Item 11. Executive Compensation

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

In this section we provide an explanation and analysis of the material elements of the compensation provided to our Chief Executive Officer, Chief Financial Officer and other three most highly compensated executive officers who were serving as executive officers at the end of our fiscal year 2017 (collectively referred to as our “named executive officers”). Those named executive officers and their positions during the fiscal year 2017 were:

Charles Liang	President, Chief Executive Officer and Chairman of the Board
Howard Hideshima	Former Senior Vice President, Chief Financial Officer
Phidias Chou	Former Senior Vice President, Worldwide Sales
Yih-Shyan (Wally) Liaw	Former Senior Vice President of International Sales, Corporate Secretary and Director
Sara Liu	Senior Vice President of Operations, Chief Administrative Officer, Treasurer and Director

Messrs. Hideshima, Chou and Liaw resigned effective January 30, 2018. They did not receive any severance or other enhanced benefits in connection with their terminations of employment.

Process Overview

The Compensation Committee of the Board of Directors discharges the Board of Directors’ responsibilities relating to compensation of all of our executive officers. The Compensation Committee is comprised of three non-employee directors, all of whom are independent pursuant to the applicable listing rules of NASDAQ, Rule 16b-3 under the Exchange Act, and Section 162(m) of the Internal Revenue Code (“Code”).

The agenda for meetings is determined by the Chair of the Compensation Committee with the assistance of our Chief Financial Officer. Committee meetings are regularly attended by our Chief Financial Officer and our General Counsel. However, our Chief Financial Officer does not attend the portion of meetings during which his own performance or compensation is being discussed. Our Chief Financial Officer and General Counsel support the Compensation Committee in its work by providing information relating to our financial plans, performance assessments of our executive officers and other personnel-related data. In addition, the Compensation Committee has the authority under its charter to hire, terminate and approve fees for advisors, consultants and agents as it deems necessary to assist in the fulfillment of its responsibilities. In August 2016, as part of making an overall assessment of each individual’s role and performance, and structuring our compensation programs for fiscal year 2017, the Compensation Committee reviewed recommendations of management as well as publicly available peer group compensation data.

Compensation Philosophy and Objectives

It is the Compensation Committee’s philosophy to link the named executive officers’ compensation to corporate performance. The base salary, quarterly bonuses and equity award grants of the named executive officers are determined in part by the Compensation Committee reviewing data on prevailing compensation practices of comparable technology companies with whom we compete for executive talent, and evaluating such information in connection with our corporate goals and compensation practices. Our compensation philosophy has been unchanged over the last several years.

The Compensation Committee considers various sources of competitive data when determining executive compensation levels, including compensation data from a sampling of public companies and public compensation surveys obtained from Radford, an Aon Hewitt company. For fiscal year 2017 compensation decisions, the sample of companies consisted of the following, which were the same companies in our peer group for fiscal year 2016 compensation decisions:

Brocade Communications Systems, Inc.	Infinera Corporation
Cray, Inc.	NetApp, Inc.
Extreme Networks, Inc.	Netgear, Inc.

In selecting the companies for inclusion in the sample, the following factors were considered: industry, net revenues, operating income and whether the company may compete against us for executive talent. These companies ranged in annual revenue from approximately $528.4 million to $5.5 billion. For fiscal years 2017 and 2016, our net sales were $2.5 billion and $2.2 billion, respectively.

The Compensation Committee does not seek to specifically benchmark compensation based upon the sample companies reviewed nor does the Compensation Committee employ any other formulaic process in making compensation decisions. Rather, the Compensation Committee uses its subjective judgment based upon a review of all information, including an annual review for each officer of his or her level of responsibility, contributions to our financial results and our overall performance. The Compensation Committee makes a generalized assessment of these factors and this information is not weighted in any specific manner.

The compensation arrangements for several of our named executive officers, including our Chief Executive Officer, were significantly below median compensation levels for similar positions at comparable companies. This is principally due to the high level of stock ownership held by such persons. In the future, we may need to increase our recruiting of new executives from outside of our company. This in turn may require us to pay higher compensation closer to or in excess of that typically paid by comparable companies.

Finally, we believe that creating stockholder value requires not only managerial talent but active participation by all employees. In recognition of this, we try to minimize the number of compensation arrangements that are distinct or exclusive to our named executive officers. We currently provide base salary, quarterly bonuses and long-term equity incentive compensation to a considerable number of our domestic employees and international employees, in addition to our executive officers.

The Role of Stockholder Say-on-Pay Votes

Our Board of Directors, the Compensation Committee and our management value the opinions of our stockholders. At our annual meeting of stockholders held on March 1, 2017 (the "2016 Annual Meeting"), we provided our stockholders the opportunity to vote to approve, on an advisory basis, the compensation of our named executive officers as disclosed in the proxy statement for our 2016 Annual Meeting. At the meeting, 40,503,998 shares or approximately 99.2% of the stockholders who were present and entitled to vote on this “say-on-pay” proposal approved the compensation of our named executive officers, while only 41,966 or approximately 0.1% voted against (with approximately 280,370 shares or approximately 0.7% abstaining). 5,961,842 shares held by brokers were not entitled to vote with respect to this proposal. Although the advisory stockholder vote on named executive officer compensation is non-binding, the Compensation Committee has considered and expects to continue to consider the outcome of the vote when making future compensation decisions for named executive officers. In determining executive compensation for fiscal year 2017, our Compensation Committee took into account the results of the 2016 Annual Meeting stockholder advisory vote to approve executive compensation, particularly the strong support expressed by our stockholders, as one of the many factors considered in deciding that our compensation policies and procedures for 2017 should largely remain consistent with our policies and procedures in prior years. 40.5 million shares for 0.3 million abstention 6.0 million non-votes.

Role of Executive Officers in the Compensation Process

Management provides recommendations to the Compensation Committee on issues such as compensation program design, and evaluations of executive and our performance. In fiscal year 2017, the Compensation Committee also had access to competitive data collected by management. While the Compensation Committee carefully considers all recommendations made by members of management, ultimate authority for all compensation decisions regarding our executive officers rests with the Compensation Committee and the Board.

Fiscal Year 2017 Named Executive Officer Compensation Components

For fiscal year 2017, the principal components of compensation for our executive officers were:

•	Base salary;

•	Quarterly bonus; and

•	Equity-based incentive compensation.

Base Salary. Base salaries for our executive officers other than the Chief Executive Officer are determined annually by the Compensation Committee based upon recommendations by our Chief Executive Officer, taking into account such factors as salary norms in comparable companies and publicly available data regarding compensation increases in the industry, a subjective assessment of the nature of the position and an annual review of the contribution and experience of each executive officer. For the Chief Executive Officer, the Compensation Committee considers substantially the same type of information, as well as our size and the Chief Executive Officer’s overall stock ownership.

In August 2016, the Compensation Committee met to review the base salaries of our named executive officers for fiscal year 2017. In determining base salaries for fiscal year 2017, the Compensation Committee decided to provide no base salary adjustments for our named executive officers.

	Principal Position During Fiscal Year 2017		Fiscal 2016 Base Salary Rate				Fiscal 2017 Base Salary Rate				Base Salary % Change
Charles Liang	President, Chief Executive Officer and Chairman of the Board		$	365,160			$	365,160			—	%
Howard Hideshima	Former Senior Vice President and Chief Financial Officer		$	322,023			$	322,023			—	%
Phidias Chou	Former Senior Vice President, Worldwide Sales		$	287,317			$	287,317			—	%
Yih-Shyan (Wally) Liaw	Former Senior Vice President, International Sales, Corporate Secretary and Director		$	233,327			$	233,327			—	%
Sara Liu	Senior Vice President of Operations, Chief Administrative Officer, Treasurer and Director		$	238,156			$	238,156			—	%

Quarterly Bonus. Our quarterly cash bonus program seeks to motivate executive officers to work effectively to achieve our financial performance objectives and to reward them when such objectives are met. Quarterly bonuses for executive officers are subject to approval by the Compensation Committee. Bonuses are not awarded based upon any specific plan or formula, but are subjectively determined based upon our performance during the quarter and the individual’s contributions. Historically these bonuses have ranged from zero to an amount equal to two weeks of base salary. For fiscal year 2017, approximately two weeks of base salary ($10,000) was granted to Mr. Chou in the aggregate as a one-time bonus in recognition of him reaching his first quarter 2017 sales target. None of the other named executive officers received any quarterly bonuses for fiscal 2017.

Other Bonus. Year-end gifting bonuses of $650 were granted to each named executive officer under a company-wide program that all employees participated in.

Equity-Based Incentive Compensation. Stock options and other equity-based awards are an important component of the total compensation of executive officers. We believe that equity-based awards align the interests of each executive with those of our stockholders. They also provide executive officers a significant, long-term interest in our success and help retain key executive officers in a competitive market for executive talent. Our 2016 Equity Incentive Plan authorizes the Compensation Committee to grant stock options and other equity-based awards to executive officers. The number of shares owned by, or subject to equity-based awards held by, each executive officer is periodically reviewed and additional awards are considered based upon a generalized assessment of past performance of the executive and the relative holdings of other executive officers. The stock options and restricted stock unit awards granted to executive officers by the Compensation Committee generally vest over periods of four years subject to continued service with our company, and stock options expire no later than ten years from the date of

grant. The stock options and restricted stock unit awards vest as to 25% of the shares on the first anniversary of the vesting commencement date and as to 1/16th of the shares per quarter thereafter.

The Compensation Committee has historically granted equity awards to employees on a two-year cycle. In August 2016, the Compensation Committee approved a grant of 12,500 stock options and 5,630 RSUs to Mr. Hideshima, based on the Compensation Committee’s review of all employee grant levels and on the recommendation of the Chief Executive Officer. No equity grants were made to any other named executive officer in fiscal year 2017 as none of the other named executive officers were eligible for a two-year refresh grant in fiscal year 2017.

Stock Ownership Guidelines

Other than as discussed below under “Stock Retention Policy,” we currently do not require our directors or executive officers to own a particular amount of our common stock. The Compensation Committee is satisfied that stock and option holdings among our directors and executive officers are sufficient at this time to provide motivation and to align this group’s interests with those of our stockholders. Our insider trading policy prohibits any of our directors, executive officers, employees or contractors from engaging in any transactions in publicly-traded options, such as puts and calls, and other derivative securities, including any hedging or similar transaction, with respect to our common stock.

Stock Retention Policy

We have adopted a stock retention policy which requires that our Chief Executive Officer hold a significant portion of the shares of our common stock acquired under our equity incentive plan for at least 36 months. Under the policy, the Chief Executive Officer must retain at least 50% of all “net” shares received (“net” shares mean those shares remaining after the sale or withholding of shares in payment of the exercise price, if applicable, and withholding taxes) for at least 36 months following the date on which an equity award is vested, settled or exercised.

Recoupment Policy

We established a Recoupment Policy that is applicable to our executive officers. Under the policy, if we are required to prepare an accounting restatement due to material noncompliance with the financial reporting requirements under United States securities laws, the Compensation Committee shall be entitled to recover from any current or former executive officer any excess incentive-based compensation received by such person during the three-year period prior to the date on which we are required to prepare the restatement. This policy applies to both equity-based and cash-based incentive compensation awards. The “excess incentive-based compensation” is the difference between the actual amount that was paid, and the amount that would have been paid under the restated financial results.

As indicated in the Explanatory Note, the consolidated financial statements included in this Annual Report on Form 10-K have been restated. The Board of Directors intends to undertake an analysis of whether any excess incentive-based compensation was paid to any of our executive officers or former executive officers. If the Board of Directors determine that any excess incentive-based compensation was paid to executives, the recoupment of the incentive-based compensation would be immaterial.

Other Benefits

Health and Welfare Benefits

Our executive officers receive the same health and welfare benefits as are offered to our other employees, including medical, dental, vision, life, accidental death and dismemberment, disability, flexible spending accounts and holiday pay. The same contribution amounts, percentages and plan design provisions are applicable to all employees.

Retirement Program

Our executive officers may participate in the same tax-qualified, employee-funded 401(k) plan that is offered to all our other employees. We do not maintain a supplemental executive retirement plan, nor do we offer any defined benefit retirement plans to our executive officers.

Perquisites

We do not provide special benefits or other perquisites to any of our named executive officers.

Employment Arrangements, Severance and Change of Control Benefits

We have not entered into employment agreements with any of our named executive officers. Messrs. Hideshima, Chou and Liaw had, and Ms. Liu currently has, a signed offer letter which provides for at-will employment. The offer letter provides for salary, stock options and right to participate in our employee benefit plans. We do not have any written employment arrangements with Mr. Liang. We do not have any arrangements with any of our executive officers that provide for any severance or other benefits in the event of termination or change of control of our company.

Tax and Accounting Treatment of Compensation

In our review and establishment of compensation programs and payments, we consider, but do not place great emphasis on, the anticipated accounting and tax treatment of our compensation programs to us and our executive officers. While we may consider accounting and tax treatment, these factors alone are not dispositive. Among other factors that receive greater consideration are the net costs to us and our ability to effectively administer executive compensation in the short and long-term interests of stockholders.

Section 162(m) of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), generally limits a company’s ability to deduct for tax purposes compensation in excess of $1.0 million paid in any single tax year to certain executive officers (and, beginning in 2018, certain former executive officers). Prior to what is referred to as the 2017 Tax Reform Act, compensation deemed to be performance-based in accordance with Section 162(m) could be exempt from this $1.0 million limitation, and compensation paid to the chief financial officer was not subject to the deductibility limitation of Section 162(m). We continue to evaluate the impact of the 2017 Tax Reform Act for its potential impact on our company. Regardless of that impact, however, we will continue to design and maintain executive compensation arrangements that we believe will attract and retain the executive talent that we need to compete successfully, even if in certain cases such compensation is not deductible for federal income tax purposes. In addition, because of the uncertainties associated with the application and interpretation of Section 162(m) and the regulations issued thereunder, there can be no assurance that compensation intended to satisfy the requirements for deductibility under Section 162(m), as in effect prior to 2018, will in fact be deductible.

We account for equity compensation paid to our employees in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Stock-Compensation (“ASC Topic 718”), which requires us to estimate and record expenses for each award of equity compensation over the service period of the award.

We intend that our plans, arrangements and agreements will be structured and administered in a manner that complies with (or is exempt from) the requirements of Section 409A of the Code. Participation in, and compensation paid under, our plans, arrangements and agreements may, in certain instances, result in the deferral of compensation that is subject to the requirements of Section 409A. If our plans, arrangements and agreements as administered fail to meet certain requirements under or exemptions from Section 409A, compensation earned thereunder may be subject to immediate taxation and tax penalties.

Summary

The Committee believes that our compensation philosophy and programs are designed to foster a performance-oriented culture that aligns our executive officers’ interests with those of our stockholders. The Committee also believes that the compensation of our executive officers is both appropriate and responsive to the goal of building stockholder value.

Compensation Committee Report

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis (“CD&A”) with our management. Based on this review and these discussions, the Compensation Committee recommended to the Board of Directors that the CD&A be included in this Annual Report on Form 10-K.

This report has been furnished by the Compensation Committee.

Sherman Tuan, Chair

Hwei-Ming (Fred) Tsai

Saria Tseng

Fiscal Year 2017 Summary Compensation Table

The following table sets forth information concerning the compensation earned during the fiscal years ended 2017, 2016 and 2015 of each person who was a named executive officer during fiscal year 2017.

FISCAL YEAR 2017 SUMMARY COMPENSATION TABLE

Name and Principal Position During Fiscal Year 2017		Year		Salary ($)(1)			Bonus ($)(2)					Stock Awards ($)(3)				Option Awards ($)(4)				Non-Equity Incentive Plan Compensation ($)				Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)				All Other Compensation ($)(5)				Total ($)
Charles Liang		2017		386,212			$	650				$	—			$	—			$	—			$	—			$	—			$	386,862
President, Chief Executive Officer and Chairman of the Board		2016		363,776			—					—				—				—				—				—				363,776
	2015		367,528			7,607					—				2,607,616				—				—				—				2,982,751
Howard Hideshima		2017		330,681			650					115,640				116,092				—				—				1,500				564,563
Senior Vice President and Chief Financial Officer		2016		322,646			—			—		—				—				—				—				—				322,646
	2015		315,816			6,990					—				403,580				—				—				—				726,386
Phidias Chou		2017		299,461			10,650					—				—				—				—				—				310,111
Senior Vice President, Worldwide Sales		2016		286,747			3,416					137,160				138,000				—				—				—				565,323
	2015		300,278			6,446					—				—				—				—				—				306,724
Yih-Shyan (Wally) Liaw		2017		246,105			650					—				—				—				—				—				246,755
Senior Vice President, International Sales, Corporate Secretary and Director		2016		232,864			—					109,959				105,089				—				—				—				447,912
	2015		247,271			5,422					—				—				—				—				—				252,693
Sara Liu		2017		244,558			650					—				—				—				—				—				245,208
Senior Vice President and Chief Administrative Officer, Treasurer and Director		2016		237,253			—					110,484				113,961				—				—				—				461,698
	2015		230,546			5,309					—				—				—				—				—				235,855

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(1)	Amounts disclosed under "Salary" includes leave pay earned by the named executive officers.

(2)	Amounts disclosed under “Bonus” reflect the discretionary cash bonuses earned by the named executive officers.

(3)	Amounts represent the grant date fair value of restricted stock unit awards calculated in accordance with ASC Topic 718, and are based on the closing market price of our common stock on the date of grant.

(4)

Amounts represent the grant date fair value of each stock option award calculated in accordance with ASC Topic 718, using the Black Scholes option-pricing model. Assumptions used in the calculation of these amounts are included in Part II, Item 8, "Financial Statements and Supplementary Data", and Part II, Item 8, Note 12 “Stock-based Compensation and Stockholders’ Equity” to our consolidated financial statements for the fiscal year 2017 included in this Annual Report on Form 10-K.

(5)	Amounts disclosed under “All Other Compensation” reflect payments made by our company in connection with medical and dental benefit waivers.

Fiscal Year 2017 Grants of Plan-Based Awards

The following table provides information concerning all plan-based awards granted during fiscal year 2017 to each person who was a named executive officer during fiscal year 2017. Except for Mr. Hideshima, no other named executive officer received a plan-based award during fiscal year 2017.

FISCAL YEAR 2017 GRANTS OF PLAN-BASED AWARDS

Name	Grant Date			All Other Stock Awards: Number of Shares of Stock or Units (#)			All Other Option Awards: Number of Securities Underlying Options (#)			Exercise or Base Price of Option Awards ($/Sh)				Grant Date Fair Value of Stock and Option Awards ($)(1)
Charles Liang	—			—			—			$	—			$	—
Howard Hideshima	8/3/2016			5,630		(2)	—			$	—			$	115,640
	8/3/2016			—			12,500		(3)	20.54				116,092
Phidias Chou	—			—			—			$	—			—
Yih-Shyan (Wally) Liaw	—			—			—			$	—			—
Sara Liu	—			—			—			$	—			—

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(1)	Represents the fair value of each stock option and restricted stock unit awards as of the date of grant, computed in accordance with ASC Topic 718.

(2)	These time-based restricted stock units generally vest at the rate of 25% on May 22, 2017 and 1/16th per quarter thereafter, such that the underlying shares are expected to be fully vested on May 22, 2020. Any unvested equity awards were forfeited upon termination of employment on January 30, 2018.

(3)	This stock option generally vests at the rate of 25% on May 8, 2017 and 1/16th per quarter thereafter, such that the awards are expected to be fully vested on May 8, 2020. Any unvested equity awards were forfeited upon termination of employment on January 30, 2018.

Outstanding Equity Awards at Fiscal Year-End 2017

The following table provides information concerning the outstanding equity-based awards as of June 30, 2017, held by each person who was a named executive officer for fiscal year 2017, including with respect to stock options, the option exercise price and expiration dates for each award.

	Option Awards												Stock Awards
Name	Number of Securities Underlying Unexercised Options (#) Exercisable			Number of Securities Underlying Unexercised Options (#) Unexercisable			Option Exercise Price ($)				Option Expiration Date		Number of Shares or Units of Stock That Have Not Vested (#)		Market Value of Shares or Units of Stock That Have Not Vested ($)(1)
Charles Liang	720,000			—			$	10.66			3/4/2019
	132,000			—			$	18.59			4/25/2021
	231,260			—			$	20.70			1/21/2023
	104,218		(2)	62,532		(2)	$	35.07			1/19/2025
Howard Hideshima	10,886			—			$	13.61			8/2/2020
	56,614			—			$	13.61			8/2/2020
	8,690			—			$	12.50			8/6/2022
	37,810			—			$	12.50			8/6/2022
	5,445		(3)	1,815		(3)	$	26.75			8/4/2024
	20,055		(4)	6,685		(4)	$	26.75			8/4/2024
	1,669		(5)	5,010		(5)	$	20.54			8/3/2026
	1,455		(6)	4,366		(6)	$	20.54			8/3/2026
													4,223	(7)	104,097
Phidias Chou	6,500			—			$	5.53			4/29/2019
	18,970			—			$	8.36			10/26/2019
	31,030			—			$	8.36			10/26/2019
	6,150			—			$	15.22			10/24/2021
	32,850			—			$	15.22			10/24/2021
	16,150		(8)	1,077		(8)	$	14.23			10/21/2023
	15,724		(9)	1,049		(9)	$	14.23			10/21/2023
	2,129		(10)	2,741		(10)	$	25.40			10/21/2025
	3,118		(11)	4,012		(11)	$	25.40			10/21/2025
													3,375	(12)	83,194
Yih-Shyan (Wally) Liaw	10,635			—			$	7.46			4/28/2018
	10,275			—			$	7.46			4/28/2018
	10,079			—			$	13.61			8/2/2020
	7,671			—			$	13.61			8/2/2020
	8,687			—			$	17.29			4/23/2022
	18,313			—			$	17.29			4/23/2022
	6,127		(13)	1,415		(13)	$	18.93			4/21/2024
	12,559		(14)	2,899		(14)	$	18.93			4/21/2024
	1,596		(15)	3,514		(15)	$	28.71			4/27/2026
	1,058		(16)	2,332		(16)	$	28.71			4/27/2026
													2,873	(17)	70,819
Sara Liu	19,615			—			$	11.81			1/25/2020
	16,285			—			$	11.81			1/25/2020
	29,000			—			$	17.09			1/23/2022
	20,125		(18)	2,875		(18)	$	17.96			1/20/2024
	3,375		(19)	5,625		(19)	$	27.28			1/27/2026
													2,785	(20)	68,650

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(1)	Represents the closing stock price per share of our common stock as of June 30, 2017 ($24.65) multiplied by the number of shares underlying RSUs that had not vested as of June 30, 2017.

(2)	Option generally vested at the rate of 25% on November 1, 2015 and 1/16th per quarter thereafter, such that the award is expected to be fully vested on November 1, 2018.

(3)	Option (ISO) generally vested at the rate of 25% on May 8, 2015 and 1/16th per quarter thereafter, such that the award is expected to be fully vested on May 8, 2018. Any unvested equity awards were forfeited upon termination of employment on January 30, 2018.

(4)	Option (NQ) generally vested at the rate of 25% on May 8, 2015 and 1/16th per quarter thereafter, such that the award is expected to be fully vested on May 8, 2018. Any unvested equity awards were forfeited upon termination of employment on January 30, 2018.

(5)	Option (ISO) generally vested at the rate of 25% on May 8, 2017 and 1/16th per quarter thereafter, such that the award is expected to be fully vested on May 8, 2020. Any unvested equity awards were forfeited upon termination of employment on January 30, 2018.

(6)	Option (NQ) generally vested at the rate of 25% on May 8, 2017 and 1/16th per quarter thereafter, such that the award is expected to be fully vested on May 8, 2020. Any unvested equity awards were forfeited upon termination of employment on January 30, 2018.

(7)	RSUs generally vested at the rate of 25% on May 22, 2017 and 1/16th per quarter thereafter, such that the underlying shares are expected to be fully vested on May 22, 2020.

(8)	Option (ISO) generally vested at the rate of 25% on September 13, 2014 and 1/16th per quarter thereafter, such that the award is expected to be fully vested on September 13, 2017.

(9)	Option (NQ) generally vested at the rate of 25% on September 13, 2014 and 1/16th per quarter thereafter, such that the award is expected to be fully vested on September 13, 2017.

(10)	Option (ISO) generally vested at the rate of 25% on September 13, 2016 and 1/16th per quarter thereafter, such that the award is expected to be fully vested on September 13, 2019. Any unvested equity awards were forfeited upon termination of employment on January 30, 2018.

(11)	Option (NQ) generally vested at the rate of 25% on September 13, 2016 and 1/16th per quarter thereafter, such that the award is expected to be fully vested on September 13, 2019. Any unvested equity awards were forfeited upon termination of employment on January 30, 2018.

(12)	RSUs generally vested at the rate of 25% on November 10, 2016 and 1/16th per quarter thereafter, such that the underlying shares are expected to be fully vested on November 10, 2019.

(13)	Option (ISO) generally vested at the rate of 25% on March 30, 2015 and 1/16th per quarter thereafter, such that the award is expected to be fully vested on March 30, 2018. Any unvested equity awards were forfeited upon termination of employment on January 30, 2018.

(14)	Option (NQ) generally vested at the rate of 25% on March 30, 2015 and 1/16th per quarter thereafter, such that the award is expected to be fully vested on March 30, 2018. Any unvested equity awards were forfeited upon termination of employment on January 30, 2018.

(15)	Option (ISO) generally vested at the rate of 25% on March 29, 2017 and 1/16th per quarter thereafter, such that the award is expected to be fully vested on March 29, 2020. Any unvested equity awards were forfeited upon termination of employment on January 30, 2018.

(16)	Option (NQ) generally vested at the rate of 25% on March 29, 2017 and 1/16th per quarter thereafter, such that the award is expected to be fully vested on March 29, 2020. Any unvested equity awards were forfeited upon termination of employment on January 30, 2018.

(17)	RSUs generally vested at the rate of 25% on May 10, 2017 and 1/16th per quarter thereafter, such that the underlying award is expected to be fully vested on May 10, 2020.

(18)	Option generally vested at the rate of 25% on December 12, 2014 and 1/16th per quarter thereafter, such that the award is expected to be fully vested on December 12, 2017.

(19)	Option generally vested at the rate of 25% on December 12, 2016 and 1/16th per quarter thereafter, such that the award is expected to be fully vested on December 12, 2019.

(20)	RSUs generally vested at the rate of 25% on February 10, 2017 and 1/16th per quarter thereafter, such that the award is expected to be fully vested on February 10, 2020.

Option Exercises and Stock Vested During Fiscal Year 2017

The following table sets forth the dollar amounts realized by each person who was a named executive officer during fiscal year 2017 pursuant to the exercise or vesting of equity-based awards during fiscal year 2017.

	Option Awards							Stock Awards
Name	Number of Shares Acquired on Exercise (#)			Value Realized on Exercise ($)(1)				Number of Shares Acquired on Vesting (#)			Value Realized on Vesting ($)(2)
Charles Liang	—			$	—			—			$	—
Howard Hideshima	63,126			$	749,544			1,407			$	34,260
Phidias Chou	11,000			$	212,554			2,025			$	49,392
Sara Liu	25,000			$	500,871			1,265			$	33,029
Yih-Shyan (Wally) Liaw	20,000			$	281,000			957			$	23,112

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(1)	Based on the difference between the sales price of our common stock at the time of exercise and the exercise price.

(2)	The value is the closing price of our common stock on the date of vesting, multiplied by the number of shares vested.

Pension and Nonqualified Deferred Compensation

We do not provide any nonqualified deferred compensation arrangements or pension plans. As such, the Pension Benefits disclosure and Nonqualified Deferred Compensation disclosure are omitted from this Annual Report on Form 10-K.

Potential Payments Upon Termination or Change of Control

We do not currently and did not during fiscal year 2017 have any arrangements with any of our executive officers that provide for any severance or other benefits in the event of termination or change of control of our company.

Director Compensation

Under our director compensation policy in effect for fiscal year 2017, we reimburse non-employee directors for reasonable expenses in connection with attendance at Board and committee meetings. Our non-employee directors receive an annual retainer of $40,000, payable quarterly. In addition, the Chairperson of our Audit Committee receives an additional annual retainer of $25,000, the Chairperson of each of our Compensation Committee and Nominating and Corporate Governance Committee receives an additional annual retainer of $5,000 and each director serving in a non-chairperson capacity on our standing Board committees receives an additional annual retainer of $2,500 per committee, payable quarterly.

Non-employee directors also are eligible to receive stock options under our 2016 Equity Incentive Plan. Under the policy, non-employee directors are granted an initial option to purchase 18,000 shares upon first becoming a member of our Board of Directors. A non-employee director serving as Chairperson of the Audit Committee receives an additional initial grant of an option to purchase 12,000 shares. Non-employee directors serving as Chairperson of the Compensation or Nominating and Corporate Governance Committees receive an additional initial grant of an option to purchase 2,000 shares. Each of these initial options generally vests and becomes exercisable over four years, with the first 25% of the shares subject to each initial option generally vesting on the first anniversary of the date of grant and the remainder generally vesting quarterly thereafter. Immediately after each of our annual meetings of stockholders, each non-employee director is granted an option to purchase 4,500 shares of our common stock, the Audit Committee Chairperson is granted an additional annual option to purchase 3,000 shares of our common stock and the Chairperson of each of the Compensation and Nominating and Corporate Governance Committees is granted an additional annual option to purchase 500 shares of our common stock. These options will vest and become exercisable generally on the first anniversary of the date of grant or immediately prior to our annual meeting of stockholders, if earlier.

The options granted to non-employee directors have a per share exercise price equal to 100% of the fair market value of the underlying shares on the date of grant, and will become fully vested if we undergo a change of control. Annual grants will be reduced proportionally if the person does not serve for the full year after the annual grant.

The following table shows for the fiscal year ended June 30, 2017 certain information with respect to the compensation of all of our non-employee directors who served in such capacity during the fiscal year ended June 30, 2017:

FISCAL YEAR 2017 DIRECTOR COMPENSATION

Name	Fees Earned or Paid in Cash ($)(1)				Stock Awards ($)			Option Awards ($)(2)				Total ($)
Laura Black	$	65,000			—			$	83,700			$	148,700
Michael McAndrews	$	42,500			—			$	50,220			$	92,720
Hwei-Ming (Fred) Tsai	$	50,000			—			$	55,800			$	105,800
Saria Tseng	$	33,750			—			$	229,049			$	262,799
Sherman Tuan	$	47,500			—			$	55,800			$	103,300

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(1)	This column represents annual director fees, non-employee committee chairman fees and other committee member fees earned in fiscal year 2017.

(2)

The dollar amount in this column represents the aggregate grant date fair value of the awards calculated in accordance with FASB ASC Topic 718, using the Black Scholes option-pricing model. On March 1, 2017 each of Ms. Black and Messrs. McAndrews, Tsai and Tuan were granted options to purchase 7,500, 4,500, 5,000 and 5,000 shares, respectively, with the grant date fair values set forth in the table above. In connection with her initial appointment to the Board, on November 4, 2016, Ms. Tseng received an initial option to purchase 18,000 shares with a grant date fair value of $9.93 and on March 1, 2017 she received an additional option to purchase 4,500 shares with a grant date fair value of $11.16. Assumptions used in the calculation of the grant date fair value amounts are included in Part II, Item 8, "Financial Statements and Supplementary Data", and Item II, Part 8, Note 12, “Stock-based Compensation and Stockholders’ Equity” to our consolidated financial statements for the fiscal year 2017 included in this Annual Report on Form 10-K.

The table below sets forth the aggregate number of shares underlying option awards held by our non-employee directors as of June 30, 2017. None of the non-employee directors held any unvested stock awards as of June 30, 2017.

Name	Option Awards
Laura Black	31,500
Michael McAndrews	27,000
Hwei-Ming (Fred) Tsai	50,000
Saria Tseng	22,500
Sherman Tuan	51,500

Compensation Committee Interlocks and Insider Participation

None of the members of the Compensation Committee is a current or former officer or employee of our company or had any relationship with our company requiring disclosure. In addition, during fiscal year 2017, none of our executive officers served as a member of the Board of Directors or Compensation Committee of any other entity that has one or more executive officers who served on our Board of Directors or Compensation Committee. Saria Tseng, Hwei-Ming (Fred) Tsai and Sherman Tuan served on the Compensation Committee in fiscal year 2017.

Compensation Program Risk Assessment

We have assessed our compensation programs and have concluded that risks arising from our compensation policies and practices are not reasonably likely to have a material adverse effect on us. We concluded that our compensation policies and practices do not encourage excessive or inappropriate risk-taking. We believe our programs are appropriately designed to encourage our employees to make decisions that result in positive short-term and long-term results for our business and our shareholders.