UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934

Check the appropriate box:

 

HARMONIC INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check all boxes that apply):

 

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

Dear Stockholders of Harmonic Inc:

You are cordially invited to attend the 2024 annual meeting of stockholders (the “Annual Meeting”) of Harmonic Inc., a Delaware corporation (the “Company”), which will be held on Tuesday, June 11, 2024, at 9:00 a.m., Pacific Time. The Annual Meeting will be a virtual meeting held over the Internet. You will be able to attend the Annual Meeting, vote your shares electronically and submit your questions during the live webcast of the meeting by visiting www.virtualshareholdermeeting.com/HLIT2024 and entering your 16-digit control number located on your proxy card. The meeting will address the following items of business:

The foregoing items of business are more fully described in the Proxy Statement accompanying this notice. All stockholders of record at the close of business on Monday, April 15, 2024, are entitled to notice of and to vote at the Annual Meeting and any adjournment or postponement thereof.

On or about April 29, 2024, we expect to send to our stockholders a Notice of Internet Availability of Proxy Materials containing instructions on how to access our proxy materials. Unless you have previously requested to receive our proxy materials in paper form or by email, you will receive a Notice of Internet Availability of Proxy Materials. Stockholders who continue to receive paper copies of proxy materials may elect to receive future proxy materials via electronic delivery by enrolling at www.proxyvote.com.

San Jose, California

April 29, 2024

YOUR VOTE IS IMPORTANT. Whether or not you plan to attend the virtual meeting we urge you to submit your vote via the Internet, telephone or mail as soon as possible to ensure your shares are represented. Please refer to your proxy card for additional instructions on voting via the Internet or by telephone. Even if you have voted by proxy, you may still vote in person by attending the virtual meeting.

PROXY STATEMENT TABLE OF CONTENTS

GENERAL INFORMATION

Harmonic Inc.

PROXY STATEMENT

2024 ANNUAL MEETING OF STOCKHOLDERS

To Be Held at 9:00 A.M. Pacific Time on Tuesday, June 11, 2024

This proxy statement and the enclosed form of proxy card are furnished in connection with the solicitation of proxies by and on behalf of the Board of Directors (the “Board of Directors” or the “Board”) of Harmonic Inc., a Delaware corporation (“Harmonic,” “we” or the “Company”), for use at the 2024 Annual Meeting of Stockholders and any adjournment(s), postponement(s) or other delays thereof (the “Annual Meeting”) to be held virtually on Tuesday, June 11, 2024, at 9:00 a.m. Pacific Time, for the purposes set forth herein and in the accompanying Notice of Annual Meeting of Stockholders. You will be able to attend the Annual Meeting, vote your shares electronically and submit your questions during the live webcast of the meeting by visiting www.virtualshareholdermeeting.com/HLIT2024 and entering your 16-digit control number located on your proxy card.

Internet Availability of Proxy Materials

Under rules adopted by the U.S. Securities and Exchange Commission (the “SEC”), we are furnishing proxy materials to our stockholders primarily via the Internet, instead of mailing printed copies of those materials to each stockholder. On or about April 29, 2024, we expect to send to our stockholders (other than those who previously requested electronic or paper delivery) a Notice of Internet Availability of Proxy Materials (the “E-Proxy Notice”) containing instructions on how to access our proxy materials, including our proxy statement (the “Proxy Statement”) and our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (the “2023 Annual Report”). The E-Proxy Notice also instructs you on how to access your proxy card to vote through the Internet or by telephone.

Who Can Vote at the Annual Meeting

Stockholders as of the close of business on April 15, 2024 (the “Record Date”) are entitled to notice of and to vote at the Annual Meeting. As of the Record Date, 111,955,920 shares of the Company’s common stock, $0.001 par value per share (the “Common Stock”), were issued and outstanding.

Stockholder of Record – Shares Registered in Your Name. If, on the Record Date, your shares were registered directly in your name with our transfer agent, Computershare Investor Services, then you are considered the stockholder of record with respect to those shares. As a stockholder of record, you may vote at the Annual Meeting or vote by proxy. Whether or not you plan to attend the virtual Annual Meeting, we urge you to vote over the Internet or by telephone, or if you received paper proxy materials by mail, by filling out and returning the proxy card in the enclosed postage-paid envelope.

A list of stockholders eligible to vote at the Annual Meeting will be available for review during our regular business hours at our principal executive offices for the ten days prior to the Annual Meeting for any purpose related to the Annual Meeting. If you would like to view the list, please contact our corporate secretary to schedule an appointment by writing to Harmonic Inc., 2590 Orchard Parkway, San Jose, California 95131, Attention: Corporate Secretary.

Beneficial Owner – Shares Registered in the Name of a Broker or Nominee. If, on the Record Date, your shares were held in an account with a brokerage firm, bank or other nominee, then you are the beneficial owner of the shares held in street name. As a beneficial owner, you have the right to direct your nominee on how to vote the shares held in your account, and it has enclosed or provided voting instructions for you to use in directing it on how to vote your shares. However, the organization that holds your shares is considered the stockholder of record for purposes of voting at the Annual Meeting. Because you are not the stockholder of record, you may not vote your shares at the Annual Meeting unless you request and obtain a valid proxy from the organization that holds your shares giving you the right to vote the shares at the Annual Meeting.

How to Vote

If you are a stockholder of record you may vote by proxy or electronically at the Annual Meeting. To vote by proxy, you may vote via the Internet or by telephone by following the instructions provided on the E-Proxy Notice or proxy card, or if you received a paper proxy card and voting instructions by mail, you should sign, date and return the enclosed proxy card in the enclosed postage-paid envelope before the Annual Meeting.

If you are a beneficial owner and not the stockholder of record, please refer to the voting instructions provided by your nominee to direct it on how to vote your shares.

Revocability of Proxies

Any proxy may be revoked by the person giving it at any time before its use at the Annual Meeting by delivering to the Secretary of the Company, at the Company’s principal offices at 2590 Orchard Parkway, San Jose, California 95131, a written notice of revocation or a signed proxy bearing a later date, or by voting on a later date by telephone or via the Internet. If you attend the virtual Annual Meeting and vote electronically, any previously submitted proxy will be revoked.

Please note, however, that if you are a beneficial owner and you wish to change or revoke your proxy, you may change your vote by submitting new voting instructions to your broker, bank or other nominee in accordance with their operating procedures or, if you have obtained a legal proxy from your broker, bank or other nominee giving you the right to vote your shares at the Annual Meeting, by attending the virtual Annual Meeting and voting electronically.

Quorum

Each stockholder is entitled to one vote for each share of Common Stock held as of the Record Date on all matters presented at the Annual Meeting. Stockholders do not have the right to cumulate their votes in the election of directors.

The holders of a majority in voting power of the Common Stock issued and outstanding and entitled to vote at the Annual Meeting, present in person or represented by proxy, constitutes a quorum for action at the Annual Meeting. Shares that reflect abstentions and broker non-votes count as present at the Annual Meeting for the purposes of determining a quorum.

Voting Requirements

Proposal 1 – Majority vote for a Director’s election. The Company’s amended and restated bylaws (the “Bylaws”) provide that, in the case of an uncontested election (i.e., an election where the number of director nominees is not greater than the number of directors to be elected), a nominee shall be elected by the affirmative vote of the majority of the votes cast by holders of Common Stock having voting power present in person or represented by proxy at a meeting for the election of directors at which a quorum is present. For this purpose, the “affirmative vote of the majority of the votes cast” means the number of shares voted “FOR” a director’s election exceeds the number of shares “AGAINST” with respect to that director’s election. In a contested election (i.e., an election where the number of nominees is greater than the number of directors to be elected), a nominee shall be elected by a plurality of the votes cast.

Proposals 2, 3, 4 and 5 – Majority vote. The advisory vote on named executive officer compensation (Proposal 2 in this Proxy Statement), the amendment to the Company’s 2002 Employee Stock Purchase Plan (Proposal 3 in this Proxy Statement), the amendment to the Company’s 1995 Stock Plan (Proposal 4 in this Proxy Statement) and the ratification of the appointment of the Company’s independent registered public accounting firm (Proposal 5 in this Proxy Statement) each require the affirmative vote of the holders of a majority of the Common Stock having voting power present in person or represented by proxy and entitled to vote on the proposal.

Treatment of abstentions and broker non-votes. In the election of directors (Proposal 1 in this Proxy Statement), abstentions and broker non-votes will be disregarded and have no effect on the outcome of the vote. With respect to Proposals 2, 3, 4 and 5 in this Proxy Statement, 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.

Meaning of “broker non-votes.” If you hold shares beneficially in street name (that is, in an account at a bank or broker) and do not provide your bank or broker with voting instructions, your shares may constitute “broker non-votes.” Broker non-votes occur on a matter when a bank or broker is not permitted to vote on that matter without instructions from the beneficial owner and instructions are not given. These matters are referred to as “non-routine” matters. All of the matters scheduled to be voted on at the Annual Meeting are “non-routine,” except for the ratification of the appointment of the Company’s independent registered public accounting firm (Proposal 5 in this Proxy Statement).

Solicitation of Proxies

The Company will bear the cost of soliciting proxies, including the preparation, assembly, Internet hosting, printing and mailing of the E-Proxy Notice, this Proxy Statement, the proxy card and any other proxy materials furnished to stockholders by the Company in connection with the Annual Meeting. In addition, the Company may reimburse brokerage firms and other persons representing beneficial owners of shares for their expenses in forwarding the proxy materials to such beneficial owners. Solicitation of proxies by mail may be supplemented by telephone, facsimile, email, Internet or personal solicitation by directors, officers, employees or independent contractors of the Company. Other than for any such independent contractors, no additional compensation will be paid to such persons for such services.

If You Receive More Than One Proxy Card or E-Proxy Notice

If you receive more than one proxy card or E-Proxy Notice, your shares are registered in more than one name or are registered in different accounts. To make certain all of your shares are voted, please follow the instructions included on the E-Proxy Notice on how to access each proxy card and vote each proxy card over the Internet or by telephone. If you received paper proxy materials by mail, please complete, sign and return each proxy card to ensure that all of your shares are voted.

Stockholder Proposal Procedures and Deadlines

Proposals of stockholders of the Company that are intended to be presented by such stockholders at our 2025 annual meeting of stockholders and that stockholders desire to have included in the Company’s proxy materials relating to such meeting pursuant to Rule 14a-8 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), must be received by Harmonic at its principal offices at 2590 Orchard Parkway, San Jose, California 95131, Attention: Corporate Secretary, no later than December 30, 2024. Any such proposals of stockholders must be in compliance with applicable laws and regulations in order to be considered for possible inclusion in the Company’s proxy materials for that meeting.

Proposals of stockholders of the Company that are intended to be presented by such stockholders at our 2025 annual meeting of stockholders and that such stockholders do not desire to have included in the Company’s proxy materials for that meeting must be received in writing by Harmonic at its principal offices at 2590 Orchard Parkway, San Jose, California 95131, Attention: Corporate Secretary, no earlier than February 11, 2025 and no later than March 13, 2025.

However, if the date of our 2025 annual meeting of stockholders occurs more than 25 days before or after June 11, 2025, then notice of a stockholder proposal that is not intended for inclusion in our proxy statement under Rule 14a-8 must be received by the Company no earlier than the 120^th day before our 2025 annual meeting of stockholders and no later than the close of business on the later of (i) the 90^th day prior to date of our 2025 annual meeting of stockholders or (ii) if the first public announcement of our 2025 annual meeting of stockholders is less than 100 days prior to the date of such annual meeting, the 10^th day following the day on which public announcement of the date of our 2025 annual meeting of stockholders is first made.

Furthermore, any stockholder’s notice of business to be brought before an annual meeting must set forth, as to each proposed matter, the information required for such proposed matter under Section 2.5(a)(iii) of the Bylaws. In addition, to be timely and in proper written form, a stockholder’s notice to the Secretary of the Company must be updated and supplemented, if necessary, so that the information provide or required to be provided in such notice by the Bylaws is true and correct as of the Record Date, within the time period as described in Section 2.5(a)(iii) of the Bylaws. A copy of the pertinent provisions of the Bylaws is available upon request to Harmonic Inc., 2590 Orchard Parkway, San Jose, California 95131, Attention: Corporate Secretary, or can be accessed from the Company’s filings with the SEC at www.sec.gov.

If a stockholder gives notice of such a proposal after the deadlines described above, the Company’s designated proxy holders will be allowed to use their discretionary voting authority to vote against the stockholder proposal when and if the proposal is raised at our 2025 annual meeting of stockholders.

Multiple Stockholders Sharing One Address

In some instances, we may deliver to multiple stockholders of record sharing a common address only one copy of the E-Proxy Notice or, if you received paper proxy materials by mail, only one copy of this Proxy Statement and our 2023 Annual Report. If requested orally or in writing, we will promptly provide a separate copy of the E-Proxy Notice or paper proxy materials to a stockholder sharing an address with another stockholder. Requests should be directed to: Harmonic Inc., 2590 Orchard Parkway, San Jose, California 95131, Attention: Corporate Secretary, or to 1-408-542-2500. Beneficial holders sharing a common address and who desire separate copies should contact their brokerage firm or bank.

Stockholders of record sharing an address who currently receive multiple copies of proxy materials or the E-Proxy Notice, and wish to receive only a single copy, should send a signed, written request to the Company at the address noted above. Beneficial holders should contact their brokerage firm or bank.

If You Plan to Attend the Annual Meeting

The Annual Meeting will be a virtual meeting held over the Internet. You will be able to attend the Annual Meeting, vote your shares electronically and submit your questions during the live webcast of the meeting by visiting www.virtualshareholdermeeting.com/HLIT2024 and entering your 16-digit control number located on your proxy card.

PROPOSAL 1:

ELECTION OF DIRECTORS

Seven (7) directors are to be elected at the Annual Meeting. Each of the directors elected at the Annual Meeting will hold office until the earlier of our 2025 annual meeting of stockholders or until such director’s successor has been elected and qualified or until such director’s earlier resignation or removal. Sophia Kim and Susan Swenson, current members of the Board, will not stand for reelection at the Annual Meeting. The Board thanks Mmes. Kim and Swenson for their service to the Company and its stockholders.

Unless otherwise instructed, the designated proxy holders will vote the proxies received by them “FOR” the Company’s seven nominees named below, all of whom are currently directors of the Company, except Stephanie Copeland and Dana Crandall. Each of the nominees was recommended for election by the Company’s Corporate Governance and Nominating Committee of the Board of Directors (the “Corporate Governance and Nominating Committee”) and the Board of Directors. In the event that any nominee of the Company becomes unable or declines to serve as a director at the time of the Annual Meeting, the designated proxy holders will vote the proxies for any substitute nominee who is designated by the Corporate Governance and Nominating Committee to fill the vacancy. It is not expected that any nominee listed below will be unable or will decline to serve as a director.

The process undertaken by the Corporate Governance and Nominating Committee in recommending qualified director candidates is described below under “Considerations in Evaluating Director Nominees” on page 12 of this Proxy Statement.

Director Nominees

The names of the nominees for director and certain information about each of them are set forth below. The information presented includes age as of April 1, 2024, positions held, principal occupation and business experience for at least the past five years, and the names of other publicly-held and select privately-held companies of which the nominee currently serves as a director or has served as a director during the past five years. In addition to the information presented below regarding the nominee’s specific experience, qualifications, attributes and skills that led our Board to the conclusion that each nominee is qualified to serve as a director, we also believe that all of our director nominees have a reputation for integrity, honesty and adherence to high ethical standards. Our incumbent director nominees each have demonstrated knowledge of our industry, an ability to exercise sound judgment, and a commitment to the Company and the Board. Finally, with respect to our director nominees who have not been officers of the Company, we value their experience on other company boards of directors and board committees and as senior officers of other companies. Each of the nominees has consented to being named in this Proxy Statement and to serve as a director if elected.

Except as indicated below, each nominee has been engaged in the principal occupation set forth above during the past five years. There are no family relationships between any directors or executive officers of the Company.

 

CORPORATE GOVERNANCE AND ESG

Board Leadership

We separate the roles of Chief Executive Officer (“CEO”) and Chair of the Board in recognition of the differences between the two roles. The CEO is responsible for setting the strategic direction of the Company and for its operational management, leadership and performance, while the independent Chair of the Board provides guidance to the CEO and sets the agenda for, and presides over, meetings of the full Board. The Board believes that this structure of a separate Chair of the Board and CEO results in the proper balancing of responsibilities, experience, and independent perspectives that meets the current corporate governance needs and oversight responsibilities of the Board. The Board also believes that this structure benefits the Company by enabling our CEO to focus on strategic matters, operational management, leadership and performance. This leadership structure also allows the Company and the Board to benefit from Patrick Gallagher’s insights in the global telecom and media industries, and significant experience in chairing public company boards.

Board Meetings and Committees

The Board of Directors held a total of eleven (11) meetings during the fiscal year ended December 31, 2023. No director attended fewer than 90 percent of the meetings of the Board, or 100 percent of the meetings of the Board committees upon which such director served, in 2023. Mr. Whalen attended all of the meetings of the Board until his resignation from the Board in June 2023. Although we do not have a formal policy regarding attendance by members of our Board of Directors at the Annual Meeting, we strongly encourage, but do not require, our directors to attend.

The Board has determined that Mmes. Clifford, Kim, Reaugh and Swenson, and Messrs. Gallagher and Krall, as well as new director nominees Stephanie Copeland and Dana Crandall, are “independent” as that term is defined under the applicable rules and regulations of the SEC and under applicable NASDAQ listing standards. In making this determination, the Board considered the current and prior relationships that each non-employee director and new director nominee has with Harmonic and all other facts and circumstances the Board deemed relevant in determining their independence, including the beneficial ownership of the Company’s capital stock by each non-employee director and new director nominee. The independent directors and new director nominees have no relationships with the Company which, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Mmes. Kim and Swenson will not be standing for re-election at the Annual Meeting.

The Board has an Audit Committee, a Compensation Committee and a Corporate Governance and Nominating Committee.

Audit Committee

The Audit Committee currently consists of Mmes. Clifford, Kim and Swenson, each of whom is independent under Rule 10A-3 of the Exchange Act and under applicable NASDAQ listing standards. Mmes. Kim and Swenson will not be standing for re-election at the Annual Meeting and will therefore no longer serve as members of the Audit Committee following the Annual Meeting. Mmes. Copeland and Crandall, each of whom is independent under Rule 10A-3 of the Exchange Act and under applicable NASDAQ listing standards, will be appointed to the Audit Committee following the Annual Meeting (subject to their election to the Board).

Ms. Clifford serves as the Chairperson of the Audit Committee. The Audit Committee serves as the representative of the Board for general oversight of the quality and integrity of Harmonic’s financial accounting and reporting process, system of internal control over financial reporting, management of financial risks, audit process, and process for monitoring the compliance with related laws and regulations. Each member of the Audit Committee also meets the financial literacy requirements of the applicable NASDAQ listing standards. The Audit Committee engages the Company’s independent registered public accounting firm and approves the scope of both audit and non-audit services. Matters within the scope of the Audit Committee were also discussed in executive sessions at regularly scheduled meetings of the Board in 2023. The Audit Committee held eight (8) meetings during 2023.

The Board has determined that Ms. Clifford is an “audit committee financial expert,” as defined by the current rules of the SEC. The Board believes that Ms. Clifford’s experience as a public company chief financial officer and finance executive qualifies her as an “audit committee financial expert.”

The Audit Committee operates under a written charter that was adopted by our Board of Directors and satisfies the applicable standards of the SEC and applicable NASDAQ listing standards. A copy of our Audit Committee charter is available on our website at www.harmonicinc.com in the Corporate Governance section of the Investor Relations page.

Compensation Committee

The Compensation Committee currently consists of Ms. Reaugh and Messrs. Gallagher and Krall, none of whom is an employee of the Company and each of whom is independent under applicable NASDAQ listing standards.

Ms. Reaugh currently serves as the Chairperson of the Compensation Committee. The Compensation Committee is responsible for approving the Company’s compensation policies, compensation paid to executive officers and administration of the Company’s equity compensation plans. The Compensation Committee held four (4) meetings during 2023. Matters within the scope of the Compensation Committee were also discussed in executive sessions at regularly scheduled meetings of the Board in 2023.

The Compensation Committee operates under a written charter that was adopted by our Board of Directors and satisfies the applicable standards of the SEC and applicable NASDAQ listing standards. A copy of our Compensation Committee charter is available on our website at www.harmonicinc.com in the Corporate Governance section of the Investor Relations page.

Corporate Governance and Nominating Committee

The Corporate Governance and Nominating Committee currently consists of Ms. Swenson and Messrs. Gallagher and Krall, each of whom is independent under applicable NASDAQ listing standards. Ms. Swenson will not be standing for re-election at the Annual Meeting and will therefore no longer serve as a member of the Corporate Governance and Nominating Committee following the Annual Meeting.

Ms. Swenson serves as the Chairperson of the Corporate Governance and Nominating Committee. Following the Annual Meeting, Ms. Swenson will step down as the Chairperson of the Corporate Governance and Nominating Committee, and subject to their

re-election to the Board, Ms. Reaugh will be appointed to serve on the committee and Mr. Krall will be appointed to serve as the Chairperson of the committee. The Corporate Governance and Nominating Committee serves as the representative of the Board for establishment and oversight of governance policy and the operation, composition and compensation of the Board. The Corporate Governance and Nominating Committee held five (5) meetings in 2023. Matters within the scope of the Corporate Governance and Nominating Committee were discussed in executive sessions at regularly scheduled meetings of the Board in 2023.

The Corporate Governance and Nominating Committee has proposed, and the Board has approved, the nomination of four (4) of the current board members for re-election, and the nomination of three (3) new candidates for election, by stockholders at the Annual Meeting.

The Corporate Governance and Nominating Committee operates under a written charter that was adopted by our Board of Directors and satisfies the applicable standards of the SEC and applicable NASDAQ listing standards. A copy of our Corporate Governance and Nominating Committee charter is available on our website at www.harmonicinc.com in the Corporate Governance section of the Investor Relations page.

Meetings of Non-Employee Directors

At each regularly scheduled Board meeting, the non-employee directors meet in an executive session without any members of management or employees present. The Chair of the Board has the responsibility of presiding over such periodic executive sessions of the Board. Last year, the non-employee directors discussed, in executive sessions, corporate strategy, risk oversight, management performance, Board performance, succession planning for management and the directors, and Board policies, processes and practices.

Corporate Governance Guidelines

The Board has adopted Corporate Governance Guidelines that set forth the key functions of the Board, as well as principles regarding board structure and composition, director voting, board operations and meetings, board interaction with management and third parties, board committees and director compensation. The Corporate Governance Guidelines, in conjunction with our certificate of incorporation, Bylaws and Board committee charters, form the framework for the governance of the Company.

The Corporate Governance Guidelines are available on the Company’s website at www.harmonicinc.com in the Corporate Governance section of the Investor Relations page. The Corporate Governance Guidelines are reviewed at least annually by our Corporate Governance and Nominating Committee, and changes are recommended to our Board for approval as appropriate.

Code of Business Conduct and Ethics

We have adopted a Code of Business Conduct and Ethics that applies to all of our Board members, officers, employees, consultants, contractors and agents, which is available on the Company’s website at www.harmonicinc.com in the Corporate Governance section of the Investor Relations page. Any amendments or waivers of the code pertaining to a member of our Board or one of our executive officers will be disclosed on our website at the above-referenced address.

Role of the Board in Risk Oversight

Management of the Company is responsible for the day-to-day management of risks the Company faces, while the Board has responsibility, as a whole and also at the committee level, for the oversight of the Company’s risk management. The Board regularly reviews the Company’s long-term business strategy, including industry trends and their potential impact on the Company, our competitive positioning, potential acquisitions and divestitures, as well as the Company’s technology and market direction. The Board also reviews information regarding the Company’s actual and planned financial position and operational performance, as well as the risks associated with each. The Compensation Committee is responsible for overseeing the management of risks relating to the Company’s executive compensation and Board remuneration, and the Company’s incentive, equity award and other benefit plans. The Audit Committee oversees management of financial risks, including, but not limited to, accounting matters, tax positions, insurance coverage and security of the Company’s cash reserves. The Audit Committee also oversees Harmonic’s cybersecurity controls and performance through regular updates from executive management and reviews of governance processes, security-related programs, performance data, potential or realized security breach information, audit and validation results, and controls to help mitigate cybersecurity risks. The Corporate Governance and Nominating Committee manages risks associated with independence and potential conflicts of interest.

At periodic meetings of the Board and its committees, management reports to, and seeks the guidance of, the Board and its committees with respect to the most significant risks that could affect our business. While each committee is responsible for evaluating certain risks and overseeing the management of such risks, the entire Board is periodically informed about such risks by committee reports and receives advice and counsel with respect to risk issues from the Company’s outside counsel.

Considerations in Evaluating Director Nominees

Pursuant to the charter of the Corporate Governance and Nominating Committee, the Committee may utilize a variety of methods to identify and evaluate candidates for service on our Board of Directors. Candidates may come to the attention of the Corporate Governance and Nominating Committee through current directors, management, professional search firms, stockholders, outside professionals or other persons. Any candidate presented would be evaluated at a meeting of the Corporate Governance and Nominating Committee or at a regular Board meeting and may be considered at any point during the year.

The Corporate Governance and Nominating Committee may take such measures as it considers appropriate in connection with its evaluation of a candidate, including candidate interviews, inquiry of the person recommending the candidate or reliance on the knowledge of the members of the Corporate Governance and Nominating Committee, members of the Board or management. The Corporate Governance and Nominating Committee has hired, from time to time, a consulting firm to assist it in identifying and screening potential candidates for election to the Board.

In evaluating a candidate, the Corporate Governance and Nominating Committee may consider a variety of criteria. These criteria include, without limitation:

While the Corporate Governance and Nominating Committee does not have a formal policy with respect to diversity, the Corporate Governance and Nominating Committee seeks nominees with a broad diversity of experiences, professions, skills, geographic representation and backgrounds, including racial, ethnic and gender diversity, and considers relevant legal requirements relating to diversity.

The Corporate Governance and Nominating Committee evaluates these factors, among others, and does not assign any particular weighting or priority to any of these factors. The Corporate Governance and Nominating Committee requires the following minimum qualifications to be satisfied by any nominee for a position on the Board of Directors:

With respect to the nomination of continuing directors for re-election, the individual’s historical and ongoing contributions to the Board are also considered. The Corporate Governance and Nominating Committee may also consider such other factors as it may deem, from time to time, are in our and our stockholders’ best interests.

The Board believes that the backgrounds and qualifications of the directors, considered as a group, should provide a significant composite mix of experience, knowledge and abilities that will allow the Board to best fulfill its responsibilities. Nominees are not discriminated against on the basis of race, religion, national origin, gender, age, sexual orientation, disability or any other basis proscribed by law.

The Corporate Governance and Nominating Committee has not set either term limits or age limits for members of the Board, believing that the Company’s interests are best served by members of the Board with substantial experience and knowledge of the Company’s business and that age is generally not a barrier to effective performance as a member of the Board.

Director Recommendations and Nominations from Stockholders

The Corporate Governance and Nominating Committee will consider recommendations from stockholders of individuals for service on the Board of Directors at our 2025 annual meeting of stockholders, provided that such recommendations are submitted in a timely manner in writing to the Corporate Secretary of the Company at Harmonic Inc., 2590 Orchard Parkway, San Jose, California 95131. If a stockholder desires to recommend an individual for consideration by the Corporate Governance and Nominating Committee for nomination by the Board, such recommendation must be received no later than December 30, 2024, which is 120 calendar days prior to the first anniversary of the date this Proxy Statement first became available to stockholders. In evaluating director candidates recommended by stockholders, the Corporate Governance and Nominating Committee will use the same criteria as it uses to evaluate all prospective members of the Board.

Under our amended and restated bylaws, stockholders may also directly nominate persons for our Board of Directors. Any nomination must comply with the requirements set forth in our amended and restated bylaws and Rule 14a-19 and should be sent in writing to the Corporate Secretary of the Company at Harmonic Inc., 2590 Orchard Parkway, San Jose, California 95131. To be timely for our 2025 annual meeting of stockholders, nominations must be delivered to the Corporate Secretary of the Company no earlier than February 11, 2025 and no later than March 13, 2025.

Our amended and restated bylaws are available on the Company’s website at www.harmonicinc.com in the Corporate Governance section of the Investor Relations page.

Board Diversity Matrix

The gender identity and demographic background of our directors as of April 1, 2024, based on self-identification, is set forth in the table below.

Director Compensation

As compensation for its non-employee directors, Harmonic uses a combination of cash and equity-based incentive compensation. Directors who are employees of the Company do not receive additional compensation for their service as directors. Mr. Harshman receives no compensation for his service as a director and compensation earned by Mr. Harshman for his service as CEO is shown in the Summary Compensation Table on page 48 of this Proxy Statement.

The 2023 non-employee director compensation program was developed in consultation with Compensia, Inc. (“Compensia”), an independent compensation consulting firm. Compensia provided recommendations and competitive non-employee director compensation data and analyses. The Corporate Governance and Nominating Committee considered and discussed these recommendations and data, and considered the specific duties and committee responsibilities of particular directors. The Corporate Governance and Nominating Committee recommended, and the Board adopted, Compensia’s recommendations when it approved the 2023 non-employee director compensation program described below. We believe the program provides our non-employee directors with reasonable and appropriate compensation that is commensurate with the services they provide and competitive with compensation paid by our peers to their non-employee directors.

The Corporate Governance and Nominating Committee periodically reviews the type and form of compensation paid to our non-employee directors, which includes a market assessment and analysis by Compensia. As part of this analysis, Compensia reviews non-employee director compensation trends and data from companies comprising the same peer group used by the Compensation Committee in connection with its review of Harmonic’s executive compensation.

Cash Compensation. Board and Board committee retainers are paid quarterly. No additional fees were paid for attending in-person or telephonic meetings of the Board or its committees.

Equity Compensation. The 2002 Director Stock Plan, as amended (the “2002 Plan”), currently provides for grants of stock options or restricted stock units (“RSUs”) to be made in three ways:

We maintain a policy that enables our non-employee directors to elect to defer the receipt of RSUs granted as Initial Grants or Annual Grants. If so elected, 100% of the RSUs subject to such Initial Grant or Annual Grant (as applicable), to the extent vested, will be deferred and paid within 60 days following the earliest to occur of (i) a change in control (as defined within the policy), (ii) the director’s separation from service (as defined under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”)), and (iii) the director’s death, subject to any required six-month delay required under Section 409A of the Code. Non-employee directors may elect to defer their Annual Grants before the end of the calendar year to which such grants relate. Unless revoked under the policy’s terms, a deferral election will remain in effect with respect to Annual Grants made in future years.

2023 Director Compensation

Outstanding Equity Awards as of December 31, 2023

The following table provides the number of shares of Common Stock subject to RSUs held by non-employee directors of the Company as of December 31, 2023, with no stock options outstanding.

Non-Employee Director Stock Ownership Policy

Under the Board’s non-employee director stock ownership policy, each non-employee director is required to beneficially own shares of Common Stock with a market value equal to at least $175,000 (excluding, for the purposes of this calculation, the value of stock options exercisable within 60 days) by the later of the Company’s 2018 annual meeting of stockholders or the fifth anniversary of the director’s election to the Board. As of April 1, 2024, each non-employee director is in compliance with these guidelines or is on track to be in compliance with these guidelines by the applicable deadline.

Communication with the Board of Directors

The Board believes that management should be the primary means of communication between the Company and all of its constituencies, including stockholders, customers, suppliers and employees. However, stockholders may communicate with individual members of the Board, committees of the Board, or the full Board by addressing correspondence to Harmonic Inc., 2590 Orchard Parkway, San Jose, California 95131, Attention: Corporate Secretary. Our Corporate Secretary or legal department, in consultation with appropriate members of the Board as necessary, will review all incoming communications and, if appropriate, such communications will be forwarded to the appropriate member or members of our Board.

Environmental, Social and Governance (ESG) Practices

We are committed to delivering a corporate culture that honors our values and principles, that fosters a culture of inclusion, equity and diversity, and that promotes sustainable operations to benefit the environment and the lives of our stakeholders. Our environmental, social and governance (ESG) commitment includes ethics and governance, human capital management, supply chain partnerships and environmental protection. We believe that the expectations of all of our stakeholders, from investors to employees to the people in the communities where we operate, must be acknowledged and addressed through these commitments. Therefore, we work to embed these commitments into our operating structure, to measure our progress and to continuously improve. We are proud to report on some of our efforts and initiatives in ESG including those listed below.

Corporate Social Responsibility Report

Additional information regarding our activities related to environmental, social and governance, can be found in our latest Corporate Social Responsibility Report (“CSR Report”), which is located on our website at www.harmonicinc.com/corporate-responsibility/responsible-business/. This website address is intended to be an inactive textual reference only. None of the information on, or accessible through, our website is part of this proxy statement or is incorporated by reference herein.

ESG Governance at Harmonic

The Corporate Governance and Nominating Committee is responsible for reviewing the Company’s ethics and governance practices and performance, as well as aspects related to diversity, equity and inclusion, human capital management and environmental performance. The Board receives updates on ESG areas from executive management on a regular basis.

Harmonic has an ESG Advisory Committee co-chaired by our General Counsel and Senior Vice President of Human Resources and our Senior Vice President, Operations and IT. The ESG Advisory Committee is comprised of executives and senior managers from across our corporate functions, including corporate marketing, human resources, operations, facilities, legal and procurement. The ESG Advisory

Committee is responsible for assessing ESG risks and opportunities, identifying best practices and management initiatives to address these risks and opportunities, and disseminating those practices into implementation tasks and guidance throughout the Company. In addition, the ESG Advisory Committee is responsible for providing updates on ESG performance to our executive management team, our Board and external stakeholders through public disclosures.

 

Ethics and Governance

We are committed to the highest standards of ethical integrity. Our approach to ethical standards is documented in our Code of Business Conduct and Ethics (the “CBCE”), which applies to all of Harmonic’s employees, officers, directors, consultants, contractors and agents. The CBCE provide rules of practice on ethical conduct and anti-corruption, conflicts of interest, compliance and communications. The CBCE sets the expectation that all Harmonic personnel and business partners live up to our commitments to Act in Good Faith, Act Ethically and Comply with the Law.

In addition to the CBCE, we also extend our ethical standards to our suppliers and their employees through our Supplier Code of Conduct, and to our reseller, distributor and service provider partners and their employees through our Business Partner Code of Conduct (and together with the CBCE and the Supplier Code of Conduct, the “Codes”). Our Supplier Code of Conduct requires our suppliers to adopt and adhere to the social, environmental and ethical industry standards set forth in the Responsible Business Alliance (RBA) Code of Conduct (formerly known as the Electronic Industry Citizenship Code of Conduct). Our Business Partner Code of Conduct emphasizes ethical and legal compliance in all business practices, and strict adherence to ethical labor and employment rules and principles.

The Codes all provide for procedures for reporting potential violations internally or through an anonymous whistleblower hotline, and both the Supplier Code of Conduct and Business Partner Code of Conduct provide for compliance audits by Harmonic. The Codes are available on our website at www.harmonicinc.com/corporatesocialresponsibility.

Human Dignity and Equality

The CBCE establishes expectations for a harassment-free and safe workplace. Harmonic is committed to ensuring that our working conditions and practices inspire trust and respect, empower our people to do their best work, and do not infringe in any way on the inherent dignity of our employees and personnel. We prohibit all abuse, harassment and other unprofessional conduct, and any discrimination during employment or hiring on the basis of gender, race, color, national origin, ancestry, citizenship, religion, age, physical or mental disability, medical condition, genetic information, pregnancy, sexual orientation, gender identity or gender expression, veteran status, or marital status or any other legally protected status.

Fair Labor Practices

In 2020, our Board approved a Human Rights and Labor Practices Policy. The policy commits Harmonic to prevent any forced labor in our operations. Looking forward, Harmonic intends to further promulgate these expectations and to condemn all forced or coercive labor practices throughout our value chain. The policy also clearly states our commitment to fair practices in hiring and termination as well as adhering to fair wage practices where no wage law is in existence. Harmonic follows internationally recognized practices and principles regarding the employment of young persons imposed by local legislation. The Human Rights and Labor Practices Policy is available on our website at www.harmonicinc.com under Corporate Responsibility.

Human Capital Management

Our success depends on our ability to attract and retain talented and skilled employees. We focus on creating a safe, welcoming and inclusive work environment where employees can be productive and innovative.

Health and Safety

Harmonic complies with all applicable health and safety laws and regulations in all countries where it operates. In addition, our internal guidelines and directives take precedence over locally applicable laws and regulations whenever they exceed local requirements. We engage with our employees, contractors, partners and customers to maintain a healthy and safe workplace for our personnel, wherever they are needed to conduct their work.

Diversity, Equity and Inclusion (DEI)

Building an inclusive workforce is critical to our ability to continuously innovate and provide our customers with outstanding products and services, enabling growth and the delivery of sustained shareholder value. Therefore, we invest in inclusion and diversity initiatives as well as professional development opportunities for employees across the Company. In addition, senior management regularly shares perspectives and priorities on the promotion of diversity across the company through e-newsletters and other communications. We also believe our employees are the true leaders in building an inclusive and diverse culture. Groups of employees based in Harmonic locations around the world have volunteered to support a variety of community impact initiatives, including programs to engage youth from underrepresented groups in technology and business, mentoring and internship programs, refugee integration initiatives, and contributing to various charitable organizations.

Training and Professional Development

An expert, creative and innovative workforce is fundamental to the success of Harmonic. Therefore, we invest in employee professional development and training. Harmonic has partnered with third party e-learning platforms to offer thousands of online courses to employees across a wide range of topic areas. In addition, we provide in-person product, technical and management training and coaching in various locations, and we conduct regular training with employees on a variety of topics critical to the functioning of the business including cybersecurity, regulatory matters, health and safety, and DEI. Employees are also annually trained on the content of the Code of Business Conduct and Ethics to ensure compliance with ethical business practices.

Responsible Supply Chain

In addition to the expectations for our suppliers and partners set forth in the Supplier Code of Conduct and Business Partner Code of Conduct, Harmonic has identified several performance expectations for key suppliers, including conflict mineral identification, health and safety, cybersecurity and environmental performance of products, and we continue to work with our key suppliers around these topics.

Environmental Responsibility and Sustainability

In our Broadband business, our cOS^™ software-based broadband access solutions, which can be deployed based on a centralized, distributed access or hybrid architecture, can drastically reduce the energy consumption, carbon emissions and physical footprint of our customers’ facilities, compared to legacy solutions.

In our Video business, Harmonic’s VOS^®360 software-as-a-service (SaaS) platforms provide both streaming and channel origination and distribution services in a public cloud environment. Compared to purchasing and maintaining dedicated equipment, our customers can significantly lower the resource and energy usage, and carbon emissions, of their video delivery operations when they adopt our SaaS solutions. By using our SaaS solutions, our customers leverage the greater efficiency of public clouds enabled by dynamic provisioning, multi-tenancy, high server utilization and advanced data center operations.

Our software-based video processing appliances continue to increase in efficiency, performance and density, enabling our customers to scale operations with fewer rack units and less energy consumption, when compared to earlier versions of our appliance products.

We also recognize that our products and our operations have environmental impacts and so we are committed to exploring methods to continually improve our own environmental performance. Our Environmental Responsibility and Sustainability Policy describes our commitments to reducing environmental impact, particularly relating to energy usage and carbon emissions, while seeking more environmentally friendly alternatives in our supplied products. Harmonic has also provided educational resources to raise the awareness of employees on environmental issues. In addition, we are committed to complying with applicable environmental regulations and have published an Environmental Compliance Statement, as well as a Conflict Minerals Policy and 2022 Conflict Minerals Report, on our website at www.harmonicinc.com under Corporate Responsibility. Our Environmental Responsibility and Sustainability Policy is also available on our Corporate Responsibility page.

Energy and emissions

Our primary operational energy use and emissions come from the electricity that we source for our offices. We have worked to reduce energy usage at our offices, including our on-site data centers. We have also focused on assessing the carbon emissions associated with transporting and shipping our products to customers around the world, and implementing strategies to reduce those emissions, primarily by maximizing sea shipments and minimizing air freight. We have embraced videoconferencing to reduce the need for business travel and to enable longer-term work-from-home flexibility and hybrid work policies at key locations. When employees do commute, we encourage more efficient transportation modes at certain sites such as public transportation, bicycles and electric or electric-hybrid vehicles.

Waste

We seek to reduce waste across our operations. Our main focus has been on recycling initiatives, from paper to electronics. Harmonic is committed to recycling or re-using materials whenever practicable, in particular in our site operations with consumables and in packaging for the supply chain.

Cybersecurity

Cybersecurity is critical to our business operations and service offerings, and we regularly review and invest in our corporate infrastructure and product security capabilities. The Audit Committee oversees Harmonic’s cybersecurity controls and performance through regular updates from executive management and reviews of governance processes, security-related programs, performance data, potential or realized security breach information, audit and validation results, and controls to help mitigate cybersecurity risks.

At the executive management level, cybersecurity is overseen by Harmonic’s Chief Cybersecurity Officer. In addition, Harmonic management works closely with the Audit Committee to regularly benchmark and update cybersecurity efforts to assess best practices and emerging regulatory requirements.

Our cybersecurity program includes controls to protect the confidentiality of data and the integrity of assets, such as security monitoring and alerts to identify internal and external threats, enhanced phishing and malware protections, data and source code access management systems, mandatory employee training and regular communications to increase cybersecurity threat awareness, and incidence response processes to respond to any potential security breaches as quickly as possible.

PROPOSAL 2:

ADVISORY VOTE ON NEO COMPENSATION

Pursuant to Section 14A of the Exchange Act of 1934 as promulgated by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, we are asking stockholders to vote on the compensation of our named executive officers (the “NEOs”), as named in accordance with applicable SEC rules, on page 37 of this Proxy Statement. This Proposal 2, commonly known as a “say-on-pay” proposal, gives our stockholders the opportunity to express their views on our NEOs’ compensation as a whole. This vote is not intended to address any specific item of compensation or any specific named executive officer, but rather the overall compensation of all of our NEOs and the named executive officer compensation philosophy, policies and practices described in this Proxy Statement.

The say-on-pay vote is advisory, and therefore not binding on the Company, the Compensation Committee or the Board. The say-on-pay vote will, however, provide information to us regarding investor sentiment about our NEO compensation philosophy, policies and practices, which the Compensation Committee will be able to consider when determining NEO compensation for the remainder of the current fiscal year and for future fiscal years. Our Board and Compensation Committee value the opinions of our stockholders, and, to the extent there is any significant vote against the NEO compensation as disclosed in this Proxy Statement, we will consider our stockholders’ concerns and the Compensation Committee will evaluate whether any action is necessary to address those concerns. At our 2023 annual meeting, our stockholders approved the compensation of our NEOs, with approximately 97% of the shares present and entitled to vote voting in favor of the say-on-pay proposal. As we evaluated our compensation practices and talent needs throughout 2023, we were mindful of the support our stockholders expressed for our philosophy of linking compensation to our financial goals and in support of enhancing stockholder value. As a result, the Compensation Committee decided to retain our general approach with respect to our NEO compensation programs, with an emphasis on delivering long-term and short-term incentive compensation that reward our executives commensurate with the value they deliver to our stockholders. Since 2011, we have held an advisory vote to approve NEO compensation each year, and the next such advisory vote will occur at our 2025 annual meeting.

The Company’s goal for its NEO compensation program is to attract, motivate and retain a talented and creative team of executives who will contribute significantly to the long-term success of the Company and the enhancement of stockholder value. As described in the “Compensation Discussion and Analysis” and “Executive Compensation” sections beginning on pages 38 and 48, respectively, of this Proxy Statement, we believe that our NEO compensation program was designed appropriately and is working to ensure management’s interests are aligned with our stockholders’ interests to support long-term value creation. We would like to highlight the following items that support these beliefs:

Accordingly, we ask our stockholders to vote “FOR” the following resolution at the Annual Meeting:

“RESOLVED, that the Company’s stockholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in the Company’s Proxy Statement for the Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the compensation tables and the other related disclosure.”

PROPOSAL 3:

APPROVAL OF AMENDMENT TO 2002 EMPLOYEE

STOCK PURCHASE PLAN

The Company’s stockholders are being asked to approve a 400,000 share increase in the number of shares of Common Stock reserved for issuance under the Company’s 2002 Employee Stock Purchase Plan (the “ESPP”).

The ESPP was adopted by the Board of Directors in March 2002 and was approved by our stockholders in May 2002. The ESPP, as initially approved, permitted the issuance of 1,500,000 shares of Common Stock. Amendments to the ESPP, adopted in May 2004, May 2006, May 2009, July 2011, August 2013, July 2014, June 2016, June 2017, June 2018, June 2019, June 2020, June 2021, June 2022 and June 2023 increased the maximum number of shares available for issuance under the ESPP by an additional 18,950,000 shares in the aggregate, resulting in 20,450,000 shares of Common Stock permitted for issuance under the ESPP. As of March 31, 2024, there were 967,738 shares of Common Stock currently available for issuance under the ESPP.

In April 2024, the Board of Directors unanimously approved an amendment to the ESPP, subject to obtaining stockholder approval, to increase the number of shares of Common Stock available for issuance under the ESPP by 400,000 shares. The ESPP has not been amended in any material way, other than to increase the number of shares of Common Stock available for issuance under the ESPP, since our stockholders last approved the ESPP at our 2023 annual meeting of stockholders. If this proposal is approved by our stockholders, the shares reserved and available for issuance under the ESPP for the current offering period and for offering periods commencing on or after July 1, 2024, will be increased by 400,000 shares. Based on the Company’s current forecasts and estimated participation rates, the Company expects that with this increase, the ESPP will have enough shares of Common Stock to cover ESPP purchases through July 2025. However, the actual period over which such shares will be sufficient to cover ESPP purchases will be impacted by the actual number of shares that will be purchased under the ESPP, which will depend on various factors including, for example, the number of participants, each participant’s contribution rate, and our stock price.

If this proposal is not approved by the Company’s stockholders, the shares reserved and available for issuance under the ESPP will be 967,738, and, based on current forecasts and estimated participation rates, the Company anticipates this may only be enough shares of Common Stock to fully cover ESPP purchases through January 2025.

We maintain the ESPP in order to encourage employees to acquire equity ownership in the Company in an effort to promote the closer alignment of the interests of employees with those of the Company’s stockholders. The proposed increase in the number of shares available for issuance under the ESPP will enable the Company to continue to use the ESPP as a valuable tool for attracting and retaining key personnel and aligning the interests of ESPP participants with those of the Company’s stockholders. We believe that the ESPP remains an important element of a competitive compensation package, especially for technology companies, as these plans are offered by many public companies with which we compete for employees. Approximately 49% of our employees eligible to participate in the ESPP during the offering period ending July 1, 2024 are participating in the ESPP.

Description of the ESPP

The following is a summary of the principal features of the ESPP and its operation. This summary is qualified in its entirety by reference to the ESPP, a copy of which is appended as Appendix A.

Purpose. The purpose of the ESPP is to provide employees with an opportunity to purchase Common Stock through payroll deductions.

Administration. The ESPP is administered by the Board or a committee of the Board appointed by the Board (in either case, the “ESPP Administrator”). The ESPP Administrator has full and exclusive discretionary authority to construe, interpret and apply the terms of the ESPP, and the ESPP Administrator’s findings, decisions, and determinations are final and binding upon all parties to the full extent permitted by law. The ESPP is intended to qualify under the provisions of Section 423 of the Code, provided that the ESPP Administrator may permit participation in the ESPP in a component of the ESPP that does not so qualify, in order to accommodate the specific requirements of local laws, regulations and procedures for jurisdictions outside of the U.S. in accordance with the terms of the ESPP.

Eligibility. Employees of the Company or any Company subsidiary or affiliate (referring to an entity that directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with the Company, but only with respect to the component of the ESPP that does not qualify under the provisions of Code Section 423) designated by the ESPP Administrator are eligible to participate in the ESPP, provided further that the employee’s customary employment with the Company or the designated subsidiary or affiliate is at least 20 hours per week and more than five months in any calendar year, unless required otherwise by applicable law. As of

the beginning of the current offering period on January 1, 2024, approximately 1,332 employees were eligible to participate in the ESPP. No employee who immediately following the grant of a purchase right under the ESPP, would own stock and/or hold outstanding options to purchase stock that is equal to or greater than 5% of the total combined voting power or value of all classes of stock of ours or any of our subsidiaries, may participate in the ESPP. Moreover, no employee may participate to the extent that he or she may purchase Common Stock at a rate, taking into account all employee stock purchase plans of the Company, that exceeds $25,000 (based on fair market value of the Common Stock determined on the first day of any offering period) for each calendar year that the purchase right remains outstanding.

Shares Available for Issuance. Subject to adjustment upon certain changes in the Company’s capitalization as described in the ESPP, the maximum number of shares of Common Stock that may be issued under the ESPP is 20,450,000 shares. If our stockholders approve this proposal, an additional 400,000 shares will become reserved and available for issuance in the current offering period and for offering periods commencing on or after July 1, 2024, resulting in a maximum number of shares of Common Stock that may be issued under the ESPP equal to 20,850,000. As of March 31, 2024, there were 967,738 shares of Common Stock available for issuance under the ESPP, a significant percentage of which are expected to be issued on the next purchase date on July 1, 2024, after the end of the current offering period.

Offering Period. The ESPP currently has consecutive offering periods that have a duration of approximately six months, commencing on the first trading day for Common Stock on or after each January 1 and July 1 and terminating on the last trading day of the offering period ending approximately six months thereafter. Our Board of Directors has the power to change the commencement date and the duration of future offering periods without stockholder approval, if such change is announced prior to the scheduled beginning of the first offering period to be affected by such change. Each offering period constitutes a purchase period during which shares of Common Stock may be purchased on behalf of the participants in accordance with the terms of the ESPP.

Participation. To participate in an offering period under the ESPP, an individual who is an eligible employee on the first day of such offering period must authorize payroll deductions pursuant to the ESPP by a written subscription agreement authorizing payroll deductions that is filed with our payroll office at least five (5) days before the first day of such offering period, or as otherwise determined by the ESPP Administrator. A participant’s subscription agreement will remain in effect for successive offering periods unless terminated by the participant.

Payroll deductions are withheld only in whole percentages of the participant’s compensation and cannot exceed 10% of a participant’s compensation that she or he receives on each pay day during the offering period. Payroll deductions for an offering period commence on the first pay day following the first day of the offering period and end on the last day of the offering period, unless sooner terminated by the participant. If a pay day occurs on the last day of an offering period under the ESPP, the amount deducted on that day will be applied to the new offering period. Amounts withheld from a participant’s payroll are credited to the participant’s account under the ESPP. No interest will accrue on this account, unless otherwise required under applicable law. Statements of account will be provided to participants at least annually.

A participant may not make any additional payments into her or his account other than by payroll deductions, except that to the extent the Administrator determines that payroll deductions are prohibited or otherwise problematic under applicable law, the ESPP Administrator may require contributions by other means it determines. To the extent necessary to comply with applicable requirements under Section 423 of the Code, and eligibility limitations pursuant to the ESPP, a participant’s payroll deductions may be decreased to zero at any time during an offering period.

A participant may decrease, but not increase, the rate of payroll deductions during an offering period. However, the ESPP Administrator may, in its discretion, limit the nature and/or number of participant rate changes during any offering period.

Grant. The number of shares of Common Stock a participant purchases in each offering period is determined by dividing the total amount of payroll deductions withheld from the participant’s compensation during the offering period by the purchase price. However, a participant may purchase no more than 1,500 shares in any offering period (or in the event that any offering periods will provide for more than one purchase date, then limited to 1,500 shares in any purchase period). The ESPP Administrator, in its discretion, may increase or decrease the maximum number of shares of Common Stock that participants may purchase in future offering periods (and for any purchase periods in such future offering periods).

Purchase Price; Exercise. The Internal Revenue Service views participants in our ESPP as receiving options. The price per share of the shares subject to the option, as permitted by the Code, is the lower of (i) 85% of the fair market value of a share of Common Stock on the first day of the offering period, or (ii) 85% of the fair market value of a share of Common Stock on the purchase date, which is the last day of the offering period. Unless a participant withdraws from the ESPP or her or his employment terminates with us or a designated subsidiary, the participant’s option for the purchase of shares is exercised automatically on each purchase date, with shares issued as

soon as reasonably practicable thereafter. Until the shares are issued, a participant will have only the rights of an unsecured creditor with respect to such shares, and no right to vote or receive dividends, or other rights as a stockholder. No fractional shares may be purchased, and any accumulated payroll deductions not sufficient to purchase a full share are retained in the participant’s account for the subsequent offering period Any other funds left over after the purchase of shares are returned to the participant.

If the number of shares with respect to which options are to be exercised exceed shares available for sale under the ESPP on a purchase date or commencement of an offering period, the ESPP Administrator may, in its sole discretion, make a pro rata allocation of the shares available for purchase and either continue the offering period then in effect or terminate the offering period then in effect. The ESPP Administrator may make such pro rata allocation of shares notwithstanding any authorization of additional shares for issuance under the ESPP by our stockholders subsequent to the commencement of an offering period. During a participant’s lifetime, the participant’s option under the ESPP is exercisable only by such participant. In addition, neither the payroll deductions credited to a participant’s account nor any rights to exercise or receive shares under the ESPP may be transferred or disposed of in any way, other than by will, the laws of descent and distribution or beneficiary designation, by the participant.

Tax Withholding. At the time a participant realizes income in connection with the ESPP, including with respect to any sale or early disposition of shares by the participant, the participant must make adequate provision for any tax withholding obligations, if any, of the Company or the applicable subsidiary or affiliate employing the participant, and the Company or applicable subsidiary or affiliate may withhold any necessary amounts from the participant’s compensation. The Company or applicable subsidiary or affiliate may withhold from the proceeds of the sale of common stock or any other method that it deems appropriate (to the extent permitted under Section 423 of the Code for options intended to qualify for treatment under that section).

Withdrawal; Termination of Employment. A participant may withdraw all, but not less than all, the payroll deductions credited to her or his account, and not yet used to exercise her or his option, under the ESPP at any time by written notice to the Company. If a participant withdraws from an offering period, no further payroll deductions by the participant will be made during the offering period and payroll deductions will not automatically resume at the beginning of the succeeding offering period. Additionally, payroll deductions credited to the participant’s account during the offering period, but not yet used to exercise the option, will be returned to the participant or, in the case of her or his death, to the person or persons entitled thereto, and the participant’s option will automatically terminate. Withdrawal from an offering period has no effect upon a participant’s eligibility to participate in subsequent offering periods. If a participant fails to remain as our employee or an employee of a designated subsidiary, or otherwise ceases to meet the ESPP eligibility requirements, she or he is deemed to have withdrawn from the ESPP. A designated subsidiary generally refers to a subsidiary or in certain limited cases other affiliate of the Company selected by the ESPP Administrator as eligible to participate in the ESPP.

Adjustments upon Changes in Capitalization and Certain Transactions. Any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse, stock split, stock dividend, combination or reclassification of Common Stock or any other change in the number of shares of Common Stock effected without the Company receiving consideration will proportionately adjust the:

Any other issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, will not affect the number or price of shares of Common Stock subject to an ESPP option.

In the event of a proposed dissolution or liquidation of the Company, an offering period then in progress will be shortened by setting a new purchase date, and terminated immediately prior to the consummation of the proposed dissolution or liquidation, unless the ESPP Administrator provides otherwise. The ESPP Administrator will notify each participant in writing at least ten business days prior to the new purchase date that her or his option will be automatically exercised on the new purchase date, unless prior to such date the participant has withdrawn from the offering period.

In the event of a merger or change of control of the Company, each outstanding option under the ESPP will be assumed or an equivalent option substituted by the successor corporation or a parent or subsidiary of the successor corporation. If the successor corporation refuses to assume, or substitute for, the option, any purchase period then in progress under the ESPP is shortened by setting a new

purchase date to occur before merger or change of control, and any offering period then in progress under the ESPP is terminated before the date of the proposed merger or change of control. The Administrator will notify each participant in writing at least ten business days prior to the new purchase date that her or his option will be automatically exercised on the new purchase date, unless prior to such date the participant has withdrawn from the offering period.

Amendment or Termination. The ESPP Administrator may, at any time and for any reason, terminate or amend the ESPP, except that no terminations can affect options previously granted, other than certain terminations specified in the ESPP. However, the ESPP Administrator may terminate an offering period on any exercise date if the ESPP Administrator determines that the termination of the Offering Period or the ESPP is in the best interests of the Company or its stockholders. The ESPP will continue in effect until terminated by the ESPP Administrator. Without stockholder approval and without regard to whether any participant rights may be considered to have been adversely affected, the ESPP Administrator is entitled to:

In the event the ESPP Administrator determines that the ongoing operation of the ESPP may result in unfavorable financial accounting consequences, the Board of Directors may, in its discretion, without stockholder approval or the consent of any participant, and to the extent necessary or desirable, modify or amend the ESPP to reduce or eliminate such accounting consequence, including, without limitation, by (i) increasing the purchase price for any offering period, including an offering period underway at the time of action by the Board of Directors, (ii) shortening any offering period so that offering period ends on a new purchase date, including an offering period underway at the time of the action by the Board of Directors, and (iii) allocating shares.

Number of Shares Purchased by Certain Individuals and Groups

Given that the number of shares that may be purchased under the ESPP is determined, in part, by the Common Stock’s market value at the beginning and end of each offering period (or upon a purchase date within an offering period), and given that participation in the ESPP is voluntary on the part of employees, the actual number of shares that may be purchased by any individual is not determinable. The following table sets forth (a) the number of shares of Common Stock that were purchased under the ESPP during fiscal year 2023 by each of our NEOs, our current executive officers as a group, our non-employee directors as a group, and our employees, including all current officers who are not executive officers, as a group, and (b) the weighted average per share purchase price paid for such shares by each such NEO or group. As of March 28, 2024, the per share closing price of our Common Stock as quoted on the Nasdaq Global Select Market was $13.44. Our NEOs have an interest in this proposal as they are eligible to participate in the ESPP. Our non-employee directors are not eligible to participate in the ESPP.

Summary of U.S. Federal Income Tax Consequences

The following brief summary is intended only as a general guide to the material U.S. federal tax consequences upon a participant and the Company with respect to the shares purchased under the ESPP. The summary is based on existing U.S. federal income tax laws and regulations, and there can be no assurance that those laws and regulations will not change in the future. The summary does not purport to be complete and does not discuss the tax consequences upon a participant’s death, or the provisions of the tax laws of any municipality, state or non-U.S. jurisdiction to which the participant may be subject. As a result, tax consequences for any particular participant may vary based on individual circumstances.

The ESPP, and the right of participants to make purchases thereunder, is intended to qualify under the provisions of Section 423 of the Code. Under an employee stock purchase plan which so qualifies, a participant generally will not have taxable income upon either the grant of the purchase right or at the time the shares of Common Stock are purchased, but the employee generally will have taxable income when the employee sells or otherwise disposes of shares purchased under such qualifying plan.

Upon sale or other disposition of the shares, the participant will generally be subject to tax in an amount that depends upon the holding period. If the shares are sold or otherwise disposed of more than two years from the first day of the applicable offering period and more than one year from the applicable purchase date, the participant will recognize ordinary income measured as the lesser of (a) the excess of the fair market value of the shares at the time of such sale or disposition over the purchase price, or (b) an amount equal to 15% of the fair market value of the shares as of the first day of the applicable offering period. Any additional gain will be treated as long-term capital gain. Alternatively, if the fair market value of the shares on the date of the sale or disposition is less than the purchase price, there will be no ordinary income and any loss recognized will be a long-term capital loss.

If the shares are sold or otherwise disposed of before the expiration of either of these holding periods, the participant will recognize ordinary income generally measured as the excess of the fair market value of the shares, on the date the shares are purchased, over the purchase price. Any additional gain or loss on such sale or disposition will be capital gain or loss. If the shares have been held for more than one year since the date of purchase, the gain or loss will be long-term. If not, the gain or loss will be short-term.

The Company generally is not entitled to a deduction for amounts taxed as ordinary income or capital gain to a participant with respect to such a sale or disposition, except to the extent of ordinary income recognized by participants upon sale or disposition of shares prior to the expiration of the holding periods described above.

PROPOSAL 4:

APPROVAL OF AMENDMENT TO 1995 STOCK PLAN

The Company’s stockholders are being asked to approve an amendment to the 1995 Stock Plan (the “1995 Plan”) which would (i) increase the number of shares of common stock reserved for issuance under the 1995 Plan by 5,000,000 shares and (ii) extend the term of the 1995 Plan to March 1, 2030. The 1995 Plan is the only equity plan of the Company available for granting equity awards to employees of the Company (aside from participation in the ESPP). If this share increase is not approved, then the remaining shares available for grants under the 1995 Plan will be insufficient to meet the Company’s grant needs through 2025.

The 1995 Plan currently permits us to grant a broad range of equity awards to eligible employees and consultants of the Company. We established the 1995 Plan in order to assist the Company in attracting, retaining and motivating the best available personnel for the successful conduct and growth of the Company’s business. The Company believes that the 1995 Plan is an essential tool to link the long-term interests of stockholders and employees and serves to motivate its officers and other employees to make decisions that will, in the long run, give the best returns to stockholders. The Company has, therefore, consistently included equity incentives as a significant component of compensation for a broad range of the Company’s employees. In addition, the Company believes this practice is critical to the Company’s ability to attract and retain employees in highly competitive markets for managerial and technical talent. The Company’s key sites in California (Silicon Valley), Israel, Hong Kong, France and certain other locations expose it to particularly intense competition in the labor market from both private and public companies. Equity incentives are offered by most companies with which the Company competes for employees, and the Company believes it is essential to provide equity awards to both new and existing employees.

In April 2024, our Board of Directors approved amending the 1995 Plan, subject to stockholder approval at the Annual Meeting. The proposed amendment would increase the number of shares reserved for issuance under the 1995 Plan by 5,000,000 shares and based on the data available as of April 1, 2024, the additional shares would increase the total number of shares available for grant under the 1995 Plan to 9,223,442.

The NEOs have an interest in this proposal as they may receive awards under the 1995 Plan from time to time.

Equity Plan Information as of April 1, 2024

1995 Plan Information as of April 1, 2024

Historical Grants under All Equity Plans

(in thousands)

Based on the data shown above, if grants during 2024 are made according to the historical average, it is likely that there would be insufficient shares available in the 1995 Plan to meet our regular grant needs through 2025.

DESCRIPTION OF 1995 PLAN

The following is a summary of the principal features of the 1995 Plan and its operation. This summary is qualified in its entirety by reference to the 1995 Plan, a copy of which is appended as Appendix B.

Purposes

The purposes of the 1995 Plan are to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to employees and consultants, and to promote the success of the Company’s business.

Term

The 1995 Plan is set to expire on March 1, 2025. However, if the proposed amendment is approved, the 1995 Plan would expire on March 1, 2030.

Types of Awards

The 1995 Plan provides for the grant of options to purchase shares of our Common Stock, stock appreciation rights (“SARs”), restricted stock (which under the 1995 Plan are units to acquire shares) (“RSUs”), performance shares (“Performance Shares”), performance units (“Performance Units”) and deferred stock units (“Deferred Stock Units”). Options granted under the 1995 Plan may either be “incentive stock options”, as defined in Section 422 of the Code (to employees only), or nonstatutory stock options.

Shares Subject to the Plan

Subject to the adjustment provisions of the 1995 Plan, the maximum number of shares of our common stock that may be issued pursuant to awards under the 1995 Plan is 54,900,000 shares of our common stock, plus (i) up to an additional maximum of 1,800,000 shares subject to options under our 1999 Non-Statutory Stock Plan that were outstanding as of May 27, 2004, that expired unexercised. Pursuant to the proposed amendment to the 1995 Plan, our stockholders are being asked to approve an increase of 5,000,000 shares to the maximum number of shares that may be issued pursuant to awards granted under the 1995 Plan. If our stockholders approve this proposed amendment, then the maximum number of shares that may be issued pursuant to awards under the 1995 Plan will be increased to 59,900,000 shares, plus the number of shares described in clause (i) above.

Each full value award (i.e. awards granted with an exercise price less than the fair market value on the date of grant) granted on or after June 5, 2019 will count against the share reserve under the 1995 Plan as one share for every share or unit granted. However, historically, full value awards granted prior to June 5, 2019, were counted against the share reserve under the 1995 Plan as 1.5 shares for every one share or unit granted. Full value awards granted prior to June 5, 2019, that debited 1.5 shares against the 1995 Plan share reserve for every share or unit return 1.5 shares to the 1995 Plan reserve for each forfeited share or unit.

If an award under the 1995 Plan expires or becomes unexercisable without having been exercised in full or, with respect to RSUs, Performance Shares, Performance Units or Deferred Stock Units, is forfeited or repurchased by virtue of it not vesting, the unpurchased shares (or for Awards other than options and SARs, the forfeited or repurchased shares) which were subject thereto will become available for future grant or sale under the 1995 Plan (unless the 1995 Plan has terminated). Upon exercise of a SAR settled in shares, the gross number of shares covered by the portion of the SAR so exercised will cease to be available under the 1995 Plan. Shares that have actually been issued under the 1995 Plan under any award will not become available for future awards under the plan; provided, however, that if unvested shares of RSUs, Performance Shares, Performance Units or Deferred Stock Units are repurchased or are forfeited by virtue of their not vesting, such shares will become available for future grant under the 1995 Plan. Shares used to pay the withholding tax related to an award or to pay for the exercise price of an award will not become available for future grant or sale under the 1995 Plan. To the extent an award under the 1995 Plan is paid out in cash rather than shares, such cash payment will not reduce the number of shares available for issuance under the plan. Notwithstanding the foregoing, subject to the adjustment provisions of the 1995 Plan, the maximum number of shares that may be issued upon the exercise of incentive stock options will equal the maximum share reserve stated in the first paragraph of this section above, plus, to the extent allowable under Section 422 of the Code, any shares that become available for issuance under the 1995 Plan under the provisions summarized in this paragraph.

Shares issued under the 1995 Plan may be authorized, but unissued, or reacquired common stock of the Company. As of April 1, 2024, the closing price of a share of our common stock on The Nasdaq Stock Market was $13.06.

Administration

The 1995 Plan may be administered by our Board or a designated committee of members of the Board. The Board has designated the Compensation Committee as administrator of the 1995 Plan (the “Plan Administrator”). Subject to the other provisions of the 1995 Plan, the Plan Administrator has the authority to: (i) construe and interpret the 1995 Plan and awards and apply their provisions; (ii) prescribe, amend or rescind rules and regulations relating to the 1995 Plan, including rules and regulations relating to sub-plans established for the purpose of qualifying for preferred tax treatment under foreign tax laws; (iii) select the consultants and employees to whom awards are to be granted; (iv) subject to the per-participant annual limits for different types of awards specified in the 1995 Plan, determine the number of shares to be made subject to each award; (v) determine whether and to what extent awards are to be granted; (vi) prescribe the terms and conditions of each award (including the provisions of the award agreement to be entered into between the Company and the grantee) including any restrictions, provided that such terms and conditions may not be inconsistent with the terms of the 1995 Plan; (vii) determine the fair market value of the common stock; (viii) allow participants to satisfy required withholding tax obligations by electing to have the Company withhold from the shares or cash issued upon exercise or vesting of an award not in excess of the maximum statutory amount; (ix) amend any outstanding award subject to applicable legal restrictions, subject to the prohibition on the reduction of the exercise price of an option or SAR as described further below; and (x) subject to certain limitations, make any other determinations deemed necessary or advisable for the administration of the 1995 Plan. All decisions, determinations and interpretations of the Plan Administrator shall be final and binding on all holders of awards, to the maximum extent permitted by applicable law.

Eligibility

The 1995 Plan provides that awards may be granted to the Company’s employees and consultants, including employees and consultants of the Company's subsidiaries and any parent of the Company. Incentive stock options may be granted only to employees. As of April 1, 2024, there were 1,305 employees (including officers) and 0 consultants eligible to participate in the 1995 Plan.

Limitations

Annual Per-Participant Award Limits. Subject to the adjustment provisions of the 1995 Plan, the 1995 Plan provides that no participant may be granted, in any fiscal year of the Company, options and SARs to purchase more than 800,000 shares of our common stock, and no participant may be granted, in any fiscal year of the Company, awards of RSUs and performance shares covering more than 800,000 shares of our common stock.

No Repricing or Exchange Program. No option or SAR granted under the 1995 Plan may be repriced, including by means of an exchange for cash or another award, without stockholder approval.

Terms and Conditions of Options

The Plan Administrator, subject to the provisions of the 1995 Plan, will have complete discretion to determine the terms and conditions of options granted under the 1995 Plan. Each option granted under the 1995 Plan is evidenced by a written stock option agreement between the optionee and the Company and is subject to the terms and conditions as provided under the 1995 Plan.

Exercise Price. The Plan Administrator determines the exercise price of options at the time the options are granted. However, the exercise price of any option must not be less than 100% of the fair market value of the underlying shares on the grant date. Options may be granted with a per share exercise price of less than 100% of the fair market value per share on the date of grant pursuant to a merger or other corporate transaction. Further, the exercise price of any incentive stock option granted to an employee who, at the time the option is granted, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any parent or subsidiary of the Company (a “ten percent owner”), the exercise price must be no less than 110% of the fair market value of the underlying shares on the grant date.

Form of Consideration. The Plan Administrator determines the means of payment for shares issued upon exercise of an option, which may be by cash, check, other shares of common stock of the Company owned by the optionee, delivery of an exercise notice together with irrevocable instructions to a broker to deliver the exercise price to the Company from sale proceeds, by a combination thereof, or by any other consideration and method of payment for the issuance of shares to the extent permitted by applicable laws.

Exercise and Vesting of the Option. Each option agreement will specify when the option may become exercisable and any conditions that must be satisfied before an option becomes exercisable (including for example, service requirements).

No Dividends or Other Stockholder Rights. Until the shares are actually issued following the exercise of an option granted under the 1995 Plan, no right to receive dividends, to vote, or any other rights as a stockholder will exist with respect to the shares relating to such option.

Termination of Employment or Service. If an optionee’s employment or service terminates for any reason (other than the optionee’s death or disability, as defined in the Code), then all options, to the extent exercisable, held by such optionee under the 1995 Plan will remain exercisable until the earlier of (i) such period of time as is set forth in his or her option agreement (or, in the absence of a stated period, three months following termination of the optionee’s employment or service), or (ii) the expiration date of the option.

Death or Disability. If an optionee is unable to continue employment or service with the Company as a result of disability or dies while providing employment or other service to the Company, then all options, to the extent exercisable, held by such optionee under the 1995 Plan will remain exercisable until the earlier of (i) 12 months after the date of termination of the optionee’s employment or service, or (ii) the expiration date of the option.

Termination of Options. Each option agreement will specify the term of the option. However, in no event will an option granted under the 1995 Plan be exercised more than seven years after the date of grant. Further, in no event will an incentive stock option granted under the 1995 Plan, to an employee who at the time the option is granted is a ten percent owner, be exercised more than five years after the grant date. No options may be exercised by any person after the expiration of its term.

Limitations. If the aggregate fair market value of all shares of common stock subject to an optionee’s incentive stock options granted by the Company that are exercisable for the first time during any calendar year exceeds $100,000, the excess options will be treated as nonstatutory options.

Terms and Conditions of SARs

Each SAR granted under the 1995 Plan is evidenced by a written SAR agreement between the recipient and the Company and is subject to the other terms and conditions as provided under the 1995 Plan. Each SAR granted under the 1995 Plan will be evidenced by an agreement that specifies the exercise price, the term of the SAR, the conditions of exercise, and such other terms and conditions as the Plan Administrator, in its sole discretion, will determine, subject to the terms and conditions as provided under the 1995 Plan.

Exercise Price. The Plan Administrator, subject to the provisions of the 1995 Plan, will have complete discretion to determine the terms and conditions of SARs granted under the 1995 Plan. No SAR may be granted with a per share exercise price less than 100% fair market value of an underlying share on the date of grant, provided, that SARs may be granted with a per share less than 100% fair market value on the date of grant pursuant to a merger or other corporate transaction. As described further above, the exercise price for the shares or cash to be issued under a SAR granted under the 1995 Plan may not be changed without stockholder approval.

Dividends. No dividends are payable prior to the vesting of a SAR.

Payment of Stock Appreciation Right Amount. Upon exercise of a SAR, the holder of the SAR shall be entitled to receive payment from the Company in an amount determined by multiplying (i) the amount by which the fair market value of a share on the date of exercise exceeds the exercise price multiplied by (ii) the number of shares with respect to which the SAR is exercised.

Payment upon Exercise of Stock Appreciation Right. At the discretion of the Plan Administrator, and as specified in the agreement evidencing the SAR, payment to the holder of a SAR may be in cash, shares of our common stock or a combination thereof. In the event that payment to the holder of a SAR is settled in cash, the shares available for issuance under the 1995 Plan will not be diminished as a result of the settlement.

Expiration of SARs. SARs granted under the 1995 Plan expire as determined by the Plan Administrator, but in no event later than seven years from the date of grant. No SAR may be exercised by any person after its expiration.

Termination of Employment or Service. If a participant’s employment or service terminates for any reason (other than the participant’s death or disability), then all SARs, to the extent exercisable, held by such participant under the 1995 Plan will remain exercisable until the earlier of (i) such period of time as is set forth in his or her SAR agreement (or, in the absence of a stated period, three months following the termination of the participant’s employment or service), or (ii) the expiration date of the SAR.

Death or Disability. If a participant is unable to continue employment or service with the Company as a result of disability or dies while providing employment or other service to the Company, then all SARs, to the extent exercisable, held by such participant under the 1995 Plan will remain exercisable until the earlier of (i) 12 months after the date of termination of the participant’s employment or service, or (ii) the expiration date of the SAR.

Terms and Conditions of RSUs

Grant of RSUs. The Plan Administrator, subject to the provisions of the 1995 Plan, will have complete discretion to determine the terms and conditions of RSUs granted under the 1995 Plan, which uses the defined term “Restricted Stock” to refer to RSUs. The Plan Administrator will determine the number of shares subject to RSUs granted to any participant, and (ii) the conditions that must be satisfied (typically based principally or solely on continued provision of services, but may include a performance-based component) for the grant or vesting of RSUs.

No Dividends or Other Stockholder Rights. Until the shares are issued under the RSUs, no right to vote or receive dividends or any other rights as a stockholder will exist with respect to the underlying shares.

RSU Agreement. Each RSU will be evidenced by an agreement that shall specify such terms and conditions as the Plan Administrator will determine; provided, however, that if the RSU grant has a purchase price, such purchase price must be paid no more than 10 years following the date of grant.

Terms and Conditions of Performance Shares and Performance Units

Grant of Performance Shares. The Plan Administrator, subject to the provisions of the 1995 Plan, will have complete discretion to determine the terms and conditions of Performance Shares granted under the 1995 Plan. The Plan Administrator will determine (i) the number of shares of our common stock subject to a Performance Share award granted to any participant, and (ii) the conditions that must be satisfied (typically based principally or solely on achievement of performance milestones, but may include a service-based component) for the grant or vesting of Performance Shares.

Performance Share Award Agreement. Each Performance Share grant will be evidenced by an agreement that will specify the terms described in the preceding paragraph and such other terms and conditions as the Plan Administrator, in its sole discretion, will determine.

Grant of Performance Units. Performance Units are similar to Performance Shares, except that they will be settled in cash in an amount equivalent to the fair market value of the underlying shares of common stock, determined as of the vesting date. Each Performance Unit will be granted in the form of units or rights to acquire shares of common stock, provided that such unit or right will be the cash equivalent of one share of common stock. The Plan Administrator, subject to the provisions of the 1995 Plan, will have complete discretion to determine the terms and conditions of Performance Units granted under the 1995 Plan. The Plan Administrator will determine the conditions that must be satisfied (typically based principally or solely on achievement of performance milestones but may include a service-based component) for the grant or vesting of Performance Units. The shares available for issuance under the 1995 Plan will not be diminished as a result of the settlement of a Performance Unit in cash.

Performance Unit Award Agreement. Each Performance Unit grant will be evidenced by an agreement that will specify such terms and conditions as the Plan Administrator will determine. The Plan Administrator determines the number of Performance Units to be granted to a Participant, provided that during any fiscal year of the Company, no participant will receive Performance Units having an initial value greater than one million dollars, except that a participant may receive Performance Units in a fiscal year of the Company in which his or her service as a participant first commences with an initial value no greater than two million dollars.

No Dividends or Other Stockholder Rights. Until the shares are issued under the Performance Shares, no right to vote or receive dividends or any other rights as a stockholder will exist with respect to the underlying shares. No right to vote or receive dividends or any other rights as a stockholder will exist with respect to Performance Units or the cash payable under any Performance Units.

Terms and Conditions of Deferred Stock Units

Grant of Deferred Stock Units. Deferred Stock Units will consist of an RSU, Performance Share or Performance Unit award that the Plan Administrator permits to be paid out in installments or on a deferred basis, in accordance with rules and procedures established by the Plan Administrator. Deferred Stock Units are subject to the individual annual limits that apply to each type of awards and the annual limits applicable to underlying awards.

Non-Transferability of Awards

Unless determined otherwise by the Plan Administrator, an award granted under the 1995 Plan may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the recipient, only by the recipient. If the Plan Administrator makes an award granted under the 1995 Plan transferable, such award will contain such additional terms and conditions as the Plan Administrator deems appropriate. In no event may an award granted under the 1995 Plan be transferred to any third party for value, unless approved by our stockholders in advance.

Adjustment Upon Changes in Capitalization; Corporate Transactions

Subject to any required action by the stockholders of the Company, in the event of any increase or decrease in the common stock of the Company by reason of any stock split, reverse stock split, stock dividend, combination, reclassification or other increase or decrease in the number of issued shares of our common stock effected without receipt of consideration by the Company, appropriate proportional adjustments will be made in the number of shares of stock authorized for issuance under the 1995 Plan, the individual fiscal year limits applicable to RSUs, Performance Share awards, SARS and options, the number of shares of stock subject to any award outstanding under the 1995 Plan, and the exercise price of any such outstanding option, RSU or other award. Any such adjustment will be made upon approval of the Compensation Committee, whose determination will be conclusive.

In the event that we are acquired in any merger of the Company with or into another corporation or the sale of substantially all of the assets, each outstanding award granted under the 1995 Plan will be assumed or an equivalent right substituted by a successor corporation. If such awards granted under the 1995 Plan are not assumed or substituted, they become fully vested (and, if applicable, fully exercisable) prior to the closing of such merger or sale of assets. Holders of options or SARs that are not assumed or substituted will be notified in advance and provided with fifteen days from the date of such notice to exercise their options or SARs, after which the options or SARs will terminate.

In the event of the proposed dissolution or liquidation of the Company, the Plan Administrator will notify each holder of an award under the 1995 Plan as soon as practicable prior to such proposed transaction, and, in its discretion may allow options or SARs to be exercised until ten days prior to such transaction as to all covered shares. In addition, the Plan Administrator may provide that any repurchase option or forfeiture rights applicable to any award granted under the 1995 Plan will lapse 100%, and that any vesting will accelerate 100% upon consummation of such proposed action. To the extent it has not been previously exercised (with respect to options and SARs) or vested (with respect to other awards), each award under the 1995 Plan will terminate immediately prior to the consummation of such proposed transaction.

Amendment, Suspensions and Termination of the 1995 Plan

Our Board of Directors may amend, suspend or terminate the 1995 Plan at any time; provided, however, that stockholder approval is required for any amendment to the extent necessary to comply with Rule 16b-3 promulgated under the Securities Exchange Act of 1934 (“Rule 16b-3”) or Section 422 of the Code, or other applicable law, rule or regulation, including the requirements of any exchange or quotation system on which the Company’s common stock is listed or quoted. No amendment, alteration, suspension or termination of the 1995 Plan will impair the rights of any participant, unless mutually agreed otherwise in writing between the participant and the Plan Administrator.

Summary of U.S. Federal Income Tax Consequences

The following summary is intended only as a general guide to the material U.S. federal income tax consequences of participation in the 1995 Plan. The summary is based on existing U.S. federal income tax laws and regulations, and there can be no assurance that those laws and regulations will not change in the future. The summary does not purport to be complete and does not discuss the tax consequences upon a participant’s death, or the provisions of the tax laws of any municipality, state or non-U.S. jurisdiction to which the participant may be subject. As a result, tax consequences for any particular participant may vary based on individual circumstances.

Options. Options granted under the 1995 Plan may be either “incentive stock options,” as defined in Section 422 of the Code, or nonstatutory options.

An optionee who is granted an incentive stock option will not recognize taxable income either at the time the option is granted or upon its exercise, although the exercise may subject the optionee to alternative minimum tax or may affect the determination of the optionee’s alternative minimum tax (unless the shares are sold or otherwise disposed of in the same year). Upon the sale or exchange of the shares more than two years after grant of an incentive stock option and more than one year after exercising the option, any gain or loss relative to the exercise price will be treated as long-term capital gain or loss. If these holding periods are not satisfied, the optionee will recognize ordinary income at the time of sale or exchange equal to the excess if any of the lower of (i) the fair market value of the shares at the date of the option exercise, or (ii) the sale price of the shares, over the exercise price of the shares. Any additional gain or loss recognized on such a premature disposition of the shares relative to such lower price will be characterized as long-term or short-term capital gain or loss, depending on the holding period. For purposes of the alternative minimum tax, the difference between the option exercise price and the fair market value of the shares on the exercise date is treated as an adjustment item in computing the optionee’s alternative minimum taxable income in the year of exercise. In addition, special alternative minimum tax rules may apply to certain subsequent premature dispositions of the shares or provide certain basis adjustments or tax credits for alternative minimum tax purposes.

All options that do not qualify as incentive stock options are referred to as nonstatutory options. An optionee will not recognize any taxable income at the time the optionee is granted a nonstatutory option. However, upon the exercise of a nonstatutory option, the optionee will recognize taxable income generally measured as the excess of the then fair market value of the shares purchased over the purchase price. For employees, such taxable income recognized in connection with the exercise of a nonstatutory option will be subject to tax withholding. Upon resale of such shares by the optionee, any difference between the sale price and the optionee’s purchase price, to the extent not recognized as taxable income as described above, will be treated as long-term or short-term capital gain or loss, depending on the holding period.

Stock Appreciation Rights. No taxable income is reportable when a stock appreciation right is granted to a participant. Upon exercise, the participant will recognize ordinary income in an amount equal to the amount of cash received and the fair market value of any shares of common stock received. Any additional gain or loss recognized upon any later disposition of the shares of common stock received would be taxed as capital gain or loss, which will be treated as long-term or short-term capital gain or loss, depending on the holding period.

RSU, Performance Units and Performance Shares. A participant will not have taxable income upon grant of RSU, Performance Units or Performance Shares. Instead, he or she will recognize ordinary income at the time of vesting and settlement equal to the fair market value of the vested shares or cash received, minus any amount paid for the vested shares of common stock.

Medicare Surtax. A participant’s annual “net investment income,” as defined in Section 1411 of the Code may be subject to a 3.8% federal surtax (generally referred to as the “Medicare Surtax”). Net investment income may include capital gain and/or loss arising from the disposition of shares subject to a participant’s awards under the 1995 Plan. Whether a participant’s net investment income will be subject to the Medicare Surtax will depend on the participant’s level of annual income and other factors.

Section 409A. Section 409A of the Code (“Section 409A”) provides certain requirements for nonqualified deferred compensation arrangements with respect to an individual’s deferral and distribution elections and permissible distribution events. Awards granted under the 1995 Plan with a deferral feature will be subject to the requirements of Section 409A. If an award is subject to and fails to satisfy the requirements of Section 409A, the recipient of that award may recognize ordinary income on the amounts deferred under the award, to the extent vested, which may be prior to when the compensation is actually or constructively received. Also, if an award that is subject to Section 409A fails to comply with Section 409A’s provisions, Section 409A imposes an additional 20% federal income tax on compensation recognized as ordinary income, as well as interest on such deferred compensation. Certain states, such as California, have enacted laws similar to Section 409A that impose additional taxes, interest and penalties on nonqualified deferred compensation arrangements in the event of failure to comply with the applicable state requirements. The Company will have withholding and reporting requirements with respect to such amounts.

Tax Effect for the Company. The Company generally will be entitled to a tax deduction in connection with an award under the 1995 Plan in an amount equal to the ordinary income realized by a participant at the time the participant recognizes such income (for example, the exercise of a nonqualified stock option). Special rules limit the deductibility of compensation paid to our CEO and certain other current and former officers of the Company that qualify as “covered employees” within the meaning of Section 162(m) of the Code (the “Covered Employees”). Under Section 162(m) of the Code, the annual compensation paid to any of these Covered Employees will be deductible only to the extent that it does not exceed $1,000,000.

Grants to NEOs, Executive Officers and Other Employees

The Company is unable to predict the amount of benefits that will be received by, or allocated to, any participant under the 1995 Plan. The table that follows shows the RSUs granted under the 1995 Plan during 2023 to the NEOs, all current executive officers as a group and all other employees as a group. No member of our Board of Directors who is not also an executive officer is eligible for awards under the 1995 Plan. The Company did not grant any other types of awards under the 1995 Plan during 2023.

Plan Benefits: 1995 Stock Plan

PROPOSAL 5:

RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee of the Board has appointed Ernst & Young LLP (“EY”), an independent registered public accounting firm, to audit the financial statements of the Company for the year ending December 31, 2024. EY has served as the Company’s independent registered public accounting firm since March 2021.

Stockholder approval is not required for the appointment of EY, as the Audit Committee has the responsibility for selecting an independent registered public accounting firm. However, the Board is submitting the selection of EY to the stockholders for ratification as a matter of good corporate practice. In the event of a negative vote on the ratification of EY, the Audit Committee may reconsider its selection. Representatives of EY are expected to be present at the Annual Meeting and will have the opportunity to make a statement if they so desire. Such representatives also are expected to be available to respond to appropriate questions from stockholders.

Independent Registered Public Accounting Firm Fees

Aggregate fees for professional services rendered for the Company by EY for the years ended December 31, 2023 and December 31, 2022 were as follows:

Audit Fees. These amounts represent fees billed for professional services rendered for the audit of our consolidated financial statements and review of interim statements included in quarterly reports and services that are normally provided by EY in connection with statutory and regulatory filings or engagements.

Tax Fees. This amount represents fees billed for tax services provided in connection with a potential transaction.

All Other Fees. This amount primarily represents fees billed for a review of the Company’s cybersecurity systems and policies.

Consistent with its charter, the Audit Committee pre-approves all audit and non-audit services from our independent registered public accounting firm. Pre-approval authority may be delegated by the Audit Committee to the Chair of the Audit Committee.

The Audit Committee considered whether the services provided by EY were compatible with maintaining the independence of EY, and concluded that the independence of EY was maintained and was not compromised by the non-audit services provided.

Audit Committee Report

In accordance with a written charter adopted by Harmonic’s Board of Directors and posted on the Company’s website at www.harmonicinc.com, the Audit Committee of the Board of Directors serves as the representative of the Board of Directors for general oversight of the quality and integrity of the Company’s financial accounting and reporting process, system of internal control over financial reporting, audit process, and process for monitoring compliance with related laws and regulations. The Audit Committee engages the Company’s independent registered public accounting firm and approves the scope of both audit and non-audit services. Harmonic’s management has primary responsibility for preparing financial statements and the financial reporting process.

Ernst & Young LLP, Harmonic’s independent registered public accounting firm for the year ended December 31, 2023, was responsible for performing an independent audit of the Company’s consolidated financial statements and internal control over financial reporting in accordance with the standards set by the Public Company Accounting Oversight Board (“PCAOB”) and to issue reports thereon.

The Audit Committee has:

The Audit Committee meets regularly with the Company’s independent registered public accounting firm, with and without management present, to discuss the results of their examinations, the evaluations of the Company’s internal control over financial reporting, and the overall quality of the Company’s adherence to applicable accounting principles and practices.

In performing all of these functions, the Audit Committee acts only in an oversight capacity and necessarily relies on the work and assurances of Harmonic’s management, which has primary responsibility for preparing financial statements and the financial reporting process, and the independent registered public accounting firm, which, in their report, expresses an opinion on the conformity of Harmonic’s annual consolidated financial statements to accounting principles generally accepted in the United States and of the Company’s internal control over financial reporting in accordance with the standards set by the PCAOB. In reliance on the reviews and discussions referred to in this report, and in light of its role and responsibilities, the Audit Committee recommended to the Board of Directors, and the Board of Directors has approved, that the audited financial statements of Harmonic for the three years ended December 31, 2023 be included for filing with the Securities and Exchange Commission in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

Deborah Clifford

Sophia Kim

Susan G. Swenson

EXECUTIVE OFFICERS

The following sets forth certain information regarding the executive officers of Harmonic as of April 1, 2024.

Patrick J. Harshman joined Harmonic in 1993 and was appointed President and CEO and as a member of our board of directors in May 2006. Prior to 2006, he held several executive leadership positions for Harmonic, including management of marketing, international sales, product management, and research and development functions. Mr. Harshman earned a Ph.D. in Electrical Engineering from the University of California, Berkeley, and completed an Executive Management Program at Stanford University. Mr. Harshman will step down as our President and CEO following the Annual Meeting.

Walter Jankovic joined Harmonic in May 2023 as Chief Financial Officer. Prior to Harmonic, Mr. Jankovic was the Senior Vice President and General Manager, Datacom Business Unit, at Lumentum, a provider of optical and photonic products, from December 2018 to October 2022. Prior to Lumentum, Mr. Jankovic served as President, Optical Connectivity, at Oclaro, Inc., a provider of optical components and modules that was acquired by Lumentum in 2018, from February 2018 to December 2018. Previously, from 2005 to 2018, he served in a number of senior finance and business unit leadership roles at Celestica Inc., an electronics manufacturing services company, including Vice President of Finance for three different business segments; Senior Vice President, Communications and Internet Service Provider Markets; and, most recently, Senior Vice President, Advanced Industrial and HealthTech Markets. Prior to Celestica, Mr. Jankovic served in various finance leadership roles at Nortel Networks. Earlier in his career, he was an engagement manager at Deloitte. Mr. Jankovic holds a B.A. in Chartered Accountancy Studies and a Master of Accounting from the University of Waterloo, and is a Chartered Professional Accountant (CPA, CA, CMA).

Nimrod Ben-Natan joined Harmonic in 1996, was named Vice President of Product Marketing, Solutions and Strategy, in 2007, and was appointed Senior Vice President and General Manager, Cable Products, in June 2012. Mr. Ben-Natan will be appointed as our President and CEO, following the Annual Meeting, effective as of the resignation of Mr. Harshman. From 1993 to 1997, Mr. Ben-Natan served as an Embedded Software Engineer at Orckit Communications Ltd., a digital subscriber line developer. Previously, he worked on wireless communications systems while he was with the Israeli Defense Signal Corps from 1988 to 1993. Mr. Ben-Natan holds a B.A. in Computer Science from Tel Aviv University.

Neven Haltmayer joined Harmonic in 2002, and was appointed Senior Vice President, Research and Development, in March 2011. Prior to his appointment, Mr. Haltmayer served as Vice President, Research and Development, from 2005 to 2011. From 2002 to 2005, Mr. Haltmayer was Director of Engineering of Compression Systems and managed the development of Harmonic’s MPEG-2 and MPEG-4 AVC/H.264 encoder and Electra product lines. Between 2001 and 2002, Mr. Haltmayer held various key positions at Canal Plus Technologies, a set-top decoder technology company, including Vice President of Engineering, and was responsible for system integration and development of set top box middleware and interactive applications. Mr. Haltmayer holds a B.S. in Electrical Engineering from the University of Zagreb, Croatia.

Ian Graham joined Harmonic in 2008, and was appointed Senior Vice President, Global Sales and Video Services, in August 2020. From February 2019 to July 2020, Mr. Graham served as Senior Vice President, International Sales and Video Services, focusing on Asia Pacific, Europe, Middle East, Africa (EMEA) and Latin America. From January 2017 to February 2019, he was Vice President of Sales for EMEA and Latin America, and from 2008 to 2017, he served as Vice President of Sales for EMEA. Prior to joining Harmonic, Mr. Graham was the Vice President of EMEA Sales at Motorola, Connected Home Solutions. Mr. Graham received a bachelor’s degree in Public Administration from Sheffield Hallam University.

COMPENSATION DISCUSSION AND ANALYSIS

Compensation Philosophy and Programs

The Company’s executive compensation programs are designed to attract, motivate and retain executives who will contribute significantly to the long-term success of the Company and the enhancement of stockholder value. Consistent with this philosophy, the following goals provide a framework for our executive compensation program:

At our 2023 annual meeting of stockholders, we held a stockholder advisory vote on the compensation of our NEOs, commonly referred to as a “say-on-pay vote.” Our stockholders approved the compensation of our NEOs, with approximately 97% of stockholder votes cast voting in favor of the say-on-pay proposal. As we evaluated our compensation practices and talent needs throughout 2023, we were mindful of the support our stockholders expressed for our philosophy of linking compensation to our financial goals and in support of enhancing stockholder value. As a result, the Compensation Committee decided to retain our general approach with respect to our executive compensation programs, with an emphasis on delivering long-term and short-term incentive compensation that rewards our executives commensurate with the value they deliver to our stockholders.

2023 Named Executive Officers

Our NEOs for 2023 were:

Role of the Compensation Committee

The Compensation Committee is responsible for approval of the Company’s executive compensation policies, compensation paid to executive officers, and administration of the Company’s equity incentive plans. The Compensation Committee currently consists, and during all of 2023 consisted, of Ms. Reaugh and Messrs. Gallagher and Krall, and Mr. Whalen was a member of the Compensation Committee until he resigned from the Board in June 2023. None of the members of the Compensation Committee is an employee of the Company, and each member is independent under applicable NASDAQ listing standards and Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The charter of the Compensation Committee was adopted by the Board of Directors, and is posted on Harmonic’s website at www.harmonicinc.com.

Role of the Compensation Consultant

The Compensation Committee has retained the services of Compensia, Inc. (“Compensia”), an independent compensation consulting firm, to assist the Compensation Committee in the evaluation of appropriate cash and equity compensation for executive management and the Board. Compensia provides no other services to the Company. Compensia makes recommendations to the Compensation Committee on the design and implementation of compensation plans, assists in determining the appropriate number of shares to be used for equity awards granted under the Company’s equity plans, reviews market and other data and recommendations provided by management, and also reviews specific compensation proposals for each of the Company’s NEOs. Compensia attends all or part of certain Compensation Committee meetings, as requested by the Compensation Committee.

In 2023, the Compensation Committee considered and assessed all relevant factors, including those set forth in Rule 10C-1(b)(4) (i) through (vi) under the Exchange Act, that could give rise to a potential conflict of interest with respect to Compensia’s work. Based on this review, the Compensation Committee is not aware of any conflict of interest that has been raised by the work performed by Compensia.

Role of Management

Our CEO, assisted by our General Counsel and Senior Vice President, Human Resources, supports the Compensation Committee in establishing meeting agendas. The CEO makes recommendations to the Compensation Committee with respect to the compensation of other members of executive management and the design and implementation of incentive compensation programs for NEOs. For 2023 executive compensation, these recommendations were based in part on executive compensation market data and market trend reports provided by Compensia to the Compensation Committee. The Compensation Committee considers the recommendations of management, but is not bound by such recommendations. The CEO does not make recommendations to the Compensation Committee with respect to his own compensation and no member of management is present at any portion of Compensation Committee meetings when his or her compensation is deliberated or decisions are made.

Management of Risk Arising from Incentive Compensation Policies

The Compensation Committee has considered whether the Company’s overall compensation program for employees creates incentives for employees to take excessive or unreasonable risks that could materially harm the Company. The Compensation Committee believes that our incentive plans are typical for our industry and market competitive, and that risks arising from our compensation policies and practices for our employees are not reasonably likely to have a material adverse effect on the Company. Several features of our compensation policies for management employees appropriately mitigate such risks, including a mix of long-term and short-term compensation incentives that we believe are properly weighted, the uniformity of compensation policies across the Company, caps on payments from the plans and the use of our business plan, which the Compensation Committee believes sets an appropriate level of risk for the Company, as a baseline for our incentive bonus plan targets. We also believe the Company’s internal legal and financial controls, as well as the Clawback Policy described on page 46 of this Proxy Statement, appropriately mitigate the probability and potential impact of an individual employee committing the Company to inappropriate transactions in exchange for short-term compensation benefits.

Elements of Compensation

In order to achieve the above goals, our total compensation packages for our executive officers include base salary and annual bonus paid in cash, as well as long-term equity compensation, all as described in greater detail below. We also make available benefit plans to our executive officers which are generally provided to all regular full-time employees of Harmonic. We believe that appropriately balancing the total compensation package and ensuring a significant portion of the package is incentive-based is necessary in order to provide market-competitive compensation. We aim to balance the various components of our compensation program for NEOs in order to motivate executives to improve our results on a cost-effective basis. The factors which are used to determine individual compensation packages are generally similar for each NEO, including our CEO. These may include, as the compensation committee may deem appropriate, factors such as: the role and importance of such individual’s contributions to the Company’s ability to execute on its business strategy and objectives; the responsibilities and nature of the functions performed; tenure, skills, and experience; value of unvested equity awards held by the NEO; internal pay equity; Company performance; historical compensation practices; and competitive labor market pressures.

In order to assess our compensation competitiveness against peer companies in 2023, the Compensation Committee, with input from Compensia, approved a compensation peer group in 2022, which included 20 companies. These peer companies were selected primarily from the telecommunications, video services technology and software industries based principally on revenue (generally from 0.5x to 2.0x our annual revenue) and market capitalization (generally from 0.33x to 3.0x our market capitalization) data that placed Harmonic approximately in the middle of the range, as well as on such companies’ headquarters proximity to Silicon Valley, which is the location of the Company’s headquarters. 16 of the companies in the peer group were the same as the peer companies approved by the Compensation Committee in 2021, and four new companies – Cambium Networks, Gogo, MaxLinear and Netgear – were added to the

peer group to replace CalAmp, Comtech Telecommunications, Voxx International (the size of these three companies was beyond peer comparison parameters with respect to market capitalization) and QAD (this company was acquired). Each of the newly added companies fit within most of the peer comparison parameters.

Data prepared by Compensia for the compensation peer group was used by the Compensation Committee to assess the general competitiveness of the 2023 cash and equity compensation, and for the design and implementation of compensation packages and for specific proposals related to the individual elements and total compensation packages for other NEOs, as well as for other employees.

The approved peer group for 2023 consisted of the following companies:

Base Salary

Base salaries for NEOs, including that of the CEO, are set according to the responsibilities of the position, the specific skills and experience of the individual and the competitive market for executive talent. The Compensation Committee reviews salaries annually and adjusts them as appropriate to reflect changes in market conditions, individual performance and responsibilities, and the Company’s financial position. Given that the Company is intended to fit within the middle of the range of the various peer comparison parameters used to set the peer group, when reviewing salaries, the Compensation Committee references the 50^th and 60^th percentile of total cash compensation (base salary and target bonus) of the compensation peer group for purposes of assessing the general competitiveness of total cash compensation of the NEOs, based on position, with the intent that superior performance under incentive bonus plans would enable the executive to elevate total cash compensation to levels that are above the median of comparable companies.

Following a review of the above factors, the data for the 2023 compensation peer group and market conditions in consultation with Compensia, the Compensation Committee believed that in order to remain market competitive, it was necessary and appropriate to increase the base salaries of each of the NEOs, as set forth in the table below, so that total cash compensation for each NEO would be near or within the 50^th and 60^th percentile range of the Company’s compensation peer group:

Incentive Bonus Plans

The Company’s annual incentive bonus plans in which NEOs participate reflect the Compensation Committee’s belief that a meaningful component of executive compensation should be contingent on the Company achieving performance targets, thereby introducing a significant element of “pay for performance” and appropriate incentives to produce superior results tied to our business success. Except as otherwise noted, each NEO participated in one annual incentive bonus plan in 2023, as discussed below.

The 2023 salary earned by each NEO as set forth on the Summary Compensation Table on page 48 of this Proxy Statement, and the bonus target opportunity as a percentage of salary (which remained unchanged from 2022 for each NEO) and applicable 2023 incentive bonus plan for each NEO, is set forth below:

2023 Bonus Plans, achievement and payouts

For 2023, the Compensation Committee agreed to incentivize performance based on financial performance goals established by the committee in February 2023 under three incentive bonus plans (the “Bonus Plans”) for our NEOs. The Compensation Committee approved the Bonus Plans to focus the NEOs and other incentive plan participants on revenue growth and improved profitability, which the committee believes are important indicators of the Company’s business growth and success. The Compensation Committee believed that the performance goals for the Bonus Plans were challenging but achievable, based on its review of the Company’s operating plan for 2023 when setting the goals, the experience of the members of the Compensation Committee with respect to the Company’s historical performance, and the business and industry outlook.

Each performance goal was allocated a percentage weighting (with the sum of such weights totaling 100% under each Bonus Plan) and the extent to which the performance goal was achieved and the weighting for such goal determined the payout, if any, attributable to such goal. The Bonus Plans provided for mid-year payouts based on year-to-date achievement of the financial goals. Mid-year payouts, if any, additionally were limited to 100% of the NEO's mid-year target bonus opportunity. The Compensation Committee established a minimum threshold that had to be met in order for any mid-year and year-end payouts to be made under the Bonus Plans, as well as a maximum full-year payout cap, applicable to all performance goals under the Bonus Plans, as set forth in the table below.

The summary tables below set forth the achieved payouts under each of the components of the Bonus Plans, and the resulting earned payout to each of the NEOs under their applicable Bonus Plan, as a percentage of the NEO’s target bonus opportunity mid-year and for the full year. All amounts earned by the NEOs under the Bonus Plans were paid in cash, and year-end payouts were net of any amounts that were paid mid-year.

Corporate Bonus Plan

Video Bonus Plan

Broadband Bonus Plan

Equity Compensation Plans

The Compensation Committee believes that equity compensation is an essential tool to link the long-term interests of stockholders and employees, especially the CEO and executive management, and serves to motivate employees, and particularly executive management, to make decisions that will, in the long run, deliver the best returns to stockholders, thus rewarding excellent long-term performance. Consistent with 2022, for 2023, in light of a trend among the Company’s peer group as well as similarly situated publicly-listed technology companies favoring full-value awards, the Compensation Committee granted the Company’s NEOs and the Company’s other executives full-value awards and no stock options. These awards consisted of time-based RSUs, and in select cases, performance-based RSUs for our NEOs.

The Compensation Committee believes RSUs promote more direct alignment between the interests of our NEOs and those of our stockholders (since the value of RSUs correlates more directly with the value of our stock) as compared to stock options while rewarding our NEOs for stockholder value creation, as well as serve as a useful retention tool through multi-year vesting requirements. Additionally, performance-based RSUs provide enhanced incentive value by rewarding our NEOs for achieving important financial, strategic, or other objectives of the Company, consistent with our pay for performance philosophy.

The Compensation Committee may employ stock option grants in the future, either alone or in combination with RSUs and/or performance-based RSUs.

Time-based Vesting RSUs. The 2023 timed-based RSUs granted to executives and NEOs vest over 3 years subject to their continued service. In 2023, Messrs. Harshman, Jankovic, Ben-Natan, Haltmayer, Graham and Rosenberg were awarded time-based RSUs covering 149,722, 118,343, 69,638, 60,685, 45,265 and 34,819 shares of Company Common Stock, respectively.

TSR Awards. In 2023, Messrs. Harshman, Jankovic and Ben-Natan were also awarded performance-based RSUs (“PRSUs”) covering a target number of shares of 149,722, 59,172 and 27,855, respectively, with vesting based on the total stockholder return (“TSR”) to holders of Company Common Stock during a three-year performance period compared to the TSR of companies in the NASDAQ Telecommunications Index or any successor to that index (the “Index”) at both the beginning and end of the performance period (the “TSR Award”).

Upon vesting, shares are immediately issued and there are no additional time- or service-based conditions associated with the TSR Award or performance-based RSUs, other than the CEO stock ownership guidelines applicable to Mr. Harshman as further described below under “Stock Ownership Guidelines”. The Compensation Committee believes the TSR Awards appropriately incentivize Messrs. Harshman, Jankovic and Ben-Natan and provide a direct and effective means for more closely aligning these executive’s interests with those of our stockholders’ interests.

Performance-based RSU Award. In 2023, Mr. Ben-Natan was also awarded 6,964 PRSUs, with vesting conditioned upon the Company and a key Broadband business customer executing a commercial agreement in 2023 with a commitment to purchase more than $200 million of products and services, as well as Mr. Ben-Natan’s continued service through the date of certification by the Compensation Committee of such performance achievement. Mr. Ben-Natan timely fulfilled the vesting condition and therefore vested 100% in the PRSU award.

Equity Award Determinations. Consistent with past practice, the total equity pool (RSUs and PRSUs) for annual grants to be made to all employees in 2023, including NEOs, was determined principally by reference to industry-specific guidelines published by shareholder advisory firms and, in part, by historical practice. The guidelines generally refer to metrics such as total annual awards as a percentage of shares outstanding and total outstanding awards as a percentage of fully diluted shares. The Compensation Committee, in consultation with the CEO (except with respect to the CEO’s own compensation), determines the size and material terms of equity awards granted to the NEOs, taking into account the role and responsibility of the NEO, competitive factors including competition for technology executives; peer group data compiled by the Compensation Committee’s compensation consultant, the size and value of long-term equity compensation already held by each executive officer and the vested percentage; the proportion between RSUs, performance-based RSUs and stock options held by each NEO; the total target cash compensation opportunity for each NEO; and individual performance and retention objectives. See “Grant of Plan-based Awards” on page 49 of this proxy statement for a summary of all equity grants made to the NEOs in 2023.

With respect to Mr. Jankovic, the value of his RSUs and PRSUs was based on market data and negotiated in connection with his hire in May 2023. With respect to Mr. Rosenberg, the value of his RSUs was based on his role as Senior Vice President of Business Development and he did not receive additional equity award value for serving as Interim Chief Financial Officer.

See “Grant of Plan-based Awards” on page 49 of this proxy statement for a summary of all equity grants made to the NEOs in 2023.

Achievement of 2020 PRSU Award. In 2020, Mr. Harshman was awarded RSUs covering a target number of shares of 182,830, with vesting based on the TSR to holders of Company common stock during the three-year performance period compared to the TSR of companies in the Index at both the beginning and end of the performance period. The performance period ended on February 14, 2023. The Compensation Committee determined that Company TSR during the performance period exceeded the Index TSR by 88%, resulting in maximum vesting of 150% of the target number of shares of Mr. Harshman’s PRSU award, or 274,245 shares.

Equity Compensation Grant Practices

The Compensation Committee approves all equity grants, except for certain grants made to non-executive employees in the ordinary course of business, for which it has delegated authority to the CEO, within parameters approved in advance by the Compensation Committee, pursuant to an employee equity issuance policy (the “Employee Equity Issuance Policy”). The Compensation Committee reviews all grants made pursuant to the Employee Equity Issuance Policy. Initial hire grants of RSUs are made on the second Friday of each month, and any other grants made by the CEO pursuant to authority granted by the Compensation Committee are made on the Friday of the week of such grant. Stock options, if issued, are granted at 100% of the closing price of our stock on the Nasdaq Stock Market on the date of grant.

Initial hire awards that are granted to executives reporting to the CEO or awards that are above the CEO’s approved range are approved by the Compensation Committee, with the grant date being the day of approval by the Compensation Committee or a later date selected by the Compensation Committee and, if in the form of a stock option, the per share exercise price being the closing price of a share of Common Stock on the Nasdaq Stock Market on the grant date. The initial grants are effective as of the date of grant, with vesting generally beginning on the date of commencement of employment. Annual grants to NEOs and executives are usually made in the first half of the year, and, in 2023, these grants were made in February. This timing enables management and the Compensation Committee to consider performance by both the Company and the individual for the then most recently completed fiscal year and balance it against our expectations for the current year.

We do not time the granting of RSUs or stock options with any favorable or unfavorable news released by the Company. The timing of initial grants is driven by the date of hire of our new employees. The Board of Directors and Compensation Committee meeting schedules, for review and approval of annual grants, are usually established several months in advance for the calendar year. Proximity of any awards to an earnings announcement or other market events is coincidental.

Retirement Benefits

The Company does not provide pension benefits or deferred compensation plans to any of its U.S. employees, including NEOs, other than a 401(k) deferred compensation plan which is open to all regular, full-time U.S. employees. The Company has a matching contribution policy for the 401(k) plan, of up to $1,000 a year for each participant, for 2023. For employees resident in non-U.S. jurisdictions, including Messrs. Ben-Natan and Graham, the Company makes required contributions to statutory pension and retirement schemes and, in a few countries, offers supplemental pension benefits in accordance with customary market practices.

Other Compensation

Other elements of compensation available to the Company’s NEOs include life and long-term disability insurance and health benefits. These benefits are available to all regular, full-time U.S. employees of the Company on the same basis, and similar benefits are provided to most employees in other countries. In addition, the Company may provide for relocation expenses to recruit key executives living outside the San Francisco Bay Area. Management periodically reviews the level of benefits provided to all employees and adjusts those levels as appropriate. The values of the benefits received by the NEOs pursuant to these other elements of compensation in 2021, 2022 and 2023 are included in the “All Other Compensation” column in the Summary Compensation Table on page 48 of this Proxy Statement.

Change-of-Control Severance Agreements

The Company does not have employment agreements with any of its present NEOs, other than standard local employment agreements entered into with Mr. Graham in 2008 and Mr. Ben-Natan in 2012, and an offer letter entered into with Mr. Jankovic in May 2023. It has, however, entered into change of control severance agreements (the “Severance Agreements”) with its NEOs. The Severance Agreements are designed to incentivize continuing service to the Company by NEOs in the event that the Company may be in discussions regarding strategic transactions and to provide short-term benefits in the event that a NEO’s position is eliminated or responsibilities or compensation are reduced following a change of control. The Company believes that these Severance Agreements help to ensure that, if the Board of Directors believes a potential transaction is in the best interests of the Company’s stockholders, its NEOs will remain focused on the consummation of such a potential transaction, without significant distraction or concern regarding their personal circumstances, such as continued employment.

Under the terms of each of the Severance Agreements, if within 18 months following a “change of control” of the Company (in each case, as defined in the relevant Severance Agreement), the NEO experiences an “involuntary termination” without “cause,” and not due to the NEO’s death or disability, then the NEO will receive:

In the case of Mr. Haltmayer, his Severance Agreement further provides that he will receive the above-listed benefits for non-CEO NEOs and vesting acceleration if Mr. Haltmayer experiences an “involuntary termination” without “cause” upon or within 12 months following a sale of the Company’s Video business or Video SaaS business that is completed on or before December 31, 2024 (a “Video Transaction”). In addition, in the event a Video Transaction occurs and Mr. Haltmayer continues providing services to the Company through the date of the completion of the Video Transaction, then 50% of the then-unvested and outstanding portion of Mr. Haltmayer’s restricted stock units will accelerate vesting.

Under the Severance Agreements, “cause” generally means (i) any act of personal dishonesty taken by the NEO in connection with his or her responsibilities as an employee and intended to result in his or her substantial personal enrichment, (ii) the conviction of a felony, (iii) a willful act by the NEO which constitutes gross misconduct and which is injurious to the Company, and (iv) following delivery to the NEO of a written demand for performance from the Company which describes the NEO’s failure to substantially perform his or her duties, continued violations by the NEO of the NEO’s obligations to the Company which are demonstrably willful and deliberate on the NEO’s part.

Under the Severance Agreements, “change of control” generally means (i) any person becomes the beneficial owner of securities of the Company representing 50% or more of the total voting power represented by the Company’s then outstanding voting securities; (ii)a change in our Board composition within a two-year period, as a result of which fewer than a majority of the directors are “incumbent directors” (meaning generally directors who either (A) are directors of the Company as of the date of the Severance Agreement, or (B) are elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the incumbent directors at the time of such election or nomination (but excluding an individual whose election or nomination is in connection with an actual or threatened proxy contest relating to the election of directors to the Company)); (iii) a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent at least 50% of the total voting power represented by the voting securities of the Company or the surviving entity outstanding immediately after such merger or consolidation; or (iv) the sale or disposition by the Company of all or substantially all the Company’s assets.

Under the Severance Agreements, “Involuntary termination” generally means (i) without the NEO’s consent, the significant reduction of duties, authority or responsibilities, or assignment of such reduced duties, authority or responsibilities; (ii) without the NEO’s consent, a substantial reduction, without good business reasons, of the facilities and perquisites (including office space and location) available to the NEO; (iii) a reduction in base salary; (iv) a material reduction in the kind or level of employee benefits, including bonuses, with the result that the overall benefits package is significantly reduced; (v) without the NEO’s consent, relocation to a facility or location more than 25 miles from the then present location; (vi) purported termination which is not effected for disability or for cause, or any purported termination for which the grounds relied upon are not valid; (vii) the failure of the Company to obtain the assumption of the Severance Agreement by any successors contemplated thereunder; or (viii) any act or set of facts or circumstances which would, under California case law or statute, constitute a constructive termination.

In addition, the 2022 and 2023 TSR Awards for Mr. Harshman, and the 2023 TSR Awards for Messrs. Jankovic and Ben-Natan are subject to special treatment on a change of control. See “Equity Compensation Plans – TSR Award” above.

Stock Ownership Guidelines and Hedging Policy

The Company has adopted stock ownership guidelines applicable to its CEO, requiring the CEO to hold any shares issued, after withholding of shares for taxes resulting from the exercise of vested stock options granted in 2017 or later or settlement of vested RSUs granted in 2017 or later, for at least 36 months from the date of RSU settlement or stock option exercise, subject to release from these requirements upon his separation from service with the Company. The Corporate Governance and Nominating Committee reviews the CEO’s compliance under such guidelines and may grant any waivers or exceptions as it deems reasonably necessary and appropriate.

Under our Insider Trading Policy, we prohibit our employees, including officers, and members of the Board of Directors from engaging in transactions involving pledging or hedging the risk associated with ownership of shares of our Common Stock.

Financial Restatements and Compensation Recovery Policy

During 2023, we adopted an updated clawback policy for compliance with the Nasdaq Listing Rules and Section 10D of the Exchange Act. The policy generally requires, if we are required to prepare an accounting restatement due to our material noncompliance with any financial reporting requirement under applicable securities laws, that we recover certain incentive-based compensation provided to our NEOs and certain other current or former executive officers (a “covered person”). Such incentive compensation generally includes compensation granted, earned or vested in whole or in part based on attaining performance goals relating to financial reporting measures, including any stock price and total stockholder return measures (with such attainment referred to in the policy as being “received”), which is received by a covered person on or after October 2, 2023, and during the three fiscal years completed immediately before the date the accounting restatement is determined to be required, and provided the covered person was an executive officer at any time during the applicable performance period for such compensation. The Company has never restated its financial statements.

Section 162(m)

We have considered the potential future effects of Section 162(m) of the Code on the compensation paid to our NEOs. Section 162(m) disallows a tax deduction for any publicly held corporation for individual compensation exceeding $1.0 million in any taxable year for our CEO and certain other current and former officers of the Company.

While the Compensation Committee considers the deductibility of compensation as a factor in making compensation decisions, the Compensation Committee retains the flexibility to provide compensation that is consistent with our goals for our executive compensation program even if such compensation is not fully tax deductible. The Compensation Committee may make decisions that result in compensation that is not fully deductible under Section 162(m) of the Code.

Compensation Committee Report

The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis contained in this Proxy Statement. Based on the Compensation Committee’s review of, and the discussions with management with respect to, the Compensation Discussion and Analysis, our Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement.

Mitzi Reaugh

Patrick Gallagher

David Krall

The information contained above under the captions “Report of the Audit Committee of the Board of Directors” and “Report of the Compensation Committee of the Board of Directors on Executive Compensation” shall not be deemed to be “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference to such filing.

EXECUTIVE COMPENSATION

Summary Compensation Table

The following Summary Compensation Table sets forth summary information concerning the compensation earned by our NEOs, in each case for services to our Company, in all capacities, during the fiscal years ended December 31, 2023, 2022 and 2021.

Grants of Plan-Based Awards

The following table summarizes certain information regarding non-equity and equity plan-based awards granted by Harmonic to the NEOs in 2023: