminate the impact 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,non-cash interest on convertible debt,expenses and other items net (includingthat may be either recurring or non-cashnon-recurring interest, net, arbitration costs, equity investment loss, acquisition related severance costs and impairment recovery on investments), and tax adjustments, orthat we do not consider to be indicative of our core ongoing operating performance. These non-GAAP net income per share diluted, as supplemental measures of operating performance, including the use ofnon-GAAPgross margin, gross margin percentage, operating income, for purposes of the financial performance measures used in our annual performance-based cash bonus plan.Non-GAAP operating income,non-GAAPoperating marginnon-GAAP percentage, 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 gross margin, gross margin percentage, operating income/(loss), GAAP operating margin/(loss), GAAP percentage, net income/(loss), and GAAP net income/(loss) per share, respectively.share. We present non-GAAP gross margin. gross margin percentage, operating income, non-GAAP operating marginnon-GAAP percentage, net income andnon-GAAP net income per share because we consider themit an important supplemental measure of our performance. We believe these measures facilitate operating performance comparisons from period to period by eliminating potential differences in gross margin. gross margin percentage, operating income/(loss), operating margin/(loss), percentage, net income/(loss), and net income/(loss) per share caused by the existence and timing of certain non-cash or non-recurring items such as certain acquisitionacquisition/divestiture and integration related costs (including changes in contingent consideration, amortization of certain acquired intangible assets, inventory fair value adjustments, integration costs, and legal and consulting costs),share-based compensation charges, loss/(recovery) on supply commitment charges, litigation settlement charges,charge, restructuring costs, impairment of intangible assets, foreign currency adjustments,retention costs, in-process research and development charges, CEO severance costs, non-cash interest on convertible debt, amortization prepaid development costs, gain on sale of audio technology assets, gain on sale of assets, 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 gross margin. gross margin percentage, operating income,non-GAAP operating margin non-GAAPpercentage, net income andnon-GAAP net income per share have limitations as analytical tools and should not be considered in isolation or as substitutesa substitute for our GAAP gross margin, gross margin percentage, operating income/(loss), GAAP operating margin/(loss), GAAP percentage, net income/(loss), or GAAP and net income/(loss)income(loss) per share. The principal limitationslimitation of these measures are thatis they do not reflect our actual expenses and may thus have the effect of inflating our GAAP gross margin. gross margin percentage, operating income/(loss), GAAP operating margin/(loss), GAAP percentage, net income/(loss), and GAAP net income/(loss) per share. | | | | | | SYNAPTICS INCORPORATED | | PROXY STATEMENT | | A-1 |
The following is a reconciliation of the differences between GAAP andnon-GAAP gross margin, gross margin percentage, operating income/(loss), and operating margin/(loss), percentage: | | | | | | | | | | | | | | | | | | | | | | | | Fiscal Years Ended June | | | | 2021 | | 2020 | | 2019 | | 2018 | | 2017 | | | | (in millions, except per share amounts) | | | | | | | GAAP gross margin | | $ | 611.2 | | | $ | 543.1 | | | $ | 497.1 | | | $ | 480.1 | | | $ | 523.6 | | GAAP gross margin percentage | | | 45.6% | | | | 40.7% | | | | 33.8% | | | | 29.4% | | | | 30.5% | | Acquisition and related costs (1) | | | 103.4 | | | | 39.7 | | | | 62.7 | | | | 109.7 | | | | 47.6 | | Share-based compensation charge | | | 3.4 | | | | 2.1 | | | | 3.1 | | | | 3.2 | | | | 2.2 | | Loss/(recovery) on supply commitment | | | (0.6 | ) | | | (3.0 | ) | | | 9.0 | | | | - | | | | - | | Retention costs | | | - | | | | 0.5 | | | | - | | | | - | | | | - | | | | | | | | | | | | | | | | | | | | | | | Non-GAAP gross margin | | $ | 717.4 | | | $ | 582.4 | | | $ | 571.9 | | | $ | 593.0 | | | $ | 573.4 | | | | | | | | | | | | | | | | | | | | | | | Non-GAAP gross margin percentage | | | 53.6% | | | | 43.7% | | | | 38.8% | | | | 36.4% | | | | 33.4% | | | | | | | | GAAP Operating income /(loss) | | $ | 147.0 | | | $ | 68.9 | | | $ | (6.3 | ) | | $ | (61.9 | ) | | $ | 64.7 | | GAAP operating margin/(loss) percentage | | | 11.0% | | | | 5.2% | | | | -0.4% | | | | -3.8% | | | | 3.8% | | Acquisition/divestiture and integration related costs (2) | | | 139.4 | | | | 55.6 | | | | 77.3 | | | | 136.0 | | | | 60.6 | | Share-based compensation charge | | | 93.1 | | | | 60.4 | | | | 59.0 | | | | 71.3 | | | | 61.8 | | Loss/(recovery) on supply commitment | | | (0.6 | ) | | | (3.0 | ) | | | 9.0 | | | | - | | | | - | | Litigation settlement charge | | | - | | | | - | | | | - | | | | - | | | | 10.0 | | Restructuring costs | | | 7.4 | | | | 33.0 | | | | 17.7 | | | | 12.0 | | | | 7.3 | | Retention costs | | | 5.1 | | | | 13.9 | | | | 2.5 | | | | - | | | | - | | In-process research and development charge | | | - | | | | 2.4 | | | | - | | | | - | | | | - | | CEO severance | | | - | | | | - | | | | 2.2 | | | | - | | | | - | | Gain on sale of audio technology assets | | | (34.2 | ) | | | - | | | | - | | | | - | | | | - | | Amortization prepaid development costs | | | 9.2 | | | | - | | | | - | | | | - | | | | - | | Other items, net(3) | | | - | | | | - | | | | (1.7 | ) | | | 4.4 | | | | - | | | | | | | | | | | | | | | | | | | | | | | Non-GAAP operating income | | $ | 366.4 | | | $ | 231.2 | | | $ | 159.7 | | | $ | 161.8 | | | $ | 204.4 | | | | | | | | | | | | | | | | | | | | | | | Non-GAAP operating margin percentage | | | 27.4% | | | | 17.3% | | | | 10.8% | | | | 9.9% | | | | 11.9% | |
| (1) | Acquisition related costs consists of items related to acquisitions, including primarily amortization associated with certain acquired intangibles and inventory fair value adjustments. |
| (2) | Acquisition/divestiture and integration related costs consists of items related to acquisitions, potential acquisitions and divestitures of businesses or assets, including primarily amortization associated with acquired intangibles, inventory fair value adjustments, integration costs, and legal and consulting costs. |
| (3) | Other items, net, within operating income GAAP to Non-GAAP adjustments includes arbitration costs and acquisition related severance. |
| | | | | | SYNAPTICS INCORPORATED | | PROXY STATEMENT | | A-2 |
The following is a reconciliation of the differences between GAAP and non-GAAP 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 | | | | 2021 | | 2020 | | 2019 | | 2018 | | 2017 | | | | (in millions, except per share amounts) | | | | | | | GAAP net income /(loss) | | $ | 79.6 | | | $ | 118.8 | | | $ | (22.9 | ) | | $ | (124.1 | ) | | $ | 48.8 | | Acquisition/divestiture and integration related costs (1) | | | 139.4 | | | | 55.6 | | | | 77.3 | | | | 136.0 | | | | 60.6 | | Share-based compensation | | | 93.1 | | | | 60.4 | | | | 59.0 | | | | 71.3 | | | | 61.8 | | Loss/(recovery) on supply commitment | | | (0.6 | ) | | | (3.0 | ) | | | 9.0 | | | | - | | | | - | | Litigation settlement charge | | | - | | | | - | | | | - | | | | - | | | | 10.0 | | Restructuring costs | | | 7.4 | | | | 33.0 | | | | 17.7 | | | | 12.0 | | | | 7.3 | | Retention costs | | | 5.1 | | | | 13.9 | | | | 2.5 | | | | - | | | | - | | In-process research and development charges | | | - | | | | 2.4 | | | | - | | | | - | | | | - | | CEO severance | | | - | | | | - | | | | 2.2 | | | | - | | | | - | | Gain on sale of audio technology assets | | | (34.2 | ) | | | - | | | | - | | | | - | | | | - | | Amortization prepaid development costs | | | 9.2 | | | | - | | | | - | | | | - | | | | - | | Non-cash interest on convertible debt | | | 19.2 | | | | 18.3 | | | | 17.6 | | | | 17.4 | | | | - | | Gain on sale of assets | | | - | | | | (105.1 | ) | | | - | | | | - | | | | - | | Other items, net(2) | | | 10.0 | | | | 2.5 | | | | (2.3 | ) | | | 7.6 | | | | (0.8 | ) | Tax adjustments | | | (11.8 | ) | | | 10.4 | | | | (18.9 | ) | | | 21.2 | | | | (13.8 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Non-GAAP net income | | $ | 316.4 | | | $ | 207.2 | | | $ | 141.2 | | | $ | 141.4 | | | $ | 173.9 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | GAAP net income/(loss) per share - diluted | | $ | 2.08 | | | $ | 3.41 | | | $ | (0.66 | ) | | $ | (3.63 | ) | | $ | 1.37 | | Acquisition/divestiture and integration related costs (1) | | | 3.64 | | | | 1.60 | | | | 2.23 | | | | 3.98 | | | | 1.70 | | Share-based compensation | | | 2.43 | | | | 1.73 | | | | 1.71 | | | | 2.07 | | | | 1.74 | | Loss/(recovery) on supply commitment | | | (0.01 | ) | | | (0.09 | ) | | | 0.26 | | | | - | | | | - | | Litigation settlement charge | | | - | | | | - | | | | - | | | | - | | | | 0.28 | | Restructuring costs | | | 0.19 | | | | 0.95 | | | | 0.51 | | | | 0.34 | | | | 0.21 | | Retention costs | | | 0.13 | | | | 0.40 | | | | 0.07 | | | | - | | | | - | | In-process research and development charges | | | - | | | | 0.07 | | | | - | | | | - | | | | - | | CEO severance | | | - | | | | - | | | | 0.06 | | | | - | | | | - | | Gain on sale of audio technology assets | | | (0.89 | ) | | | - | | | | - | | | | - | | | | - | | Amortization prepaid development costs | | | 0.24 | | | | - | | | | - | | | | - | | | | - | | Non-cash interest on convertible debt | | | 0.50 | | | | 0.53 | | | | 0.50 | | | | 0.51 | | | | - | | Gain on sale of assets | | | - | | | | (3.02 | ) | | | - | | | | - | | | | - | | Other items, net(2) | | | 0.26 | | | | 0.07 | | | | (0.14 | ) | | | 0.14 | | | | (0.03 | ) | Tax adjustments | | | (0.31 | ) | | | 0.30 | | | | (0.54 | ) | | | 0.64 | | | | (0.39 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Non-GAAP net income per share - diluted | | $ | 8.26 | | | $ | 5.95 | | | $ | 4.00 | | | $ | 4.05 | | | $ | 4.88 | | | | | | | | | | | | | | | | | | | | | | |
| (1) | AcquisitionAcquisition/divestiture and integration related costs consists of items related to either completedacquisitions, potential acquisitions and divestitures of businesses or announced acquisitions,assets, including changes in contingent consideration,primarily amortization associated with certain acquired intangible assets,intangibles, inventory fair value adjustments, integration costs, 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.
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(4)(2) | 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. |
| | | | | | SYNAPTICS INCORPORATED | | PROXY STATEMENT | | A-3 |
APPENDIX B – AMENDED AND RESTATED 2019 EQUITY AND INCENTIVE COMPENSATION PLAN SYNAPTICS INCORPORATED AMENDED AND RESTATED 20102019 EQUITY AND 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 retain non-employee Directors, officers and other employees of 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 byParticipant’s willful, material, and irreparable breach of any employment, consulting, change in control or other agreement between the Participant to perform his or her duties as assigned byand the Company (oror a Related Entity)Subsidiary, (ii) the Participant’s gross negligence in a reasonable manner, (ii)the performance or intentional nonperformance (continuing for thirty (30) days after receipt of written notice of need to cure) of any violation or breach byof the Participant of his or her employment, consulting or other similar agreement withParticipant’s material duties and responsibilities to the Company, (or a Related Entity), if any, (iii) any violationthe Participant’s willful dishonesty, fraud, or breach by the Participant of his or hernon-competition and/ornon-disclosure agreement with the Company (or a Related Entity), if any, (iv) any act by the Participant of dishonesty 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.
(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). | | | | | | B-1 | | PROXY STATEMENT | | SYNAPTICS INCORPORATED |
(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, if applicable, any Subsidiary; provided, however, that to the extent any Option Right granted hereunder is intended to qualify as an Incentive Stock Option, “Disability” for purposes of such Related Entity.Option Right shall mean a “permanent and total disability” as defined in Section 22(e)(3) of the Code. (n) “Effective Date” means October 29, 2019, the date this Plan was initially 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 or that an adjustment thereto is appropriate, 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, to the extent applicable to the award, is in compliance with the fair market value pricing rules set forth in Section 9(b)(ii).409A of the Code. (ii) “Independent Director”
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(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 memberperson who is selected by the Committee to receive benefits under this Plan and who is at the time (i) a non-employee Director (which, for purposes of the Boardthis Plan, means a Director who is not, at the relevant time, employed by the Company or one of its Subsidiaries), (ii) an officer or other employee of the Company or its Subsidiaries. (jj) “Option” meansany Subsidiary, or (iii) an individual consultant or advisor who renders or has rendered bona fide services to the Company or any Subsidiary (other than services in connection with the offering or sale of securities of the Company or a right grantedSubsidiary in a capital-raising transaction or as a market maker or promoter of securities of the Company or a Subsidiary); provided, however, that an individual referred to a Participant under Section 6(b) hereof,in clause (iii) may participate in this Plan only if such participation would not adversely affect either the Company’s eligibility to purchase Stock or other Awards at a specified price during specified time periods.
(kk) “Optionee” means a personuse Form S-8 to whom an Option is grantedregister the offering and sale of shares issuable 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” means a person who has been granted an Award under the Plan which remains outstanding, including a person who is no longer an Eligible Person.
(oo) “Performance Award” means a right, granted to an Eligible Person under Section 7 hereof, to receive Awards based upon performance criteria specified bySecurities Act of 1933, as amended, or the Committee.
(pp) “Person” shall haveCompany’s compliance with any other applicable laws. Only individuals described in the meaning ascribed to such termforegoing clauses (i), (ii) or (iii), in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, and shall include a “group”each case as defined in Section 13(d) thereof.
(qq) “Plan” has 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 designateddetermined by the Committee, are eligible to receive awards under this Plan.
(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 bookkeeping entry that records the equivalent of one share of Common Stock awarded pursuant to Section 8 of this Plan. (aa) “Performance Unit” means a bookkeeping entry awarded pursuant to Section 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. (cc) “Predecessor Plans” means the 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 same type (e.g., time-based restricted stock units) as the replaced award, (ii) that has a value at least equal to the value of the replaced 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 treatment of which under the Code is not less favorable to a risk of forfeiture.
(tt) “Rule16b-3” and “Rule16a-1(c)(3)” means Rule16b-3 and Rule16a-1(c)(3), as from time 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), in each case after giving effect to any changes to the replaced award in connection with the Change in Control permitted or required under the applicable Evidence of Award. 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.
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(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 theanother entity. 3. Shares Available Under this Plan. (c) Limitation of Liability. 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.
4. Stock Subject to Plan.
(a) Limitation on Overall Number ofMaximum Shares Subject to AwardsAvailable Under this Plan. (i) Subject to adjustment as provided in Section 10(c) hereof, the total number11 of shares of Stock reservedthis Plan 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 sharescounting rules set forth in Section 3(b) of Stock covered by an Award granted under thethis 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 reasonand except as provided in Section 22 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 thethis 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 Common Stock available for grantissuance 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 4,590,000 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. (b) Share Counting Rules. | | | | | | B-4 | | PROXY STATEMENT | | SYNAPTICS INCORPORATED |
(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: (i)(A) shares of Common Stock withheld by the Company, tendered or otherwise used in payment of the exercise priceOption Price of an Option Right will not be added (or added back, as applicable) to the maximumaggregate number of shares of Common Stock available under theSection 3(a)(i) of this Plan; (ii)(B) shares of Common Stock withheld by the Company, tendered or otherwise used to satisfy a tax withholding obligation with respect to Options and Stock Appreciation Rightsawards granted under this Plan will not be added (or added back, as applicable) to the maximumaggregate number of shares of Common Stock available under theSection 3(a)(i) of this Plan; (iii)(C) shares of Common Stock subject to a Stockan Appreciation Right that are not actually issued in connection with the settlement in shares of Stock of such Stock Appreciation Right on the exercise thereof will not be added back to the maximumaggregate number of shares of Common Stock available under theSection 3(a)(i) of this Plan; and (iv)(D) shares of Common Stock reacquired by the Company on the open market or otherwise using cash proceeds from the exercise of an 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) LimitationLimit on Number of Incentive Stock Option SharesOptions. SubjectNotwithstanding anything to the contrary contained in this Section 3 or elsewhere in this Plan, and subject to adjustment as provided in Section 10(c) hereof,11 of this Plan, the aggregate number of shares of Common Stock which may beactually issued pursuant toor transferred by the Company upon the exercise of Incentive Stock Options shall be the lesser of (i) the number ofwill not exceed 4,590,000 shares of Stock that may be subject to Awards under Section 4(a), or (ii) 15,000,000.Common Stock. (d) Minimum Vesting Requirements; Minimum Holding Requirements for CEO Awards. In general, (i) Except as set forth below in this Section 3(d)(i), no Awardaward granted under this Plan 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 a one-year vesting period or a one-year performance period, as applicable. However, up to 5% of the sum of (i)(A) the number of shares available for issuance under the Share Reserve asaggregate limit set forth in Section 3(a)(i) of the 2016 Effective Datethis Plan plus (ii)(B) 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 granted under the Predecessor Plans that are forfeited, or have expired, terminated or been canceled for any reason whatsoever (other than by reason of exercise or vesting), including shares that are returned to the Share Reserve from Awards outstanding on the 2016 Effective Date and are cancelled or from Full Value Awardsforfeited, expire, are settled for cash (in whole or in satisfaction of withholding tax liabilities,part), or are unearned (in whole or in part) after the Effective Date, may be granted onissued or delivered after the 2016 Effective Date in the formrespect of Awardsawards that do not meet such minimum vesting requirements. NothingIn addition, nothing in this Section 4(d)3(d)(i) shall limit the Company’s ability to grant Awardsawards that contain rights to accelerated vesting onin connection with the award recipient’s death or Disability or in connection with a terminationChange in Control (or the Committee’s authority to provide for the acceleration of employmentan award, or service,portion thereof, in any such circumstances), and any shares subject to any portion of an award that provides for acceleration, or limitthat accelerates, in connection with the Company’s powers under Section 10(c)award recipient’s death or Disability, or in connection with a Change in Control, shall not count against the 5% pool of shares described in the immediately preceding sentence (the “5% Pool”). In addition, the minimum vesting criteria set forth in this Section 4(d)3(d)(i) 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, and the shares subject to any such award shall not count against the 5% Pool. (e) Application
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(ii) Any award granted under this Plan on or after the Effective Date to a person who, at the time of Limitationsgrant of such award, is the chief executive officer of the Company shall be subject to the provisions of this Section 3(d)(ii). The limitations contained in Section 4Any such award shall apply onlyprovide that, as to Awardsany Net Shares acquired pursuant to the award, the award recipient shall not sell or otherwise transfer such Net Shares prior to the first to occur of (A) one year after the date such Net Shares have been acquired pursuant to the award and are vested, and (B) the date that are settledthe award recipient is no longer employed by the deliveryCompany or one of shares of Stock.its Subsidiaries. The Committee may adopt reasonable counting procedures to ensure appropriate counting, avoid double counting (as, for example,restrictions in the casepreceding sentence shall not apply to sales or transfers (A) to one or more “family members” (as such term is defined in the General Instructions to a Registration Statement on Form S-8) for tax or estate planning purposes, provided that the transferee shall continue to be subject to the restrictions on sale and transfer of tandemthe Net Shares pursuant to this Section 3(d)(ii) as though such Net Shares had continued to be held by the award recipient, or substitute awards) and make adjustments if(B) in connection with or following a Change in Control. For purposes of this Section 3(d)(ii), “Net Shares” means the total number of shares acquired pursuant to the award, less any shares sold or withheld to pay the purchase or exercise price of Stock actually delivered differs from the number ofaward and any shares previously countedsold or withheld to satisfy any tax and tax withholding obligations arising in connection with an Award.the grant, exercise, vesting or payment of the award. 5. Eligibility; Per-Person Award Limitations.
(a) Eligibility(e) Non-Employee Director Compensation Limit. Awards may be granted underNotwithstanding anything contained in this Section 3, or elsewhere in this Plan, to 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,contrary and 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 any non-employee Director in any fiscalcalendar year by any one Participant shall be $2,000,000, and (iii)granted compensation (including, without limitation, cash compensation) for the maximum amount that may be earnedDirector’s service 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 equity awards (under this Plan or any other stock planmember of the Company) that haveBoard (including Board committees) in such year having an aggregate value (measured at the Date of Grant as applicable, and calculating the value of any awards based on the 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 Independenta non-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 such non-employee Director by the other Independent Directors to him or hernon-employee directors in respect of such service as an employee or consultant.
6.4. Specific Terms of Awards.
(a) GeneralOption Rights. 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 per Share on the Date of 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) by the actual or constructive transfer to the Company of shares of Common Stock owned by the Optionee having a value at the time of exercise equal to the total Option Price, (iii) subject to any conditions or limitations established by the Committee, 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 (v) by such other methods as may be approved by the Committee. | | | | | | B-6 | | PROXY STATEMENT | | SYNAPTICS INCORPORATED |
(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 broker on a date satisfactory to the Company of some or all of the shares of Common Stock to which such exercise relates. (e) Successive grants may be made to the 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 shareParticipant, subject to the minimum vesting provisions of Section 3(d)(i). (g) Any grant of Option Rights may specify Management Objectives that must (except as the Committee may otherwise provide) 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 Options, 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 will be exercisable more than 10 years from the Date of Grant. The Committee may provide in any Evidence of Award for 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 Participant of Appreciation Rights. 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 subject to all of the requirements, contained in the following provisions: (i) Each grant may specify that the amount payable on exercise of an Appreciation Right will be paid by the dateCompany in cash, shares of grant.Common Stock or any combination thereof. (ii) Other Terms. The Committee shall determine atAny grant may specify that the dateamount payable on exercise of grant or thereafter, the time or times at which and the circumstances under which a Stockan Appreciation Right may be exercised in wholenot 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 in part (including based on achievementperiods. | | | | | | B-7 | | PROXY STATEMENT | | SYNAPTICS INCORPORATED |
(iv) Each grant will specify the period or periods of performance goals and/continuous service by the Participant with the Company or future service requirements),any Subsidiary, if any, that is necessary before the time or times at which Stock Appreciation Rights shall ceaseor 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, subject to the minimum vesting provisions of Section 3(d)(i). (v) Any grant of Appreciation Rights may specify Management Objectives that must (except as the Committee may otherwise provide) 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 become exercisable following terminationdividend equivalents thereon. (vii) Successive grants 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, whether or not a Stock Appreciation Right shall be in tandem or in combination with any other Award, and any other terms and conditions of any Stock Appreciation Right. Stock Appreciation Rights may be either freestanding ormade 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 tandemrespect of each Appreciation Right a Base Price, which (except with other Awards.respect to awards under Section 22 of this Plan) may not be less than the Market Value per Share on the Date of Grant; and (d) Restricted Stock.(ii) No Appreciation Right granted under this Plan may be exercised more than 10 years from the Date of Grant. The Committee is authorizedmay 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 Stock. The Committee may, 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,on 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 on the Date of Grant or until achievement of Management Objectives referred to in Section 6(e) of this Plan (except as the Committee may impose, or as otherwise provided in this Plan. Subject to Section 4(c), the restrictions may lapse separately or in combination atprovide). (d) Each such times, under such circumstances (including based on achievement of performance goals and/or future service requirements), in 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 continuing substantial risk of forfeiture while held by any transferee). | | | | | | B-8 | | PROXY STATEMENT | | SYNAPTICS INCORPORATED |
(e) Any grant of Restricted Stock may specify Management Objectives that, if achieved, will result in termination or early termination of the restrictions 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 Participant, grantedsubject to the minimum vesting provisions of Section 3(d)(i). (g) Any such grant or sale of Restricted Stock shall havewill require that any and all dividends or other distributions paid thereon during the period of the rights of a stockholder, including the right to vote thesuch restrictions be automatically deferred and/or reinvested in additional Restricted Stock, andwhich will be subject to the right to receive dividends thereon (subject tosame restrictions as the underlying award. For the avoidance of doubt, any mandatory reinvestment or other requirement imposed by the Committee). Notwithstanding the foregoing, following the 2018 Effective Date, anysuch 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, subject to the minimum vesting provisions of Section 3(d)(i). (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 (and will be forfeited to the extent such underlying Restricted Stock Units are forfeited). (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)
| | | | | | B-9 | | PROXY STATEMENT | | SYNAPTICS INCORPORATED |
(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. ExceptThe 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, subject to the minimum vesting provisions of Section 3(d)(i).
(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 Stockdividend equivalents are paid (and will be forfeited to the extent the underlying Performance Shares or other property has been distributed.Performance Units are forfeited).
(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. | | | | | | B-10 | | PROXY STATEMENT | | SYNAPTICS INCORPORATED |
(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(c) The Committee may authorize the grant of fully vested shares of Common Stock as a bonus, or may authorize the grant of other awards in lieu of obligations of the Company or a Subsidiary to pay cash or deliver other property under this Plan or under other plans or compensatory arrangements, subject to such terms as will be determined by the Committee in a manner that complies with Section 409A of the Code and Annual Incentive Awardssubject to the minimum vesting provisions of Section 3(d)(i).
(a) Performance Conditions(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 deferred until and paid contingent upon the earning of such awards (and will be forfeited to the extent the applicable requirements for payment of the underlying awards are not satisfied). The right
(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, to exercise or receive a grant or settlement of any Award, and the timing thereof, may be subject to such performance conditions as maythe minimum vesting provisions of Section 3(d)(i). 10. Administration of this Plan. (a) This Plan will be specifiedadministered by the Committee. Subject to the express share limits and provisions of this Plan (including the minimum vesting provisions of Section 3(d)(i)), the Committee is authorized to do all things necessary or desirable in connection with the authorization of awards and the administration of this Plan, including, without limitation (but subject to the express share limits and provisions of this Plan), the authority to (i) determine the persons eligible to receive awards under this Plan; (ii) grant awards to such persons, determine the price (if any) at which securities will be offered or awarded and the number of securities to be offered or awarded to any of such persons (in the case of securities-based awards), determine the other specific terms and conditions of awards (including any vesting or exercisability requirements as to such awards or that no delayed exercisability or vesting is required), establish the events (if any) on which vesting or exercisability may accelerate (which may include, without limitation, specified terminations of employment or services or other circumstances), and establish the events (if any) of termination, expiration or reversion of such awards; (iii) construe and interpret this Plan and any agreements defining the rights and obligations of the Company, its Subsidiaries, and participants under this Plan, make any and all determinations under this Plan and any such agreements, and prescribe, amend and rescind rules and regulations relating to the administration of this Plan or the awards granted under this Plan; (iv) cancel, modify, or waive the Corporation’s rights with respect to, or modify, discontinue, suspend, or terminate any or all outstanding awards, subject to any required consent under Section 18(d); or (v) accelerate, waive or extend the vesting or exercisability, or modify or extend the term of, any or all such outstanding awards in such circumstances as the Committee may determine to be appropriate. 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 to the extent of such delegated authority. The Board may also assume administration of this Plan or certain portions of this Plan, in which case references in this Plan to the Committee will be deemed to be referenced to the Board to the extent the Board has assumed administration of such aspect of this Plan. | | | | | | B-11 | | PROXY STATEMENT | | SYNAPTICS INCORPORATED |
(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 binding on all persons. 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 Rule 13d-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.
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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 comply with Code Section 162(m). (e) Status(ii) the following individuals no longer constitute a majority of Section 7(b)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 Section 7(c) Awards Under Code Section 162(m). Itwhose 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 intenteffect of such offer is to take over and control the Company, and such offer is consummated for the equity securities of the Company that Performance Awards and Annual Incentive Awards under Section 7(b) and 7(c) hereof granted to persons who are designatedrepresenting 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 Committee as likely to be Covered Employees within the meaningStockholders 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 given Participant will be a Covered Employee with respect to a fiscal year that has not yet been completed, the term Covered Employee as used herein shall mean only a person designated by the Committee, at the time of grant of Performance Awardsmerger, consolidation, recapitalization, or an Annual Incentive Award, as likely to be a Covered Employee with respect to that fiscal year. If any provision of the Plan 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 planreorganization of the Company, a reverse stock split of outstanding voting securities, or consummation of any Related Entity, orsuch transaction if Stockholder approval is not obtained, other than any business entity to be acquiredsuch 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 or a Related Entity, or anyimmediately prior to the transaction, with the voting power of each such continuing holder relative to other rightsuch continuing holders not substantially altered in the transaction;
(v) the consummation of a Participant to receive payment fromtransaction approved by the Company or any Related Entity. Such additional, tandem, 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, the Committee shall require the surrenderStockholders of such other Award or award in consideration for the granta plan of the new Award. In addition, Awards may be granted in lieu of cash compensation, including in lieu of cash amounts payable under other planscomplete liquidation of the Company or any Related Entity in whichan agreement for 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 Committeesale 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 madedisposition by the Company of all or a Related Entity uponsubstantial portion of the exerciseCompany’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
| | | | | | B-13 | | PROXY STATEMENT | | SYNAPTICS INCORPORATED |
(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 Rule 13d-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 Option or otherEvidence of Award or settlement of an Award may be made in such forms asanother written agreement between a Participant and the Committee shall determine, including, without limitation, cash, other Awards or other property,Company 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, innotwithstanding the discretion of the Committee or upon occurrence of one or more specified events (in addition toPlan’s minimum vesting requirements, if 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 reasonable 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. (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 any provision of this Plan or any Award agreement does not comply with the requirements of Rule16b-3 or Rule16a-1(c)(3) as then applicable to any such transaction, such provision will be construed or deemed amended to the extent necessary to conform to the applicable requirements of Rule16b-3 or Rule16a-1(c)(3) so that such Participant shall avoid liability under Section 16(b).
(e) Code Section 409A. If and to the extent that the Committee believes that any Awards may constitute a “nonqualified deferred compensation plan” under Section 409A of the Code, the terms and conditions set forth in the Award Agreement for that Award shall be drafted in a manner that is intended to comply with, and shall be interpreted in a manner consistent with, the applicable requirements of Section 409A of the Code, unless otherwise agreed to in writing by the Participant and the Company.
(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) Dividends and Dividend Equivalents. Following the 2018 Effective Date, no Award granted under the Plan shall provide for Dividend Equivalents or otherwise provide 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): occurs, then:
(i) The Committee may, within its discretion, accelerate the vestingOption Rights and exercisability of any Award carrying a right to exerciseAppreciation Rights issued that wasare not previouslyyet fully vested and exercisable as of the time of the Change in Control subjectshall immediately become vested and exercisable in full, except to applicable restrictions set forththe extent that a Replacement Award is provided to the Participant in Section 10(a) hereof;accordance with the terms described herein; (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 theAny restrictions, deferral of settlement and forfeiture conditions applicable to anyRestricted Stock, Restricted Stock Units, or other Awardawards granted under Section 9 that vest solely based on continued service (and not based on the Planachievement of Management Objectives) shall lapse and such Awards mayawards shall be deemed fully vested as of the time ofimmediately prior to the Change in Control, except to the extent of any waiver bythat 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 restrictionsthereto 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 be replaced with a Replacement Award that will vest thereafter pursuant to the service-based vesting schedule set forth in Section 10(a) hereof;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 anyRestricted Stock Units granted with Management Objectives that the Company describes as “Market Stock Units,” a prorated portion of such outstanding Award subject to achievementMarket Stock Units shall vest based on actual performance 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 as ofManagement Objectives through the date of the Change in Control. (b) Definition of “Change in Control.” A “Change in Control” shall be deemed to have occurred upon:
(i) Upon the consummation of a transaction approved by the stockholders The remainder 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 doMarket Stock Units (that did 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) Individuals who, as of the date on which the Award is granted, constitute the Board (the “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 Award 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 Directors of the Company) shall be, for purposes of this Agreement, considered as though such person were a member of the Incumbent Board; or
(iii) the acquisition (other than from the Company) by any person, entity or “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) the Company or a Related Entity, (2) any person, entity or “group” that as of the date on which the Award is granted owns beneficial ownership (within the meaning of Rule13d-3 promulgated under the Securities Exchange Act) of a Controlling Interest or (3) any employee benefit plan of the Company or a Related Entity.
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), “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 transfereesvest 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, exceptimmediately preceding sentence) will vest in accordance with their regular vesting schedule 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 (whetherset forth in the formEvidence 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, thenunless the successor or acquiring entity or an affiliate thereof may, within 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,Change in Control does not causeprovide a Replacement Award for such an assumption or substitution,remaining Market Stock Units. If such Replacement Award is not provided, then each Awardany remaining restrictions, deferral of settlement and forfeiture conditions applicable to such Market Stock Units shall terminate uponlapse and such Market Stock Units shall be deemed fully vested as of immediately prior to 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)13. Other AdjustmentsClawback/Recovery.. In addition, the Committee is authorized to make adjustments in the terms All awards (cash 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 Awardsequity) granted under Section 8(b) hereof or Annual Incentive Awards granted under Section 8(c) hereof to Participants designated by the Committee as Covered Employeesthis Plan 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)(a) 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 Awardaward would have been lower had it been calculated on the basis of such restated results, or (ii)(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 Awardsawards (to the extentthen-outstanding), the recoupment of any gains realized with respect to such Awards,awards, or a combination of the foregoing, to the extent of the overpayment.
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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.” (e) Taxes. The Company and any Related Entity are authorized to withhold from any Award granted, any payment relatingtermination” that may be applicable to an Awardaward granted under this Plan.
14. Non-U.S. Participants. In order to facilitate the making of any grant or combination of grants under this Plan, including from a distribution of Stock,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 payrollSubsidiary outside of the United States of America or other paymentwho provide services to the Company or any Subsidiary under an agreement with a Participant, amounts of withholding and other taxes dueforeign nation or potentially payable in connection with any transaction involving an Award, and to take such other actionagency, as the Committee may deem advisableconsider necessary or appropriate to enableaccommodate differences in local law, tax policy or custom. Moreover, the CompanyCommittee may approve such supplements to or amendments, restatements or alternative versions of this Plan (including sub-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 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 Stocksecretary 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 Employeeappropriate officer of the Company may certify any such document as having been approved 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 reductionadopted in the number of sharessame manner as this Plan. No such special terms, supplements, amendments or cash amount subject torestatements, however, will include any portion of such Awardprovisions 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 accordanceare inconsistent with the terms of an Award.
(i) Unfunded Status of Awards; Creation of Trusts. Thethis Plan is intendedas then in effect unless this Plan could have been amended 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 anyeliminate 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 Planinconsistency without further approval 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).Stockholders.
(k)15. Payments in the Event of Forfeitures; Fractional SharesTransferability.. 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” 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 the Internal Revenue Code of 1986, as amended from time to time, including regulations thereunder, and successor provisions and regulations thereto.
(d) “Committee” means the committee appointed by the Board to administer the Plan as described in Section 13 of the Plan or, if no such Committee is appointed, the Board.
(e) “Common Stock” means the Company’s common stock, par value $.001 per share. (f) “Company” means Synaptics Incorporated, a Delaware corporation.
(g) “Compensation” means, with respect to each Participant for each pay period, the full base salary and overtime paid to such Participant by the Company or a Designated Subsidiary. Except as otherwise determined by the Committee, “Compensation”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, nor will any such award be subject in any manner to anticipation, alienation, sale, assignment, pledge, encumbrance, attachment or garnishment. 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, 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 so withheld by the Company for tax withholding will be valued at an amount equal to the Market Value per Share 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 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 include: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. | | | | | | B-15 | | PROXY STATEMENT | | SYNAPTICS INCORPORATED |
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. The provisions of this Plan and any grants made hereunder will be construed and interpreted 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) bonusesthe 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 the six-month delay rule set forth in Section 409A of the Code in order to avoid taxes or commissions;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. | | | | | | B-16 | | PROXY STATEMENT | | SYNAPTICS INCORPORATED |
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 to the extent then required by applicable law or deemed necessary or advisable by the Board, any amendment to this Plan shall be subject to Stockholder approval. (b) Except for adjustments in connection with a corporate transaction or event described in Section 11 of this Plan or in connection with a Change in Control as provided herein, 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 (without limitation) 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 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 but subject to the minimum vesting provisions of Section 3(d)(i), 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 earlier of (i) the date this Plan was originally adopted by the Board and (ii) the Effective Date, but all grants made prior to such tenth anniversary 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. | | | | | | B-17 | | PROXY STATEMENT | | SYNAPTICS INCORPORATED |
21. Miscellaneous Provisions. (a) The Company will not be required to issue any amounts contributedfractional 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) The Committee shall establish the effect (if any) of a termination of employment or service on the rights and benefits under each award under this Plan and in so doing may make distinctions based upon the cause of termination and type of award. If the Participant is not an employee of the Company or one of its Subsidiaries, is not a member of the Board, and provides other services to the Company or one of its Subsidiaries, the Committee shall be the sole judge for purposes of this Plan and awards hereunder of whether the Participant continues to render services to the Company or one of its Subsidiaries and the date, if any, upon which such services shall be deemed to have terminated. For purposes of this Plan and any award hereunder, if an entity ceases to be a Subsidiary of the Company, a termination of employment or service shall be deemed to have occurred with respect to each Participant who is employed by or provides services to such Subsidiary and who does not satisfy the requirements for eligibility to receive awards under this Plan (as set forth in the definition of “Participant” in Section 2 of this Plan) after giving effect to the transaction or other event giving rise to the change in status (unless the Subsidiary that is sold, spun-off or otherwise divested (or its successor or a direct or indirect parent of such Subsidiary or successor) assumes the Participant’s award(s) in connection with such transaction). (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) Unless the express policy of the Company or one of its Subsidiaries (as applicable), or the Committee, otherwise provides, or except as otherwise required by applicable law, the employment relationship shall not be considered terminated in the case of: (i) sick leave, (ii) military leave, or (iii) any other leave of absence authorized 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 exerciseone of any stock options or incentive awards; (vi) any amounts paid by the Company or 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 Status as an Employee” means the absence of any interruption or termination of service as an Employee. Continuous Status as an Employee shall not be considered interrupted in the case of a leave of absence agreed to in writing by the Companyits Subsidiaries, or the Designated Subsidiary that employs the Employee,Committee; provided that, such leave is for a period of not more than 90 days orunless reemployment upon the expiration of such leave is guaranteed by contract or statute.
(i) “Designated Subsidiaries” meanslaw or the Subsidiaries that have been designated byCommittee otherwise provides, such leave is for a period of not more than three months. In the Board from time to time in its sole discretion as eligible to participate in the Plan.
(j) “Employee” meanscase of any person, including an Officer, whose customary employment withemployee of 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 dayon an approved leave of each Exercise Period.
(l) “Exchange Act” means the Securities Exchange Act of 1934, as amended.
(m) “Exercise Date” means the last Trading Day ending on or before November 15 immediately following the First Offering Date, and the last Trading Day ending on or before each May 15 and November 15 thereafter.
(n) “Exercise Period” means, for any Offering Period, each period commencing on the 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.
(p) “Fair Market Value” means, with respect to a share of Common Stock, 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 of an Offering Period, the term “Offering Date” shall mean the first Trading Dayabsence, continued vesting of the Exercise Period coinciding with or next succeeding the dayaward while on 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, 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 May 16 or November 16, as applicable, immediately following the end of the previous Offering Period and ending on May 15 or November 15, as applicable, which is 24 months thereafter.
(t) “Officer” means a person who is an officer of the Company within the meaning of Section 16 under the Exchange Act and the rules and regulations promulgated thereunder.
(u) “Participant” means an Employee who has elected to participate in the Plan by filing an enrollment agreement with the Company as provided in Section 5 of the Plan.
(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 withheldleave 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) Any Employee who has completed at least three (3) months of employment with the Company or any Designated Subsidiary and who is an Employee as of the 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 any Employee who is an Employee as of the First Offering Date shall be eligible to become a Participant as of such First Offering Date.
(b) Notwithstanding any provision of the Plan to the contrary, no Participant shall be granted an option under the Plan (i) to the extent that if, immediately after 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 possessing 5% or more of the total combined voting power or value of all classes of stockemploy of the Company or one of its Subsidiaries may be suspended until the employee returns to service, unless the Committee otherwise provides or applicable law otherwise requires. In no event shall an award be exercised after the expiration of any Subsidiaryapplicable maximum term of the Company, or (ii)award.
(f) No Participant will have any rights as a Stockholder with respect 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) for each calendar year in which such option is outstanding at any time. 4.Offering Periods. The Plan shall generally be implemented by a series of Offering Periods. The first Offering Period commenced on the First Offering Date and ended on November 15, 2012, which was 22 1/2 months thereafter, and succeeding 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 15 or November 15, as applicable, which is 24 months thereafter. If, however, the Fair Market Value of a shareshares of Common Stock on any Exercise Date (except the final scheduled Exercise Date of any Offering Period) is lower than the Fair Market Value of a share of Common Stock on the Offering Date, then the Offering Period in progress shall end immediately following the close of trading on such Exercise Date, and a new Offering Period shall begin on the next subsequent May 16subject to awards granted to him 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) daysher under this Plan prior to the scheduled beginningdate as 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 on 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 the Offering Period, unless sooner terminated by the Participant as provided in Section 11.
(c) Unless a Participant elects otherwise prior to the last Exercise 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 be deemed (i) to have elected to participate in the immediately succeeding Offering Period (and, for purposes 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 succeeding Offering Period.
6.Participant Contributions.
(a) Except as otherwise authorized by the Committee 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 deductions 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%actually recorded as the holder of such shares of Common Stock upon the stock records 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 Periods as provided in Section 5(c)). The amount of payroll deductions shall be a whole percentage (i.e., 1%, 2%, 3%, etc.) of the Participant’s Compensation.Company.
(b) A Participant may discontinue his or her participation in the Plan as provided in Section 11, or may decrease or increase the rate or amount of his or her payroll deductions during 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 change in rate or amount shall be effective with the first full payroll period following ten (10) business days after the Company’s receipt of the new enrollment agreement.
| | | | | | B-18 | | PROXY STATEMENT | | SYNAPTICS INCORPORATED |
(c) Notwithstanding the foregoing, to the extent necessary to comply with Section 423(b)(8) of the Code and Section 3(b) hereof, a Participant’s payroll deductions may be decreased to 0% at such time during any Exercise Period which is scheduled to end during the current calendar year that the aggregate of all payroll deductions accumulated
(g) Except with respect to such Exercise PeriodOption Rights and any other Exercise Period ending within the same calendar year are equal to the product of $25,000 multiplied by the Applicable Percentage for the calendar year. Payroll deductions shall recommence at the rate provided in the Participant’s enrollment agreement at the beginning of the following Exercise Period which is scheduled to end in the following calendar year, unless terminated by the Participant as provided in Section 11. (d) Notwithstanding anything to the contrary in the foregoing, but subject to the limitations set forth in Section 3(b),Appreciation Rights, the Committee may permit Participants to make after-tax contributionselect to defer the Plan at such times and subject 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 purchaseissuance of shares of Common Stock pursuant to options granted under this 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 to the Participant’s account under the Plan. No interest shall accrue or be credited with respect to a Participant’s Plan Contributions. All Plan Contributions received or held by the Company may be used by the Company for any corporate purpose, and the Company shall not be obligated to segregate or otherwise set apart such Plan Contributions from any other corporate funds.
7.Grant of Option.
(a) On a Participant’s Entry Date, subject to the limitations set forth in Sections 3(b) and 12(a), the Participant shall be granted an option to purchase on each subsequent Exercise Date during the Offering Period in which such Entry Date occurs (at the Exercise Price determined as provided in Section 8 below) up to a number of shares of Common Stock determined by dividing such Participant’s Plan Contributions accumulated priorpursuant to such Exercise Daterules, procedures or programs as it may establish for purposes of this Plan and retainedwhich are intended to comply with the requirements of Section 409A of the Code. The Committee also may provide that deferred issuances and settlements include the crediting of dividend equivalents or interest on the deferral amounts.
(h) If any provision of this Plan is or becomes invalid or unenforceable in 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 provided in Section 7(b). (b) The Fair Market Value of a share of Common Stock on a given date shall be determinedjurisdiction, or would disqualify this Plan or any award under any law deemed applicable by the Committee, such provision will be construed or deemed amended or limited in its discretion; provided, that if there is a public market forscope to conform to applicable laws or, in the Common Stock, the Fair Market Value per share shall be either (i) the closing pricediscretion of the Common Stock on such date (or,Committee, it will be stricken and the remainder of this Plan will remain in the event that the Common Stock is not traded on such date, on the immediately preceding trading date), as reported by the National Associationfull force and effect. Notwithstanding anything in this Plan or an Evidence 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 priorAward to the valuation date, the valuecontrary, nothing in this Plan or in an Evidence 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 becomeAward prevents 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) daysfrom providing, without prior to the Offering Date thereof.
9.Exercise of Options. Unless the Participant withdraws from the Plan as provided in Section 11, 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 such option shall be purchased for the Participant at the applicable Exercise Price with the accumulated Plan Contributions then credited to the Participant’s account under the Plan. During a Participant’s lifetime, a Participant’s option to purchase shares hereunder is exercisable only by the Participant.
10.Delivery. As promptly as practicable after each Exercise Date, the Company shall arrange for the delivery to each Participant (or the Participant’s beneficiary), as appropriate, 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 such Participant’s option. Any amount remaining to the credit of a Participant’s account after an Offering Period (other than an amount which is insufficient to purchase a full share of common stock) shall be returned to the Participant as soon as administratively practicable after the end of the Offering Period.
11.Withdrawal; Termination of Employment.
(a) A Participant may withdraw from the Plan at any time by giving written notice to the Company. AllCompany, 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.
(i) Awards payable under this Plan Contributions credited toshall be payable in shares or from the Participant’s account and not yet invested in Common Stock will be paid to the Participant as soon as administratively practicable after receiptgeneral assets of the Participant’s noticeCompany, and no special or separate reserve, fund or deposit shall be made to assure payment of withdrawal,such awards. No Participant or other person shall have any right, title or interest in any fund or in any specific asset of the Participant’s option to purchase sharesCompany or any Subsidiary by reason of any award hereunder. Neither the provisions of this Plan (or of any related documents), nor the creation or adoption of this Plan, nor any action taken pursuant to the provisions of this Plan automatically willshall create, or be terminated,construed to create, a trust of any kind or a fiduciary relationship between the Company or any Subsidiary 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 Period in accordance with Section 5(a). (b) Upon termination of the Participant’s Continuous Status as an Employee prior to any Exercise Date for any reason, including retirement or death, the Plan Contributions credited to the Participant’s account and not yet invested in Common Stock will be returned to the Participant or in the case of death, to the Participant’s beneficiary as determined pursuant to Section 14, and 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 sale 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 toother person. To the extent that anya Participant or other person acquires a right to purchase reserved sharesreceive payment pursuant to any award hereunder, such right shall be no greater than the right of any unsecured general creditor of the Company.
(j) The existence of this Plan, the Evidences of Award and the awards granted hereunder shall not be exercised by any Participant for any reasonlimit, affect, or if such right to purchase shall terminate as provided herein, shares that have not been so purchased hereunder shall 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 right 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 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 used in Rule 16b-3.
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 the death of a Participant and in the absence of a beneficiary validly designated under the Plan who is living at the time of such Participant’s death, the Company shall deliver such shares and/or cash to the executor or administrator of the estate of the Participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its discretion, may deliver such shares and/or cash to the spouse or to any one or more dependents or relatives of the Participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate.
15.Transferability. Neither Plan Contributions credited to a Participant’s account nor any rights to exercise any option or receive shares of Common Stock under the Plan may be assigned, transferred, pledged or otherwise disposed ofrestrict in any way (other than by willthe right or power of the lawsCompany or any Subsidiary (or any of descent and distribution,their respective shareholders, boards of directors or committees thereof (or any subcommittees), as provided in Section 14). Any attempted assignment, transfer, pledgethe case may be) to make or authorize: (a) any adjustment, recapitalization, reorganization or other distribution shall be without effect, except thatchange in the capital structure or business of 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 Participantor any Subsidiary, (b) any merger, amalgamation, consolidation or change 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 eventownership of the proposedCompany or any Subsidiary, (c) any issue of bonds, debentures, capital, preferred or prior preference stock ahead of or affecting the capital stock (or the rights thereof) of the Company or any Subsidiary, (d) any 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 proposedor any Subsidiary, (e) any sale or transfer of all or substantially allany part of the Company’s assets or the mergerbusiness of the Company with or into another corporation (each, a “Sale Transaction”), each option under the Plan shall be assumedany Subsidiary, (f) any other award, grant, or an equivalent option shall be substituted by such successor corporation or a parent or subsidiarypayment 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 purposes of this Section 17(b), an option granted under the Plan shall be deemed to have been assumed if, following the Sale Transaction, the option confers the right to purchase, for each share of option stock subject to the option immediately prior to the Sale Transaction, the consideration (whether stock, cashincentives or other securitiescompensation under any other plan or property) received in the Sale Transaction by holders of Common Stock for each share of Common Stock held on the effective date of the Sale Transaction (and if such holders were offered a choice of consideration, the type of consideration chosenauthority (or any other action with respect to any benefit, incentive or compensation), or (g) any other corporate act or proceeding 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 corporationCompany or its parent (as defined in Section 424(e) of the Code), the Committee may, with the consent of the successor corporation and theany Subsidiary. No Participant provide for the consideration to be received upon exercise of the option to be solely common stock of the successor corporation 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 Committeeother person shall have sole discretion to exercise any claim under any award or award agreement against any member 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, may ator the Company or any time,employees, officers or from 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 423agents of the CodeCompany 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), the Company shall obtain stockholder approvalSubsidiary, as a result of any such amendment.action. Awards need not be structured so as to be deductible for tax purposes.
19.22. TerminationStock-Based Awards in Substitution for Awards Granted by Another Company. Notwithstanding anything in this Plan to the contrary:
(a) Awards may be granted under this 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 Plan.close of the merger or acquisition, and, to the extent applicable, will be conducted in a manner that complies with Section 409A of the 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 all rightsmay account for shares of Employees hereunder shall terminate onCommon Stock substituted for the earliest of: (a)securities covered by the Exercise Date that Participants become entitled to purchase aoriginal awards and the number of shares greater thansubject to the number of reserved shares remaining availableoriginal awards, as well as any exercise or purchase prices applicable to the original awards, adjusted to account for purchase underdifferences in stock prices in connection with the Plan; ortransaction.
| | | | | | B-19 | | PROXY STATEMENT | | SYNAPTICS INCORPORATED |
(b) such date as is determined by the Board in its discretion. In the event that a company acquired by the Plan terminatesCompany or any Subsidiary or with which the Company or any Subsidiary merges has shares available under circumstances describeda pre-existing plan previously approved by stockholders and not adopted in Section 19(a) above, reservedcontemplation of such acquisition or merger, the shares remaining asavailable 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 the termination date shallpre-existing plan absent the acquisition or merger, and may only be soldmade to Participants on a pro rata basis.individuals who were not employees or directors of the Company or any Subsidiary prior to such acquisition or merger. 20.Notices. All notices(c) Any shares of Common Stock that are issued or other communicationstransferred by, a Participantor 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 connection with the Plan shall be deemedSection 3 of this Plan. In addition, no shares of Common Stock subject to have been duly given when received in the form specifiedan award that is granted by, the Company at the location, or by the person, designated by the Company for the receipt thereof.
21.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 stockholdersbecomes an obligation of, the Company for approval within twelve months afterunder Sections 22(a) or 22(b) of this Plan will be added to the date the Plan is adopted by the Board, and the Plan (as amended and restated) shall become effective upon such stockholder approval.aggregate limit contained in Section 3(a)(i) of this Plan.
22.Conditions Upon Issuance of Shares.
(a) The Plan, the grant 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-20 | | PROXY STATEMENT | | SYNAPTICS INCORPORATED |
(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 connection 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 shall govern all matter relating to this Plan except to the extent (if any) superseded by the laws of the United States.
26.Additional Restrictions of Rule16b-3SYNAPTICS INCORPORATED 1251 MCKAY DRIVE SAN JOSE, CA 95131. 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 restrictions as may be required by Rule
16b-3Investor Address Line 1 Investor Address Line 2 Investor Address Line 3 Investor Address Line 4 Investor Address Line 5 John Sample 1234 ANYWHERE STREET ANY CITY, ON A1A 1A1 to qualify for the maximum exemption from Section 16 of the Exchange Act with respect to Plan transactions.
VOTE BY INTERNET Before The 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—Meeting - Go to www.virtualshareholdermeeting.com/syna2018 syna2021
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— PHONE - 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.
NAME
THE COMPANY NAME INC. - COMMON THE COMPANY NAME INC. - CLASS A THE COMPANY NAME INC. - CLASS B THE COMPANY NAME INC. - CLASS C THE COMPANY NAME INC. - CLASS D THE COMPANY NAME INC. - CLASS E THE COMPANY NAME INC. - CLASS F THE COMPANY NAME INC. - 401 K
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DETACH AND RETURN THIS PORTION FOR YOUR RECORDS ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY SYNAPTICS INCORPORATED
The Board of Directors recommends you vote FOR the following:
1. Election of Directors Nominees: For Against Abstain
Nominees
1a. Jeffrey D. Buchanan 1b. Keith B. Geeslin 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 4.
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 2018Officers.
(“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 25, 2022.
4. Proposal to approve the Company’s amended and restated 2019 Equity and Incentive Compensation Plan.
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. Against Abstain
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
 
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-P12387 www.proxyvote.com .
SYNAPTICS INCORPORATED Annual Meeting of Stockholders October 30, 201826, 2021 9:00 AM Pacific Time This proxy is solicited by the Board of Directors
The stockholder(s) hereby appoint(s) Francis F. LeeDean Butler 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 Stockcommon stock of SYNAPTICS INCORPORATED that the stockholder(s) is/are entitled to vote at the Annual Meeting of Stockholders to be held at 9:00 AM, Pacific Time on October 30, 2018,26, 2021, via live interactive webcast on the Internet at www.virtualshareholdermeeting.com/syna2018,syna2021, 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 |
