Our by-laws provide that a quorum consists of a majority of the shares of common stock outstanding and entitled to vote at the annual meeting. Shares of common stock represented by a properly signed and returned proxy will be treated as present at the annual meeting for purposes of determining the existence of a quorum at the annual meeting. Abstentions and broker "non-votes" are counted as present or represented for purposes of determining the existence of a quorum at the annual meeting. A "non-vote" occurs when a broker or nominee holding shares for a beneficial owner returns a proxy but does not vote on a proposal because the broker or nominee does not have discretionary voting power and has not received instructions from the beneficial owner.

We are soliciting proxies on behalf of our Board of Directors. No compensation will be paid by any person in connection with our solicitation of proxies. We will reimburse brokers, banks and other nominees for the out-of-pocket expenses and other reasonable clerical expenses they incur in obtaining instructions from beneficial owners of our common stock. In addition to our solicitation by mail, our directors, officers and employees may make special solicitations of proxies personally or by telephone, facsimile, courier or e-mail. We expect that the expense of any special solicitation will be nominal. We will pay all expenses incurred in connection with this solicitation.

You may revoke your proxy at any time before it is voted at the meeting. In order to revoke your proxy, you must either:

ü

sign and return another proxy card with a later date;

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provide written notice of the revocation of your proxy to our secretary;

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if you voted by Internet or telephone, by following the instructions for revocation provided by Internet or telephone; or

ü

attend the meeting and vote in person.

qualified. This year, the term of the Class II directors is expiring.

Our Nominating and Corporate Governance Committee has nominated Martin A. Kits van Heyningen and Charles R. Trimble to serve as Class II directors for a three-year term. Our stockholders last elected Messrs. Kits van Heyningen and Trimble at our annual meeting of stockholders in May 2013, and their current terms will expire at the 2016 annual meeting.

three-year term. In accordance with our director resignation policy, each of Messrs. Kits van Heyningen and Trimble has submitted his resignation in advance of the annual meeting, and each resignation will only become effective if (a) the candidate fails to receive a majority of the votes properly cast on his re-election and (b) our Board accepts his resignation. For more information about majority voting and our director resignation policy, please see "Board of Directors and Committees of the Board – Corporate Governance – Majority Voting."

number of shares subject to the 2016 Plan, our Board considered the number of shares expected to be necessary to enable us to continue to make competitive grants under the 2016 Plan for several years. Our Board recommends that stockholders approve the 2016 Plan so that we may continue to provide equity and incentive compensation intended to attract, retain and motivate current and prospective officers, employees, directors and consultants. Our Board believes that stock options and other forms of equity and incentive compensation will promote our growth and provide a meaningful incentive to our officers, employees, directors and consultants to perform well.

As of April 18, 2016, there were outstanding under all of our plans (a) stock options to purchase 1,036,422 shares of our common stock at a weighted average exercise price of $10.89 per share and a weighted average remaining term of 2.24 years (none of which has dividend equivalent rights) and (b) 680,566 unvested shares of restricted stock. At that date, no other equity awards were outstanding under any of our plans, and no shares were available for the issuance of any new awards under any of our plans (other than our employee stock purchase plan).

The 2016 Plan provides for the issuance of cash awards. As described below, Section 162(m) of the Code generally prevents us from deducting more than $1.0 million in compensation each year for each of our Chief Executive

officers will qualify as performance-based compensation under Section 162(m), although we retain the flexibility to adopt compensation programs that would not qualify as performance-based compensation (such as discretionary awards).

As of April 18, 2016, there were 16,499,302 shares of our common stock outstanding. The approval of the 2016 Plan will result in potential dilution of our outstanding stock. Based solely on the closing price of our common stock on April 18, 2016 of $9.73 per share, the aggregate market value of the 3,000,000 shares of common stock to be reserved for issuance under the 2016 Plan (which excludes shares that may be rolled over from forfeitures, cancellations, reacquisitions and terminations of awards that are outstanding under our earlier plans) would be $29,190,000.

A majority of the votes properly cast on the proposal at the annual meeting will be necessary to approve the 2016 Plan.

Administration

The 2016 Plan will be administered by our Board of Directors or a committee of two or more directors who are intended to qualify as "non-employee directors" under Rule 16b-3 under the Securities Exchange Act of 1934, as amended, or the Exchange Act, as determined by the Board. The Board or any such committee in its capacity as administrator of the 2016 Plan is referred to as the "administrator" of the plan. For purposes of awards to directors or officers who are subject to Section 16 of the Exchange Act, the administrator will be deemed to include only directors who are determined by the Board to be "non-employee directors" under Rule 16b-3 under the Exchange Act, and for purposes of performance-based awards, the administrator will be a committee composed of two or more directors who are determined by the Board to be "outside directors" under Section 162(m) of the Code. In general, an outside director is a director who is not a current employee, a former employee who receives compensation for prior services, a former officer, or a person that receives remuneration from us, either directly or indirectly in exchange for goods or services, in any capacity other than as a director. The failure of any person to qualify as a non-employee director or an outside director will not affect the validity of any award granted or other action taken under the plan.

The administrator may delegate authority to one or more executive officers to grant awards at fair market value to persons who are not subject to Section 16 of the Exchange Act and who are not "covered persons" under Section 162(m) of the Code. The administrator must specify a limit on the number of awards that may be granted and establish guidelines for the exercise price of any stock option, the conversion ratio or price of other awards and vesting criteria.

All decisions and interpretations of the administrator are binding on all persons subject to the plan, including the company and recipients of awards.

Shares available for issuance

The total number of shares of our common stock issuable under the 2016 Plan is 3,000,000, plus an additional number of shares (not to exceed 1,716,988) equal to the number of shares subject to outstanding awards under our earlier plans that are subsequently forfeited, cancelled, reacquired by us or otherwise terminated (other than by exercise), but only if such shares would have been added back to the shares available for issuance under the 2016 Plan if they had been issued pursuant to an award under the 2016 Plan. Any such shares would be added at the ratio of one share for each share subject to such a stock option or stock appreciation right or two shares for each share subject to other types of such awards.

Solely for purposes of the overall limitation on the number of shares available under the 2016 Plan, each stock option and stock appreciation right granted under the 2016 Plan will reduce the number of shares available for grant by one share for every one share granted, and each grant of any other type of award (sometimes referred to as a "full value award") will reduce the number of shares available for grant by two shares for every one share granted.

The maximum number of shares with respect to awards that may be granted under the 2016 Plan to any individual may not exceed 250,000 shares (or, in the case of a non-employee director 100,000 shares) in any fiscal year.

If an award is forfeited, cancelled, satisfied without the issuance of shares or otherwise terminated, or if shares were issued pursuant to an unvested full value award and were reacquired by us at no more than the grantee's purchase price, the number of shares that were removed from the pool of available shares under the 2016 Plan with respect to that award will be restored to the pool. However, if an award is exercised through tendering or attesting to the ownership of previously owned shares or through withholding shares that would otherwise be awarded (including shares withheld for tax withholding purposes), the pool of available shares will be reduced by the gross number of shares being exercised, without reduction for the number of shares tendered, attested to or withheld. The 2016 Plan also provides that any shares that we may

Stock options become exercisable at such time or times, whether or not in installments, as the administrator shall determine on or after the date of grant.

Stock options are not transferable by the optionee other than by will or by the laws of descent and distribution. Notwithstanding the foregoing, the administrator, in its sole discretion, may provide in the award agreement for a stock option, or may agree in writing with respect to an outstanding stock option, that the optionee may transfer non-qualified stock options to members of his or her immediate family, to trusts for the benefit of such family members, or to partnerships in which such family members are the only partners, provided that the transferee agrees in writing to be bound by all of the terms and conditions of the 2016 Plan and the applicable option.

In general, an optionee may pay the exercise price of an option in cash or, if permitted by the applicable option agreement, by tendering (or attesting to the ownership of) shares of our common stock not subject to restrictions under any plan, by a "cashless exercise" through a broker supported by an irrevocable instruction to such broker to deliver sufficient funds to pay the applicable exercise price, by reducing the number of shares otherwise issuable to the optionee upon exercise of the option by a number of shares having a fair market value equal to the aggregate exercise price of the options being exercised, or by any other method permitted by the administrator.

Stock appreciation rights.    Pursuant to the 2016 Plan, we may grant stock appreciation rights, which are awards entitling the recipient to receive cash or shares of our common stock having a value on the date of exercise equal to the product of (a) the difference between the fair market value of one share of our common stock on the date of exercise and the exercise price of such stock appreciation right, multiplied by (b) the number of shares of stock with respect to which the stock appreciation right shall have been exercised. The exercise price of stock appreciation rights may not be less than 100% of the fair market value of our common stock on the date of grant, and the terms and conditions of stock appreciation rights will be determined from time to time by the administrator, except that the term of any stock appreciation right may not exceed ten years from the date of grant. Stock appreciation rights become exercisable at such time or times, whether or not in installments, as the administrator shall determine on or after the date of grant. Except as specifically provided in an award agreement, stock appreciation rights and all rights with respect to such awards may not be sold, assigned, transferred, pledged or otherwise encumbered, other than by will or the laws of descent and distribution.

Restricted stock awards.    Pursuant to the 2016 Plan, we may grant restricted stock awards, which are awards entitling the recipient to acquire, at such a purchase price, if any, as the administrator may determine, shares of our common stock subject to such restrictions and conditions

Performance share awards.    Pursuant to the 2016 Plan, we may grant performance share awards, which are awards entitling the recipient to acquire shares of common stock upon the attainment of specified performance goals; provided, however, that the administrator, in its discretion, may provide either at the time of grant or at the time of settlement that a performance share award will be settled in cash. The period during which performance is to be measured for performance share awards shall not, at the time time of issuance, be less than one year. Except as specifically provided in an award agreement, performance share awards and all rights with respect to such awards may not be sold, assigned, transferred, pledged or otherwise encumbered, other than by will or the laws of descent and distribution.

Dividend equivalent rights.    Pursuant to the 2016 Plan, we may grant dividend equivalent rights, which are awards entitling the recipient to receive credits based on cash dividends that would be paid on the shares of stock specified in the dividend equivalent right (or other award to which it relates). A dividend equivalent right may be granted as a component of another award (other than a stock option or stock appreciation right), and may provide that such dividend equivalent right shall be settled upon settlement, or payment of, or lapse of restrictions on, such other award, and that such dividend equivalent right shall expire or be forfeited or annulled under the same conditions as such other award.

Cash awards.    The administrator, in its discretion, may provide for cash payments to be made under the 2016 Plan. Cash awards may be made subject to such terms, conditions and restrictions as the administrator considers necessary or advisable.

Performance-based awards to covered employees.    Under the 2016 Plan, we may grant performance-based awards, which are restricted stock awards, restricted stock units, performance share awards and cash awards that are granted to "covered employees," as defined in Section 162(m) of the Code, as "performance-based compensation" under Section 162(m). If the 2016 Plan is approved by our stockholders, performance-based awards preserve the deductibility of these awards for federal income tax purposes. Participants are only entitled to receive payment for a performance-based award for any given performance period to the extent that pre-established performance goals set by the administrator for the period are satisfied. The criteria that will be used to establish performance goals will be limited to the following: (a) stock price, (b) market share, (c) gross or net sales, (d) gross or net revenue, (e) return on equity, assets, investment or capital, (f) economic profit (economic value added), (g) total shareholder return, (h) working capital, (i) costs or expenses, (j) margins, (k) earnings (including EBITDA) or earnings per share, (l) cash flow (including adjusted operating cash flow), (m) customer satisfaction,

an additional 5,000 shares of common stock, as long as such director continues to serve on the Audit Committee. Each award will vest in four equal quarterly installments after the date of grant.

The terms of the automatic grant policy may be changed by the Board of Directors at any time.

Recoupment of compensation

The 2016 Plan provides that all awards under the plan are subject to recoupment or clawback of compensation under any provision of applicable law, any term of any award agreement and any policy that we may adopt from time to time. The administrator is entitled to take whatever action it determines to be necessary or appropriate to recover all or any portion of an award or any stock, payment or other compensation acquired or received in respect of that award arising or resulting from any misconduct, accounting restatement to correct an error, or any other miscalculation, error or mistake. Remedies available to the administrator include the termination, cancellation, reduction, limitation, rescission, amendment or modification of any award or any vesting, issuance of shares, payment or other consideration in respect of any award.

Adjustments for changes in common stock and other events

In the event of any reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split, combination or other similar change in our capital stock, or any merger, consolidation, conversion or sale of all or substantially all of our assets, the administrator will make appropriate or proportionate adjustments to the 2016 Plan and awards outstanding under the plan.

The administrator may also adjust the number of shares subject to awards and the exercise price or other terms of awards to take into consideration material changes in accounting principles or practices, extraordinary dividends, acquisitions or dispositions or other events if the administrator determines that the adjustment is appropriate to avoid distortion in the operation of the plan. No such adjustment will be made to incentive stock options, without the consent of the optionee, if it would constitute a certain type of modification, extension or renewal of the option under the Code.

The administrator need not take the same or similar action with respect to any two or more awards and will have the sole discretion to determine whether and to what extent any action it takes will apply to all, or only some, or none of the awards.

In general, a change of control includes (a) any "person" (as that term is used in Section 13(d) and Section 14(d)(2) of the Exchange Act) becoming the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) of 50% or more of the combined voting power of our outstanding securities, (b) the consummation of a merger of consolidation, other than a transaction in which our voting securities outstanding immediately before such consummation represent more than 50% of the combined voting power of the voting securities of the surviving entity (or a parent) outstanding immediately after such merger or consolidation, (c) the closing of the sale of all or substantially all of our assets, (d) our incumbent directors, and their successors approved by a majority vote, ceasing to constitute at least a majority of the Board and (e) a complete liquidation or dissolution of the company.

Change in status

If the employment or other service relationship of the holder of a stock option or stock appreciation right terminates, the stock option or stock appreciation right may be exercised within the period of time specified in the award agreement, to the extent that the award is vested on the date of termination. If the award agreement does not specify other periods, a stock option or stock appreciation right will terminate immediately upon the date of termination in the event of termination by us for cause (as defined in the 2016 Plan) and will remain exercisable (to the extent vested on the date of termination): (a) in the case of any termination other than for disability (as defined in the 2016 Plan), death or cause, for three months following the date of termination; or (b) in the case of termination for disability or death, or if the holder dies within three months after his or her date of termination, for twelve months following the date of termination. In any event, no stock option or stock appreciation right may be exercised after the expiration of the term of such award.

Amendment or termination

Subject to requirements of law or any stock exchange or similar rules that would require a vote of our stockholders, our Board of Directors may, at any time, amend or discontinue the 2016 Plan, and the administrator may, at any time, amend or cancel any outstanding award for the purpose of satisfying changes in law or for any other lawful purpose, but no such action may adversely affect a recipient's rights under any outstanding award without his or her consent.

The following table provides information concerning the benefits that we can determine will be received by:

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each executive officer named in the summary compensation table;

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all current executive officers, as a group;

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all current directors who are not executive officers, as a group; and

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all employees who are not executive officers, as a group.

purposes on the grant of the option. On the exercise of a non-qualified stock option, the difference between the fair market value of the common stock on the exercise date and the option exercise price is treated as compensation to the holder of the option, taxable as ordinary income in the year of exercise. That fair market value becomes the basis for the underlying shares, which will be used in computing any capital gain or loss upon disposition of the shares. The capital gain or loss will be long-term gain or loss if the holder has held the stock for more than one year after the date of exercise of the option.

subsequent resale of such vested shares, the recipient will recognize capital gain or loss, as the case may be, in an amount equal to the difference between the amount the recipient receives in exchange for the vested shares and the fair market value of the vested shares at the time of vesting. The gain or loss will be long-term capital gain or loss if more than one year has passed since the shares vested.

However, the recipient of a restricted stock award may elect to recognize ordinary income upon the receipt, rather than the vesting, of shares of restricted stock in connection with the award in accordance with Section 83(b) of the Code. In this case, the recipient recognizes ordinary income in an amount equal to the excess, if any, of the fair market value of the shares at the time the recipient received the shares over the amount the recipient paid for the shares. Upon the subsequent resale of such vested shares, the recipient will recognize capital gain or loss, as the case may be, in an amount equal to the difference between the amount the recipient receives in exchange for the vested shares and the fair market value of the vested shares at the time the recipient received the shares. The gain or loss will be long-term capital gain or loss if more than one year has passed since the recipient received the shares.

Restricted stock units.    The recipient of a restricted stock unit recognizes no income until the recipient receives shares of common stock issued in connection with the award. Upon such receipt, the recipient recognizes ordinary income in an amount equal to the excess, if any, of the fair market value of the shares at the time the recipient received the shares over any amount the recipient paid for the shares. Upon the subsequent disposition of shares received pursuant to a restricted stock unit, the recipient will recognize capital gain or loss, as the case may be, in the amount of the difference between the price received in exchange for the shares and the fair market value of the shares at the time the recipient received them. The gain or loss will be long-term capital gain or loss if more than one year has passed since the recipient received the shares.

Although restricted stock units vest much like restricted stock awards, the Section 83(b) election described above does not apply to restricted stock units because they are unfunded and unsecured promises to issue stock in the future, and thus are not property as contemplated by that section of the Code.

Unrestricted stock awards.    Upon receipt of common stock pursuant to an unrestricted stock award, the recipient will recognize as ordinary income the difference between the fair market value of the common stock less the amount, if any, the recipient paid for such stock. The recipient's basis in such shares will be equal to the fair market value of the shares on the date of receipt, and this basis will be used in determining any capital gain or loss

income by a recipient of an award under the 2016 Plan in the year in which the recipient recognizes ordinary income upon the exercise of a non-qualified stock option, the disqualifying disposition of an incentive stock option, the receipt or vesting of shares of stock in connection with a restricted stock award, the receipt of an unrestricted stock award, or the receipt of stock or cash in connection with a restricted stock unit, a performance share award, a dividend equivalent right or a cash award.

Section 162(m) of the Code generally prevents us from deducting more than $1.0 million in compensation each year for each of our CEO and our three next most highly paid executive officers (other than our Chief Financial Officer). Performance-based compensation that meets criteria established by the Internal Revenue Service is not subject to this limitation. Some of the awards that we grant under the 2016 Plan may not qualify as performance-based compensation. Accordingly, we may be unable to deduct some or all of the amounts that may be recognized as ordinary income by our executive officers.

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Remove a six-month restriction on the future participation of employees who are directors or officers and who withdraw from an offering (which is not required for transactions under the 1996 Plan to be exempt under Rule 16b-3 of the Exchange Act);

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Remove a six-month restriction on the sale or transfer of shares purchased under the plan by employees who are directors or officers (which is not required for transactions under the 1996 Plan to be exempt under Rule 16b-3 of the Exchange Act);

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Remove a provision that limits the maximum number of shares available for purchase in any offering under the plan to 1% of the outstanding shares of our common stock;

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Modify the formula for determining the number of shares that may be purchased in an offering by any participant; and

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Implement various other changes.

April 18, 2016 of $9.73 per share, the aggregate market value of the additional 1,000,000 shares of common stock to be reserved for issuance under the 1996 Plan would be $9,730,000.

A majority of the votes properly cast on the proposal at the annual meeting will be necessary to approve the amendment and restatement of the 1996 Plan.

Eligibility

An employee is eligible to participate in the 1996 Plan at the beginning of the first offering period that starts after the employee completes 12 months of continuous service with us or one of our subsidiaries, provided that he or she is customarily employed at least 20 hours per week and more than five months in a calendar year by us or a subsidiary that would qualify as a "subsidiary corporation" under Section 424 of the Code.

No employee may be granted an option under the 1996 Plan:

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if, immediately after the grant, the employee would own stock, and/or outstanding options to purchase stock, possessing five percent (5%) or more of the total combined voting power or value of all classes of our capital stock; or

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which permits his or her rights to purchase stock under the 1996 Plan, and any other employee stock purchase plan that we or a subsidiary maintains, to exceed $25,000 of the fair market value of such stock (determined at the time such option is granted) for each calendar year in which such option is outstanding.

As of April 18, 2016, approximately 544 employees were eligible to participate in the 1996 Plan.

Payroll deductions

Each eligible employee may authorize payroll deductions at a specified percentage of his or her compensation for each pay period, up to a maximum of six percent (6%), in one-percent increments, which will be credited to his or her account under the 1996 Plan. During an offering period, a participant may not change his or her deduction percentage.

Transferability

Neither payroll deductions credited to a participant's account nor any rights with regard to the exercise of an option or to receive common stock under the 1996 Plan may be assigned, transferred, pledged, or otherwise disposed of in any way by the participant other than by will or the laws of descent and distribution.

Adjustments

In the event of any merger, consolidation, sale of all or substantially all of our assets, stock split, stock dividend, other adjustment to our capital stock, recapitalization, reorganization or similar transaction, the Compensation Committee will make such adjustments to the 1996 Plan and options thereunder as it deems appropriate. If a surviving or resulting corporation or entity refuses to allow substitutions, any offering period then in progress will be shortened by setting a new termination date for such offering.

Amendment or termination

Our Board may at any time terminate or amend our 1996 Plan, except that any increase in the aggregate number of shares reserved under the 1996 Plan requires stockholder approval. No such termination will affect options previously granted, nor may an amendment make any change in any option previously granted which would adversely affect the rights of any participant under the 1996 Plan. Notwithstanding the foregoing, the Board or the Compensation Committee may, at any time, terminate the 1996 Plan and refund (without interest) amounts in participants' accounts or shorten any ongoing or future offering period.

New plan benefits

Because benefits under the 1996 Plan depend on employees' elections to participate in the plan and the fair market value of the shares of our common stock at various future dates, it is not possible to determine future benefits that will be received by executive officers and other employees under the plan. Non-employee directors are not eligible to participate in the plan.

Historical plan purchases

Historically, purchases of shares of our common stock under the 1996 Plan have been made primarily by our employees who are not executive officers. Since the inception of the plan, employees who are not named executive officers have purchased an aggregate of 646,268 shares under the plan, whereas our current named executive officers, as a group, have purchased only 3,212 shares under the plan. Of the shares purchased by

the lesser of (a) the excess of the fair market value of the shares on the date of disposition over the amount paid upon purchase of the shares, or (b) the excess of the fair market value of the shares on the commencement date of the applicable offering over the amount paid upon purchase of the shares, is taxable as ordinary income. There is no corresponding deduction for the company, however. If the employee disposes of the shares at a price less than the price at which he or she acquired the shares, the employee realizes no ordinary income and has a long-term capital loss measured by the difference between the purchase price and the selling price.

If an employee disposes of shares acquired pursuant to the 1996 Plan within two years after the commencement date of the offering pursuant to which the shares were acquired, or within one year after the date on which the shares were acquired, the difference between the purchase price and the fair market value of the shares at the time of purchase will be taxable to him or her as ordinary income in the year of disposition. In this event, we may deduct from our gross income an amount equal to the amount treated as ordinary income to each such employee. Any excess of the selling price over the fair market value at the time the employee purchased the shares will be taxable as long-term or short-term capital gain, depending upon the period for which the shares were held. If any shares are disposed of within either the two-year or one-year period at a price less than the fair market value at the time of purchase, the same amount of ordinary income (i.e., the difference between the purchase price and the fair market value of the shares at the time of purchase) is realized, and a capital loss is recognized equal to the difference between the fair market value of the shares at the time of purchase and the selling price.

If a participating employee should die while owning shares acquired under the plan, ordinary income may be reportable on his or her final income tax return.

representatives of Grant Thornton LLP will be present at the annual meeting. They will have an opportunity to make a statement if they wish to do so and, if present, will be available to respond to appropriate questions.

A majority of the votes properly cast at the annual meeting will be necessary to ratify the selection by the Audit Committee of our Board of Directors of Grant Thornton LLP as our independent registered public accounting firm for the year ending December 31, 2016.

cash-based incentive compensation, and long-term equity-based compensation.

Our executive compensation objectives are to:

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offer fair and competitive compensation that attracts and retains superior executive talent;

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directly and substantially link rewards to measurable corporate performance;

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align the interests of executive officers with those of stockholders by providing executive officers with an equity stake in our company;

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optimize the cost to us and value to executives; and

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promote long-term career commitments that support a long-standing internal culture of loyalty and dedication to our interests.

The three principal elements of our executive compensation program seek to provide the following rewards:

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Base salaries provide fixed compensation to reward individual value that an executive officer brings to us through experience and past and expected future contributions to our success, while factoring in our specific needs and comparable responsibilities at similar organizations.

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Annual cash-based incentive compensation is designed to reward the achievement of our annual business and financial goals set at the beginning of each year, as well as individual performance, determined on a discretionary basis. This incentive program generally awards compensation based on the degree to which our actual financial results meet the financial goals of our internal business plan and on the individual performance of each executive. In recent years, our annual incentive compensation program has been designed to reward achievement of specific targets for internal financial metrics, such as revenue and adjusted EBITDA, over which our executives have more direct control, rather than external metrics, such as stock price performance or total shareholder return, which are influenced by factors extrinsic to our performance, such as broad market trends or the performance of our industry or competitors, over which our executives have no control.

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Equity grants are designed to reward the achievement of long-term growth in our stock price. In 2015, the Board elected to grant stock options to our CEO and restricted stock awards to our other named executive officers in order to better align their compensation with prevailing

commence employment. From time to time, we may offer a signing or retention bonus to attract a new executive officer.

The base salary and equity award for each executive, together with the overall cash-based incentive compensation plan for all executives, are generally established within the first quarter of each fiscal year at meetings of the Compensation Committee held for this purpose. These meetings generally follow one or more informal presentations or discussions of our financial performance, including achievement of performance targets, for the prior fiscal year. In deciding the compensation to be awarded to the executive officers other than the CEO for the current year and cash-based incentive compensation earned during the prior fiscal year, the Compensation Committee typically reviews and evaluates recommendations from the CEO. The CEO and the members of the Compensation Committee discuss the CEO's recommendations. In deciding the compensation to be awarded to the CEO for the current year and the cash-based incentive compensation earned by the CEO during the prior year, the Compensation Committee typically receives a written self-assessment from the CEO and recommendations from the Chairman of the Compensation Committee. The members of the Compensation Committee then discuss the Chairman's recommendations. The CEO is not present at the time of these deliberations. The Compensation Committee may accept or adjust any recommendations, and the Compensation Committee makes all final compensation decisions.

Our cash-based incentive compensation program comprises corporate performance goals and, for sales executives, business unit performance goals, as well as a discretionary element of individual performance for all executives. Under this program, our Compensation Committee approved two formulas for 2015: one formula for executive officers responsible for business units and one formula for other executive officers. For executive officers responsible for business units, 25% of each executive's target incentive compensation was based on the degree of achievement of our corporate performance goals for 2015, 50% was based on the degree of achievement of applicable business unit performance goals for 2015, and 25% was based on individual performance, as determined by the Compensation Committee in its discretion. For other executive officers, 75% of each executive's target incentive compensation was based on the degree of achievement of our corporate performance goals for 2015 and 25% was based on individual performance, as determined by the Compensation Committee in its discretion. The corporate performance portion of the cash-based incentive compensation program is generally based on a formula approved by the Compensation Committee at the start of each year, but the Compensation Committee has the

which was gathered at the 25^th, 50^th, and 75^th percentiles for (1) base salaries, (2) bonus, (3) total cash compensation (base salary plus bonus), (4) long-term incentives (number of shares of stock options granted and long-term incentive value of equity-based compensation), and (5) total direct compensation (total cash compensation and long-term incentives).

Historically, the Compensation Committee has generally targeted approximately the median base salary level (50^th percentile) of the base salaries of executives in the survey data used by the Compensation Committee as the basis for comparison. Adjustments to the median base salary levels were made in 2015 based on comparisons to the survey data, market median salary increases and evaluation of other factors, such as executive tenure, skill and performance relative to expectations for average performance for comparable executives, which are not reflected in the survey data. These factors reflected the value each individual brought to us through experience, education and training, our specific needs, and the individual's past and expected future contributions to our success. Radford advised the Compensation Committee that base salary levels are considered to be competitive if they fall within 10% of the desired market position. In 2015, the Compensation Committee concluded that our 2014 base salaries for our named executive officers, other than the CEO, approximated the market 50^th percentile for most executives, ranging from 5% below to 5% above the 50^th percentile of the survey data for their respective positions. The CEO's base salary approximated the 75th percentile of the survey data for his position, which was 21% above the 50th percentile of the survey data.

The Compensation Committee believes that benchmarking and aligning base salaries is especially critical to a competitive compensation program. Other elements of our compensation are affected by changes in base salary. For example, our annual cash-based incentive compensation is targeted and paid out as a percentage of base salary.

Our compensation program allows executives to participate in an annual cash-based incentive compensation program. Consistent with prior years, the payouts for our executives for achieving the expected level of corporate performance for 2015 (as a percentage of base salary) were targeted at approximately the median (50^th percentile) of payouts for executives in the survey data reviewed by the Compensation Committee in 2015. As a percentage of base salary, targets for cash-based incentive compensation for the named executive officers for 2015 approximated the market 50^th percentile for most executives, ranging from approximately 13% below (in the case of the executive in charge of a business unit) to 13% above (in the case of the CEO) the 50^th percentile of the Radford survey data. In 2015, the named executive officers' targets for cash-based

compensation for all but one of our named executive officers, including our CEO, approximated the market 50^th percentile for executives, ranging from approximately 9% below to (in the case of the CEO) 17% above the 50^th percentile of the Radford survey data. Because we granted our named executive officers (other than the CEO) the same quantity of equity awards, the target total direct compensation for one named executive officer was 54% above the 50th percentile of the Radford survey data for his position.

Base Salary

The Compensation Committee defines base salary as the annualized regular cash compensation of an employee, excluding cash bonus awards, corporate contributions to employee benefit plans, and other compensation not designated as salary. As described above, base salaries are set for our named executive officers at a meeting of our Compensation Committee which is held for that purpose in the first quarter of the year.

In establishing base salaries for our named executive officers for 2015, the Compensation Committee took into account the value each individual brings to us through experience, education and training, our specific needs and the individual's past and expected future contributions to our success, as well as our overall corporate performance, the market guidance from the Radford survey data and the recommendations of our CEO. The Compensation Committee also considered appropriate cost-of-living adjustments. For 2015, the Compensation Committee made a 3% cost-of-living adjustment to the base salaries of our named executive officers, as well as other small merit increases. For 2015, the average adjustment to salaries for our named executive officers was an increase equal to 3.3% of base salary for 2014, with the largest increase equal to 3.5% of base salary for 2014. These adjustments were effective January 1, 2015.

Annual Cash-based Incentive Compensation

Our management incentive plan is designed to reward our executives for the achievement of annual goals, principally, achievement of corporate financial goals, and, secondarily, achievement of individual goals. It is our philosophy that the executives be rewarded for their performance as a team. We believe this is important to align our executive officers' interests with strong corporate performance and to promote cooperation among them. The executives also are rewarded for achieving individual goals set at the beginning of each year.

selected adjusted EBITDA and revenue as performance measures because it believed that adjusted EBITDA and revenue are strong operating measurements of how well or poorly we performed from a financial standpoint in 2015. The Compensation Committee believed that sufficient increases in adjusted EBITDA and revenue should have a favorable impact on the value of our common stock, considering the degree to which improvements in these metrics typically influence the valuations of investors and stock market analysts.

The portion of the bonus based on individual performance for named executive officers was based solely on the discretion of the Compensation Committee.

Incentive Compensation Awarded

The Compensation Committee awarded incentive compensation for 2015 based on its assessment of the degree of achievement of corporate and mobile broadband business unit performance goals for 2015, as well as individual performance in that year.

The Compensation Committee determined that, despite overall revenue growth of 7%, we did not achieve any of our corporate or mobile broadband business unit minimum targets for revenue growth but achieved 81% of our corporate target for adjusted EBITDA and 83% of the adjusted EBITDA target for our mobile broadband business unit. Accordingly, based on the sliding scale used in the 2015 incentive plan, the Compensation Committee awarded bonus payments of 65% and 72% with respect to the portion of each named executive officer's incentive compensation target attributable to corporate and mobile broadband business unit performance, as applicable.

Individual performance bonuses were awarded based on the Compensation Committee's consideration of qualitative factors (such as the executive's contribution to corporate results and attainment of business unit goals); contribution towards strategic initiatives; and other priorities. Bonuses awarded for individual performance for the named executive officers ranged from 95% to 100% of individual performance targets. Accordingly, total cash-based incentive compensation actually awarded to the named executive officers for 2015 performance was, in the case of our CEO, 66% of his base salary, rather than the targeted 90% of base salary, and, in the case of our other named executive officers, ranged from approximately 26% to 39% of their respective base salaries, rather than the targeted range of 35% to 50% of their respective base salaries.

In determining the individual performance bonus for each named executive officer, the Compensation Committee considers individual achievements throughout the year. The following summarizes some of the individual achievements of our named executive officers considered

Ø  Successfully developed multi-functional teams to accelerate and improve product development process

Ø  Led effort to develop a more efficient, automated and integrated test methodology for product development

Ø  Completed product development efforts in a timely fashion with improved product quality

Ø  Improved predictability and reliability of process for development and introduction of new products

Ø  Successfully managed engineering resources within budget to achieve competing development goals

Ø  Achieved continued success in her role as partner and advisor to senior management on legal and compliance matters

Ø  Sucessfully guided management through numerous contract negotiations critical to our future

Ø  Led effort to enhance our compliance program for the international legal environment in which we operate

Ø  Assumed greater responsibility for achieving a successful outcome in numerous human resource compliance matters

Ø  Achieved successful outcome in a patent litigation matter and other disputes

Equity Incentive Program

For 2015, the Compensation Committee decided to grant our named executive officers substantially the same equity incentive awards as in 2014, except that our CEO received stock options instead of restricted stock. Despite the decrease in the value of our common stock between the grant of our 2014 awards and our 2015 awards, the Compensation Committee generally elected not to increase the size of restricted stock awards in part because granting awards having a similar dollar value would have increased our burn rate and reduced the number of shares available for grant in the future. The Compensation Committee also considered the fact that, despite the lower value of the 2015 equity awards, the named executive officers' target total direct compensation, as described above, nonetheless generally fell within the range of competitiveness. The Compensation Committee believed that stock options would give our CEO enhanced incentives to achieve increases in the value of our common stock, and that granting stock options to the CEO was the best method to strengthen the link beween strategy, priorities, financial performance and payoffs. The equity grant to our CEO in 2015 was also based upon the Radford

We maintain an Employee Stock Purchase Plan and a tax-qualified 401(k) plan, which provides for broad-based employee participation. Under the 401(k) plan, all of our U.S. employees, including executive officers, are eligible to receive matching contributions from us. We match 50% of all employee 401(k) plan contributions up to 6% of salary, with no maximum annual corporate match per employee. We do not provide defined benefit pension plans or defined contribution retirement plans to our named executive officers or other U.S. employees other than the 401(k) plan.

We provided automobile and/or housing allowances to three named executive officers in 2015. Martin A. Kits van Heyningen's automobile allowance was $23,600 and Robert J. Balog's automobile allowance was $6,000. Brent C. Bruun received $15,000 in 2015 for automobile and housing allowances. No other named executive officers received any other perquisites or other personal benefits or property from us during 2015.

Compensation Recovery

We are currently entitled to recover compensation paid to certain named executive officers pursuant to the Sarbanes-Oxley Act of 2002. As described elsewhere in this proxy statement, we have submitted a new equity compensation plan, the 2016 Plan, for approval by our stockholders. The 2016 Plan includes broad rights to recover compensation awarded under the plan. Specifically, the 2016 Plan provides that all awards under the plan are subject to recoupment or clawback of compensation under any provision of applicable law, any term of any award agreement and any policy that we may adopt from time to time. The administrator is entitled to take whatever action it determines to be necessary or appropriate to recover all or any portion of an award or any stock, payment or other compensation acquired or received in respect of that award arising or resulting from any misconduct, accounting restatement to correct an error, or any other miscalculation, error or mistake.

Equity Ownership by Executives

We do not currently have a formal stock ownership requirement for executives or any related hedging policies. However, stock ownership by executives is encouraged on a voluntary basis. Each of our executive officers holds both vested and unvested stock options and restricted stock awards to the extent shown in the table entitled "Outstanding Equity Awards as of December 31, 2015." The Compensation Committee reviews the vested and unvested stock options and restricted stock awards held by the executives each year.

We consider tax deductibility in the design and administration of our executive officer compensation plans and programs. However, we believe that it is in the best interests of our stockholders that we retain flexibility and discretion to make compensation awards, whether or not deductible, when such awards are consistent with our strategic goals.

Rules under generally accepted accounting principles determine the manner in which we account for grants of equity-based compensation to our employees in our consolidated financial statements. Our accounting policies for equity-based compensation are further discussed in note 7 of our audited consolidated financial statements in our Form 10-K for the year ended December 31, 2015, as filed with the SEC on March 14, 2016.