UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant
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Filed by a party other than the Registrant
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Check the appropriate box:
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Preliminary proxy statement
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Confidential, For Use of the Commission
Only
(as permitted by Rule 14a-6(e)(2))
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Definitive proxy statement
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Definitive additional materials
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Soliciting material pursuant to §240-14a-12
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Maxim Integrated Products, Inc.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement,
if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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x
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
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(4)
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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Fee paid previously with preliminary materials:
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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(1)
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Amount previously paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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PRELIMINARY COPY, SUBJECT TO COMPLETION
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MAXIM INTEGRATED
160 Rio
Robles
San Jose, CA 95134
(408)
601-1000
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October 3, 2016
Dear Maxim Integrated Stockholders:
We are pleased to invite you
to attend Maxim Integrated Products, Inc.s (Maxim Integrated, the Company, we or our) 2016 Annual Meeting of Stockholders to be held on Wednesday, November 9, 2016 at 10:00 a.m. Pacific Time, at
our Event Center at 160 Rio Robles, San Jose, California 95134.
Details regarding admission to the meeting and the business to be conducted are
described in this proxy statement, as well as in the Notice of Internet Availability of Proxy Materials (the Notice) to be mailed to you on or about October 3, 2016. We have also made available a copy of our 2016 Annual Report on Form
10-K with this proxy statement. We encourage you to read our 2016 Annual Report as it includes our audited financial statements and provides information about our business and products.
We have elected to provide access to our proxy materials for the 2016 annual meeting over the Internet under the notice and access rules of the U.S. Securities and Exchange Commission. We believe that
this process expedites stockholders receipt of proxy materials, lowers the costs of our annual meeting, and helps to conserve natural resources. The Notice you will receive in the mail contains instructions on how to access this proxy
statement and our 2016 Annual Report and how to vote online. The Notice also includes instructions on how to request a paper copy of the annual meeting materials, should you wish to do so.
Of particular importance is our proposal to provide that the courts located within the State of Delaware will serve as the exclusive forum for the adjudication of certain legal disputes. We believe that such
provisions are in the best interest of our stockholders.
Our stockholders will also be voting on a proposed amendment to our 1996 Equity Plan to provide
a maximum annual limit on non-employee director compensation for cash and equity and an increase in the shares available under our 2008 Employee Stock Purchase Plan.
We are also seeking an advisory vote on the Companys compensation program for the executive officers named in the proxy statement. We welcome your views on our executive compensation program.
Your vote is important. Please review the instructions on each of your voting options described in this proxy statement as well as in the Notice. Also, please let
us know if you plan to attend our annual meeting when you vote by telephone or over the Internet by indicating your plans when prompted or, if you requested to receive printed proxy materials, by marking the appropriate box on the enclosed proxy
card.
Thank you for your ongoing support of Maxim Integrated. We look forward to seeing you at our 2016 annual meeting.
Sincerely,
Tunç Doluca
President and
Chief Executive Officer
Notice of Annual Meeting of Stockholders
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MAXIM INTEGRATED
160 Rio
Robles
San Jose, CA 95134
(408) 601-1000
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Time and Date
on
Wednesday,
November 9, 2016
(the meeting date),
10:00 a.m., Pacific Time.
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Place
Event Center
160 Rio Robles
San Jose, California 95134.
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Record Date
You are
entitled to vote only if you were
a Maxim Integrated stockholder as of the
close of business on September 16,
2016 (the record date).
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Items of Business
(1)
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To elect eight members of the board of directors to hold office until the next annual meeting of stockholders or until their respective successors have been elected and
qualified.
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(2)
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To ratify the appointment of Deloitte & Touche LLP as Maxim Integrateds independent registered public accounting firm for the fiscal year ending June 24, 2017.
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(3)
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To ratify and approve an amendment to Maxim Integrateds 2008 Employee Stock Purchase Plan (the 2008 ESP Plan) to increase the number of shares available for
issuance thereunder by 1,500,000 shares.
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(4)
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To ratify and approve an amendment to Maxim Integrateds 1996 Stock Incentive Plan (the 1996 Equity Plan) to provide a maximum annual limit on non-employee
director compensation for cash and equity.
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(5)
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To ratify and approve an amendment to Maxim Integrateds Bylaws to designate Delaware as the exclusive forum for the adjudication of certain legal disputes.
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(6)
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Advisory vote to approve the compensation of our Named Executive Officers.
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(7)
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To consider such other business as may properly come before the meeting.
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Adjournments and Postponements
Any action on the items of business described above may be considered at the annual meeting at the time and on the date specified above or at any time and date to which the annual meeting may be properly reconvened
after being adjourned or postponed.
Meeting Admission
You are entitled to attend the annual meeting only if you were a Maxim Integrated stockholder as of the close of business on the record date or hold a valid proxy to vote at the annual meeting. Since seating is
limited, admission to the meeting will be on a first-come, first-served basis. You should be prepared to present photo identification for admittance. If you are not a stockholder of record but hold shares through a brokerage firm, bank,
broker-dealer, trustee or nominee (i.e., in street name), you should provide proof of beneficial ownership as of the record date, such as your most recent account statement prior to the record date, a copy of the voting instruction card provided by
your brokerage firm, bank, broker-dealer, trustee or nominee, or similar evidence of ownership. If you do not provide photo identification or comply with the other procedures outlined above, you will not be admitted to the annual meeting. Cameras
and other video or audio recording devices will not be permitted at the meeting.
Please let us know if you plan to attend the meeting by
marking the appropriate box on the enclosed proxy card. If you requested to receive printed proxy materials or if you vote by telephone or over the Internet, please indicate your plans when prompted.
The annual meeting will begin promptly on the meeting date at 10:00 a.m., Pacific Time. Check-in will begin at 9:30 a.m., Pacific Time, and you
should allow ample time for the check-in procedures.
Your vote is very important. Whether or not you plan to attend the annual
meeting, we encourage you to read this proxy statement and submit your proxy or voting instructions as soon as possible. For specific instructions on how to vote your shares, please refer to the instructions on the Notice of Internet Availability of
Proxy Materials you will receive in the mail, the Questions and Answers section in this proxy statement or, if you requested to receive printed proxy materials, your enclosed proxy card.
By order of the board of directors,
Tunç Doluca
President and Chief Executive Officer
This proxy statement and form of proxy will be filed with
the SEC on or about October 3, 2016. The Notice containing instructions on how to access this proxy statement online or receive a paper or email copy will be mailed to our stockholders on or about October 3, 2016.
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2016 NOTICE OF MEETING AND PROXY STATEMENT
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TABLE OF CONTENTS
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2016 NOTICE OF MEETING AND PROXY STATEMENT
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Questions and Answers
About the Proxy Materials and the Annual Meeting
MAXIM INTEGRATED
160 Rio Robles
San Jose, California 95134
Proxy Statement for Annual Meeting of Stockholders
NOVEMBER 9, 2016
Q:
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Why am I receiving these materials?
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A:
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Our board of directors is making these materials available to you on the Internet, or, upon your request, by delivering printed proxy materials to you, in connection with the
solicitation of proxies for use at Maxim Integrateds 2016 Annual Meeting of Stockholders (the 2016 Annual Meeting or the annual meeting), which will take place on November 9, 2016 at 10 a.m. Pacific Time, at our Event
Center located at 160 Rio Robles, San Jose, California 95134. As a stockholder holding shares of our common stock as of the close of business on September 16, 2016 (the record date), you are invited to attend the annual meeting and you
are requested to vote on the proposals described in this proxy statement.
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As of the record date, 283,643,397 shares of Maxim Integrateds common stock were issued and outstanding.
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What information is contained in this proxy statement?
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The information in this proxy statement relates to the proposals to be voted on at the annual meeting, the voting process, the compensation of our directors and most highly paid
executive officers, and certain other information required to be provided by the rules and regulations of the U.S. Securities and Exchange Commission (the SEC).
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Why did I receive a notice in the mail regarding the Internet availability of proxy materials instead of a full set of printed proxy materials?
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Under the applicable rules of the SEC, we may furnish proxy materials, including this proxy statement and our 2016 Annual Report, to our stockholders by providing access to such
documents on the Internet instead of mailing printed copies. Providing access to proxy materials over the Internet helps us lower the cost of holding our annual meeting and saves natural resources. On or about October 3, 2016, we are mailing the
notice of the Internet Availability of Proxy Materials (the Notice) to our stockholders (except those stockholders who previously requested electronic or paper delivery of proxy materials), which includes instructions as to how
stockholders may access and review all of the proxy materials on the Internet. The Notice also instructs you as to how you may
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submit your proxy on the Internet. If you would like to receive a paper or email copy of our proxy materials, you should follow the instructions for requesting such materials provided in the
Notice.
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How do I get electronic access to the proxy materials?
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The Notice will provide you with instructions regarding how to:
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view our proxy materials for the annual meeting on the Internet and vote online; and
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if desired, instruct us to send our future proxy materials to you electronically by email or by mail.
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I share an address with another stockholder and we only received one copy of the Notice and/or other proxy materials. How may I obtain a separate copy?
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Under the procedure approved by the SEC called householding, if you have the same address and last name as another stockholder and do not participate in electronic
delivery of proxy materials, you may receive only one copy of the Notice, or, if applicable, one copy of any other proxy materials, unless you instruct us otherwise. Please note that you will still be able to access the proxy materials on the
Internet and vote your shares separately. If you received a single copy of the Notice or other proxy materials as a result of householding and you would like to have separate copies of such materials mailed to you, please submit your request either
by calling the number provided below or mailing a written request to the address provided below:
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Corporate Secretary
Maxim Integrated Products, Inc.
160 Rio Robles
San Jose, CA 95134
(408) 601-1000
We will promptly
mail a separate copy of this proxy statement upon our receipt of such request. Please note that if you want to receive a paper copy of this proxy statement or other proxy materials, you should follow the instructions included in the Notice.
MAXIM INTEGRATED PRODUCTS, INC.
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2016 Proxy Statement
1
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2016 NOTICE OF MEETING AND PROXY STATEMENT
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Questions and Answers About the Proxy Materials and the Annual Meeting
(continued)
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What items of business will be voted on at the annual meeting?
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The items of business scheduled to be voted on at the annual meeting are the following:
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the election of eight (8) directors;
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the ratification of the appointment of Deloitte & Touche LLP as Maxim Integrateds independent registered public accounting firm for the fiscal
year ending June 24, 2017;
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the ratification and approval of an amendment to Maxim Integrateds 2008 ESP Plan to increase the number of shares available for issuance thereunder by
1,500,000 shares;
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the ratification and approval of an amendment to Maxim Integrateds 1996 Equity Plan to provide a maximum annual limit on non-employee director compensation
for cash and equity;
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the ratification and approval of an amendment to Maxim Integrateds Bylaws to designate Delaware as the exclusive forum for the adjudication of certain
legal disputes; and
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an advisory vote to approve the compensation of our Named Executive Officers.
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In addition, we will consider any other items of business that properly come before the annual meeting.
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What are the requirements for admission to the meeting?
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Only stockholders holding shares of Maxim Integrateds common stock as of the record date or their proxy holders and Maxim Integrateds guests may attend the meeting.
Since seating is limited, admission to the meeting will be on a first-come, first-served basis. Registration and seating will begin at 9:30 a.m. (Pacific Time). Cameras and other video or audio recording devices will not be permitted at the meeting.
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If you attend, please note that you may be asked to present valid picture identification, such as a drivers license or passport. If you hold your shares as a beneficial
owner through a brokerage firm, bank, broker-dealer, trustee or nominee, you will need to ask your brokerage firm, bank, broker-dealer, trustee or nominee for an admission card in the form of a legal proxy. You will need to bring the legal proxy
with you to the meeting. If you do not receive the legal proxy in time, bring your most recent brokerage statement (reflecting your share ownership as of the record date) with you to the meeting. We can use that to verify your ownership of shares of
our common stock and admit you to the meeting. However, as discussed more fully under the heading What is the difference between holding shares as a stockholder of record and as a beneficial owner?, beneficial owners will not be able to
vote their shares at the annual meeting without a legal proxy.
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How does the board of directors recommend that I vote?
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Our board of directors recommends that you vote your shares (1) FOR the election of each of the nominees to the board of directors (Item 1), (2)
FOR the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending June 24, 2017 (Item 2), (3) FOR the ratification and approval of
an amendment to Maxim Integrateds 2008 ESP Plan to increase the number of shares available for issuance thereunder by 1,500,000 shares (Item 3), (4) FOR the ratification and approval of an amendment to Maxim Integrateds
1996 Equity Plan to provide a maximum annual limit on non-employee director compensation (Item 4), (5) FOR the adoption and approval of an amendment to Maxim Integrateds Bylaws to designate Delaware as the exclusive forum for
the adjudication of certain legal disputes (Item 5), and (6) FOR the approval of the compensation of our Named Executive Officers pursuant to the advisory vote thereon (Item 6).
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How many votes do I have?
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For each proposal to be voted on, you have one vote for each share of Maxim Integrateds common stock you own as of the record date.
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What is the difference between holding shares as a stockholder of record and as a beneficial owner?
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Many Maxim Integrated stockholders hold their shares through a broker or other nominees rather than directly in their own name. As summarized below, there are some distinctions
between shares held of record and those owned beneficially.
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Stockholder of Record:
If your shares are registered directly in your name with our transfer agent, Computershare, as of the record date, you
are considered, with respect to those shares, the stockholder of record, and the Notice was sent directly to you by Maxim Integrated. As the stockholder of record, you have the right to grant your voting proxy directly to Maxim Integrated or to vote
in person at the annual meeting. If you requested to receive printed proxy materials, Maxim Integrated has enclosed or sent a proxy card for you to use. You may also vote on the Internet or by telephone, as described in the Notice and below under
the heading How can I vote my shares without attending the annual meeting?, or by completing and mailing the proxy card if you requested a printed copy of the proxy materials.
Beneficial Owner:
If your
shares are held in an account at a brokerage firm, bank, broker-dealer, trust or other similar organization, like the vast majority of our stockholders, you are considered the beneficial owner of shares held in street name, and the Notice was
forwarded to you by that organization. As the
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MAXIM INTEGRATED PRODUCTS, INC.
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2016 Proxy Statement
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2016 NOTICE OF MEETING AND PROXY STATEMENT
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Questions and Answers About the Proxy Materials and the Annual Meeting
(continued)
beneficial owner, you have the right to direct your brokerage firm, bank, broker-dealer or trustee how to vote your shares, and you are also invited to attend the annual meeting. Since a
beneficial owner is not the stockholder of record, you may not vote your shares in person at the annual meeting unless you obtain a legal proxy from the brokerage firm, bank, broker-dealer, trust or other similar organization that holds your shares
giving you the right to vote the shares at the meeting. If you do not wish to vote in person or you will not be attending the annual meeting, you may vote by proxy. You may vote by proxy over the Internet, by telephone or by mail, as described in
the Notice and below under the heading How can I vote my shares without attending the annual meeting?
Q:
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How can I vote my shares in person at the annual meeting?
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Shares held in your name as the stockholder of record may be voted by you in person at the annual meeting. Shares owned beneficially and held in street name may be voted by you
in person at the annual meeting only if you obtain a legal proxy from the brokerage firm, bank, broker-dealer, trustee or nominee that holds your shares giving you the right to vote the shares.
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Even if you plan to attend the annual meeting, we recommend that you also submit your proxy or voting instructions as described below so that your
vote will be counted if you later decide not to attend the meeting.
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How can I vote my shares without attending the annual meeting?
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Whether you own shares directly as the stockholder of record or own shares beneficially which are held in street name, you may direct how your shares are voted without attending
the annual meeting. If you are a stockholder of record, you may vote by proxy. You may vote by proxy over the Internet or by telephone by following the instructions provided in the Notice, or, if you requested to receive printed proxy materials, you
may also vote by mail pursuant to instructions provided on the proxy card. If you own shares beneficially which are held in street name, you may also vote by proxy over the Internet or by telephone by following the instructions provided in the
Notice, or, if you requested to receive printed proxy materials, you may also vote by mail by following the voting instruction card provided to you by your brokerage firm, bank, broker-dealer, trustee or nominee.
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You may change your vote at any time prior to the taking of the vote at the annual meeting. If you are a stockholder of record, you may change your vote by (1) delivering to
Maxim Integrateds Corporate Secretary at 160 Rio Robles, San Jose, California 95134, a written notice of revocation or a duly executed proxy
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bearing a date subsequent to your original proxy prior to the date of the annual meeting, or (2) attending the annual meeting and voting in person. Attendance at the meeting will not cause
your previously granted proxy to be revoked unless you specifically so request. For shares you own beneficially which are held in street name, you may change your vote by submitting new voting instructions to your brokerage firm, bank,
broker-dealer, trustee or nominee following the instructions they provided, or, if you have obtained a legal proxy from your brokerage firm, bank, broker-dealer, trustee or nominee giving you the right to vote your shares, by attending the annual
meeting and voting in person.
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What happens if I deliver a signed proxy without specifying how my shares should be voted?
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If you sign and deliver your proxy without instructions and do not later revoke the proxy, the proxy will be voted FOR the slate of nominees to the board of directors
described in this proxy statement, and FOR Proposals No. 2, No. 3, No. 4, No. 5, and No. 6. As to any other matter that may properly come before the annual meeting, the proxy will be voted according to the
judgment of the proxy holders.
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How many shares must be present or represented to conduct business at the annual meeting?
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The quorum requirement for holding the annual meeting and transacting business is that holders of a majority of the voting power of the issued and outstanding common stock of
Maxim Integrated as of the record date must be present in person or represented by proxy. Both abstentions and broker non-votes (described below) are counted for the purpose of determining the presence of a quorum.
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What is the voting requirement to approve each of the proposals?
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In the election of directors, the eight nominees receiving the highest number of affirmative FOR votes at the annual meeting will be elected (Item 1).
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The affirmative FOR vote of a majority of the votes cast on the proposal is required to approve (1) the
ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending June 24, 2017 (Item 2), (2) the ratification and approval of an amendment to Maxim
Integrateds 2008 ESP Plan to increase the number of shares available for issuance thereunder by 1,500,000 shares (Item 3), (3) the ratification and approval of an amendment to Maxim Integrateds 1996 Equity Plan to provide a maximum
limit on non-employee director compensation (Item 4), and (4) the advisory vote to approve the compensation of our Named Executive Officers (Item 6). The ratification and
MAXIM INTEGRATED PRODUCTS, INC.
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2016 Proxy Statement
3
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2016 NOTICE OF MEETING AND PROXY STATEMENT
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Questions and Answers About the Proxy Materials and the Annual Meeting
(continued)
approval of an amendment to Maxim Integrateds Bylaws to designate Delaware as the exclusive forum for the adjudication of certain legal disputes requires the affirmative vote of a majority
of the outstanding common stock of Maxim Integrated (Item 5). The vote of stockholders on Item 6 is advisory only and not binding on Maxim Integrated or the board of directors. However, the board of directors and the Compensation Committee will
take the voting results into consideration when making future decisions regarding executive compensation.
Q:
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What are my voting choices?
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A:
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In the election of directors, you may vote FOR or WITHHOLD with regard to all or some of the nominees. Votes cast as WITHHOLD with respect to
the election of directors will be counted for purposes of determining the presence or absence of a quorum at the annual meeting and will have the effect of a vote against the nominee. The board of directors recently adopted majority voting in
uncontested director elections, and thus, if a particular nominee does not receive the affirmative vote of a majority of the votes cast, then the nominee must submit his or her resignation to the board of directors. For Proposals No. 2,
No. 3, No. 4, No. 5, and No. 6, you may vote FOR, AGAINST or ABSTAIN. If you elect to ABSTAIN, the abstention has the same effect as a vote AGAINST.
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What is the effect of broker non-votes and abstentions?
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If you own shares beneficially which are held in street name and do not provide your broker with voting instructions, your shares may constitute broker non-votes.
Generally, broker non-votes occur on a matter when a broker is not permitted to vote on that matter without instructions from the beneficial owner and instructions are not given. In tabulating the voting result for any particular proposal, shares
that constitute broker non-votes are not considered votes cast on that proposal. Therefore, broker non-votes will not affect the outcome of matters being voted on at the meeting, assuming that a quorum is obtained, except that broker non-votes will
have the same effect as a vote against Item 5.
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Abstentions are considered votes cast and thus have the same effect
as votes against the matter.
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Is cumulative voting permitted for the election of directors?
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No. You may not cumulate your votes for the election of directors in this election.
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What happens if additional matters are presented at the annual meeting?
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Other than the six (6) specific items of business described in this proxy statement, we are not aware of any other business to be
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acted upon at the annual meeting. If you grant a proxy, the persons named as proxy holders, Mark Casper and Bruce E. Kiddoo, or either of them, will have the discretion to vote your shares on any
additional matters properly presented for a vote at the annual meeting. If for any reason any of the nominees described in this proxy statement are not available as a candidate for director, the persons named as proxy holders will vote your proxy
for such other candidate or candidates as may be nominated by the board of directors.
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Who will serve as inspector of elections?
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The inspector of elections will be a representative from Broadridge Financial Solutions. Broadridge Financial Solutions will tabulate the votes in connection with the annual
meeting.
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Who will bear the cost of soliciting votes for the annual meeting?
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Maxim Integrated will pay the entire cost of preparing, assembling, printing, mailing and distributing these proxy materials and soliciting votes. If you choose to access the
proxy materials and/or vote over the Internet, you are responsible for Internet access charges you may incur. If you choose to vote by telephone, you are responsible for telephone charges you may incur. In addition to the mailing of these proxy
materials, the solicitation of proxies or votes may be made in person, by telephone or electronic communication by our directors, officers and employees, who will not receive any additional compensation for such solicitation activities. We will,
upon request, reimburse brokerage firms and others for their reasonable expenses in forwarding solicitation material to the beneficial owners of our common stock.
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Where can I find the voting results of the annual meeting?
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We intend to announce preliminary voting results at the annual meeting and publish final results in our current report on Form 8-K, to be filed with the SEC within four
(4) business days of the annual meeting date.
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What is the deadline for submission of stockholder proposals for consideration at the fiscal year 2017 Annual Meeting of Stockholders (the 2017 Annual Meeting)?
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For proposals other than nomination of director candidates: Pursuant to SEC Rule 14a-8(e) promulgated under the Securities Exchange Act of 1934, as amended (the Exchange
Act), a stockholder proposal will be considered for inclusion in our proxy materials for the 2017 Annual Meeting only if the Corporate Secretary of Maxim Integrated receives the proposal by no later than June 5, 2017.
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MAXIM INTEGRATED PRODUCTS, INC.
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2016 Proxy Statement
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2016 NOTICE OF MEETING AND PROXY STATEMENT
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Questions and Answers About the Proxy Materials and the Annual Meeting
(continued)
Our Bylaws also establish an advance notice procedure for stockholders who wish to present a
proposal before an annual meeting of stockholders but do not intend for the proposal to be included in our proxy statement.
Our Bylaws
provide that the only business that may be conducted at an annual meeting is business that is (1) pursuant to Maxim Integrateds proxy materials with respect to such meeting, (2) brought by, or at the direction of, our board of
directors, or (3) brought by a stockholder of Maxim Integrated who is a stockholder of record entitled to vote at the annual meeting who has timely delivered written notice to our Corporate Secretary, which notice must contain the information
specified in our Bylaws. To be timely for our fiscal year 2017 Annual Meeting, our Corporate Secretary must receive the written notice, prepared in accordance with our Bylaws, at our principal executive offices:
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not later than the close of business on August 19, 2017; and
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not earlier than the close of business on July 20, 2017.
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In the event that we hold our 2017 Annual Meeting more than thirty (30) days before or sixty (60) days after the one-year anniversary date of the fiscal year 2016 Annual Meeting, then notice of a
stockholder proposal that is not intended to be included in our proxy statement must be received not later than the close of business on the earlier of the following two (2) dates:
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the ninetieth (90th) day prior to our 2017 Annual Meeting; or
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the tenth (10th) day following the day on which public announcement of the meeting date is made (either in a press release reported by the Dow Jones News
Service, Associated Press or a comparable national news service or in a document publicly filed by Maxim Integrated with the SEC).
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If a stockholder who has notified us of his or her intention to present a proposal at an annual meeting takes any action contrary to the representations made in his or her notice to Maxim Integrateds
Corporate Secretary, or if such representations contain an untrue statement of a material fact or omit a material fact, we are not required to present the proposal for a vote at such meeting.
For nomination of director candidates: Stockholders may propose nominees to be eligible for
election as directors at the 2017 Annual Meeting in accordance with the provisions of our Bylaws. To properly nominate such a candidate, a stockholder must deliver written notice, prepared in accordance with our Bylaws, to Maxim Integrateds
Corporate Secretary prior to the deadlines set forth above for stockholder proposals. Prior to submitting a nomination, stockholders should take care to note all deadlines under the SEC Rules and Maxim Integrated Bylaws described above.
Nominations should be addressed to:
Corporate Secretary
Maxim Integrated Products, Inc.
160 Rio Robles
San Jose, CA
95134
(408) 601-1000
If a stockholder who has notified us of his or her intention to nominate a director candidate at an annual meeting takes any action contrary to
the representations made in his or her notice to Maxim Integrateds Corporate Secretary, or if such representations contain an untrue statement of a material fact or omit a material fact, we are not required to present the nomination at such
meeting. For further information on requirements for director nominations by stockholders, please see our Bylaws and Corporate Governance Guidelines as well as the section entitled Nominations of Director Candidates by Stockholders in
this proxy statement.
Copy of Bylaw and Corporate Governance Guideline Provisions: A copy of our Bylaws and Corporate Governance
Guidelines can be found in the Corporate Governance section of Maxim Integrateds corporate website at
http://investor.maximintegrated.com/corporate-governance
. You may also contact our Corporate Secretary at the address given above for
a copy of the relevant bylaw and Corporate Governance Guideline provisions regarding the requirements for making stockholder proposals and nominating director candidates.
MAXIM INTEGRATED PRODUCTS, INC.
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2016 Proxy Statement
5
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2016 NOTICE OF MEETING AND PROXY STATEMENT
|
Corporate Governance and
Board of Directors Matters
Board of
Directors
The names, ages and qualifications of each of our directors as of October 3, 2016 are as set forth in Proposal No. 1 in this
proxy statement. Except as described therein, each of the nominees has been engaged in his principal occupation during the past five (5) years. There are no family relationships among any of our directors or executive officers.
Board of Directors Leadership Structure and Committee Composition
Currently, there are nine (9) members of the board of directors, consisting of William (Bill) P. Sullivan, Tunç Doluca, Tracy C. Accardi, James R. Bergman, Joseph R. Bronson, Robert E. Grady, William D.
Watkins, A. R. Frank Wazzan, and MaryAnn Wright. Mr. Wazzan will not stand for re-election to the board of directors at the 2016 Annual Meeting. Mr. Sullivan, an independent director, is the Chairman of the board of directors. The Company has
no fixed policy on whether the roles of Chairman and Chief Executive Officer should be separate or combined. This decision is based on the best interests of the Company and its stockholders under the circumstances existing at the time. The board of
directors currently believes that it is most appropriate to separate the roles of Chairman and Chief Executive Officer in recognition of the qualitative differences between the two roles as set forth below. The Chief Executive Officer is primarily
responsible for setting the strategic direction for the Company and the day to day leadership of the Company, while the Chairman presides over meetings of the full board of directors and ensures that the board of directors time and attention
are focused on the matters most critical to the Company.
Our board of directors has the following three (3) standing committees: (1) an Audit
Committee, (2) a Compensation Committee (including its sub-committee, the Equity Grant Sub-Committee), and (3) a Nominating and Governance Committee. Each of the committees operates under a written charter adopted by the board of
directors. All of the committee charters are available in the Corporate Governance section of our website at
http://investor.maximintegrated.com/corporate-governance
. During fiscal year 2016, the board of directors held nine (9) meetings
and acted by written consent four (4) times. During fiscal year 2016, each director attended at least seventy-five percent (75%) of all meetings of the board of directors. While not mandatory, we strongly encourage our directors to attend
our annual meeting of stockholders. All of our directors at the time of the 2015 Annual Meeting of Stockholders attended the 2015 Annual Meeting of Stockholders except for William D. Watkins, who had a traveling conflict and was unable to attend.
Independence of the Board of Directors
Our
board of directors has determined that, with the exception of Mr. Doluca, Maxim Integrateds Chief Executive Officer, all of its members during fiscal year 2016 were, and currently are, independent directors as that term is
defined in the Marketplace Rules of The NASDAQ Stock Market (NASDAQ), including for the purposes of the Audit Committee composition requirements. Such independence definition includes a series of objective tests, including that the
director not be an employee of Maxim Integrated and not be engaged in certain types of business transactions or dealings with Maxim Integrated. In addition, as further required by the NASDAQ rules, the board of directors has made a subjective
determination that no relationships exist between Maxim Integrated and each director which, in the opinion of the board of directors, would interfere with the exercise of independent judgment in carrying out his responsibilities as a director. The
independent directors meet regularly in executive session, without members of management present.
The Boards Role in Risk Oversight
It is managements responsibility to identify, assess and manage the material risks that the Company faces, and the board of directors oversees
management in this effort. Specifically, the board of directors role in the Companys risk oversight process includes receiving periodic reports at regularly scheduled board meetings from members of senior management on areas of material
risk to the Company as they arise, including financial, operational, legal, regulatory, strategic and reputational risks. The full board of directors (or the appropriate committee in the case of risks that are under the purview of a particular
committee) receives these reports from a member of senior management to enable it to understand our risk identification, risk management and risk mitigation strategies. Upon receiving such reports, the board of directors provides such guidance as it
deems necessary.
In general, the entire board of directors has oversight responsibility for the Companys strategic risks, such as mergers and
acquisitions and divestitures, as well as reputational risks. The Audit Committee has oversight responsibility for financial and related legal risks (such as accounting, asset management, tax strategy and internal controls). The board of directors
has delegated primary oversight responsibility with respect to operational risks, such as supply continuity, manufacturing and business continuity, to its Nominating and Governance Committee. Oversight for regulatory and compliance risks and cyber
security are generally shared among board committees. For example, the Nominating and Governance Committee oversees compliance with the Companys Corporate Governance Guidelines and governance related laws, the Audit
6
MAXIM INTEGRATED PRODUCTS, INC.
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2016 Proxy Statement
|
2016 NOTICE OF MEETING AND PROXY STATEMENT
|
Corporate Governance and Board of Directors Matters
(continued)
Committee oversees compliance with the Companys Code of Business Conduct and Ethics and the Compensation Committee oversees compliance with the Companys compensation plans and related
laws and policies. In addition, the chairs of the Audit Committee and Nominating and Governance Committee oversee cyber security risks and the Companys initiatives for prevention. The Companys Internal Audit group performs a risk
assessment as part of their annual audit process and their findings regarding this assessment are presented to the Audit Committee and the Nominating and Governance Committee.
Risk Considerations in our Compensation Policies and Practices
Company management reviewed our compensation
programs, policies and practices in effect during fiscal year 2016 for all employees, including officers, to determine if those programs, policies and practices create or encourage unreasonable or inappropriate risk taking. As part of the risk
assessment, management, including the Chief Executive Officer, Vice President of Human Resources and Vice President, Deputy General Counsel, discussed: (1) the key components and features of the Companys policies and programs, (2) a
methodology to determine if those policies and programs created a material adverse risk to the Company and (3) their conclusions. Based on this assessment, management concluded that the Companys compensation policies and practices for its
employees, including all officers, are not reasonably likely to have a material adverse effect on the Company for the following reasons:
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The Company structures its compensation programs to consist of both fixed and variable components. The fixed portion (base salary) of the compensation programs
is designed to provide steady income regardless of the Companys stock price performance so that executives and employees of the Company will not focus exclusively on stock price performance to the detriment of other important business metrics.
The variable (cash bonus and equity) components of the compensation programs are designed to reward both short and long-term individual and company performance, which we believe discourages employees from taking actions that focus only on the
short-term success of the Company. For short-term performance, annual cash performance bonuses are generally awarded (1) for employees other than those officers who are subject to the reporting requirements in Section 16(a) of the Exchange
Act (executive officers), based on individual performance compared to quarterly goals and Company operating income (excluding the effect of special items), and (2) for executive officers, based on operating income (excluding the
effect of special items), product development effectiveness, and individual performance. For long-term performance, the Company grants various types of equity-based awards that are designed to promote the sustained success of the Company. The
Company attempts to structure equity awards to ensure that employees have equity awards that adequately vest in future years. Restricted stock units generally vest in quarterly installments over a period of one (1) to four (4) years and
provide some value irrespective of our stock price. Performance shares (referred to herein as market share units or MSUs), which the Company began granting to senior members of management in September 2014 on a broad-based
basis, are scheduled to vest in one annual installment approximately four (4) years from grant date based upon the relative stock price performance of the Companys stock price as compared to the SPDR S&P Semiconductor Exchange Traded
Fund. The Company believes that these variable elements of compensation are a sufficient percentage of overall compensation to motivate our employees and officers to achieve superior short-term and long-term corporate results, while the fixed
element is also sufficiently high to discourage the taking of unnecessary or excessive risks in pursuing such results.
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Officers and non-officer employees are encouraged to focus on corporate profitability, which is the key driver to the size of the total bonus pool. If the
Companys profit is lower, then payouts under the applicable bonus programs will be smaller.
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The Company has established substantially similar compensation programs, policies, and targets for executive officers as a group which are also more heavily
weighted toward performance, as well as other employees as a group. The Company believes this encourages consistent behavior and focus across the Company.
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The Company has imposed both a cap on the amount of its annual cash performance bonus pool payable to executive officers at 200% of the target performance bonus
amount for an individual executive office, which the Company believes mitigates excessive risk taking. Even if the Company greatly exceeds its operating income growth targets, the annual cash bonus payable is limited by the pre-determined target
performance bonus amount cap. Additionally, in the event actual operating income (excluding the impact of special items) is less than fifty percent (50%) of target operating income (excluding the impact of special items) for the fiscal
year, no annual cash bonus will be payable to executive officers.
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The Company has strict internal controls over the measurement and calculation of operating income (excluding the effect of special items) designed to keep these
items from being susceptible to manipulation by any employee, including our officers. As part of our internal controls, our finance department oversees and reviews the calculations used by management to determine the total size of the annual bonus
pool payable to executive officers. In addition, all of our employees are required to be familiar with, and our executives are required to periodically certify that they have read and are bound by, our Code of Business Conduct and Ethics, which
covers, among other items, accuracy and integrity of the Companys books and records.
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MAXIM INTEGRATED PRODUCTS, INC.
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2016 Proxy Statement
7
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2016 NOTICE OF MEETING AND PROXY STATEMENT
|
Corporate Governance and Board of Directors Matters
(continued)
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The Company prohibits all of its executive officers and members of the board of directors from engaging in hedging transactions involving the Companys
securities to insulate themselves from the effects of poor stock price performance.
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The Company prohibits its Chief Executive Officer and members of the board of directors from pledging their Company securities as collateral for a loan or
holding those securities in a margin account, except for twenty-five percent (25%) of the number of shares that is in excess of the minimum stock ownership guideline required for members of the board of directors and the Chief Executive
Officer, respectively. In addition, the Company prohibits all other executive officers from pledging their Company securities as collateral for a loan or holding those securities in a margin account, except for fifty percent (50%) of the total
number of shares of common stock owned by them.
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Audit Committee and Audit Committee Financial Expert
The Audit Committee, which has been established in accordance with Section 3(a)(58)(A) of the Exchange Act, is currently comprised of James R. Bergman, Joseph
R. Bronson, and William D. Watkins, each of whom is independent within the meaning of the NASDAQ director independence standards, as currently in effect. Since October 2008, Mr. Bronson has been the Chairman of the Audit Committee. The board of
directors has determined that Mr. Bronson is an audit committee financial expert as defined under the rules of the SEC. The Audit Committee has a written charter that was amended and restated effective August 8, 2013. The Audit
Committee held eight (8) meetings during fiscal year 2016 and did not act by written consent during fiscal year 2016. Each member of the Audit Committee attended at least seventy-five percent (75%) of the Audit Committee meetings held
during fiscal year 2016.
The Audit Committee performs, among other tasks, the following primary functions:
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oversees the accounting, financial reporting, and audit processes of Maxim Integrateds financial statements,
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appoints Maxim Integrateds independent registered public accounting firm,
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approves the services performed by Maxim Integrateds independent auditors, and
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reviews and evaluates Maxim Integrateds accounting principles and its system of internal controls, including its internal audit function.
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Compensation Committee and Equity Grant Sub-Committee
The Compensation Committee is currently comprised of Tracy C. Accardi, James R. Bergman, Robert E. Grady, and A. R. Frank Wazzan, each of whom is independent within the meaning of the NASDAQ director independence
standards, as currently in effect. Since March 2007, Mr. Wazzan has been the Chairman of the Compensation Committee. The Compensation Committee has a written charter that was amended and restated effective May 9, 2013.
The Compensation Committee performs, among other tasks, the following primary functions:
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annually reviews and approves corporate goals and objectives relevant to the compensation of the Chief Executive Officer and annually reviews and evaluates Maxim
Integrateds Chief Executive Officer against such approved goals and objectives,
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in consultation with the Chief Executive Officer, reviews and approves the compensation of our executive officers,
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administers the 1996 Equity Plan and 2008 ESP Plan,
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makes recommendations to the board of directors with respect to compensation of our directors and committee members,
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oversees the preparation of the Compensation Discussion and Analysis and issues the Compensation Committee Report in accordance with the regulations of the SEC
to be included in Maxim Integrateds proxy statement or annual report on Form 10-K,
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annually conducts an independence assessment of all compensation consultants and other advisers to it, and
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performs such functions regarding compensation as the board of directors may delegate.
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With respect to its review of the compensation of the Chief Executive Officer and of other executive officers, and to its oversight of the 1996 Equity Plan and 2008 ESP Plan, the Compensation Committee retains an
independent consultant, Compensia, Inc. (Compensia), to review both the effectiveness of such programs in retaining employees and their comparability to plans offered by other companies in the semiconductor industry and the technology
industry broadly.
Pursuant to its charter, on June 30, 2007, the Compensation Committee established a two-person sub-committee that is comprised of
two (2) directors on the Compensation Committee, which sub-committee is referred to as the Equity Grant Sub-Committee. The Equity Grant Sub-Committees purpose is to make equity awards under Maxim Integrateds Equity Award Grant
Policy. The Equity Grant Sub-Committee meets the first Tuesday of each month to consider and approve equity awards to employees; while this sub-committee is comprised of two (2) rotating members, it is common for all three (3) members of
the Compensation Committee to attend these meetings. The Compensation Committee, including the two-person Equity Grant Sub-Committee, held fourteen (14) meetings, and the Compensation Committee did not act by written consent during fiscal year
2016. Each member of the Compensation Committee (or sub-committee, as the case may be) attended all of these meetings.
8
MAXIM INTEGRATED PRODUCTS, INC.
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2016 Proxy Statement
|
2016 NOTICE OF MEETING AND PROXY STATEMENT
|
Corporate Governance and Board of Directors Matters
(continued)
Nominating and Governance Committee
The Nominating and Governance Committee (the Governance Committee) is currently comprised of Robert E. Grady and MaryAnn Wright, each of whom is independent within the meaning of the NASDAQ director
independence standards, as currently in effect. Since October 2008, Mr. Grady has been the Chairman of the Governance Committee.
The Governance
Committee performs, among other tasks, the following primary functions:
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assists the board of directors by identifying and recommending prospective director candidates,
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develops and recommends to the board of directors the governance principles applicable to Maxim Integrated,
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oversees the evaluation of the board of directors and the board of directors evaluation of management,
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oversees the process by which the board of directors, together with management, engages and communicates with stockholders in regard to governance matters, and
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reviews the Companys succession planning process.
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The Governance Committee is responsible for regularly assessing the appropriate size of the board of directors and whether any vacancies on the board of directors are expected, due to retirement or otherwise. In
the event of any anticipated vacancy, the Governance Committee has the policy of considering all bona fide candidates from all relevant sources, including the contacts of current directors, professional search firms, stockholders, and other persons.
The Governance Committee held two (2) formal meetings during fiscal year 2016 and each member of the Governance Committee attended both of such meetings. The Governance Committee also held many ad hoc meetings throughout the year to
discuss governance matters, and the Governance Committee Chair generally provides an update to the full board of directors on governance related matters during each regular board meeting.
Criteria and Diversity
In evaluating potential candidates for the board of directors, the Governance Committee
will apply the criteria set forth in the Companys Corporate Governance Guidelines. These criteria include the candidates experience in the technology industry, the general business or other experience of the candidate, diversity of
experience, the needs of Maxim Integrated for an additional or replacement director, the personality and character of the candidate, diversity, and the candidates interest in the business of Maxim Integrated, other commitments, as well as
numerous other subjective criteria. The Governance Committee does not assign any particular weighting or priority to these factors. While the board of directors has not established specific minimum qualifications for director candidates, the board
of directors believes that such candidates must contribute to the goal of maintaining a board that is (1) independent, (2) of high integrity, (3) composed of directors with qualifications that increase the effectiveness of the board
of directors and (4) compliant with the requirements of applicable rules of NASDAQ and the SEC. In addition, we do not have a formal written policy regarding the consideration of diversity in identifying candidates; however, as discussed above,
diversity is one of the numerous criteria the Governance Committee reviews before recommending a candidate.
Nominations of Director Candidates by
Stockholders
Maxim Integrated stockholders may nominate a director candidate (1) at any annual meeting of stockholders in accordance with our
Bylaws, the procedure for which is more fully set forth in the Questions and Answers section of this proxy statement under the heading What is the deadline for submission of stockholder proposals for consideration at the 2017 Annual
Meeting?, (2) at any special meeting of stockholders in accordance with our Bylaws, and (3) by submitting their recommendations to the Governance Committee in accordance with our Corporate Governance Guidelines. The deadline for
nominating director candidates for the 2016 Annual Meeting has already passed.
Maxim Integrateds Corporate Governance Guidelines, together with
Maxim Integrateds restated certificate of incorporation and Bylaws and charters of committees of the board of directors, form the framework for the corporate governance of Maxim Integrated. Maxim Integrateds Corporate Governance
Guidelines are available in the Corporate Governance section of Maxim Integrateds website at
http://investor.maximintegrated.com/corporate-governance
. Pursuant to our Corporate Governance Guidelines, our board of directors will consider
all bona fide director candidates nominated by stockholders of Maxim Integrated.
More specifically, the board of directors has established the following
procedures by which stockholders may submit nominations of director candidates for consideration by the Governance Committee and the board of directors:
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To nominate a director candidate for consideration by the Governance Committee, a stockholder must have held at least 100,000 shares of Maxim Integrated stock
for at least twelve (12) consecutive months leading up to the date of the recommendation and must notify the Governance Committee by writing to the General Counsel of Maxim Integrated.
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MAXIM INTEGRATED PRODUCTS, INC.
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2016 Proxy Statement
9
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2016 NOTICE OF MEETING AND PROXY STATEMENT
|
Corporate Governance and Board of Directors Matters
(continued)
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The nominating stockholders notice shall set forth the following information:
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(1) To the extent reasonably available, information relating to such director nominee as would be required to be disclosed in a proxy statement
pursuant to Regulation 14A under the Exchange Act in which such individual is a candidate for election to the board of directors;
(2)
The director nominees written consent to (a) if selected by the Governance Committee as a director candidate, be named in Maxim Integrateds proxy statement and (b) if elected, serve on the board of directors; and
(3) Any other information that such stockholder believes is relevant in considering the director nominee. Stockholder recommendations to the
Governance Committee or the board of directors should be sent to:
Corporate Secretary
Deputy General Counsel
Maxim
Integrated Products, Inc.
160 Rio Robles
San Jose, CA 95134
(408) 601-1000
For purposes of nominating a director candidate to be considered at an annual meeting, it is unnecessary to send recommendations to the board of directors or the Governance Committee. Instead, a stockholder wishing
to nominate a director candidate at an annual meeting must follow the procedures set forth in our Bylaws, including providing written notice prepared in accordance with our Bylaws to Maxim Integrateds General Counsel and Corporate Secretary.
For more detailed information on nomination requirements at a future annual meeting, please see the Questions and Answers section of this proxy statement under the heading What is the deadline for submission of stockholder proposals for
consideration at the 2017 Annual Meeting?
Equity Grant Date Policy
The board of directors has adopted a specific procedure in the granting of equity awards to our officers, directors and employees, as set forth in the Companys Equity Award Grant Policy effective June 4,
2007 (the Equity Policy). The Equity Policy can be located on the Companys Website at
http://www.investor.maximintegrated.com/corporate-governance.
Under the Equity Policy, equity awards may only be granted by our board of
directors or the Compensation Committee of the board of directors, as well as a two-person subcommittee of the Compensation Committee (the Equity Grant Sub-Committee), at a duly noticed meeting. Equity awards may not be granted by unanimous written
consent in lieu of a meeting. In addition, the Company invites its Vice President of Human Resources, a senior member from the stock administration team, and the Companys independent registered public accounting firm (the Auditors)
to each meeting of the Compensation Committee (or Equity Grant Sub-Committee), at which equity awards are granted. In fiscal year 2016, our Corporate Secretary, our Vice President of Human Resources, a senior member from the stock administration
team and the Auditors, in the capacity as independent observers, generally attended the meetings of the Compensation Committee (or Equity Grant Sub-Committee) at which equity awards were granted. The grant date for an equity award is the date on
which any of the above-listed granting bodies meets and approves the equity award.
We follow the following specific procedures with respect to the grant
of equity awards that are contained in the Equity Policy:
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New Hire Grants; Special Recognition/Promotional Equity Grants: Equity awards to newly hired non-officer employees or awards for special recognition to existing
non-officer employees are made on the first Tuesday of the month (or the succeeding month) after the date on which the individual commences employment with us or following the special recognition event. Equity awards to newly hired officers or
awards for special recognition to officers are made on the first Tuesday of the month (or a succeeding month) after the date on which the individual commences employment with us or following the special recognition event that is during an open
trading window under our Insider Trading Policy.
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Annual Equity Grants: Annual equity grants to employees and officers are made during an open trading window under our Insider Trading Policy, which are typically
granted in September of each year.
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Equity Awards to Directors: Equity awards are made to incumbent non-employee directors upon their re-election to the board of directors at the annual meeting of
stockholders. Equity awards to newly appointed non-employee directors are made on the first Tuesday of the month (or a succeeding month) after the date on which the individual is appointed to the board of directors that is during an open trading
window under our Insider Trading Policy.
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Compensation Committee Interlocks and Insider Participation
No member of Maxim Integrateds Compensation Committee is, or ever has been, an executive officer or employee of Maxim Integrated or any of its subsidiaries.
No interlocking relationship exists, or during fiscal year 2016 existed, between Maxim Integrateds board of directors or Compensation Committee and the board of directors or compensation committee of any other company.
10
MAXIM INTEGRATED PRODUCTS, INC.
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2016 Proxy Statement
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2016 NOTICE OF MEETING AND PROXY STATEMENT
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Corporate Governance and Board of Directors Matters
(continued)
Outside Advisors
Our board of directors and each of its committees may retain outside advisors and consultants of their choosing at Maxim Integrateds expense. Committees of the board of directors may retain outside advisors
and consultants of their choosing without the consent of the board of directors.
Board Effectiveness
Our board of directors performs an annual self-assessment to evaluate its effectiveness in fulfilling its obligations. For fiscal year 2016, this assessment was
held in August 2016.
Communication between Stockholders and Directors
Maxim Integrateds Corporate Governance Guidelines provide that any communication from a stockholder to the board of directors generally or to a particular director should be in writing and should be delivered
to the Companys General Counsel at the principal executive offices of the Company. Each such communication should set forth (1) the name and address of such stockholder as they appear on the Companys books, and if the stock is held
by a nominee, the name and address of the beneficial owner of the stock, and (2) the class and number of shares of the Companys stock that are owned of record by such record holder and beneficially by such beneficial owner, together with
the length of time the shares have been so owned. The Companys General Counsel will, in consultation with appropriate directors as necessary, generally screen out communications from stockholders to identify communications that are
solicitations for products and services, matters of a personal nature not relevant for stockholders or matters that are of a type that render them improper or irrelevant to the functioning of the board of directors or the Company. Steps are taken to
ensure that the views of stockholders are heard by the board of directors or individual directors, as applicable, and that appropriate responses are provided to stockholders on a timely basis. Stockholders may send communications to: General
Counsel, Maxim Integrated, 160 Rio Robles, San Jose, California 95134.
The Governance Committee, in accordance with its Charter, oversees the process by
which the board of directors, together with management, engages and communicates with stockholders in regard to governance matters.
Common Stock
Maxim Integrated common stock is currently traded on the NASDAQ Global Select Market under the symbol MXIM.
Headquarters Information
Our headquarters are located at
160 Rio Robles, San Jose, California 95134 and the telephone number at that location is (408) 601-1000.
Code of Business Conduct and Ethics
We have a Code of Business Conduct and Ethics (the Code of Ethics), which applies to all directors and employees, including but not
limited to our principal executive officer, principal financial officer and principal accounting officer. The Code of Ethics is designed to promote: (1) honest and ethical conduct, including the ethical handling of actual or apparent conflicts
of interest arising from personal and professional relationships, (2) full, fair, accurate, timely, and understandable disclosure in reports and documents that we are required to file with the SEC and in other public communications,
(3) compliance with applicable governmental laws, rules and regulations, (4) the prompt internal reporting of violations of the Code of Ethics to an appropriate person or entity, and (5) accountability for adherence to the Code of
Ethics. A copy of the Code of Ethics is available on our website at
http://investor.maximintegrated.com/corporate-governance
. A hard copy of the Code of Ethics will be sent free of charge upon request. We intend to satisfy the disclosure
requirement regarding any amendment to, or a waiver from, a provision of the Code of Business Conduct and Ethics by posting such information on our website.
Hedging Prohibition and Restrictions on Pledging Company Securities
The Company has a policy that prohibits
all of its executive officers and members of the board of directors from engaging in hedging transactions involving the Companys securities. In addition, the Company has a policy that prohibits its Chief Executive Officer and members of the
board of directors from pledging their Company securities as a collateral for a loan or holding those securities in a margin account, except for twenty-five percent (25%) of the number of shares that is in excess of the minimum stock ownership
guideline required for the Chief Executive Officer and members of the board of directors, respectively. In addition, the Company prohibits all other executive officers from pledging their Company securities as collateral for a loan or holding those
securities in a margin account, except for fifty percent (50%) of the total number of shares of common stock owned by them.
MAXIM INTEGRATED PRODUCTS, INC.
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2016 Proxy Statement
11
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2016 NOTICE OF MEETING AND PROXY STATEMENT
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Corporate Governance and Board of Directors Matters
(continued)
Executive Compensation Recoupment Policy
The Company has a policy that provides that in the event of a material restatement of its financial results due to misconduct, the Compensation Committee shall review the facts and circumstances and take actions it
considers appropriate with respect to the compensation of any executive officer whose fraud or willful misconduct contributed to the need for such restatement. Such actions may include, without limitation, seeking reimbursement of any bonus paid to
such executive officer exceeding the amount that, in the judgment of the Compensation Committee, would have been paid had the financial results been properly reported.
Majority Voting in Uncontested Director Elections
The Companys Bylaws provide that in uncontested
elections of directors, if a nominee does not receive the approval from at least a majority of the votes cast, then such nominee is required to submit his or her resignation to the board of directors.
The Ability of Stockholders to Call a Special Meeting
The
Companys Bylaws provide that stockholders owning no less than thirty-five percent (35%) of the total number of common shares outstanding have the ability to call a special meeting of stockholders.
Director Compensation
The following table shows certain
information regarding non-employee director compensation for the fiscal year ended June 25, 2016 (except as otherwise noted):
Director Compensation for Fiscal Year 2016
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Name
(1)
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Fees earned
or paid in
cash ($)
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Restricted
Stock Unit
Awards
($)
(2)
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Total ($)
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James R. Bergman
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74,800
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216,052
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290,852
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Joseph R. Bronson
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87,300
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216,052
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303,352
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Robert E. Grady
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|
|
74,800
|
|
|
216,052
|
|
290,852
|
William P. Sullivan
|
|
|
|
28,650
|
|
|
210,028
|
|
238,678
|
William D. Watkins
|
|
|
|
67,300
|
|
|
216,052
|
|
283,352
|
A.R. Frank Wazzan
|
|
|
|
72,300
|
|
|
216,052
|
|
288,352
|
(1)
|
Mses. Accardi and Wright were appointed as members of the board of directors after the end of fiscal year 2016.
|
(2)
|
Represents the aggregate grant date fair value of grants of restricted stock units made during fiscal year 2016, computed in accordance with Financial Accounting Standards Board
(FASB) ASC Topic 718. Each of Messrs. Bergman, Bronson, Grady, Watkins, and Wazzan was awarded 5,600 restricted stock units on November 12, 2015 in connection with their service on the board of directors, and the aggregate grant
date fair value of each of these awards was $216,052. Mr. Sullivan was awarded 5,600 restricted stock units on June 7, 2016 in connection with his service on the board of directors, and the aggregate grant date fair value of this award was $210,028.
In each case, the aggregate grant date fair value disregards an estimate of forfeitures. The assumptions used in the valuation of these awards are set forth in Note 6, Stock-Based Compensation of the Notes to Consolidated Financial
Statements in our Annual Report on Form 10-K for the fiscal year ended June 25, 2016.
|
The type and aggregate number of outstanding equity
awards held by each of the directors as of June 25, 2016 were as follows:
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Stock
Options (#)
|
|
Unvested Restricted Stock Units (#)
|
Mr. Bergman
|
|
|
|
43,724
|
|
|
|
|
2,800
|
|
Mr. Bronson
|
|
|
|
30,900
|
|
|
|
|
2,800
|
|
Mr. Grady
|
|
|
|
56,548
|
|
|
|
|
2,800
|
|
Mr. Sullivan
|
|
|
|
|
|
|
|
|
5,600
|
|
Mr. Watkins
|
|
|
|
20,600
|
|
|
|
|
2,800
|
|
Mr. Wazzan
|
|
|
|
43,724
|
|
|
|
|
2,800
|
|
12
MAXIM INTEGRATED PRODUCTS, INC.
|
2016 Proxy Statement
|
2016 NOTICE OF MEETING AND PROXY STATEMENT
|
Corporate Governance and Board of Directors Matters
(continued)
Cash Compensation
The cash compensation structure for non-employee directors in fiscal year 2016 was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Director
|
|
Retainer
($)
|
|
Audit
Committee
Retainer ($)
|
|
Compensation
Committee
Retainer ($)
|
|
Nominating and
Corporate
Governance
Committee
Retainer
($)
|
|
Total
Retainer ($)
(3)
|
James R. Bergman
|
|
|
|
57,300
|
|
|
|
|
10,000
|
|
|
|
|
7,500
|
|
|
|
|
|
|
|
|
|
74,800
|
|
Joseph R. Bronson
|
|
|
|
57,300
|
|
|
|
|
30,000
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
87,300
|
|
Robert E. Grady
|
|
|
|
57,300
|
|
|
|
|
|
|
|
|
|
7,500
|
|
|
|
|
10,000
|
(2)
|
|
|
|
74,800
|
|
William P. Sullivan
|
|
|
|
117,300
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
117,300
|
|
William D. Watkins
|
|
|
|
57,300
|
|
|
|
|
10,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
67,300
|
|
A.R. Frank Wazzan
|
|
|
|
57,300
|
|
|
|
|
|
|
|
|
|
15,000
|
(2)
|
|
|
|
|
|
|
|
|
72,300
|
|
(1)
|
Receives a higher retainer as a result of serving as Chairman of the Board. Mr. Sullivan was appointed as Chairman of the Board in May 2016 and received this retainer on a pro
rata basis for fiscal year 2016.
|
(2)
|
Receives a higher retainer as a result of serving as Committee Chairman.
|
(3)
|
All retainer fees are paid quarterly in arrears and Maxim Integrated reimburses each director for reasonable expenses incurred in attending meetings of the board of directors or
its committees.
|
The compensation for services as directors is reviewed on an annual basis by the Compensation Committee and the board of
directors.
Equity Compensation
Non-employee directors participate in the 1996 Equity Plan. Effective November 12, 2014, the board of directors, based upon the recommendation of the
Compensation Committee, determined that each non-employee director should be awarded and vest in 6,400 restricted stock units per calendar year. Restricted stock units are awarded on an annual basis. Restricted stock units vest in quarterly
installments over a one-year period. Equity awards to non-employee directors are generally made at the meeting of the board of directors immediately following their re-election to the board of directors.
* * *
MAXIM INTEGRATED PRODUCTS, INC.
|
2016 Proxy Statement
13
|
2016 NOTICE OF MEETING AND PROXY STATEMENT
|
Proposal No. 1
Election of Directors
The Governance Committee recommended, and the board of directors nominated, William (Bill) P. Sullivan, Tunç Doluca, Tracy C. Accardi, James R. Bergman,
Joseph R. Bronson, Robert E. Grady, William D. Watkins, and MaryAnn Wright as nominees for election as members of our board of directors at the 2016 Annual Meeting. Except as set forth below, unless otherwise instructed, the persons appointed as
proxy holders in the accompanying form of proxy will vote the proxies received by them for such nominees, all of whom are presently directors of Maxim Integrated. William (Bill) P. Sullivan was appointed to the board of directors in December 2015.
Tracy C. Accardi and MaryAnn Wright were appointed to the board of directors in August 2016. All of the other nominees were elected directors by a vote of the stockholders at the last annual meeting of stockholders which was held on
November 12, 2015.
In the event that any nominee becomes unavailable or unwilling to serve as a member of our board of directors, the proxy holders
will vote in their discretion for a substitute nominee. The term of office of each person elected as a director will continue until the next annual meeting or until a successor has been elected and qualified, or until the directors earlier
death, resignation, or removal.
The following paragraphs provide information as of October 3, 2016 about each nominee. Such information includes
the age, position, principal occupation, and business experience for at least the past five (5) years, and the names of other publicly held companies of which the nominee currently serves as a director or has served as a director during the
past five (5) years. In addition, we are providing a description of each nominees specific experience, qualifications, attributes, and skills that led the board of directors to conclude that such nominee should serve as a director. There
are no family relationships among any directors or executive officers of Maxim Integrated.
|
|
|
|
|
Name
|
|
Age
|
|
Director
Since
|
William P. Sullivan
|
|
66
|
|
2015
|
Tunç Doluca
|
|
58
|
|
2007
|
Tracy C. Accardi
|
|
56
|
|
2016
|
James R. Bergman
|
|
74
|
|
1988
|
Joseph R. Bronson
|
|
68
|
|
2007
|
Robert E. Grady
|
|
58
|
|
2008
|
William D. Watkins
|
|
63
|
|
2008
|
MaryAnn Wright
|
|
54
|
|
2016
|
14
MAXIM INTEGRATED PRODUCTS, INC.
|
2016 Proxy Statement
|
2016 NOTICE OF MEETING AND PROXY STATEMENT
|
Proposal No. 1
(continued)
|
|
|
William
(Bill) P. Sullivan
Independent
Director
Since: 2015
Age: 66
|
|
Mr. Sullivan has been a director of Maxim Integrated since December 2015 and has been Chairman of the
Board since May 2016. Mr. Sullivan served as chief executive officer of Agilent Technologies, a global provider of scientific instruments, software, services and consumables in life sciences, diagnostics and applied chemical markets, from 2005 to
March 2015. Mr. Sullivan was Agilents president from 2005 to 2012 and 2013 to 2014. Prior to that, he served as executive vice president and chief operating officer from 2002 to 2005 and senior vice president and general manager of
Agilents Semiconductor Products Group from 1999 to 2002. Mr. Sullivan is currently on the board of directors for Edison International and was previously a director of Agilent, Avnet, Inc., and URS Corporation. He is a graduate of the
University of California, Davis.
In nominating Mr. Sullivan to serve on the
board of directors, the Governance Committee considered as important factors, among other items, Mr. Sullivans experience as president and chief executive officer of a large public company, significant operational experience, and his
leadership skills.
|
Tunç Doluca
Director Since: 2007
Age: 58
|
|
Mr. Doluca has served as a director of Maxim Integrated, as well as the President and Chief Executive Officer, since January 2007. He joined Maxim Integrated in October 1984 and served as Vice President between
1994 and 2005. He was promoted to Senior Vice President in 2004 and Group President in May 2005. Prior to 1994, he served in a number of integrated circuit development positions.
In nominating Mr. Doluca to serve on the board of directors, the Governance Committee
considered as important factors, among other items, Mr. Dolucas experience in the semiconductor industry and thirty (30) years of service at Maxim Integrated, including twenty (20) years as an officer of the Company, including
his current position as the Chief Executive Officer, his technical expertise, and his executive leadership and management skills.
|
MAXIM INTEGRATED PRODUCTS, INC.
|
2016 Proxy Statement
15
|
2016 NOTICE OF MEETING AND PROXY STATEMENT
|
Proposal No. 1
(continued)
|
|
|
Tracy
C. Accardi
Independent
Director Since:
2016
Age: 56
|
|
Ms. Accardi has served as Vice President of Global Research and Development, Breast and Skeletal
Health Solutions at Hologic since 2014, where she leads development of screening, diagnostic and biopsy systems for the detection and treatment of breast cancer. Previously, Ms. Accardi was Chief Technology Officer at Omniguide Surgical from 2012 to
2014, and Executive Consultant at Mednest Consulting from 2011 to 2012, after having held senior research and development positions at Covidien from 2007 to 2011, Johnson & Johnson Company from 2003 to 2007, and Philips Medical Systems from 2001
to 2003. In prior experience, she served in various managerial roles in Corporate Research and Development, Healthcare and Aerospace at General Electric from 1981 to 2001. She received a Master of Science in Mechanical Engineering from Rensselaer
Polytechnic Institute and a Bachelor of Science in Mechanical Engineering from Carnegie Mellon University.
In nominating Ms. Accardi to serve on the board of directors, the Governance Committee considered as important factors, among other items, Ms. Accardis extensive experience and knowledge of the medical
device industry and her demonstrated expertise in technology development, strategic technology planning, program management, licensing and acquisition integration, clinical relationship management and all phases of product
commercialization.
|
James
R. Bergman
Independent
Director Since:
1988
Age: 74
|
|
Mr. Bergman has served as a
director of Maxim Integrated since 1988. Mr. Bergman was a founder and has been General Partner of DSV Associates since 1974 and a founder and General Partner of its successors, DSV Partners III and DSV Partners IV. These firms provide venture
capital and management assistance to emerging companies, primarily in high technology. Since July 1997, he has also served as a Special Limited Partner of Cardinal Health Partners and Cardinal Partners II, which are private venture capital funds.
Mr. Bergman attended UCLA where he graduated with honors with a BS in Engineering and later received an MBA with distinction.
In nominating Mr. Bergman to serve on the board of directors, the Governance Committee considered as important factors, among other items,
Mr. Bergmans experience as a venture capitalist in technology companies, his experience and familiarity with financial statements, and his deep and fundamental understanding of Maxim Integrateds culture, employees and products as a
result of service on the board of directors for over twenty-five (25) years.
|
16
MAXIM INTEGRATED PRODUCTS, INC.
|
2016 Proxy Statement
|
2016 NOTICE OF MEETING AND PROXY STATEMENT
|
Proposal No. 1
(continued)
|
|
|
Joseph
R. Bronson
Independent
Director Since:
2007
Age: 68
|
|
Mr. Bronson has served as a director of Maxim Integrated since November 2007. Since June 2014, he has
been Managing Director, Strategic Advisor for Cowen & Co., a New York City based investment bank. From May 2011 to March 2014 he served as an Advisory Director at GCA Savvian, LLC, a financial advisory services firm. Mr. Bronson is
Principal and Chief Executive Officer of The Bronson Group, LLC, which provides financial and operational consulting services. Mr. Bronson served as the Chief Executive Officer of Silicon Valley Technology Corporation, a private company that
provides technical services to the semiconductor and solar industries from 2009 to March 2010. Mr. Bronson served as President and Chief Operating Officer of Sanmina-SCI, a worldwide contract manufacturer, between August 2007 and October 2008,
and he also served on Sanmina-SCIs board of directors between August 2007 and January 2009. Before joining Sanmina-SCI, Mr. Bronson served as President and Co-Chief Executive Officer of FormFactor, Inc., a manufacturer of advanced
semiconductor wafer probe cards, between 2004 and 2007. Prior to 2004, Mr. Bronson spent twenty-one (21) years at Applied Materials in senior level operations management, concluding with the positions of Executive Vice President and Chief
Financial Officer. In addition to Maxim Integrated, Mr. Bronson currently serves on the boards of directors of Jacobs Engineering Group Inc., SDC Materials, Ryan Herco Flow Solutions, and PDF Solutions, Inc.
In nominating Mr. Bronson to serve on the board of directors, the Governance Committee
considered as important factors, among other items, Mr. Bronsons expertise and familiarity with financial statements, financial disclosures, auditing and internal controls, his senior management level experience at large publicly traded
companies and understanding of board best practices.
|
MAXIM INTEGRATED PRODUCTS, INC.
|
2016 Proxy Statement
17
|
2016 NOTICE OF MEETING AND PROXY STATEMENT
|
Proposal No. 1
(continued)
|
|
|
Robert
E. Grady
Independent
Director Since:
2008
Age: 58
|
|
Mr. Grady has served as a director of Maxim Integrated since August 2008. Since March 2015,
Mr. Grady has been a Partner at Gryphon Investors, a middle market-focused private equity investment firm. From 2010 to 2014, Mr. Grady was a Managing Director at Cheyenne Capital Fund, a private equity investment firm, and served as
the volunteer Chairman of the New Jersey State Investment Council (which oversees the states $79 billion pension fund). From 2000 to 2009, Mr. Grady was a Managing Director at The Carlyle Group, a global private equity firm, where he
served as a member of the firms Management Committee as Chairman and Fund Head of Carlyles U.S. venture and growth capital group, Carlyle Venture Partners (CVP); on the investment committees of CVP, Carlyle Asia Growth Partners, and
Carlyle Europe Technology Partners; and as a director of multiple Carlyle portfolio companies. Between 1993 and 2000, he was a Partner and Member of the Management Committee at Robertson Stephens & Company, an emerging growth-focused
investment banking firm. Previously, Mr. Grady served in the White House as Deputy Assistant to the President of the United States of America, as Executive Associate Director of the Office of Management and Budget (OMB), and as
Associate Director of OMB for Natural Resources, Energy and Science. Mr. Grady is a former director of the National Venture Capital Association, and he served as Chairman of the National Venture Capital Association in 2006 and 2007. From 1993
to 2004, Mr. Grady served on the faculty of the Stanford Graduate School of Business as a Lecturer in Public Management. In addition to Maxim Integrated, Mr. Grady currently serves on the board of directors of Stifel Financial Corp., a
financial services firm focused on investment banking and asset management, and of the Jackson Hole Mountain Resort. From July 2004 to June 2010, Mr. Grady also served on the board of directors of AuthenTec, Inc., a maker of fingerprint
identification semiconductors, and from September 2009 to July 2010, Mr. Grady served on the board of directors of Thomas Weisel Partners Group, Inc., which was acquired by Stifel Financial Corp. Mr. Grady has also been a director of
multiple privately held companies and non-profit organizations over the past 25 years. Currently, Mr. Grady is a Trustee of the St. Johns Hospital Foundation, a member of the Steering Committee of the Wyoming Business Alliance, a member
of the Investment Committee of the Community Foundation of Jackson Hole, and a member of the Council on Foreign Relations. Mr. Grady holds an A.B. degree from Harvard College and a M.B.A. degree from the Stanford Graduate School of
Business.
In nominating Mr. Grady to serve on the board of directors, the
Governance Committee considered as important factors, among other items, Mr. Gradys extensive experience in the financial services industry, including his leadership roles at several large financial services firms, his expertise with
strategic business combinations and corporate strategy development, and his corporate governance experience as the chairman of a large public pension fund, and his experience as a director.
|
18
MAXIM INTEGRATED PRODUCTS, INC.
|
2016 Proxy Statement
|
2016 NOTICE OF MEETING AND PROXY STATEMENT
|
Proposal No. 1
(continued)
|
|
|
William
D. Watkins
Independent
Director Since:
2008
Age: 63
|
|
Mr. Watkins has served as a director of Maxim Integrated since August 2008. Since September 2013,
Mr. Watkins has been the Chief Executive Officer of Imergy Power Solutions, a leader in stationary energy storage using innovative flow battery technology, and in December 2013, Mr. Watkins became the Chairman of the Board at Imergy. From
February 2010 to April 2013, Mr. Watkins was the Chief Executive Officer and a member of the board of directors of Bridgelux, Inc., a leading light emitting diode (LED) developer. Mr. Watkins was Seagate Technologys Chief Executive
Officer between July 2004 and January 2009 and was a member of its board of directors between 2000 and January 2009. Previously, Mr. Watkins was Seagates President and Chief Operating Officer, a position he had held since 2000, and in
this capacity was responsible for the companys global hard disc drive operations. Mr. Watkins joined Seagate in 1996 as part of the companys merger with Conner Peripherals. In addition to Maxim Integrated, Mr. Watkins currently
serves on the board of directors of Flextronics International Ltd. Mr. Watkins is co-owner of the Vancouver Stealth. Watkins holds a B.S. degree in political science from the University of Texas.
In nominating Mr. Watkins to serve on the board of directors, the Governance Committee
considered as important factors, among other items, Mr. Watkins operational and management experience, his experience as Chief Executive Officer, President and Chief Operating Officer of Seagate, his understanding of the electronics and
semiconductor industries, as well as his expertise and familiarity with financial statements.
|
MaryAnn
Wright
Independent
Director Since:
2016
Age: 54
|
|
Ms. Wright serves as Group Vice
President, Technology and Industry Relations at Johnson Controls. During her 9-year tenure with the company, she has served in several leadership roles focused on R&D, engineering and product development. Before joining Johnson Controls, Ms.
Wright was Executive Vice President of Engineering, Product Development, Commercial and Program Management at Collins & Aikman Corporation from 2006 to 2007. Prior to that, she served in several executive management positions at Ford Motor
Company during her tenure from 1988 to 2005. Ms. Wright has served as a director of Group 1 Automotive, Inc. since 2014. She received a Master of Science in Engineering from the University of Michigan, her Master of Business Administration from
Wayne State University and a Bachelor of Arts in International Studies and Economics from the University of Michigan.
In nominating Ms. Wright to serve on the board of directors, the Governance Committee considered as important factors, among other items, Ms. Wrights extensive experience and knowledge of the automotive
industry, her work in the area of energy storage solutions and a variety of advanced powertrain technologies, and her deep technical background.
|
Required Vote
The eight
(8) nominees receiving the highest number of affirmative FOR votes shall be elected as directors. Unless marked to the contrary, proxies received will be voted FOR these nominees.
Recommendation
Our board of directors recommends a vote
FOR the election to the board of directors of each of the foregoing nominees.
* * *
MAXIM INTEGRATED PRODUCTS, INC.
|
2016 Proxy Statement
19
|
2016 NOTICE OF MEETING AND PROXY STATEMENT
|
Proposal No. 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
The Audit Committee of the board of directors has appointed Deloitte & Touche LLP as the independent registered public accounting firm
to audit our consolidated financial statements for the fiscal year ending June 24, 2017. During fiscal year 2016, Deloitte & Touche LLP served as our independent registered public accounting firm and also provided certain tax and
audit-related services. See the information provided in this proxy statement under the heading Independent Public Accountants. Notwithstanding its appointment and even if our stockholders ratify the appointment, the Audit Committee, in
its discretion, may appoint another independent registered public accounting firm at any time during fiscal year 2017 if the Audit Committee believes that such a change would be in the best interests of Maxim Integrated and its stockholders. If the
appointment is not ratified by our stockholders, the Audit Committee may consider whether it should appoint another independent registered public accounting firm. Representatives of Deloitte & Touche LLP are expected to attend the annual
meeting, where they will be available to respond to appropriate questions and, if they desire, to make a statement.
Required Vote
Ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending June 24, 2017
requires the affirmative FOR vote of a majority of the votes cast on the proposal. Unless marked to the contrary, proxies received will be voted FOR ratification of the appointment of Deloitte & Touche LLP.
Recommendation
Our board of directors
recommends a vote FOR the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending June 24, 2017.
* * *
20
MAXIM INTEGRATED PRODUCTS, INC.
|
2016 Proxy Statement
|
2016 NOTICE OF MEETING AND PROXY STATEMENT
|
Proposal No. 3
RATIFICATION AND APPROVAL OF AN AMENDMENT TO MAXIM INTEGRATEDS
2008 EMPLOYEE STOCK PURCHASE PLAN TO INCREASE THE NUMBER OF SHARES AVAILABLE FOR ISSUANCE THEREUNDER BY 1,500,000 SHARES
At the 2016 Annual Meeting,
stockholders will be asked to ratify and approve an amendment to the 2008 ESP Plan to increase the maximum number of shares of Maxim Integrated common stock that may be purchased under the 2008 ESP Plan by an additional 1,500,000 shares. The
amendment to the 2008 ESP Plan to increase the maximum number of shares that may be purchased by 1,500,000 shares was approved by Maxim Integrateds board of directors. The 2008 ESP Plan was originally approved by the board of directors in
October 2008 and then ratified by stockholders on December 15, 2008, and was amended annually starting in 2009 through 2015 to increase the shares reserved for issuance thereunder by 2,000,000 shares on each occasion. Maxim Integrated
anticipates that approximately 1,500,000 shares will be purchased by employees under the 2008 ESP Plan during fiscal year 2017 based upon current assumptions regarding employee participation levels, and is therefore seeking to increase the number of
shares reserved for issuance under the 2008 ESP Plan by 1,500,000 shares.
Prior to the effectiveness of the proposed amendment, a total of 18,000,000
shares of Maxim Integrated common stock had been reserved for issuance under the 2008 ESP Plan. As of September 1, 2016, approximately 6,136,866 shares were available for purchase under the 2008 ESP Plan. The board of directors has approved, subject
to stockholder ratification and approval, an amendment to increase the maximum number of shares of Maxim Integrated common stock reserved under the 2008 ESP Plan by 1,500,000 shares to a total of 19,500,000 shares subject to adjustment as provided
therein.
The closing price of Maxim Integrateds common stock on September 1, 2016 was $41.20 per share.
Maxim Integrated believes that substantial equity participation by employees is important in creating an environment in which employees will be motivated to remain
employed and be productive for long periods of time. Maxim Integrated further believes that the attraction, retention and motivation of highly qualified personnel is essential to Maxim Integrateds continued growth and success and that
incentive plans, such as the 2008 ESP Plan, are necessary for Maxim Integrated to remain competitive in its compensation practices. In addition, Maxim Integrated believes that the 2008 ESP Plan (and other equity incentive programs) is an effective
way to assure alignment of employees and stockholders interests and believes all such equity incentives are in the best interest of the stockholders.
The benefits to be received by Maxim Integrateds employees and officers pursuant to the 2008 ESP Plan are not determinable at this time.
Required Vote
Ratification and approval of the amendments to increase the number of shares reserved under the
2008 ESP Plan requires the approval of a majority of the shares represented in person or by proxy and voting at the annual meeting. A general description of the principal terms of the 2008 ESP Plan approved by the board of directors and the purpose
of the 2008 ESP Plan is set forth below. Unless otherwise marked, all properly signed and returned proxies will be voted FOR Proposal No. 3.
Recommendation
Our board of directors recommends a vote FOR the ratification and approval of
the amendment to Maxim Integrateds 2008 Employee Stock Purchase Plan as described herein.
The following summary of certain provisions of the
2008 ESP Plan is qualified in its entirety by reference to the 2008 ESP Plan, a copy of which is attached as Appendix A to this proxy statement. Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the 2008 ESP
Plan.
Summary of Material Features of the 2008 ESP Plan
Eligible Employees
All employees of Maxim Integrated and its subsidiaries designated by the
committee appointed by the board of directors to administer the 2008 ESP Plan (the Committee) will be eligible to participate in the 2008 ESP Plan, a total of approximately 7,000 individuals. However, the Committee may exclude from
participation (1) a group of certain highly compensated employees, (2) employees who have been employed by Maxim Integrated or any subsidiary for less than two (2) years, (3) employees whose customary employment is for not more
than five (5) months in any calendar year, and (4) employees who customarily works twenty (20) hours per week or less.
MAXIM INTEGRATED PRODUCTS, INC.
|
2016 Proxy Statement
21
|
2016 NOTICE OF MEETING AND PROXY STATEMENT
|
Proposal No. 3
(continued)
Notwithstanding the foregoing, no employee shall be eligible for participation under the 2008 ESP Plan if,
immediately after such grant, that employee would own stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of Maxim Integrated or of any affiliate of Maxim Integrated (including any
stock which such employee may purchase under all outstanding rights and options). In addition, no employee will be permitted to purchase stock under all employee stock participation plans, including the 2008 ESP Plan, of Maxim Integrated and its
affiliates (1) at a rate which in the aggregate exceeds $25,000 of the fair market value of such stock (determined under Section 423 of the Internal Revenue Code of 1986, as amended (the Code), at the time the right is granted)
for any calendar year in which the right is outstanding at any time or (2) 1,600 shares of stock in an offering period, whichever is less.
Participation
The Committee has the power from time to time to grant or provide for the grant
of rights to purchase stock of Maxim Integrated under the 2008 ESP Plan to eligible employees (an Offer) on a date or dates (the Offer Date(s)) identified in the 2008 ESP Plan. Each Offer will be in such form and will contain
such terms and conditions as the Committee deems appropriate, except that each Offer must include the substance of the required provisions of the 2008 ESP Plan, which are described below. Each Offer will be outstanding for approximately twelve
(12) months (the Offer Period) and there will be overlapping Offer Periods.
An eligible employee becomes a participant in an Offer by
delivering a written enrollment form to Maxim Integrated, within the time specified in each Offer, authorizing payroll deductions of up to a maximum percentage of twenty-five percent (25%) of his or her Eligible Compensation (as defined in the
2008 ESP Plan) from each paycheck during the Offer Period. All payroll deductions made for a participant are credited to his or her account under the 2008 ESP Plan and are deposited with the general funds of Maxim Integrated. The purchase price of
the shares is accumulated by payroll deductions (or direct payments, if permitted) over the Offer Period. At any time during the Offer Period, a participant may terminate his or her payroll deductions (as described further below), but a participant
may not increase, reduce or begin such payroll deductions after the beginning of any Offer Period.
Purchase of Stock
The purchase dates generally will occur on the last business day immediately preceding the second to last Saturday in May and November (each a Purchase
Date) in each year unless this day immediately follows the Thanksgiving holiday in the United States in which case the Purchase Date will be the last Friday of November of each year. On each Purchase Date, the balance in each
participants account will be applied to the purchase of whole shares of stock of Maxim Integrated. No fractional shares shall be issued upon the exercise of rights granted under the 2008 ESP Plan. The amount remaining in each
participants account after the purchase of shares that is less than the amount required to purchase one (1) share of stock on the last Purchase Date of an Offer Period shall be returned to the participant as soon as practicable after the
Purchase Date, without interest.
Purchase Price
The purchase price per share of stock acquired pursuant to the 2008 ESP Plan will be the lesser of: (1) eighty-five percent (85%) of the fair market value per share of such stock on the Offer Date and
(2) eighty-five percent (85%) of the fair market value per share of such stock on the Purchase Date. Fair market value per share is defined in the 2008 ESP Plan and generally means the closing price per share on NASDAQ.
Withdrawal
A participant may withdraw from
an Offer by terminating his or her payroll deductions and by delivering to the Committee a written notice of withdrawal from the Offer. Such withdrawal may be elected within a certain period of time prior to the end of the applicable Offer Period.
Upon any withdrawal from an Offer by the employee, Maxim Integrated will distribute to the employee his or her accumulated payroll deductions (reduced for prior purchases), without interest, and such employees interest in the Offer will be
automatically terminated. Upon such withdrawal from an Offer, the employee is not entitled to participate again in such Offer and the employee may not be able to participate in the 2008 ESP Plan for such period of time as determined by the
Committee. Any such employee participating in a new Offer after his or her withdrawal from an Offer will be required to timely submit a new enrollment form.
Termination of Employment
Rights granted pursuant to any Offer under the 2008 ESP Plan shall
terminate immediately upon cessation of an employees employment for any reason, and Maxim Integrated shall promptly distribute to such employee all of his or her accumulated payroll deductions (reduced for prior purchases), without interest.
22
MAXIM INTEGRATED PRODUCTS, INC.
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2016 Proxy Statement
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2016 NOTICE OF MEETING AND PROXY STATEMENT
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Proposal No. 3
(continued)
No transferability
Rights granted under the 2008 ESP Plan are not transferable by a participating employee other than by will or the laws of descent and distribution and are exercisable during such participating employees
lifetime only by him or her.
Adjustments upon Changes in Stock or Other Events
If (1) Maxim Integrated shall at any time be involved in a merger, consolidation, dissolution, liquidation, reorganization, exchange of shares, sale of all or
substantially all of the assets or stock of Maxim Integrated or its subsidiaries or a transaction similar thereto, (2) any stock dividend, stock split, reverse stock split, stock combination, reclassification, recapitalization or other similar
change in the capital structure of Maxim Integrated, or any distribution to holders of Maxim Integrated common stock other than cash dividends, shall occur or (3) any other event shall occur which in the judgment of the Committee necessitates
action by way of adjusting the number or kind of shares, or both, which thereafter may be sold under the 2008 ESP Plan, then the Committee may take any necessary actions to preserve to the participating employees rights substantially
proportionate to the rights existing prior to such event. Such actions may include, without limitation, adjustments in the number and kind of shares subject to the 2008 ESP Plan (including the number of shares reserved for issuance thereunder) and
the purchase price of such shares under the 2008 ESP Plan.
Notwithstanding any other provision of the 2008 ESP Plan, if Maxim Integrateds common
stock ceases to be listed or traded, as applicable, on a national stock exchange or over-the-counter market (the Triggering Event), then, in the discretion of the Committee, (1) the balance in the participating employees
payroll account not yet invested may be refunded to the participating employee, and such participating employee will have no further rights or benefits under the 2008 ESP Plan, (2) an amount equal to the product of the fair market value of a
share on the date of the Triggering Event multiplied by the number of shares such participating employee would have been able to purchase with the balance of his or her payroll account on the date of such Triggering Event may be paid to the
participating employee, and such participating employee shall have no further rights or benefits under the 2008 ESP Plan, or (3) the 2008 ESP Plan may be continued.
Amendment, Suspension and Termination of the 2008 ESP Plan
The board of directors may at any
time and for any reason amend, suspend or terminate the 2008 ESP Plan. However, any amendment of the 2008 ESP Plan shall require stockholder approval if such approval would be required for continued compliance with applicable laws or
regulations. In addition, no termination of the 2008 ESP Plan may alter or impair any outstanding rights to purchase shares pursuant to any offering thereunder.
Federal Income Tax Consequences
The following summarizes only the federal income tax
consequences of participation under the 2008 ESP Plan based upon federal income tax laws in effect on the date of this proxy statement. This summary does not purport to be complete, and does not discuss any non-U.S., state or local tax consequences.
In addition, the discussion does not address tax consequences which may vary with, or are contingent on, a participants individual circumstances. Each participant in the 2008 ESP Plan is strongly advised to consult with his or her personal tax
advisor regarding participation in the 2008 ESP Plan.
The 2008 ESP Plan, and the right of participants to make purchases thereunder, is intended to
qualify under the provisions of Sections 421 and 423 of the Code (except to comply with applicable foreign or local law). Under these provisions, no income will be taxable to a participant on the Offer Date or at the time of purchase of shares.
Amounts deducted from a participants pay under the 2008 ESP Plan are part of the employees regular compensation and remain subject to federal, state and local income and employment withholding taxes.
Upon disposition of the shares, the participant will generally be subject to tax, the amount of which will depend upon the participants holding period. If the
participant disposes of his or her shares more than two (2) years after the Offer Date and more than one (1) year after the purchase of the shares, the lesser of (1) fifteen percent (15%) of the fair market value of the shares on
the Offer Date and (2) the excess (or zero (0) if there is no excess) of the fair market value of the shares on the date of the disposition of the shares over the purchase price will be treated as ordinary income, and any further gain will
be treated as long-term capital gain. If the participant disposes off the shares before the expiration of these holding periods, the excess of the fair market value of the shares on the purchase date over the purchase price will be treated as
ordinary income, and any further gain or loss on such disposition will be long-term or short-term capital gain or loss, depending on the holding period.
Maxim Integrated is not entitled to a deduction for amounts taxed as ordinary income or capital gain to a participant except to the extent of ordinary income
reported by participants upon disposition of shares within two (2) years from the Offer Date or within one (1) tax year of the date of purchase. Maxim Integrated is required to report to the United States Internal Revenue Service any
ordinary income recognized by a participant as a result of a disposition if such information is available to Maxim Integrated.
MAXIM INTEGRATED PRODUCTS, INC.
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2016 Proxy Statement
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2016 NOTICE OF MEETING AND PROXY STATEMENT
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Proposal No. 4
RATIFICATION AND APPROVAL OF AN AMENDMENT TO MAXIM INTEGRATEDS
1996 STOCK INCENTIVE PLAN TO PROVIDE A MAXIMUM ANNUAL LIMIT ON NON-EMPLOYEE DIRECTOR COMPENSATION FOR CASH AND EQUITY
At the 2016 Annual Meeting,
stockholders will be asked to ratify and approve an amendment to Maxim Integrateds 1996 Equity Plan to provide a maximum annual limit on non-employee director compensation for cash and equity as well as to reflect certain technical revisions.
The amendment to the 1996 Equity Plan has been approved by the board of directors.
Non-Employee Director Compensation Limit
The proposed amendment would impose a $550,000 limit on the compensation that can be awarded to a non-employee director in any given fiscal year, including the sum
of (1) cash compensation/fees and (2) the grant date fair value of all compensation awarded under the 1996 Equity Plan. This limitation, however, would not apply to the extent a non-employee director has been or becomes an employee of Maxim
Integrated during such fiscal year.
We believe that it is important to disclose to our stockholders, and for our stockholders to approve, a maximum
annual limit on future awards that we may grant to our non-employee directors. We selected $550,000 as the maximum value that may be awarded to our non-employee directors under Maxim Integrateds 1996 Equity Plan per fiscal year because we
believe it places a meaningful limit on awards to our non-employee directors. While our actual non-employee director compensation in recent years has been considerably lower than this proposed limit, we believe that setting a limitation at this
level provides us with a reasonable degree of flexibility for the remainder of the plan term, or extensions thereof, to make adjustments that we may in the future deem appropriate or necessary for our non-employee director compensation program to
remain competitive in the market.
No Request for Share Increase at 2016 Annual Meeting
A total of 141,100,000 shares of Maxim Integrated common stock had been reserved for issuance under the 1996 Equity Plan. As of September 1, 2016, approximately 24,871,461 shares were available for purchase under
the 1996 Equity Plan, and there were 4,960,712 outstanding stock options with a weighted average exercise price of $25.68 per share and a weighted average remaining contractual term of 2.95 years, and 6,645,034 outstanding restricted stock units.
At the 2016 Annual Meeting, Maxim Integrated is not seeking to increase the number of shares under the 1996 Equity Plan. We have historically requested
that our stockholders approve an increase in the number of shares under the 1996 Equity Plan. For example, at the 2015 Annual Meeting, our stockholders approved the increase in the number of shares under the 1996 Equity Plan by 4,000,000 shares. We
believe that we have a sufficient number of shares (and an appropriate buffer amount) to award to new employees as well as current employees during fiscal year 2017. We may request the approval of an increase in the number of shares under the 1996
Equity Plan at the 2017 Annual Meeting.
The closing price of Maxim Integrateds common stock on September 1, 2016 was $41.20 per share.
Required Vote
Ratification and approval of the amendment to
Maxim Integrateds 1996 Equity Plan requires the approval of a majority of the shares represented in person or by proxy and voting at the annual meeting. A general description of the principal terms of the 1996 Equity Plan approved by the board
of directors and the purpose of the 1996 Equity Plan is set forth below. Unless otherwise marked, all properly signed and returned proxies will be voted FOR Proposal No. 4.
Recommendation
Our board of directors recommends a vote FOR the amendment to Maxim
Integrateds 1996 Equity Plan as described herein.
The following summary of certain provisions of the 1996 Equity Plan is qualified in its entirety by reference to the 1996 Equity Plan, a copy of which is attached as Appendix B to this
proxy statement. Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the 1996 Equity Plan.
24
MAXIM INTEGRATED PRODUCTS, INC.
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2016 Proxy Statement
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2016 NOTICE OF MEETING AND PROXY STATEMENT
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Proposal No. 4
(continued)
Summary of Material Features of the 1996 Equity Plan
Purpose.
The purpose of the 1996 Equity Plan
is to increase stockholder value by attracting and retaining the best available personnel. We believe that our employees, including highly talented analog engineers, which are scarce, are the main driver of stockholder value. The Company needs to
have competitive compensation programs to recruit, retain and motivate our employees, and the Companys equity programs are a key component of its compensation structure. We also believe that employee ownership aligns employee interests with
those of the stockholders and has contributed to Maxim Integrateds success.
Types of Awards.
The 1996 Equity Plan provides for the grant of the following types of incentive awards: (1) stock options, (2) restricted stock units (including MSUs),
and (3) restricted stock, which are each hereinafter referred to individually as an Award. Those who will be eligible for Awards under the 1996 Equity Plan include employees, directors and consultants who provide services to the
Company and its parent and subsidiary companies.
Number of Shares of Common Stock Available Under the 1996 Equity Plan.
A total of 141,100,000 shares of the Companys common stock is reserved for issuance under the 1996 Equity Plan subject to the adjustments
described herein. Any shares subject to awards of restricted stock units and restricted stock will be counted against the share reserve as two (2) shares for every one (1) share subject to such award. Further, to the extent that a share
that was subject to an award that counted as two (2) shares against the 1996 Equity Plan reserve pursuant to the preceding sentence is recycled back into the 1996 Equity Plan, the 1996 Equity Plan will be credited with two (2) shares that
will thereafter be available for issuance under the 1996 Equity Plan.
If we experience a stock split, reverse stock split, stock dividend, spin-off,
combination, or reclassification of our shares, or any other change or increase or decrease in the number of issued shares effected without our receipt of consideration (except for certain conversions of convertible securities), appropriate
adjustments will be made, subject to any required action by the Companys stockholders, to the number of shares available for issuance under the 1996 Equity Plan, the number of shares covered by each outstanding Award, the price per share
covered by each outstanding Award, and the numerical per-person share limits for each type of Award, as appropriate to reflect the stock dividend or other change.
Maxim Integrated common stock covered by the 1996 Equity Plan may be either authorized but unissued shares or treasury shares. If there is a lapse, expiration, termination, or cancellation of any Award granted
under the 1996 Equity Plan without the issuance of shares or payment of cash thereunder, or if shares are issued under any Award under the 1996 Equity Plan and thereafter are reacquired by the Company pursuant to rights reserved upon the issuance
thereof, the shares subject to or reserved for such Award, or so retained or reacquired, may again be used for new Awards under the 1996 Equity Plan. Notwithstanding the foregoing, any shares of common stock of the Company tendered to or withheld by
the Company (a) in connection with the exercise of options under the 1996 Equity Plan (or any other equity plans of the Company) or (b) for the payment of tax withholding on any award shall not be available for future issuance under the
1996 Equity Plan (or any other equity plans of the Company). In addition, the Company will be required to seek prior stockholder approval in order to conduct any award-for-award exchange offer or cash tender offer with respect to outstanding awards
under the 1996 Equity Plan (or any other equity plans of the Company).
Administration.
The 1996 Equity Plan provides that the grant of Awards and other determinations under the 1996 Equity Plan shall be made by (1) the board of directors or
(2) a committee designated by the board of directors (the Administrator) which, in the case of grants of Awards to employees who are officers of the Company, is constituted in a manner to permit the grants and related transactions
under the 1996 Equity Plan to be exempt from Section 16(b) of the Exchange Act in accordance with Rule 16b-3 of the Exchange Act and which, in the case of grants to covered employees, is intended to constitute
performance-based compensation, is made up solely of two (2) or more outside directors as such terms are defined under Section 162(m) of the Code. The Administrator has the authority to select employees, directors,
and consultants to whom Awards may be granted; to determine the number of shares to be covered by each Award; and to determine the terms and conditions of any Award granted under the 1996 Equity Plan.
The Administrator has the authority, in its discretion, to select individuals for participation under the 1996 Equity Plan, determine the number of shares covered
by each Award, to approve the forms of award agreements to be used, to determine the terms and conditions of any Award, to modify or amend the terms of any outstanding Award, to construe and interpret the terms of the 1996 Equity Plan and the Awards
and to take such other action, not inconsistent with the terms of the 1996 Equity Plan as it deems appropriate, among the other enumerated powers in the 1996 Equity Plan.
MAXIM INTEGRATED PRODUCTS, INC.
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2016 Proxy Statement
25
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2016 NOTICE OF MEETING AND PROXY STATEMENT
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Proposal No. 4
(continued)
Performance Based Compensation.
Section 162(m) of the Code limits the annual deduction a public corporation may claim for compensation paid to the Companys Chief Executive Officer and to each of its next three (3) most highly
compensated executive officers (other than the Chief Financial Officer) to $1 million, except in limited circumstances. One such exception is for performance-based compensation, which is defined as compensation paid solely on account of
the attainment of one or more performance goals, but only if (1) the goals are determined by a compensation committee of the board of directors comprised of two (2) or more outside directors, (2) the material terms of the performance
goals are disclosed to stockholders and approved by a majority vote before the remuneration is paid, (3) before the remuneration is paid, the compensation committee certifies that the performance goals and any other material terms were in fact
satisfied, and (4) limits are set on the number of Awards that any individual may receive. The 1996 Equity Plan has been designed to permit the Administrator to grant Awards that qualify as performance-based for purposes of satisfying the
conditions of Section 162(m), thereby permitting the Company to continue to receive a federal income tax deduction in connection with such Awards.
The 1996 Equity Plan limits the number of shares with respect to which incentive stock options and non-qualified stock options may be granted in any fiscal year of
the Company to any participant to 4,000,000 shares and limits the number of shares with respect to which restricted stock units and restricted stock Awards may be granted in any fiscal year of the Company to any participant to 2,000,000 shares under
each type of Award.
Eligibility.
All key employees and selected directors, other service providers, advisors and independent contractors of the Company and any parent or subsidiaries will be
eligible to receive Awards under the 1996 Equity Plan, a total of approximately 2,600 individuals, including our executive officers and non-employee directors. Awards may be granted to eligible persons residing in foreign jurisdictions under
additional terms and conditions to accommodate local laws and to provide such eligible persons favorable treatment under local laws, provided that no such terms are inconsistent with the 1996 Equity Plan.
Duration.
The 1996 Equity Plan will
continue in effect until August 11, 2024, unless terminated earlier by the board of directors.
Corporate Transactions/Changes
in Control/Subsidiary Dispositions.
The Administrator shall have the authority, exercisable either in advance of any actual or anticipated, or at
the time of, an actual corporate transaction, change in control or subsidiary disposition and exercisable at the time of the grant of an Award under the 1996 Equity Plan or any time while an Award remains outstanding, to provide for the full
automatic vesting and exercisability of one or more outstanding unvested Awards under the 1996 Equity Plan and the release from restrictions on transfer and repurchase or forfeiture rights of such Awards in connection with a corporate transaction,
change in control or subsidiary disposition, on such terms and conditions as the Administrator may specify. The Administrator also shall have the authority to condition any such Award vesting and exercisability or release from such limitations upon
the subsequent termination of the continuous status as an employee or service of the participant within a specified period following the effective date of the change in control or subsidiary disposition. The Administrator may provide that any Awards
so vested or released from such limitations in connection with a change in control or subsidiary disposition, shall remain fully exercisable until the expiration or earlier termination of the Award. Effective upon the consummation of a corporate
transaction, all outstanding Awards under the 1996 Equity Plan shall terminate unless assumed by the successor company or its parent.
Options.
The 1996 Equity Plan provides that
the purchase price of any stock option shall be at least one hundred percent (100%) of the fair market value of the Company common stock at the time the option is granted (or 110% in the case of any participant who owns 10% of the total
combined voting power of all classes of the Companys stock). Fair market value per share is defined in the 1996 Equity Plan and generally means the closing price per share on NASDAQ. The Administrator may provide for the payment of the
purchase price in cash, by check, by delivery of other common stock of the Company having a market value equal to the purchase price of such shares, by delivery of an exercise notice accompanied by a copy of irrevocable instructions to a broker to
deliver promptly to the Company proceeds to pay the purchase price, or any combination of the foregoing.
The maximum term of any option will be ten
(10) years from the date it is granted, except that with respect to any participant who owns ten percent (10%) of the combined voting power of all classes of the Companys stock, the term of an incentive stock option may not exceed
five (5) years. Options are generally exercisable for a period of ninety (90) days after termination or retirement, 365 days after termination due to disability or 547 days after termination due to death.
26
MAXIM INTEGRATED PRODUCTS, INC.
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2016 Proxy Statement
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2016 NOTICE OF MEETING AND PROXY STATEMENT
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Proposal No. 4
(continued)
Restricted Stock Units.
The Administrator is able to grant Awards of restricted stock units. Awards of restricted stock units vest in accordance with the terms and conditions established by the Administrator in its sole discretion. For
example, the Administrator may set restrictions based on the achievement of specific performance goals or based upon continued service. There are no minimum vesting requirements for restricted stock units. Upon satisfying the applicable vesting
criteria, a participant is entitled to settlement of the underlying units. The Administrator may pay earned restricted stock units in cash, shares or a combination of both. Awards of restricted stock units may be issued either alone, in addition to,
or in tandem with other Awards granted under the 1996 Equity Plan and/or cash awards made outside of the 1996 Equity Plan. The Administrator will determine the number of units granted pursuant to an Award of restricted stock units, but no
participant will be granted more than 2,000,000 units during any fiscal year.
Restricted Stock.
The Administrator is able to grant Awards of restricted stock. Awards of restricted stock represent unvested shares of Company common stock. Restricted stock vests
in accordance with the terms and conditions established by the Administrator in its sole discretion. For example, the Administrator may set restrictions based on the achievement of specific performance goals or based upon continued service. There
are no minimum vesting requirements for Awards of restricted stock. Awards of restricted stock may be issued either alone, in addition to, or in tandem with other Awards granted under the 1996 Equity Plan and/or cash awards made outside of the 1996
Equity Plan Holders of shares of restricted stock may exercise full voting rights with respect to such shares and will also be entitled to receive all dividends paid with respect to such shares (however, if an dividends are paid in shares, the
shares will be subject to the same restrictions as the shares of restricted stock with respect to which they were paid). The Committee will determine the number of shares granted pursuant to an Award of restricted stock, but no participant will
be granted a restricted stock Award to purchase or acquire more than 2,000,000 shares of common stock during any fiscal year.
Non-Employee Directors.
There is a limit of
$550,000 on the compensation that can be awarded to a non-employee director in any given fiscal year, including the sum of (1) cash compensation/fees and (2) the value of Awards under the 1996 Equity Plan (based on the grant date fair value of
the Awards for financial reporting purposes).
Performance Goals.
The performance goals applicable to an Award, as determined by the Administrator, may provide for a targeted level or levels of achievement using one or more of the following measures: cash flow; cash position;
earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization; earnings per share; economic profit; economic value added; equity or stockholders equity; free cash flow, free cash flow per share; market
share; net income; net profit; net sales; operating earnings; operating income; profit before tax; ratio of debt to debt plus equity; ratio of operating earnings to capital spending; return on net assets; sales growth; share price; share price
performance relative to one or more peer companies; share price performance relative to one or more indexes; total return to stockholders; or total return to stockholders relative to one or more peer companies or indexes. The performance goals for a
participant will be determined by the Administrator based on the Companys tactical and strategic objectives, which may differ from participant to participant and from Award to Award. The Administrator will timely determine whether to make
any adjustments to the calculation of any performance goal with respect to any participant for any significant events or events that are unusual in nature or infrequent in occurrence and other non-recurring items affecting the Company and both
before and after taking into account equity based compensation charges. In all other respects, the performance goals will be calculated in accordance with the Companys financial statements, generally accepted accounting principles, or
under a methodology established by the Administrator prior to the issuance of an Award.
Withholding
Prior to the delivery of any shares or cash pursuant to an Award (or exercise thereof), the Company will have the power and right to withhold, or require the
participant to remit to the Company, an amount sufficient to satisfy federal, state, local, foreign or other taxes required to be withheld. The Administrator may, in its sole discretion, permit the participant to satisfy such withholding
obligation by paying cash, electing to have the Company withhold otherwise deliverable cash or shares having a fair market value equal to the amount required to be withheld, delivering to the Company already-owned shares having a fair market value
equal to the amount required to be withheld, or selling a sufficient number of shares otherwise deliverable to the participant through such means as the Administrator may determine in its sole discretion equal to the amount required to be withheld.
MAXIM INTEGRATED PRODUCTS, INC.
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2016 Proxy Statement
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2016 NOTICE OF MEETING AND PROXY STATEMENT
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Proposal No. 4
(continued)
Amendments and Discontinuance.
The 1996 Equity Plan is subject to amendment, suspension or termination by the Administrator at any time, and to the extent required to comply with applicable laws, the Company must obtain stockholder approval of
any amendment in such manner and to such a degree as required. Any amendment, suspension or termination of the 1996 Equity Plan may not affect outstanding Awards unless mutually agreed otherwise in writing between the participant and the
Administrator.
Repricing Options; Exchange Transactions.
The Administrator does not have the authority to reprice any outstanding option. For these purposes, to reprice an outstanding option means to amend any outstanding option to reduce the
exercise price. In addition, the Administrator will be required to seek prior stockholder approval for conducting any award-for-award exchange offer or cash tender offer with respect to outstanding awards under the 1996 Equity Plan (or any other
equity plans of the Company).
Number of Awards Granted to Employees, Consultants, and Directors
The number of Awards that an employee, director or consultant may receive under the 1996 Equity Plan is in the discretion of the Administrator and therefore cannot
be determined in advance. As of the date of this proxy statement, only stock options, restricted stock units and market share units have been granted under the 1996 Equity Plan. The following table sets forth (1) the aggregate number of shares
subject to options granted under the 1996 Equity Plan during the fiscal year ended June 25, 2016, (2) the aggregate number of restricted stock units granted under the 1996 Equity Plan during the fiscal year ended June 25, 2016 and (3) the
aggregate number of market share units granted under the 1996 Equity Plan during the fiscal year ended June 25, 2016, where each unit represents a right to acquire one (1) share of common stock.
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Name of Individual or
Group
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Number of
Options Granted
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Number of
Restricted Stock
Units Granted
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Number of Market
Share Units
Granted
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Tunç Doluca
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|
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|
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39,052
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56,924
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Bruce E. Kiddoo
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|
|
|
|
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21,120
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24,840
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Vivek Jain
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|
|
|
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15,620
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|
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22,772
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Christopher J. Neil
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|
|
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9,940
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14,492
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Edwin B. Medlin
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11,360
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16,560
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All current executive officers, as a group
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104,192
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|
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145,940
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All current directors who are not executive officers, as a group
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33,600
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All employees, including all current officers who are not executive officers, as a
group
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2,768,181
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215,744
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Federal Income Tax Consequences
Non-qualified Stock Options.
Under existing law and regulations, the grant of non-qualified
stock options with an exercise price equal to the fair market value of the underlying stock on the date of grant will not result in income taxable to the participant. However, the exercise of such a non-qualified stock option results in taxable
ordinary income to the holder and will be subject to withholding for federal income and employment tax purposes. The Company is entitled to an income tax deduction in the amount of the income recognized by the participant. At the time of the
exercise of a non-qualified stock option, the amount so taxable and so deductible will be the difference between the fair market value of the shares purchased and the exercise price. Any gain or loss on the participants subsequent disposition
of the shares of Maxim Integrated common stock will receive long-term or short-term capital gain or loss treatment, depending on whether the shares are held for more than one (1) year following exercise. The Company does not receive a tax
deduction for any such gain realized by the holder.
Incentive Stock Options.
A participant recognizes no income when an incentive stock option is granted or exercised. However, the difference between the fair market value of the shares on
the date of exercise and the option price is classified as an item of adjustment in the year of exercise for purposes of the participants alternative minimum tax.
If the participant does not dispose of the shares received on exercise of an incentive stock option prior to two (2) years from the date of grant and one (1) year from the date of exercise of the stock
option, any gain realized by the holder on the disposition of the stock will be accorded
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2016 Proxy Statement
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2016 NOTICE OF MEETING AND PROXY STATEMENT
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Proposal No. 4
(continued)
long-term capital gain treatment, and no deduction will be allowed to the Company. If either holding period requirement is not satisfied, the participant will recognize ordinary income at the
time of such disqualifying disposition equal to the lesser of (1) the gain realized on the disposition, or (2) the difference between the option price and the fair market value of the shares on the date of exercise, and the
Company will be entitled to an income tax deduction equal to the amount of such ordinary income recognized by the participant. Any additional gain or loss on the disqualifying disposition not reflected above would be long-term or short-term capital
gain, depending on whether the shares are held for more than one (1) year following exercise.
Restricted Stock and Restricted
Stock Units.
A participant generally will not have taxable income at the time an Award of restricted stock and restricted stock units is granted.
Instead, he or she will recognize ordinary income in the first taxable year in which his or her interest in the shares underlying the Award becomes either (1) freely transferable or (2) no longer subject to substantial risk of forfeiture.
However, the recipient of a restricted stock Award may instead elect to recognize income at the time he or she receives the Award of restricted stock in an amount equal to the fair market value of the shares underlying the Award (less any cash paid
for the shares) on the date the Award is granted. The Company generally will be entitled to a tax deduction in connection with an Award under the 1996 Equity Plan in an amount equal to the ordinary income realized by a participant and at the time
the participant recognizes such income.
Tax Effects to the Company
The Company generally will be entitled to a tax deduction in connection with an Award under the 1996 Equity Plan in an amount equal to the ordinary income realized by a participant and at the time the participant
recognizes such income (for example, upon the exercise of a nonqualified stock option). Special rules limit the deductibility of compensation paid to the Companys Chief Executive Officer and to each of its three (3) most highly
compensated other executive officers other than the Chief Financial Officer. In general under Section 162(m) of the Code, the annual compensation paid to any of these executives is deductible only to the extent that it does not exceed
$1,000,000. The Company can, however, preserve the deductibility of certain compensation in excess of $1,000,000 under the 1996 Equity Plan if the conditions of Section 162(m) are met. These conditions include stockholder approval of the 1996
Equity Plan, setting limits on the number of Awards that any individual may receive, and, for Awards other than certain types of stock options, establishing performance criteria that must be met before the Award actually vests or is paid. The 1996
Equity Plan has been designed to permit the Administrator to grant Awards that qualify as performance-based for purposes of satisfying the conditions of Section 162(m), thereby permitting the Company to continue to receive a federal income tax
deduction in connection with those Awards.
The foregoing discussion of the federal income tax aspects of Awards under the 1996 Equity Plan is based upon
federal income tax laws in effect on the date of this proxy statement. The foregoing discussion is not a complete description of the federal income tax aspects of options under the 1996 Equity Plan. In addition, administrative and judicial
interpretations of the application of the federal income tax laws are subject to change. Furthermore, no information is given with respect to state or local taxes that may be applicable to any options. Participants in the 1996 Equity Plan who are
residents of or are employed in a country other than the United States may be subject to taxation in accordance with the tax laws of that particular country in addition to or in lieu of United States federal income taxes. Each participant in
the 1996 Equity Plan is strongly advised to consult with his or her personal tax advisor regarding participation in the 1996 Equity Plan.
* * *
MAXIM INTEGRATED PRODUCTS, INC.
|
2016 Proxy Statement
29
|
2016 NOTICE OF MEETING AND PROXY STATEMENT
|
Proposal No. 5
RATIFICATION AND APPROVAL OF AN AMENDMENT TO MAXIM INTEGRATEDS
BYLAWS TO DESIGNATE DELAWARE AS THE EXCLUSIVE FORUM FOR THE ADJUDICATION OF CERTAIN LEGAL DISPUTES
At the 2016 Annual Meeting, stockholders will be
asked to ratify and approve an amendment to Maxim Integrateds Bylaws that, if adopted, would designate Delaware as the exclusive forum for the adjudication of certain legal actions involving the Company. Specifically, if this proposal is
approved by stockholders, the Bylaws will be amended to insert a new provision as Article XII in the Bylaws and to make appropriate conforming changes (the Amendment). The Amendment has been approved by the board of directors. The text
of the new Article XII, as proposed, would be as follows:
EXCLUSIVE FORUM FOR ADJUDICATION OF DISPUTES
Unless the Corporation consents in writing to the selection of an alternative forum, the sole and exclusive forum for (i) any
derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Corporation to the Corporation or the Corporations
stockholders, (iii) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law, or (iv) any action asserting a claim governed by the internal affairs doctrine shall be the Court of Chancery in the State of
Delaware (or, if the Court of Chancery does not have jurisdiction, the federal district court for the District of Delaware), in all cases subject to the courts having personal jurisdiction over the indispensable parties named as defendants.
Any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of these Bylaws.
Reasons for the Amendment
The board of directors has
carefully considered the proposed Amendment and concluded that adopting the Amendment is in the best interests of the Company and its stockholders for the following reasons:
(i)
|
the Amendment provides that all intra-corporate disputes will be litigated in the State of Delaware, where the Company is incorporated and whose law governs such disputes;
|
(ii)
|
the Delaware courts have developed considerable expertise in dealing with corporate law issues, as well as a substantial and influential body of case law construing
Delawares corporate law and long-standing precedent regarding corporate governance;
|
(iii)
|
Delawares well-developed body of case law would provide stockholders with more certainty about the outcome of intra-corporate disputes;
|
(iv)
|
the Amendment will help the Company avoid multiple lawsuits in multiple jurisdictions on the same matter, thus saving significant costs and effort in addressing cases brought in
multiple jurisdictions;
|
(v)
|
the Amendment will reduce the risk that the outcome of cases in multiple jurisdictions could be inconsistent, even though each jurisdiction purports to follow Delaware law;
|
(vi)
|
the Amendment could help the Company avoid the risk that Delaware law would be misapplied by a court in another jurisdiction;
|
(vii)
|
the Amendment will only regulate the forum where our stockholders may file claims relating to the specified intra-corporate disputes; it does not restrict the ability of our
stockholders to bring such claims, nor does it affect the remedies available if such claims are ultimately successful; and
|
(viii)
|
the Company will retain the ability to consent to an alternative forum in appropriate circumstances where the Company determines that its interests and those of its stockholders
are best served by permitting a particular dispute to proceed in a forum other than Delaware.
|
The board of directors is seeking
stockholder approval for the Amendment based on the following:
(i)
|
the board of directors belief that such a provision is in the best interests of our stockholders;
|
(ii)
|
specific feedback sought and received from some of our larger stockholders on this topic; and
|
(iii)
|
the board of directors own determination that the approval of stockholders should be sought because of the importance of the issue.
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30
MAXIM INTEGRATED PRODUCTS, INC.
|
2016 Proxy Statement
|
2016 NOTICE OF MEETING AND PROXY STATEMENT
|
Proposal No. 5
(continued)
Additionally, the board of directors is increasingly concerned about recent trends in lawyer-driven shareholder
litigation relating to mergers and acquisitions or in connection with other matters submitted for stockholder approval. Such cases are typically filed in the state court where the defendant company is headquartered or where one or more of the
plaintiff shareholders are domiciled, rather than the state where the company is incorporated, thus requiring a court less familiar with the laws of the state of incorporation to interpret and apply those laws.
The board of directors understands that such a provision may limit a stockholders ability to bring certain claims in a judicial forum that the stockholder
finds favorable and therefore the exclusive forum provision may discourage lawsuits with respect to such claims. However, as noted above, the exclusive forum bylaw only regulates the forum where stockholders may file claims relating to the specified
intra-corporate disputes. Our Bylaws does not restrict the ability of stockholders to bring such claims, nor the remedies available if such claims are ultimately successful. Also, our Bylaws permits the Company to consent to an alternative forum if
the Company determines that such other forum is in the best interests of the Companys stockholders.
The board of directors is also aware that
certain proxy advisors, and even some institutional holders, take the view that they will not support an exclusive forum clause until the company requesting it can show it already has suffered material harm as a result of multiple stockholder suits
filed in different jurisdictions regarding the same matter. The board of directors believes that it is more prudent and in the best interests of stockholders to take preventive measures before the Company and the interests of most of its
stockholders are materially harmed by the increasing practice of the plaintiffs bar to file claims in multiple jurisdictions. It is important to note that the Amendment is not being proposed in anticipation of or reaction to any specific
litigation or transaction; rather, the Amendment is being proposed on a prospective basis to prevent potential future harm to the Company and its stockholders.
The board of directors is committed to strong corporate governance practices, including a board of directors that is substantially comprised of independent directors elected on an annual basis, a majority vote
standard in uncontested director elections, an independent Chairman of the Board, stockholders ability to call special meetings, stockholders right to act by written consent, and the absence of a poison pill.
Although exclusive forum provisions such as the one we are proposing are becoming increasingly common, and we know of no reason a court in another state would not
be willing to enforce its terms, we cannot be sure that all state courts would enforce the provision and transfer any covered proceeding to the Delaware courts.
After considering the foregoing, the board of directors believes the Amendment is in the best interests of the Company and its stockholders and recommends that our stockholders ratify and approve the Amendment. If
approved by our stockholders, the Amendment will be immediately effective. If the Amendment is not approved, the board of directors will reconsider whether the Amendment is in the best interests of the Company and its stockholders and conduct
further outreach to stockholders on this topic.
Required Vote
Ratification and approval of the Amendment to our Bylaws requires the affirmative vote of a majority of the outstanding common stock. Unless otherwise marked, all properly signed and returned proxies will be voted
FOR Proposal No. 5.
Recommendation
Our board of directors recommends a vote FOR the ratification and approval of the Amendment to Maxim Integrateds Bylaws to designate Delaware as the exclusive forum for the adjudication of
certain legal disputes.
* * *
MAXIM INTEGRATED PRODUCTS, INC.
|
2016 Proxy Statement
31
|
2016 NOTICE OF MEETING AND PROXY STATEMENT
|
Proposal No. 6
ADVISORY VOTE TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE
OFFICERS
Section 14A of the Securities Exchange Act of 1934 enables Maxim Integrated stockholders to vote to approve, on an advisory or non-binding
basis, the compensation of our Named Executive Officers as disclosed in this proxy statement in accordance with SEC rules.
Maxim Integrated has a
pay-for-performance compensation philosophy that forms the foundation of Maxim Integrateds decisions regarding compensation of its Named Executive Officers. A significant portion of each Named Executive Officers compensation
is tied to performance and is structured to ensure that there is an appropriate balance between long-term and short-term performance, and also a balance between operational performance and stockholder return. This compensation philosophy, and the
program structure approved by the Compensation Committee (including its sub-committee, the Equity Grant Sub-Committee), is central to Maxim Integrateds ability to attract, retain, motivate, and reward the best and brightest executives who have
the talent and experience to achieve our goals. This approach has resulted in Maxim Integrateds ability to attract and retain the executive talent necessary to guide Maxim Integrated. Please see Compensation Discussion and Analysis
contained in this proxy statement for an overview of the compensation of Maxim Integrateds Named Executive Officers.
We are asking for stockholder
approval of the compensation of our Named Executive Officers as disclosed in this proxy statement in accordance with SEC rules, which disclosures include the disclosures under Compensation Discussion and Analysis, the compensation tables
and the narrative discussion accompanying these tables. We have elected to hold this non-binding advisory vote on executive compensation annually. This vote is not intended to address any specific item of compensation, but rather the overall
compensation of our Named Executive Officers and the policies and practices described in this proxy statement. We believe that our executive compensation policies and programs serve the interests of our stockholders and that the compensation
received by our executive officers is commensurate with the performance and strategic position of Maxim Integrated.
This vote is advisory and therefore
not binding on Maxim Integrated, the Compensation Committee (including its sub-committee, the Equity Grant Sub-Committee), or the board of directors. The board of directors and the Compensation Committee value the opinions of Maxim Integrated
stockholders and to the extent there is any significant vote against the Named Executive Officers compensation as disclosed in this proxy statement, we will consider those stockholders concerns, and the Compensation Committee will evaluate
whether any actions are necessary to address those concerns.
Required Vote
Advisory approval of this proposal requires the affirmative FOR vote of a majority of the votes cast on the proposal. Unless otherwise marked, all properly signed and returned proxies will be voted
FOR advisory approval of Proposal No. 6.
Recommendation
Our board of directors recommends a vote FOR the approval of the compensation of Maxim Integrateds Named Executive Officers as disclosed in this proxy statement pursuant to the compensation
disclosure rules of the SEC.
* * *
32
MAXIM INTEGRATED PRODUCTS, INC.
|
2016 Proxy Statement
|
2016 NOTICE OF MEETING AND PROXY STATEMENT
|
Proposal No. 6
(continued)
Security Ownership of Certain Beneficial Owners, Directors and Management
The following table sets forth certain information regarding the ownership of Maxim Integrateds common stock as of June 25, 2016, the last day of fiscal year
2016, by: (1) each current director; (2) each current Named Executive Officers; (3) all executive officers and directors as a group; and (4) all those known by Maxim Integrated to be beneficial owners of more than five percent
(5%) of its common stock. The number of shares beneficially owned is determined under the rules of the SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beneficial Ownership
(1)
|
|
|
Beneficial Owner
|
|
Number of
Shares
|
|
Percent of
Total (%)
|
|
|
5% Shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FMR LLC (Fidelity Management & Research
Company)
(2)
|
|
|
|
24,912,657
|
|
|
|
|
8.8
|
|
|
|
|
|
|
Wellington Management Group LLP
(3)
|
|
|
|
22,156,014
|
|
|
|
|
7.8
|
|
|
|
|
|
|
Dodge & Cox
(4)
|
|
|
|
21,876,261
|
|
|
|
|
7.7
|
|
|
|
|
|
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The Vanguard Group
(5)
|
|
|
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20,484,960
|
|
|
|
|
7.2
|
|
|
|
|
|
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BlackRock Inc.
(6)
|
|
|
|
14,310,737
|
|
|
|
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5.0
|
|
|
|
|
|
|
Directors:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tracy C. Accardi, Director
|
|
|
|
|
|
|
|
|
*
|
|
|
|
|
|
|
James R. Bergman, Director
(7)
|
|
|
|
148,849
|
|
|
|
|
*
|
|
|
|
|
|
|
Joseph Bronson, Director
(8)
|
|
|
|
39,200
|
|
|
|
|
*
|
|
|
|
|
|
|
Robert E. Grady, Director
(9)
|
|
|
|
91,675
|
|
|
|
|
*
|
|
|
|
|
|
|
William P. Sullivan, Director
(10)
|
|
|
|
9,800
|
|
|
|
|
*
|
|
|
|
|
|
|
William D. Watkins, Director
(11)
|
|
|
|
73,061
|
|
|
|
|
*
|
|
|
|
|
|
|
A.R. Frank Wazzan, Director
(12)
|
|
|
|
148,082
|
|
|
|
|
*
|
|
|
|
|
|
|
MaryAnn Wright, Director
|
|
|
|
|
|
|
|
|
*
|
|
|
|
|
|
|
Named Executive Officers:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tunç Doluca, President, Chief Executive Officer and
Director
(13)
|
|
|
|
2,048,233
|
|
|
|
|
*
|
|
|
|
|
|
|
Bruce E. Kiddoo, Senior Vice President and Chief Financial
Officer
(14)
|
|
|
|
276,527
|
|
|
|
|
*
|
|
|
|
|
|
|
Edwin B. Medlin, Senior Vice President and General
Counsel
(15)
|
|
|
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166,857
|
|
|
|
|
*
|
|
|
|
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|
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Vivek Jain, Senior Vice President, Technology and Manufacturing
Group
(16)
|
|
|
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137,839
|
|
|
|
|
*
|
|
|
|
|
|
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Christopher J. Neil, Senior Vice President, Head of Maxim
Ventures
(17)
|
|
|
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405,671
|
|
|
|
|
*
|
|
|
|
|
|
|
All executive officers and directors as a group (14 persons)
(18)
|
|
|
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3,645,400
|
|
|
|
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1.3
|
|
|
|
|
|
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(1)
|
This table is based upon information supplied by officers, directors, principal stockholders and Maxim Integrateds transfer agent, and contained in Schedules 13G filed with
the SEC. Unless otherwise indicated, the address of each person or entity listed is c/o Maxim Integrated Products, Inc., 160 Rio Robles, San Jose, California 95134. Unless otherwise indicated in the footnotes to this table and subject to community
property laws where applicable, each of the stockholders named in this table has sole voting and investment power with respect to the shares indicated as beneficially owned. Applicable percentages are based on 283,909,043 shares outstanding on June
25, 2016 adjusted as required under rules promulgated by the SEC.
|
(2)
|
Based solely on information provided by FMR LLC (FMR) in a Schedule 13G filed with the SEC on February 12, 2016. Fidelity Management & Research Company is a
wholly-owned subsidiary of FMR LLC and carries out the voting of the shares under written guidelines established by the Fidelity Funds Boards of Trustees. The address of FMR is 245 Summer Street, Boston, MA 02210.
|
(3)
|
Based solely on information supplied by Wellington Management Group LLP (WMG) in a Schedule 13G filed with the SEC on February 11, 2016. The address of WMG is
c/o Wellington Management Company LLP, 280 Congress Street, Boston, MA 02210.
|
(4)
|
Based solely on information supplied by Dodge & Cox in a Schedule 13G filed with the SEC on February 12, 2016. The address of Dodge & Cox
is 555 California Street, 40
th
Floor, San Francisco, CA 94104.
|
(5)
|
Based solely on information supplied by The Vanguard Group in a Schedule 13G filed with the SEC on February 10, 2016. The address of The Vanguard Group is 100 Vanguard Blvd,
Malvern, PA 19355.
|
(6)
|
Based solely on information provided by BlackRock, Inc. (BlackRock) in a Schedule 13G filed with the SEC on February 9, 2016. The address of
BlackRock is 55 East 52
nd
Street, New York, NY 10055.
|
(7)
|
Includes (i) 30,849 shares subject to options exercisable within 60 days of June 25, 2016, (ii) 1,400 restricted stock units that vest within 60 days of June 25, 2016,
and (iii) 20,000 shares held by the Bergman Family Foundation for which Mr. Bergman disclaims beneficial ownership.
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(8)
|
Includes (i) 18,025 shares subject to options exercisable within 60 days of June 25, 2016, (ii) 1,400 restricted stock units that vest within 60 days of June 25, 2016,
(iii) 400 shares held in custodian accounts, and (iv) 3,775 shares held by trust.
|
(9)
|
Includes (i) 43,673 shares subject to options exercisable within 60 days of June 25, 2016 and (ii) 1,400 restricted stock units that vest within 60 days of June 25,
2016.
|
(10)
|
Includes (i) 4,200 restricted stock units that vest within 60 days of June 25, 2016.
|
(11)
|
Includes (i) 37,261 shares subject to options exercisable within 60 days of June 25, 2016, (ii) 1,400 restricted stock units that vest within 60 days of June 25, 2016
and (iii) 21,250 shares held by trust.
|
MAXIM INTEGRATED PRODUCTS, INC.
|
2016 Proxy Statement
33
|
2016 NOTICE OF MEETING AND PROXY STATEMENT
|
Proposal No. 6
(continued)
(12)
|
Includes (i) 30,849 shares subject to options exercisable within 60 days of June 25, 2016 and (ii) 1,400 restricted stock units that vest within 60 days of June 25,
2016.
|
(13)
|
Includes (i) 535,828 shares subject to options exercisable within 60 days of June 25, 2016, (ii) 9,500 market share units that vest within 60 days of June 25, 2016 and
(iii) 1,368,853 shares held by trust.
|
(14)
|
Includes (i) 133,426 shares subject to options exercisable within 60 days of June 25, 2016, (ii) 3,750 restricted stock units that vest within 60 days of June 25, 2016
and (iii) 80,731 shares held by trust.
|
(15)
|
Includes (i) 100,302 shares subject to options exercisable within 60 days of June 25, 2016 and (ii) 4,000 restricted stock units that vest within 60 days of June 25,
2016.
|
(16)
|
Includes (i) 67,364 shares subject to options exercisable within 60 days of June 25, 2016 and (ii) 3,750 restricted stock units that vest within 60 days of June 25,
2016.
|
(17)
|
Includes (i) 263,972 shares subject to options exercisable within 60 days of June 25, 2016 and (ii) 3,750 restricted stock units that vest within 60 days of June 25,
2016.
|
(18)
|
Includes (i) 1,296,561 shares subject to options exercisable within 60 days of June 25, 2016 and (ii) 37,638 restricted stock units and market share units that vest within
60 days of June 25, 2016.
|
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our directors and officers, and persons who own more than ten percent (10%) of a registered class of Maxim
Integrateds equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities of Maxim Integrated. Officers, directors, and greater than ten percent
(10%) stockholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file.
To the best of our
knowledge, based solely on a review of the copies of such reports furnished to Maxim Integrated and written representations that no other reports were required, during the fiscal year ended June 25, 2016, all Section 16(a) filing
requirements applicable to its officers, directors, and greater than ten percent (10%) beneficial owners were complied with. The Company files the Section 16 reports on behalf the Companys directors and executive officers.
34
MAXIM INTEGRATED PRODUCTS, INC.
|
2016 Proxy Statement
|
2016 NOTICE OF MEETING AND PROXY STATEMENT
|
Certain Relationships and Related
Transactions
Related Transactions
During the fiscal year ended June 25, 2016, Robert Bergman, the son of James R. Bergman,
a member of our board of directors, was employed by Bedrock Automation Platforms, Inc. (Bedrock). Bedrock is an independent subsidiary of the Company engaged in a line of business separate and distinct from the Companys primary
business. Robert Bergman received approximately $290,000 in aggregate cash compensation from Bedrock in fiscal year 2016. Maxim Integrated does not believe Bedrock or Robert Bergman to be a related party with respect to this transaction.
Maxim Integrated has entered into indemnification agreements with certain of its current and former directors and executive officers. The indemnification agreements
provide, among other things, that Maxim Integrated will indemnify each of its directors and officers, under the circumstances and to the extent provided therein, for expenses, damages, judgments, fines, and settlements each may be required to pay in
actions or proceedings to which he or she may be made a party by reason of his or her position or positions as a director, officer or other agent of Maxim Integrated, and otherwise to the fullest extent permitted under Delaware law and Maxim
Integrateds Bylaws.
Review, Approval or Ratification of Related Party Transactions
The Audit Committee Charter provides for the Audit Committee to review and approve all related party transactions for potential conflicts of interest on an ongoing
basis (if such transactions are not approved by another independent body of the board of directors). Related party transactions include, for purposes of the Audit Committee review, without limitation, transactions involving Maxim Integrated and any
director, executive officer, beneficial owner of more than five percent (5%) of Maxim Integrated common stock, any immediate family member of any such person, or any firm, corporation, partnership, or other entity in which any such person is
employed or any such person has a five percent (5%) or greater beneficial ownership interest. In determining whether to approve or ratify a transaction with a related party, the Audit Committee will take into account all relevant facts and
circumstances it deems relevant, including, without limitation, the nature of the related partys interest in the transaction, the benefits to Maxim Integrated of the transaction, whether the transaction would impair the judgment of a director
or executive officer to act in the best interests of Maxim Integrated and its stockholders, the potential impact of such transaction on a directors independence, and whether the transaction is on terms no less favorable than terms that may be
available in a transaction with an unaffiliated third party under the same or similar circumstances.
Any member of the Audit Committee who is a related
party with respect to a transaction under review may not participate in the deliberations or vote on the approval of the transaction. Maxim Integrated will disclose the terms of related person transactions in its filings with the SEC to the extent
required.
The terms of the sale of products and the employment of the individuals described above under the heading Related Transactions
were not specifically approved by the Audit Committee because such terms (including compensation terms) were, and continue to be, consistent and commensurate with those of other similarly situated customers and employees of Maxim Integrated.
MAXIM INTEGRATED PRODUCTS, INC.
|
2016 Proxy Statement
35
|
2016 NOTICE OF MEETING AND PROXY STATEMENT
|
Executive
Compensation
Executive Officers
The following is information regarding our executive officers, including their positions and their ages as of October 3, 2016.
|
|
|
|
|
Name
|
|
Age
|
|
Position
|
Tunç Doluca
|
|
58
|
|
President and Chief Executive Officer
|
Bruce E. Kiddoo
|
|
55
|
|
Senior Vice President and Chief Financial Officer
|
Edwin B. Medlin
|
|
59
|
|
Senior Vice President and General Counsel
|
Vivek Jain
|
|
56
|
|
Senior Vice President, Technology and Manufacturing Group
|
Christopher J. Neil
|
|
50
|
|
Senior Vice President, Head of Maxim Ventures
|
Steven Yamasaki
|
|
62
|
|
Vice President, Human Resources
|
Tunç Doluca has served as a director of Maxim Integrated as well as the President and Chief Executive Officer since January
2007. He joined Maxim Integrated in October 1984 and served as Vice President from 1994 to 2004. He was promoted to Senior Vice President in 2004 and Group President in May 2005. Prior to 1994, he served in a number of integrated circuit development
positions. Mr. Doluca holds a BSEE degree from Iowa State University and an MSEE degree from the University of California, Santa Barbara.
Bruce E.
Kiddoo joined Maxim Integrated in September 2007 as Vice President of Finance. On October 1, 2008, Mr. Kiddoo was appointed Chief Financial Officer and Principal Accounting Officer of Maxim Integrated and was appointed Senior Vice President in
September 2009. Prior to joining Maxim Integrated, Mr. Kiddoo held various positions at Broadcom Corporation, a global semiconductor company, beginning in December 1999. Mr. Kiddoo served as Broadcoms Corporate Controller and Principal
Accounting Officer from July 2002 and served as Vice President from January 2003. He also served as Broadcoms Acting Chief Financial Officer from September 2006 to March 2007. Mr. Kiddoo holds a BS degree in Applied Science from the United
States Naval Academy and an MBA degree from the College of William & Mary.
Edwin B. Medlin joined Maxim Integrated in November 1999 as Director and
Associate General Counsel. He was promoted to Vice President and Senior Counsel in April 2006, was appointed General Counsel in September 2010, and he was promoted to Senior Vice President and General Counsel in May 2015. Prior to joining Maxim
Integrated, he was with the law firm of Ropers, Majeski, Kohn and Bentley between 1987 and 1994 where he held various positions, including director. Between 1994 and 1997, he held the positions of General Counsel, and later, General Manager, at Fox
Factory, Inc., a privately held manufacturing company. Between 1997 and 1999 he held the positions of General Counsel and later, Vice President of Global Sales and Marketing, at RockShox, Inc., a publicly traded corporation. Mr. Medlin holds a
degree in Economics from the University of California, Santa Barbara, and a Juris Doctorate from Santa Clara University.
Vivek Jain joined Maxim
Integrated in April 2007 as Vice President responsible for our wafer fabrication operations. In June 2009, Mr. Jain was promoted to Senior Vice President with expanded responsibility for managing test and assembly operations in addition to wafer
fabrication operations. Prior to joining Maxim Integrated, Mr. Jain was with Intel Corporation as Plant Manager for Technology Development and Manufacturing Facility in Santa Clara, California from 2000. Mr. Jain holds a BS degree in Chemical
Engineering from the Indian Institute of Technology at New Delhi, an MS degree in Chemical Engineering from Penn State University, and an MS degree in Electrical Engineering from Stanford University.
Christopher J. Neil joined Maxim Integrated in September 1990, was promoted to Vice President in April 2006, was named Division Vice President in September 2009 and
was promoted to Senior Vice President in September 2011. In May 2015, Mr. Neil was appointed to create and lead Maxim Ventures, the Companys venture arm. Prior to 2006, he held several engineering and executive management positions. Mr. Neil
holds BSEE and MSEE degrees from the Massachusetts Institute of Technology.
Steven Yamasaki
joined Maxim Integrated in April 2010 as Vice
President of Human Resources. Prior to joining Maxim Integrated, he was Corporate Vice President of Human Resources of Applied Materials from 2008 to 2010, and was Executive Vice President of Human Resources of YRC Worldwide from 2004 to 2008.
Before joining YRC Worldwide, Mr. Yamasaki was Vice President of Human Resources at ConAgra Foods Inc. and Honeywell International. Mr. Yamasaki has a Bachelor of Business Administration degree from the University of Michigan.
36
MAXIM INTEGRATED PRODUCTS, INC.
|
2016 Proxy Statement
|
2016 NOTICE OF MEETING AND PROXY STATEMENT
|
Compensation Discussion
and Analysis
The following discussion
and analysis of compensation arrangements of our Chief Executive Officer (CEO), Chief Financial Officer, and other three (3) most highly compensated executive officers during fiscal year 2016 (the Named Executive
Officers) should be read together with the compensation tables and related disclosures set forth below. This discussion contains forward-looking statements that are based on our current plans, considerations, expectations, and determinations
regarding future compensation programs. The actual amount and form of compensation and the compensation programs that we adopt may differ materially from currently planned programs as summarized in this discussion.
Overview
The Compensation Committee is responsible for establishing, implementing, and monitoring adherence with our compensation philosophy. Currently, we have six
executive officers, five of whom are our Named Executive Officers. Details of fiscal 2016 compensation for our Named Executive Officers can be found in the Summary Compensation Table.
This Compensation Discussion and Analysis provides a review of our executive compensation philosophy, policies and practices for our executive officers and how it applies to our Named Executive Officers
specifically. The discussion focuses on our executive compensation policies and decisions and the most important factors relevant to an analysis of these policies and decisions. In this Compensation Discussion and Analysis, we address why we believe
our executive compensation program is appropriate for us and our stockholders and explain how executive compensation is determined.
Executive
Compensation Philosophy and Components
The objectives of our executive compensation program are as follows:
|
|
to attract, retain, motivate, and reward the best and brightest executives who have the talent and experience required to achieve our goals;
|
|
|
to align the short-term and long-term interests and objectives of our executive officers with our stockholders;
|
|
|
to create a high-performance culture by linking total rewards to Company performance, including performance relative to our peers;
|
|
|
to recognize our executives for their contributions to our success by rewarding individual performance; and
|
|
|
to ensure that our executive compensation program is easily understood by program participants.
|
We accomplish these objectives by providing our executive officers with compensation components that are specifically linked to either short-term or long-term
corporate and executive performance. The majority of our executive compensation is short-term or long-term variable compensation. The principal components of our executive compensation are:
|
|
cash performance bonuses; and
|
|
|
equity awards (in the form of restricted stock units and market share units).
|
Each of these components is intended to achieve one or more of our compensation objectives. The Compensation Committee relies on its judgment in determining the appropriate mix of cash and equity compensation for
our executive officers. In general, to encourage a high-performance culture and to align the interests of our executive officers with those of our stockholders, the Compensation Committee makes a significant portion of each executive officers
compensation performance-based with cash performance bonuses and equity awards, while generally keeping base salaries below competitive levels. Our variable cash and equity programs are designed to reward recent performance with cash compensation
and to motivate long-term performance and retention through equity awards. Both programs are also designed to reward our executive officers both for individual and overall corporate performance. Such a structure allows the Compensation Committee
flexibility to reward outstanding individual performance and to recognize the contributions of our executive officers to the overall success of Maxim Integrated.
MAXIM INTEGRATED PRODUCTS, INC.
|
2016 Proxy Statement
37
|
2016 NOTICE OF MEETING AND PROXY STATEMENT
|
Compensation Discussion and Analysis
(continued)
Best Practices Followed at Maxim Integrated
Tax Considerations
Section 162(m) of the Code states that public companies cannot deduct compensation paid to certain of its top executive officers in excess of $1 million per officer per year. We believe it is in our best
interest, to the extent practical, to have executive officer compensation be fully deductible under Section 162(m). However, the Compensation Committee also retains the discretion to provide compensation that may not be fully deductible. There
is no guarantee that all compensation paid by the Company will be compliant with Section 162(m) of the Code. The Compensation Committee may decide, in its discretion, to pay incentive-based compensation or grant equity awards that do not
qualify for the performance-based compensation exception, or that may not be deductible for purposes of Section 162(m) of the Code, if it determines that this is in the best interests of the Company and its stockholders. In a few
instances, a portion of our annual bonus payments to certain of our executive officers does not currently qualify as deductible under Section 162(m), and restricted stock units do not qualify as deductible under Section 162(m). The
Compensation Committee will continue to evaluate whether it is in Maxim Integrateds best interest to qualify future incentive awards under Section 162(m). Our 1996 Equity Plan has been structured with the intention that stock options and
MSUs granted under the plan be qualified as performance-based compensation not subject to Section 162(m).
Stock Ownership
Guidelines
We have stock ownership guidelines for our CEO and members of our board of directors. These guidelines require our CEO to own shares of
common stock with a value of at least four (4) times his annual base
salary and our outside board members to own shares of common stock with a value of at least three (3) times the annual retainer paid to non-employee directors. Our stock ownership guidelines
are available on the Investor Relations section of our website at
http://investor.maximintegrated.com/corporate-governance
.
Executive Compensation Recoupment Policy
The Company has a policy that provides that in the event of a material restatement of its financial results due to misconduct, the Compensation Committee shall
review the facts and circumstances and take actions it considers appropriate with respect to the compensation of any executive officer whose fraud or willful misconduct contributed to the need for such restatement. Such actions may include, without
limitation, seeking reimbursement of any bonus paid to such executive officer exceeding the amount that, in the judgment of the Compensation Committee, would have been paid had the financial results been properly reported.
Hedging Prohibition and Restrictions on Pledging Company Securities
The Company has a policy that prohibits all of its executive officers and members of the board of directors from engaging in hedging transactions involving the Companys securities as well as limiting the
amount of Company securities that the board of directors and executive officers may pledge. This policy is described in the Corporate Governance and Board of Directors Matters section of this Proxy Statement above. No shares of the
Company have been pledged by any of the Companys executive officers or members of the board of directors.
Governance of Executive Officer Compensation
Program
Role and Members of the Compensation Committee
The members of our Compensation Committee are appointed by our board of directors. The Compensation Committee is responsible for determining executive officer
compensation. As of the record date, the Compensation Committee was comprised of four (4) members of the board of directors, Tracy C. Accardi, James R. Bergman, Robert E. Grady, and A. R. Frank Wazzan, each of whom is an independent,
non-employee director. Ms. Accardi was appointed to the Compensation Committee in August 2016. Since March 2007, Dr. Wazzan has served as Chairman of the Compensation Committee.
The primary purpose of the Compensation Committee is to:
|
|
review and approve corporate goals and objectives relevant to the compensation of our CEO and certain other executive officers,
|
|
|
evaluate CEO performance, and determine CEO compensation based on this evaluation;
|
|
|
approve and oversee, in consultation with our CEO, the total compensation package for certain executive officers, including their base salaries, cash performance
bonuses, equity awards, severance benefits and change-in-control benefits (if any);
|
|
|
approve compensation decisions applicable to our executive officers;
|
|
|
review periodically and make recommendations to the board of directors regarding any equity or long-term compensation plans, and administer these plans; and
|
|
|
make recommendations to the board of directors with respect to compensation for members of the board of directors and its committees.
|
38
MAXIM INTEGRATED PRODUCTS, INC.
|
2016 Proxy Statement
|
2016 NOTICE OF MEETING AND PROXY STATEMENT
|
Compensation Discussion and Analysis
(continued)
The Compensation Committee operates according to a charter that details its specific duties and responsibilities. The
Compensation Committee periodically reviews the charter and recommends proposed changes to the board of directors for approval. The Compensation Committee charter is available on our website in the Corporate Governance section at
http://investor.maximintegrated.com/corporate-governance.
The charter sets forth the membership requirements, authority and duties of the Compensation Committee, which shall consist of no fewer than two (2) members, all of whom
(i) meet the independence requirements of the NASDAQ rules, (ii) are non-employee directors under the definition of Rule 16b-3 promulgated under Section 16 of the Exchange Act, and (iii) are outside
directors for purposes of the regulations promulgated under Section 162(m) of the Code. During fiscal year 2016, and currently, all members of the Compensation Committee met these criteria.
Process for Evaluating Executive Officer Performance and Compensation
The Compensation Committee generally holds at least three (3) scheduled meetings during the year and holds additional meetings periodically to review and discuss executive compensation issues. The Compensation
Committee Chairman will also provide an update to the board of directors during a regularly scheduled meeting regarding Compensation Committee matters when appropriate. In addition, members of the Compensation Committee communicate on an informal
basis concerning Compensation Committee matters throughout the fiscal year. The Compensation Committee may also consider and take certain actions by unanimous written consent. In fiscal year 2016, the Compensation Committee, including its two-person
Equity Grant Sub-Committee, held fourteen (14) meetings and did not take any actions by unanimous written consent.
Our Vice President of Human
Resources and our Corporate Secretary support the Compensation Committee in its work. The Compensation
Committee also has the authority to engage the services of outside advisors, experts and others for assistance.
Outside Compensation Consultant
In fiscal year 2016, the Compensation Committee engaged an
independent, compensation consulting firm, Compensia, to advise the Compensation Committee and the board of directors on executive cash and equity compensation matters as well as board and board committee compensation. Compensia reports directly to
the Compensation Committee, and the Compensation Committee has sole authority to hire, terminate and direct the work of Compensia. The Compensation Committee has assessed the independence of Compensia pursuant to the NASDAQ rules and concluded that
Compensias work for the Compensation Committee does not raise any conflicts of interest. For further discussion of the role of the Compensation Committee in the executive compensation decision-making process, and for a description of the
nature and scope of Compensias assignment, see Executive Compensation Benchmark below.
Role of Management in
Executive Compensation Process
The Compensation Committee seeks input from our CEO and the Vice President of Human Resources to obtain
recommendations with respect to our compensation programs, practices and packages for executive officers. Our CEOs role in the compensation-setting process consists of (i) evaluating executive and employee performance; (ii) assisting
in the establishment of business performance targets and objectives; and (iii) recommending salary levels and equity awards. While the Compensation Committee may discuss our CEOs compensation package with him, it meets in executive
session in his absence to determine his compensation.
Executive Compensation Benchmark
In September 2015, based on the recommendations of Compensia, and in consultation with our CEO and Vice President of
Human Resources, the Compensation Committee approved a compensation peer group to be used for benchmarking and for setting executive compensation for fiscal year 2016. In determining the appropriate compensation peer group, the Compensation
Committee considered
companies within the semiconductor industry that have revenue, number of employees, and operations similar to our corresponding components. Many of the companies in this peer group compete with
us for executive talent. Periodically, the Compensation Committee will review and update the compensation peer group as appropriate.
MAXIM INTEGRATED PRODUCTS, INC.
|
2016 Proxy Statement
39
|
2016 NOTICE OF MEETING AND PROXY STATEMENT
|
Compensation Discussion and Analysis
(continued)
The compensation peer group members for fiscal year 2016 are as follows:
|
|
|
Altera Corporation
Analog Devices
Atmel
Fairchild Semiconductor
Freescale Semiconductor
Intersil
KLA-Tencor
Lam Research
Linear Technology
Marvell Technology Group
|
|
Microchip Technology
NVIDIA
ON Semiconductor
Qorvo
Skyworks Solutions
Semtech
Silicon Labs
Texas Instruments
Xilinx
|
The Compensation Committee included Texas Instruments (a much larger company), Semtech and Silicon Labs in the peer
group for reference purposes only as each compete with us for executive talent.
The Compensation Committee does not target pay at a specific target
percentile. Rather, the Compensation Committee believes that fixed compensation (primarily base salary) should be relatively modest and that variable compensation (primarily annual bonus and long-term incentive opportunities) should provide
meaningful upside opportunities tied to performance. In addition, the Compensation Committee believes compensation opportunities should reflect Company performance, individual roles and performance and retention factors. Consistent with the
foregoing, when setting each compensation component and total compensation opportunities, the Compensation Committee considers the following factors in addition to competitive market data:
|
|
the Companys overall performance relative to peers and established objectives;
|
|
|
each individuals skills, job scope, experience, and qualifications relative to other similarly-situated executives at peer companies;
|
|
|
the Companys internal value for a position relative to other positions or market practices;
|
|
|
a subjective assessment of each individuals contributions to the Companys overall performance, ability to lead his or her business unit or function,
work as part of a team, and reflect the Companys core values; and
|
|
|
the Companys ability to retain critical talent.
|
These factors provide the framework for our Compensation Committees decision-making. No single factor above is determinative in setting pay levels, nor is the impact of any one factor on the determination of
pay levels quantifiable.
Evaluation of Named Executive Officer
Compensation
Fiscal 2016 Compensation Plan for Executive OfficersAdvisory Vote on Executive Compensation
At our 2014 and 2015 Annual Meetings of Stockholders, approximately 83% and 80%, respectively, of the votes with respect to the advisory proposal on
the compensation of our named executive officers were voted in favor of our executive compensation program described in the applicable years proxy statement. The Compensation Committee considered these results and, in light of the strong
support we received from our stockholders with respect to our 2014 and 2015 executive compensation programs, the Compensation Committee did not believe that any significant changes were necessary or advisable with respect to the 2016 executive
compensation program. Further, this consideration did not affect our executive compensation decisions and policies for fiscal 2016.
Consequently, the
2016 executive compensation program was similar to the 2015 executive compensation program, except the Compensation Committee decided to remove selected relative stock price growth as a program metric.
Base Salary
Base salaries are used to attract, motivate, and retain highly qualified executives. Base salary is the primary fixed component of compensation in the executive compensation program and, in addition to the broader
principles summarized above, is determined by:
|
|
level of responsibility and company impact;
|
|
|
pay levels of similar positions in our peer group;
|
|
|
expertise and experience of the executive; and
|
|
|
competitive conditions in the industry.
|
Annual
base salary increases, if any, are, in addition to the broader principles summarized above, a reflection of:
|
|
the individuals performance for the preceding year;
|
|
|
the Companys performance;
|
|
|
the individuals pay level relative to similar positions in our peer group;
|
|
|
anticipated future contributions of the executive; and
|
|
|
competitive conditions in the industry.
|
For
the Named Executive Officers, base salaries are relatively modest compared to the base salaries paid to similarly situated executives in the compensation peer group companies.
40
MAXIM INTEGRATED PRODUCTS, INC.
|
2016 Proxy Statement
|
2016 NOTICE OF MEETING AND PROXY STATEMENT
|
Compensation Discussion and Analysis
(continued)
Fiscal 2016 Base Salary Actions
The Compensation Committee, after a review of individual and overall company performance, as well as market practices for executive compensation, approved base salary increases for our Named Executive Officers as
set forth in the table below:
|
|
|
|
|
|
|
|
|
|
|
Named Executive Officer
|
|
Title
|
|
Annualized 2016
Base Salary ($)
|
|
|
% Increase
from 2015
|
|
Tunç Doluca
|
|
President and Chief Executive Officer
|
|
|
600,000
|
|
|
|
1.7
|
|
Bruce E. Kiddoo
|
|
Senior Vice President and Chief Financial Officer
|
|
|
410,000
|
|
|
|
2.5
|
|
Edwin B. Medlin
|
|
Senior Vice President and General Counsel
|
|
|
370,000
|
|
|
|
|
|
Vivek Jain
|
|
Senior Vice President, Technology and Manufacturing Group
|
|
|
410,000
|
|
|
|
2.5
|
|
Christopher J. Neil
|
|
Senior Vice President, Head of Maxim Ventures
|
|
|
410,000
|
|
|
|
|
|
Fiscal 2016 Annual Cash Performance Bonuses under 2016 Compensation Plan
In September 2015, the Compensation Committee approved a cash incentive compensation plan for our CEO and all officers reporting to our CEO, including the Named
Executive Officers, applicable to fiscal year 2016 performance. The following is a description of the fiscal year 2016 annual bonus pool:
|
|
Target Bonus Pool Size
: The target aggregate cash bonus pool is an amount equal to 0.8% of the Companys operating income as determined under GAAP,
excluding the effect of special items.
|
|
|
Target Operating Income
: The target operating income at the beginning of fiscal year 2016 was approximately $674 million.
|
|
|
Target Total Bonus Pool
: The aggregate target cash bonus available for distribution to our CEO and all officers reporting to our CEO, including the Named
Executive Officers, was $5.4 million.
|
|
|
No Annual Cash Bonus
: In the event actual fiscal year 2016 operating income (excluding the impact of special items) is less than fifty percent
(50%) of target operating income (excluding the impact of special items) of $674 million, no annual cash bonus will be payable to the executive officers.
|
|
|
Cap on Annual Cash Bonus
: In no event will the annual cash performance bonus payable to an executive officer exceed 200% of an executive officers
annual target performance bonus amount.
|
|
|
Adjusted +/-20% Linearly
: The annual cash performance bonus payable to an executive officer may be adjusted +/-20% linearly based on individual
performance. Additionally, our CEOs individual performance includes product development metrics.
|
The chart below depicts the calculation of the
aggregate bonus pool to be distributed to our CEO and all officers reporting to our CEO:
MAXIM INTEGRATED PRODUCTS, INC.
|
2016 Proxy Statement
41
|
2016 NOTICE OF MEETING AND PROXY STATEMENT
|
Compensation Discussion and Analysis
(continued)
Selection of Operating Income and Modulators of Bonus Pool
We selected operating income as the primary program metric (as a basis to determine the overall size of the cash bonus pool) because we deem it to be an objective
and clear measure of our operating performance. It demonstrates efficiency of company performance and aligns financial reporting with compensation calculations and cannot be easily manipulated. We selected product development execution metrics to
measure top-line growth and productivity.
Impact Points, Allocation of Bonus Pool to Executive Officers
Each executive officers share of the bonus pool is dependent upon his or her impact points, which are determined at the beginning of the
fiscal year and subject to adjustment following the completion of the fiscal year. The number of impact points is based in part on the executive officers level of responsibility and
relative value of the executive officers impact on Maxim Integrateds performance as compared to the other executive officers for the fiscal year. Impact points are expressed as a percentage of the pool. Each participants share of
the bonus pool equaled the product of (a) the percentage determined by taking his or her total impact points, as approved by the Compensation Committee at the end of the fiscal year, and dividing them by the total number of impact points
allocated to all executive officers, (b) their individual performance, which is measured as a percentage of the executive officers performance goals met over the period, and (c) the bonus pool calculated as described above.
Formula to Calculate
Individual Bonuses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Individual Impact Points %
|
|
X
|
|
Individual Performance %
|
|
X
|
|
Performance Bonus Pool
|
|
=
|
|
Performance Bonus
|
Actual Results for Fiscal Year 2016 under Cash Bonus Pool and Bonus Payouts to Executive Officers
In September 2016, the Compensation Committee approved cash bonuses for our CEO and officers reporting to our CEO, including the Named Executive
Officers, for their performance during fiscal year 2016 under the cash bonus pool. The following are actual results for fiscal year 2016:
|
|
Fiscal Year 2016 Operating Income
: The Companys fiscal year 2016 operating income as determined under GAAP, excluding the effect of special items,
was $603.3 million compared to $567.9 million in fiscal year 2015, a 6.2% increase.
|
|
|
Fiscal Year 2016 Total Bonus Pool
: The total cash bonus available for distribution to our CEO and all officers reporting to our CEO, including the Named
Executive Officers, was $4.8 million, of which approximately $4.4 million was distributed to our CEO and all officers reporting to our CEO. The full cash bonus pool was not distributed. The total bonus pool for our CEO and all officers reporting to
our CEO, including the Named Executive Officers, was calculated as follows:
|
0.8% x $603.3 million = $4.8 million
Fiscal Year 2016 Performance
Bonuses Paid to the Named Executive Officers
The table below describes each Named Executive Officers performance bonus as approved by the
Compensation Committee for fiscal year 2016 performance, under the cash bonus pool for executive officers:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Named Executive Officer
|
|
Impact Points
(As a %)
|
|
FY16 Target Performance
Bonus Amount Under
Bonus Pool ($)
|
|
Amount of FY16
Performance Bonus Paid
Under Bonus Pool ($)
|
|
Additional Bonus for
Individual Performance
($)*
|
Tunç Doluca
|
|
|
|
27.5
|
|
|
|
|
1,482,800
|
|
|
|
|
1,459,986
|
|
|
|
|
|
|
Bruce E. Kiddoo
|
|
|
|
12.0
|
|
|
|
|
647,040
|
|
|
|
|
689,210
|
|
|
|
|
75,000
|
|
Edwin B. Medlin
|
|
|
|
8.0
|
|
|
|
|
431,360
|
|
|
|
|
428,584
|
|
|
|
|
50,000
|
|
Vivek Jain
|
|
|
|
11.0
|
|
|
|
|
593,120
|
|
|
|
|
599,922
|
|
|
|
|
50,000
|
|
Christopher J. Neil
|
|
|
|
7.0
|
|
|
|
|
377,440
|
|
|
|
|
347,983
|
|
|
|
|
|
|
*
|
The Compensation Committee approved this additional bonus for fiscal year 2016 after considering individual performance and increased responsibilities. Elements of individual
performance that were evaluated included achievement of profitability and growth targets, actual performance compared to quarterly goals, leadership, and collaboration.
|
42
MAXIM INTEGRATED PRODUCTS, INC.
|
2016 Proxy Statement
|
2016 NOTICE OF MEETING AND PROXY STATEMENT
|
Compensation Discussion and Analysis
(continued)
Equity Compensation under 2016 Compensation Program
We believe equity compensation is an effective way to align the interests of our executive officers with those of our stockholders in order to achieve long-term
stock price growth. In designing our equity compensation program, we take into account stockholder concerns about stock usage and dilution. Equity awards are granted by the Compensation Committee or its Equity Grant Sub-Committee at duly noticed
meetings. In fiscal 2016, we utilized a mix of restricted stock units and market share units to compensate our executive officers. We believe that market stock units align our executive officers interests with those of our stockholders, as the
executive officers benefit from future stock price appreciation relative to an index, while restricted stock units promote strong current retention incentives for Maxim Integrateds executive officers.
We did not grant any stock options in fiscal year 2016.
Equity Awards for Fiscal Year 2016
Market Share Units
An aggregate award of 145,940 market share units at target was made in September 2015 to our executive officers, including the
Named Executive Officers. These MSUs vest on August 15, 2019, in each case subject to continued employment on the applicable vesting date. The number of MSUs that will ultimately vest and be
issued is based upon the Companys stock price relative to the performance of the SPDR S&P Semiconductor Index (XSD) measured over a four-year period.
MSUs were granted in lieu of stock options.
Restricted Stock Units
All executive officers, including the Named Executive Officers, were granted an aggregate of 104,192 restricted stock units in September 2015. These restricted
stock units vest over twelve (12) quarters in 2017, 2018, and 2019.
Although we believe that long-term equity incentives are an important part of
our compensation program and that they align the interests of our executives with those of our stockholders, we also recognize the importance of limiting the stockholder dilution associated with our equity compensation programs. The foregoing awards
were a result of balancing these two competing objectives.
The table below depicts the number of restricted
stock units and MSUs granted to the Named Executive Officers in fiscal year 2016:
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
# of Restricted Stock
Units Granted in
Sept. 2015
|
|
# of MSU at Target
granted
in Sept.
2015
|
Tunç Doluca
|
|
|
|
39,052
|
|
|
|
|
56,924
|
|
Bruce E. Kiddoo
|
|
|
|
21,120
|
|
|
|
|
24,840
|
|
Edwin B. Medlin
|
|
|
|
11,360
|
|
|
|
|
16,560
|
|
Vivek Jain
|
|
|
|
15,620
|
|
|
|
|
22,772
|
|
Christopher J. Neil
|
|
|
|
9,940
|
|
|
|
|
14,492
|
|
Employee Stock Purchase Plan
Our stockholders approved the 2008 ESP Plan at the 2008 Annual Meeting of Stockholders and approved amendments to the 2008 ESP Plan to increase the number of shares available for issuance under the 2008 ESP Plan at
each of the Annual Meetings of Stockholders held from 2009 to 2015. Pursuant to the 2008 ESP Plan, employees and officers who meet certain eligibility qualifications are able to purchase Maxim Integrateds common stock at a discount of up to
fifteen percent (15%) from the market price. Employee contributions are made through payroll deductions.
Benefits and
Perquisites
Maxim Integrateds philosophy regarding benefits for our employees, including executive officers, is that they should be
competitive with the market in order to attract and retain a high quality workforce,
meet the needs of our employees, encourage employee well-being, and provide protection from catastrophic events. We provide medical, dental and vision insurance coverage to executives that are
generally available to other full-time employees, including basic group life insurance and disability insurance. For all management employees, including our executive officers, we pay the premiums for executive life insurance, executive disability
and umbrella liability insurance plans. We also offer a tax qualified 401(k) plan in which all U.S. based employees, including officers, are eligible to participate. All of our Named Executive Officers participated in our 401(k) plan during fiscal
year 2016. In fiscal year 2016, employees were eligible to receive a matching contribution from Maxim Integrated equal to one hundred percent (100%) of the before-tax contributions made by the employee up to three percent (3%) of total
cash compensation. Under certain limited circumstances we have provided
reimburse-
MAXIM INTEGRATED PRODUCTS, INC.
|
2016 Proxy Statement
43
|
2016 NOTICE OF MEETING AND PROXY STATEMENT
|
Compensation Discussion and Analysis
(continued)
ment of expenses for tax preparation for certain executives (and all of such reimbursements to date have been de minimis).
The Compensation Committee reviews the perquisites provided to executive officers as part of its overall review of executive compensation. The Compensation Committee has determined the type and amount paid in
perquisites to be within the appropriate range of competitive compensation practices. Details regarding the Named Executive Officers perquisites, including the fiscal year 2016 cost to Maxim Integrated, are shown in the Summary Compensation
Table under the All Other Compensation column and the accompanying narrative.
Employment Agreements
Several years ago, we entered into an at-will employment agreement with Mr. Doluca. The agreement does not grant any right to be retained by us, and we may
terminate the employment of Mr. Doluca either with or without cause at any time. In the event of any termination of employment by Maxim Integrated, all compensation and benefits, except benefits provided by law (e.g., COBRA health insurance
continuation benefits) immediately cease to accrue. However, in the event of termination of employment by Maxim Integrated without cause, severance payments are to be made in accordance with our normal policy then in effect, if any, or as otherwise
mutually agreed between Maxim Integrated and Mr. Doluca.
This agreement provides that if Mr. Doluca terminates his full-time employment with
us and his written notice of termination provides that he is willing to provide certain consulting services to us, we will make health insurance coverage available to him and his family during the period of provision of such services (or willingness
to provide services) by Mr. Doluca. The terms of his service, unless otherwise agreed, will provide for part-time services (up to one (1) day per month) and annual compensation equal to at least five percent (5%) of his base salary at
the time of termination, provided that services are rendered. Health insurance coverage will be similar to that under the group health plan we maintain for our employees.
During the ten-year period following the notice of termination, Mr. Doluca will pay the same amount for health coverage as a
sim-
ilarly situated full-time employee is required to pay for coverage under our group health plan. After such ten-year period, he will pay us what the cost of the coverage would be if it were being
provided pursuant to COBRA health insurance continuation benefits. In the event of Mr. Dolucas death while receiving health insurance coverage, his spouse is eligible for health insurance coverage until death so long as the surviving
spouse pays for the coverage. In the event Mr. Doluca becomes disabled while receiving health insurance coverage, he is deemed to have met his service obligations to us during the disability period. Upon reaching age sixty-five (65), Medicare
becomes the primary payer of medical expenses incurred by Mr. Doluca. All of such continued health insurance coverage terminates upon the occurrence of certain disqualifying events, including, but not limited to, if he competes with Maxim
Integrated or becomes eligible for health insurance coverage elsewhere.
Post-Employment Obligations
The at-will employment agreement with Mr. Doluca provides that in the event of termination of employment by Maxim Integrated without cause, severance payments
are to be made in accordance with our normal policy then in effect, if any, or as otherwise mutually agreed between Maxim Integrated and Mr. Doluca. Maxim Integrated does not currently have any normal policy with respect to severance payments
to former executives.
Reasonableness of Compensation
The Compensation Committee believes it is fulfilling our compensation objectives and in particular, rewarding executive officers in a manner that supports our strong pay-for-performance philosophy. Executive
compensation is tied to our performance and is structured to ensure that there is an appropriate balance between our long-term and short-term performance, and also a balance between our operational performance and stockholder return. The
Compensation Committee believes the average target pay position relative to market and pay mix are reasonable and appropriate.
44
MAXIM INTEGRATED PRODUCTS, INC.
|
2016 Proxy Statement
|
2016 NOTICE OF MEETING AND PROXY STATEMENT
|
Compensation
Committee Report
Our Compensation Committee has reviewed and discussed the
Compensation Discussion and Analysis required by Item 402 (b) of Regulation S-K with management and, based on such review and discussions, our Compensation Committee recommended to the board of directors that the Compensation Discussion
and Analysis be included in this proxy statement and in our Annual Report on Form 10-K for the fiscal year ended June 25, 2016.
Compensation
Committee
A.R. Frank Wazzan, Chairman
Tracy C.
Accardi
James R. Bergman
Robert E. Grady
MAXIM INTEGRATED PRODUCTS, INC
.
|
2016 Proxy Statement
45
|
2016 NOTICE OF MEETING AND PROXY STATEMENT
|
Summary Compensation Table
The compensation for Maxim Integrateds Named Executive Officers for all services rendered in all capacities to Maxim Integrated and its subsidiaries during the fiscal year ended June 25, 2016 is set forth
below.
Fiscal Year 2016 Summary Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Awards
|
|
|
|
Non-Equity
Incentive
Plan
Compensation
($)
(4)
|
|
|
|
|
Name and Principal
Position
|
|
Year
|
|
Salary
($)
|
|
Bonus
($)
|
|
Restricted
Stock Unit
Awards
($)
(1)
|
|
Market
Share
Unit
Awards
($)
(2)
|
|
Option
Awards
($)
(3)
|
|
|
All
Other
Compensation
($)
|
|
Total
($)
|
Tunç Doluca
President and
Chief Executive Officer
|
|
|
|
2016
|
|
|
|
|
600,000
|
|
|
|
|
|
|
|
|
|
1,091,347
|
|
|
|
|
1,687,227
|
|
|
|
|
|
|
|
|
|
1,459,986
|
|
|
|
|
16,045
|
(5)
|
|
|
|
4,854,605
|
|
|
|
|
2015
|
|
|
|
|
590,000
|
|
|
|
|
160,000
|
|
|
|
|
3,253,011
|
|
|
|
|
1,032,240
|
|
|
|
|
|
|
|
|
|
840,000
|
|
|
|
|
15,845
|
(6)
|
|
|
|
5,891,096
|
|
|
|
|
2014
|
|
|
|
|
590,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,100,400
|
|
|
|
|
1,149,568
|
|
|
|
|
900,000
|
|
|
|
|
16,105
|
(7)
|
|
|
|
3,756,073
|
|
Bruce E. Kiddoo
Senior Vice President and
Chief Financial Officer
|
|
|
|
2016
|
|
|
|
|
410,000
|
|
|
|
|
75,000
|
|
|
|
|
597,366
|
|
|
|
|
736,258
|
|
|
|
|
|
|
|
|
|
689,210
|
|
|
|
|
6,262
|
(8)
|
|
|
|
2,514,095
|
|
|
|
|
2015
|
|
|
|
|
400,000
|
|
|
|
|
115,724
|
|
|
|
|
1,284,083
|
|
|
|
|
391,000
|
|
|
|
|
|
|
|
|
|
420,000
|
|
|
|
|
6,262
|
(9)
|
|
|
|
2,617,069
|
|
|
|
|
2014
|
|
|
|
|
400,000
|
|
|
|
|
|
|
|
|
|
411,494
|
|
|
|
|
|
|
|
|
|
540,973
|
|
|
|
|
559,337
|
|
|
|
|
8,106
|
(10)
|
|
|
|
1,919,910
|
|
Edwin B. Medlin
Senior Vice President and
General Counsel
|
|
|
|
2016
|
|
|
|
|
370,000
|
|
|
|
|
50,000
|
|
|
|
|
317,467
|
|
|
|
|
490,838
|
|
|
|
|
|
|
|
|
|
428,584
|
|
|
|
|
11,799
|
(11)
|
|
|
|
1,668,688
|
|
|
|
|
2015
|
|
|
|
|
370,000
|
|
|
|
|
|
|
|
|
|
1,513,503
|
|
|
|
|
211,140
|
|
|
|
|
|
|
|
|
|
294,000
|
|
|
|
|
11,530
|
(12)
|
|
|
|
2,400,173
|
|
|
|
|
2014
|
|
|
|
|
320,000
|
|
|
|
|
|
|
|
|
|
495,126
|
|
|
|
|
|
|
|
|
|
393,722
|
|
|
|
|
357,190
|
|
|
|
|
13,185
|
(13)
|
|
|
|
1,579,222
|
|
Vivek Jain
Senior Vice President,
Technology and Manufacturing Group
|
|
|
|
2016
|
|
|
|
|
410,000
|
|
|
|
|
50,000
|
|
|
|
|
436,516
|
|
|
|
|
674,962
|
|
|
|
|
|
|
|
|
|
599,922
|
|
|
|
|
14,579
|
(14)
|
|
|
|
2,185,979
|
|
|
|
|
2015
|
|
|
|
|
400,000
|
|
|
|
|
83,000
|
|
|
|
|
1,284,083
|
|
|
|
|
391,000
|
|
|
|
|
|
|
|
|
|
420,000
|
|
|
|
|
19,004
|
(15)
|
|
|
|
2,597,087
|
|
|
|
|
2014
|
|
|
|
|
400,000
|
|
|
|
|
|
|
|
|
|
411,494
|
|
|
|
|
|
|
|
|
|
540,973
|
|
|
|
|
485,740
|
|
|
|
|
19,693
|
(16)
|
|
|
|
1,857,900
|
|
Christopher J. Neil
Senior Vice President,
Head of Maxim Ventures
|
|
|
|
2016
|
|
|
|
|
410,000
|
|
|
|
|
|
|
|
|
|
277,783
|
|
|
|
|
429,543
|
|
|
|
|
|
|
|
|
|
347,983
|
|
|
|
|
8,299
|
(17)
|
|
|
|
1,473,608
|
|
|
|
|
2015
|
|
|
|
|
410,000
|
|
|
|
|
|
|
|
|
|
1,164,444
|
|
|
|
|
391,000
|
|
|
|
|
|
|
|
|
|
409,621
|
|
|
|
|
11,711
|
(18)
|
|
|
|
2,386,776
|
|
|
|
|
2014
|
|
|
|
|
410,000
|
|
|
|
|
|
|
|
|
|
411,494
|
|
|
|
|
|
|
|
|
|
540,973
|
|
|
|
|
485,740
|
|
|
|
|
11,112
|
(19)
|
|
|
|
1,859,319
|
|
(1)
|
The aggregate grant date fair value of restricted stock units awarded in fiscal years 2016, 2015 and 2014, respectively, computed in accordance with FASB ASC Topic 718. In each
case, the aggregate grant date fair value disregards an estimate of forfeitures. The assumptions used in the valuation of these awards are set forth in Note 6, Stock-Based Compensation, of the Notes to Consolidated Financial Statements
of our Annual Report on Form 10-K for the fiscal year ended June 25, 2016.
|
(2)
|
Represents the aggregate grant date fair value of MSUs awarded in fiscal years 2016, 2015, and 2014 computed in accordance with FASB ASC Topic 718. The aggregate grant date fair
value disregards an estimate of forfeitures.
|
(3)
|
Represents the aggregate grant date fair value of grants awarded in fiscal years 2016, 2015 and 2014, respectively, computed in accordance with FASB ASC Topic 718. In each case,
the aggregate grant date fair value disregards an estimate of forfeitures. For the assumptions used in the valuation of these awards and other relevant information, see Note 6, Stock-Based Compensation, to the Consolidated Financial
Statements of our Annual Report on Form 10-K for the fiscal year ended June 25, 2016.
|
(4)
|
Reflects payments earned under the non-equity incentive plan that were paid in the subsequent fiscal year. These payments are performance bonuses under Maxim Integrateds
bonus plan for officers.
|
(5)
|
Reflects Mr. Dolucas Company paid (i) executive disability premium of $5,445 and (ii) matching 401(k) contributions of $10,600.
|
(6)
|
Reflects Mr. Dolucas Company paid (i) executive disability premium of $5,445 and (ii) matching 401(k) contributions of $10,400.
|
(7)
|
Reflects Mr. Dolucas Company paid (i) executive disability premium of $3,865, (ii) umbrella liability insurance premium of $1,840 and (iii) matching
401(k) contributions of $10,400.
|
(8)
|
Reflects Mr. Kiddoos Company paid (i) executive disability premium of $3,800 and (ii) matching 401(k) contributions of $2,462
|
(9)
|
Reflects Mr. Kiddoos Company paid (i) executive disability premium of $3,800 and (ii) matching 401(k) contributions of $2,462
|
(10)
|
Reflects Mr. Kiddoos Company paid (i) executive disability premium of $5,034, (ii) umbrella liability insurance premium of $610 and (iii) matching
401(k) contributions of $2,462.
|
(11)
|
Reflects Mr. Medlins Company paid (i) executive disability premium of $4,368, and (ii) matching 401(k) contributions of $7,431.
|
(12)
|
Reflects Mr. Medlins Company paid (i) executive disability premium of $4,368, and (ii) matching 401(k) contributions of $7,162.
|
(13)
|
Reflects Mr. Medlins Company paid (i) executive disability premium of $5,237, and (ii) matching 401(k) contributions of $7,338.
|
(14)
|
Reflects Mr. Jains Company paid (i) executive disability premium of $3,979, and (ii) matching 401(k) contributions of $10,600.
|
(15)
|
Reflects Mr. Jains Company paid (i) executive life insurance premium of $4,625, (ii) executive disability premium of $3,979, and (iii) matching 401(k)
contributions of $10,400.
|
(16)
|
Reflects Mr. Jains Company paid (i) executive life insurance premium of $3,439, (ii) executive disability premium of $4,944, (iii) umbrella liability
insurance premium of $610 and (iv) matching 401(k) contributions of $10,700.
|
(17)
|
Reflects Mr. Neils Company paid (i) executive disability premium of $3,147, and (ii) matching 401(k) contributions of $5,153.
|
(18)
|
Reflects Mr. Neils Company paid (i) executive life insurance premium of $3,644, (ii) executive disability premium of $3,147, and (iii) matching 401(k)
contributions of $4,920.
|
(19)
|
Reflects Mr. Neils Company paid (i) executive life insurance premium of $2,736, (ii) executive disability premium of $2,846, (iii) umbrella liability
insurance premium of $610 and (iv) matching 401(k) contributions of $4,920.
|
46
MAXIM INTEGRATED PRODUCTS, INC.
|
2016 Proxy Statement
|
2016 NOTICE OF MEETING AND PROXY STATEMENT
|
Grants of Plan-Based Awards
The following table shows certain information regarding grants of plan-based awards to the Named Executive Officers for the fiscal year ended June 25, 2016, which includes estimated possible performance bonuses
under our cash bonus plan and equity grants.
Grants of Plan-Based Awards in Fiscal Year 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grant
Date
|
|
Estimated Possible Payouts under
Non-Equity Incentive Plan
Awards
|
|
All Other
Stock
Awards: Number
of Restricted
Stock & Market
Share Units
(#)
|
|
Grant Date
Fair Value of
Stock and
Option Awards
($)
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
|
|
|
Target
($)
|
|
|
|
|
Tunç Doluca
|
|
|
|
9/1/2015
|
|
|
|
|
|
|
|
|
|
1,327,279
|
|
|
|
|
|
|
|
|
|
95,976
|
|
|
|
|
2,778,574
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bruce E. Kiddoo
|
|
|
|
9/1/2015
|
|
|
|
|
|
|
|
|
|
579,176
|
|
|
|
|
|
|
|
|
|
45,960
|
|
|
|
|
1,333,624
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Edwin B. Medlin
|
|
|
|
9/1/2015
|
|
|
|
|
|
|
|
|
|
386,117
|
|
|
|
|
|
|
|
|
|
27,920
|
|
|
|
|
808,305
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vivek Jain
|
|
|
|
9/1/2015
|
|
|
|
|
|
|
|
|
|
530,911
|
|
|
|
|
|
|
|
|
|
38,392
|
|
|
|
|
1,111,479
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Christopher J. Neil
|
|
|
|
9/1/2015
|
|
|
|
|
|
|
|
|
|
337,853
|
|
|
|
|
|
|
|
|
|
24,432
|
|
|
|
|
707,326
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
This column reflects the aggregate grant date fair value of all awards on the grant date computed in accordance with FASB ASC 718 and disregards an estimate of forfeitures
related to service-based vesting conditions. The assumptions used in the valuation of these awards are set forth in Note 6, Stock-Based Compensation, of the Notes to Consolidated Financial Statements of our Annual Report on Form
10-K for the fiscal year ended June 25, 2016.
|
MAXIM INTEGRATED PRODUCTS, INC.
|
2016 Proxy Statement
47
|
2016 NOTICE OF MEETING AND PROXY STATEMENT
|
Outstanding Equity Awards at June 25, 2016
The following table provides certain information regarding outstanding equity awards as of June 25, 2016 held by the Named Executive Officers.
Outstanding Equity Awards at June 25, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Restricted Stock Unit Awards
|
|
Market Share Unit Awards
|
Name
|
|
Number
of
securities
underlying
unexercised
options (#)
exercisable
|
|
Number
of
securities
underlying
unexercised
options (#)
unexercisable
|
|
Option
exercise
price
($)
|
|
Option
expiration
date
|
|
Number of
shares
or units
of stock that
have not vested
(#)
|
|
Market value
of shares or
units of stock
that have not
vested
($)
(1)
|
|
Number of
shares or
units of stock
that have not
vested
(#)
|
|
Market value of
shares or units
of stock that
have
not
vested
($)
(2)
|
Tunç Doluca
|
|
|
|
79,860
|
|
|
|
|
|
|
|
|
|
18.11
|
|
|
|
|
12/1/2016
|
|
|
|
|
134,052
|
(3)
|
|
|
|
4,705,225
|
|
|
|
|
122,924
|
(4)
|
|
|
|
4,313,632
|
|
|
|
|
|
176,184
|
|
|
|
|
|
|
|
|
|
16.58
|
|
|
|
|
9/7/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
154,468
|
|
|
|
|
|
|
|
|
|
22.28
|
|
|
|
|
9/6/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
83,544
|
|
|
|
|
83,544
|
(5)
|
|
|
|
27.30
|
|
|
|
|
9/4/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
170,000
|
(6)
|
|
|
|
28.16
|
|
|
|
|
9/3/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bruce E. Kiddoo
|
|
|
|
67,232
|
|
|
|
|
|
|
|
|
|
22.28
|
|
|
|
|
9/6/2018
|
|
|
|
|
58,620
|
(7)
|
|
|
|
2,057,562
|
|
|
|
|
49,840
|
(8)
|
|
|
|
1,749,384
|
|
|
|
|
|
42,728
|
|
|
|
|
39,272
|
(9)
|
|
|
|
27.30
|
|
|
|
|
9/4/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
80,000
|
(10)
|
|
|
|
28.16
|
|
|
|
|
9/3/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Edwin B. Medlin
|
|
|
|
28,228
|
|
|
|
|
|
|
|
|
|
22.28
|
|
|
|
|
9/6/2018
|
|
|
|
|
50,860
|
(11)
|
|
|
|
1,785,162
|
|
|
|
|
30,060
|
(12)
|
|
|
|
1,055,106
|
|
|
|
|
|
26,548
|
|
|
|
|
19,564
|
(13)
|
|
|
|
27.30
|
|
|
|
|
9/4/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,000
|
(14)
|
|
|
|
28.16
|
|
|
|
|
9/3/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,724
|
|
|
|
|
17,936
|
(15)
|
|
|
|
28.44
|
|
|
|
|
12/3/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vivek Jain
|
|
|
|
47,728
|
|
|
|
|
39,272
|
(16)
|
|
|
|
27.30
|
|
|
|
|
9/4/2019
|
|
|
|
|
53,120
|
(17)
|
|
|
|
1,864,512
|
|
|
|
|
47,772
|
(18)
|
|
|
|
1,676,797
|
|
|
|
|
|
|
|
|
|
|
80,000
|
(19)
|
|
|
|
28.16
|
|
|
|
|
9/3/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Christopher J. Neil
|
|
|
|
91,612
|
|
|
|
|
|
|
|
|
|
16.58
|
|
|
|
|
9/7/2017
|
|
|
|
|
43,430
|
(20)
|
|
|
|
1,524,744
|
|
|
|
|
39,492
|
(21)
|
|
|
|
1,386,169
|
|
|
|
|
|
85,680
|
|
|
|
|
|
|
|
|
|
22.28
|
|
|
|
|
9/6/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
39,272
|
|
|
|
|
39,272
|
(22)
|
|
|
|
27.30
|
|
|
|
|
9/4/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
80,000
|
(23)
|
|
|
|
28.16
|
|
|
|
|
9/3/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Market value is computed by multiplying the closing price ($35.10 per share) of Maxim Integrateds common stock on the last trading day of the fiscal year (June 24, 2016) by
the number of shares reported in the adjacent left column.
|
(2)
|
Market value is computed by multiplying the closing price ($35.10 per share) of Maxim Integrateds common stock on the last trading day of the fiscal year (June 24, 2016) by
the number of shares reported in the adjacent left column.
|
(3)
|
95,000 shares vest over 10 consecutive quarters beginning on August 15, 2016. 39,052 shares vest in quarterly installments during calendar year 2019.
|
(4)
|
66,000 shares vest on August 15, 2018 and 56,924 shares vest on August 15, 2019, respectively, if specific performance metrics are met.
|
(5)
|
41,772 shares vest on August 15, 2016 and November 15, 2016, respectively.
|
(6)
|
170,000 shares vest in quarterly installments during calendar year 2017.
|
(7)
|
3,750 shares vested on August 15, 2016, 3,750 shares vest on November 15, 2016 and 4,260 shares vest over 10 consecutive quarters beginning February 15, 2017.
|
(8)
|
25,000 shares vest on August 15, 2018 and 24,840 shares vest on August 15, 2019, respectively, if specific performance metrics are met.
|
(9)
|
19,636 shares vest on August 15, 2016 and November 15, 2016, respectively.
|
(10)
|
80,000 shares vest in quarterly installments during calendar year 2017.
|
(11)
|
4,000 shares vested on August 15, 2016 and 4,000 shares vest on November 15, 2016. 15,500 shares vest in quarterly installments during calendar year 2017, 16,000 shares
vest in quarterly installments during calendar year 2019.
|
(12)
|
13,500 shares vest on August 15, 2018 and 16,560 shares vest on August 15, 2019, respectively, if specific performance metrics are met.
|
(13)
|
9,782 shares vest on August 15, 2016 and November 15, 2016, respectively.
|
(14)
|
35,000 shares vest in quarterly installments during calendar year 2017.
|
(15)
|
1,468 shares vest on August 15, 2016 and November 15, 2016, respectively. 15,000 shares vest in quarterly installments during calendar year 2017.
|
(16)
|
19,636 shares vest on August 15, 2016 and November 15, 2016, respectively.
|
(17)
|
37,500 shares vest over 10 consecutive quarters beginning on August 15, 2016. 15,620 shares vest in quarterly installments during calendar year 2019.
|
(18)
|
25,000 shares vest on August 15, 2018 and 22,772 shares vest on August 15, 2019, respectively, if specific performance metrics are met.
|
(19)
|
80,000 shares vest in quarterly installments during calendar year 2017.
|
(20)
|
3,750 shares vested on August 15, 2016 and 3,750 shares vest on November 15, 2016. 11,000 shares vest in quarterly installments during calendar year 2017, 15,000 shares
vest in quarterly installments during calendar year 2018 and 9,940 shares vest in quarterly installments during calendar year 2019.
|
(21)
|
25,000 shares vest on August 15, 2018 and 14,492 shares vest on August 15, 2019, respectively, if specific performance metrics are met.
|
(22)
|
19,636 shares vest on August 15, 2016 and November 15, 2016, respectively.
|
(23)
|
80,000 shares vest in quarterly installments during calendar year 2017.
|
48
MAXIM INTEGRATED PRODUCTS, INC.
|
2016 Proxy Statement
|
2016 NOTICE OF MEETING AND PROXY STATEMENT
|
Option Exercises and Stock Vested
The following table provides certain information regarding option exercises and vesting of restricted stock units and market share units with respect to the Named Executive Officers during fiscal year 2016.
Option Exercises and Stock Vested in Fiscal Year 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Restricted Stock and Market Share
Unit Awards
|
Name
|
|
Number of
shares
acquired on
exercise (#)
|
|
Value realized on
exercise
($)
(1)
|
|
Number of
shares
acquired on
vesting (#)
|
|
Value realized on
vesting
($)
(2)
|
Tunç Doluca
|
|
|
|
150,000
|
|
|
|
|
2,535,000
|
|
|
|
|
19,000
|
|
|
|
|
650,085
|
|
Bruce E. Kiddoo
|
|
|
|
50,000
|
|
|
|
|
893,942
|
|
|
|
|
15,272
|
|
|
|
|
538,348
|
|
Edwin B. Medlin
|
|
|
|
30,200
|
|
|
|
|
526,783
|
|
|
|
|
16,333
|
|
|
|
|
575,789
|
|
Vivek Jain
|
|
|
|
62,232
|
|
|
|
|
721,277
|
|
|
|
|
15,272
|
|
|
|
|
538,348
|
|
Christopher J. Neil
|
|
|
|
83,000
|
|
|
|
|
1,622,984
|
|
|
|
|
15,272
|
|
|
|
|
538,348
|
|
(1)
|
The value realized on exercise is the number of shares acquired on exercise multiplied by the difference between the market price upon exercise and the exercise price.
|
(2)
|
The value realized is the number of shares vesting multiplied by the fair market value of Maxim Integrateds common stock on the respective vesting date.
|
MAXIM INTEGRATED PRODUCTS, INC.
|
2016 Proxy Statement
49
|
2016 NOTICE OF MEETING AND PROXY STATEMENT
|
Non-Qualified Deferred Compensation
We do not have any non-qualified deferred compensation agreements, plans or arrangements for and as of the year ended June 25, 2016 with respect to the Named Executive Officers.
Employment Contracts and Change in Control Arrangements
Mr. Doluca is a party to an agreement with us, pursuant to which he may be entitled to certain severance payments and benefits under the specified
circumstances.
For further information and detail regarding the above-mentioned agreements and change in control arrangements, please see
Compensation Discussion and Analysis contained in this proxy statement.
Change-of-Control
We currently have a double trigger change-of-control plan (the Severance Plan) covering substantially all of our full-time employees,
including our Named Executive Officers. The Severance Plan provides for the payment of certain benefits in the event a Named Executive Officer is terminated without cause or resigns for good reason during the 24-month period following a
change-of-control of Maxim Integrated or within the period following the public announcement of, but prior to, the closing of a change-of-control event. In serving the interest of stockholders, the Severance Plan is designed to help retain the
employees of the Company, help maintain a stable work environment and provide certain economic benefits to employees in the event their employment is terminated in the circumstances described below.
A change-of-control is defined as:
|
|
a merger or consolidation of Maxim Integrated in which more than fifty percent (50%) of the outstanding voting power changes hands;
|
|
|
a sale of all or substantially all of Maxim Integrateds assets;
|
|
|
the acquisition of more than fifty percent (50%) of Maxim Integrateds voting power by any person or group; or
|
|
|
a change in the composition of our board of directors, such that a majority of directors are no longer Incumbent Directors (Incumbent Directors are
directors as of the date the change-of-control plan was implemented and directors elected other than in connection with an actual or threatened proxy contest).
|
If, during the 24-month period following the change-of-control or within the period following the public announcement
of, but prior to, the closing of a change-of-control event, the Named Executive Officers employment is terminated for reasons other than cause (as defined in the Severance Plan) or the individual terminates employment for good reason (as
defined in the Severance Plan), then the Named Executive Officer will receive a lump sum cash payment consisting of:
|
|
base salary not yet paid through the date of termination and all unpaid vacation pay; and
|
|
|
a severance payment equal to two (2) times the sum of the Named Executive Officers annual base salary in effect immediately prior to the date of
termination and the average performance bonus during the past three (3) years.
|
In addition, all unvested stock options,
restricted stock units, and market share units are accelerated and become fully vested upon a change-of-control and a termination without cause (or resignation for good reason) occurring within twenty-four (24) months following the
change-of-control or within the period following the public announcement of, but prior to, the closing of a change-of-control event. All stock options remain exercisable until the end of their stated term, which is typically ten (10) years from
the grant date for options granted before 2007 and seven (7) years from the grant date for options granted in 2007 and thereafter. Also, each Named Executive Officer is eligible to receive continued health insurance benefits at the
Companys cost for twenty-four (24) months. The Named Executive Officers are not entitled to receive a gross-up amount to compensate the officer for any golden parachute excise taxes imposed by the Code. Our board of directors retains the
absolute right to modify and/or terminate the change-of-control plan and the benefits thereunder at any time before the occurrence of a change-of-control.
If there had been a termination of employment without cause during the 24-month period following a change-of-control of Maxim Integrated or within the period
following the public announcement of, but prior to, the closing of a change-in-control event, then assuming such termination occurred at the end of fiscal year 2016, the amounts we estimate that would have been paid to the Named Executive Officers
are set forth in the table below. The actual amounts that would be paid out can only be determined at the time the Named Executive Officer is terminated from employment.
50
MAXIM INTEGRATED PRODUCTS, INC.
|
2016 Proxy Statement
|
2016 NOTICE OF MEETING AND PROXY STATEMENT
|
Potential Payments upon Termination Related to a Change of Control
|
|
|
|
|
|
|
Name
|
|
Type of Payment
|
|
Payments
Upon
Involuntary or Good
Reason Termination
related to a Change of
Control
(1)(2)(3)(4)
($)
|
|
Tunç Doluca
|
|
Base salary
|
|
|
1,200,000
|
|
|
|
Performance Bonus
|
|
|
2,133,324
|
|
|
|
Health plan coverage
|
|
|
35,355
|
|
|
|
Accelerated Vesting of Unvested Equity Awards:
|
|
|
|
|
|
|
Stock Options
|
|
|
1,831,443
|
|
|
|
Restricted Stock Units
|
|
|
4,705,225
|
|
|
|
Market Share Units
|
|
|
4,314,632
|
|
|
|
Total
|
|
|
14,219,980
|
|
Bruce E. Kiddoo
|
|
Base salary
|
|
|
820,000
|
|
|
|
Performance Bonus
|
|
|
1,112,365
|
|
|
|
Health plan coverage
|
|
|
35,355
|
|
|
|
Accelerated Vesting of Unvested Equity Awards:
|
|
|
|
|
|
|
Stock Options
|
|
|
861,522
|
|
|
|
Restricted Stock Units
|
|
|
2,057,562
|
|
|
|
Market Share Units
|
|
|
1,749,384
|
|
|
|
Total
|
|
|
6,636,187
|
|
Edwin B. Medlin
|
|
Base salary
|
|
|
740,000
|
|
|
|
Performance Bonus
|
|
|
719,849
|
|
|
|
Health plan coverage
|
|
|
35,355
|
|
|
|
Accelerated Vesting of Unvested Equity Awards:
|
|
|
|
|
|
|
Stock Options
|
|
|
514,953
|
|
|
|
Restricted Stock Units
|
|
|
1,785,186
|
|
|
|
Market Share Units
|
|
|
1,055,106
|
|
|
|
Total
|
|
|
4,850,449
|
|
Vivek Jain
|
|
Base salary
|
|
|
820,000
|
|
|
|
Performance Bonus
|
|
|
1,003,775
|
|
|
|
Health plan coverage
|
|
|
35,355
|
|
|
|
Accelerated Vesting of Unvested Equity Awards:
|
|
|
|
|
|
|
Stock Options
|
|
|
861,522
|
|
|
|
Restricted Stock Units
|
|
|
1,864,512
|
|
|
|
Market Share Units
|
|
|
1,676,797
|
|
|
|
Total
|
|
|
6,261,960
|
|
Christopher J. Neil
|
|
Base salary
|
|
|
820,000
|
|
|
|
Performance Bonus
|
|
|
828,896
|
|
|
|
Health plan coverage
|
|
|
35,355
|
|
|
|
Accelerated Vesting of Unvested Equity Awards:
|
|
|
|
|
|
|
Stock Options
|
|
|
861,522
|
|
|
|
Restricted Stock Units
|
|
|
1,524,744
|
|
|
|
Market Share Units
|
|
|
1,386,169
|
|
|
|
Total
|
|
|
5,456,686
|
|
(1)
|
All amounts are estimated based on an assumed triggering date of last business day (June 24, 2016) of the fiscal year ended June 25, 2016 and the closing price ($35.10 per share)
of Maxim Integrateds common stock on that date.
|
(2)
|
The net value of the options is based on the difference between the exercise price of unvested in-the-money options on June 25, 2016 and the closing price ($35.10 per share) of
Maxim Integrateds common stock on that date multiplied by the number of such options.
|
(3)
|
Performance bonus is based on the average of non-equity incentive compensation plan performance bonus earned for each of the last three fiscal years.
|
(4)
|
The cost of health insurance benefits is estimated based on the monthly premium the Company would pay for a similarly situated employee over 24 months.
|
MAXIM INTEGRATED PRODUCTS, INC.
|
2016 Proxy Statement
51
|
2016 NOTICE OF MEETING AND PROXY STATEMENT
|
Equity Compensation Plan Information
The following table gives information about Maxim Integrateds common stock that may be issued upon the exercise of options, warrants, and rights under all of Maxim Integrateds existing equity
compensation plans as of June 25, 2016.
|
|
|
|
|
|
|
Plan Category
|
|
(a)
Number of securities
to be issued upon
exercise
of
outstanding options,
warrants, and rights
|
|
(b)
(2)
Weighted-average
exercise price of
outstanding options,
warrants, and rights ($)
|
|
(c)
Number of securities
remaining available for
future
issuance under
equity compensation
plans (excluding
securities reflected in
column
(a))
|
Equity compensation plans approved by security holders
(1)
|
|
13,229,424
|
|
25.11
|
|
34,090,458
(3)
|
(1)
|
Represents common stock issuable upon the exercise of options granted under our existing stockholder approved equity compensation plans. Includes 6,620,813 restricted stock units
and 673,532 market share units which have an exercise price of zero.
|
(2)
|
This weighted average exercise price does not include the 6,620,813 restricted stock units and 673,532 market share units which have an exercise price of zero.
|
(3)
|
Represents 27,953,592 shares of common stock available for issuance under the 1996 Equity Plan and 6,136,866 shares of common stock available for issuance under the 2008 ESP Plan
at June 25, 2016.
|
52
MAXIM INTEGRATED PRODUCTS, INC.
|
2016 Proxy Statement
|
2016 NOTICE OF MEETING AND PROXY STATEMENT
|
Independent
Public Accountants
Audit and Non-Audit Fees
The following table presents fees for professional services rendered by Deloitte & Touche LLP and affiliates for the audit of Maxim Integrateds
annual financial statements for the fiscal years ended June 25, 2016 and June 27, 2015, respectively, and fees billed for other services rendered by Deloitte & Touche LLP during such fiscal years. All fees set forth below are exclusive
of any value-added tax (VAT) or goods and services tax (GST).
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal
2016
|
|
Fiscal 2015
|
Audit Fees
(1)
|
|
|
$
|
1,664,251
|
|
|
|
$
|
1,912,435
|
|
Tax Fees
(2)
|
|
|
|
338,273
|
|
|
|
|
160,416
|
|
All Other Fees
(3)
|
|
|
|
496,763
|
|
|
|
|
223,412
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
$
|
2,499,287
|
|
|
|
$
|
2,296,263
|
|
(1)
|
Audit Fees consist of fees billed for professional services rendered in connection with the audit of Maxim Integrateds consolidated annual financial statements and review
of the interim consolidated financial statements included in quarterly reports and audit services that are normally provided by Deloitte & Touche LLP and affiliates in connection with statutory and regulatory filings.
|
(2)
|
Tax Fees consist of fees billed for professional services rendered for federal, state and international tax compliance, tax advice and federal, state and international tax
planning.
|
(3)
|
All Other Fees consist of fees for products and services other than the services reported above.
|
Audit Committee Pre-Approval Policies and Procedures
The Audit Committee pre-approves all audit and
permissible non-audit services provided by the independent auditors. These services may include audit services, audit-related services, tax services and other services. The Audit Committee has adopted a policy for the pre-approval of services
provided by the independent auditors. Under the policy, pre-approval is generally provided for up to one (1) year and any pre-approval is detailed as to the particular service or category of services and is subject to a specific budget. In
addition, the Audit Committee may also provide pre-approval for particular services on a case-by-case basis. For each proposed service, the independent auditor is required to provide detailed back-up documentation at the time of approval. For fiscal
year 2016, there were no audit-related fees, tax fees, or any other fees that were approved by the Audit Committee pursuant to the de minimus exception under Regulation S-X Rule 2-01(c)(7)(i)(C).
MAXIM INTEGRATED PRODUCTS, INC
.
|
2016 Proxy Statement
53
|
2016 NOTICE OF MEETING AND PROXY STATEMENT
|
Report of the Audit Committee of the Board of Directors
The Audit Committee of the board of directors is comprised entirely of independent
directors who meet the independence requirements of the Marketplace Rules of The NASDAQ Stock Market and the SEC. The Audit Committee operates pursuant to a charter that is available on the Investor Relations section of our website at
http://investor.maximintegrated.com/corporate-governance
.
The Audit Committee oversees Maxim Integrateds financial reporting process on
behalf of the board of directors. Management is responsible for the preparation, presentation and integrity of the financial statements, including establishing accounting and financial reporting principles and designing systems of internal controls
over financial reporting. Maxim Integrateds independent auditors are responsible for expressing an opinion as to the conformity of Maxim Integrateds consolidated financial statements with generally accepted accounting principles.
In performing its responsibilities, the Audit Committee has reviewed and discussed, with management and the independent auditors, the audited
consolidated financial statements in Maxim Integrateds Annual Report on Form 10-K for the year ended June 25, 2016. The Audit Committee has also discussed with the independent auditors matters required to be discussed by the Public Company
Accounting Oversight Boards Auditing Standard No. 16, Communications with Audit Committees.
Pursuant to Independence Standards Board Standard
No. 1, Independence Discussions with Audit Committees, the Audit Committee received written disclosures and the letter from the independent auditors, and discussed with the auditors their independence.
Based on the reviews and discussions referred to above, the Audit Committee recommended to the board of directors that the audited consolidated financial statements
be included in Maxim Integrateds Annual Report on Form 10-K for the year ended June 25, 2016.
Audit Committee
Joseph R. Bronson, Chairman
James R. Bergman
William D. Watkins
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2016 Proxy Statement
Appendix A
MAXIM INTEGRATED PRODUCTS, INC.
2008 E
MPLOYEE
S
TOCK
P
URCHASE
P
LAN
(As
amended)
1
The Company wishes to attract employees to the Company, its Subsidiaries and Affiliates and to induce employees to remain with the Company, its Subsidiaries and Affiliates, and to encourage them to increase their
efforts to make the Companys business more successful, whether directly or through its Subsidiaries and Affiliates. In furtherance thereof, the Plan is designed to provide equity-based incentives to the Eligible Employees of the Company, its
Subsidiaries and Affiliates. The Plan is intended to comply with the provisions of Section 423 of the Code and shall be administered, interpreted and construed accordingly, although the Company makes no undertaking or representation to maintain
such qualification. In addition, the Plan authorizes the purchase of Shares under a Non-423(b) Component, pursuant to rules, procedures or sub-plans adopted by the Board of Directors or the Committee and designed to achieve tax, securities law or
other objectives.
1. Definitions.
When used
herein, the following terms shall have the respective meanings set forth below:
Affiliate
means any entity, other than a Subsidiary,
in which the Company has an equity or other ownership interest.
Board of Directors
means the Board of Directors of the Company.
Code
means the Internal Revenue Code of 1986, as amended.
Code Section
423(b) Component
shall mean an employee stock purchase plan which is designed to meet the requirements set forth in Section 423(b) of the Code, as amended.
The provisions of the Code Section 423(b) Plan should be construed, administered and enforced in accordance with Section 423(b) of the Code.
Committee
means the committee appointed by the Board of Directors of the Company under Section 3 hereof.
Common Stock
means the Common Stock, par value $0.001 per share, of the Company.
Company
means Maxim Integrated Products, Inc., a Delaware corporation.
Designated
Companies
shall mean the Company and any Subsidiary or Affiliate which has been designated by the Board of Directors or the Committee from time to time in its sole discretion as eligible to participate in the Plan. For purposes of the Code
Section 423(b) Component, only the Company and its Subsidiaries may be Designated Companies, provided, however that at any given time, a Subsidiary that is a Designated Company under the Code Section 423(b) Component shall not be a
Designated Company under the Non-423(b) Component.
Effective Date
means the later of December 15, 2008 or the date of the
approval of this Plan by the Companys stockholders.
Eligible Compensation
for any pay period means, unless otherwise determined
by the Committee, the amount of base salary for such period. Eligible Compensation does not include, without limitation, any payments for reimbursement of expenses, bonuses, incentive compensation, overtime, deferred compensation, and other non-cash
or non-basic payments, unless otherwise determined by the Committee.
Eligible Employee
means employees eligible to participate in the
Plan pursuant to the provisions of Section 4.
Enrollment Period
means such period preceding an Offer Period as is specified by
the Committee with respect to such Offer Period.
Exchange Act
means the Securities Exchange Act of 1934, as amended.
Fair Market Value
per Share as of a particular date means (i) if Shares are then listed on a national stock exchange, the closing price per
Share on the exchange for the last preceding date on which there was a sale of Shares on such exchange, as determined by the Committee, (ii) if Shares are not then listed on a national stock exchange but are then traded on an over-the-counter
market, the average of the closing bid and asked prices for such Shares in such over-the-counter market for the last preceding date on which there was a sale of such Shares in such market, as determined by the Committee, or (iii) if Shares are
not then listed on a national exchange or traded on an over-the- counter market, such value as the Committee in its discretion may in good faith determine; provided that, where such shares are so listed or traded, the Committee may make
discretionary determinations where the shares have not been traded for 10 trading days.
Non-423(b) Component
means the grant of an
option under the Plan which is not intended to meet the requirements set forth in Section 423(b) of the Code, as amended.
Offer
Date
means the first day of an Offer Period.
1
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As approved by the Board of Directors on August 18, 2016 and submitted to stockholders for approval on November 9, 2016.
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Offer Period
means, as applicable, in each case subsequent to the approval of this Plan by the
Companys stockholders, (i) the initial Offer Period beginning on such date to be determined by the Committee and ending on November 28, 2009 (or, if such date is not a trading day, the trading day immediately preceding such date,
unless otherwise provided by the Committee), (ii) the Offer Period beginning on the business day immediately following the second to last Friday of May of each year (or, if such date is not a trading day, the trading day immediately following
such date, unless otherwise provided by the Committee) and ending on the second to last Friday of May of the next year (or, if such date is not a trading day, the trading day immediately preceding such date, unless otherwise provided by the
Committee), and (iii) the Offer Period beginning on the business day immediately following the second to last Friday of November of each year unless this day immediately follows the Thanksgiving holiday in the United States in which case it
will be the business day immediately following the last Friday of November of each year (or, if each such date is not a trading day, the trading day immediately following such date, unless otherwise provided by the Committee) and ending on the
second to last Friday of November of the next year unless this day immediately follows the Thanksgiving holiday in the United States in which case it will be on the last Friday of November (or, if each such date is not a trading day, the trading day
immediately preceding such date, unless otherwise provided by the Committee). Each Offer Period of approximately 12 months in length (except for the initial Offer Period) may overlap each other as set forth above, and each will consist of 2 Purchase
Periods of approximately 6 months in length.
Participating Employee
means an employee (i) for whom payroll deductions are
currently being made or who otherwise contributes to the Plan, or (ii) for whom payroll deductions are not currently being made or who does not otherwise contribute to the Plan because he or she has reached the limitation set forth in the first
sentence of Section 6.
Payroll Account
means an account maintained by the Company with respect to each Participating Employee as
contemplated by Section 5.
Plan
means this Maxim Integrated Products, Inc. 2008 Employee Stock Purchase Plan, as it may from
time to time be amended, which includes a Code Section 423(b) Plan and a Non-423(b) Component.
Plan Year
means the fiscal year
of the Company.
Purchase Date
means, as applicable, the second (2nd) to last Friday of May and November of each year unless this
day immediately follows the Thanksgiving holiday in the United States in which case the Purchase Date will be the last Friday of November of each year.
Purchase Period
means a specified period of time within an Offer Period beginning on the Offer Date and ending on a Purchase Date. An Offer
Period shall consist of 2 Purchase Periods, each of which shall approximately be 6 months in length.
Shares
means shares of Common
Stock.
Stock Account
means a brokerage account as contemplated by Section 8.
Subsidiary
means any corporation that is a subsidiary corporation with respect to the Company under Section 424(f) of the Code.
2. Shares Reserved for the Plan.
There shall be
reserved for issuance and purchase by employees under the Plan an aggregate of 19,500,000 Shares, subject to adjustment as provided in Section 12, any or all of which Shares may be granted under the Code Section 423(b) Component. Shares
subject to the Plan may be Shares now or hereafter authorized but unissued, or Shares that were once issued and subsequently reacquired by the Company. If and to the extent that any right to purchase reserved Shares shall not be exercised by any
employee for any reason 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 purposes of the Plan unless the Plan shall have been terminated, but such
unpurchased Shares shall not be deemed to increase the aggregate number of Shares specified above to be reserved for purposes of the Plan (subject to adjustment as provided in Section 12).
3. Administration of the Plan.
The Plan shall be
administered by the Committee appointed by the Board of Directors. The Board of Directors shall consider the rules of Rule 16b-3 promulgated under the Exchange Act in connection with any such appointment, if and to the extent that such appointments
may have an effect thereunder. Each member of the Committee shall serve at the pleasure of the Board of Directors. The acts of a majority of the members present at any meeting of the Committee at which a quorum is present, or acts approved in
writing by a majority of the entire Committee, shall be the acts of the Committee for purposes of the Plan. If and to the extent applicable, no member of the Committee may act as to matters under the Plan specifically relating to such member.
Notwithstanding the foregoing, the Board of Directors may designate the Compensation Committee of the Board of Directors to act as the Committee hereunder.
The Committee may make such rules and regulations and establish such procedures and sub-plans for the operation and administration of the Plan as it deems appropriate, including relating to the operation and
administration of the Plan to accommodate the specific requirements of local laws and procedures for jurisdictions outside of the United States. The Committee shall have authority to interpret the Plan, with such interpretations to be conclusive and
binding on all persons and otherwise accorded the maximum deference permitted by law and shall take any other actions and make any other determinations or decisions that it deems necessary or appropriate in connection with the Plan or the
administration or interpretation thereof.
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4. Eligible Employees.
Except as described below, all employees of the Company and its Designated Companies shall be eligible to participate in the Plan, provided that each of such employees does not own, for purposes of Section 423
of the Code, immediately after the right is granted, stock possessing 5% or more of the total combined voting power or value of all classes of capital stock of the Company or of a Subsidiary.
To the extent permitted under local law, the Committee may also exclude from participation in the Plan any or all of (i) a group of highly compensated employees designated by the Committee as being ineligible
to participate in the Plan as permitted by Section 423(b)(4)(D) of the Code, (ii) employees who have been employed by the Company or any Subsidiary for less than 2 years, (iii) employees whose customary employment is for not more than
5 months in any calendar year, and (iv) employees who customarily work 20 hours per week or less. The employment of an employee of a Subsidiary or an Affiliate which ceases to be a Subsidiary or an Affiliate as defined
herein shall, automatically and without any further action, be deemed to have terminated (and such employee shall cease to be an Eligible Employee hereunder).
5. Election to Participate and Payroll Deductions/Contributions.
Each Eligible Employee may elect to
participate in the Plan during the Enrollment Period immediately prior to the beginning of each Offer Period during a Plan Year. Each Eligible Employee may elect a payroll deduction of from 1% to 25% of Eligible Compensation from each paycheck, in
increments of 1% (i.e., 1%, 2%, 3%, etc.), unless otherwise so provided by the Committee. Elections under this Section 5 are subject to the limits set forth in Section 6. All payroll deductions shall be credited, as promptly as
practicable, to a Payroll Account in the name of the Participating Employee. The Committee, in its discretion, may decide that an Eligible Employee may contribute to the Plan by means other than payroll deductions. All funds held by the Company
under the Plan shall not be segregated from other corporate funds (except that the Company may in its discretion establish separate bank or investment accounts in its own name) and may be used by the Company for any corporate purpose, unless
otherwise required by local law.
Each Participating Employee may cancel his or her election to participate in the Plan by signing and delivering written
notice to the Committee, on a form specified for such purpose by the Committee, at such times as may be established by the Committee. In such case, the entire balance in the Payroll Account of such former Participating Employee shall be repaid to
such former Participating Employee as promptly as practicable in accordance with Section 9, without interest (unless required by local law). Upon such voluntary withdrawal during an Offer Period by a Participating Employee, such withdrawing
Participating Employee may not be entitled to participate in the Plan again for such time as may be established by the Committee. Thereafter, such Eligible Employee is eligible to participate in subsequent Offer Periods under the Plan upon timely
delivery of a new enrollment form.
Unless prohibited by any applicable laws, regulations or stock exchange rules, the Committee, in its discretion, may
prescribe that, if the Fair Market Value of the Shares on a Purchase Date within an Offer Period then in progress is lower than the Fair Market Value of the Shares on the first business day of such Offer Period, then each Participating Employee in
such Offer Period shall automatically be deemed (i) to have withdrawn from such Offer Period at the close of the Purchase Period ending on such Purchase Date, and (ii) to have enrolled in a new Offering Period commencing on the business
day immediately following the last Saturday of May or November of each year, as applicable (or, if such date is not a trading day, the trading day immediately following such date, unless otherwise provided by the Committee).
Subject to the preceding paragraphs of this Section 5, if so provided by the Committee, an Eligible Employee who is a Participating Employee immediately prior
to the beginning of an Offer Period will be deemed (i) to have elected to participate for such Offer Period and (ii) to have authorized the same percentage payroll deduction for such Offer Period in effect for such Eligible Employee as
that in effect (without regard to Section 6) on the day before such Offer Period. The Committee may adopt the procedures set forth in the foregoing sentence for some but not all Offer Periods.
6. Limitation of Number of Shares That an Employee May Purchase.
No right to purchase Shares under the Plan shall provide an employee the right to purchase Common Stock under all employee stock purchase plans of the Company and its Subsidiaries which accrues at a rate which in
the aggregate exceeds $25,000 of the fair market value of such stock (determined under Section 423 of the Code at the time the right is granted) for each calendar year in which the right is outstanding at any time. Notwithstanding the
foregoing, the maximum number of shares of Common Stock that an Eligible Employee may purchase during an Offer Period shall not exceed 1,600 shares.
7. Purchase Price.
The purchase price for each Share shall
be the lesser of (i) 85% of the Fair Market Value of such Shares on the Offer Date and (ii) 85% of the Fair Market Value of such Shares on the Purchase Date.
8. Method of Purchase.
As of the Purchase Date, each Participating Employee shall be deemed, without any
further action, to have purchased the number of whole Shares which the balance of his or her Payroll Account at that time will purchase, determined by dividing the balance in his or her Payroll Account not theretofore invested by the purchase price
as determined in Section 7.
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All Shares purchased as provided in the foregoing paragraph shall be initially maintained in separate Stock Accounts
for the Participating Employees at a brokerage firm selected by, and pursuant to an arrangement with, the Company. The Company shall deliver the shares to the Stock Account as soon as reasonably practicable after the close of the applicable Purchase
Date, A Participating Employee shall be free to undertake a disposition (as that term is defined in Section 424 of the Code) of the Shares in his or her Stock Account at any time, whether by sale, exchange, gift or other transfer of legal
title, but, for Participating Employees in the Code Section 423(b) Component, in the absence of such a disposition of such Shares, unless otherwise provided by the Committee, the Shares must remain in the Participating Employees Stock
Account at the brokerage firm so selected until the holding period set forth in Section 423(a) of the Code has been satisfied. With respect to those Shares for which the Section 423 (a) holding period has been satisfied or which are
held by Participating Employees in the Non-Section 423(b) Component, the Participating Employee may, without limitation, move those Shares to another brokerage account of the Participating Employees choosing or request that a stock
certificate be issued and delivered to him or her.
If and to the extent provided by the Committee, for so long as such Shares are maintained in Stock
Accounts, all dividends paid with respect to such Shares shall be credited to each Participating Employees Stock Account, and will be automatically reinvested in whole Shares. The Committee may provide that transaction fees incurred with
respect to dividend reinvestment may be paid by the Company.
Unless otherwise provided by the Committee, in no event shall fractional Shares be
purchased hereunder, and any remaining cash in a Participating Employees Payroll Account resulting from such failure to invest in fractional Shares shall be returned to the Participating Employee as soon as practicable. Notwithstanding any
other provision of the Plan, the Committee may permit the purchase of fractional Shares hereunder and establish rules and procedures relating thereto.
9. Termination of Participation or Employment.
The right to
participate in the Plan shall terminate immediately when a Participating Employee ceases to be employed by the Company or a Designated Company for any reason (including death or disability) or a Participating Employee otherwise becomes ineligible.
Participation also terminates immediately when the Participating Employee voluntarily cancels his or her election to participate in the Plan as provided in Section 5.
Notwithstanding any other provision of the Plan to the contrary, the Company shall distribute to such former Participating Employee (or, in the event of death, to his or her estate), the balance in his or her
Payroll Account not theretofore invested, without interest (unless required by local law), any such distribution or payment to be made as soon as practicable. If applicable, fractional Shares will be sold on the open market and the Participating
Employee will receive the net proceeds, if any, after all fees have been paid.
10. Rights as a Stockholder.
At the time funds from a Participating Employees Payroll Account are used to purchase the Common Stock, he or she shall have all of the rights and privileges
of a stockholder of the Company with respect to the Shares purchased under the Plan whether or not certificates representing such Shares have been issued.
11. Rights Not Transferable.
Rights granted under the Plan are not transferable by a Participating Employee
other than by will or the laws of descent and distribution and are exercisable during his or her lifetime only by him or her.
12. Adjustment in Case
of Changes Affecting Common Stock.
If (i) the Company shall at any time be involved in a merger, consolidation, dissolution, liquidation,
reorganization, exchange of shares, sale of all or substantially all of the assets or stock of the Company or its Subsidiaries or a transaction similar thereto, (ii) any stock dividend, stock split, reverse stock split, stock combination,
reclassification, recapitalization or other similar change in the capital structure of the Company, or any distribution to holders of Common Stock other than cash dividends, shall occur or (iii) any other event shall occur which in the judgment
of the Committee necessitates action by way of adjusting the number or kind of shares, or both, which thereafter may be sold under the Plan, then the Committee may forthwith take any such action as in its judgment shall be necessary to preserve to
the Participating Employees rights substantially proportionate to the rights existing prior to such event, and to maintain the continuing availability of Shares under Section 2 and the last sentence of Section 6 (if Shares are
otherwise then available) in a manner consistent with the intent hereof, including, without limitation, adjustments in (x) the number and kind of shares subject to the Plan, (y) the purchase price of such shares under the Plan, and
(z) the number and kind of shares available under Section 2 and the last sentence of Section 6. To the extent that such action shall include an increase or decrease in the number of Shares (or units of other property then available)
subject to the Plan, the number of Shares (or units) available under Section 2 and the last sentence of Section 6 above shall be increased or decreased, as the case may be, proportionately, as may be provided by Committee in its
discretion.
Notwithstanding any other provision of the Plan, if the Common Stock ceases to be listed or traded, as applicable, on a national stock
exchange or over-the-counter market (a Triggering Event), then, in the discretion of the Committee, (i) the balance in the Participating Employees Payroll Account not theretofore invested may be refunded to the Participating
Employee, and such Participating Employee shall have no further rights or benefits under the Plan, (ii) an amount equal to the product of the Fair Market Value of a Share on the date of the Triggering Event
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multiplied by the number of Shares such Participating Employee would have been able to purchase with the balance of his or her Payroll Account on such Triggering Event if such Triggering Event
were the Purchase Date may be paid to the Participating Employee, and such Participating Employee shall have no further rights or benefits under the Plan, or (iii) the Plan may be continued without regard to the application of this sentence.
13. Amendment of the Plan.
The Board of
Directors may at any time, or from time to time, amend the Plan in any respect; provided, however, that the Plan may not be amended in any way that would cause, if such amendment were not approved Companys shareholders, the Code
Section 423(b) Component to fail to comply with
(i)
|
the requirements for employee stock purchase plans under Section 423 of the Code; or
|
(ii)
|
any other requirement of applicable law or regulation;
|
unless and
until stockholder approval is obtained.
14. Termination of the Plan.
The Plan and all rights of employees hereunder shall terminate:
(i)
|
on the date that Participating Employees become entitled to purchase a number of Shares greater than the number of reserved Shares remaining available for purchase; or
|
(ii)
|
at any time, at the discretion of the Board of Directors.
|
In the
event that the Plan terminates under circumstances described in (i) above, reserved Shares remaining as of the termination date shall be subject to Participating Employees on a pro rata basis. No termination of the Plan shall alter or impair
any rights outstanding at the time of such termination to purchase Shares pursuant to any offering of the right to purchase Shares hereunder.
15.
Governmental and Other Regulations; Further Assurances.
The Plan, and the grant and exercise of the rights to purchase Shares hereunder, and the
Companys obligation to sell and deliver Shares upon the exercise of rights to purchase Shares, shall be subject to all applicable federal, state and foreign laws, rules and regulations, and to such approvals by any regulatory or governmental
agency as may be required. The Company shall not be required to issue or deliver any certificates for Shares prior to the completion of any registration or qualification of such Shares under, and the obtaining of any approval under or compliance
with, any state or federal law, or any ruling or regulation of any government body which the Company shall, in its sole discretion, determine to be necessary or advisable. Certificates for Shares issued hereunder may be legended as the Committee may
deem appropriate.
The Participating Employee shall take whatever additional actions and execute whatever additional documents the Committee may in its
reasonable judgment deem necessary or advisable in order to carry out or effect one or more of the obligations or restrictions imposed on the Participating Employee pursuant to the Plan.
16. Non-U.S. Subsidiaries.
Without amending the Plan, the Committee may allow for participation under the
terms hereunder by Eligible Employees of non-U.S. Subsidiaries and Affiliates with such modifications of the terms and conditions otherwise specified hereunder as may in the judgment of the Committee be necessary or desirable to foster and promote
achievement of the purposes hereof, and, in furtherance of such purposes, the Committee may make such amendments, procedures and the like and establish such sub-plans as may be necessary or advisable to comply with provisions of laws (including tax
laws) in other countries in which such Subsidiaries and Affiliates operate or have employees.
17. Indemnification of Committee.
The Company shall indemnify and hold harmless the members of the Board of Directors of the Company and the members of the Committee from and against any and all
liabilities, costs and expenses incurred by such persons as a result of any act or omission to act in connection with the performance of such persons duties, responsibilities and obligations under the Plan if such person acts in good faith and
in a manner that he or she reasonably believes to be in, or not opposed to, the best interests of the Company, to the maximum extent permitted by law.
18. Withholding; Disqualifying Dispositions.
Notwithstanding any other provision of the Plan, the Company or any Designated Company, as appropriate, shall have the authority and the right to deduct or
withhold, or require a Participating Employee to remit to the Company or the Designated Company, an amount sufficient to satisfy U.S. federal, state, and local taxes and taxes imposed by jurisdictions outside of the United States (including income
tax, social insurance contributions, payment on account and any other taxes that may be due) required by law to be withheld with respect to any taxable event concerning a Participating Employee arising as a result of his or her participation in the
Plan or to take such other action as may be necessary in the opinion of the Company or a Designated Company, as appropriate, to satisfy withholding obligations for the payment of taxes.
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No shares shall be delivered hereunder to any Participating Employee until the Participating Employee has made arrangements acceptable to the Company for the satisfaction of these tax obligations
with respect to any taxable event concerning the Participating Employees participation in the Plan.
If Shares acquired under the Plan are disposed
of in a disposition that does not satisfy the holding period requirements of Section 423(a) of the Code, such Participating Employee in the Code Section 423(b) Plan who is employed by a Designated Company which is part of the
Companys U.S. federal income tax return shall notify the Company in writing as soon as practicable thereafter of the date and terms of such disposition.
19. Notices.
All notices or other communications by a Participating Employee to the Company under or in
connection with the Plan shall be deemed to have been duly given when received in the form specified by the Company at the location, or by the person, designated by the Company for the receipt thereof.
20. Severability.
If any particular provision of this Plan
is found to be invalid or unenforceable, such provision shall not affect the other provisions of the Plan, but the Plan shall be construed in all respects as if such invalid provision had been omitted.
21. No Right to Continued Employment.
The Plan and any
right to purchase Common Stock granted hereunder shall not confer upon any employee any right with respect to continued employment by the Company or any Subsidiary or Affiliate, nor shall they restrict or interfere in any way with the right of the
Company or any Subsidiary or Affiliate by which an employee is employed to terminate his or her employment at any time.
22. Captions.
The use of captions in the Plan is for convenience. The captions are not intended to and do not provide substantive rights.
23. Effective Date of the Plan.
The Plan shall be effective
as of the Effective Date, provided that the Plan is approved by stockholders prior thereto.
24. Code Section 409A.
The Code Section 423(b) Plan is exempt from the application of Section 409A of the Code. The Non-423(b) Component is intended to be exempt from
Section 409A of the Code under the short-term deferral exception and any ambiguities shall be construed and interpreted in accordance with such intent. In the case of a Participating Employee who would otherwise be subject to Section 409A
of the Code, to the extent an option to purchase Shares or the payment, settlement or deferral thereof is subject to Section 409A of the Code, the option to purchase Shares shall be granted, paid, exercised, settled or deferred in a manner that
will comply with Section 409A of the Code, including the final regulations and other guidance issued with respect thereto, except as otherwise determined by the Board of Directors or the Committee. Notwithstanding the foregoing, the Company
shall have no liability to a Participating Employee or any other party if the option to purchase Common Stock under the Plan that is intended to be exempt from or compliant with Section 409A of the Code is not so exempt or compliant or for any
action taken by the Board of Director or the Committee with respect thereto.
25. Governing Law.
The provisions of the Plan shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to its conflict of law rules.
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Appendix B
MAXIM INTEGRATED PRODUCTS, INC.
A
MENDED
AND
R
ESTATED
1996 S
TOCK
I
NCENTIVE
P
LAN
1
1.
Purposes of the Plan
. The purposes of this 1996 Stock Incentive Plan are to attract and
retain the best available personnel for positions of substantial responsibility, to provide additional incentive to Employees, Directors and Consultants of the Company and its Subsidiaries and to promote the success of the Companys business.
2.
Definitions
. As used herein, the following definitions shall apply:
(a)
Administrator
means the Board or any of the Committees appointed to administer the Plan.
(b)
Affiliate
and
Associate
shall have the respective meanings ascribed to such terms in Rule 12b-2 promulgated under the Exchange Act.
(c)
Applicable Laws
means the legal requirements relating to the administration of stock incentive plans, if any, under
applicable provisions of federal securities laws, state corporate and securities laws, the Code, the rules of any applicable stock exchange or national market system, and the rules of any foreign jurisdiction applicable to Awards granted to
residents therein.
(d)
Award
means, individually or collectively, a grant under the Plan of Options, Restricted Stock
and Restricted Stock Units.
(e)
Award Agreement
means the written or electronic agreement setting forth the terms and
provisions applicable to each Award granted under the Plan, including an Option Agreement. The Award Agreement is subject to the terms and conditions of the Plan.
(f)
Board
means the Board of Directors of the Company.
(g)
Change in
Control
means a change in ownership or control of the Company effected through either of the following transactions:
(i) the
direct or indirect acquisition by any person or related group of persons (other than an acquisition from or by the Company or by a Company-sponsored employee benefit plan or by a person that directly or indirectly controls, is controlled by, or is
under common control with, the Company) of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities possessing more than fifty percent (50%) of the total combined voting power of the Companys outstanding
securities pursuant to a tender or exchange offer made directly to the Companys stockholders which a majority of the Continuing Directors who are not Affiliates or Associates of the offeror do not recommend such stockholders accept, or
(ii) a change in the composition of the Board over a period of thirty-six (36) months or less such that a majority of the
Board members (rounded up to the next whole number) ceases, by reason of one or more contested elections for Board membership, to be comprised of individuals who are Continuing Directors.
Notwithstanding the foregoing, if it is determined that an Award hereunder is subject to the requirements of Section 409A, then, to the extent necessary to comply with the requirements of Section 409A
with respect to the payment of any amounts thereunder deemed to constitute nonqualified deferred compensation subject to Section 409A, the Company will not be deemed to have undergone a Change in Control unless the Company is deemed
to have undergone a change in control event as defined in Treasury Regulation Section 1.409A-3(i)(5).
(h)
Code
means the Internal Revenue Code of 1986, as amended.
(i)
Committee
means any committee
appointed by the Board to administer the Plan.
(j)
Common Stock
means the Common Stock of the Company.
(k)
Company
means Maxim Integrated Products, Inc., a Delaware corporation.
(l)
Consultant
means any person who is a consultant, advisor, independent contractor, vendor, customer or other person having a
past, current or prospective business relationship with the Company or any Parent or Subsidiary.
(m)
Continuing
Directors
means members of the Board who either (i) have been Board members continuously for a period of at least thirty-six (36) months or (ii) have been Board members for less than thirty-six (36) months and were
elected or nominated for election as Board members by at least a majority of the Board members described in clause (i) who were still in office at the time such election or nomination was approved by the Board.
(n)
Continuous Status as an Employee, Director or Consultant
means that the employment, director or consulting relationship with
the Company, any Parent, or Subsidiary, is not interrupted or terminated. Continuous Status as an Employee, Director or Consultant shall not be considered interrupted in the case of (i) any leave of absence approved by the Company or
(ii) transfers between locations of the Company or between the Company, its Parent, any Subsidiary, or any successor.
1
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As approved by the Board of Directors on August 18, 2016 and submitted to stockholders for approval on November 9, 2016.
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2016 Proxy Statement
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(o)
Corporate Transaction
means any of the following stockholder-approved
transactions to which the Company is a party:
(i) a merger or consolidation in which the Company is not the surviving entity, except for
a transaction the principal purpose of which is to change the state in which the Company is incorporated,
(ii) the sale, transfer
or other disposition of all or substantially all of the assets of the Company (including the capital stock of the Companys subsidiary corporations) in connection with complete liquidation or dissolution of the Company, or
(iii) any reverse merger in which the Company is the surviving entity but in which securities possessing more than fifty percent (50%) of
the total combined voting power of the Companys outstanding securities are transferred to a person or persons different from those who held such securities immediately prior to such merger.
(p)
Covered Employee
means any person who is a covered employee under Section 162(m)(3) of the Code.
(q)
Determination Date
means the latest possible date that will not jeopardize the qualification of an Award granted under the
Plan as Performance-Based Compensation.
(r)
Director
means a member of the Board.
(s)
Employee
means any person, including an Officer or Director, who is an employee of the Company or any Parent or Subsidiary.
Except with respect to the grant of Incentive Stock Options, Employee also means any person, including an Officer or Director, who is an employee of any other affiliated entity of the Company, as determined by the Company in its sole discretion.
Neither service as a Director nor payment of a directors fee by the Company will be sufficient to constitute employment by the Company.
(t)
Exchange Act
means the Securities Exchange Act of 1934, as amended.
(u)
Fair Market Value
means, as of any date, the value of Common Stock determined as follows:
(i) Where there exists a
public market for the Common Stock, the Fair Market Value of a share of Common Stock shall be (A) the closing sale price of the Common Stock on the date of the determination (or, if no sales were reported on such date, on the last trading date
on which sales were reported) on (1) the stock exchange determined by the Administrator to be the primary market for the Common Stock, or (2) the Nasdaq National Market, or (3) ,as reported by Market Sweep, a service from Interactive
Data Services, Inc., or such other reporting source as the Administrator deems reliable; whichever is applicable or (B) if the Common Stock is not traded on any such exchange or national market system, the closing price of a Share on the Nasdaq
Small Cap Market or over-the-counter (Pink Over-The-Counter Markets Inc. Electronic Quotation Service), as applicable, on the date of the determination (or, if no such price was reported on that date, on the last date on which such price was
reported), as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or
(ii) In the absence of an
established market of the type described in (i), above, for the Common Stock, the Fair Market Value thereof shall be determined by the Administrator in good faith (in a manner intended to comply with Section 409A).
(v)
Fiscal Year
means the fiscal year of the Company.
(w)
Grantee
means an Employee, Director or Consultant who receives an Award under the Plan.
(x)
Incentive Stock Option
means an Option that by its terms qualifies and is otherwise intended to qualify as an incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.
(y)
Non-Qualified Stock Option
means an Option that by its terms does not qualify
or is not intended to qualify as an Incentive Stock Option.
(z)
Officer
means a person who is an officer of the
Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.
(aa)
Option
means a stock option granted pursuant to the Plan.
(bb)
Option Agreement
means the written
agreement evidencing the grant of an Option executed by the Company and the Grantee, including any amendments thereto.
(cc)
Parent
means a parent corporation, whether now or hereafter existing, as defined in Section 424(e) of the Code.
(dd)
Performance-Based Compensation
means compensation qualifying as performance-based compensation under Section 162(m) of the Code.
(ee)
Performance Goals
has the meaning given to it in Section 11.
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(ff)
Performance Period
means any Fiscal Year of the Company or such other period
as determined by the Administrator in its sole discretion.
(gg)
Period of Restriction
means the period during which
the transfer of Shares of Restricted Stock are subject to restrictions and therefore, the Shares are subject to a substantial risk of forfeiture. Such restrictions may be based on the passage of time, the achievement of Performance Goals, or the
occurrence of other events as determined by the Administrator.
(hh)
Plan
means this Amended and Restated 1996 Stock
Incentive Plan.
(ii)
Restricted Stock
means Shares issued pursuant to a Restricted Stock award under Section 7
of the Plan, or issued pursuant to the early exercise of an Option.
(jj)
Restricted Stock Unit
means a bookkeeping
entry representing an amount equal to the Fair Market Value of one Share, granted pursuant to Section 8. Each Restricted Stock Unit represents an unfunded and unsecured obligation of the Company.
(kk)
Rule 16b-3
means Rule 16b-3 promulgated under the Exchange Act or any successor thereto.
(ll)
Section 16(b)
means Section 16(b) of the Exchange Act.
(mm)
Section 409A
shall mean Section 409A of the Code and all formal guidance and regulations promulgated thereunder.
(nn)
Share
means a share of the Common Stock, as adjusted in accordance with Section 13 of the Plan.
(oo)
Subsidiary
means a subsidiary corporation, whether now or hereafter existing, as defined in Section 424(f)
of the Code.
(pp)
Subsidiary Disposition
means the disposition by the Company of its equity holdings in any
Subsidiary effected by a merger or consolidation involving that Subsidiary, the sale of all or substantially all of the assets of that Subsidiary or the Companys sale or distribution of substantially all of the outstanding capital stock of
such Subsidiary.
(qq) U.S. Taxpayer means a Grantee who is, or may be, subject to taxation under the laws of the United
States or a political subdivision thereof.
3.
Stock Subject to the Plan
.
(a)
Stock Subject to the Plan
. Subject to the provisions of Section 13 below, the maximum aggregate number of Shares which may be issued pursuant to this Plan is 141,100,000 Shares.
(b)
Full Value Awards
. Any Shares subject to Options will be counted against the numerical limits of this Section 3 as one Share for
every Share subject thereto. Any Shares subject to Awards of Restricted Stock or Restricted Stock Units with a per share or unit purchase price lower than one hundred percent (100%) of Fair Market Value on the date of grant will be counted
against the numerical limits of this Section 3 as two Shares for every one Share subject thereto. To the extent that a Share that was subject to an Award that counted as two Shares against the Plan reserve pursuant to the preceding sentence is
recycled back into the Plan under the next paragraph of this Section 3, the Plan will be credited with two Shares.
(c)
Lapsed
Awards
. If an Award expires or becomes unexercisable without having been exercised in full, or, with respect to Restricted Stock and Restricted Stock Units, is forfeited to or repurchased by the Company, the unexercised Shares (or for Awards
other than Options, the forfeited or repurchased Shares) which were subject thereto will become available for future grant or sale under the Plan (unless the Plan has terminated). Notwithstanding anything contrary contained herein, the following
Shares shall not be added to the Shares authorized for grant under Section 3(a) and will not be available for future grants of Awards under this Plan or any other plans listed in Section 3(a): (i) Shares tendered by a Grantee or
withheld by the Company in payment of the exercise price of an Option (or any other option granted under any other plans listed in Section 3(a)), and (ii) Shares tendered by a Grantee or withheld by the Company to satisfy any tax
withholding obligation with respect to an Award (or any other equity award granted under any other plans listed in Section 3(a)). Notwithstanding the foregoing and, subject to adjustment provided in Section 13, the maximum number of Shares
that may be issued upon the exercise of Incentive Stock Options will equal the aggregate Share number stated in Section 3(a), plus, to the extent allowable under Section 422 of the Code, any Shares that become available for issuance under
the Plan under this Section 3(b).
4.
Administration of the Plan
.
(a) Plan Administrator.
(i)
Administration with Respect to Directors and Officers
. With
respect to grants of Awards to Directors or Employees who are also Officers or Directors, the Plan shall be administered by (A) the Board or (B) a Committee designated by the Board, which Committee shall be constituted in such a manner as
to satisfy the Applicable Laws and to permit such grants and related transactions under the Plan to be exempt from Section 16(b) of the Exchange Act in accordance with Rule 16b-3. Once appointed, such Committee shall continue to serve in its
designated capacity until otherwise directed by the Board.
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(ii)
Administration With Respect to Consultants and Other Employees
. With respect to grants of
Awards to Employees or Consultants who are neither Directors nor Officers, the Plan shall be administered by (A) the Board or (B) a Committee designated by the Board, which Committee shall be constituted in such a manner as to satisfy the
Applicable Laws. Once appointed, such Committee shall continue to serve in its designated capacity until otherwise directed by the Board. Subject to Applicable Laws, the Board may authorize one or more Officers to grant such Awards and may limit
such authority by requiring that such Awards must be reported to and ratified by the Board or a Committee within six (6) months of the grant date, and if so ratified, shall be effective as of the grant date.
(iii)
Administration With Respect to Covered Employees
. Notwithstanding the foregoing, grants of Awards to any Covered Employee intended to
qualify as Performance-Based Compensation shall be made only by a Committee (or subcommittee of a Committee) which is comprised solely of two or more Directors eligible to serve on a committee making Awards qualifying as Performance-Based
Compensation. In the case of such Awards granted to Covered Employees, references to the Administrator or to a Committee shall be deemed to be references to such Committee or subcommittee.
(iv)
Administration Errors
. In the event an Award is granted in a manner inconsistent with the provisions of this subsection (a), such Award
shall be presumptively valid as of its grant date to the extent permitted by the Applicable Laws.
(b)
Powers of the
Administrator
. Subject to Applicable Laws and the provisions of the Plan (including any other powers given to the Administrator hereunder), and except as otherwise provided by the Board, the Administrator shall have the authority, in its
discretion:
(i) to select the Employees, Directors and Consultants to whom Awards may be granted from time to time hereunder;
(ii) to determine whether and to what extent Awards are granted hereunder;
(iii) to determine the number of Shares or the amount of other consideration to be covered by each Award granted hereunder;
(iv) to determine the Fair Market Value;
(v) to approve forms of Award Agreement for use under the Plan;
(vi) to determine the terms and
conditions of any Award granted hereunder;
(vii) to modify or amend the terms of any outstanding Award granted under the Plan in any
lawful way, provided that any amendment that would adversely affect the Grantees rights under an outstanding Award shall not be made without the Grantees written consent; provided, however, that any provision of the Plan to the contrary
notwithstanding, the Administrator shall not have the authority to reprice any outstanding Option, it being understood that reprice shall mean to amend any outstanding Option to reduce the exercise price;
(viii) to construe and interpret the terms of the Plan and Awards granted pursuant to the Plan;
(ix) notwithstanding any provision of the Plan to the contrary, in order to facilitate compliance with the tax, securities, foreign exchange,
probate or other applicable provisions of the laws in other countries in which the Company or its Affiliates operate or have key employees or non-employee directors, the Administrator, in its discretion, shall have the power and authority to
(A) determine which (if any) Employees, Directors, and/or Consultants rendering services or employed outside the U.S. are eligible to participate in the Plan or to receive any type of Award hereunder; (B) determine which non-U.S.-based
Affiliates or operations (
e.g.
, branches, representative offices) participate in the Plan or any type of Award hereunder; (C) modify the terms and conditions of any Awards made to such Employees, Directors, and/or Consultants, or with
respect to such non-U.S.-based Affiliates or operations; and (D) establish sub-plans, modify methods of exercise, modify payment restrictions on sale or transfer of Shares and other terms and procedures to the extent deemed necessary or
desirable by the Administrator to comply with Applicable Laws of the non-U.S. jurisdiction. The Administrator shall not, however, have the power or authority to amend the Plan with respect to the maximum aggregate number of Shares that may be issued
under the Plan as set forth in Section 3(a), increase the Award limits as set forth in Sections 6, 7 and 8; or lengthen the term of an Option set forth in Section 6(d); and
(x) to take such other action, not inconsistent with the terms of the Plan, as the Administrator deems appropriate.
(c)
Effect of Administrators Decision
. All decisions, determinations and interpretations of the Administrator shall be conclusive and
binding on all persons.
5.
Eligibility
. Non-Qualified Stock Options, Restricted Stock and Restricted Stock Units may be granted to Employees,
Directors and Consultants, which awards need not be identical. Incentive Stock Options may be granted only to Employees. Employees providing services to an Affiliate that is not a Subsidiary are not eligible to receive Options, SARs or other
stock rights within the meaning of Section 409A, unless (i) the Participant is not a U.S. Taxpayer or (ii) the Committee determines that the Option, SAR or stock right is exempt from, or may be granted in compliance with,
Section 409A. An Employee, Director or Consultant who has been granted an Award may, if otherwise eligible, be granted additional Awards. Awards may be granted to such Employees, Directors and Consultants who are residing in foreign
jurisdictions as the Administrator may determine from time to time. Designation of a Grantee in any year shall not require the Administrator to designate such person to receive an Award in any other year or, once designated, to receive the same type
or amount of Award as granted to the Grantee in any other year.
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6.
Terms and Conditions of Options
.
(a)
Designation of Option
. Each Option will be designated in the Award Agreement as either an Incentive Stock Option or a Non-Qualified Stock Option. However, notwithstanding such designation, to the extent
that the aggregate Fair Market Value of the Shares subject to Options designated as Incentive Stock Options are exercisable for the first time by a Grantee during any calendar year (under all plans of the Company and any Parent or Subsidiary)
exceeds $100,000, such excess Options, to the extent of the Shares covered thereby in excess of the foregoing limitation, will be treated as Non-Qualified Stock Options. For the purposes of this Section 6(a), Incentive Stock Options will be
taken into account in the order in which they were granted, and the Fair Market Value of the Shares will be determined as of the date the Option with respect to such Shares is granted.
(b)
Conditions of Option
. Subject to the terms of the Plan, the Administrator will determine the provisions, terms and conditions of each
Option including, but not limited to, the Option vesting schedule, form of payment upon exercise of the Option and satisfaction of any performance criteria.
(c)
Individual Option Limit
. The maximum number of Shares with respect to which Options may be granted to any individual in any Fiscal Year shall be 4,000,000. The foregoing limitation shall be adjusted
proportionately in connection with any change in the Companys capitalization pursuant to Section 13. To the extent required by Section 162(m) of the Code or the regulations thereunder, in applying the foregoing limitation with
respect to an individual, if any Option is canceled, the canceled Option shall continue to count against the maximum number of Shares with respect to which Options may be granted to the individual. For this purpose, the repricing of an Option shall
be treated as the cancellation of the existing Option and the grant of a new Option.
(d)
Term of Option
. The Administrator will
determine the term of each Option in its sole discretion, provided the term of an Option will not be more than ten (10) years from the date of grant. Moreover, in the case of an Incentive Stock Option granted to a Grantee who, at the time the
Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Parent or Subsidiary, the term of the Incentive Stock Option will be five
(5) years from the date of grant thereof or such shorter term as may be provided in the Award Agreement.
(e)
Option Exercise
Price, Consideration and Taxes
.
(i)
Exercise Price
. The exercise price for an Option shall be as follows:
(A) In the case of an Incentive Stock Option:
(1) granted to an Employee who, at the time of the grant of such Incentive Stock Option owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any
Parent or Subsidiary, the per Share exercise price will be not less than one hundred ten percent (110%) of the Fair Market Value per Share on the date of grant.
(2) granted to any Employee other than an Employee described in the preceding paragraph, the per Share exercise price will be not less than one hundred percent (100%) of the Fair Market Value per Share on the
date of grant.
(B) In the case of a Non-Qualified Stock Option, the per Share exercise price shall be not less than one hundred percent
(100%) of the Fair Market Value per Share on the date of grant.
(C) Notwithstanding the foregoing, the Options may be granted with
a per Share exercise price of less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant pursuant to a transaction described in, and in a manner consistent with, Section 424(a) of the Code.
(ii)
Consideration
. Subject to Applicable Laws, the consideration to be paid for the Shares to be issued upon exercise of an Option including
the method of payment, shall be determined by the Administrator (and, in the case of an Incentive Stock Option, shall be determined at the time of grant). In addition to any other types of consideration the Administrator may determine, unless
otherwise provided in the Award Agreement, the Administrator is authorized to accept as consideration for Shares issued under the Plan the following:
(A) cash;
(B) check;
(C) surrender of Shares (including withholding of Shares otherwise deliverable upon exercise of the Option) which have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the
Shares as to which said Option shall be exercised (but only to the extent that such exercise of the Option would not result in an accounting compensation charge with respect to the Shares used to pay the exercise price unless otherwise determined by
the Administrator);
(D) delivery of a properly executed exercise notice together with such other documentation as the Administrator
and the broker, if applicable, shall require to effect an exercise of the Option and delivery to the Company of the sale proceeds required to pay the exercise price; or
(E) any combination of the foregoing methods of payment.
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(f)
Exercise of Option
.
(i)
Procedure for Exercise; Rights as a Stockholder
.
(A) Any Option granted hereunder will be exercisable at such times and under such conditions as determined by the Administrator under the terms of the Plan and specified in the Award Agreement.
(B) An Option shall be deemed to be exercised when written notice of such exercise has been given to the Company or its designated agent (e.g., the
exclusive, captive broker) in accordance with the terms of the Option, from the person entitled to exercise the Option and full payment for the Shares with respect to which the Option is exercised has been received by the Company or its designated
agent, or the appropriate exercise/sale transaction has been executed under subsection 6(e)(ii)(D) above. Until the issuance (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company) of
the stock certificate evidencing such Shares, no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to Shares subject to an Option, notwithstanding the exercise of an Option. The Company shall issue (or
cause to be issued) such stock certificate in uncertificated form promptly upon exercise of the Option. No adjustment will be made for a dividend or other right for which the record date is prior to the date the stock certificate in uncertificated
form is issued, except as provided in the Award Agreement or Section 13, below.
To the extent that reporting of United States
taxable income with respect to an Option exercise under subsections 6(e)(ii) (A)-(C) above is based on the fair market value of the underlying Shares on the date of exercise, the Company shall use the Fair Market Value on the day the Option is
deemed exercised in accordance with this Section 6(f)(B), that is the closing sales price (see Section 2(u)) on the day the written notice of exercise and full payment for the Shares (i.e., cashiers check, money order, Shares
(pursuant to subsection 6(e)(ii)(C) above) or readily available funds) are received by the Company or its designated agent. In the case of an exercise under subsection 6(e)(ii)(D) above, the United States taxable income will be calculated using the
actual sales price of the underlying Shares subject to the Option.
(ii)
Exercise of Option Following Termination of Employment,
Director or Consulting Relationship
. In the event of termination of a Grantees Continuous Status as an Employee, Director or Consultant with the Company for any reason other than disability or death (but not in the event of an
Grantees change of status from Employee to Consultant or from Consultant to Employee), such Grantee may, but only within ninety (90) days after the date of such termination (but in no event later than the expiration date of the term of
such Option as set forth in the Award Agreement), exercise his or her Option to the extent that the Grantee was entitled to exercise it at the date of such termination or to such other extent as may be determined by the Administrator. If the Grantee
should die within ninety (90) days after the date of such termination, the Grantees estate or the person who acquired the right to exercise the Option by bequest or inheritance may exercise the Option to the extent that the Grantee was
entitled to exercise it at the date of such termination within five hundred forty-seven (547) days of the Grantees date of death (but in no event later than the expiration date of the term of such Option as set forth in the Award
Agreement). In the event of a Grantees change of status from Employee to Consultant, an Employees Incentive Stock Option shall convert automatically to a Non-Qualified Stock Option on the ninety-first (91st) day following such
change of status. Unless otherwise provided by the Administrator, if on the date of termination the Grantee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will revert to the Plan. To the extent
that Grantee is not entitled to exercise the Option at the date of termination, or if Grantee does not exercise such Option to the extent so entitled within the time specified herein, the Option will terminate.
(iii)
Disability of Grantee
. In the event of termination of a Grantees Continuous Status as an Employee, Director or Consultant as a
result of his or her disability, Grantee may, but only within three hundred sixty-five (365) days from the date of such termination (and in no event later than the expiration date of the term of such Option as set forth in the Award Agreement),
exercise the Option to the extent otherwise entitled to exercise it at the date of such termination; provided, however, that if such disability is not a disability as such term is defined in Section 22(e)(3) of the Code, in the case
of an Incentive Stock Option such Incentive Stock Option shall automatically convert to a Non-Qualified Stock Option on the day three (3) months and one day following such termination. Unless otherwise provided by the Administrator, if on the
date of termination the Grantee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will revert to the Plan. To the extent that Grantee is not entitled to exercise the Option at the date of
termination, or if Grantee does not exercise such Option to the extent so entitled within the time specified herein, the Option will terminate.
(iv)
Death of Grantee
. In the event of the death of a Grantee, the Option may be exercised at any time within five hundred forty-seven (547) days following the date of death (but in no event later than
the expiration of the term of such Option as set forth in the Option Agreement except as otherwise provided for in subsection (vi) below)), by the Grantees estate or by a person who acquired the right to exercise the Option by bequest or
inheritance, but only to the extent that the Grantee was entitled to the Option at the date of death. If, at the time of death, the Grantee was not entitled to exercise his or her entire Option, the Shares covered by the unexercisable portion of the
Option shall immediately revert to the Plan unless otherwise determined by the Administrator. If, after death, the Grantees estate or a person who acquired the right to exercise the Option by bequest or inheritance does not exercise the Option
within the time specified herein, the Option shall terminate.
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7.
Restricted Stock
.
(a)
Grant of Restricted Stock
. Subject to the terms and provisions of the Plan, the Administrator, at any time and from time to time, may grant Shares of Restricted Stock to Employees, Directors or
Consultants in such amounts as the Administrator, in its sole discretion, will determine.
(b)
Restricted Stock Agreement
. Each
Award of Restricted Stock will be evidenced by an Award Agreement that will specify the Period of Restriction, the number of Shares granted, and such other terms and conditions as the Administrator, in its sole discretion, will determine.
Notwithstanding the foregoing, during any Fiscal Year no Grantee will receive more than an aggregate of 2,000,000 Shares of Restricted Stock. Unless the Administrator determines otherwise, Shares of Restricted Stock will be held by the Company as
escrow agent until the restrictions on such Shares have lapsed.
(c)
Transferability
. Except as provided in this Section 7,
Shares of Restricted Stock may not be sold, transferred, pledged, assigned or otherwise alienated, or hypothecated until the end of the applicable Period of Restriction.
(d)
Other Restrictions
. The Administrator, in its sole discretion, may impose such other restrictions on Shares of Restricted Stock as it may deem advisable or appropriate.
(e)
Removal of Restrictions
. Except as otherwise provided in this Section 7, Shares of Restricted Stock covered by each Restricted Stock
grant made under the Plan will be released from escrow as soon as practicable after the last day of the Period of Restriction. The restrictions will lapse at a rate determined by the Administrator; provided, however, that Shares of Restricted Stock
will not vest more rapidly than one-third (1/3rd) of the total number Shares of Restricted Stock subject to an Award each year from the date of grant (or, if applicable, the date a Grantee begins providing services to the Company or any of its
Affiliates), unless the Administrator determines that the Award is to vest upon the achievement of performance criteria, provided the period for measuring such performance will cover at least twelve (12) months. After the grant of Restricted
Stock, the Administrator, in its sole discretion, may reduce or waive any restrictions for such Restricted Stock.
(f)
Voting
Rights
. During the Period of Restriction, Grantees holding Shares of Restricted Stock granted hereunder may exercise full voting rights with respect to those Shares, unless the Administrator determines otherwise.
(g)
Dividends and Other Distributions
. During the Period of Restriction, Grantees holding Shares of Restricted Stock will be entitled to
receive all dividends and other distributions paid with respect to such Shares, unless otherwise provided by the Administrator. If any such dividends or distributions are paid in Shares, the Shares will be subject to the same restrictions on
transferability and forfeitability as the Shares of Restricted Stock with respect to which they were paid.
(h)
Return of Restricted
Stock to Company
. On the date set forth in the Award Agreement, the Restricted Stock for which restrictions have not lapsed will automatically revert to the Company and again will become available for grant under the Plan.
8.
Restricted Stock Units
.
(a)
Grant
.
Restricted Stock Units may be granted at any time and from time to time as determined by the Administrator. Each Restricted Stock Unit grant will be evidenced by an Award Agreement that will specify such other terms and conditions as the
Administrator, in its sole discretion, will determine, including all terms, conditions, and restrictions related to the grant, the number of Restricted Stock Units and the form of payout, which, subject to Section 8(d), may be left to the
discretion of the Administrator. Notwithstanding the anything to the contrary in this subsection (a), during any Fiscal Year, no Grantee will receive more than an aggregate of 2,000,000 Restricted Stock Units.
(b)
Vesting Criteria and Other Terms
. The Administrator will set vesting criteria in its discretion, which, depending on the extent to which
the criteria are met, will determine the number of Restricted Stock Units that will be paid out to the Grantee. The Administrator may set vesting criteria based upon the achievement of Company-wide, business unit, or individual goals (including, but
not limited to, continued employment), or any other basis determined by the Administrator in its discretion.
(c)
Earning Restricted
Stock Units
. Upon meeting the applicable vesting criteria, the Grantee will be entitled to receive a payout as specified in the Award Agreement. Notwithstanding the foregoing, at any time after the grant of Restricted Stock Units, the
Administrator, in its sole discretion, may reduce or waive any vesting criteria that must be met to receive a payout.
(d)
Form and
Timing of Payment
. Payment of earned Restricted Stock Units will be made as soon as practicable after the date(s) set forth in the Award Agreement; provided that payment of earned Restricted Stock Units will be made in no event later than the
fifteenth (15th) day of the third month following the end of the latter of the calendar year or fiscal year in which such Restricted Stock Units vest. The Administrator, in its sole discretion, may pay earned Restricted Stock Units in cash,
Shares, or a combination thereof. Shares represented by Restricted Stock Units that are fully paid in cash again will be available for grant under the Plan.
(e)
Cancellation
. On the date set forth in the Award Agreement, all unearned Restricted Stock Units will be forfeited to the Company.
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B-7
9.
Leaves of Absence
. Unless the Administrator provides otherwise, vesting of Awards granted hereunder will be
suspended during any unpaid leave of absence. A Grantee will not cease to be an Employee in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations of the Company or between the Company, its Parent,
or any Subsidiary. For purposes of Incentive Stock Options, no such leave may exceed ninety (90) days, unless reemployment upon expiration of such leave is guaranteed by statute or contract. If reemployment upon expiration of a leave of absence
approved by the Company is not so guaranteed, then three (3) months following the ninety-first (91st) day of such leave any Incentive Stock Option held by the Grantee will cease to be treated as an Incentive Stock Option and will be
treated for tax purposes as a Non-Qualified Stock Option.
10.
Transferability of Awards
. Unless determined otherwise by the Administrator, an
Award may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Grantee, only by the Grantee. If the
Administrator makes an Award transferable, such Award will contain such additional terms and conditions as the Administrator deems appropriate.
11.
Performance Goals
. Awards of Restricted Stock and Restricted Stock Units may be made subject to the attainment of performance goals relating to one or more business criteria within the meaning of Section 162(m) of the Code and may
provide for a targeted level or levels of achievement (
Performance Goals
) including cash flow; cash position; earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization; earnings per Share;
economic profit; economic value added; equity or stockholders equity; free cash flow, free cash flow per Share, market share; net income; net profit; net sales; operating earnings; operating income; profit before tax; ratio of debt to debt
plus equity; ratio of operating earnings to capital spending; return on net assets; sales growth; Share price; Share price performance relative to one or more peer companies; Share price performance relative to one or more indexes; total return to
stockholders; or total return to stockholders relative to one or more peer companies or indexes. The Performance Goals for a Grantee will be determined by the Administrator based on the Companys tactical and strategic business objectives,
which may differ from Grantee to Grantee and from Award to Award. Prior to the Determination Date, the Administrator will determine whether to make any adjustments to the calculation of any Performance Goal with respect to any Grantee for any
significant events or events that are unusual in nature or infrequent in occurrence and other non-recurring items affecting the Company and both before and after taking into account equity based compensation charges. In all other respects,
Performance Goals will be calculated in accordance with the Companys financial statements, generally accepted accounting principles, or under a methodology established by the Administrator prior to the issuance of an Award.
12.
Conditions Upon Issuance of Shares
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(a)
Legal Compliance
. Shares will not be issued pursuant to the exercise of an Award unless the exercise of such Award and the issuance and delivery of such Shares will comply with Applicable Laws and will be further subject to the approval of
counsel for the Company with respect to such compliance.
(b)
Investment Representations
. As a condition to the exercise of an
Award, the Company may require the person exercising such Award to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if,
in the opinion of counsel for the Company, such a representation is required by any Applicable Laws.
13.
Adjustments
. Subject to any required
action by the stockholders of the Company, the number of Shares covered by each outstanding Award, and the number of Shares which have been authorized for issuance under the Plan but as to which no Awards have yet been granted or which have been
returned to the Plan, as well as the price per share of Common Stock covered by each such outstanding Award, shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split,
reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other similar event resulting in an increase or decrease in the number of issued shares of Common Stock. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason hereof shall be made with respect to, the number or price of Shares subject to an Award.
14.
Corporate Transactions/Changes in Control/Subsidiary Dispositions
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(a) The Administrator shall have the authority, exercisable either in advance of any actual or anticipated Corporate Transaction, Change in Control or Subsidiary Disposition or at the time of an actual Corporate
Transaction, Change in Control or Subsidiary Disposition and exercisable at the time of the grant of an Award under the Plan or any time while an Award remains outstanding, to provide for the full automatic vesting and exercisability of one or more
outstanding unvested Awards under the Plan and the release from restrictions on transfer and repurchase or forfeiture rights of such Awards in connection with a Corporate Transaction, Change in Control or Subsidiary Disposition, on such terms and
conditions as the Administrator may specify. The Administrator also shall have the authority to condition any such Award vesting and exercisability or release from such limitations upon the subsequent termination of the Continuous Status as an
Employee or Consultant of the Grantee within a specified period following the effective date of the Change in Control or Subsidiary Disposition. The Administrator may provide that any Awards so vested or released from such limitations in connection
with a Change in Control or Subsidiary Disposition, shall remain fully exercisable until the expiration or sooner termination of the Award. Effective upon the consummation of a Corporate Transaction, all outstanding Awards under the Plan shall
terminate unless assumed by the successor company or its Parent.
B-8
MAXIM INTEGRATED PRODUCTS,
INC.
|
2016 Proxy
Statement
(b) The portion of any Incentive Stock Option accelerated under this Section 14 in connection
with a Corporate Transaction, Change in Control or Subsidiary Disposition shall remain exercisable as an Incentive Stock Option under the Code only to the extent the $100,000 dollar limitation of Section 422(d) of the Code is not exceeded. To
the extent such dollar limitation is exceeded, the accelerated excess portion of such Option shall be exercisable as a Non-Qualified Stock Option.
15.
Tax Withholding
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(a)
Withholding Requirements
. Prior to the delivery of any Shares or cash pursuant to an Award (or
exercise thereof), the Company will have the power and the right to deduct or withhold, or require a Grantee to remit to the Company, an amount sufficient to satisfy federal, state, local, foreign or other taxes (including the Grantees FICA
obligation) required to be withheld with respect to such Award (or exercise thereof). The Company will have no obligation to permit exercise of an Award or to issue any Shares or cash pursuant to an Award, unless and until either the exercise of the
Award or the issuance of Shares or cash pursuant thereto is accompanied by sufficient payment, as determined by the Company in its absolute discretion, to meet those withholding obligations on such exercise, issuance, lapse or disposition or other
arrangements are made that are satisfactory to the Company in its absolute discretion to provide otherwise for such payment. The Company will have no liability to any Grantee or transferee for exercising the foregoing right not to permit exercise or
issue or deliver Shares or cash.
(b)
Withholding Arrangements
. The Administrator, in its sole discretion and pursuant to such
procedures as it may specify from time to time, may permit a Grantee to satisfy such tax withholding obligation, in whole or in part (without limitation) by (i) paying cash, (ii) electing to have the Company withhold otherwise deliverable
cash or Shares having a Fair Market Value equal to the amount required to be withheld, (iii) delivering to the Company already-owned Shares having a Fair Market Value equal to the amount required to be withheld, or (iv) selling a
sufficient number of Shares otherwise deliverable to the Grantee through such means as the Administrator may determine in its sole discretion (whether through a broker or otherwise) equal to the amount required to be withheld. The amount of the
withholding requirement will be deemed to include any amount which the Administrator agrees may be withheld at the time the election is made, not to exceed the amount determined by using the maximum federal, state or local marginal income tax rates
applicable to the Grantee with respect to the Award on the date that the amount of tax to be withheld is to be determined. The fair market value of the Shares to be withheld or delivered will be determined as of the date that the taxes are required
to be withheld.
16.
Date of an Award
. The date of grant of an Award will be, for all purposes, the date on which the Administrator makes the
determination to grant such Award, or such other date as is determined by the Administrator. Notice of the grant determination will be given to each Grantee to whom an Award is so granted within a reasonable time after the date of such grant.
17.
Term of Plan
. Subject to Section 23 of the Plan, the term of the Plan shall remain in effect until August 11, 2024, unless
terminated earlier under Section 18 of the Plan.
18.
Section
409A
(a) The Company intends that any Awards be structured in compliance with, or to satisfy an exemption from, Section 409A, such that there are no
adverse tax consequences, interest, or penalties as a result of the payments. Notwithstanding anything else to the contrary herein, if any Award is subject to Section 409A, the Administrator may, in its sole discretion and without a
Grantees prior consent, amend the Plan and/or Awards, adopt policies and procedures, or take any other actions (including amendments, policies, procedures and actions with retroactive effect) as are necessary or appropriate to (i) exempt
the Plan and/or any Award from the application of Section 409A, (ii) preserve the intended tax treatment of any such Award, or (iii) comply with the requirements of Section 409A, including without limitation any such regulations
guidance, compliance programs and other interpretative authority that may be issued after the date of the grant.
(b) Notwithstanding any
contrary provision in the Plan or Award Agreement, any payment(s) of nonqualified deferred compensation (within the meaning of Section 409A) that are otherwise required to be made under the Plan to a specified employee (as defined
under Section 409A) as a result of his or her separation from service (other than a payment that is not subject to Section 409A) shall be delayed for the first six (6) months following such separation from service (or, if earlier, the
date of death of the specified employee) and shall instead be paid (in a manner set forth in the Award Agreement) on the payment date that immediately follows the end of such six (6) month period or as soon as administratively practicable
thereafter.
(c) A termination of employment shall not be deemed to have occurred for purposes of any provision of the Plan or any Award
Agreement providing for the payment of any amounts or benefits that are considered nonqualified deferred compensation under Section 409A upon or following a termination of employment, unless such termination is also a separation from
service within the meaning of Section 409A and the payment thereof prior to a separation from service would violate Section 409A. For purposes of any such provision of the Plan or any Award Agreement relating to any such
payments or benefits, references to a termination, termination of employment or like terms shall mean separation from service.
19.
No Guarantees Regarding Tax Treatment
. Grantees (and their beneficiaries) shall be responsible for all taxes with respect to any Awards under the Plan. The Administrator and the Company make no
guarantees to any person regarding the tax treatment of Awards or payments
MAXIM INTEGRATED PRODUCTS, INC.
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2016 Proxy Statement
B-9
made under the Plan. Neither the Administrator nor the Company has any obligation to take any action to prevent the assessment of any tax on any person with respect to any Award under
Section 409A of the Code or otherwise and none of the Company, any of its Subsidiaries or Affiliates, or any of their employees or representatives shall have any liability to a Grantee with respect thereto.
20.
Limitation on Grants to Non-Employee Directors
. Subject to any applicable adjustment as provided in Section 13, in each fiscal year of the Company, no
non-employee Director shall be granted, solely with respect to service as a non-employee Director, compensation (excluding expense reimbursements) that exceeds five hundred fifty thousand dollars ($550,000) in cash compensation/fees and Awards
granted under the 1996 Equity Plan, in the aggregate, with the value of such Awards based on the grant date fair value of the Awards for financial reporting purposes. For purposes of clarification regarding the foregoing limit, Awards granted in
previous fiscal years will not count against the Award limits in subsequent fiscal years even if the Awards from previous fiscal years are earned or otherwise settled in fiscal years following the fiscal year in which they are granted.
21.
Unfunded Plan
. The Plan is intended to constitute an unfunded plan for incentive compensation. Prior to the issuance of Shares, cash or other form of
payment in connection with an Award, nothing contained herein shall give any Grantee any rights that are greater than those of a general unsecured creditor of the Company. The Administrator may, but is not obligated, to authorize the creation of
trusts or other arrangements to meet the obligations created under the Plan to deliver Shares with respect to awards hereunder.
22.
Amendment,
Suspension or Termination of the Plan
.
(a) The Administrator may at any time amend, suspend or terminate the Plan. To the extent
required to comply with Applicable Laws, the Company shall obtain stockholder approval of any Plan amendment in such manner and to such a degree as required. Notwithstanding the foregoing, the Company shall, at all times, obtain stockholder approval
prior to implementing any (i) exchange offer in which any outstanding Awards (or any other outstanding equity awards granted under any other plans listed in Section 3 (a)) would be cancelled in exchange for new Awards of any kind or
(ii) offer to purchase any outstanding Awards (or any other outstanding equity awards granted under any other plans listed in Section 3(a)) for any amount of cash, in each case, based on a new valuation of the Awards (or any other
outstanding equity awards granted under any other plans listed in Section 3(a)) subject to such offer after their original grant dates.
(b) No Award may be granted during any suspension of the Plan or after termination of the Plan.
(c)
Any amendment, suspension or termination of the Plan shall not affect Awards already granted, and such Awards shall remain in full force and effect as if the Plan had not been amended, suspended or terminated, unless mutually agreed otherwise
between the Grantee and the Administrator, which agreement must be in writing and signed by the Grantee and the Company.
23.
Reservation of
Shares
.
(a) The Company, during the term of the Plan, will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
(b) The inability of the Company to obtain authority from any regulatory body having
jurisdiction, which authority is deemed by the Companys counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to
which such requisite authority shall not have been obtained.
24.
Stockholder Approval
. The Plan, as amended and restated on August 16, 2012,
will be subject to approval by the stockholders of the Company within twelve (12) months after such date; provided that, in the event such approval is not obtained within twelve (12) months after such date, the Plan as in effect prior to
August 16, 2012, shall continue in effect until August 11, 2015, unless terminated earlier under Section 22 of the Plan. Such stockholder approval will be obtained in the manner and to the degree required under Applicable Laws.
25.
No Effect on Terms of Employment
. The Plan shall not confer upon any Grantee any right with respect to continuation of employment or
consulting relationship with the Company, nor shall it interfere in any way with his or her right or the Companys right to terminate his or her employment or consulting relationship at any time, with or without cause.
26.
Electronic Delivery
. Any reference herein to a written agreement or document will include any agreement or document delivered electronically, filed
publicly at
www.sec.gov
(or any successor website thereto) or posted on the Companys intranet.
B-10
MAXIM INTEGRATED PRODUCTS,
INC.
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2016 Proxy
Statement
PRELIMINARY COPY, SUBJECT TO COMPLETION.
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HOW TO VOTE:
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Please choose one of the following voting methods:
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VOTE BY INTERNET -
www.proxyvote.com
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MAXIM INTEGRATED PRODUCTS, INC.
ATTN: MARK CASPER
160 RIO ROBLES
SAN JOSE, CA 95134
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Use the Internet to transmit your voting instructions and for electronic
delivery of information up until 11:59 PM Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting
instruction form.
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the costs incurred by our company in mailing proxy materials,
you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when
prompted, indicate that you agree to receive or access proxy materials electronically in future years.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 PM Eastern Time the day before the cut-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.
VOTE IN PERSON
You may also vote in person by attending the Annual Meeting and requesting a ballot to vote your shares. Please check the meeting materials for any special
requirements for meeting attendance.
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
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M78531-P56020 KEEP
THIS
PORTION FOR YOUR RECORDS
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DETACH AND RETURN THIS PORTION ONLY
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THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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MAXIM INTEGRATED
PRODUCTS, INC.
The Board of Directors recommends you vote
FOR all of the nominees listed below and FOR proposals 2 through 6:
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For
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Withhold
All
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For All
Except
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To withhold authority to vote for any individual nominee(s), mark For All Except and write the number(s) of the nominee(s) on the line below.
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¨
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¨
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1.
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To elect eight members of the board of directors to hold office until the next annual meeting of stockholders or until their respective successors have been elected and qualified.
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The eight director nominees are as follows:
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01)
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William P. Sullivan
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05) Joseph R. Bronson
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02)
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Tunç Doluca
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06) Robert E. Grady
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03)
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Tracy C. Accardi
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07) William D. Watkins
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04)
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James R. Bergman
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08) MaryAnn Wright
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For
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Against
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Abstain
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4. To ratify and approve an amendment to Maxim Integrateds 1996 Stock Incentive Plan
to provide a maximum annual limit on non-employee director compensation for cash and equity.
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For
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Against
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Abstain
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2.
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To ratify the appointment of Deloitte & Touche LLP as
Maxim Integrateds independent registered public accounting firm for the fiscal year ending June 24, 2017.
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3.
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To ratify and approve an amendment to Maxim
Integrateds 2008 Employee Stock Purchase Plan to increase the number of shares available for issuance thereunder by 1,500,000 shares.
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5. To ratify and approve an amendment to Maxim Integrateds
Bylaws to designate Delaware as the exclusive forum for the adjudication of certain legal disputes.
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6. Advisory vote to approve named executive officer compensation.
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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.
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Signature [PLEASE SIGN WITHIN BOX]
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Date
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Signature (Joint Owners)
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Date
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10:00 AM, Pacific Time, on Wednesday, November 9, 2016.
Meeting location: Maxim Integrated Products, Inc., Event Center, 160 Rio Robles,
San Jose, California 95134.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report on Form 10-K Document is available at
www.proxyvote.com
.
M78532-P56020
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MAXIM INTEGRATED PRODUCTS, INC.
Annual Meeting of Stockholders
November 9, 2016 10:00 AM Pacific Time
This proxy is solicited by the Board of Directors
The stockholders hereby appoint Mark Casper and Bruce Kiddoo, or either of them, as proxies, each with the power to appoint his substitute, and hereby
authorize them to represent and to vote, as designated on the reverse side of this ballot, all the shares of Common Stock of Maxim Integrated Products, Inc. that the stockholders are entitled to vote at the Annual Meeting of Stockholders to be held
on November 9, 2016, at 10:00 AM, Pacific Time, at our Event Center located at 160 Rio Robles, San Jose, California 95134, and any meeting properly reconvened after adjournment or postponement of the Annual Meeting.
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. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY
ADJOURNMENT OR POSTPONEMENT THEREOF.
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