DEF 14A 1 avnwannualproxyfy20.htm DEF 14A Document

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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¨ Soliciting Material Pursuant to § 240.14a-12
Aviat Networks, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)

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AVIAT NETWORKS, INC.
200C Parker Dr. Suite 100A
Austin, Texas 78728


Notice of Annual Meeting of Stockholders for Fiscal Year 2020
To Be Held on November 11, 2020

TO THE HOLDERS OF COMMON STOCK OF AVIAT NETWORKS, INC.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders for fiscal year 2020 (the “Annual Meeting”) of Aviat Networks, Inc. (the “Company”) will be held at 2801 Via Fortuna, Suite 100, Austin, Texas 78746, on November 11, 2020, at 12:30 p.m. Central time. For your convenience, you may either attend the Annual Meeting in-person or online via webcast by visiting www.virtualshareholdermeeting.com/AVNW2020 and entering your 16-digit control number included with the Notice of Internet Availability or proxy card. You will be able to vote your shares while attending the Annual Meeting, whether in-person or online, for the following purposes:

1.To elect six directors to serve until the Company’s 2021 Annual Meeting of Stockholders or until their successors have been elected and qualified.

2.To vote on the ratification of the appointment by our Audit Committee of BDO USA, LLP (“BDO”) as the Company’s independent registered public accounting firm for fiscal year 2021.

3.To hold an advisory, non-binding vote to approve the Company’s named executive officer compensation (“Say-on-Pay”).

4.To approve the Amended and Restated Tax Benefit Preservation Plan (the “Tax Benefit Preservation Plan”) dated as of August 27, 2020, by and between the Company and Computershare Inc., as Rights Agent.

5.To transact such other business as may properly come before the Annual Meeting or any adjournment or postponement or other delay thereof.

Only holders of common stock at the close of business on September 15, 2020, are entitled to notice of and to vote at the Annual Meeting or any adjournment, postponement or other delay thereof.

We are monitoring developments regarding the novel coronavirus (“COVID-19”) and preparing in the event any changes for our Annual Meeting are necessary or appropriate. If we decide to make any change, such as to the date or location or to hold the meeting solely online via webcast, we will announce the change in advance by issuing a press release which will be filed with the Securities and Exchange Commission (“SEC”) and by posting details, including instructions on how stockholders can participate, on our website at https://investors.aviatnetworks.com/. We also recommend that you visit our website to confirm the status of the Annual Meeting before planning to attend in-person.

Whether or not you expect to attend the Annual Meeting in-person or online, we urge you to submit a proxy to vote your shares. This will help ensure the presence of a quorum at the Annual Meeting.

By Order of the Board of Directors
September 25, 2020/s/ Peter A. Smith
President and Chief Executive Officer






Important Notice Regarding the Availability of Proxy Materials
for the Stockholder Meeting to Be Held on November 11, 2020
This Proxy Statement for the 2020 Annual Meeting of Stockholders and
our Annual Report to Stockholders for the Fiscal Year Ended July 3, 2020 are available at
https://materials.proxyvote.com/05366Y

Your vote is important regardless of the number of shares you own. The Board of Directors urges you to sign, date and return the enclosed proxy card by mail (using the enclosed postage-paid envelope) as promptly as possible, or vote electronically or by telephone as described in the attached proxy statement. If you have any questions or need assistance in voting your shares, please contact Broadridge, toll-free at 1-800-690-6903.



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AVIAT NETWORKS, INC.

PROXY STATEMENT

FOR THE ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON NOVEMBER 11, 2020

This proxy statement (this “Proxy Statement”) applies to the solicitation of proxies by the Board of Directors (the “Board”) of Aviat Networks, Inc. (which we refer to as “Aviat,” the “Company,” “we,” “our,” and “ours”) for use at the Annual Meeting of Stockholders for fiscal year 2020 and any adjournment, postponement or other delay thereof (the “Annual Meeting”), to be held at 12:30 p.m., local time, on November 11, 2020. The Annual Meeting will be held at 2801 Via Fortuna, Suite 100, Austin, Texas 78746. The telephone number is (408) 941-7100. You may also attend the meeting online via webcast, at www.virtualshareholdermeeting.com/AVNW2020. Stockholders attending the meeting online via webcast will be able to submit questions and vote their shares live at the meeting. These proxy materials are being made available on or about September 28, 2020, to our stockholders entitled to notice of and to vote at the Annual Meeting.

ABOUT THE ANNUAL MEETING

What is the purpose of the Annual Meeting?
The purpose of the Annual Meeting is to obtain stockholder action on the matters outlined in the notice of meeting included with this Proxy Statement. All holders of shares of common stock at the close of business on September 15, 2020, are entitled to notice of and to vote at the Annual Meeting. At the Annual Meeting, our stockholders will vote (i) to elect six directors; (ii) on the ratification of the appointment by our Audit Committee of BDO USA, LLP (“BDO”) as our independent registered public accounting firm for fiscal year 2021; (iii) on an advisory, non-binding resolution to approve the Company’s named executive officer compensation (“Say-on-Pay”); (iv) to approve the Company’s Tax Benefit Preservation Plan; and (v) to transact such other business as may properly come before the Annual Meeting or any adjournment or postponement or other delay thereof.

What is the record date, and who is entitled to vote at the Annual Meeting?
The record date for the stockholders entitled to vote at the Annual Meeting is September 15, 2020 (the “Record Date”). The Record Date was established by the Board as required by the Delaware General Corporation Law and our Bylaws. Owners of shares of our common stock at the close of business on the Record Date are entitled to receive notice of the Annual Meeting and to vote at the Annual Meeting. You may vote all shares that you owned as of the Record Date.

What are the voting rights of the holders of common stock at the Annual Meeting?
Each outstanding share of our common stock is entitled to one vote on each matter considered at the Annual Meeting. As of the Record Date, there were 5,423,007 shares of our common stock outstanding.

Who may attend the Annual Meeting?
All stockholders as of the Record Date, or their duly appointed proxies, may attend the Annual Meeting subject to space availability for in-person attendance. Because seating is limited, admission in-person for the Annual Meeting will be on a first-come, first-served basis. Stockholders will be able to participate in the Annual Meeting online via webcast by visiting www.virtualshareholdermeeting.com/AVNW2020 and entering the 16-digit control number included in your notice of
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Internet availability of the proxy materials, or on your proxy card or in the instructions that accompanied your proxy materials.
The Annual Meeting will begin promptly at 12:30 p.m. Central time. Online check-in will be available beginning at 12:15 p.m. Central time. Please allow ample time for online check-in procedures. If you encounter any difficulties accessing the webcast Annual Meeting during login or in the course of the meeting, please contact the phone number found on the login page at www.virtualshareholdermeeting.com/AVNW2020.
If your shares are held in “street name” (that is, through a bank, broker or other holder of record) and you wish to attend the Annual Meeting in-person, you must bring to the Annual Meeting a copy of a bank or brokerage statement reflecting your stock ownership as of the Record Date.
Each stockholder attending the Annual Meeting in-person may be asked to present valid picture identification, such as a driver’s license or passport. Cameras, recording devices and other electronic devices will not be permitted at the Annual Meeting. You may contact us by calling (408) 941-7100 for directions to the Annual Meeting.

How do I vote?
Stockholders of record can vote by proxy as follows:
Via the Internet: Stockholders may submit voting instructions through the Internet by following the instructions included with the proxy card.

By Telephone: Stockholders may submit voting instructions by telephone by following the instructions included with the proxy card.

By Mail: Stockholders may sign, date and return their proxy card in the pre-addressed, postage-paid envelope provided.

At the Annual Meeting: If you attend the Annual Meeting in-person, you may vote in-person by ballot, even if you have previously returned a proxy card. You may attend the Annual Meeting, vote, and submit a question during the Annual Meeting online by visiting www.virtualshareholdermeeting.com/AVNW2020 and using your 16-digit control number to enter the meeting.

If you hold your shares in “street name,” the bank, broker or other holder of record holding your shares will send you separate instructions describing the procedure for voting your shares. If you hold your shares in “street name,” you will not be able to vote in-person by ballot at the Annual Meeting unless you have previously requested and obtained a “legal proxy” from your broker, bank or other holder of record and present it at the Annual Meeting. If you hold shares in a “street name” or other holder of record holding and wish to attend the Annual Meeting online, you may be required to provide proof of beneficial ownership, such as your most recent account statement as of the Record Date, a copy of the voting instruction form provided by your broker, bank, trustee, or nominee, or other similar evidence of ownership. If you do not comply with the procedures outlined above, you will not be admitted to the online Annual Meeting.
Why did I receive a one-page notice in the mail regarding the Internet availability of proxy materials this year instead of a full set of proxy materials?
Pursuant to SEC rules, we have provided access to our proxy materials over the Internet. Accordingly, we are sending a Notice of Internet Availability of Proxy Materials (the “Notice”) to our stockholders of record and beneficial owners of shares held in “street name.” All stockholders entitled to vote at the Annual Meeting will have the ability to access the proxy materials on a website referred to in the Notice or request a printed set of the proxy materials. Instructions on how to access the proxy materials over the Internet or to request a printed copy may be found in the Notice. In addition, the Notice contains information on how stockholders of record may request delivery of proxy materials in printed form by mail or electronically by email on an ongoing basis. Please note that, while our proxy materials are available at the website
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referenced in the Notice of Internet Availability and on our website, no other information contained on either website is incorporated by reference into or considered to be a part of this document.

How can I access the proxy materials and annual report on the Internet?
This Proxy Statement, the form of proxy card, the Notice and our annual report on Form 10-K for the fiscal year ended July 3, 2020 are available at www.Proxyvote.com.

Why is Aviat soliciting proxies?
In lieu of personally attending and voting at the Annual Meeting, you may appoint a proxy to vote on your behalf. The Board has designated proxy holders to whom you may submit your voting instructions. The proxy holders for the Annual Meeting are John Mutch, Chairman of the Board, and Peter Smith, Director, President and Chief Executive Officer (“CEO”).

How do I revoke my proxy?
If you are a stockholder of record, you may revoke your proxy at any time before your shares are voted at the Annual Meeting by:
delivering a written notice of revocation to the Company’s Secretary, at 200 Parker Drive, Suite C100A, Austin, TX 78728;
signing, dating and returning a proxy card bearing a later date;
submitting another proxy by Internet or telephone (the latest dated proxy will control); or
attending the Annual Meeting and voting in-person or online by ballot.
If you hold your shares in “street name,” you should follow the directions provided by the bank, broker or other holder of record to revoke your proxy. Regardless of how you hold your shares, your attendance at the Annual Meeting after having executed and delivered a valid proxy card will not in and of itself constitute a revocation of your proxy.

What vote is required to approve each item?
Proposal No. 1 (election of directors): the director nominees will be elected by a majority of the votes cast. Stockholders may not cumulate votes in the election of directors. The Board recommends a vote “FOR” all nominees.
Proposal No. 2 (ratification of BDO as the Company’s independent registered public accounting firm): the affirmative vote by the holders of a majority of the voting power of the common stock present in-person or represented by proxy at the Annual Meeting and entitled to vote on the proposal is necessary for approval of Proposal No. 2. The Board recommends a vote “FOR” Proposal No. 2.
Proposal No. 3 (advisory, non-binding vote on named executive officer compensation): the affirmative vote by the holders of a majority of the voting power of the common stock present in-person or represented by proxy at the Annual Meeting and entitled to vote on the proposal is necessary for approval of Proposal No. 3. The Board recommends a vote “FOR” Proposal No. 3.
Proposal No. 4 (approval of the Company’s Tax Benefit Preservation Plan): the affirmative vote by the holders of a majority of the voting power of the common stock present in-person or represented by proxy at the Annual
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Meeting and entitled to vote on the proposal is necessary for approval of Proposal No. 4. The Board recommends a vote “FOR” Proposal No. 4.

What happens if a director does not receive a sufficient number of votes?
Aviat’s Corporate Governance Guidelines provide that a director nominee who receives a greater number of votes “AGAINST” his or her election than votes “FOR” his or her election must promptly offer his or her resignation to the Board. The Board will determine whether to accept the nominee’s resignation. See “Majority Vote Policy in Director Elections” for additional information.

What constitutes a quorum, abstention and broker “non-vote”?
The presence at the Annual Meeting either in-person, virtually through the webcast, or by proxy of the holders of common stock entitled to cast a majority of the voting power of all of the common stock issued and outstanding and entitled to vote at the Annual Meeting constitutes a quorum for the transaction of business at the Annual Meeting.
Abstentions and broker “non-votes” are counted as present and are, therefore, included for purposes of determining whether a quorum is present at the Annual Meeting. An abstention occurs when a stockholder does not vote for or against a proposal but specifically abstains from voting. A broker “non-vote” occurs when a bank, broker or other holder of record holding shares in street name for a beneficial owner signs and submits a proxy or votes with respect to shares of common stock held in a fiduciary capacity, but does not vote on a particular matter because the bank, broker or other holder of record does not have discretionary voting power with respect to that matter and has not received instructions from the beneficial owner or because the bank, broker or other holder of record elects not to vote on a matter as to which it does have discretionary voting power. Under the rules governing banks, brokers and other holders of record who are voting with respect to shares held in street name, such entities have the discretion to vote such shares on routine matters but not on non-routine matters. Only Proposal No. 2 is a routine matter.
For Proposal No. 1, abstentions and broker “non-votes”, if any, will be disregarded and have no effect on the outcome of the vote. For Proposals No. 2, No. 3, and No. 4, abstentions will have the same effect as voting against the proposal, and broker “non-votes”, if any, will be disregarded and have no effect on the outcome of the vote.

Who pays for the cost of solicitation?
We will bear the entire cost of solicitation, including the preparation, assembly, printing, and mailing of this Proxy Statement, the proxy card, the Notice and any additional solicitation materials that may be furnished to our stockholders and the maintenance and operation of the website providing Internet access to these proxy materials. We will reimburse banks, brokers and other holders of record for reasonable expenses incurred in sending proxy materials to beneficial owners of our common stock and maintaining Internet access for such materials and the submission of proxies. We may supplement the original solicitation of proxies by mail through solicitation by telephone, email, over the Internet or by other means by our directors, officers and other employees. No additional compensation will be paid to these individuals for any such services.
In addition, the Company has retained D.F. King & Co. to assist it in the solicitation of proxies. The Company has agreed to pay D.F. King & Co. a fee of $10,500, plus reimbursement for their reasonable out-of-pocket expenses. The Company has also agreed to indemnify D.F. King & Co. against certain liabilities and expenses, including certain liabilities and expenses under the federal securities laws.

What is the deadline for submitting proposals and director nominations for the 2021 Annual Meeting?
For stockholder proposals that are not intended to be included in next year’s proxy statement and for director nominations that are intended to be included in next year’s proxy statement, a stockholder of record must submit a written
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notice thereof, which notice must be received by our Corporate Secretary at our principal executive offices not earlier than August 13, 2021, or later than September 12, 2021. The full requirements for the submission of nominations of directors and proposals of business not intended to be included in the Company’s proxy are contained in Article II, Sections 13 and 14, respectively, of our Bylaws, which are available for review at our website, www.aviatnetworks.com.
Stockholder proposals intended for inclusion in next year’s proxy statement pursuant to Rule 14a-8 under the Securities Exchange Act of 1934 (the “Exchange Act”) must be directed to the Corporate Secretary, Aviat Networks, Inc., at our principal executive offices, and must be received by May 28, 2021.
In accordance with the rules of the SEC, the proxies solicited by the Board for the 2021 Annual Meeting will confer discretionary authority on the proxy holders to vote on any director nomination or stockholder proposal properly presented at the 2021 Annual Meeting if the Company fails to receive notice of such matter in accordance with the periods specified above.

Who will count the votes?
Broadridge will tabulate the votes cast by proxy. The Company has retained an independent inspector of elections in connection with Aviat’s solicitation of proxies for the Annual Meeting. Aviat intends to notify stockholders of the results of the Annual Meeting by filing a Form 8-K with the SEC.

CORPORATE GOVERNANCE
We believe in and are committed to sound corporate governance principles. Consistent with our commitment to and continuing evolution of corporate governance principles, we adopted a Code of Conduct, Corporate Governance Guidelines and written charters for the Governance and Nominating Committee, Audit Committee and Compensation Committee which are available in the Governance subsection of the Investor page of our website at https://aviatnetworks.com. Each of our Board committees is required to conduct an annual review of its charter and applicable guidelines.

Board Members
The authorized size of the Board is currently six. Our Bylaws require that the Board have a minimum of three directors. Directors are nominated by the Governance and Nominating Committee of the Board. To further continue our commitment to Board diversity, the Board elected Dahlia Loeb on May 19, 2020.
The following are the members of the Board as of the date of this Proxy Statement. See Proposal No. 1 for additional information regarding the nominees for director.


NameTitle and Positions
John MutchDirector, Chairman of the Board
Kenneth KongDirector
Dahlia LoebDirector
John J. QuickeDirector
Peter SmithDirector, President and Chief Executive Officer
Dr. James C. StoffelDirector

The Board has determined that each of our current directors other than Mr. Smith has no relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and is otherwise
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independent in accordance with listing rules of the NASDAQ Stock Market (the “NASDAQ Listing Rules”). Our independent directors regularly meet in executive session without members of management present.
All of our directors are requested to attend our annual meetings of stockholders. Four of our six directors, representing all of our current directors who were directors at the time of the 2019 Annual Meeting, attended our 2019 Annual Meeting either in-person or via telephone.

Director Selection Process
The Governance and Nominating Committee is responsible for leading the search for qualified individuals for election as directors to ensure the Board has an optimal mix of skills, expertise and diversity of background. The Governance and Nominating Committee recommends candidates to the full Board for election. Any formal invitation to a director candidate is authorized by the full Board. The Governance and Nominating Committee identifies candidates through a variety of means, including recommendations from members of the Board, suggestions from Company management and, from time to time, a third-party search firm. The Governance and Nominating Committee also considers candidates recommended by stockholders. Stockholders wishing to recommend director candidates for consideration by the Governance and Nominating Committee may do so by writing to the Secretary of the Company, giving the recommended candidate’s name, biographical data and qualifications.
Recently Appointed Directors
Dahlia Loeb was recommended to the Governance and Nominating Committee through a Board member. Ms. Loeb brings over two decades of investment and capital markets experience, and a wealth of knowledge of both public and private companies in a wide range of industries, including telecommunications, communications infrastructure, wireless and tech-enabled services.
Peter Smith was recommended to the Board by the Company after joining the Company as President and CEO. Mr. Smith has more than 25 years of leadership experience in business management and a proven track record of creating value for companies.

Board and Committee Meetings and Attendance
In fiscal year 2020, the Board held eleven meetings. Each of the Board members attended 100% of the Board meetings and 100% of the total number of meetings of the committee or committees on which the member served, in each case, with respect to Board and committee meetings that took place while such director was a member of the Board.

Board Member Qualifications
Our Board believes that its members should encompass a range of talents, skills and expertise, which enables the Board to provide sound guidance with respect to the Company’s operations and interest. Each director shall have the ability to apply good business judgement and must be able to exercise his or her duties of loyalty and care. Candidates for the position of director should exhibit proven leadership capabilities, high integrity, exercise high level responsibilities within their chosen careers, and have an ability to quickly grasp complex principles of business, finance, international transactions, and communication technologies. Our Board prefers a variety of professional experiences and backgrounds among its members. In addition to considering a candidate’s experiences and background, candidates are reviewed in the context of the current composition of the Board and evolving needs of our businesses. In particular, the Board has sought to include members that have experience in establishing, growing and leading communications companies in senior management positions and serving on the board of directors of other companies. In determining that each of the members of the Board is qualified to be a director, the Board has relied on the attributes listed below and, where applicable, on the direct personal knowledge of each of the members’ prior service on the Board.
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Our bylaws provide that a director may not be older than 75 years of age on the date of his or her election or appointment to the Board unless otherwise specifically approved by a resolution passed by the Board.

Directors’ Biographies

The following is a brief description of the business experience and background of each nominee for director, including the capacities in which each has served during at least the past five years:
Mr. John Mutch, age 64, currently serves as Chairman of the Board and has served on the Board since January 2015. He served on the Board of Directors of Steel Excel Inc. (“Steel Excel”), a provider of drilling and production services to the oil and gas industry and a provider of event-based sports services and other health-related services, from 2007 to 2016. From December 2008 to January 2014, he served as Chairman of the board of directors and Chief Executive Officer of Beyondtrust Software, a privately-held security software company. Mr. Mutch has been the founder and managing partner of MV Advisors LLC (“MV Advisors”), a strategic block investment firm that provides focused investment and strategic guidance to small and mid-cap technology companies, since December 2005. Prior to founding MV Advisors, in March 2003, Mr. Mutch was appointed by the U.S. Bankruptcy court to the board of directors of Peregrine Systems, Inc. (“Peregrine Systems”), a provider of enterprise asset and service management solutions. He assisted that company in a bankruptcy work-out proceeding and was named President and Chief Executive Officer in July 2003. Previous to running Peregrine Systems, Mr. Mutch served as President, Chief Executive Officer and a director of HNC Software, an enterprise analytics software provider. Before HNC Software, Mr. Mutch spent seven years at Microsoft Corporation in a variety of executive sales and marketing positions. Mr. Mutch previously served on the boards of directors of Phoenix Technologies Ltd., a leader in core systems software products, services and embedded technologies, Edgar Online, Inc., a provider of financial data, analytics and disclosure management solutions, Aspyra, Inc., a provider of clinical and diagnostic information systems for the healthcare industry, Overland Storage, Inc., a provider of unified data management and data protection solutions, and Brio Software, Inc., a provider of business intelligence software. He has served as a director at Agilysys, Inc., a provider of information technology solutions, since March 2009. From April 2017 to May 2019, Mr. Mutch served as a director at Maxwell Technologies, Inc., a manufacturer of energy storage and power delivery solutions for automotive, heavy transportation, renewable energy, backup power, wireless communications and industrial and consumer electronics applications. From July 2017 to March 2018, he served as a director at YuMe, Inc., a provider of digital video brand advertising solutions, at which time YuMe was acquired by RhythmOne plc, a technology-enabled digital media company, and Mr. Mutch continued serving as a director on the RhythmOne board until January 2019.
Mr. Mutch brings to the Board extensive experience as an executive in the technology sector. He also has experience as a director at several public companies in the technology sector. He is or has been a member of the audit committee of various public and private companies and brings valuable financial expertise to the Board.
Dahlia Loeb, age 47, was appointed to the Board in May 2020. Ms. Loeb has been a managing director of Arcadia Investment Partners ("Arcadia"), an investment firm since May 2016. Ms. Loeb is responsible for evaluating and overseeing investments across Arcadia's private equity, alternative fixed income, and real estate holdings. She has also been a managing partner at Reveille Capital Management, an investment firm, since February 2008, where she is responsible for overseeing investments across public equity, private equity, and venture capital. Before Arcadia, Ms. Loeb was a portfolio manager at Arrowgrass Capital Partners LLP, a hedge fund sponsor, and was a managing director and portfolio manager at Intrepid Capital Management, a hedge fund sponsor. She holds a B.A. in Economics from Harvard College and an M.B.A. from Harvard Business School.
Ms. Loeb brings over two decades of investment and capital markets knowledge, and a wealth of experience with both public and private companies in a wide range of industries, including telecommunications, communications infrastructure, wireless and tech-enabled services.
Mr. Kenneth Kong, age 46, has served as a member of the Board since November 2016. He is a Senior Vice President at Steel Services, Ltd. (“Steel Services”), a management and advisory company that provides management services to Steel Partners Holdings, L.P. and its affiliates. As an investment professional at Steel Services, Mr. Kong sources and analyzes investment opportunities in publicly traded securities in a diverse number of industries. He is also a member of the Mergers and Acquisitions team at Steel Services focused on deal sourcing, due diligence and analysis. Since joining the firm
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in 1997 as an investment analyst, Mr. Kong also performed in various key positions in managing investor relations, marketing and administration for Steel Partners II, L.P., Steel Partners Japan Strategic Fund, L.P. and Steel Partners China Access I, L.P. From 2006 to 2016, he managed Steel Partners China Access I, L.P., a private investment fund focused on investing in publicly listed state-owned enterprises in the People’s Republic of China. Mr. Kong currently serves as a of Trustee BNS Holding Liquidating Trust, Inc. since 2012, and served as a director of Ore Holdings, Inc. from October 2010 to August 2017. Additionally, he has served as a director on several private companies.
Mr. Kong’s brings to the Board an extensive knowledge of capital allocation and related matters.
Mr. John J. Quicke, age 71, has served as a member of the Board since January 2015. Mr. Quicke served as a director of Rowan Companies, plc, an offshore contract drilling company, from January 2009 to March 2019. From January 2016 to May 2019, he served as a consultant, and as Chairman of Steel Energy Services LTD, a subsidiary of Steel Partners Holdings, L.P. He served on the board of directors of Steel Excel from 2007 to July 2016 and served as its Interim President and Chief Executive Officer from January 2010 to March 2013. In March 2013, he was named President and Chief Executive Officer of Steel Excel’s Steel Energy segment and served in that capacity until December 2015. Mr. Quicke served as Managing Director and operating partner of Steel Partners LLC, a subsidiary of Steel Partners Holdings L.P. from September 2005 until December 2015. Previously, Mr. Quicke served in various capacities at Sequa Corporation, a diversified manufacturer, including Vice Chairman and Executive Officer, President, and as a director of the company. Mr. Quicke previously served as a Vice President and director of Handy & Harman Ltd. (“H&H”), director, President and Chief Executive Officer of DGT Holdings Corp. and as a director of Angelica Corporation, a provider of health care linen management services, Layne Christensen Company, a global solutions provider for essential natural resources, NOVT Corporation, a vascular brachytherapy business, JPS Industries, Inc., a manufacturer of mechanically formed glass and aramid substrate materials for specialty applications.
Mr. Quicke’s extensive experience, including board service on ten public companies over 20 years, over 25 years of significant operating experience, which includes participation in acquisition and disposition transactions, as well as his financial and accounting expertise, enable him to assist in the effective management of the Company.
Mr. Peter Smith, age 54, has been our President and CEO since January 2020 and a member of the Board since February 2020. Mr. Smith has more than 25 years of leadership experience in business management and a proven track record of creating value for companies. He most recently served as Senior Vice President, US Windows and Canada for Jeld-Wen from March 2017 to December 2019, where he had full profit and loss responsibility for Jeld-Wen’s $1B+ windows business, implementing lean manufacturing principles and strategic development programs to deliver growth and improved profitability. Prior to Jeld-Wen, from October 2013 to March 2017, he served as President of Polypore International’s Transportation and Industrial segment and oversaw transformative initiatives that helped prepare the former public company for sale to the Asahi Kasei Group. Previously, he served as Chief Executive Officer and a director of Voltaix Inc., until its sale to Air Liquide.
Earlier in his career, Mr. Smith held various executive leadership positions at Fortune 100 and Fortune 500 companies, including Cooper Industries, Dover Knowles Electronics and Honeywell Specialty Materials. In these roles, his responsibilities ran the gamut of operations, sales and marketing, business development, and mergers and acquisitions. Mr. Smith also served on the board of Soleras Advanced Coatings from 2015 to 2018. He has both a Bachelor of Science degree in Material (Ceramics) Engineering and PhD in Material Science and Engineering from Rutgers University, and holds a Master of Business Administration degree from Arizona State University.
Dr. James C. Stoffel, age 74, has served as a member of the Board since January 2007 and was the lead independent director for Aviat from July 2010 to February 2015. In addition, Dr. Stoffel currently serves on the board of directors of PAR Technology Corporation, a NYSE listed company which provides software as a service (SaaS) and related solutions to the hospitality industry. He has been on the PAR board of directors since November 2017 and is currently the Lead Independent Director of PAR and chairman of the Compensation Committee. Since June 1, 2020, Dr. Stoffel has served as a director on the board of EZAccess MD. Dr. Stoffel retired from the board of directors of Harris Corporation in October 2018, having served since August 2003. He also retired in December 2018 from Trillium International, LLC, a private equity company, where he served as co-founding General Partner since 2006. He continues to be an advisor to multiple private equity firms. Prior to his private equity work, Dr. Stoffel was Senior Vice President, Chief Technical Officer and Director of Research and Development of Eastman Kodak Company (“Kodak”). He held this position from 2000 to April 2005. He joined Kodak in 1997 as Vice President and Director, Electronic Imaging Products Research and Development, and became Director of
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Research and Engineering in 1998. Prior to joining Kodak, he was with Xerox Corporation (“Xerox”), where he began his career in 1972. His most recent position with Xerox was Vice President, Corporate Research and Technology.
Dr. Stoffel’s prior service as a senior executive of large, publicly traded, technology driven companies and his more than 30 years of experience focused on technology development provide him with an extensive knowledge of the complex technical research and development, management, financial and governance issues faced by a public company with international operations. This experience brings our Board important knowledge and expertise related to research and development, new product introductions, strategic planning, manufacturing, operations and corporate finance. His experience as an advisor to private equity firms also provides him with additional knowledge related to strategic planning, capital raising, mergers and acquisitions and economic analysis. Dr. Stoffel also has gained an understanding of public company governance and executive compensation through his service on public company boards, including as a lead independent director.

Board Leadership
The Board does not have a policy regarding the separation of the roles of CEO and Chairman of the Board as the Board believes that it is in the best interests of the Company for the Board to make that determination based on the position and direction of the Company and the membership of the Board. The members of the Board possess considerable experience and unique knowledge of the challenges and opportunities that the Company faces and are in the best position to evaluate the needs of the Company and how to best organize the capabilities of the directors and management to meet those needs.
When the CEO also serves as Chairman of the Board, our Corporate Governance Guidelines provide for the appointment of a lead independent director.
The Board has determined that having Mr. Mutch serve as Chairman is in the best interest of the Company at this time. This structure ensures a greater role for the independent directors in the oversight of the Company and active participation of the independent directors in setting agendas and establishing Board priorities and procedures and is useful in establishing a system of corporate checks and balances. Separating the Chairman position from the CEO position allows the CEO to focus on setting the strategic direction of the Company and the day-to-day leadership and performance of the Company, while the Chairman leads the Board in its role of, among other things, providing advice to, and overseeing the performance of, the CEO. In addition, managing the Board can be a time-intensive responsibility, and this structure permits our CEO to focus on the management of the Company’s day-to-day operations.

The Board’s Role in Risk Oversight
Assessing and managing risk is the responsibility of the management of the Company. The Board’s oversight of major risks occurs at both the full Board level and at the Board committee level. The Board oversees and reviews certain aspects of the Company’s risk management efforts, focusing on the adequacy of the Company’s risk management and risk mitigation processes. Management is responsible for establishing the Company’s business strategy, identifying and assessing the related risks and implementing appropriate risk management practices. At the Board’s request, management proposed a process for identifying, evaluating and monitoring material risks and such process has been approved by the Board and is currently in effect. This risk management program is overseen by senior management who, in connection with their regular review of the overall business, identify and prioritize a broad range of material risks (e.g., financial, strategic, compliance and operational). Senior management also discusses mitigation plans to address such material risks. Prioritized risks and management’s plans for mitigating such risks are regularly presented to the full Board for discussion and in order to ensure monitoring. In addition to the risk management program, the Board encourages management to promote a corporate culture that incorporates risk management into the Company’s corporate strategy and day-to-day business operations.
In addition, each of our Board committees also oversees the management of risks that fall within the committee’s areas of responsibility. In performing this function, each committee has full access to management, as well as the ability to engage advisors. The Audit Committee oversees the Company’s compliance with legal and regulatory requirements. The Governance and Nominating Committee assists the Board in shaping the corporate governance of the Company. The Compensation Committee oversees the management of risks relating to the Company’s executive compensation plans and incentive structure.
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A discussion of risk factors in the Company’s compensation design can be found below under the heading “Risk Considerations in Our Compensation Program.”

Principles of Corporate Governance, Bylaws and Other Governance Documents
The Board has adopted Corporate Governance Guidelines and other corporate governance documents that supplement certain provisions of our Bylaws and relate to, among other things, the composition, structure, interaction and operation of the Board. Some of the key governance features of our Corporate Governance Guidelines, Bylaws and other governance documents are summarized below.
Majority Voting in Director Elections. In an uncontested election of directors, to be elected to the Board, each nominee must receive the affirmative vote of shares representing a majority of the votes cast, meaning that the number of votes “FOR” a director nominee must exceed the number of votes “AGAINST” that director nominee.
Aviat’s Corporate Governance Guidelines provide that any director nominee in an uncontested election who does not receive a greater number of votes “FOR” his or her election than votes “AGAINST” such election must, promptly following certification of the stockholder vote, offer his or resignation to the Board for consideration in accordance with the following procedures. All of these procedures will be completed within 90 days following certification of the stockholder vote.
The Board, through its Qualified Independent Directors (as defined below), will evaluate the best interests of the Company and its stockholders and decide the action to be taken with respect to such offered resignation, which can include, without limitation: (i) accepting the resignation; (ii) accepting the resignation effective as of a future date not later than 180 days following certification of the stockholder vote; (iii) rejecting the resignation but addressing what the Qualified Independent Directors believe to be the underlying cause of the withhold votes; (iv) rejecting the resignation but resolving that the director will not be re-nominated in the future for election; or (v) rejecting the resignation.
In reaching their decision, the Qualified Independent Directors will consider all factors they deem relevant, including but not limited to: (i) any stated reasons why stockholders did not vote for such director; (ii) the extent to which the “AGAINST” votes exceed the votes “FOR” the election of the director and whether the “AGAINST” votes represent a majority of the outstanding shares of common stock; (iii) any alternatives for curing the underlying cause of the “AGAINST” votes; (iv) the director’s tenure; (v) the director’s qualifications; (vi) the director’s past and expected future contributions to the Company; (vii) the overall composition of the Board, including whether accepting the resignation would cause the Company to fail or potentially fail to comply with any applicable law, rule or regulation of the SEC or the NASDAQ Listing Rules; and (viii) whether such director’s continued service on the Board for a specified period of time is appropriate in light of current or anticipated events involving the Company.
Following the Board’s determination, the Company will, within four business days, disclose publicly in a document furnished or filed with the SEC the Board’s decision as to whether or not to accept the resignation offer. The disclosure will also include a description of the process by which the decision was reached, including, if applicable, the reason or reasons for rejecting the offered resignation.
A director who is required to offer his or her resignation in accordance with this policy may not be present during the deliberations or voting whether to accept his or her resignation or, except as otherwise provided below, a resignation offered by any other director in accordance with this policy. Prior to voting, the Qualified Independent Directors may afford the affected director an opportunity to provide any information or statement that he or she deems relevant.
For purposes of this policy, “Qualified Independent Directors” means all directors who (i) are independent directors (as defined in accordance with the NASDAQ Listing Rules) and (ii) are not required to offer their resignation in connection with an election in accordance with this policy. If there are fewer than three independent directors then serving on the Board who are not required to offer their resignations in accordance with this policy, then the Qualified Independent Directors means all of the independent directors, and each independent director who is required to offer his resignation in accordance with this policy must recuse himself from the deliberations and voting only with respect to his individual offer to resign.
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All nominees for election as a director in an uncontested election are deemed to have agreed to abide by this policy and will offer to resign and will resign if requested to do so in accordance with this policy (and will if requested submit an irrevocable resignation letter, subject to this majority voting policy, as a condition to being nominated for election).
Prohibition Against Pledging Aviat Securities and Hedging Transactions. In accordance with Aviat’s Insider Trading Policy directors and executive officers are prohibited from short sales of Aviat securities, entering into puts, calls or other derivative securities, pledging Aviat securities and engaging in hedging transactions with respect to Aviat securities. Aviat specifically prohibits directors and executive officers from holding Aviat securities in any margin account for investment purposes or otherwise using Aviat securities as collateral for a loan. An exception to this prohibition may be granted where a person wishes to pledge Company securities as collateral for a loan (not including margin debt) and clearly demonstrates the financial capacity to repay the loan without resort to the pledged securities. Insiders are also prohibited from purchasing certain instruments (including prepaid variable forward contracts, equity swaps, and collars) and engaging in transactions designed to hedge or offset any decrease in the value of Aviat securities.
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Board Committees
The Board maintains an Audit Committee, a Compensation Committee and a Governance and Nominating Committee as its regular committees. Copies of the charters for the Audit Committee, the Compensation Committee and the Governance and Nominating Committee are available on our website at https://investors.aviatnetworks.com/corporate-governance/documents-charters.
The following table shows, at the conclusion of fiscal year 2020, the Chairman and members of each committee, the number of committee meetings held, and the principal functions performed by each committee as described in such committee’s charter:
CommitteeNumber of Meetings in Fiscal 2020MembersPrincipal Functions
 Audit
5
John Mutch*
John J. Quicke
Dr. James C. Stoffel
• Selects our independent registered public accounting firm
• Reviews reports of our independent registered public accounting firm
• Reviews and pre-approves the scope and cost of all services, including all non-audit services, provided by the firm selected to conduct the audit
• Monitors the effectiveness of the audit process
• Reviews independent registered public accounting firm’s and management’s assessment of the adequacy of financial reporting and operating controls
• Monitors corporate compliance program
• Reviews the process by which management identifies and mitigates key areas of risk
 Compensation
7
Dr. James C. Stoffel*
John J. Quicke
Kenneth Kong
Dahlia Loeb
• Reviews our executive compensation policies and strategies
• Oversees and evaluates our overall compensation structure and programs
• Reviews and oversees management’s continuity planning processes

Governance and
Nominating
5
John J. Quicke*
 Dr. James C. Stoffel
 John Mutch
• Develops and implements policies and practices relating to corporate governance
• Reviews and monitors implementation of our governance policies and procedures
• Establish, implement, and monitor the processes for (a) effective communication with stockholders and (b) consideration of stockholder proposals
• Assists in developing criteria for open positions on the Board
• Reviews and recommends nominees for election of directors to the Board
• Reviews and recommends policies, if needed, for selection of candidates for directors
 




_____________________
* Chairman of Committee
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Audit Committee
The Audit Committee is primarily responsible for selecting and approving the services performed by, our independent registered public accounting firm, as well as reviewing our accounting practices, corporate financial reporting and system of internal controls over financial reporting. No material amendments to the Audit Committee Charter were made during fiscal year 2020. During fiscal year 2020, the Audit Committee was comprised of independent, non-employee members of our Board who were “financially sophisticated” under the NASDAQ Listing Rules.
The Board has determined that Mr. Mutch and Mr. Quicke qualify as “audit committee financial experts,” as defined under Item 407(d)(5)(i) of Regulation S-K under the Securities Act of 1933 and the Exchange Act and that Mr. Mutch and Mr. Quicke are independent under Nasdaq listing standards and Rule 10A-3(b)(1) of the Exchange Act. Such status does not impose on any director duties, liabilities or obligations that are greater than the duties, liabilities or obligations otherwise imposed on a director as members of our Audit Committee and the Board.

Compensation Committee
    The Compensation Committee has the authority and responsibility to approve our overall executive compensation strategy, to administer our annual and long-term compensation plans and to review and make recommendations to the Board regarding executive compensation. The Compensation Committee is comprised of independent, non-employee members of the Board in accordance with NASDAQ Listing Rules. During fiscal year 2020, the Compensation Committee utilized Pearl Meyer & Partners, LLC (“Pearl Meyer”) as an independent, third-party consulting firm.

Compensation Committee Interlocks and Insider Participation
No member of the Compensation Committee was an officer or employee or former officer of the Company. None of our executive officers currently serves or in the past year has served as a member of the Board of Directors or Compensation Committee of any entity that has one or more executive officers serving on our Board or Compensation Committee. For a description of transactions between us and members of our Compensation Committee and affiliates of such members, please see “Transactions with Related Persons.”

Governance and Nominating Committee
Each member of the Governance and Nominating Committee met the independence requirements of the NASDAQ Listing Rules.
The Governance and Nominating Committee develops and implements policies and practices related to corporate governance consistent with sound corporate governance principles. The Governance and Nominating Committee establishes, implements, and monitors the processes for (a) effective communication with stockholders and (b) consideration of stockholder proposals.
The Governance and Nominating Committee also recommends candidates to the Board and periodically reviews whether a more formal selection policy should be adopted. The Governance and Nominating Committee does not have a specific policy with regard to the consideration of any director candidates recommended by security holders, and there is no difference in the manner in which the committee members evaluate nominees for director based on whether the nominee is recommended by a stockholder. We currently do not pay a third party to identify or assist in identifying or evaluating potential nominees, although we may in the future utilize the services of such third parties.
In reviewing potential candidates for the Board, the Governance and Nominating Committee considers the individual’s experience and background. Candidates for the position of director should exhibit proven leadership capabilities, high integrity, exercise high level responsibilities within their chosen career, and possess an ability to quickly grasp complex principles of business, finance, international transactions and communications technologies. In general, candidates who have held an established executive level position in business, finance, law, education, research, government or civic activity will be preferred.
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Although the Governance and Nominating Committee has not adopted a formal diversity policy with regard to the selection of director nominees, diversity is one of the factors that the committee considers in identifying director nominees. When identifying and recommending director nominees, the Governance and Nominating Committee views diversity expansively to include, without limitation, concepts such as race, gender, national origin, differences of viewpoint, professional experience, education, skill and other qualities or attributes that contribute to board diversity. As part of this process, the Governance and Nominating Committee evaluates how a particular candidate would strengthen and increase the diversity of the Board in terms of how that candidate may contribute to the Board’s overall balance of perspectives, backgrounds, knowledge, experience, skill sets and expertise in substantive matters pertaining to the Company’s business.
In making its recommendations, the Governance and Nominating Committee bears in mind that the foremost responsibility of a director of a corporation is to represent the interests of the stockholders as a whole. The Governance and Nominating Committee intends to continue to evaluate candidates for election to the Board on the basis of the foregoing criteria.

Stockholder Communications with the Board
Stockholders who wish to communicate directly with the Board may do so by submitting a comment via the Company’s website at https://investors.aviatnetworks.com/investor-resources/contact-us or by sending a letter addressed to: Aviat Networks, Inc., c/o Corporate Secretary, 200 Parker Drive, Suite C100A, Austin, TX 78728. The Corporate Secretary monitors these communications and provides a summary of all received messages to the Board at its regularly scheduled meetings. When warranted by the nature of communications, the Corporate Secretary will request prompt attention by the appropriate committee or independent director of the Board, independent advisors or management. The Corporate Secretary may decide in her judgment whether a response to any stockholder communication is appropriate.

Code of Conduct
We implemented our Code of Conduct effective January 26, 2007 and as amended July 1, 2020. All of our employees, including the CEO and CFO, are required to abide by the Code of Conduct to help ensure that our business is conducted in a consistently ethical and legal manner. The Company has adopted a written policy, and management has implemented a reporting system, intended to encourage our employees to bring to the attention of management and the Audit Committee any complaints regarding the integrity of our internal system of controls over financial reporting, or the accuracy or completeness of financial or other information related to our financial statements.

TRANSACTIONS WITH RELATED PERSONS
During fiscal year 2020, we believe there were no transactions, or series of similar transactions, to which we were or are to be a party in which the amount exceeded $120,000, and in which any of our directors or executive officers, any holders of more than 5% of our common stock or any members of any such person’s immediate family, had or will have a direct or indirect material interest, other than compensation described in the sections titled “Director Compensation and Benefits” and “Executive Compensation,” other than a third party software solution with a value of $173,000 over two years purchased through a 10% shareholder in order to receive preferential pricing.
The Company does not have a formal written policy with respect to the review, approval, or ratification of transactions with related persons, but has established procedures to identify these transactions, if any, and bring them to the attention of the Board for consideration. These procedures include a quarterly assessment in connection with our quarterly financial risk assessments. The Board considers the following regulatory guidance: (i) Item 404(a) of Regulation S-K of the Securities Act of 1933, as amended (Transactions with Related Persons); (ii) Accounting Standards Codification Topic 850 (Related Party Disclosures); (iii) Public Company Accounting Oversight Board Auditing Standard No. 18 (Related Parties); and (iv) the NASDAQ’s governance standards related to independence determinations.
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Our Code of Conduct prohibits all employees, including our executive officers, from benefiting personally from any transactions with us other than approved compensation benefits.

DIRECTOR COMPENSATION AND BENEFITS
The Board has delegated responsibility to the Compensation Committee to determine the form and amount of director compensation, which reviewed and assessed from time to time by the Compensation Committee with changes, if any, recommended to the Board for action. Director compensation may take the form of cash, equity, and other benefits ordinarily available to directors.
Directors who are not employees of ours received the following fees, as applicable, for their services on our Board during fiscal year 2020:
$60,000 basic annual cash retainer, payable on a quarterly basis, which a director may elect to receive in the form of shares of common stock;
$25,000 annual cash retainer, payable on a quarterly basis, for service as Chairman of the Board;
$20,000 annual cash retainer, payable on a quarterly basis, for service as Chairman of the Audit Committee;
$10,000 annual cash retainer, payable on a quarterly basis, for service as Chairman of the Governance and Nominating Committee;
$15,000 annual cash retainer, payable on a quarterly basis, for service as Chairman of the Compensation Committee; and
Annual grant of restricted stock units (“RSUs”) under our 2018 Incentive Plan (the “2018 Plan”) valued at $75,000, with 100% vesting at the earlier of (1) the day before the date of the Annual Meeting, or (2) the first anniversary of the 2019 annual stockholders’ meeting, subject to continuing service as a director through such earlier date.
    As a result of the COVID-19 pandemic, in the fourth quarter of fiscal year 2020, the Board approved a one-time 25% reduction of the cash retainers payable to the non-employee directors for their service during the fourth quarter of fiscal year 2020, including any additional cash retainers payable to the Chairman of the Board and to non-employee directors for their service as committee chairs during such quarter. The Board approved these reductions after reviewing market data and receiving advice from its independent compensation consultant, Pearl Meyer, regarding reductions in director compensation as a result of current market conditions due to the COVID-19 pandemic.

We reimburse each non-employee director for reasonable travel expenses incurred and in connection with attendance at Board and committee meetings on our behalf, and for expenses such as supplies and continuing director education costs, including travel for one course per year. Employee directors are not compensated for service as a director.
As adopted by the Company’s Board of Directors in November 2019, members of the Board shall achieve ownership of three times (3x) such director’s annual cash retainer (exclusive of chairperson or committee fees). A director is required to achieve compliance with the foregoing ownership requirement by the later of (a) five years from the date of adoption of the guidelines, or (b) five years from the start of such director’s directorship with the Company. All vested RSUs or Company shares purchased by a director in the open market shall be counted toward a director’s ownership requirement.

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Fiscal Year 2020 Compensation of Non-Employee Directors
Our non-employee directors received the following aggregate amounts of compensation in respect of fiscal year 2020:
NameFees Earned in Cash
Stock Awards (2)
Total
($)($)($)
Kenneth Kong 56,250 74,483 130,733 
Dahlia Loeb(1)
11,250 36,285 47,535 
John Mutch98,438 74,483 172,921 
John J. Quicke65,625 74,483 140,108 
Dr. James C. Stoffel70,313 74,483 144,796 
__________________
1.Ms. Loeb was appointed by the Board as a non-employee director and a member of the Compensation Committee, effective May 19, 2020. She received a pro-rated annual cash retainer and equity award for her service on the Board during the fourth quarter of fiscal year 2020.
2.The amounts shown in this column reflect the aggregate grant date fair value of RSUs granted to our non-employee directors computed in accordance with FASB ASC Topic 718, determined without regard to estimated forfeitures. The assumptions made in determining the fair values of our stock awards and option awards are set forth in Notes 1 and 9 to our fiscal year 2020 Consolidated Financial Statements in Part II, Item 8 of our Annual Report on Form 10-K for the fiscal year ended July 3, 2020, as filed with the SEC on August 27, 2020.
As of July 3, 2020, our non-employee directors held the following numbers of unvested RSUs, all of which were granted under the 2018 Plan:
NameUnvested Stock Awards
Kenneth Kong5,293 
Dahlia Loeb2,460 
John Mutch5,293 
John J. Quicke5,293 
Dr. James C. Stoffel5,293 
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Indemnification
Our Bylaws require us to indemnify each of our directors and officers with respect to their activities as a director, officer, or employee of ours, or when serving at our request as a director, officer, or trustee of another corporation, trust, or other enterprise, against losses and expenses (including attorney fees, judgments, fines, and amounts paid in settlement) incurred by them in any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative, to which they are, or are threatened to be made, a party(ies) as a result of their service to us. In addition, we carry directors’ and officers’ liability insurance, which includes similar coverage for our directors and executive officers. We will indemnify each such director or officer for any one or a combination of the following, whichever is most advantageous to such director or officer:
The benefits provided by our Bylaws in effect on the date of the indemnification agreement or at the time expenses are incurred by the director or officer;
The benefits allowable under Delaware law in effect on the date the indemnification bylaw was adopted, or as such law may be amended;
The benefits available under liability insurance obtained by us; and
Such benefits as may otherwise be available to the director or officer under our existing practices.
Under our Bylaws, each director or officer will continue to be indemnified even after ceasing to occupy a position as an officer, director, employee or agent of ours with respect to suits or proceedings arising from his or her service with us.
In addition, the Company has entered into indemnification agreement with each director and officer.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Except as noted below, the following table sets forth information with respect to the beneficial ownership of our common stock as of September 15, 2020 by each person or entity known by us to beneficially own more than 5 percent of our common stock, by our directors, by our nominees for director, by our named executive officers and by all our directors, nominees for director and executive officers as a group. Except as indicated in the footnotes to this table, and subject to applicable community property laws, the persons listed in the table below have sole voting and investment power with respect to all shares of our common stock shown as beneficially owned by them. Unless otherwise indicated, the address of each of the beneficial owners identified is c/o Aviat Networks, Inc., 200 Parker Drive. Suite C100A. Austin, TX 78728. As of September 15, 2020, there were 5,423,007 shares of our common stock outstanding.
Name and Address of Beneficial Owner
Common Shares Currently Held(1)
Common Shares That May Be Acquired Within 60 Days of the Record Date(2)
Total Beneficial OwnershipPercentage Beneficially Owned
Steel Partners Holdings L.P.670,240 (3)670,240 12.4 %
590 Madison Avenue, 32nd Floor
New York, NY
Kennedy Capital Management, Inc.528,238 (4)528,238 9.7 %
10829 Olive Blvd.,
St. Louis, MO 63141
Thomas A. Satterfield, Jr.361,474 (5)361,474 6.7 %
2609 Caldwell Mill Lane, Birmingham, Alabama 35243
Renaissance Technologies
291,085 (6)291,085 5.4 %
800 Third Avenue
New York, New York 10022
Named Executive Officers and Directors
John J. Quicke35,230 5,293 40,523 *
Dr. James C. Stoffel29,947 8,326 38,273 *
John Mutch26,896 5,293 32,189 *
Kenneth Kong12,125 5,293 17,418 *
Dahlia Loeb 2,460 2,460 *
Peter Smith   *
Eric Chang8,478 4,894 13,372 *
Michael Pangia   *
Walter Stanley Gallagher, Jr.3,394 14,541 17,935 *
Shaun McFall29,135 9,219 38,354 *
All directors, nominee for director and executive officers as a group (10 persons)145,205 55,319 200,524 3.7 %
__________________________
* Less than one percent
(1)Beneficial ownership is determined under the rules and regulations of the SEC, and generally includes voting or dispositive power with respect to such shares.
(2)Shares of common stock that a person has the right to acquire within 60 days are deemed to be outstanding and beneficially owned by that person for the purpose of computing the total number of shares beneficially owned by that person and the percentage ownership of that person, but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person or group. Accordingly, the amounts in the table include
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shares of common stock that such person has the right to acquire within 60 days of September 15, 2020 by the exercise of stock options or vesting of restricted stock units.
(3)Based solely on a review of Amendment No. 6 to the Schedule 13D filed with the SEC on January 13, 2015 by Steel Excel Inc., Steel Partners Holdings L.P., SPH Group LLC, SPH Group Holdings LLC and Steel Partners Holdings GP Inc. Each of the foregoing entities reported shared voting and dispositive power with respect to all of such shares.
(4)Based solely on a review of Amendment No. 1 to Schedule 13G, filed with the SEC on February 14, 2020 by Kennedy Capital Management, Inc. Kennedy Capital Management, Inc. reported sole voting power and sole dispositive power with respect to all 528,238 shares.
(5)Based solely on a review of Amendment No. 1 to Schedule 13G, filed with the SEC on February 13, 2020, by Thomas A. Satterfield, Jr. Thomas A. Satterfield, Jr. reported shared voting power and shared dispositive power with respect to 361,474 shares and reported sole voting power and sole dispositive power with respect to 20,000 shares.
(6)Based solely on a review of Amendment No. 2 to Schedule 13G, filed with the SEC on February 13, 2020, by Renaissance Technologies LLC. Renaissance Technologies LLC reported sole voting power and sole dispositive power with respect to all 291,085 shares.


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REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
For fiscal year 2020, the Audit Committee consisted of three members of the Board, each of whom was independent of the Company and its management, as defined in the NASDAQ Listing Rules. The Board has adopted, and periodically reviews, the Audit Committee charter. The charter specifies the scope of the Audit Committee’s responsibilities and how it carries out those responsibilities.
The Audit Committee reviews management’s procedures for the design, implementation, and maintenance of a comprehensive system of internal controls over financial reporting and disclosure controls and procedures focused on the accuracy of our financial statements and the integrity of our financial reporting systems. The Audit Committee provides the Board with the results of its examinations and recommendations and reports to the Board as it may deem necessary to make the Board aware of significant financial matters requiring the attention of the Board.
The Audit Committee does not conduct auditing reviews or procedures. The Audit Committee monitors management’s activities and discusses with management the appropriateness and sufficiency of our financial statements and system of internal control over financial reporting. Management has primary responsibility for the Company’s financial statements, the overall reporting process and our system of internal control over financial reporting. Our independent registered public accounting firm audits the financial statements prepared by management, expresses an opinion as to whether those financial statements fairly present our financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States (“GAAP”) and discusses with the Audit Committee any issues they believe should be raised with us.
The Audit Committee reviews reports from our independent registered public accounting firm with respect to their annual audit and approves in advance all audit and non-audit services provided by our independent auditors in accordance with applicable regulatory requirements. The Audit Committee also considers, in advance of the provision of any non-audit services by our independent registered public accounting firm, whether the provision of such services is compatible with maintaining their independence.
In accordance with its responsibilities, the Audit Committee has reviewed and discussed with management the audited financial statements for the year ended July 3, 2020 and the process designed to achieve compliance with Section 404 of the Sarbanes-Oxley Act of 2002. The Audit Committee has also discussed with our independent registered public accounting firm, BDO, the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC. The Audit Committee has received the written disclosures and letter from BDO required by applicable requirements of the PCAOB regarding the communications of BDO with the Audit Committee concerning independence, and has discussed with BDO its independence, including whether the provision by BDO of non-audit services, as applicable, is compatible with its independence.
Based on these reviews and discussions, the Audit Committee recommended to the Board that the Company’s audited financial statements for the year ended July 3, 2020 be included in Company’s Annual Report on Form 10-K.

Audit Committee of the Board of Directors
John Mutch, Chairman
John J. Quicke
Dr. James C. Stoffel

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INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FEES
BDO was our independent registered public accounting firm for the fiscal years ended July 3, 2020 and June 28, 2019. Representatives of BDO will be present at the Annual Meeting, will have opportunity to make a statement should they so desire and will be available to respond to appropriate questions.
The following table sets forth the fees billed for services rendered by our auditors, BDO, for each of our last two fiscal years:
Fiscal Year 2020(1)
Fiscal Year 2019(1)
Audit Fees (2)
$1,071,000 $1,219,000 
Audit-Related Fees (3)
 122,000 
Tax Fees (4)
5,000 79,000 
All Other Fees  
Total Fees for Services Provided$1,076,000 $1,420,000 
________________________
(1)Includes fees to be billed to us by BDO and BDO’s international affiliates for fiscal 2020 and 2019 financial statement audits, quarterly reviews and statutory audits.
(2)Audit fees include fees associated with the annual audit, as well as reviews of our quarterly reports on Form 10-Q, SEC registration statements, accounting and reporting consultations and statutory audits required internationally for our subsidiaries.
(3)Audit-Related fees consisted primarily of financial due diligence services.
(4)Tax fees were for services related to tax compliance and tax planning services.
BDO did not perform any professional services related to financial information systems design and implementation for us in fiscal year 2020 or fiscal year 2019.
The Audit Committee has determined in its business judgment that the provision of non-audit services described above is compatible with maintaining BDO’s independence.
Audit Committee Pre-Approval Policy
Section 10A(i)(1) of the Exchange Act and related SEC rules require that all auditing and permissible non-audit services to be performed by a company’s principal accountants be approved in advance by the Audit Committee of the Board, subject to a “de minimis” exception set forth in the SEC rules (the “De Minimis Exception”). Pursuant to Section 10A(i)(3) of the Exchange Act and related SEC rules, the Audit Committee has established procedures by which the Chairperson of the Audit Committee may pre-approve such services provided the pre-approval is detailed as to the particular service or category of services to be rendered and the Chairperson reports the details of the services to the full Audit Committee at its next regularly scheduled meeting. All audit-related and non-audit services in fiscal years 2020 and 2019, if any, were pre-approved by the Audit Committee at regularly scheduled meetings of the Audit Committee, or through the process described in this paragraph, and none of such services was performed pursuant to the De Minimis Exception.

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis
Overview and Summary
This Compensation Discussion and Analysis, which has been prepared by management, is intended to help our stockholders understand our executive compensation philosophy, objectives, policies, practices, and decisions. It is also intended to provide context for the compensation awarded to, earned by, or paid to each of our named executive officers (our “named executive officers”) during fiscal 2020 (defined as June 29, 2019 – July 3, 2020) as detailed in the Summary Compensation Table below and in the other tables and narrative discussion that follow.

Named Executive OfficerPosition
Peter A. SmithDirector, President and Chief Executive Officer
Eric ChangSenior Vice President and Chief Financial Officer
Michael PangiaFormer President and Chief Executive Officer
Walter Stanley Gallagher, Jr
Former Senior Vice President, Chief Operating Officer and Principal Financial Officer and former Interim President and Chief Executive Officer
Shaun McFallFormer Senior Vice President and Chief Marketing and Strategy Officer

Over the past year our Company has gone through certain leadership changes. Mr. Pangia, our Chief Executive Officer (“CEO”) at the beginning of the 2020 fiscal year, stepped down on September 18, 2019, and Mr. Gallagher was appointed Interim President and CEO to serve in that role while the Company conducted a search for a new CEO. During that time, Mr. Gallagher continued to serve as our Senior Vice President, Chief Operating Officer and Principal Financial Officer. Mr. Chang was promoted in September 2019 to Senior Vice President. On January 2, 2020, the Company appointed Peter Smith as President and CEO and Mr. Gallagher transitioned back to serving only as the Senior Vice President, Chief Operating Officer and Principal Financial Officer. On April 3, 2020, Mr. Gallagher resigned from his role as Senior Vice President, Chief Operating Officer and Principal Financial Officer, and Mr. Chang was appointed Senior Vice President and Chief Financial Officer effective as of such date. On July 3, 2020, Mr. McFall resigned from his role as the Senior Vice President and Chief Marketing and Strategy Officer.
To understand our approach to executive compensation, you should read the entire Compensation Discussion and Analysis that follows. The following brief summary introduces the major topics covered:
The cornerstone of our executive compensation program is pay for performance. Accordingly, while we pay competitive compensation and other benefits, our named executive officers’ compensation opportunity is weighted toward variable pay.
The objectives of our executive compensation program are to reward superior performance, motivate our executives to achieve our goals and attract and retain a strong management team. We believe that our emphasis on long term stockholder value creation results in an executive compensation program structure that is beneficial to our Company and our stockholders.
The Compensation Committee is made up of independent, non-employee members of the Board and oversees the executive compensation program for our named executive officers. The Compensation Committee works closely with its independent compensation consultant and management to evaluate the effectiveness of the Company’s executive compensation program throughout the year. The Compensation Committee’s specific responsibilities are set forth in its charter, which can be found on the Company’s website at http://investors.aviatnetworks.com/committee-details/compensation-committee. In reviewing the elements of our executive compensation program - base salary, annual cash incentives, long-term incentives and post-termination compensation - our Compensation Committee reviews market data from similar companies.
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Our competitive positioning philosophy is to set compensation fairly, as compared to the compensation of our peer group companies, with allowances for internal factors such as tenure, individual performance, the nature of the relative scope and complexity of the role and tenure.
Our annual incentive program is based on specific Company financial performance goals for the fiscal year and includes provisions to “clawback” any excess amounts paid in the event of a later correction or restatement of our financial statements.
As a result of the novel coronavirus disease (“COVID-19”) pandemic, the Company implemented certain compensation adjustments as part of an overall plan to protect its cash flow. These adjustments, which impacted the named executive officers, included a one-time, five-day furlough, and a temporary suspension of the Company’s matching program for the U.S. 401(k) plan during the fourth quarter of fiscal 2020. The U.S. 401(k) matching program was reinstated in July 2020 following the end of fiscal year 2020.
We believe the compensation program for the named executive officers supported our strategic priorities and aligned compensation earned with the Company’s financial performance in fiscal year 2020.
Compensation Governance Best Practices
The Compensation Committee believes that a demonstrated commitment to best practices in compensation governance is itself an essential component of our approach to executive compensation. The following practices are some examples of this commitment:
Pay for performance: A substantial portion of our executives’ compensation opportunity is tied to achieving specified corporate objectives. In fiscal year 2020, 100% of the annual bonuses granted pursuant to the Annual Incentive Plan (the “AIP”) were performance-based and at-risk, subject to the Company’s achievement of certain financial objectives. Under the 2018 Plan, one-third of the equity awards granted to the executives during fiscal year 2020 were performance share units (“PSUs”), the vesting of which is subject to the Company’s achievement of certain financial objectives.
Mix of short-term and long-term compensation: Short-term compensation for our named executive officers is comprised of base salaries and bonuses payable pursuant to the AIP, which pays out only to the extent that the Company meets its financial targets. Long-term compensation comprised of PSUs (one-third), stock options (one-third) and time-based RSUs (one-third) was granted under our 2018 Plan during fiscal year 2020. PSUs are earned at the end of a three-year performance period based upon the Company’s achievement of certain performance criteria put in place for each fiscal year within the applicable performance period. Stock options and RSUs granted in fiscal year 2020 cliff vest three years from the date of grant.
Independent compensation consultant: The Compensation Committee directly retains the services of Pearl Meyer, an independent compensation consultant, to advise it in determining reasonable and market-based compensation policies and practices.
Prohibition on hedging and pledging: Our named executive officers, together with all other employees, are prohibited from engaging in hedging, pledging or similar transactions with respect to our securities.
No perquisites: Our named executive officers are not provided any perquisites or special benefits other than our occasional provision of relocation expense reimbursement.
No single trigger change of control acceleration: Change of control arrangements in our employment agreements include “double trigger” vesting provisions providing for acceleration of vesting of outstanding unvested equity awards only in the event that both a change of control occurs, and the named executive officer’s employment terminates thereafter for reasons specified in the employment agreements.
No tax gross-ups: We do not provide gross-up payments to cover our named executive officers’ personal income taxes that may pertain to any of the compensation or benefits paid or provided by the Company.
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Clawback: We have a clawback policy that entitles us to recover all or a portion of any performance-based compensation, including cash and equity components, for any excess amounts paid in the event of a later correction or misstatement of our financial statements, omissions or fraud.
Compensation risk management: The Compensation Committee reviews and analyzes the risk profile of our compensation programs and practices on an annual basis.
Compensation Philosophy and Objectives
The primary objectives of our total executive compensation program are to use compensation as a tool to recruit and retain outstanding executives and incentivize them to create longer-term value for our stockholders. The following principles guide our overall compensation program:
reward superior performance;
motivate our executives to achieve strategic, operational, and financial goals;
enable us to attract and retain a world-class management team; and
align outcomes and rewards with stockholder expectations.
Each year, the Compensation Committee reviews the executive compensation program to ensure its design and policies remain appropriately aligned with our evolving business needs and to consider best compensation practices. Our executive compensation program is also reviewed to ensure that it achieves a balance between providing meaningful retention and performance incentives to our executives while managing both the Company’s share burn rate and the dilutive effects of equity awards to the Company’s stockholders.
Executive Compensation Process
The Compensation Committee is responsible for establishing and implementing executive compensation policies in a manner consistent with our compensation objectives and principles. The Compensation Committee reviews and approves the features and design of our executive compensation program, and approves the compensation levels, individual AIP objectives and total compensation targets for our named executive officers other than our CEO. The independent members of the full Board approve the compensation level, individual AIP objectives, and financial targets for our CEO, based on recommendations from the Compensation Committee. The Compensation Committee also monitors executive succession planning and monitors our performance as it relates to overall compensation policies for employees, including benefit plans.
In discharging its responsibilities, the Compensation Committee may engage outside consultants and consult with our Human Resources Department, as well as internal and external legal or accounting advisors, as the Compensation Committee determines to be appropriate. The Compensation Committee considers recommendations from our CEO and senior management when making decisions regarding our executive compensation program and compensation of our named executive officers. Following each fiscal year end, our CEO, assisted by our Human Resources Department, assesses the performance of all executives other than the CEO. Following this annual performance review process, our CEO recommends base salary and incentive awards for executives (other than himself) to the Compensation Committee. The CEO, with the help of management and the independent consultant, makes recommendations to the Compensation Committee regarding the plan design of the overall executive compensation program for review, discussion and approval. The Compensation Committee is also responsible for developing pay recommendations for the CEO and in securing the full Board’s approval of these recommendations annually.
Independent Compensation Consultant for Compensation Committee
The Compensation Committee has the authority under its charter to engage the services of outside advisors, experts and others for assistance. Accordingly, the Compensation Committee has hired Pearl Meyer as an independent consultant to advise the Compensation Committee on matters related to the compensation of the Company’s named executive officers. All services that Pearl Meyer provided to Aviat in fiscal year 2020 were approved by the Compensation Committee and were related to executive or Board compensation. Pearl Meyer provides an annual review of the Company’s compensation practices, reviews and makes recommendations regarding Aviat’s compensation peer groups and provides independent input to the Compensation Committee on programs and practices.
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Compensation Committee Advisor Independence
The Compensation Committee has considered the independence of Pearl Meyer pursuant to NASDAQ Listing Rules and related SEC rules and has found no conflict of interest in Pearl Meyer continuing to provide advice to the Compensation Committee. The Compensation Committee is also regularly advised by the Company’s primary outside counsel, Vinson & Elkins LLP (“V&E”) and Olshan Frome Wolosky LLP (“Olshan”). We appointed V&E as our primary outside counsel and terminated Olshan in April 2020. Pursuant to the NASDAQ Listing Rules and related SEC rules, the Compensation Committee has found no conflict of interest in V&E continuing to provide advice to the Compensation Committee. The Compensation Committee reassesses the independence of its advisors annually.
Consideration of Say on Pay Results
Each year at our annual meeting, we conduct an advisory vote of our stockholders on our executive compensation program. Although this vote is not binding on the Board or us, we believe that it is important for our stockholders to have an opportunity to express their views regarding our executive compensation philosophy, program and practices as disclosed in our proxy statement on an annual basis. The Board and our Compensation Committee value stockholders’ opinions and, to the extent there is any significant vote against the compensation of our named executive officers, the Compensation Committee evaluates whether any actions are warranted or appropriate.
At our 2019 Annual Meeting, 95% of the votes cast on the advisory vote on executive compensation supported our named executive officers’ compensation as disclosed in the proxy statement. Our Compensation Committee evaluated these results and considered many other factors in evaluating our executive compensation programs as discussed in the Compensation Discussion and Analysis. Although none of our Compensation Committee’s subsequent actions or decisions with respect to the compensation of our named executive officers were directly attributable to the results of the vote, our Compensation Committee took the vote outcome into consideration in the course of its deliberations. Our Compensation Committee believes that concerns on executive compensation matters should be considered as part of its deliberations and intends to consider the results of future advisory votes in its compensation review process.
Competitive Benchmarking
Our management and Compensation Committee consider external data provided by Pearl Meyer to assist in benchmarking total target compensation. Our compensation policies and practices are to target total compensation levels for all officers, including our named executive officers, at competitive levels for similar positions as derived from the market composite data, assuming experience in the position and competent performance. The Compensation Committee may decide to target total compensation above or below the 50th percentile of the market data for similar positions in unique circumstances based on an individual’s background, experience, and relative complexity and scope of the applicable role. Though compensation levels may differ among our named executive officers based upon competitive factors and the role, responsibilities and performance of each named executive officer, there are no material differences in our compensation policies or in the way total direct compensation opportunity is determined for any of our named executive officers.
For fiscal year 2020, targets for total cash and cash-based compensation (base salary and short-term incentive compensation pursuant to the AIP), long-term incentives and total direct compensation (base salary, and short- and long-term incentive compensation) for our named executive officers were set based on data collected by Pearl Meyer from our proxy peer group companies and from a proprietary survey source, using results for technology companies with annual revenues between $200 million and $500 million. The peer group companies selected and used for compensation comparisons are reflective of our market for executive talent and business line competitors. Also, the overall composition of the peer group reflects companies of similar complexity and size to us.
For fiscal year 2020, our peer group companies included:
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ADTRAN, Inc.Applied Optoelectronics, Inc.
Bel Fuse, Inc.Calix, Inc.
Casa Systems, Inc.Clearfield, Inc.
Comtech Telecommunications Corp.DASAN Zhone Solutions, Inc.
Digi International, Inc.EMCORE Corp.
Harmonic, Inc.Inseego Corp.
Park Aerospace Corp.PCTEL, Inc.
Ribbon Communications, Inc.Richardson Electronics, Ltd.

Each year, the Compensation Committee and Pearl Meyer review the appropriateness of the comparison group used for assessing the compensation of our CEO and other named executive officers. For fiscal year 2020, we removed five companies (Aerohive Inc., CalAmp Corp., Cohu Inc., KVH Industries, Inc. and NeoPhotonics Corp.) and added eight companies (ADTRAN, Inc., Applied Optoelectronics, Inc., Casa Systems, Inc., Clearfield, Inc., DASAN Zhone Solutions, Inc., Park Aerospace Corp., Ribbon Communications Inc., and Richardson Electronics, Ltd.) to position peer median revenue and market capitalization more closely to that of our company.
Data for our peer group companies was collected directly from these companies’ proxy statements.
Total Compensation Elements
Our executive compensation program includes four major elements:
base salary
annual incentive compensation pursuant to the AIP
long-term compensation (equity incentives)
post-termination compensation
Each named executive officer’s performance is measured against factors such as short- and long-term strategic goals and financial measures of our performance, including factors such as revenue, non-GAAP net income and adjusted earnings before interest, taxes, depreciation and amortization, AIP expense and other non-GAAP items (“Gross Adjusted EBITDA”).
Base Salary
Base salaries are provided as compensation for day-to-day responsibilities and services. Executive salaries are reviewed annually. Our CEO generally makes recommendations to the Compensation Committee in August of each year regarding the base salary of each named executive officer, other than himself. The Compensation Committee considers each named executive officer’s responsibilities, as well as the Company’s performance and recommended increases in base salary for select named executive officers and other officers. In fiscal year 2020, the CEO recommended, and the Compensation Committee approved, that the base salaries for named executive officers be held flat at fiscal 2019 levels, except for Mr. Gallagher, who received an increased base salary when he was appointed as the Interim President and CEO in addition to his role as the Senior Vice President, Chief Operating Officer and Principal Financial Officer and Mr. Chang, whose base salary was increased in connection with his promotion to Senior Vice President. The base salary amounts and additional details concerning the compensation for our named executive officers for fiscal year 2020 are set forth in the Summary Compensation Table below.
Annual Incentive Plan (AIP)
Our AIP is designed to motivate our executives to focus on achievement of our short-term financial goals. The CEO reviews his recommendations for each named executive officer with the Compensation Committee, considering market data obtained from Pearl Meyer. Based on recommendations by the CEO, and as specified in any applicable employment agreement, the Compensation Committee recommends to the Board an annual incentive compensation target, expressed as a percentage of base salary, for each named executive officer.
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The Compensation Committee also recommends to the Board specific Company financial performance measures and targets including the relative weighting and payout thresholds. The financial targets are aligned with our Board-approved annual operating plan, and during the year periodic reports are made to the Board about our performance compared with the targets. Under the AIP, a significant portion of the executive’s annual compensation is tied directly to our financial performance. The target amount of annual incentive compensation under our AIP, expressed as a percentage of base salary, generally increases with an executive’s level of management responsibility and is paid in the form of cash. For fiscal year 2020, individual AIP target incentives for our named executive officers were set at 70% of base salary for Mr. Smith and 50% for Mr. Chang, 90% for Mr. Pangia, 50% for Mr. Gallagher and 50% for Mr. McFall, in each case, prorated for the number of days employed by the Company and salary adjustments during fiscal year 2020. Executives can earn more or less than target if threshold or maximum performance levels are achieved. Threshold performance achievement results in a 25% of target bonus award opportunity and maximum performance, generally, results in 120% of target award opportunity. No incentive can be earned if the Company does not achieve the threshold performance objective for Gross Adjusted EBITDA, even if revenue targets are met.
For fiscal year 2020, the AIP provided for an all cash payout. The performance metric was 100% based on Gross Adjusted EBITDA, with an additional payout totaling $200,000 in the event a revenue target was achieved, with no payout triggered if the threshold for Gross Adjusted EBITDA was not achieved. Gross Adjusted EBITDA is adjusted earnings before interest, taxes, depreciation and amortization, AIP expense and other non-GAAP items. Revenue was calculated on a GAAP basis. The following table outlines the threshold, target and maximum performance and payout levels approved by the Compensation Committee for fiscal year 2020.
Fiscal Year 2020 Annual Incentive Plan - Minimum, Target and Maximum Thresholds
Results-Driven Entitlement
Fiscal Year 2020 Annual Incentive Plan
Performance
Payout
Metric
Tiers
($)
(As % of Award Target)
Gross Adjusted EBITDA (100% weight before AIP Expense)
Threshold
$10,500,00025%
Target
$14,500,000100%
Maximum
$16,500,000120%
Revenue (additional funding only if threshold is achieved)
Threshold
$250,000,000

During fiscal year 2020, the Company experienced significant events that could have impacted achievement of the targeted Gross Adjusted EBITDA, including a cybersecurity attack at one of the Company’s contract manufacturers that impacted our deliveries and the COVID-19 pandemic which significantly impacted worldwide economic conditions. No adjustments were made to the performance objectives, the target performance or the actual results for these significant events. During the 2020 fiscal year, partially as a result of management’s swift actions to counter the aforementioned events, we achieved target performance for the Gross Adjusted EBITDA metric, but the revenue threshold was not achieved. All named executive officers earned a payout as shown in the Summary Compensation Table below. However, in order to assist the Company in managing cash flow during the COVID-19 pandemic, management recommended, and the Compensation Committee concurred, to defer 50% of the AIP cash payout until December 2020 for all named executive officers, whether or not employed by the Company as of such date.
Long-Term Compensation - Equity Incentives
The Compensation Committee uses the 2018 Plan as a means for determining awards of stock options, RSUs, PSUs, and other stock-based awards to our executives. Equity awards have been granted under either our 2007 Stock Equity Plan (“2007 Plan”) or the 2018 Plan. The 2007 Plan was discontinued following stockholder approval of the 2018 Plan. As of September 1, 2020, 463,195 shares were available for issuance under the 2018 Plan.
Our equity awards are designed to motivate our executives to focus on achievement of our long-term financial goals. Equity awards motivate our executives to achieve our long-term goals and to the extent our results affect our stock price, link such results with the performance of our stock over a longer period. Using equity awards helps us to retain executives,
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encourage share ownership and maintain a direct link between our executive compensation program and stockholder value creation.
For fiscal year 2020, the named executive officers were eligible to receive equity awards. As has historically been the Company’s practice, these equity awards were granted in September 2019 following the filing of the Annual Report on Form 10-K using a combination of PSUs, stock options and RSUs, as follows:
Equity VehicleWeightingPurpose/Description
PSUs
1/3
Three-year cliff vesting from the issuance date assuming achievement of annual non-GAAP net income target over a three-year performance period starting fiscal year 2020 and continued employment through the vesting date in September 2022
Stock options1/3
Strike price: Determined based on the closing stock price on the date of grant
Vesting: Three-year cliff vesting from the issuance date assuming continued employment through the vesting date
Expiration: Seven years from date of grant if not exercised
RSUs
1/3Three-year cliff vesting from the issuance date assuming continued employment through the vesting date

The table below shows the equity incentive award values granted to each of the named executive officers during fiscal year 2020:
Named Executive Officer
PSUs (at target)(1)
Stock Options(2)
RSUs(3)
Total Value
Peter Smith4
$664,485 $ $ $664,485 
Eric Chang5
$44,376 $87,748 $44,376 $176,500 
Michael Pangia$ $ $ $ 
Walter Stanley Gallagher, Jr.$51,211 $52,772 $51,211 $155,194 
Shaun McFall$54,621 $56,289 $54,621 $165,531 

1 The grant date fair value of the PSUs was determined under FASB ASC Topic 718 excluding the effect of estimated forfeitures.
2 Individual award amounts were calculated based on Black-Scholes values.
3 The grant date fair value of the RSUs was determined under FASB ASC Topic 718 and was calculated using the closing market price of our common stock on the respective grant dates.
4 Mr. Smith received a sign-on equity award of PSUs upon joining the Company on January 2, 2020. Per the terms of his award, he received 46,500 stock awards. 18,750 of these awards will be earned if the stock price reaches $22.50 within two years of his start date and the remaining 27,750 will be earned if the stock price reaches $30.00 within three years of his start date. The grant date fair value was determined using the Monte Carlo simulation based on the probable outcome of achieving the performance condition.
5 Mr. Chang received a one-time additional award of stock options on May 19, 2020 valued at $42,000 in connection with his promotion to Senior Vice President and Chief Financial Officer of the Company.
Annual performance metrics and payout levels for the three-year performance period starting fiscal year 2020 were established at the beginning of the performance period.
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Recovery of Executive Compensation
Our executive compensation program permits us to recover or “clawback” all or a portion of any performance-based compensation, including equity awards, if our financial statements are restated as a result of errors, omissions, or fraud. The amount which may be recovered will be the amount by which the affected compensation exceeded the amount that would have been payable had the financial statements been initially filed as restated, or any greater or lesser amount that the Compensation Committee or our Board shall determine. In no case will the amount to be recovered by us be less than the amount required to be repaid or recovered as a matter of law. Recovery of such amounts by us would be in addition to any actions imposed by law, enforcement agencies, regulators, or other authorities.
Hedging and Pledging Prohibition
Our named executive officers, as well as all other employees, are prohibited from engaging in hedging, pledging or similar transactions with respect to our securities where the transaction is designed or intended to decrease the risks associated with holding our securities. This prohibition includes transactions involving puts, calls, collars or other derivative securities.
Perquisites
Our named executive officers participate in the same group insurance and employee benefit plans as our other full-time U.S. employees. Historically we have not provided special benefits or other perquisites to our named executive officers, but due to the move of the Company’s headquarters to Austin, Texas in fiscal year 2020, we provided Mr. Gallagher a one-time allowance for home office needs so that he would not be required to relocate to Austin, Texas. See the Summary Compensation Table below.
Stock Ownership Guidelines
While we do not have a minimum stock ownership requirement for our named executive officers, the Corporate Governance Guidelines adopted by the Board encourage the ownership of our common stock.
Tax and Accounting Considerations
Tax Considerations. The Compensation Committee annually reviews and considers the deductibility of the compensation paid to our named executive officers, which includes each of the Named Officers, under Section 162(m) of the Internal Revenue Code. Pursuant to Section 162(m), compensation paid to certain named executive officers in excess of $1 million generally is not deductible.
As a result, compensation paid to our named executive officers in future years in excess of $1 million may not be deductible unless it qualifies for certain transition relief. While the Company will monitor guidance and developments in this area, the Compensation Committee believes that its primary responsibility is to provide a compensation program that attracts, retains and rewards the executive talent necessary for our success. Consequently, the Compensation Committee may pay or provide, and has paid or provided, compensation that is not tax deductible or is otherwise limited as to tax deductibility.
Accounting Considerations. The Compensation Committee also considers the accounting implications of various forms of executive compensation under GAAP. In its financial statements, the Company records salaries and performance-based compensation such as bonuses as expenses in the amount paid or to be paid to the named executive officers. Accounting rules also require the Company to record share-based compensation in its financial statements for equity awards.
Generally Available Benefit Programs
In fiscal year 2020, our named executive officers were eligible to participate in the health and welfare programs that are generally available to all full-time U.S.-based employees, including medical, dental, vision, life, short-term and long-term disability insurance, employee counseling assistance, flexible spending accounts and accidental death and dismemberment insurance.
The named executive officers and all other eligible U.S.-based employees participate in our tax-qualified 401(k) plan. Under the 401(k) plan, all eligible employees can receive matching contributions from the Company of 2.5% of
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compensation contributed. Each employee under the age of 50 can contribute a maximum of $19,000 during each calendar year, and each employee over the age of 50 can contribute a maximum of $25,000. Due to the COVID-19 pandemic, the Company’s U.S. 401(k) plan matching program was temporarily suspended from April 6, 2020 to July 3, 2020.
The named executive officers and all other eligible U.S.-based employees can elect, on a quarterly basis, to apply a portion of their cash compensation to purchase shares of our common stock at a 5% discount under the Harris Stratex Networks, Inc. 2010 Employee Stock Purchase Plan (our “employee stock purchase plan”). An employee’s total purchases in any year cannot exceed $25,000 in value or 15% of his or her salary, whichever is less. Furthermore, an employee may not purchase more than 48 shares of common stock annually under the employee stock purchase plan.
The 401(k) plan, employee stock purchase plan and the other benefits generally available to all other U.S.-based employees allow us to remain competitive and enhance employee loyalty and productivity. These benefit programs are primarily intended to provide all eligible employees with competitive and quality healthcare, financial contributions for retirement and to enhance hiring and retention.
Post-Termination Compensation
Employment agreements have been established with each of our named executive officers. These agreements provide for certain payments and benefits to the employee upon certain terminations of his or her employment. These arrangements are discussed in more detail below. We have determined that such payments and benefits are an integral part of a competitive compensation package for our named executive officers.
The severance payments and benefits provided to each of Messrs. Pangia, Gallagher, and McFall were determined in accordance with each of their employment agreements. The Company did not enter into any separate severance agreement or arrangement with such individuals. For additional information regarding our employment agreements with our named executive officers, see the discussion under “Potential Payments Upon Termination or Change of Control.”
Actions Taken Following 2020 Fiscal Year End
In connection with Mr. Chang’s April 3, 2020 promotion from Senior Vice President, Corporate Controller and Principal Accounting Officer to Senior Vice President and Chief Financial Officer, the Company entered into an amendment to Mr. Chang’s employment agreement effective as of such date (the “Chang Amendment”). The Chang Amendment provided for an increase to Mr. Chang’s annualized base salary from $280,000 to $300,000, effective July 4, 2020.

Compensation Committee Report
The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis included in this Proxy Statement. Based on this review and discussion, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement and in the Company’s annual report on Form 10-K for the fiscal year ended July 3, 2020.
Compensation Committee of the Board of Directors
Dr. James C. Stoffel, Chairman
Kenneth Kong
Dahlia Loeb
John J. Quicke
Risk Considerations in Our Compensation Program
The Compensation Committee, pursuant to its charter, is responsible for reviewing and overseeing the compensation and benefits structure applicable to our employees, generally. We believe that our compensation policies and practices for our
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employees are structured in such a way as to discourage excessive risk-taking and do not create risks that are reasonably likely to have a material adverse effect on our company. In reaching this conclusion, we considered the following factors:
Our compensation program is designed to provide a mix of both fixed and “at risk” incentive compensation.
Our Compensation Committee is responsible for managing the administration, determination and approval of total and, in the case of the named executive officers, individual approval of payouts under the incentive plans.
The incentive elements of our compensation program (annual incentives and multi-year equity awards) are designed to reward both annual performance (under the AIP) and longer-term performance (under the 2018 Plan). We believe this design mitigates any incentive for short-term risk-taking that could be detrimental to our company’s long-term best interests.
The performance periods for our PSUs overlap, and our time-vested RSUs generally cliff vest after three years. This mitigates the motivation to maximize performance in any one period at the expense of others.
Maximum payouts under our AIP are currently capped at 120% of the target award opportunity set by the Compensation Committee. We believe these limits mitigate excessive risk-taking, since the maximum amount that can be earned is limited.
Finally, our AIP and our 2018 Plan both contain provisions under which awards may be recouped or forfeited if the recipient has not complied with our policies. In addition, our performance-based plans (cash incentive and performance shares) both contain provisions under which awards may be recouped or forfeited if the financial results for a period affecting the calculation of an award are later restated downward.
The Compensation Committee retains an independent compensation consultant.
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Summary Compensation Table
    The following table summarizes the total compensation for each of our fiscal years ended July 3, 2020, June 28, 2019 and June 29, 2018 of our named executive officers, who for fiscal year 2020 consisted of all individuals who served as our principal executive officer and our principal financial officer during fiscal year 2020 and Mr. McFall, who was our only other executive officer during fiscal year 2020.
Name/Principal PositionFiscal Year
Salary(6)
Bonus(7)
Stock Awards(8)
Option Awards(9)
Non-Equity Incentive Plan Compensation(10)
All Other Compensation(11)
Total
($)
($)
($)
($)
($)
($)
($)
Peter A. Smith,
Director, President and Chief Executive Officer(1)
2020187,692  664,485  138,113 3,996 994,286 
Eric Chang,
Senior Vice President and Chief Financial Officer(2)
2020270,231  88,752 87,748 137,736 5,929 590,396 
2019260,000  65,344 65,591  8,148 399,083 
2018240,000    41,426 7,267 288,693 
Michael Pangia,
Former President and Chief Executive Officer(3)
2020120,577    109,407 480,304 710,288 
2019550,000  259,150 260,165  3,613 1,072,928 
2018550,000    237,338 3,380 790,718 
Walter Stanley Gallagher, Jr.
Former Senior Vice President and Chief Operating Officer (4)
2020258,269 29,148 102,422 52,772 127,804 137,094 707,509 
2019300,000  78,534 78,841  2,064 459,439 
20185,769  81,250   79 87,098 
Shaun McFall,
Former Senior Vice President and Chief Marketing and Strategy Officer(5)
2020320,000  109,242 56,289 160,000 27,944 673,475 
2019320,000  83,767 84,095  10,617 498,479 
2018320,000    89,757 9,562 419,319 
_______________________
* Our fiscal year 2020 ended July 3, 2020, fiscal year 2019 ended June 28, 2019 and fiscal year 2018 ended June 29, 2018. The amounts in the Summary Compensation Table represent total compensation paid or earned for our fiscal years as included in our annual financial statements.
(1)Mr. Smith’s employment with the Company commenced on January 2, 2020.
(2)Mr. Chang was appointed as our Senior Vice President and Chief Financial Officer on April 3, 2020.
(3)Mr. Pangia’s employment with the Company ended on September 18, 2019.
(4)Mr. Gallagher was appointed as our Interim President and CEO on September 18, 2019, and served in this role (in addition to serving as our Senior Vice President, Chief Operating Officer and Principal Financial Officer until January 2, 2020, when the Company appointed Peter Smith as the President and CEO. At this time, Mr. Gallagher continued to serve as our Senior Vice President, Chief Operating Officer and Principal Financial Officer until his employment with the Company ended on April 3, 2020.
(5)Mr. McFall served as our Senior Vice President, Chief Marketing and Strategy Officer through the end of fiscal year 2020, but he resigned effective July 3, 2020.
(6)The annual base salary for Mr. Smith was $400,000.
The annual base salary for Mr. Chang was $260,000 until his appointment as Senior Vice President in September 2019, at which time his annual base salary was increased to $280,000.
The annual base salary for Mr. Pangia was $550,000.
The annual base salary for Mr. Gallagher was $300,000 until his appointment as Interim President and CEO in September 2019, at which time his annual base salary was increased to $350,000.
The annual base salary for Mr. McFall was $320,000.
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(7)Mr. Gallagher received a bonus in recognition for his service as Interim President and CEO during fiscal year 2020.
(8)The “Stock Awards” column shows the aggregate grant date fair value of the market-based PSUs, granted to Mr. Smith in fiscal 2020 and the performance-based PSUs and RSUs granted to the other named executive officers in fiscal 2020.
     The grant date fair value of the PSUs and RSUs was determined under FASB ASC Topic 718 and represents the amount we would expense in our financial statements over the entire vesting schedule for the awards. The grant date fair value of the PSUs was determined using a Monte Carlo simulation based on the probable outcome of achieving the performance condition, excluding the effect of estimated forfeitures, and the grant date fair value of the RSUs was calculated using the closing market price of our common stock on the respective grant dates. The assumptions used for determining values are set forth in Notes 1 and 8 to our audited consolidated financial statements in Part II, Item 8 of our Annual Report on Form 10-K for fiscal year 2020. These amounts reflect our accounting for these grants and do not correspond to the actual values that may be recognized by the named executive officers. The value of the PSUs granted to each of Messrs. Chang, Gallagher and McFall during fiscal year 2020 included in the Summary Compensation Table assumes 100% performance objectives will be met.
(9)    The “Option Awards” column shows the aggregate grant date fair value of the stock options granted in fiscal 2020, determined using Black-Scholes values. The assumptions used for determining values are set forth in Notes 1 and 9 to our audited consolidated financial statements in Part II, Item 8 of our Annual Report on Form 10-K for fiscal year 2020.
(10)    The “Non-Equity Incentive Plan Compensation” column shows the cash award earned under the AIP for fiscal year 2020, determined based on achievement of the applicable performance metrics. Fifty percent of the awards earned for fiscal year 2020 will not be paid to the named executive officers until December 2020 in light of the COVID-19 pandemic. The cash awards earned under the AIP by Messrs. Pangia and Gallagher during fiscal year 2020 are based upon actual performance achieved during fiscal year 2020 and are prorated based on their days of service during fiscal year 2020.
(11)    The following table describes the components of the “All Other Compensation” column for fiscal year 2020.
Life Insurance(a)
Company Matching Contributions Under 401(k) Plan(b)
Home Office Allowance(c)
Severance(d)
Total All Other Compensation
NameYear($)($)($)($)($)
Peter A. Smith20201,419 2,577   3,996 
Eric Chang2020654 5,275   5,929 
2019612 7,536   8,148 
2018460 6,807   7,267 
Michael Pangia2020834   479,470 480,304 
20193,613    3,613 
20183,380    3,380 
Walter Stanley Gallagher, Jr.20201,796  30,000 105,298 137,094 
20192,064    2,064 
201879    79 
Shaun McFall20202,812 6,154  18,978 27,944 
20192,219 8,398   10,617 
20182,049 7,513   9,562 
_____________________
(a)Represents premiums paid for life insurance that represent taxable income for the named executive officer.
(b)Represents matching contributions made by the Company to the 401(k) account of the named executive officer.
(c)Represents an allowance for Mr. Gallagher to work from home due to the move of the Company’s corporate headquarters to Austin, TX.
(d)Represents cash severance payments paid to Messrs. Pangia and Gallagher during fiscal year 2020, including COBRA payments of $23,499 and $7,083, respectively, and the payout of accrued but unused paid time off in the
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amount of $32,894 and $17,446, respectively. Represents cash payment to Mr. McFall for the payout of accrued but unused paid time off in the amount of $18,978.

Grants of Plan-Based Awards in Fiscal Year 2020
    The following table lists the grants and incentives made to the named executive officers during our fiscal year ended July 3, 2020, of plan-based awards, both equity and non-equity based under our AIP and 2018 Plan. There is no assurance that the grant date fair value of stock and option awards will ever be realized.
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards1)
Estimated Future Payments Under Equity Incentive Plan Awards(2)
All Other Stock Awards: Number of Shares of Stock or Units(3)
All Other Option Awards: Number of Securities Underlying Options(4)
Grant Date, Fair Value of Stock and Option Awards(5)
Type of AwardGrant DateThresholdTargetMaximumThresholdTargetMaximum
Name($)($)($)(#)(#)(#)(#)(#)($)
Peter A. SmithPSU1/2/2020    46,500    664,485 
AIP 35,000 140,000 168,000       
Eric ChangOptions5/19/2020       7,058 42,009 
Options9/20/2019       7,491 45,739 
RSU9/20/2019      3,071  44,376 
PSU9/20/2019    3,071    44,376 
AIP 34,434 137,736 165,283       
Michael PangiaAIP 27,352 109,407 131,288       
Walter Stanley Gallagher, Jr.
Options9/20/2020       8,643 52,772 
RSU9/20/2019      3,544  51,211 
PSU9/20/2019    3,544    51,211 
AIP 31,951 127,804 153,365       
Shaun McFallOptions9/20/2019       9,219 56,289 
RSU9/20/2019      3,780  54,621 
PSU9/20/2019    3,780    54,621 
AIP 40,000 160,000 192,000       
______________________
(1)The amounts shown under Estimated Possible Payouts Under Non-Equity Incentive Plan Awards reflect possible payouts under our fiscal 2020 AIP. For Mr. Smith, these columns represent the pro-rata portion of his AIP award for the portion of fiscal year 2020 following his appointment. For Messrs. Gallagher and Chang, these columns have been adjusted to take into account the value of their potential annual cash incentive calculated based on the portion of the year they served in different roles. For Messrs. Pangia and Gallagher, these columns represent the pro-rata portion of their respective AIP awards for the portion of fiscal year 2020 during which they were employed by the Company. Finally, the columns for Mr. McFall’s AIP award are not prorated because he was employed until the last day of fiscal year 2020. The target AIP awards were earned by each of the named executive officers.
(2)These amounts represent the threshold, target and maximum number of PSUs granted to the named executive officers during fiscal year 2020. For Mr. Smith, the number of PSUs which ultimately are earned and vest is based on the Company’s achievement of certain stock price within two or three years of his start date. For Messrs. Chang, Gallagher and McFall, the number of PSUs which ultimately are earned, vest 100% on the third anniversary of the grant date based on the achievement of the performance criteria applicable to each fiscal year within the three-year performance period, subject to the named executive officer’s continued employment through such vesting date. Pursuant to the terms of the employment agreements and 2018 Plan, Messrs. Gallagher and McFall each received pro rata vesting of their respective PSUs assuming target performance was achieved for the period of time worked during the performance period, as described below in “Outstanding Equity Awards for Fiscal Year Ended July 3, 2020” and “Potential Payments Upon Termination or Change of Control—2020 Named Executive Officer Departures.”
(3)These amounts represent the number of RSUs granted to the named executive officers during fiscal year 2020, which vest in full on the third anniversary of the date of grant, subject to the named executive officer’s continued employment through such vesting date. Pursuant to the terms of the employment agreements and 2018 Plan, these
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unvested RSUs were accelerated for Messrs. Gallagher and McFall, as described below in “Outstanding Equity Awards for Fiscal Year Ended July 3, 2020” and “Potential Payments Upon Termination or Change of Control—2020 Named Executive Officer Departures.”
(4)These amounts represent the number of stock options granted to the named executive officers during fiscal year 2020, which vest in full on the third anniversary of the date of grant, subject to the named executive officer’s continued employment through such vesting date. Pursuant to the terms of the employment agreements and 2018 Plan, these unvested stock options were accelerated for Messrs. Gallagher and McFall, as described below in “Outstanding Equity Awards for Fiscal Year Ended July 3, 2020” and “Potential Payments Upon Termination or Change of Control—2020 Named Executive Officer Departures.”
(5)The “Fair Value of Stock and Option Awards” column shows the aggregate grant date fair value of the PSUs, RSUs and stock options granted in fiscal year 2020. The grant date fair value of these awards was determined under FASB ASC Topic 718, disregarding estimated forfeitures, and represents the amount we would expense in our financial statements over the entire vesting schedule for the awards in the event the vesting provisions are achieved. The grant date fair value of the PSUs is based on probable outcome with regard to applicable performance metrics.
The assumptions used for determining values are set forth in Notes 1 and 9 to our audited consolidated financial statements in Part II, Item 8 of our Annual Report on Form 10-K for the fiscal 2020. These amounts reflect our accounting for these grants and do not correspond to the actual values that may be recognized by the named executive officers.

Outstanding Equity Awards at Fiscal Year-End 2020
The following table provides information regarding outstanding unexercised stock options and unvested stock awards held by each of our named executive officers as of July 3, 2020. Each grant of options or unvested stock awards is shown separately for each named executive officer. The vesting schedule for each award of options and unvested stock awards is shown in the footnotes following this table based on the option grant date. The material terms of the option awards, other than exercise price and vesting are generally described in the 2007 Plan and the 2018 Plan.
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Option AwardsStock Awards
Grant DateNumber of Securities Underlying Unexercised Options ExercisableNumber of Securities Underlying Unexercised Options UnexercisableOption Exercise PriceOption Expiration DateNumber of Shares or Units of Stock that have not Vested
Market Value of Shares or Units of Stock that have not Vested(7)
Equity Incentive Plan Awards: Number of Unearned Shares Units or Other Rights that have not Vested
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that have not Vested(7)
Name(#)(#)($)(#)($)(#)($)
Peter A. Smith01/02/2020      46,500 (1)864,435 
Eric Chang05/19/2020 7,058 (2)12.84 5/19/2027    
09/20/2019 7,491 (3)14.45 9/20/20263,071 (4)57,090 3,071 (5)57,090 
09/07/20182,447 4,894 (2)17.80 9/7/2025  2,447 (6)45,490 
Michael Pangia(8)
         
Walter Stanley Gallagher, Jr.(8)
09/20/20198,643  14.45 4/2/2021    
09/07/20182,942  17.80 4/2/2021    
Shaun McFall(8)
09/20/20199,219  14.45 7/2/2021    
09/07/20183,138  17.80 7/2/2021    
02/02/20158,254  15.60 7/2/2021    
09/09/201313,131  31.20 9/9/2020    
______________________
(1)Mr. Smith received a sign-on equity award of 46,500 target PSUs upon joining the Company on January 2, 2020. 18,750 of these PSUs will be earned and vested if the stock price reaches $22.50 within two years of his start date, and the remaining 27,750 PSUs will be earned and vested if the stock price reaches $30.00 within three years of his start date.
(2)Stock options that vest annually over three years from date of grant.
(3)Stock options that cliff vest three years from date of grant.
(4)RSUs that cliff vest three years from date of grant.
(5)PSUs eligible to vest based on the Company’s non-GAAP net income. From 0% to 150% of the target PSUs will vest in September 2022 following the end of the fiscal year July 1, 2022, that the Compensation Committee certifies achievement of the performance measure. Vesting of these PSUs is dependent on continuous employment with us through the vesting date. The number of PSUs reported in the table above reflects 100% of the target number of granted PSUs based on the Company’s annual non-GAAP net income for the performance periods.
(6)PSUs eligible to vest based on the Company’s non-GAAP net income. The shares will vest on the date that the Compensation Committee certifies the achievement of the performance measure. Fifty percent of the second tranche of grants representing 612 PSUs were canceled subsequent to July 3, 2020 as we did not meet the performance metrics in full. Vesting of these PSUs is dependent on continuous employment with us through the vesting date in September 2021.
(7)Market value is based on the $18.59 closing price of a share of our common stock on July 2, 2020 (July 3, 2020 was a holiday), as reported on the NASDAQ Global Select Market.
(8)Except for the accelerated vesting of a pro-rata portion of their respective PSU awards, Messrs. Gallagher and McFall forfeited all outstanding and unvested equity awards as of their respective resignation dates. The vested stock options previously granted to each of Messrs. Gallagher and McFall will remain outstanding and exercisable for the shorter of the expiration date or one year following their respective termination dates. See “Options Exercised and Stock Vested in Fiscal Year 2020” and “Potential Payments Upon Termination or Change of Control—2020 Named Executive Officer Departures.”

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Option Exercised and Stock Vested in Fiscal Year 2020
    The following table provides information for each of our named executive officers regarding the number of shares of our common stock acquired upon the vesting of stock awards during fiscal year 2020. No options to purchase common stock were exercised during fiscal year 2020. Stock awards vesting during fiscal year 2020 consisted of RSUs and PSUs. There were no shares vested for Peter Smith during fiscal year 2020.
Stock Awards
Name
Number of Shares Acquired on Vesting (#) (1)
Value Received on Vesting ($) (2)
Peter A. Smith  
Eric Chang7,259 103,440 
Michael Pangia43,446 613,458 
Walter Stanley Gallagher, Jr.7,392 62,093 
Shaun McFall22,279 346,043 
_________________________
(1)Vested number of shares of RSUs and PSUs.
(2)Amount shown is the aggregate market value of the vested RSUs and PSUs, calculated by multiplying the number of RSUs and PSUs that vested by the closing price of our stock on the applicable vesting date or, if the vesting date is not a NASDAQ trading day, the previous trading day.
Pension Benefits
Other than our U.S. 401(k) plan, we do not have any plan that provides for payments or other benefits at, following, or in connection with retirement to our named executive officers.
Nonqualified Deferred Compensation
We do not have any plan that provides for the deferral of compensation by named executive officers on a basis that is not tax qualified.


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Equity Compensation Plan Summary
The following table provides information as of July 3, 2020, relating to our equity compensation plan:
Plan CategoryNumber of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and RightsWeighted-Average Exercise Price of Outstanding OptionsNumber of Securities Remaining Available for Further Issuance Under Equity Compensation Plans (Excluding Securities Reflected in the First Column)
Equity Compensation plan approved by security holders(1)
524,815 (2)$17.30 (3)711,362 (4)
Equity Compensation plans not approved by security holders $  
Total524,815 $17.30 711,362 
_____________________
(1)Consists of the 2007 Plan, the 2018 Plan and our employee stock purchase plan.
(2)The number includes 321,718 shares to be issued upon exercise of options, 80,829 shares to be issued upon vesting of RSUs, 122,268 shares to be issued upon vesting of PSUs (based on achievement of target performance metrics).
(3)Excludes weighted average fair value of RSUs and PSUs.
(4)Includes 57,598 shares reserved for future issuances under the employee stock purchase plan.

Potential Payments Upon Termination or Change of Control
We entered into employment agreements with each of the named executive officers, which provide for such executives to receive certain payments and benefits if their employment with us is terminated.
Quantification of Severance and Benefits Payable to Current Named Executive Officers.
The employment agreements with Messrs. Smith and Chang are set forth in detail below and assume a termination event on July 3, 2020, and refer to our stock price on that date. The Board has determined that such payments and benefits are an integral part of a competitive compensation package for our named executive officers.
The table below reflects the compensation and benefits due to each of Messrs. Smith and Chang in the event of his termination of employment by us without cause or termination by the executive for good reason (other than within 12 months or within 18 months after a Change of Control, as defined below) and in the event of disability and in the event of termination of employment by us without cause or termination by the executive for good reason within 12 months or within 18 months after a Change of Control (depending on individual employment agreements). The amounts shown in the table are estimates of the amounts that would be paid upon termination of employment. There are no compensation and benefits due to any named executive officer in the event of death, or of termination of employment by us for cause or voluntary termination. The actual amounts would be determined only at the time of the termination of employment.
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NameConditions for Payouts
Base Salary Component(1)
Cash Incentive Component(2)
Accelerated Equity Vesting(3)
Insurance Benefit(4)
Out-Placement Services(5)
Total
Peter SmithTermination without cause or for good reason, or due to disability$400,000 $138,113 $ $27,228 $30,000 $595,341 
Within 12 months after Change of Control$400,000 $280,000 $ $54,456 $30,000 $764,456 
Eric ChangTermination without cause or for good reason, or due to disability$300,000 $137,736 $118,510 $ $30,000 $586,246 
Within 18 months after Change of Control$300,000 $150,000 $162,948 $ $30,000 $642,948 
______________________
(1)The base salary component represents the total gross monthly payments to each named executive officer at the current salary. Mr. Chang’s salary as of July 4, 2020 in connection with his promotion to Senior Vice President and Chief Financial Officer on April 3, 2020.
(2)The cash incentive component represents the cash bonus due at target under the fiscal year 2020 AIP.
(3)Reflects acceleration of outstanding equity awards, including pro-rata vesting of the equity a