The Compensation Committee does not use a specific formula for allocating total direct compensation
between variable and fixed compensation, between annual and long-term compensation or between cash and non-
cash compensation. However, the Compensation Committee believes that a substantial portion of total direct
compensation should be at-risk compensation (with the percentage of the executive's compensation that is at risk
increasing as the executive's responsibility increases).
Effective Corporate Governance Reinforces our Executive Compensation Program
We believe that other aspects of our executive compensation practices also help to drive performance and
align with our stockholders' long-term interests. These practices generally include the following:
we balance short- and long-term incentives by using a mix of cash bonus opportunities, stock options,
RSUs and/or PSUs, and a mix of performance measures;
we cap maximum payout levels under awards with performance-based vesting metrics and incentive
awards and provide the Compensation Committee with the authority to reduce payouts for these awards in
its discretion;
our equity awards do not automatically vest on a change in control;
we do not provide any tax gross-ups;
the Compensation Committee reviews tally sheets (as described below) when making compensation
determinations;
we provide only modest perquisites;
we maintain share ownership guidelines;
our stock option grants have exercise prices equal to the closing price of our stock on the date of grant of
the award;
we mitigate the potential dilutive effect of equity awards through our share repurchase program;
we do not reprice underwater stock options without shareholder approval;
we maintain a compensation recovery policy applicable in the event an officer's misconduct leads to an
accounting restatement; and
we do not permit hedging or short-sales transactions by executive officers or directors.
Determination of Executive Compensation
Role of the Compensation Committee
Our executive compensation program is administered by our Compensation Committee. The Compensation
Committee is responsible for approving all elements of compensation for our executive officers. The
Compensation Committee generally reviews the performance and compensation of our executive officers on an
annual basis and at the time of hiring, promotion or other change in responsibilities. The Compensation
Committee's annual review typically occurs shortly after the completion of each fiscal year, with the review for
fiscal 2013 compensation commencing in August 2012 and continuing during the Compensation Committee's
meeting in September 2012.
While the Compensation Committee considers our target pay positioning strategy (described below) as one
factor in setting compensation for our executives, the Compensation Committee's practice is to consider all
elements of compensation, our compensation philosophy and objectives and a subjective evaluation of other
relevant facts and circumstances when determining the appropriate level and mix of each element of
compensation for our executive officers, including the following:
the executive's experience, performance and judgment;
survey and peer company market data prepared by the Compensation Committee's compensation
consultant, as explained in more detail below;
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