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Item 9A. Controls and Procedures

2021-02-05 compared with 2020-02-07 · 46 added, 32 removed, 316 unchanged (20% of the section changed)

75 unchanged sentences

To the extent 2021 actual non-GAAP operating income is above the minimum amount of non-GAAP operating income, the payout increases linearly from zero at the minimum amount of non-GAAP operating income as set forth in the 2021 PSU Plan up to 100% of the non-GAAP operating income component of the target when actual non-GAAP operating income equals target non-GAAP operating income in the 2021 PSU Plan.

If 2020 actual non-GAAP operating income is above the target amount of non-GAAP operating income, then the payout for performance above target increases linearly from the target amount up to a maximum of 200% of the non-GAAP operating income component of the target when actual non-GAAP operating income equals or exceeds the established target to achieve the maximum payout under the non-GAAP operating income component of the 2020 PSU Plan.

If 2021 actual non-GAAP operating income is above the target amount of non-GAAP operating income, then

the payout for performance above target increases linearly from the target amount up to a maximum of 200% of the non-GAAP operating income component of the target when actual non-GAAP operating income equals or exceeds the established target to achieve the maximum payout under the non-GAAP operating income component of the 2021 PSU Plan.

Strategic Goals Component of the 2021 PSU Plan:

Each of the five goals in the strategic goals component of the 2021 PSU Plan is assigned a weighting percentage, which percentages range from 2% to 14%, and which collectively add up to 30%.

If the Company’s 2020 actual achievement of a goal

does not exceed at least the established minimum requirement for a particular goal, then no amount is earned for that goal.

If the Company’s 2021 actual achievement of a goal does not exceed at least the established minimum requirement for a particular goal, then no amount is earned for that goal.

To the extent 2021 actual performance for a goal is better than the established minimum for the goal, then the payout increases linearly from zero at the minimum amount of performance as set forth in the 2021 PSU Plan up to 100% of the amount for that goal when actual performance equals target performance for that goal in the 2021 PSU Plan.

32 unchanged sentences

Each Officer, as described below, was granted long term performance stock units, referred to as “PRSUs,” which will vest (referred to as a “payout” below) based on Company revenue performance as against the 2021 PRSU Plan’s established three-year (years 2021, 2022 and 2023) compound annual growth rate (“CAGR”) of revenue as measured against a specified index of the analog semiconductor industry CAGR (the “Index”).

The level of performance of the Company’s three-year revenue CAGR as against the Index is intended to have a difficulty in attainment level consistent with the Company’s 2019 PRSU Plan.

The level of performance of the Company’s three-year revenue CAGR as against the Index is intended to have a difficulty in attainment level consistent

with the Company’s 2020 PRSU Plan.

The portion of the performance stock units that will vest will be calculated based on the Company’s actual three-year revenue CAGR as compared to the Index and awarded in early 2024 upon approval by the Compensation Committee.

3 unchanged sentences

If the Company’s actual three-year revenue CAGR exceeds the target, then the payout for performance above target increases linearly from the target amount up to a maximum of 200% of the target when the Company’s actual three-year revenue CAGR equals or exceeds the established amount to achieve the maximum payout as set forth in the 2021 PRSU Plan.

Except to the extent provided in the executive officer benefits agreements between the Company and each Officer, each Officer must be employed through the end of the performance period to receive stock pursuant to the PRSUs under the 2020 PRSU Plan.

Except to the extent provided in the executive officer benefits agreements between the Company and each Officer, each Officer must be employed by the Company through the end of the performance period to receive stock pursuant to the PRSUs under the 2021 PRSU Plan.

2021 Target PRSUs

36 unchanged sentences

Information relating to compensation policies and practices as they relate to risk management is set forth under the caption “Compensation Policies and Practices as They Relate to Risk Management” under “Proposal 1 Election of Directors” in the Proxy Statement, which information is incorporated herein by reference.

Information regarding compensation committee interlocks is set forth under the caption "Compensation Committee Interlocks and Insider Participation" in the Proxy Statement, which information is incorporated herein by reference.

Information regarding compensation committee interlocks is set forth under the caption "Compensation Committee Interlocks and Insider Participation"

in the Proxy Statement, which information is incorporated herein by reference.

The Compensation Committee Report is set forth under the caption “Compensation Committee Report” in the Proxy Statement, which report is incorporated herein by reference.

24 unchanged sentences

1997 Outside Directors Stock Option Plan

Amendment No.

1 to the Power Integrations, Inc.

1997 Outside Directors Stock Option Plan, effective as of January 27, 2009

Amendment No.

2 to the Power Integrations, Inc.

1997 Outside Directors Stock Option Plan, effective as of April 12, 2010

Forms of agreement under 1997 Outside Directors Stock Option Plan

8 unchanged sentences

Form of Long Term Performance Stock Unit Notice and Agreement under the 2007 Equity Incentive Plan

Incorporation by Reference

Exhibit Description

Exhibit/Appendix

Power Integrations, Inc.

28 unchanged sentences

and Seiko Epson Corporation, with an effective date of December 19, 2008

Incorporation by Reference

Exhibit Description

Exhibit/Appendix

Amendment Number Two to Wafer Supply Agreement, between Seiko Epson Corporation and Power Integrations International, Ltd., entered into on January 5, 2011

25 unchanged sentences

Form of Restricted Stock Unit Grant Notice and Form of Restricted Stock Unit Award Agreement for executive officers for use prior to January 2013

Incorporation by Reference

Exhibit Description

Exhibit/Appendix

Form of Restricted Stock Unit Grant Notice and Form of Restricted Stock Unit Award Agreement for executive officers for use after January 2013

13 unchanged sentences

and Radu Barsan

Executive Officer Benefits Agreement, dates as of April 23, 2015, between Power Integrations, Inc.

and Raja Petrakian

ON Semiconductor Corporation Settlement Agreement

ON Semiconductor Corporation Term Sheet

Amendment Number Ten to the Amended and Restated Wafer Supply Agreement,

between Power Integrations International, Ltd.

and Lapis Semiconductor Co., Ltd.

(formerly OKI Semiconductor Co., Ltd.), effective as of December 16, 2019

Amendment Number Eleven to the Amended and Restated Wafer Supply Agreement, between Power Integrations International, Ltd.

and Lapis Semiconductor Co., Ltd.

(formerly OKI Semiconductor Co., Ltd.), effective as of December 20, 2019

Amendment Number Nine to Wafer Supply Agreement, effective as of November 1, 2017 by Power Integrations International Ltd.

and Seiko Epson Corporation

2020 Compensation Arrangements with Named Executive Officers