DEF 14A 1 knowlesproxy2022.htm DEF 14A Document

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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 Soliciting Material Pursuant to § 240.14a-12

KNOWLES CORPORATION
(Name of Registrant as Specified in its Charter)
        
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.



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NOTICE OF 2022 ANNUAL MEETING OF SHAREHOLDERS
March 11, 2022
Dear Fellow Stockholders:
Notice is hereby given that the 2022 Annual Meeting of Shareholders (including any adjournments or postponements thereof, the "2022 Annual Meeting") of Knowles Corporation, a Delaware corporation (including any consolidated subsidiaries thereof, the "Company," "Knowles," "we," "us" and "our") will be held on April 26, 2022 at 9:00 a.m. Central Time. Due to the public health impact of the coronavirus pandemic and to support the health and well-being of our shareholders, employees and their families, we have adopted a virtual format for our meeting. We will provide a live webcast of the meeting at www.virtualshareholdermeeting.com/KN2022. You will be able to vote and submit questions online through the virtual meeting platform during the 2022 Annual Meeting. You will not be able to attend the 2022 Annual Meeting in person. For further information about how to participate in the meeting, see "Information About the 2022 Annual Meeting" on page 60 of this Proxy Statement. The principal business of the 2022 Annual Meeting will be the consideration of the following matters:
1.to elect the eight directors named in the attached Proxy Statement for a one-year term or until their respective successors have been duly elected and qualified;
2.to ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2022;
3.to approve, on a non-binding, advisory basis the compensation of our named executive officers; and
4.to transact any other business that may properly come before the 2022 Annual Meeting.
All shareholders of record at the close of business on March 1, 2022 (the "Record Date") are entitled to vote at the 2022 Annual Meeting or any postponement or adjournment thereof. We plan to send a Notice of Internet Availability of Proxy Materials on or about March 11, 2022. Your vote is very important. Whether or not you plan to attend the meeting, we urge you to review the proxy materials and vote your shares as soon as possible by carefully following the instructions on the Notice of Internet Availability of Proxy Materials. Alternatively, if you have requested written proxy materials, please sign, date and return the proxy card in the return envelope provided as promptly as possible.
Thank you for your continued support of our Company.
On behalf of the Board of Directors,
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ROBERT J. PERNA
Secretary
Important Notice of Internet Availability of Proxy Materials for the Annual Meeting to be Held on April 26, 2022: The Proxy Statement for the 2022 Annual Meeting and the Annual Report on Form 10-K for the fiscal year ended December 31, 2021 are available at www.proxyvote.com.


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TABLE OF CONTENTS
Director Nominee Skills and Experience
2

PROPOSAL 3 — ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION
A-1
A-1
3

PROXY STATEMENT SUMMARY
This summary highlights information contained elsewhere in this Proxy Statement. It does not contain all of the information that you should consider in connection with the matters before the 2022 Annual Meeting. Please read the entire Proxy Statement carefully before voting.
ANNUAL MEETING INFORMATION
DateApril 26, 2022
Time9:00 a.m. Central Time
Place
The 2022 Annual Meeting will be held online at www.virtualshareholdermeeting.com/KN2022 via live webcast. To participate in the 2022 Annual Meeting, you will need the 16-digit control number included on your proxy card or on your Notice of Availability of Proxy Materials. You will not be able to attend the 2022 Annual Meeting in person.
Record Date
The Board of Directors set March 1, 2022 as the Record Date for the 2022 Annual Meeting. This means that only shareholders as of the close of business on that date are entitled to receive this notice of the 2022 Annual Meeting and vote at the 2022 Annual Meeting and any adjournments or postponements of the 2022 Annual Meeting. A list of these shareholders will be available for at least ten days prior to the 2022 Annual Meeting. To arrange review of the list of shareholders for any purpose relevant to the 2022 Annual Meeting, please contact investor relations at investorrelations@knowles.com. The shareholder list will also be open for examination by any shareholder electronically during the 2022 Annual Meeting at www.virtualshareholdermeeting.com/KN2022 when you enter your 16-digit control number.
Voting
Shareholders at the close of business on the Record Date will be entitled to vote their shares using the Internet or the telephone or by attending the 2022 Annual Meeting virtually and voting online. Instructions for voting by using the Internet or the telephone are set forth in the Notice of Internet Availability that has been provided to you. Shareholders of record who received a paper copy of the proxy materials also may vote their shares by marking their votes on the proxy card provided, signing and dating it, and mailing it in the envelope provided, or by attending the 2022 Annual Meeting virtually and voting online. For more information on voting, attending the 2022 Annual Meeting virtually and other meeting information, please see "Information about the 2022 Annual Meeting" on page 60 of this Proxy Statement.

AGENDA AND BOARD RECOMMENDATIONS
Unanimous Board RecommendationSee
Page
Proposal 1
Election of eight directors named in this Proxy Statement for a one-year term or until their respective successors have been duly elected and qualified
FOR
each nominee
Proposal 2Ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for fiscal year 2022FOR
Proposal 3Non-binding, advisory vote to approve our named executive officer compensationFOR

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DIRECTOR NOMINEES
Our Board is currently comprised of eight directors. You are being asked to vote on the election of the director nominees listed below for a one-year term. For more information about the background and qualifications of the director nominees, please see "Nominees for Election to the Board" on page 17 of this Proxy Statement.
NameAgeIndependenceTenureCommittees
Keith Barnes70Yes8 yearsCompensation Committee
Governance and Nominating Committee
Hermann Eul63Yes6 YearsCompensation Committee
Didier Hirsch70Yes7 YearsAudit Committee
Governance and Nominating Committee
Ye Jane Li54Yes4 YearsAudit Committee
Governance and Nominating Committee
Donald Macleod73Yes8 YearsAudit Committee
Jeffrey Niew55No8 YearsN/A
Cheryl Shavers68Yes4 YearsCompensation Committee
Governance and Nominating Committee
Michael Wishart67Yes2 YearsAudit Committee




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CORPORATE GOVERNANCE HIGHLIGHTS
•
All directors are elected annually
•
Each Board committee is comprised of independent directors
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Separate non-executive Chairman and Chief Executive Officer roles
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Average tenure of independent directors is six years
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Regular Board, committee and director evaluations
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Highly engaged Board with each director having attended 100% of Board meetings in 2021
•
Policies prohibiting hedging and pledging of Company stock
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Simple majority voting standard for uncontested director elections with a director resignation policy
•
Robust annual director evaluation program
•
Adopted a “Rooney Rule” for director searches to further increase Board diversity


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EXECUTIVE COMPENSATION HIGHLIGHTS
Knowles' executive compensation program is designed to achieve the following key objectives:
•Motivate executives to enhance long-term shareholder value;
•Reinforce Knowles' pay-for-performance culture by aligning executive compensation with Knowles' business objectives and financial performance;
•Provide a total compensation opportunity that allows Knowles to attract and retain talented executives; and
•Use incentive compensation to promote desired behavior without encouraging unnecessary or excessive risk-taking.

The following highlights of our executive compensation describe certain practices applicable to our named executive officers ("NEOs") that the Compensation Committee believes support the pay-for-performance nature of our program and further align the interests of our NEOs with those of our shareholders.

Our Executive Compensation Practices
ü
We deliver a significant proportion of total compensation in the form of equity with PSUs as a component of the LTIP to further align compensation with the Company's long-term business plan.
üPayouts for cash incentives and PSUs are capped.
üWe have multi-year vesting periods for equity awards.
üWe perform market comparisons of executive compensation against a relevant peer group.
üWe use an independent compensation consultant reporting directly to the Compensation Committee and providing no other services to the Company.
üWe have double-trigger vesting for equity awards in the event of a change-in-control.
üWe maintain stock ownership guidelines (CEO: 5x base salary; Other NEOs: 3x base salary).
üWe maintain a formal incentive clawback policy.
ü
The Compensation Committee regularly meets in executive session without any members of management present.
üWe hold an annual "say on pay" vote.
üWe maintain an annual shareholder engagement process.
üWe do not allow repricing of underwater stock options without shareholder approval.
üWe do not allow hedging, short sales or pledging of our securities by directors or executive officers.
üWe do not provide for tax gross-ups upon a change-in-control.
üWe do not have employment contracts.
üWe do not provide excessive perquisites.



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EXECUTIVE COMPENSATION HIGHLIGHTS, CONTINUED
Pay-for-performance is a core tenet of Knowles' executive compensation program. Knowles' focus on pay-for- performance is best demonstrated through the structure of our executive compensation program. As shown on the chart below, the majority of executive pay is at risk and variable based on a combination of annual and long-term performance requirements and Knowles' stock price performance.
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Our compensation programs are designed so that compensation outcomes for strong performance should pay above target, while outcomes where performance is below expectations should pay below target taking into consideration short-term financial targets and long-term shareholder value creation. The chart below demonstrates pay-for-performance by comparing the CEO's target and realizable total compensation for the last three fiscal years.
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(1)Target base salary and AIP values are the target amounts for each year. Target LTI value for each year is based on the grant date value (calculated based on the grant date closing stock price) of equity granted in that year, where the value for PSUs assumes payout at 100%. The grant date closing stock price was $16.07 in 2019, was $16.77 in 2020, and was $20.60 in 2021.
(2)Realizable base salary and AIP values are the actual amounts paid for each year. Realizable LTI value for each year is based on Knowles December 31, 2021 closing stock price of $23.35. The realizable value for PSUs granted in 2019 was adjusted to reflect the recent payout at 66.2%. The realizable value shown for PSUs granted in 2020 and 2021 (for which the performance period has not ended) assumes payout at 100%.

COVID-19 and its impact on our 2020 performance had a multi-year impact on Mr. Niew's realizable compensation as it affected his 2019 PSU payout, his 2020 annual incentive payout, and his 2020 base salary, which were all below target levels. However, the performance of Knowles’ stock price has had a positive impact on Mr. Niew's realizable compensation. During the three-year time period from 2019 through 2021, Knowles stock price increased approximately 75%. As a result, the realizable LTI values are higher than target LTI values each year in the chart above.
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EXECUTIVE COMPENSATION HIGHLIGHTS, CONTINUED
2021 Compensation Highlights
Based on our shareholder advisory vote on executive compensation in 2020, as well as input gained during shareholder outreach in 2020, the Compensation Committee determined that our current executive compensation program is well aligned with shareholder interests and expectations. As part of our continual review of our executive compensation programs, to ensure our program facilitates our ability to attract and retain key talent and that our incentive design is aligned with our strategic goals the Compensation Committee approved the following enhancements for the 2021 compensation programs:
•Replaced adjusted EBIT with Non-GAAP gross profit margin in our annual incentive plan for the financial component of the 2021 annual incentive to align with our business strategy and an increased focus on profitability. Non-GAAP gross profit margin will be weighted 50% and revenue will be weighted 30%.
•Replaced the benchmark companies used to compare our relative total shareholder performance in our performance share unit ("PSU") plan from the component companies in the S&P Semiconductor Select Index to the component companies in the Russell 2000 Index for both the 2020 PSUs and 2021 PSUs. Knowles is a member of the Russell 2000 and it represents a broader, more diversified index that aligns with our strategy of delivering high value, differentiated solutions to a diverse set of growing end markets. Additionally, there is closer financial comparability between Knowles and the companies in this index. For the 2021 PSU awards, the Committee also approved a holding period for the one-year period following settlement of the PSUs and capped the payout value at five times the target number of PSUs multiplied by the grant date closing price.
•Approved a new LTI mix for executive officers from 50% PSUs, 25% restricted stock units ("RSUs") and 25% stock options to 50% PSUs and 50% RSUs to align with market competitive practice among our peers, where stock options are less prevalent.
In addition to the above compensation program enhancements, the Committee approved the following 2021 compensation actions for our NEOs:
•Approved an increase in Mr. Niew’s 2021 LTI target from $3,400,000 to $3,700,000 to align Mr. Niew’s total compensation with the peer group median. This is the first LTI target increase for Mr. Niew since 2017. Consistent with the Committee’s focus on aligning pay and performance, the Committee assigned the entire incremental equity value of $300,000 into the performance share unit component of Mr. Niew’s LTI target. This increased the PSU portion of Mr. Niew’s LTI target from 50% to 55%. After this change, Mr. Niew’s overall LTI mix for 2021 was 55% PSUs and 45% RSUs.
•For the other NEOs, approved an increase in Mr. Giesecke’s 2021 LTI target, which was increased from $750,000 to $800,000. Mr. Giesecke’s LTI mix for 2021 was 50% PSUs and 50% RSUs consistent with the other named executive officers. The LTI target for the other NEOs remained the same for 2021 as it was for 2020.
•Approved base salary and annual incentive target increases for Mr. Cabrera from $306,000 to $335,000 and 50% to 60%, respectively, to align with the market median. Mr. Cabrera had not received increases to his base salary and annual incentive since 2016. All other NEOs compensation targets remain unchanged from 2020 levels.
•Mr. Niew’s 2021 annual bonus was paid at approximately 128% of target; and
•2021 annual bonuses for each of the other NEOs ranged from approximately 131% to approximately 141% of target.
•Approved a payout of 66.2% of target for the PSUs awarded in 2019, which recently completed its three-year performance period on February 1, 2022.
More detailed information on our executive compensation programs can be found in the "Executive Compensation" section which begins on page 31 of this Proxy Statement.


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CORPORATE GOVERNANCE
We are committed to conducting our business in accordance with the highest level of ethical and corporate governance standards. Our Board periodically reviews Knowles' corporate governance practices and takes other actions to address changes in regulatory requirements, developments in governance best practices and matters raised by shareholders. The following describes some of the actions taken to help ensure that our conduct earns the respect and trust of shareholders, customers, business partners, employees and the communities in which we live and work.
Governance Guidelines and Codes
Our Board has adopted written corporate governance guidelines (the "Corporate Governance Guidelines") that set forth the policies and procedures by which the Company and the Board are governed. In addition, our Board and its committees have adopted policies and procedures that govern how the Company and its executives conduct business and manage risk. These documents are available on our website at http://investor.knowles.com/corporate-governance.
Director Independence
Our Corporate Governance Guidelines provide that at least two-thirds of the Board and all of the members of the Audit, Compensation and Governance and Nominating Committees must be independent from management and must meet all of the applicable criteria for independence established by the New York Stock Exchange ("NYSE"), the Securities and Exchange Commission ("SEC") and the Board. Our Board makes an annual determination of the independence of each director. No director may be deemed independent unless the Board determines that neither the director nor any of the director's immediate family members has a material relationship with Knowles, directly or as an officer, shareholder or partner of an organization that has a material relationship with Knowles.
Our Board has determined that each director who served on the Board in 2021, except for Mr. Niew, has no material relationship with Knowles and meets the independence requirements of the NYSE and the SEC. In addition, all members of our Board, except for Mr. Niew, meet our Standards for Director Independence, which are available on our website at http://investor.knowles.com/corporate-governance.
Board Leadership Structure
Our Board has adopted a structure whereby the Chairman of the Board is an independent director. Our Board believes that having a chairman who is independent of management provides strong leadership for the Board and helps ensure critical and independent thinking with respect to our Company's strategy and performance. Our CEO is also a member of the Board as the management representative. We believe this is important to make information and insight directly available to the directors in their deliberations. Our Board believes that this structure provides an appropriate, well-functioning balance between non-management and management directors that combines experience, accountability and effective risk oversight.
Risk Oversight
Senior management is responsible for day-to-day management of risks facing Knowles, including the creation of appropriate risk management policies and procedures. The Board is responsible for overseeing management in the execution of these responsibilities and for assessing the Company's overall approach to risk management. The Board regularly assesses significant risks to the Company in the course of its review and oversight of the Company's strategy and the Company's annual operating plan. As part of its responsibilities, the Board and its standing committees also regularly review material strategic, operational, financial, legal, compensation, compliance and ESG risks with executive officers. The Audit Committee also performs an oversight role with respect to financial, legal, cybersecurity, enterprise and compliance risks, and reports on its findings and assessments at each regularly scheduled Board meeting. The Compensation Committee considers risk in connection with its design of compensation programs, and has engaged an independent compensation consultant to assist in mitigating compensation-related risk. The Governance and Nominating Committee oversees and monitors risks relating to the Company's governance structure and processes and ESG risks and opportunities.
Director Attendance at Shareholders Meetings
Directors are encouraged to attend the annual meeting of the stockholders. All directors attended the 2021 Annual Meeting. All current directors are expected to attend the 2022 Annual Meeting via the virtual platform.


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Directors' Meetings
Our Board conducts executive sessions in conjunction with its regularly scheduled meetings at least quarterly without management representatives present. Mr. Macleod, as Chairman of the Board, presides at these sessions. If Mr. Macleod is determined to no longer be an independent director or is not present at any of these sessions, the Chair of the Governance and Nominating Committee, who is currently Dr. Shavers, will preside.
Audit Committee Procedures; Disclosure Controls and Procedures Committee
The Audit Committee holds quarterly meetings at which it routinely meets separately with each of our independent registered public accounting firm (PwC), our Chief Audit Executive, and management to assess certain matters including the status of the independent audit process and management's assessment of the effectiveness of the Company's internal controls over financial reporting. In addition, the Audit Committee, as a whole, reviews and meets to discuss each Form 10-Q and Form 10-K (including the financial statements) prior to the filing of those forms with the SEC. Management maintains a Disclosure Controls and Procedures Committee, which includes among its members our Chief Financial Officer, Controller, Vice President of Investor Relations, Vice President of Tax, Chief Audit Executive and General Counsel. This management committee meets at least quarterly to review our quarterly earnings releases and each Form 10-Q and Form 10-K, as well as any other material disclosures, to support our disclosure controls and procedures.
Complaints "Hotline" and Communication with Directors
In accordance with the Sarbanes-Oxley Act of 2002 ("Sarbanes-Oxley"), the Audit Committee has established procedures for (i) the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters ("accounting matters") and (ii) the confidential, anonymous submission by employees of concerns regarding questionable accounting matters. Such complaints or concerns may be submitted anonymously to Knowles, in care of our Director of Compliance or General Counsel, by email to Audit.Committee@knowles.com, or through an external service provider as described in our Code of Business Conduct, which is available on our website at http://investor.knowles.com/corporate-governance. Shareholders and other interested persons may also communicate with our Board and the non-management directors using any of these methods or channels.
Compensation Consultant Independence and Fee Disclosure
The Compensation Committee has the authority and discretion to retain external compensation consultants and other advisors as it deems appropriate. The Compensation Committee has adopted a policy providing for the continuing independence and accountability to the Compensation Committee of any advisor retained by the Compensation Committee to assist the Compensation Committee in the discharge of its duties. The policy formalizes the independent relationship between the Compensation Committee's advisors and Knowles, while permitting management limited ability to access the advisors' knowledge of Knowles for compensation matters.
In order to ensure the independence of the compensation consultant, the consultant reports directly to the Compensation Committee and works specifically for the Compensation Committee solely on executive compensation matters. Under the policy, the Compensation Committee will annually review and pre-approve services that may be provided by the independent advisor to management without further committee approval. Compensation Committee approval is required prior to management retaining the Compensation Committee's independent advisor for any executive compensation services or other consulting services or products above an aggregate annual limit of $50,000.
The Compensation Committee's independent compensation consultant periodically reviews and advises on the adequacy and appropriateness of our overall executive compensation plans, programs and practices and, from time to time, answers specific questions raised by the Compensation Committee or management. Compensation decisions are made by, and are the responsibility of, the Compensation Committee and our Board, and may reflect factors and considerations other than the information and recommendations provided by the Compensation Committee's consultant.
The Compensation Committee has appointed Compensia, Inc. ("Compensia") as its independent compensation consultant. During 2021, Compensia provided no other services to, and had no other relationship with, Knowles. Compensia focuses on executive compensation matters and does not have departments, groups or affiliates that provide services other than those related to executive compensation and benefits.




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Qualifications and Nominations of Directors
The Governance and Nominating Committee considers and recommends to the Board nominees for election to, or for filling any vacancy on, our Board or its committees in accordance with our By-Laws, our Corporate Governance Guidelines and the Governance and Nominating Committee's charter. As part of the Board’s succession planning, the Governance and Nominating Committee periodically reviews the skills and experience of each of the current directors and uses a board skills matrix to ensure the Board as a whole appropriately reflects the key attributes, experiences, qualifications and skills most needed to support the Company’s long-term strategy. Upon completion of the Board skills matrix, the Governance and Nominating Committee identifies areas of director knowledge and experience that may benefit the Board in the future and uses that information as part of the director search and nomination effort. To be considered for Board membership, a nominee for director must be an individual who has the highest personal and professional integrity, who has demonstrated exceptional ability and judgment, and who will be most effective, in conjunction with the other members of our Board, in serving the long-term interests of our shareholders.
The Governance and Nominating Committee also considers directors' qualifications as independent directors (the Board requires that at least two-thirds of its members be independent and all of the members of the Audit, Compensation and Governance and Nominating Committees be independent); the Audit Committee's process of determining the financial literacy of members of the Audit Committee and the qualification of Audit Committee members as "audit committee financial experts;" the qualification of Compensation Committee members as "independent directors" and "non-employee directors;" and the diversity, skills, background and experiences of Board members in the context of the needs of the Board. In consideration of directors' qualifications, the Governance and Nominating Committee may also consider such other factors as it may deem to be in the best interests of Knowles and its shareholders. The Board believes that a diverse membership having a variety of skills, styles, experience and competencies is an important feature of a well-functioning board. Accordingly, the Board believes that diversity (inclusive of gender and race) should be a consideration in Board succession planning and recruiting, consistent with nominating only the most qualified candidates for the Board who bring the required skills, competencies and fit to the boardroom. The Board remains committed to considering board candidate slates that are as diverse as possible and, to that end, amended the Corporate Governance Guidelines in July 2021 to provide that women and minority candidates shall be included in the pool of candidates for any director search.
Whenever the Governance and Nominating Committee concludes, based on the reviews or considerations described above or due to a vacancy, that a new nominee to our Board is required or advisable, it will consider recommendations from directors, management, shareholders and, if it deems appropriate, consultants retained for that purpose. It is the policy of the Committee to consider director candidates recommended by the Company's shareholders and apply the same criteria in considering those director candidates that it employs in considering candidates proposed from any other source. Shareholders who wish to recommend an individual for nomination should send that person's name and supporting information to the Governance and Nominating Committee, in care of the Secretary of Knowles at 1151 Maplewood Drive, Itasca, Illinois 60143. Shareholders who wish to directly nominate an individual for election as a director, without going through the Governance and Nominating Committee, must comply with the procedures in our By-Laws. For more information, please see "Shareholder Proposals and Director Nominations for the 2023 Annual Meeting" on page 64 of this Proxy Statement.
Insider Trading Policy
We maintain an insider trading policy that contains prohibitions on, among other items, officers, directors and employees purchasing or selling our securities while in possession of material, non-public information, or otherwise using such information for their personal benefit.
Our executives and directors are permitted to enter into trading plans that are intended to comply with the requirements of Rule 10b5-1 of the Exchange Act so that they can prudently diversify their asset portfolios and exercise their stock options before expiration.
Prohibition on Hedging, Pledging and Short Sales
The Company prohibits its directors, executive officers, and employees who receive long-term incentive plan awards (and their respective family members) from engaging in any hedging transactions or any form of hedging involving the Company's securities, including short sales, put and call stock options, pre-paid variable forward contracts, equity swaps, collars, and exchange funds. In addition, such persons may not pledge or hypothecate or approve the pledging or hypothecation of any Company securities which they own or beneficially control, as collateral for any loan or line of credit or to hold Company securities in a margin account.
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Stock Ownership Guidelines
Knowles has stock ownership guidelines for executive officers of 5x base salary for the CEO and 3x base salary for the other executive officers. Executive Officers have five years from the date on which they become subject to the guidelines to satisfy the applicable guideline level and, if the level is not achieved, the Compensation Committee, in consultation with management, may pay a portion of that executive officer's annual bonus or other awards in shares. Once an individual reaches age 58, the Compensation Committee will have the discretion to relax the applicable guidelines for that executive officer. For the purposes of these guidelines, ownership includes shares owned outright or held in a trust by the individual and jointly with, or separately by, the individual's spouse and/ or children sharing the same household as the individual, shares held through Knowles' 401(k) plan, share units held through Knowles' Deferred Compensation Plan (the "Deferred Compensation Plan"), and the "in-the-money" value of vested, unexercised stock options and stock-settled appreciation rights. As of December 31, 2021, Messrs. Niew, Anderson, Cabrera, and Giesecke were in compliance with their ownership guideline, and Mr. Perna was on track to meet his ownership guideline within the five-year period.
In addition, to further align the interest of the independent directors of the Board with the Company's shareholders, the Board has adopted stock ownership guidelines for the non-employee directors. Under the guidelines, each non-employee director is expected to own Company common stock with a value at least equal to 4x the base annual cash compensation paid to such director during the period he or she serves as a director, not including any additional cash compensation paid to chairs of the Board or committees and to committee members. Non-employee directors are expected to meet these requirements within five years after the date of their election or appointment to the Board. As of December 31, 2021, all of our non-employee directors were in compliance with these guidelines.
Clawback Policy
The Company has adopted a formal incentive clawback policy, which it believes is reflective of the maturation of Knowles as a public company and indicative of sound corporate governance. In the event of a financial restatement, the Compensation Committee has the authority to require the return, repayment or forfeiture of any performance-based compensation (cash and equity) for a period of up to 24 months after such payment or award was made regardless of fault.

ONGOING SHAREHOLDERS ENGAGEMENT PROGRAM
Our directors and management are dedicated to being responsive and transparent with our shareholders on key topics, including executive compensation, corporate governance, environmental sustainability, and human capital management matters. We have adopted a recurring year-long shareholder engagement approach led by a cross-functional team, including participation of independent directors, as shown in the table below.
Winter/Spring
We continue to engage with shareholders and use feedback to enhance proxy disclosures and make appropriate governance and compensation changes.
Year-Round Engagement

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Spring/Summer
We review shareholder feedback from discussions earlier in the year and the results of the annual meeting and address any annual meeting items requiring follow up.
Fall/Winter
We conduct comprehensive shareholder discussions to assess which governance and compensation practices are a priority.
Summer/Fall
We monitor governance trends and conduct general off-season engagement outreach with shareholders and proxy advisors.
We value the views of shareholders when establishing and evaluating relevant policies and practices. For example, in direct response to investor feedback, in 2021 we released our first sustainability report. In January 2022, we reached out to shareholders representing approximately 65% of shares outstanding and conducted meetings with investors who accepted our invitations to engage, which represented approximately 30% of shares outstanding. Consistent with our long-standing practice, our investor outreach was conducted by our Chairman of the Board, without executive management present. Key themes addressed during this outreach included: our corporate strategy, governance matters (including board composition), executive compensation, ESG matters and the release of our first sustainability report, and our diversity initiatives. Shareholders appreciated our active outreach and the opportunity to speak with our Board Chair, and offered constructive feedback on the topics discussed. Overall shareholder response from these meetings was positive and supportive of the Company's strategic direction.
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CORPORATE RESPONSIBILITY AND SUSTAINABILITY
Environment, Social, and Governance
The Company is committed to conducting business in an ethical, socially responsible, and environmentally sustainable manner. Our Board, primarily through its Governance and Nominating Committee, oversees our corporate responsibility and sustainability programs. Oversight of ESG matters is an important part of the Board's work, and ESG matters are considered in setting the policies and principles that govern our business.
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As the sustainability landscape evolves, the Company continues to assess how we can communicate more effectively with investors about our sustainability programs and performance. As part of that process, in 2021, Knowles published its inaugural Corporate Sustainability Report. In it the Company shares its strategies, statistics and long-term sustainability initiatives and provides additional insight into how we do business with integrity, how we respect and value our employees and the environment, and how our shared values unite us as a company. Our Corporate Sustainability Report includes disclosures aligned with industry specific guidelines developed by the Sustainability Accounting Standards Board ("SASB") and other metrics, providing a more unified sustainability reporting framework. Our 2021 Corporate Sustainability Report can be found at www.knowles.com under "About Knowles," then "Environmental, Social & Governance." The information contained on www.knowles.com is provided for reference only and is not incorporated by reference into this Proxy Statement.
    Corporate Governance and Ethical Business Practices
As a socially responsible company, we strive to align our business practices and policies with the needs of our key stakeholders, and to that end we have developed comprehensive governance policies that meet or exceed the requirements of applicable laws, regulations and rules, and the NYSE's listing standards. Our Corporate Governance Guidelines, Code of Business Conduct, and overall corporate governance structure is strengthened by our anonymous and confidential ethics and compliance hotline which allows us to hear our employees' suggestions, concerns or reports of misconduct.
We are committed to respecting human rights and establishing high ethical standards across the Company. We have a Human Rights Policy, which governs all employment and work activities involving our employees in our facilities worldwide. The Human Rights Policy is consistent with the core tenets of the International Labor Organization's fundamental conventions and the United Nations Universal Declaration of Human Rights, and is informed by other internationally recognized standards, including the Responsible Business Alliance. We expect our employees and business partners to abide by the provisions of the Human Rights Policy, which includes principles of non-discrimination, fair compensation and working hours, a ban on child labor, and freely chosen employment. We have also adopted a Statement on Modern Slavery and Human Trafficking, which highlights the policies and measures we have implemented under the United Kingdom Modern Anti-Slavery Act of 2015. The statement was approved by our Board and can be accessed on our website at www.knowles.com under "About Knowles," then "Environmental, Social & Governance."

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    Social Responsibility
In accordance with our values, we embrace a culture where bright, creative people are expected and celebrated, and everyone's contribution helps drive change and achieve success. We are committed to being a good corporate citizen by supporting the professional development and well-being of our employees and contributing to our community. An important component of achieving this goal is fostering a workplace environment that embraces diversity and inclusion. Our diversity and inclusion strategy is centered on three pillars:
socialresponsibility.jpg
Under this framework, we have launched a communications campaign to educate our employees and the community on our vision and philosophy regarding diversity and inclusion, as well as the initiatives we have undertaken toward reaching our goals. Those initiatives have included partnering with non-profit organizations and various academic institutions to provide scholarships, mentoring, and internship opportunities for students from underrepresented groups. We have also worked to increase diversity in our candidate pool and through targeted career development programs. See "Human Capital Management" below for more information on our diversity and inclusion initiatives.
    Environmental Stewardship
We are dedicated to preserving the environment for future generations and providing a healthy and safe workplace for our employees while promoting our continued success. Through sustainable practices, such as reducing waste, increasing energy efficiency and using renewable materials, we strive to meet the global environmental needs of today and tomorrow. We are working towards a sustainable supply chain by taking steps to ensure that our suppliers share our commitment to understanding and reducing our environmental impact. In addition, we maintain an Environmental, Health and Safety Policy that reflects our continual efforts to reduce our carbon footprint and to ensure the health, safety and welfare of our employees. Our global management team and workforce have been recognized for initiatives related to our continuing efforts concerning environmental stewardship, including:
•Adopting a Green Materials Policy and Supplier Code of Conduct
•On-site compliance audits of key Tier 1 suppliers
•Programs to ensure low reliance on products likely to contain conflict minerals
•Operating an environmental, health and safety management system that is aligned to the requirements of ISO 14001 and OSHAS 18001
•Implementation of RoHS/REACH Hazardous Material Reduction Programs
•Implementation of the Waste Electrical and Electronic Equipment Directive
Human Capital Management
We believe our success is dependent upon attracting, developing and retaining high performing employees at all levels of the organization. Our Chief Human Resources Officer is responsible for developing and executing our human capital strategy, with oversight by the Compensation Committee of our Board of Directors. Key initiatives of the Company with respect to human capital management include:
Recruitment, Training and Development
We utilize a variety of recruitment vehicles to source top talent, including strategic partnerships with search firms, leveraging social media channels, strategic partnerships with universities and industry organizations and a robust employee referral program. We invest in the ongoing training and development of our employees by offering tuition and continuous education reimbursement, leveraging an e-learning platform, and implementing formal mentorship programs. Additionally, we support the advancement of women and other underrepresented minority groups by providing accelerated development programs. Our Chief Human Resources Officer annually reviews with the Board of Directors our overall talent management strategy and progress.
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Commitment to Diversity, Inclusion and Equality
We believe our diverse teams, with their unique ideas, thoughts, and perspectives, form the building blocks for our culture of innovation at Knowles. We strive to create and maintain a workplace environment that embraces the diversity of thoughts, ideas, beliefs, and experiences brought by our team members. We recognize that nurturing an inclusive workplace enables us to attract, develop, and retain our team members regardless of their race, color, gender identity, language, national origin, religion, orientation, or age. To successfully execute on our strategy, we have established a Diversity and Inclusion Council comprised of employees from various areas of the Company along with members of senior management who serve as executive sponsors. The Council is tasked with advising the management team on concrete initiatives we can undertake as an organization to strengthen diversity and inclusion at the Company. Under the Council's leadership, we have commemorated and celebrated numerous diversity, cultural, and historical events throughout the year.

Knowles is also committed to the advancement of women in the workplace and gender diversity in engineering careers. We endeavor to be known as an Employer of Choice for Women in Engineering and have implemented programs with the goal of increasing the representation of women in the engineering community. For example, Knowles is the perennial sponsor of the University of Illinois at Chicago's ("UIC") Women in Engineering Summer Program. We have also supported UIC's women engineering students with programs such as academic scholarships, summer internship programs, mentorship programs, and full-time employment opportunities. Our goal is to build a pipeline of multi-generational talent and accelerate the development of women engineers into advanced technical and leadership positions at Knowles. Additionally, we are focused on increasing the representation of women in leadership roles at Knowles. For our 2021 Corporate Summer Internship Program, over 50% of our engineering internship positions were filled by women engineering students.

We are fully committed to supporting our communities and the advancement of underrepresented minority groups. In 2021, we launched our partnership with the Partnership to Educate and Advance Kids (PEAK), a Chicago-based nonprofit that is focused on providing academically average students from the city's most challenging and under-served neighborhoods with financial, educational, and personal support through their high school years. In addition to providing financial assistance to help fund the students' education, we also launched a tutoring program whereby Knowles employees work with students who need additional help with STEM subjects.

To support first generation students from underserved communities who are pursuing STEM degrees, we partnered with the engineering schools at Penn State University and the University of Illinois at Urbana-Champaign. In 2021, we awarded academic scholarships to first year students in the undergraduate engineering programs at each of these universities.
Providing a Competitive Total Rewards Program
To be able to attract and retain the best employees, Knowles provides a competitive total rewards program that incorporates our pay for performance philosophy. Our total rewards program includes market-competitive base pay, broad-based short-term and long-term incentive plans, healthcare benefits, retirement plans, paid time off, family leave and employee assistance programs.
Fostering a Safe Work Environment
We believe it is important to provide a healthy and safe workplace for our employees. We continue to maintain an Environmental, Health, and Safety Policy that reflects our goals to not only reduce our carbon footprint, but to ensure the health, safety, and welfare of our employees. During 2021, environmental, health, and safety training and instruction were provided at all levels within the Company. In addition, throughout the COVID-19 pandemic, we have adopted enhanced safety measures and practices across all of our facilities, including adopting social distancing measures (such as limiting or reducing the number of workers at our sites), enacting enhanced cleaning measures, and providing workers with personal protection equipment.
Additional information regarding Knowles' activities related to its people and sustainability, as well as workforce diversity data, can be found in the Knowles 2021 Corporate Sustainability Report, which is located on our website. The contents of our website and our Corporate Sustainability Report are referenced for general information only and are not incorporated into this Proxy Statement.
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PROPOSAL 1 - ELECTION OF DIRECTORS
Our Board currently consists of eight directors. All directors stand for one-year terms. If re-elected at the 2022 Annual Meeting, each of the eight director nominees will have terms of service that expire at the 2023 Annual Meeting of Shareholders (the "2023 Annual Meeting") or until their respective successors have been duly elected and qualified.
Director Nominee Skills and Experience
The Board, in part through its delegation to the Governance and Nominating Committee, seeks to recommend qualified individuals to become members of the Board. The Board selects individuals as director nominees who, in the opinion of the Board, demonstrate the highest personal and professional integrity along with exceptional ability and judgment, who can serve as a sounding board for our CEO on planning and policy, and who will be most effective, in connection with the other directors and director nominees, in collectively serving the long-term interests of all our shareholders. The Board prefers nominees to be independent of the Company but believes it is desirable to have on the Board at least one representative of current management. In considering diversity in selecting director nominees, the Governance and Nominating Committee gives weight to the extent to which candidates would increase the effectiveness of the Board by broadening the mix of experience, knowledge, backgrounds, skills, ages and tenures represented among its members. The Board believes that diversity (inclusive of gender and race) should be a consideration in Board succession planning and recruiting, consistent with nominating only the most qualified candidates for the Board who bring the required skills, competencies and fit to the boardroom. The Board remains committed to considering Board candidate slates that are as diverse as possible and, to that end, in 2021, approved an amendment to the Corporate Governance Guidelines providing that women and minority candidates shall be included in the pool from which the Governance & Nominating Committee selects director candidates, to further ensure that diversity is a central component of search criteria for director candidates. Given the global reach and the complexity of businesses operated by Knowles, the Board also considers multi-industry and multi-geographic experience a significantly favorable characteristic. This blend of Board attributes is summarized in the chart below.
DIRECTOR SKILLS AND EXPERTISE
Qualification/Experience BarnesEulHirschLiMacleodNiewShaversWishart
Strategic Planning●●●●●●●●
Global/International●●●●●●●●
Technology Industry Experience●●●●●●●●
Financial Expertise●●●●●●
Sales, Marketing and Brand Management●●●●
Engineering●●●●
Supply Chain●●●
Investment Banking/ Capital Markets●●●●
Enterprise Risk Management●●●●●●●
Information Technology●●●
Public Company Board●●●●●●●●
Nominees for Election to the Board
The Board of Directors, upon the recommendation of the Governance and Nominating Committee, has determined that Keith Barnes, Hermann Eul, Didier Hirsch, Jane Li, Donald Macleod, Jeffrey Niew, Cheryl Shavers and Michael Wishart meet the Board's standards for director qualifications and has nominated each of them to stand for election to the Board for one-year terms expiring at the 2023 Annual Meeting or until their respective successors are duly elected and qualified or their earlier removal, resignation or retirement. Below we have provided a biography for each of the Board's nominees, including a description of the qualifications, experience, attributes and skills of each such nominee.
The Board of Directors has determined that all of the Board's nominees with the exception of Mr. Niew qualify as independent directors under "NYSE corporate governance listing standards and the Company's Standards for Director Independence (as defined below). All of the Board's nominees have consented to be named in this Proxy Statement and to serve as a director of the Company if elected. Proxies may not be voted for a greater number of persons than the number of nominees named in this Proxy Statement. The Board of Directors is not aware that any of its nominees will be unwilling or unable to serve as a director. However, if any of the Board's nominees is unable to
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serve or for good cause will not serve as a director, the Board of Directors may choose a substitute nominee. If any substitute nominees are designated, we will file an amended proxy statement that, as applicable, identifies the substitute nominees, discloses that such nominees have consented to being named in the revised proxy statement and to serve if elected, and includes certain biographical and other information about such nominees required by SEC rules. The persons named as proxies on the Company's proxy card will vote for the Company's remaining nominees and substitute nominees chosen by the Board.
The enclosed proxy card enables a shareholder to vote "for" or "against" or "abstain" from voting as to each director nominated by the Board. If you vote "abstain" for any director nominee, as opposed to voting "for" or "against" any such director nominee, your shares voted as such will be counted for purposes of establishing a quorum, but will have no effect on the outcome of the vote on Proposal 1. Abstentions and broker non-votes will not constitute votes "for" or votes "against" Proposal 1 and will accordingly have no effect on the outcome of the vote on Proposal 1. Pursuant to our Corporate Governance Guidelines (as defined below), if an incumbent director nominee receives more "against" than "for" votes, such nominee will be required to tender his or her resignation for consideration by the Board, and the Board will then determine whether or not to accept the resignation.
YOUR VOTE IS VERY IMPORTANT. To assure that your shares are represented at the 2022 Annual Meeting, we urge you to date, sign and return the enclosed proxy card promptly in the postage-paid envelope provided, or vote by telephone or the Internet as instructed on the proxy card, whether or not you plan to attend the 2022 Annual Meeting.
The persons named as proxies intend to vote the proxies "FOR" the election of each of the Board's eight nominees, unless otherwise specified on the proxy card.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH OF
THE FOLLOWING NOMINEES FOR DIRECTOR.

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Director Biographies
keith-lxbarnes.jpg
Independent Age: 70
Director since: February 2014

Committee(s):
Governance and Nominating; Compensation (Chair)
KEITH BARNES
Select Business Experience: Mr. Barnes is the retired Chairman and CEO of Verigy Pte. Ltd., a manufacturer of testing equipment for the semiconductor industry. Mr. Barnes served as CEO (from 2006 to 2010) and Chairman of the Board (from 2008 to 2011) of Verigy Ltd. He was formerly Chairman and CEO (from 2003 to 2006) of Electroglas, Inc. and CEO (from 1995 to 2001) of Integrated Measurement Systems, Inc. Before that, he was a division president at Cadence Design Systems, Inc., and prior thereto, division president of Valid Logic Systems, Inc.
Other Board Experience: Mr. Barnes is a director (since 2011) and the current chairman of the compensation committee of Viavi Solutions Corporation as well as a director (since 2015) and the current chairman of the compensation committee of Rogers Corporation. Mr. Barnes was previously a director of Mentor Graphics Corporation (from 2012 to 2017); Spansion, Inc. (from 2011 to 2015); Intermec Inc., Verigy Ltd., Cascade Microtech, Inc., Electroglas Inc. and DATA I/O Corporation. He also served as the Vice Chairman (from 2002 to 2003) of the board of directors of the State of Oregon Growth Account.
Skills and Qualifications: Mr. Barnes has extensive experience, including as a specialist in maximizing shareholder value and leading companies through initial public offerings, secondary offerings and debt financings. He has had leadership roles in successful spin offs, mergers and acquisitions.
prof-drxhermannxeul.jpgIndependent
Age: 63
Director since:
July 2015

Committee(s): Compensation
DR. HERMANN EUL
Select Business Experience: Dr. Eul served as Corporate Vice President and General Manager (from 2011 to 2016) of Intel Corporation, a multinational technology company, and President and Managing Director (from 2011 to 2015) of Intel Mobile Communications/Intel Deutschland GmbH. Dr. Eul joined Intel Corporation with its acquisition of Infineon Technologies' wireless solutions business. At Infineon, Dr. Eul served as Executive Vice President and a member of the management board (from 2005 to 2011), and was responsible for research and development (as Chief Technology Officer) as well as sales and marketing (as Chief Marketing Officer). Prior to being promoted to Infineon's executive board, he held numerous management positions at Infineon and Siemens (Infineon was spun off from Siemens in 1999).
Other Board Experience: Dr. Eul is currently a non-executive director of VDE (German Industry Association for Electrical, Electronic, and Information Technologies), Tactual Labs, Inc. and Cradle IP LLC (since 2017). In December 2019, Dr. Eul joined the Supervisory Board of ARRI AG. In July 2020, Dr. Eul joined the Supervisory Board of AT&S AG. He previously served on the boards of Acatech, Bundesverband der Deutschen Industrie e.V. (BDI) and Bitkom.
Skills and Qualifications: As a seasoned leader and executive, Dr. Eul has deep knowledge of the Company's Audio segment customers. He is a sought-after semiconductor industry expert who also serves on advisory boards of a variety of technology companies, VC funds and investment banks. Dr. Eul contributes substantial knowledge in the areas of research and development, operations, and sales and marketing. Dr. Eul has a master's degree in electrical engineering and a Ph.D in engineering from Bochum University in Germany. Dr. Eul was also a full professor at the University of Hanover and served as a vocational professor.
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didier-hirsch.jpgIndependent
Age: 70
Director since: December 2014

Committee(s):
Audit (Chair); Governance and Nominating
DIDIER HIRSCH
Select Business Experience: Mr. Hirsch was the Senior Vice President and Chief Financial Officer (from 2010 to 2018) of Agilent Technologies, Inc. ("Agilent"), a global leader in life science, diagnostics and applied chemical markets, providing instruments, software, services and consumables for the entire laboratory workflow. Previously, he served as Agilent's Chief Accounting Officer (from 2007 to 2010), interim Chief Financial Officer (2010), Vice President, Corporate Controllership and Tax (from 2006 to 2010), Vice President and Controller (from 2003 to 2006) and Vice President and Treasurer (from 1999 to 2003). Prior to joining Agilent, Mr. Hirsch served in various financial capacities and roles at Hewlett-Packard Company (from 1989 to 1999).

Other Board Experience: Mr. Hirsch is a director (since 2020) of Sophia Genetics S.A. He was formerly a director (from 2012 to 2015) of International Rectifier Corporation and a director (from 2012 to 2021) of Logitech International S.A.
Skills and Qualifications: Mr. Hirsch's qualifications to serve on our Board include his experience as Chief Financial Officer of a public company, his financial and risk management expertise, his experience on the boards of directors of two other public companies (including his service as chair of an audit committee), his international experience, his regulatory knowledge and his work with technology and semiconductor companies throughout his career.
yejaneliheadshot.jpgIndependent
Age: 54
Director since: February 2018

Committee(s):
Audit; Governance and Nominating

YE JANE LI
Select Business Experience: Ms. Li is a Strategic Advisor (since 2013) at Diversis Capital, LLC, a private equity firm that invests in middle-market companies. She was the Chief Operating Officer (from 2012 to 2015) at Huawei Enterprise USA, Inc., a company that markets IT products and solutions to datacenters and enterprises. Previously, Ms. Li served as the General Manager (from 2010 to 2012) at Huawei Symantec USA, Inc., a consultant (2009) to The Gores Group, a private equity firm focusing on the technology sector, and the Executive Vice President and General Manager (from 2004 to 2009) at Fujitsu Compound Semiconductor Inc. and its joint venture with Sumitomo Electric Industries, Ltd., Eudyna Devices Inc. Prior to 2004, Ms. Li held executive and management positions with NeoPhotonics Corporation, Novalux Inc. and Corning Incorporated.
Other Board Experience: Ms. Li is a director of Semtech Corporation (since 2016), ServicePower (since 2017), CTS Corporation (since 2020) and PDF Solutions, Inc. (since 2021). She was previously a director (from 1998 to 2001) of Women in Cable TV and Telecommunications, a non-profit organization promoting women's leadership in Cable TV and Telecommunications industries.
Skills and Qualifications: Ms. Li's qualifications to serve as a member of the Board include her senior executive level experience in a wide range of technology companies, from telecommunication components and systems, to semiconductor to IT and datacenters, representing a variety of market segments Knowles serves. Her background and experience also provide the Board with invaluable insights into Asian markets, which are important strategic markets for Knowles.
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donald-macleod.jpg
Chairman of the Board

Independent
Age: 73
Director since: February 2014

Committee(s): Audit
DONALD MACLEOD
Select Business Experience: Mr. Macleod was the CEO (from 2009 to 2011) of National Semiconductor Corporation ("National Semiconductor"), an analog semiconductor company, until National Semiconductor was acquired by Texas Instruments Incorporated. Mr. Macleod joined National Semiconductor in 1978 and served in a variety of executive positions prior to becoming CEO, including Chief Operating Officer (from 2001 to 2009) and Chief Financial Officer (from 1991 to 2001).
Other Board Experience: Mr. Macleod has previously served as a director (from 2007 to 2019) of Broadcom Inc. (formerly, Avago Technologies Limited), Chairman (from 2012 to 2017) of the Board of Intersil Corporation and Chairman of the Board (from 2010 to 2011) of National Semiconductor.
Skills and Qualifications: Mr. Macleod's qualifications to serve as a director include his strategic perspectives in product development and marketing and supply chain optimization and guiding financial performance developed through his more than 30 years of experience in senior management and executive positions in the semiconductor industry (both in Europe and the United States). As a member of the board of directors of several publicly-traded semiconductor companies, he has also gained substantial knowledge and understanding of how to successfully operate a technology company like Knowles. Furthermore, he brings significant accounting and finance qualifications and experience to the Board. Mr. Macleod is a member of the Institute of Chartered Accountants of Scotland.
jniew-2021.jpgDirector
President and CEO
Age: 55
Director since: February 2014
JEFFREY NIEW
Select Business Experience: Mr. Niew is the President & CEO (since 2013) of Knowles. He was formerly the Vice President of Dover Corporation and President and CEO (from 2011 to February 2014) of Dover Communication Technologies. Mr. Niew joined Knowles Electronics LLC in 2000, and became Chief Operating Officer in 2007, President in 2008 and President and CEO in 2010. Prior to joining Knowles Electronics, Mr. Niew was employed by Littelfuse, Inc. (from 1995 to 2000) where he held various positions in product management, sales and engineering in the Electronic Products group, and by Hewlett-Packard Company (from 1988 to 1994) where he served in various engineering and product management roles in the Optoelectronics Group.
Other Board Experience: Mr. Niew is a member of the Advisory Board of the University of Illinois College of Engineering. Mr. Niew stepped down from his position as a director of Advanced Diamond Technologies, Inc. in 2020, after serving in that role for over five years.
Skills and Qualifications: Mr. Niew is Knowles' current CEO and the Board believes it is desirable to have on the Board at least one active management representative to facilitate the Board's access to timely and relevant information and its oversight of the Company's strategy, planning, performance and enterprise risks. Mr. Niew brings to the Board considerable management experience and a deep understanding of Knowles' markets and operating model which he gained during almost 20 years in management positions at Knowles, including 11 years in senior management positions. His broad experience in all aspects of management and Knowles' products, technologies, customers, markets, operations and executive team enable him to give valuable input to the Board in matters involving business strategy, capital allocation, transactions and succession planning.
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cherylshaversheadshot.jpgIndependent
Age: 68
Director since: August 2017
Committee(s): Compensation; Governance and Nominating (Chair)

DR. CHERYL SHAVERS
Select Business Experience: Dr. Shavers has been the Chairman and CEO (since February 2001) of Global Smarts, Inc., a business advisory services company. She served as Under Secretary of Commerce for Technology (from 1999 to 2001) for the United States Department of Commerce after having served as its Under Secretary Designate in 1999. She has served on the Advisory Boards for E.W. Scripps Company and the Anita Borg Institute for Technology. She also has served in several engineering and managerial roles for Intel Corporation as well as Portfolio Manager of Microprocessor Products Group in Intel Capital prior to 1999.
Other Board Experience: Dr. Shavers is a director (since 2018) of ITT Inc. In January 2021 she joined the Board of Voyager Space Holdings. She was previously the Non-Executive Chairman (from 2001 to 2003) of BitArts Ltd., as well as a director of ATMI, Inc. (from 2006 to 2014), Rockwell Collins, Inc. (from 2014 to 2018) and Mentor Graphics Corporation (from 2016 to 2017).
Skills and Qualifications: Dr. Shavers brings extensive leadership and operations experience as a CEO along with particular experience with developing technology plans and the transition of advanced technology into business opportunities.
wishart.jpgIndependent
Age: 67
Director since:
May 2020
Committee(s):
Audit

MICHAEL WISHART
Select Business Experience: Mr. Wishart has been the chief executive officer since 2015 of efabless corporation, an early-stage company offering an open platform and marketplace for community-based design of electronics. Mr. Wishart co-founded efabless in 2014 and has served on its board of directors since then. Mr. Wishart previously served as a managing director and advisory director of Goldman, Sachs & Co. from 1999 until he retired in June 2011. From 1991 to 1999, he served as managing director, including as head of the global technology investment banking group for Lehman Brothers. From 1978 to 1980 and from 1982 to 1991 he held various positions in the investment banking division at Smith Barney, Harris Upham & Co.
Other Board Experience: Mr. Wishart served on the board of directors of Spansion Inc. from 2013 until 2015 and of Cypress Semiconductor Corporation from 2015 until 2020, and he currently serves on the board of OneD Material, a private company engaged in the technology transfer and licensing of proprietary silicon-graphite anode material to improve the performance of lithium ion batteries. In addition, Mr. Wishart is a venture partner at Tyche Partners, a venture capital firm focused on hardware-related companies, since 2015.
Skills and Qualifications: Mr. Wishart brings strategy and leadership experience within the global technology industry and insights into capital markets that will benefit Knowles in driving sustainable growth and enhancing shareholder value. He holds a bachelor of science degree from St. Lawrence University and a master of business administration degree from the Stanford Graduate School of Business.
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Overview of the Board and Board Committees
All of our directors, with the exception of our CEO Mr. Niew, qualify as independent directors under New York Stock Exchange ("NYSE") corporate governance listing standards and the Company's Standards for Director Independence available on our website at http://investor.knowles.com/corporate-governance.
Our Board has three standing committees: the Audit Committee, the Compensation Committee and the Governance and Nominating Committee. Our Board has determined that each member of the Audit Committee qualifies as an "audit committee financial expert" as defined by SEC rules, is "financially literate" as defined in the NYSE Listing Standards and qualifies as independent under special standards established by the SEC and the NYSE for members of audit committees. Our Board has also determined that each member of the Compensation Committee meets the definition of "non-employee director" under Rule 16b-3 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and qualifies as independent under special standards established by the SEC and the NYSE for members of compensation committees.
Our Board met five times in 2021 and each director attended 100% of the Board and committee meetings held while such director was a member of the Board or the relevant committee. The table below sets forth a summary information about our current Board of Directors.
DirectorsAudit CommitteeCompensation CommitteeGovernance and Nominating Committee
Keith BarnesChairü
Hermann Eulü
Didier HirschChairü
Ye Jane Liüü
Donald Macleod*ü
Jeffrey Niew
Cheryl ShaversüChair
Michael Wishartü
* Chairman of the Board
Audit Committee
The primary functions of the Audit Committee include:
•Selecting and engaging our independent registered public accounting firm ("independent auditors");
•Overseeing the work of our independent auditors and our internal audit function;
•Overseeing our compliance with legal and regulatory requirements;
•Approving in advance all services to be provided by, and all fees to be paid to, our independent auditors, who report directly to the Audit Committee;
•Reviewing with management and the independent auditors the audit plan and results of the auditing engagement;
•Reviewing with management and our independent auditors the quality and adequacy of our internal control over financial reporting; and
•Reviewing at least annually the Company cybersecurity and other information technology risks, control and procedures.
The Audit Committee's responsibilities, authority and resources are described in greater detail in its written charter, which is available on our website at http://investor.knowles.com/corporate-governance. The Audit Committee met five times in 2021.
Compensation Committee
The Compensation Committee, together with our independent directors, reviews the Company's compensation philosophy and oversees the Company's policies and strategies related to human capital management, including but not limited to those policies and strategies regarding recruiting, retention, career development and progression, diversity and employment practices. The Compensation Committee also:
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•Approves compensation for our CEO and non-CEO executive officers;
•Grants awards and approves payouts under our equity plans and our Annual Executive Incentive Plan;
•Approves changes to our compensation plans;
•Reviews and recommends compensation for the Board; and
•Supervises the administration of the compensation plans.
The Compensation Committee's responsibilities, authority and resources are described in greater detail in its written charter, which is available on our website at http://investor.knowles.com/corporate-governance. The Compensation Committee met five times in 2021.
Governance and Nominating Committee
The Governance and Nominating Committee develops and recommends corporate governance policies and practices to our Board. The Governance and Nominating Committee also:
•Identifies and recommends to our Board candidates for election as directors and any changes it believes desirable in the size and composition of our Board;
•Makes recommendations to our Board concerning the structure and membership of the committees of the Board;
•Prepares policies and procedures for the selection of a new CEO in the event of an emergency or the retirement of the CEO and assists the Board with fulfilling its responsibilities relating to CEO succession planning; and
•Advises the Board on the whole as to corporate social responsibility, environmental and governance matters.
The Governance and Nominating Committee's responsibilities, authority and resources are described in greater detail in its written charter, which is available on our website at http://investor.knowles.com/corporate-governance. The Governance and Nominating Committee met five times in 2021.
Board, Committee, and Individual Director Evaluations
Our Board recognizes the critical role that Board, Committee and Director evaluations play in ensuring the effective functioning of our Board. Accordingly, the Board regularly evaluates its performance and the effectiveness of its Committees through self-assessments, corporate governance reviews and periodic charter reviews. In addition, the Governance and Nominating Committee evaluates the qualifications and performance of each incumbent director before recommending the nomination of that director for an additional term.
The Governance and Nominating Committee oversees the implementation of individual director evaluations, the objective of which is to have a substantive dialogue with the director being evaluated to help the director be a more effective member of the Board. Under the current process adopted by the Governance and Nominating Committee, each year approximately one-third of the directors are evaluated. Legal counsel conducts the evaluations and privately discusses the performance of each director being evaluated through individual interviews with all the other members of the Board. A summary of the feedback is then provided to the Chairman of the Board and the Chair of the Governance and Nominating Committee, who communicate the results to each director being evaluated and to the Governance and Nominating Committee as a whole.
Procedures for Approval of Related Person Transactions
We generally do not engage in transactions in which our executive officers or directors, any of their immediate family members or any of our more than 5% shareholders have a material interest. Should such a proposed transaction or series of similar transactions involve any such person and in an amount that exceeds $120,000, the transaction must be reviewed and approved in advance by the Governance and Nominating Committee in accordance with a written policy and the procedures adopted by our Board, which are posted on our website.
Under the procedures, our General Counsel determines whether a proposed transaction requires review under the policy and, if so, prior to entering into the transaction the proposed transaction must be presented to the Governance and Nominating Committee for its review and consideration at its next regularly scheduled meeting. The Governance and Nominating Committee reviews the relevant facts and circumstances of the transaction and approves, rejects or ratifies the transaction. If it is impractical or undesirable to wait until the next regularly scheduled meeting of the Governance and Nominating Committee, the Chair of the Governance and Nominating Committee may call a special meeting of the Governance and Nominating Committee to review and consider the transaction. Should the proposed transaction involve the CEO or enough members of the Governance and Nominating Committee to prevent a quorum, the disinterested members of the Governance and Nominating Committee will review the transaction and make a recommendation to the Board, and the disinterested members of the Board will then approve, reject or ratify the transaction. No director may participate in the review of any transaction in which he or she is a related person.
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Directors' Compensation
We use a combination of cash and stock-based incentives to attract and retain qualified candidates to serve on the Board. In setting director compensation, we consider the significant amount of time that directors expend to fulfill their duties, the skill level required of the members of the Board and competitive practices among peer companies. Employee directors do not receive additional compensation for their service on the Board. If a director serves for less than a full calendar year, the compensation to be paid to that director may be prorated as deemed appropriate by the Compensation Committee.
In October 2021, non-employee director compensation was set as follows:
Annual retainer of $235,000, payable $65,000 in cash and $170,000 in stock (with one-year cliff vesting provision);
Chairman of the Board — additional annual retainer of $70,000, payable in cash;
Committee Chairs — additional annual retainer of $24,500 for the Audit Committee Chair; $20,000 for the Compensation Committee Chair; and $12,500 for the Governance and Nominating Committee Chair, payable in cash; and
Committee Members (other than Committee Chairs) - additional annual retainer of $10,000 for service on the Audit Committee; $7,500 for service on the Compensation Committee; and $5,000 for service on the Governance and Nominating Committee, payable in cash.
Non-employee directors also receive, at the time they are elected to the Board, a one-time stock grant valued at $170,000 with a three-year cliff vesting provision. Non-employee directors are also reimbursed for all reasonable travel and out-of-pocket expenses associated with attending Board and committee meetings and continuing education seminars.
Each non-employee director serving as of the 2021 Annual Meeting received the stock portion of his or her annual retainer in the form of a grant of 8,004 RSUs on April 27, 2021, and these units convert into common stock on a one-for-one basis and vest (subject to continued service) on April 27, 2022.
2021 Director Compensation Table
The following table shows information regarding the compensation earned or paid during 2021 to non-employee directors who served on the Board during the year. For information on the compensation paid to Mr. Niew, please see the "Summary Compensation Table" on page 46 of this Proxy Statement and the related tables and narratives under "Executive Compensation" beginning on page 31 of this Proxy Statement. Mr. Niew does not receive any additional compensation for his service as a member of the Board.
NameFees Earned or
Paid in Cash
($)
Stock
Awards
($)(1)
Total
($)
Keith Barnes83,750170,005253,755
Hermann Eul68,750170,005238,755
Didier Hirsch87,250170,005257,255
Ronald Jankov (2)
38,750170,005208,755
Ye Jane Li72,500170,005242,505
Donald Macleod130,000170,005300,005
Cheryl Shavers75,000170,005245,005
Michael Wishart70,000170,005240,005

(1)In accordance with SEC rules, the amounts shown reflect the aggregate grant date fair value of RSUs granted to non-employee directors during 2021, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation — Stock Compensation ("FASB ASC 718"). The grant date fair value is measured based on the closing price of our common stock on the date of grant.
(2)Mr. Jankov passed away on September 19, 2021.





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2021 Outstanding Stock Awards for Directors Table
The following table shows the number of shares subject to outstanding stock awards as of December 31, 2021 held by each non-employee director.
Name
Number of Shares Subject to Outstanding
Stock Awards as of 12/31/2021(1)
Keith Barnes30,709 
Hermann Eul8,004 
Didier Hirsch8,004 
Ronald Jankov (2)
— 
Ye Jane Li8,004 
Donald Macleod18,360 
Cheryl Shavers8,004 
Michael Wishart8,004 
__________
(1)Pursuant to the Non-employee Director Deferral Program adopted by the Compensation Committee on February 28, 2014, each non-employee director may elect to defer the receipt of all (but not less than all) of the shares earned in a calendar year until termination of service as a non-employee director or, if earlier, until a specified date elected by the non-employee director that is at least one year and not more than 15 years after the date of grant. Under this deferral program, Mr. Barnes has deferred receipt of 30,709 shares and Mr. Macleod has deferred receipt of 10,356 shares.

(2)Mr. Jankov passed away on September 19, 2021. On that date his outstanding RSU grant became fully vested and was paid to his estate.

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PROPOSAL 2 —RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee has appointed PricewaterhouseCoopers LLP ("PwC") as the Company's independent registered public accounting firm to audit the annual accounts of Knowles and its subsidiaries for the fiscal year ending December 31, 2022. PwC has audited the financial statements of the Company since 2013. Representatives of PwC are expected to be present at the 2022 Annual Meeting via the virtual platform and will have the opportunity to make a statement if they desire to do so. The representatives will also be available to respond to questions at the 2022 Annual Meeting.
Although shareholder ratification of PwC's appointment is not required by Knowles' By-Laws or otherwise, our Board is submitting the ratification of PwC's appointment for 2022 to Knowles' shareholders because we value our shareholders' views on our independent registered public accounting firm and as a matter of good corporate practice. The Audit Committee will consider the outcome of this vote in its decision to appoint an independent registered public accounting firm but is not bound by our shareholders’ vote. Even if the selection of PwC is ratified, the Audit Committee may change the appointment at any time during the year if it determines a change would be in the best interests of the Company and our shareholders.
The persons named as proxies intend to vote the proxies "FOR" the ratification of the appointment of PwC as our independent registered public accounting firm for 2022, unless otherwise specified on the proxy card.

THE BOARD UNANIMOUSLY RECOMMENDS A VOTE "FOR"
THE RATIFICATION OF THE APPOINTMENT OF PwC AS OUR INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM FOR 2022

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Audit Committee Report
In accordance with the requirements of Sarbanes-Oxley, the related SEC rules and the NYSE Listing Standards, the Board engaged PwC as the Company's independent registered public accounting firm to audit the annual accounts of Knowles and its subsidiaries for 2021.
The Audit Committee is responsible for the duties set forth in its charter but is not responsible for preparing the financial statements, implementing or assessing internal control over financial reporting or auditing the financial statements. Knowles' management is responsible for preparing the financial statements, maintaining effective internal control over financial reporting and assessing the effectiveness of internal control over financial reporting. Knowles' independent auditors are responsible for auditing the financial statements and expressing an opinion on the effectiveness of internal control over financial reporting. The review of the financial statements by the Audit Committee is not the equivalent of an audit.
Pursuant to its oversight responsibilities, the Audit Committee discussed with PwC the overall scope for the audit of Knowles' 2021 financial statements. The Audit Committee met with PwC, with and without Knowles' management present, to discuss the results of PwC's examination, their assessment of Knowles' internal control over financial reporting and the overall quality of Knowles' financial reporting.
The Audit Committee reviewed and discussed, with both the management of Knowles and PwC, Knowles' 2021 audited financial statements, including a discussion of critical accounting policies, the quality, not just the acceptability, of the accounting principles followed, the reasonableness of significant judgments reflected in such financial statements and the clarity of disclosures in the financial statements.
The Audit Committee also (1) discussed with PwC the applicable requirements of the Public Company Accounting Oversight Board and the SEC, (2) reviewed the written disclosures and the letter from PwC required by the applicable requirements of the Public Company Accounting Oversight Board regarding the independent auditor's communications with the Audit Committee concerning independence and (3) discussed with PwC its independence, including any relationships or permitted non-auditing services that might impact PwC's objectivity and independence.
Based upon the discussions and review referred to above, the Audit Committee recommended that the audited financial statements for the year ended December 31, 2021 be included in Knowles' Annual Report on Form 10-K for the year ended December 31, 2021.
Audit Committee:
Didier Hirsch (Chair)
Ye Jane Li
Donald Macleod
Michael Wishart

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Fees Paid to Independent Registered Public Accounting Firm
The independent registered public accounting firm of the Company during the year ended December 31, 2021 was PwC. All PwC services during 2021 were approved by the Audit Committee specifically or pursuant to the pre-approval procedures outlined below. PwC's aggregate fees, rounded to the nearest hundred dollars, during 2021 and 2020 are set forth in the table below:
Type of FeeYear Ended December 31,
2021
($)		Year Ended December 31,
2020
($)
Audit Fees(1)
2,116,9001,826,500
Audit-Related Fees——
Tax Fees
——
All Other Fees(2)
15,4004,500

(1)Audit fees include fees for audit or review services in accordance with generally accepted auditing standards and fees for services that generally only independent auditors provide, such as statutory audits and review of documents filed with the SEC. Audit fees also include fees incurred in connection with the Company's acquisition of Integrated Microwave Corporation in 2021.
(2)Other fees include services performed related to the Company's filing of a Malaysian tax incentive application in 2021 and advisory services related to licensing accounting research tools.

Pre-Approval of Services Provided by Independent Registered Public Accounting Firm
Consistent with its charter and applicable SEC rules, our Audit Committee pre-approves all audit and permissible non-audit services provided by PwC to us and our subsidiaries. With respect to certain services which PwC has customarily provided, the Audit Committee has adopted specific pre-approval policies and procedures, which the Audit Committee reviews at least annually. In developing these policies and procedures, the Audit Committee considered the need to ensure the independence of PwC while recognizing that, in certain situations, PwC may possess the expertise and be in the best position to advise us and our subsidiaries on issues and matters other than accounting and auditing.
The policies and procedures adopted by the Audit Committee require pre-approval by the Audit Committee of audit-related and certain non-audit-related tax and other routine and recurring services that are proposed to be performed by the independent auditor. The pre-approval of such services by the Audit Committee is effective for a fiscal year, specific as to a particular service or category of services and is subject to a limitation on fees. In addition, pre-approved services which are expected to exceed the limitation on fees require separate, specific pre-approval. For each proposed service, the independent auditor and management are required to provide information regarding the engagement to the Audit Committee at the time of approval. In evaluating whether to approve such services, the Audit Committee considers whether each service is compliant with the SEC rules and regulations on auditor independence.
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PROPOSAL 3 —
ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION
Knowles is offering our shareholders an opportunity to vote to approve, on an advisory and nonbinding basis, the compensation of NEOs as disclosed in this Proxy Statement, as required by Section 14A of the Exchange Act. This proposal, commonly known as a "say-on-pay" vote, gives our shareholders the opportunity to express their views on our NEOs' compensation. We currently intend to submit this say-on-pay vote to our shareholders annually, based on the recommendation of the Compensation Committee and in consideration of the shareholder vote on the frequency of say-on-pay votes that was last taken at the 2020 annual meeting.
We are asking our shareholders to indicate their support for our NEO compensation as described in this Proxy Statement. Knowles' compensation programs are designed to strike an appropriate balance between aligning executive compensation with financial performance, and promoting retention. We believe our pay programs are aligned with this compensation philosophy and that the at-risk compensation components have delivered value commensurate with our business and financial performance.
This vote is not intended to address any specific item of compensation but rather the overall compensation of our NEOs and the philosophy, policies and practices described in this Proxy Statement. Accordingly, we ask our shareholders to vote "FOR" the following resolution at the 2022 Annual Meeting:
"RESOLVED, that Knowles' shareholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in Knowles' Proxy Statement for the 2022 Annual Meeting of Shareholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the Summary Compensation Table and the other related tables and disclosures."
The say-on-pay vote is advisory and therefore not binding on Knowles, our Compensation Committee or our Board. Our Board and our Compensation Committee value the opinions of our shareholders and, to the extent there is any significant vote against the NEO compensation as disclosed in this Proxy Statement, we will consider our shareholders' concerns and the Compensation Committee will evaluate whether any actions are necessary to address those concerns.
The persons named as proxies intend to vote the proxies "FOR" the approval of the compensation of our NEOs, unless otherwise specified on the proxy card.

THE BOARD UNANIMOUSLY RECOMMENDS AN ADVISORY VOTE "FOR" THE RESOLUTION TO APPROVE OUR NAMED EXECUTIVE OFFICER COMPENSATION.

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis — Executive Summary
Introduction
The Compensation Discussion and Analysis ("CD&A") outlines the 2021 compensation paid to Knowles’ executive officers who are identified as NEOs. The purpose of this discussion is to provide investors with an understanding of the company’s executive compensation policies and practices, and the decisions regarding the compensation for the NEOs.
The Compensation Committee is committed to designing an executive compensation program that pays for delivering performance, with reduced payouts when performance falls short of expectations. Furthermore, the Compensation Committee values our shareholders' feedback and will incorporate changes it deems appropriate.

Named Executive Officers
2021 Named Executive Officers
Jeffrey S. NiewPresident & Chief Executive Officer
John S. AndersonSenior Vice President & Chief Financial Officer
Raymond D. CabreraSenior Vice President, Human Resources & Chief Administrative Officer
Daniel J. GieseckeSenior Vice President & Chief Operating Officer
Robert J. PernaSenior Vice President, General Counsel & Secretary

Business Highlights
Knowles delivered very strong results for our shareholders in 2021. The COVID-19 global pandemic brought on unique and unprecedented challenges to our business over the last two years. Despite these challenges, we were able to improve our financial performance in 2021 across a number of measures as shown on the charts below.

Knowles 2019-2021 Financial Highlights1

image4.jpg

In 2021, as a result of our business strategy to focus on attractive markets plus innovative and differentiated solutions, we experienced revenue growth and margin expansion. Revenue for 2021 was $868 million, up approximately 14% and 2% compared to 2020 and 2019, respectively. Adjusted EBIT (adjusted earnings before interest and income taxes) of $174 million increased approximately 120% and 37% compared to 2020 and 2019, respectively. Non-GAAP gross profit margin (non-GAAP gross profit as a percentage of revenue) finished at 41.7%, up approximately 16% and 7% versus 2020 and 2019, respectively.

1 Adjusted EBIT and non-GAAP gross profit margin are non-GAAP financial measures. For additional information regarding and reconciliation of these non-GAAP financial measures, see Appendix A.
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Our strategy is also helping us to deliver exceptional cash flow results. For 2021, we generated approximately $182 million of cash flow from operations, which was up approximately 42% from 2020 ($128 million) and 47% from 2019 ($124 million).

In our Audio segment, robust performance was driven by a global market recovery, new product introductions and market share gains. In our Precision Devices segment, strong performance was driven by increased revenues in the defense, medtech, electric vehicle and industrial markets coupled with the acquisition of Integrated Microwave Corporation. Our gross profit margin expansion was driven by an improved product and customer mix, and improved factory capacity utilization. Our 2021 performance was also supported by our continued focus on advancing our strategy of delivering differentiated solutions to a diverse set of growing end markets.

2021 Compensation Highlights
Based on our shareholder advisory vote on executive compensation in 2020, as well as input gained during shareholder outreach in 2020, the Compensation Committee determined that our current executive compensation program is well aligned with shareholder interests and expectations. As part of our continual review of our executive compensation programs, to ensure our program facilitates our ability to attract and retain key talent and that our incentive design is aligned with our strategic goals we approved the following enhancements for the 2021 compensation programs:
•Replaced adjusted EBIT with non-GAAP gross profit margin in our annual incentive plan for the financial component of the 2021 annual incentive to align with our business strategy and an increased focus on profitability. Non-GAAP gross profit margin will be weighted 50% and revenue will be weighted 30%.
•Replaced the benchmark companies used to compare our relative total shareholder performance in our performance share unit ("PSU") plan from the component companies in the S&P Semiconductor Select Index to the component companies in the Russell 2000 Index for both the 2020 PSUs and 2021 PSUs. Knowles is a member of the Russell 2000 Index and it represents a broader, more diversified index that aligns with our strategy of delivering high value, differentiated solutions to a diverse set of growing end markets. Additionally, there is closer financial comparability between Knowles and the companies in this index. For the 2021 PSU awards, the Committee also approved a holding period for the one-year period following settlement of the PSUs and capped the payout value at five times the target number of PSUs multiplied by the grant date closing price.
•Approved a new LTI mix for executive officers from 50% PSUs, 25% RSUs and 25% stock options to 50% PSUs and 50% RSUs to align with market competitive practice among our peers, where stock options are less prevalent.
In addition to the above compensation program enhancements, the Committee approved the following 2021 compensation actions for our NEOs:
•Approved an increase in Mr. Niew’s 2021 LTI target from $3,400,000 to $3,700,000 to align Mr. Niew’s total compensation with the peer group median. This is the first LTI target increase for Mr. Niew since 2017. Consistent with the Committee’s focus on aligning pay and performance, the Committee assigned the entire incremental equity value of $300,000 into the performance share unit component of Mr. Niew’s LTI target. This increased the PSU portion of Mr. Niew’s LTI target from 50% to 55%. After this change, Mr. Niew’s overall LTI mix for 2021 was 55% PSUs and 45% RSUs.
•For the other NEOs, approved an increase in Mr. Giesecke’s 2021 LTI target, which was increased from $750,000 to $800,000. Mr. Giesecke’s LTI mix for 2021 was 50% PSUs and 50% RSUs consistent with the other named executive officers. The LTI target for the other NEOs remained the same for 2021 as it was for 2020.
•Approved base salary and annual incentive target increases for Mr. Cabrera from $306,000 to $335,000 and 50% to 60%, respectively, to align with the market median. Mr. Cabrera had not received increases to his base salary and annual incentive since 2016. All other NEOs compensation targets remain unchanged from 2020 levels.
•Mr. Niew’s 2021 annual bonus was paid at approximately 128% of target; and
•2021 annual bonuses for each of the other NEOs ranged from approximately 131% to approximately 141% of target.
•Approved a payout of 66.2% of target for the PSUs awarded in 2019, which recently completed its performance period on February 1, 2022.
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Shareholder Support on Executive Compensation
At the 2021 annual meeting, approximately 97% of the shareholders voting at the meeting approved, on an advisory basis, the compensation paid to Knowles’ named executive officers in 2020. The Compensation Committee will continue to consider shareholder feedback and the results of say-on-pay votes when making future compensation decisions.

In addition, on an annual basis, we solicit our shareholders to provide feedback directly to our Board of Directors on key topics including executive compensation. In January 2022, we reached out to shareholders representing approximately 65% of shares outstanding and conducted meetings with investors who accepted our invitations to engage, which represented approximately 30% of our shares outstanding. The Chairman of the Board of Knowles led these meetings with investors.

Executive Compensation Program Best Practices
The following highlights of our executive compensation describe certain practices applicable to the NEOs that the Compensation Committee believes support the pay-for-performance nature of our program and further align the interests of our NEOs with our shareholders:
Our Executive Compensation Practices
üWe deliver a significant proportion of total compensation in the form of equity with PSUs as a component of the LTIP to further align compensation with the Company's long-term business plan.
üPayouts for cash incentives and PSUs are capped.
üWe have multi-year vesting periods for equity awards.
üWe perform market comparisons of executive compensation against a relevant peer group.
üWe use an independent compensation consultant reporting directly to the Compensation Committee and providing no other services to the Company.
üWe have double-trigger vesting for equity awards in the event of a change-in-control.
üWe maintain stock ownership guidelines (CEO: 5x base salary; Other NEOs: 3x base salary).
üWe maintain a formal incentive clawback policy.
üThe Compensation Committee regularly meets in executive session without any members of management present.
üWe hold an annual "say on pay" vote.
üWe maintain an annual shareholder engagement process.
üWe do not allow repricing of underwater stock options without shareholder approval.
üWe do not allow hedging, short sales or pledging of our securities by directors or executive officers.
üWe do not provide for tax gross-ups upon a change-in-control.
üWe do not have employment contracts.
üWe do not provide excessive perquisites.

2021 Executive Compensation Program Structure
Knowles' executive compensation program is designed to achieve the following key objectives:
•Motivate executives to enhance long-term shareholder value;
•Reinforce Knowles' pay-for-performance culture by aligning executive compensation with Knowles' business objectives and financial performance;
•Provide a total compensation opportunity that allows Knowles to attract and retain talented executives; and
•Use incentive compensation to promote desired behavior without encouraging unnecessary or excessive risk-taking.
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The following table describes the structure of the 2021 compensation program.

Pay Element
Purpose
Percent of Total
Characteristics
Base Salary
(See page 36)
Provide a competitive level of fixed compensation to attract and retain talented executives
CEO: 13%
Other NEOs (average): 28%
Cash
- Determined based on executive's responsibilities, performance, skills and experience relative to market data
Annual Incentive
(See page 37)
Motivate and reward executives for achieving financial and individual performance goals
CEO: 15%
Other NEOs (average): 18%
Cash
- Award based on achievement of pre-established financial goals (80%) and individual strategic objectives (20%)
- Individual strategic objectives are measured based on specific criteria identified at the beginning of the year
Long-Term Incentives
(See page 40)
Motivate and reward executives' contributions to enhancing long-term shareholder value and the achievement of long-term business objectives
CEO: 72%
Other NEOs (average): 54%
PSUs
- 55% of LTIP target grant value for CEO and 50% for other NEOs
- 3-year relative total shareholder return ("r-TSR") payout performance measure
- Relative TSR is measured against companies in the Russell 2000 Index
- No payout if r-TSR is below 25th percentile of benchmark companies
RSUs
- 45% of LTIP target grant value for CEO and 50% for other NEOs
- Vesting over three-year period subject to continued employment


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Pay-for-Performance
Pay-for-performance is a core tenet of Knowles' executive compensation program. Knowles' focus on pay-for- performance is best demonstrated through the structure of our executive compensation program, where the majority of executive pay is at risk and variable based on a combination of annual and long-term performance requirements and Knowles' stock price performance. As shown below for 2021, 87% percent of Mr. Niew's target compensation and, on average, 72% percent of the target compensation for the other NEOs was subject to performance. In addition, 72% of Mr. Niew's target compensation and, on average, 54% of the target compensation for the other NEOs was equity-based and, therefore, aligned with interests of shareholders.
image2.jpg
Our compensation programs are designed so that compensation outcomes for strong performance should pay above target, while outcomes where performance is below expectations should pay below target taking into consideration short-term financial targets and long-term shareholder value creation. The chart below demonstrates pay-for-performance by comparing the CEO's target and realizable total compensation for the last three fiscal years.
image.jpg
(1)Target base salary and AIP values are the target amounts for each year. Target LTI value for each year is based on the grant date value (calculated based on the grant date closing stock price) of equity granted in that year, where the value for PSUs assumes payout at 100%. The grant date closing stock price was $16.07 in 2019, $16.77 in 2020, and $20.60 in 2021.
(2)Realizable base salary and AIP values are the actual amounts paid for each year. Realizable LTI value for each year is based on Knowles December 31, 2021 closing stock price of $23.35. The realizable value for PSUs granted in 2019 was adjusted to reflect the recent payout at 66.2%. The realizable value shown for PSUs granted in 2020 and 2021 (for which the performance period has not ended) assumes payout at 100%.

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COVID-19 and its impact on our 2020 performance had a multi-year impact on Mr. Niew's realizable compensation as it affected his 2019 PSU payout and his 2020 annual incentive payout, which where both below target levels, and his 2020 base salary, which was temporarily reduced. The negative impact of COVID-19 on the Company’s 2020 revenue performance contributed to a 2019 PSU payout at approximately 66.2% of target and a 2020 annual incentive payout at approximately 75% of target. To help mitigate the impact of COVID-19 on our business, we focused on reducing operating expense including the temporary reduction of Mr. Niew’s pay by 15% between April 1, 2020 and October 1, 2020. However, the performance of Knowles’ stock price has had a positive impact on Mr. Niew's realizable compensation. Knowles stock price increased approximately 75% during the three-year period from 2019 through 2021, moving from a closing price of $13.31 on December 31, 2018 to a closing price of $23.35 on December 31, 2021. This significant growth is reflected in the chart above by the value of the realizable LTI in comparison to the value of the target LTI.
2021 NEO Total Target Compensation Overview
The table below presents the total target compensation by element for each NEO for the 2021 executive compensation program. For more information on these elements of compensation, please see "2021 NEO Compensation Decisions" below.
2021 Total Target Compensation by Element
ExecutiveBase SalaryTarget Annual IncentiveLong-term IncentiveTotal
Jeffrey Niew$650,000$780,000$3,700,000$5,130,000
John Anderson$414,000$289,800$1,000,000$1,703,800
Raymond Cabrera$335,000$201,000$600,000$1,136,000
Daniel Giesecke$400,000$280,000$800,000$1,480,000
Robert Perna$430,000$258,000$700,000$1,388,000

2021 NEO Compensation Decisions
This section describes 2021 NEO pay decisions with respect to base salary, annual incentive opportunity and long-term incentive opportunity.

Base Salary
Executive
2020
Base Salary (1)
2021
Base Salary
Jeffrey Niew$650,000$650,000
John Anderson$414,000$414,000
Raymond Cabrera (2)
$306,335$335,000
Daniel Giesecke $400,000$400,000
Robert Perna$430,000$430,000
__________
(1)The base salary is showing as target annual base and does not reflect the COVID-related reductions. To help mitigate the impact of COVID-19 on our business, we focused on reducing operating expense including the temporary reduction of Mr. Niew’s base salary by 15% between April 1, 2020 and October 1, 2020. The base salaries for Messrs. Anderson, Cabrera, Giesecke, and Perna were reduced 10% during this time period.
(2)Mr. Cabrera received an increase from $306,335 to $335,000 effective February 8, 2021 to align his base salary with the market median. Mr. Cabrera had not received an increase to his base salary since 2016.
Base salaries are intended to provide a competitive level of fixed compensation in order to attract and retain talented executives. Base salaries are generally set based on the executive's responsibilities, performance, skills, and
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experience as compared with relevant market data. The table above compares each executive's target 2020 and 2021 annual base salaries.
Annual Incentive
Structure
Knowles' annual incentive plan is designed to motivate and reward executives for achieving financial and individual objectives. The Compensation Committee believes that balancing the measurement of performance between financial and individual strategic objectives is an important factor in mitigating risk and supporting long-term value creation for Knowles' shareholders.


Components

Key Factors

2021 Performance Measure
Financial Performance Bonus
80% of Total

Based on performance measured against Company and/or business unit performance criteria established at the beginning of the fiscal year
Payout determined by comparing performance against three performance levels set for each pre-set criterion: threshold (25% payout), target (100% payout), and maximum (200% payout)
An adjusted EBIT threshold is required to be met for a financial performance bonus payout

Non-GAAP
Gross Profit Margin (50%)

Revenue (30%)
Individual Strategic Objectives Bonus 20% of Total
Measured against individual performance criteria
Each NEO’s payout was determined by comparing individual performance against specific individual criteria set at the beginning of 2021
Payouts can range from 0% to 200% depending on the NEO’s performance against individual strategic objectives
Varies by NEO
(For more information, see below)

Target Amounts
The NEOs' annual incentive targets are defined as a percentage of their base salaries and are determined based on the NEOs' responsibilities, skills, and experience as compared with relevant market data. The following table compares each executive's 2020 and 2021 annual incentive targets.

Executive2020 Annual Incentive Target2021 Annual Incentive Target
% of Salary$% of Salary$
Jeffrey Niew120%$780,000120%$780,000
John Anderson70%$289,80070%$289,800
Raymond Cabrera (1)
50%$153,16860%$201,000
Daniel Giesecke70%$280,00070%$280,000
Robert Perna60%$258,00060%$258,000
__________
(1)Mr. Cabrera's target annual incentive was increased from 50% of annual base to 60% for 2021 to be better aligned with the market.

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Financial Performance Bonus
The Compensation Committee set the 2021 annual financial and individual strategic incentive targets to be reasonably achievable with strong management performance. Maximum performance levels were designed to be difficult to achieve in light of historical performance and the business forecast of the Company. For 2021, the financial portion of the annual incentives for Messrs. Niew, Anderson, Cabrera, Giesecke, and Perna were based solely on metrics at the corporate level. The table below shows the financial metrics for the corporate performance levels.

2021 Annual Financial Goals
Financial Performance Bonus
(% of Target Payout)		Corporate
Non-GAAP
Gross Profit Margin %		Revenue (millions)
Threshold (25%)37.1%$769.0
Target (100%)40.7%$845.0
Maximum (200%)44.0%$912.6

For 2021, the Company paid the NEOs the following amounts relating to the financial performance bonus. Corporate Knowles actual revenue achievement was between target and maximum ($868.1 million) and actual non-GAAP gross profit margin % achievement was also between target and maximum (41.7%) resulting in 132.7% of the financial bonus being earned.
Executive2021 Financial Performance Bonus (80% of Bonus)
Bonus Opportunity
(as a % of an NEO's Target Percentage)		Bonus Percentage EarnedBonus Paid
Jeffrey Niew0 - 200%132.70%$828,048
John Anderson0 - 200%132.70%$307,652
Raymond Cabrera0 - 200%132.70%$213,382
Daniel Giesecke0 - 200%132.70%$297,248
Robert Perna0 - 200%132.70%$273,893

Individual Strategic Objectives Bonus
NEO performance for the annual incentive plan's individual strategic objectives is based on specific criteria identified at the beginning of the year and measured throughout the year. The Compensation Committee believes that the individual strategic objectives established for each of the NEOs are supportive of Knowles' long-term strategic objectives, and are indicators of the executive's success in fulfilling his responsibilities to the Company. The performance levels for the individual strategic objectives were designed to be achievable, but required strong and consistent performance by the NEO.

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Summaries of the specific individual strategic objectives for Mr. Niew and the other NEOs are outlined in the table below:
Executive2021 Individual Strategic Objectives
Jeffrey Niew
•Drive revenue growth in strategic markets (8%)
•Drive innovation across the product portfolio (12%)
John Anderson

•Maximize consolidated free cash flow (10%)
•Optimize global effective tax rate (5%)
•Achieve strategic finance goals (5%)

Raymond Cabrera
•Achieve strategic global human resources goals and execute the Company's Diversity & Inclusion strategy (10%)
•Achieve strategic global information technology goals (10%)
Daniel Giesecke
•Achieve global operations value creation targets (8%)
•Factory optimization and new products introduction (6%)
•Maximize consolidated free cash flow (6%)
Robert Perna
•Achieve key legal department operating goals (10%)
•Support business unit strategic initiatives (10%)

Each personal objective is given a rating from "Did Not Achieve" to "Far Exceeded," with weighted performance ratings and payouts consistent with the following table:
Individual Strategic Objectives Rating2021 Payout Level
Far Exceeded200%
Exceeded150%
Target100%
Achieved Most Not All50%
Did Not Achieve0%
The CEO recommended, and the Compensation Committee approved, the 2021 cumulative weighted individual strategic objectives scores and payout levels for each of the NEOs other than himself. The Compensation Committee met with the CEO in January 2022 to evaluate his performance against his strategic objectives. The Compensation Committee determined the cumulative weighted individual strategic objectives score for the CEO and recommended to the independent directors of the Board the CEO's payout level. The individual bonus payout for each NEO, as shown in the accompanying table, was determined by multiplying the bonus percentage achieved by 20% (representing the percentage of the individual bonus to the total annual bonus opportunity) of the target bonus percentage.
Executive2021 Individual Strategic Objectives Bonus (20% of Bonus)
Overall RatingBonus Percentage EarnedBonus Paid
Jeffrey NiewBetween Exceeded and Target110%$171,952
John AndersonExceeded150%$86,940
Raymond CabreraBetween Exceeded and Target125%$50,250
Daniel GieseckeBetween Far Exceeded and Exceeded175%$98,000
Robert PernaBetween Exceeded and Target125%$64,500


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2021 Actual Results
The table below presents the results of the NEOs' financial goals and individual strategic objectives versus target, as well as the corresponding annual incentive payouts.
Executive2021 Annual Incentive
2021 Annual Incentive TargetFinancial Incentive Individual Strategic Objective IncentiveTotal% of 2021 Annual Incentive Target
Jeffrey Niew$780,000$828,048$171,952$1,000,000128.2%
John Anderson$289,800$307,652$86,940$394,592136.2%
Raymond Cabrera$201,000$213,382$50,250$263,632131.2%
Daniel Giesecke$280,000$297,248$98,000$395,248141.2%
Robert Perna$258,000$273,893$64,500$338,393131.2%
Long-Term Incentives

2019 PSU Payout

The performance period for the PSUs awarded in 2019 was completed on February 1, 2022. Under the original plan design, the PSU payout was based upon a three-year revenue goal with a three-year relative total shareholder return (“r-TSR”) modifier. As previously disclosed in our 2021 Proxy Statement, the Compensation Committee adjusted the performance period under the 2019 PSUs after it was determined that the original revenue goals were unattainable due to impact of COVID-19 on our business in 2020.

In considering the modification, the Committee recognized the important steps taken by the Company to manage the business through the pandemic and the need to ensure that we retained and motivated key employees to successfully drive the business forward beyond the pandemic to create additional long-term value for our shareholders. The Committee consulted with its independent advisor, Compensia, Inc., and sought feedback from shareholders during the Board’s 2020 annual shareholder outreach effort. The feedback from shareholders was an important consideration in the Committee’s decision to adjust the 2019 PSUs.

After careful review, the Committee adjusted the performance period from a singular, three-year period to three, one-year periods. Each period was weighted one-third to isolate the impact that COVID-19 had on the Company’s 2020 performance and in acknowledgement that the Company would still face challenges presented by the COVID-19 pandemic into 2021. Annual revenue goals for the first two years of the performance period (2019 and 2020) were established using the original Compounded Annual Growth Rates (“CAGRs”) used to establish the original 3-year revenue goals. The Compensation Committee established a new revenue goal for the 2021 performance period, which the Compensation Committee believed was rigorous and required meaningful performance to achieve, and was aligned with the Company’s 2021 business strategy and financial goals. Under the revised revenue goal, the payout could range from 0% to 150%.

The 2019 PSU award had a relative total shareholder return modifier that compared Knowles’ performance to the component companies of the S&P Semiconductor Select Index. The r-TSR modifier could adjust the overall award by 50% to 150% based on Knowles ranking amongst the component companies of the index. Each year of the performance period (2019, 2020 and 2021) was measured independently against the revenue and r-TSR goals. Additionally, for the 2021 performance period, the r-TSR modifier was capped at 100%, so the r-TSR modifier would not increase the payout based on revenue performance but the payout may be decreased if our r-TSR performed below the benchmark.

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Based on actual performance for 2019, 2020, and 2021, the Committee approved an aggregate payout of 66.2% for the 2019 PSUs. The following table shows the performance by year:
a2019psus.jpg

For 2019, the Company’s actual revenue of $854.8 million was below the target of $868.1 million, while the relative TSR ranking was at the 54th percentile, which produced an overall payout of approximately 64.6%, which was weighted at approximately 21.5% after factoring in the one-third weighting. For 2020, given the impact of COVID-19 on the business, the Company’s actual revenue of $764.3 million was below the threshold of $868.4 million resulting in a 0% payout for that performance year. For 2021, the Company achieved actual revenue of $868.1M which was above the target of $845 million. The r-TSR ranking was 50.2%, which resulted in the r-TSR modifier being capped at 100%. This resulted in the overall payout for 2021 being approximately 134.2%, which was weighted at approximately 44.7% after factoring in the one-third weighting. As shown in the graphic above, the total payout for the three-year period was approximately 66.2%.

2020 PSU Modification
As previously discussed in our 2021 Proxy Statement, in February of 2021, the Compensation Committee adjusted the peer group for the r-TSR measure for the 2020 PSUs from the component companies of the S&P Semiconductor Select Industry Index to the component companies of the Russell 2000 Index. This brought the r-TSR measure for the 2020 PSUs in line with the r-TSR measure used for the 2021 PSUs granted in February 2021. In making this adjustment, the Compensation Committee considered that Knowles is a member of the Russell 2000 Index and this index represents a broader, more diversified index that aligns with our strategy of delivering high value, differentiated solutions to a diverse set of growing end markets. Additionally, there is closer financial comparability between Knowles and the companies in this index.
2021 LTIP Grants
The Company's LTIP is designed to motivate and reward executives' contributions to enhancing long-term shareholder value and the achievement of long-term business objectives. The value of the 2021 annual long-term incentive grants is based on each executive's responsibilities, skills, and experience as compared with relevant market data. For 2021, LTI was delivered through a mixture of performance share units and restricted stock units as shown below.
chart-66b7014daea94b12ae0.jpgchart-9b29e92582f444bf8fe.jpg

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The following table compares the annual equity award grants to NEOs in 2020 to the grants in 2021. The 2021 annual grant of PSUs and RSUs was awarded to the NEOs on February 8, 2021.
Executive2020 Annual Grants2021 Annual Grants
RSUsPSUsStock OptionsTotalRSUs
PSUs (1)
Total
Jeffrey Niew$850,000$1,700,000$850,000$3,400,000$1,665,000$2,035,000$3,700,000
John Anderson$250,000$500,000$250,000$1,000,000$500,000$500,000$1,000,000
Raymond Cabrera$150,000$300,000$150,000$600,000$300,000$300,000$600,000
Daniel Giesecke$187,500$375,000$187,500$750,000$400,000$400,000$800,000
Robert Perna$175,000$350,000$175,000$700,000$350,000$350,000$700,000

(1)     Values for the PSUs differ from the Summary Compensation Table due to (1) differences in the stock price used to convert the grant values to a number of units and the accounting value per unit that is required to be reported in the Summary Compensation Table, and (2) the incremental values associated with the modifications of the 2019 and 2020 PSU awards approved in 2021 (as described beginning on page 40).

The Compensation Committee approved an increase in Mr. Niew’s 2021 LTI target from $3,400,000 to $3,700,000 to align Mr. Niew’s total compensation with the peer group median. This is the first LTI target increase for Mr. Niew since 2017. Consistent with the Committee’s focus on aligning pay and performance, the Committee assigned the entire incremental equity value of $300,000 into the performance share unit component of Mr. Niew’s LTI target. This increased the PSU portion of Mr. Niew’s LTI target from 50% to 55%. Mr. Niew’s overall LTI mix for 2021 was 55% PSUs and 45% RSUs.
The Compensation Committee also approved an increase in Mr. Giesecke’s 2021 LTI target, which was increased from $750,000 to $800,000. Mr. Giesecke’s LTI mix for 2021 was 50% PSUs and 50% RSUs consistent with the other named executive officers. The LTI target for the other NEOs remained the same for 2021 as it was for 2020.
The 2021 RSUs vest ratably over three years based on continued service with Knowles. Similar to the 2020 PSU awards, the 2021 PSU awards have relative total shareholder return (r-TSR) as the sole measure. The peer group for the relative TSR measure is the component companies of the Russell 2000 Index. The performance period is February 1, 2021 through February 1, 2024. Knowles TSR performance will be compared to the r-TSR performance of the component companies of the Russell 2000 Index and be paid out based on the following schedule:

Knowles'
Relative TSR Ranking		Relative TSR Payout %
75th percentile or higher225%
50th percentile100%
25th percentile25%
Below 25th percentile0%
In the event that the Company’s TSR at the end of the performance period is negative, then the maximum payout shall be limited to 100% of target PSUs. The r-TSR payout for any ranking that is not indicated in the above table will be interpolated linearly using the two closest data points in the above table. The 2021 PSUs have a holding period of one-year following settlement of the PSUs. In addition, the maximum value of the PSUs paid is capped at five times the target number of PSUs multiplied by the original grant date closing price.

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Our Compensation Program Design Process
Role of the Compensation Committee
The Compensation Committee, together with the other independent directors, is responsible for structuring our compensation program and approving the compensation of the CEO and other NEOs, among other duties expressed in its charter. The Compensation Committee makes these approvals based on its review of corporate and individual performance, input from the CEO with respect to the NEOs other than himself (detailed in this CD&A) and the advice of its independent advisor. Two other key inputs to the Compensation Committee's decision-making process are the current status of the Company's business strategy and the feedback we receive from our shareholders.
Independent Advisor to the Compensation Committee
The Compensation Committee engages Compensia, Inc. ("Compensia") as its independent advisor. Compensia's duties include:
•CEO pay analysis;
•NEO pay analysis and review of CEO recommendations regarding NEO compensation;
•Peer group review;
•Independent director compensation review;
•Incentive program design; and
•Collaboration with management on behalf of the Compensation Committee in developing management's recommendations to the Compensation Committee regarding executive pay matters.
Compensia has been retained by and reports directly to the Compensation Committee. The Compensation Committee assessed Compensia's independence in light of the SEC requirements and NYSE listing standards and determined that Compensia's work did not raise any conflict of interest or independence concerns.
Role of Management
The CEO makes compensation recommendations to the Compensation Committee for the NEOs other than himself, based on an assessment of individual and corporate performance. Management personnel prepare compensation information and performance assessments for the Compensation Committee.
Compensation Peer Group and Market Data
The Compensation Committee periodically examines market data to evaluate pay levels, pay practices and other compensation decisions. This market data review includes corresponding pay levels and pay practices employed at a peer group of similarly-sized companies in similar lines of business to the Company and which compete in similar markets for business or talent. The Compensation Committee does not believe it is appropriate to establish compensation levels based only on market practices. For each element of compensation, the Compensation Committee uses the median of the peer group as a reference point, while also considering other factors (e.g., Knowles' financial performance, individual roles and responsibilities relative to peer references and the overall mix of compensation).
The Compensation Committee considers the following general criteria in selecting the compensation peer group:
•Companies that are publicly-traded in the U.S.;
•Companies in the same or similar lines of business;
•Companies that serve similar customers; and
•Companies with revenue of approximately 0.5x to 2.0x Knowles' revenue and within a reasonable size range of Knowles with respect to other financial and operating metrics, such as market capitalization and earnings before interest and taxes.

As part of its ongoing review of the executive compensation peer group, the Compensation Committee regularly assesses the peer group against the above criteria and periodically approves updates to the peer group. In October 2020, the Compensation Committee reviewed the peer group in preparation for 2021 compensation decisions and agreed to remove II-VI from the peer group following the completion of its acquisition of Finisar, which increased its size beyond the Compensation Committee’s parameters.
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The following peer group was used for 2021 NEO compensation decisions.

2021 Compensation Peer Group
Arlo Technologies
Cirrus Logic
CTS
Diodes
FormFactor
Infinera
Lattice Semiconductor
MACOM Technology Solutions
MaxLinear
Methode Electronics		MTS Systems
NetScout Systems
OSI Systems
Power Integrations
Rogers
Semtech
Silicon Laboratories
SMART Global Holdings
Synpatics
Viavi
Compensation and Risk
We believe that our compensation programs are designed with appropriate risk mitigators, including:
*Stock ownership guidelines for executive officers that align the interests of the executive officers with those of our shareholders;
*Mix of base salary, cash incentive opportunities, and long-term equity compensation, that provide a balance of short-term and long-term incentives with fixed and variable components;
*Capped payout levels for cash incentives;
*Inclusion of non-financial metrics, such as qualitative performance factors, in determining actual compensation payouts; and
*Equity compensation that typically vests over a multi-year period to encourage executives to take actions that promote the long-term sustainability of our business.
In October 2021, management of the Company analyzed whether Knowles' compensation policies and practices create material risks to Knowles. This analysis was reviewed by the Compensation Committee and Compensia, the Compensation Committee's independent compensation consultant. The Compensation Committee concluded that Knowles' compensation programs do not create risks that are reasonably likely to have a material adverse effect on the Company.
Other Compensation Programs and Policies
Severance and Change-in-Control Benefits
Knowles does not offer employment contracts to any of its NEOs; however, NEOs participate in the Knowles' Executive Severance Plan (the "Severance Plan") and Senior Executive Change-In-Control Severance Plan (the "CIC Severance Plan"). We believe these plans help accomplish Knowles' objective of attracting and retaining talented executives and reduce the need to negotiate individual severance arrangements with departing executives. The Compensation Committee also believes the CIC Severance Plan promotes management independence and helps retain, stabilize, and focus executives in the event of a potential change-in-control.
For further information regarding these plans and a quantification of the compensation to be received under these plans in the event of a change-in-control or termination of an NEO's employment as of December 31, 2021, please see "2021 Potential Payments upon Termination or Change-in-Control" on page 52 of this Proxy Statement.
Benefits
Our global benefits philosophy is to provide NEOs with protection and security through health and welfare, retirement, disability insurance and life insurance programs. The NEOs are eligible to participate in the same retirement and benefit plans that are generally available to Knowles' employees. The Company provides eligible NEOs with executive life insurance, which we believe is consistent with both peer and competitive pay practices, and is available to us at a reasonable group cost. In addition, executives are also eligible to receive expatriate and relocation benefits in accordance with the Company's policies.
Generally, it is the Compensation Committee's philosophy not to provide perquisites to our NEOs except in very limited circumstances. Knowles reimburses each NEO for an annual physical examination in order to lower the risk that undiagnosed health issues may have on leadership continuity. Knowles executives also have access to tickets to sporting events, which the executives primarily use to recognize and reward their team members.
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Retirement and Pension Benefits
Our executive officers are entitled to participate in the same defined contribution retirement plan that is generally available to all of our eligible employees. We make matching contributions to eligible participants' retirement plan accounts based on a percentage of their eligible compensation under applicable rules. We believe that this retirement program permits our executives to save for their retirement in a tax-effective manner.
In addition, our executive officers and other select management employees are eligible to participate in the Knowles Deferred Compensation Plan, which permits the deferral of base salary, annual bonus, RSUs and PSUs. Knowles implemented the deferred compensation plan to provide a market competitive benefit and help facilitate retirement savings for participants in a cost- and tax-effective way for the company.

Compensation Committee Report
The Compensation Committee has reviewed and discussed the CD&A with management.
Based on such review and discussions with management, the Compensation Committee recommended to the Board that the CD&A be included in this Proxy Statement and incorporated by reference in our Annual Report on Form 10-K for the year ended December 31, 2021.
Compensation Committee:
Keith Barnes (Chair)
Hermann Eul
Cheryl Shavers
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Summary Compensation Table
The following table sets forth information regarding 2021 and, to the extent required under SEC executive compensation disclosure rules, 2020 and 2019 compensation for each of our NEOs.
Name and Principal PositionYearSalary
($)
Stock Awards
($) (1)
Option Awards
($)
Non-Equity Incentive Plan Compensation
($) (2)
Change in Pension Value and Nonqualified Deferred Compensation Earnings
($) (3)
All Other Compensation
($) (4)
Total
($)
Jeffrey Niew
President &
Chief Executive Officer		2021650,0007,328,950—1,000,000—20,3148,999,264
2020610,0002,549,998849,999583,75291,90019,5364,705,185
2019650,0002,550,011850,000381,050125,40019,2864,575,747
John Anderson
Senior Vice President &
Chief Financial Officer		2021414,0002,029,762—394,592—14,5002,852,854
2020398,077750,008250,001231,3764,20014,2501,647,912
2019414,000750,009250,000230,6816,00014,0001,664,690
Raymond Cabrera (5)
Senior Vice President, Human Resources & Chief Administrative Officer
2021333,4221,217,846—263,632—16,0581,830,958
2020294,553450,002150,000119,2264,00015,4941,033,275
Daniel Giesecke
Senior Vice President &
Chief Operating Officer		2021400,0001,581,823—395,248—16,2862,393,357
2020355,846562,502187,502223,552—15,4591,344,861
2019357,500562,497187,502204,705—15,7861,327,990
Robert Perna (6)
Senior Vice President & General Counsel
2021430,0001,405,661—338,393—18,4952,192,549
2020413,461524,991175,001200,827—18,2451,332,525
2019274,493524,997175,003121,216—123,9721,219,681

The following table restates the fiscal year 2021 reportable compensation, excluding the incremental value for the modifications of the 2019 PSUs and 2020 PSUs and provides a clearer representation of the intended compensation opportunity for fiscal year 2021.

NameYearSalary
($)
Stock Awards
($) (7)
Option Awards
($)		Non-Equity Incentive Plan Compensation
($)		Change in Pension Value and Nonqualified Deferred Compensation Earnings
($)		All Other Compensation
($)		Total
($)
Jeffrey Niew2021650,0004,476,445—1,000,000—20,3146,146,759
John Anderson2021414,0001,190,784—394,592—14,5002,013,876
Raymond Cabrera2021333,422714,461—263,632—16,0581,327,573
Daniel Giesecke2021400,000952,598—395,248—16,2861,764,132
Robert Perna2021430,000833,529—338,393—18,4951,620,417
This supplemental Summary Compensation Table view is for informational purposes only and is not presented in accordance with SEC requirements.
__________
(1)The 2021 value shown in this column includes the value of: (a) each NEO's RSU grant issued in February 2021; plus (b) each NEO's PSU grant issued in February 2021; plus (c) the incremental award value, for each NEO, of the PSU grant issued in 2019 and the PSU grant issued in 2020, which were each modified in February 2021. For the RSUs and PSUs issued in February 2021, amounts reported in this column represent their aggregate grant date fair value, calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation - Stock Compensation (“FASB ASC Topic 718”). For the PSUs issued in 2019 and 2020, and modified in February 2021, the
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amounts reported in this column represent the incremental fair value, calculated in accordance with FASB ASC Topic 718. These amounts do not correspond to the actual value that might be realized by the NEOs. See Note 14 to the Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2021 for a discussion of the relevant assumptions used in calculating the amounts reported. The amounts included for the PSUs granted in February 2021 are calculated based on the grant date fair value assuming target level of performance. If maximum level of performance had been assumed, the grant date fair value of the 2021 PSUs would have been: Mr. Niew: $6,325,763; Mr. Anderson: $1,554,257; Mr. Cabrera: $932,542; Mr. Giesecke: $1,243,368; and Mr. Perna: $1,087,954.
(2)The 2021 amounts represent the annual incentive bonus received by each NEO under the Knowles Annual Incentive Plan based on performance in 2021 as determined by the Compensation Committee. The annual incentive plan is discussed in our CD&A beginning on page 37 of this Proxy Statement and the estimated possible threshold, target, and maximum amounts for the incentive awards are reflected in the table “Grants of Plan-Based Awards in 2021” on page 48 of this Proxy Statement.
(3)Amounts represent changes in the present value of accumulated benefits under the Knowles Pension Replacement Plan, which is described below under "Knowles Pension Replacement Plan" on page 51 of this Proxy Statement.
(4)Amounts included in this column for 2021 are set forth by category in the “2021 All Other Compensation Table” below.
(5)Mr. Cabrera was not a NEO in 2019.
(6)Mr. Perna joined the Company as Senior Vice President & General Counsel in May 2019.
(7)The incremental values for the modified 2019 and 2020 fiscal year PSU grants that are excluded from the supplemental Summary Compensation Table for each NEO are as follows:


Name2019 PSU modification
($)		2020 PSU modification
($)		Total of PSU modifications
($)
Jeffrey Niew972,4001,880,1052,852,505
John Anderson286,003552,975838,978
Raymond Cabrera171,607331,778503,385
Daniel Giesecke214,498414,727629,225
Robert Perna185,055387,077572,132




2021 All Other Compensation Table
Name401(k) Match ($)Executive Life Insurance ($)Physical Examination ($)Total ($)
Jeffrey Niew14,5005,814—20,314
John Anderson14,500——14,500
Raymond Cabrera14,5001,558—16,058
Daniel Giesecke14,5001,786—16,286
Robert Perna14,500—3,99518,495

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Grants of Plan-Based Awards in 2021
The following table shows information regarding the awards made to our NEOs in 2021.
NameTypeGrant Date
(1)		Estimated Future Payouts Under Non-Equity Incentive Plan AwardsEstimated Future Payouts Under Equity Incentive Plan AwardsAll Other Stock Awards: Number of Shares of Stock or Units (#)Grant Date Fair Value of Stock and Option Awards ($)
Threshold
($)		Target
($)		Maximum
($)		Threshold
(#)		Target
(#)		Maximum
(#)
Jeffrey
Niew		Restricted Stock Units(2)2/8/2021——————80,825 1,664,995 
Performance Share Units(3)2/8/2021———24,697 98,786 222,269 —2,811,450 
Annual Incentive Plan(4)—156,000 780,000 1,560,000 —————
Modified 2019 PSUs(5)2/8/2021— — — ————972,400
Modified 2020 PSUs(6)2/8/2021— — — ————1,880,105
John AndersonRestricted Stock Units(2)2/8/2021——————24,272 500,003 
Performance Share Units(3)2/8/2021———6,068 24,272 54,612 —690,781
Annual Incentive Plan(4)—57,960289,800579,600— — — ——
Modified 2019 PSUs(5)2/8/2021———— — — —286,003
Modified 2020 PSUs(6)2/8/2021———— — — —552,975
Raymond CabreraRestricted Stock Units(2)2/8/2021——————14,563 299,998
Performance Share Units(3)2/8/2021———3,641 14,563 32,767 —414,463
Annual Incentive Plan(4)—40,200 201,000 402,000 —————
Modified 2019 PSUs(5)2/8/2021——————— 171,607
Modified 2020 PSUs(6)2/8/2021——————— 331,778
Daniel GieseckeRestricted Stock Units(2)2/8/2021——————19,417 399,990
Performance Share Units(3)2/8/2021———4,854 19,417 43,688 —552,608
Annual Incentive Plan(4)—56,000 280,000 560,000 —————
Modified 2019 PSUs(5)2/8/2021——————— 214,498
Modified 2020 PSUs(6)2/8/2021——————— 414,727
Robert PernaRestricted Stock Units(2)2/8/2021———— — — 16,990349,994
Performance Share Units(3)2/8/2021— — — 4,24816,99038,228—483,535
Annual Incentive Plan(4)—51,600258,000516,000—————
Modified 2019 PSUs(5)2/8/2021———— — — —185,055
Modified 2020 PSUs(6)2/8/2021———— — — —387,077
__________
(1)The 2021 annual long-term incentive grants were approved by the Compensation Committee on February 8, 2021.
(2)This RSU grant was made as part of the 2021 annual long-term incentive grant process. These RSUs vest in three equal installments (subject to rounding of partial shares) each year on the anniversary of the grant date, subject to the NEO's continued employment through the applicable vesting date.
(3)This PSU grant was made as part of the 2021 annual long-term incentive grant process. The PSUs will be paid out in shares of Knowles common stock at the end of the three-year performance period based on Knowles relative total shareholder return performance ranked against the component companies of the Russell 2000 Index companies during the 2021 to 2023 performance period. The threshold, target and maximum amounts assume 25%, 100% and 225%, respectively, satisfaction of the PSU goals.
(4)The amounts shown in this row reflect the potential payout at threshold, target and maximum for 2021 performance under the Knowles Annual Incentive Plan. The bonus amount paid in February 2021 is disclosed in the Summary Compensation Table in the column “Non-Equity Incentive Plan Compensation” for 2021 for each NEO.
(5)Accounting expense resulting from the February 8, 2021 modification by the Compensation Committee of these performance share units issued in 2019. Following this modification, these performance share units were earned at 66.2%. See "Executive Compensation - Long-Term Incentives - 2019 PSU Payout" on page 40 for a description of the modification.
(6)Accounting expense resulting from the February 8, 2021 modification by the Compensation Committee of these performance share units issued in 2020. See "Executive Compensation - Long-Term Incentives - 2020 PSU Modification" on page 41 for a description of the modification.
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Outstanding Equity Awards at Fiscal Year-End 2021
The following table provides information about equity awards made to the NEOs that are outstanding as of December 31, 2021, including outstanding stock option awards, unvested RSUs, and unvested PSUs held by each of the NEOs and SSAR awards granted by Dover Corporation prior to the spin-off which were converted into Knowles equity awards in connection with the spin-off.

Option AwardsStock Awards
NameNumber of Securities Underlying Unexercised Options
(#)
Exercisable		Number of Securities Underlying Unexercised Options
(#)
Unexercisable		 Option Exercise Price
($) 		Option Expiration DateNumber of shares or units of stock that have not vested
(#)		Market value of shares or units of stock that have not vested
($)(1)		Equity Incentive Plan Awards: Number of unearned shares, units or other rights that have not vested
(#)		Equity Incentive Plan Awards: Market or Payout Value of unearned shares, units or other rights that have not vested ($)(1)
Jeffrey Niew82,710 (2)21.7702/09/202292,795(6)2,166,763 
75,254 (2)23.9202/14/2023105,328(7)2,459,409 
638,298 11.0202/16/202398,786(8)2,306,653 
156,018 19.2802/15/2024
157,699 14.2902/15/202517,632 (3)411,707 
91,104 45,552 (3)16.0702/19/202633,791 (4)789,020 
47,619 95,238 (4)16.7702/09/202780,825 (5)1,887,264 
John Anderson30,099 (2)23.9202/14/202327,293(6)637,292 
69,681 11.0202/16/202330,979(7)723,360 
34,825 19.2802/15/202424,272(8)566,751 
46,382 14.2902/15/20255,186 (3)121,093 
26,795 13,398 (3)16.0702/19/20269,939 (4)232,076 
14,005 28,012 (4)16.7702/09/202724,272 (5)566,751 
Raymond Cabrera22,577 (2)23.9202/14/202316,376(6)382,380 
63,830 11.0202/16/202318,587(7)434,006 
18,574 19.2802/15/202414,563(8)340,046 
27,829 14.2902/15/20253,112 (3)72,665 
16,077 8,039(3)16.0702/19/20265,964 (4)139,259 
8,403 16,807(4)16.7702/09/202714,563 (5)340,046 
Daniel Giesecke15,051 (2)23.9202/14/202320,469(6)477,951 
95,745 11.0202/16/202323,234(7)542,514 
27,860 19.2802/15/202419,417(8)453,387 
34,787 14.2902/15/20253,890 (3)90,832 
20,096 10,049 (3)16.0702/19/20267,454 (4)174,051 
10,504 21,009 (4)16.7702/09/202719,417 (5)453,387 
Robert Perna17,812 8,906 (9)17.3905/12/20263,355 (9)78,339 17,659(6)412,338 
9,804 19,608 (4)16.7702/09/20276,957 (4)162,446 21,685(7)506,345 
16,990 (5)396,717 16,990(8)396,717 
__________
(1)Based on a December 31, 2021 closing Knowles stock price of $23.35 per share.
(2)Grants made prior to March 7, 2014 were granted under the Dover Corporation equity compensation plans and were converted into Knowles stock-settled stock appreciation rights at the time of the spin-off in 2014.
(3)The remaining stock options or RSUs subject to this award vested on February 19, 2022.
(4)One-half of the remaining stock options or RSUs subject to this award vested on February 10, 2022, and the other half is scheduled to vest on February 10, 2023, provided the NEO continues to be employed with Knowles through the vesting date.
(5)The remaining RSUs subject to this award are scheduled to vest ratably in three annual installments commencing on February 8, 2022, provided the NEO continues to be employed with Knowles through the vesting date.
(6)The PSUs subject to this award vested on February 1, 2022 at 66.2% of target. Because performance is determined on a cumulative basis over the performance period (which commenced in 2019), the PSUs are being reported at target for purposes of this table.
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(7)The PSUs subject to this award vest on February 1, 2023, provided that the NEO continues to be employed with Knowles through the vesting date and that the applicable performance conditions are satisfied. As described under "Executive Compensation - Compensation Discussion and Analysis - Executive Summary," beginning on page 31, between 0% and 225% of the target number of PSUs vest depending on the Company’s relative TSR performance ranking against the Russell 2000 Index companies over the performance period (which commenced in 2020). Because performance is determined on a cumulative basis over the performance period, the PSUs are being reported at target for purposes of this table.
(8)The PSUs subject to this award vest on February 1, 2024, provided the NEO continues to be employed with Knowles through the vesting date and that the applicable performance conditions are satisfied. As described under "Executive Compensation - Compensation Discussion and Analysis - Executive Summary," begining on page 31, between 0% and 225% of the target number of PSUs vest depending on the Company’s relative TSR performance ranking against the Russell 2000 Index companies over the performance period (which commenced in 2021). Because performance is determined on a cumulative basis over the performance period, the PSUs are being reported at target for purposes of this table.
(9)The remaining stock options or RSUs subject to this award are scheduled to vest on May 13, 2022, provided the NEO continues to be employed with Knowles through the vesting date.

Option Exercises and Stock Vested in 2021
The following table provides additional information regarding stock option exercises and shares acquired upon the vesting of stock awards, including the value realized, for each NEO during fiscal year 2021.
NameOption AwardsStock Awards
Number of Shares Acquired on Exercise (#)Value Realized on Exercise ($)
Number of Shares Acquired on Vesting (#)(1)
Value Realized on Vesting ($)(2)
Jeffrey Niew364,188 1,055,597 125,939 2,609,166 
John Anderson151,371 763,825 37,042 767,425 
Raymond Cabrera69,505 124,909 22,224 460,430 
Daniel Giesecke52,960 131,247 27,781 575,558 
Robert Perna— — 6,832 
(3)
136,910 
__________
(1)Amount represents gross number of shares of common stock vested and is not reduced by shares withheld by the Company for tax purposes.
(2)Aggregate dollar value realized on vesting of the stock awards is calculated by multiplying the closing price of the common stock on the vesting date by the number of vested shares.
(3)Includes 3,478 fully vested deferred restricted stock units. As elected by Mr. Perna, these shares will be deferred until his separation from service with Knowles.
2021 Nonqualified Deferred Compensation
Under the Knowles Deferred Compensation plan ("Knowles DCP"), eligible participants may defer a portion of his or her eligible compensation (up to 75% of base salary, up to 100% of eligible bonus, and up to 100% of restricted stock units and performance share unit grants) during the calendar year as long as the participant makes such election prior to the beginning of the calendar year. Participants in the deferred compensation plan may select from a subset of the investment elections available to all eligible employees under Knowles's tax-qualified Section 401(k) plan for their cash deferrals (base salary and/or annual bonus). Generally, deferred amounts will be distributed from the plan only on account of termination of service, disability, death or at a scheduled in-service withdrawal date chosen by the participant, subject to Section 409A of the Internal Revenue Code. A payment may not be designated for a calendar year after the year in which a participant attains the age of 75.
In addition, the Company continues to administer the Knowles Corporation Executive Deferred Compensation Plan ("Legacy Knowles EDCP"), which is a legacy plan from Dover Corporation. This is a frozen plan and no new contributions have been made after the spin-off in February 2014. Generally, deferred amounts will be distributed from the plan only on account of retirement at age 65 (or age 55 with 10 years of service), disability, other termination of service, or at a scheduled in-service withdrawal date chosen by the participant, subject to Section 409A of the Internal Revenue Code.

50

NamePlan Name
Executive contributions in Last FY ($)(1)
Registrant contributions in Last FY ($)
Aggregate earnings in Last FY ($)(2)
Aggregate withdrawals/distributions ($)Aggregate Balance at Last FYE ($)
Jeffrey NiewKnowles DCP61,688—11,526—110,569
Legacy Knowles EDCP——19,161—200,812
John AndersonKnowles DCP115,688—57,435—395,144
Raymond CabreraKnowles DCP—————
Daniel GieseckeKnowles DCP—————
Legacy Knowles EDCP——22,875—123,122
Robert PernaKnowles DCP
125,672 (3)
—14,011—167,214

__________
(1)The amounts in this column represent employee compensation deferrals that are included in the Summary Compensation Table for fiscal year 2021 under the "Salary" and/or "Non-Equity Incentive Plan Compensation" columns.
(2)These amounts include earnings (losses), dividends and interest provided on current contributions and existing balances, including the change in value of the underlying investment options in which the NEO is deemed to be invested. These amounts are not reported in the Summary Compensation Table as compensation.
(3)Includes the value of fully vested deferred restricted stock units based on the Knowles closing stock price on the vesting date.

Knowles Pension Replacement Plan
When Knowles was spun-off from Dover, we retained the Knowles Pension Replacement Plan ("Knowles PRP"), which is a frozen non-qualified pension plan for tax purposes.
Benefits accrued under the Knowles PRP reflect service while the respective NEOs were covered under the Dover Corporation Pension Replacement Plan prior to the spin-off of Knowles. Benefits were determined by multiplying the participant’s years of actual service as of December 31, 2013 (subject to a maximum of 30 years) by a percentage of the participant’s final average compensation as defined under the plan, reduced by the amount of company-provided benefits under any other retirement plans, including the pension plan, as well as the company-paid portion of Social Security benefits.
As of January 1, 2014, all of Knowles NEOs who participate in the Knowles PRP became fully vested in their benefits (in connection with the spin-off of Knowles from Dover) and are eligible to begin receiving benefits upon termination of employment. Knowles PRP benefits may be forfeited for "cause" (defined as conviction of a felony which places Knowles at legal or other risk, or is expected to cause substantial harm to the business of a Knowles company or its relationships with employees, distributors, customers or suppliers).
Normal retirement age for the Knowles PRP is age 65. Knowles employees who were participants on or before March 1, 2010 will be entitled to receive the portion of their benefits that accrued through December 31, 2009 without any reduction due to early retirement if they retire after they reach age 62 and complete 10 years of service.
Knowles does not anticipate establishing a new pension replacement plan nor covering additional employees in this plan.
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Pension Benefits Through 2021
NamePlan Name
Number of Years Credited Service
(#)(1)
Normal Retirement Age
(#)
Present Value of Accumulated Benefit
($)(2)
Payments During Last Fiscal Year ($)
Jeffrey NiewKnowles PRP8.365646,800—
John AndersonKnowles PRP4.36534,600—
Ray CabreraKnowles PRP8.36528,200—
Daniel Giesecke (3)
Knowles PRP8.365——
Robert Perna (4)
N/AN/AN/AN/AN/A
__________
(1)Years of service are only credited through the December 31, 2013 plan freeze.
(2)The present value of the accumulated benefit is shown as of December 31, 2021. The values assume retirement occurring at the greater of age 65 or the executive's current age, applicability of the PRI-2012 Generational Mortality Table, and a discount rate of 3.00%.
(3)As of December 31, 2013, the value of Mr. Giesecke's off-setting benefits was greater than the gross Knowles PRP benefit, therefore Mr. Giesecke was not entitled to a benefit under the frozen Knowles PRP.
(4)Not eligible for the Knowles Pension Replacement Plan.
2021 Potential Payments upon Termination or Change-in-Control
The discussion and tables below describe the payments to which each of the NEOs would be entitled in the event of termination of such executive's employment or a change-in-control as of December 31, 2021.
Knowles has in place the Severance Plan and the CIC Severance Plan. The Severance Plan creates a consistent and transparent policy for determining separation benefits for all similarly situated executives, and formalizes Knowles' executive severance practices. The CIC Severance Plan likewise establishes a consistent policy regarding double-trigger change-in-control severance payments, and is based on market best practices. All of Knowles' NEOs are eligible to participate in both the Severance Plan and the CIC Severance Plan as of December 31, 2021.
Potential Severance Payments Upon Termination
The Severance Plan provides that if a covered executive's employment is terminated without cause (as defined in the Severance Plan), the executive will be entitled to certain severance benefits. The Equity and Cash Incentive Plan and Knowles' other benefit plans each have their own provisions relating to rights and obligations under the plan upon termination. For a termination other than for cause, the NEOs would generally be entitled to the following benefits:
•12 months of salary continuation;
•12 months of company-provided healthcare benefit continuation;
•A prorated annual incentive bonus for time worked during the year based on actual performance;
•Under the PRP, each participant will become entitled to receive the actuarial value of the participant's benefit accrued through the date of the termination; and
•Under Deferred Compensation Plan, amounts deferred under the plan will continue to accrue any earnings and will be payable in accordance with the elections made by the executive officers.
In the event of death, disability or retirement, the NEO would also be entitled to the following:
•Stock options or SSARs unvested at the date of termination would become vested and exercisable;
•Restricted Stock or RSUs unvested at the date of termination would become vested (in the event of death and disability), or would continue to vest according to their original schedule (in the event of retirement); and
•Performance shares or PSUs unvested at the date of termination would become vested (on a pro-rata basis in the event of death and disability), or would continue to vest according to their original schedule (in the event of retirement).

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The table below shows the aggregate amount of potential payments and other benefits that each of Knowles' NEOs would have been entitled to receive if his employment had terminated under the specified circumstances, other than as a result of a change-in-control, on December 31, 2021. The amounts shown assume that termination was effective as of December 31, 2021, include amounts earned through such time and are estimates of the amounts which could have been paid out to the executives upon their termination. The actual amounts to be paid out can only be determined at the time of each executive's termination of employment.

  Voluntary Termination
($)		Involuntary Not For Cause Termination
($)
For Cause Termination
($) (1)
For Retirement
($)		For Death or Disability
($)
Jeffrey Niew
  Cash severance—   1,430,000 (2)—   — — 
  Unvested restricted stock/RSUs— — — 3,087,991 (3)3,087,991 (3)
  Vested Stock options/SSARs11,041,212 (4)11,041,212 (4)—   11,041,212 (4)11,041,212 (4)
  Unvested stock options— — — 958,285 (5)958,285 (5)
  Unvested PSUs— — — 4,766,062 (6)2,235,080 (6)
  Retirement plan payments554,117 (7)554,117 (7)— 554,117 (7)554,117 (7)
  Deferred comp plans311,381 (8)311,381 (8)311,381 (8)311,381 (8)311,381 (8)
  Health and welfare benefits—   13,951 (9)—   — — 
  Total:11,906,710   13,350,661   311,381   20,719,048   18,188,066   
John Anderson
  Cash severance—   703,800 (2)—   — — 
  Unvested restricted stock/RSUs— — — 919,920 (3)919,920 (3)
  Vested Stock options/SSARs1,760,622 (4)1,760,622 (4)—   1,760,622 (4)1,760,622 (4)
  Unvested stock options— — — 281,856 (5)281,856 (5)
  Unvested PSUs— — — 1,290,111 (6)624,131 (6)
  Retirement plan payments30,580 (7)30,580 (7)— 30,580 (7)30,580 (7)
  Deferred comp plans395,144 (8)395,144 (8)395,144 (8)395,144 (8)395,144 (8)
  Health and welfare benefits—   19,844 (9)—   — — 
  Total:2,186,346   2,909,990   395,144   4,678,233   4,012,253   
Raymond Cabrera
Cash severance— 536,000 (2)— — — 
Unvested restricted stock/RSUs— — — 551,970 (3)551,970 (3)
Vested Stock options/SSARs1,287,084 (4)1,287,084 (4)— 1,287,084 (4)1,287,084 (4)
Unvested stock options— — — 169,114 (5)169,114 (5)
Unvested PSUs— — — 774,053 (6)374,471 (6)
Retirement plan payments23,964 23,964 — 23,964 (7)23,964 (7)
Deferred comp plans— — — — — 
Health and welfare benefits— 19,702 (9)— — — 
Total:1,311,048 1,866,750 — 2,806,185 2,406,603 
Daniel Giesecke
  Cash severance—   680,000 (2)—   — — 
  Unvested restricted stock/RSUs— — — 718,270 (3)718,270 (3)
  Vested Stock options/SSARs1,850,646 (4)1,850,646 (4)—   1,850,646 (4)1,850,646 (4)
  Unvested stock options— — — 211,396 (5)211,396 (5)
  Unvested PSUs— — — 995,901 (6)476,527 (6)
  Retirement plan payments— — — — — 
  Deferred comp plans123,122 (8)123,122 (8)123,122 (8)123,122 (8)123,122 (8)
  Health and welfare benefits—   19,987 (9)—   — — 
  Total:1,973,768   2,673,755   123,122   3,899,335   3,379,961   
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  Voluntary Termination
($)		Involuntary Not For Cause Termination
($)
For Cause Termination
($) (1)
For Retirement
($)		For Death or Disability
($)
Robert Perna
  Cash severance—   688,000 (2)—   — — 
  Unvested restricted stock/RSUs— — — 637,502 (3)637,502 (3)
  Vested Stock options/SSARs170,670 (4)170,670 (4)—   170,670 (4)170,670 (4)
  Unvested stock options— — — 182,101 (5)182,101 (5)
  Unvested PSUs— — — 903,061 (6)436,885 (6)
  Retirement plan payments— — — — — 
  Deferred comp plans167,214 (8)167,214 (8)167,214 (8)167,214 (8)167,214 (8)
  Health and welfare benefits—   20,041 (9)—   — — 
  Total:337,884   1,045,925   167,214   2,060,548   1,594,372   
__________
(1)An executive whose employment is terminated by Knowles for cause will forfeit all outstanding cash and equity awards, whether or not vested or exercisable. The executive will receive a payment of amounts deferred and accrued in the deferred compensation plan but will forfeit benefits under the PRP in accordance with the PRP terms.
(2)This amount represents 12 months’ salary continuation plus an amount equal to the pro rata portion of the target annual incentive payable for the year in which the termination occurs (reflects a full year’s target bonus for a termination December 31, 2021).
(3)Restricted stock / RSUs would vest in the event of death or disability. In the event of retirement, the restricted stock or RSUs would continue to vest according to their original schedule. The amounts are based on the December 31, 2021 stock closing price of 23.35 per share.
(4)The officers hold vested but unexercised options and/or SSARs as of December 31, 2021. The amounts reflect the intrinsic (in-the-money) value of vested stock options and SSARs as of December 31, 2021 based on the December 31, 2021 closing stock price of $23.35 per share.
(5)Stock options would vest and become exercisable in the event of retirement, death or disability. The officers hold unvested stock options as of December 31, 2021. The amounts reflect the intrinsic (in-the-money) value of unvested stock options as of December 31, 2021 based on the December 31, 2021 closing stock price of $23.35 per share.
(6)Performance shares / PSUs would vest in the event of death or disability on a pro-rata basis. In the event of retirement, the performance shares or PSUs would continue to vest according to their original schedule. The amounts are based on the December 31, 2021 stock closing price of $23.35 per share.
(7)Reflects benefits accrued under the Knowles PRP as of December 31, 2021. Benefits accrued under the PRP are forfeited in the event of a termination for cause, as defined in the Knowles PRP.
(8)These amounts reflect compensation deferred by the executive and earnings accrued thereon under the Knowles deferred compensation plan as of December 31, 2021; no increase in such benefits would result from the termination event.
(9)Under the severance plan, an executive is entitled to a monthly amount equal to the then cost of COBRA health continuation coverage based on the level of health care coverage in effect on the termination date, if any, for the lesser of 12 months or the period that the executive receives COBRA benefits.
Potential Payments Following a Change-in-Control
Under the CIC Severance Plan, the payment of severance benefits following a change-in-control is subject to a double-trigger — that is, such benefits are payable only upon certain specified termination events within 3 months prior to, upon or within 18 months following the date of a change-in-control. However, rights of an executive under the Equity and Cash Incentive Plan, the Deferred Compensation Plan, the PRP and other benefit plans are governed by the terms of those plans and typically are affected by the change-in-control event itself, even if the executive continues to be employed by Knowles or a successor company following the change-in-control.
The CIC Severance Plan, the Equity and Cash Incentive Plan and Knowles' other benefit plans each have their own provisions relating to rights and obligations under the plan upon termination. In the event of a change-in-control and without a termination, the NEOs would generally be entitled to the following benefits:
•Under the PRP, each participant will become entitled to receive the actuarial value of the participant's benefit accrued through the date of the change-in-control; and
•Under the Deferred Compensation Plan, amounts deferred under the plan will continue to accrue any earnings and will be payable in accordance with the elections made by the executive officer.
In the event of a qualified termination within 3 months prior to, upon or within 18 months following the date of a change-in-control, the NEOs would generally be entitled to the following additional benefits:
•A lump sum payment equal to 2.0 multiplied by the sum of (i) the executive's annual salary on the termination date or the change-in-control date, whichever is higher, and (ii) his target annual incentive bonus for the year in which the termination or the date of the change-in-control occurs, whichever is higher;
•A lump sum payment equal to the then cost of COBRA health continuation coverage, based on the level of health care coverage in effect on the termination date, if any, for one year;
54

•All outstanding stock options and SSARs will immediately become exercisable in accordance with the terms of the appropriate stock option or SSAR agreement under the Equity and Cash Incentive Plan;
•All unvested restricted stock or RSUs will immediately become vested in accordance with the terms of the appropriate restricted stock or RSU agreement under the Equity and Cash Incentive Plan; and
•Performance shares or PSUs unvested as of the date of termination would become vested in accordance with the terms of the appropriate performance share or PSU agreement under the Equity and Cash Incentive Plan.
Under the CIC Severance Plan, no executive is entitled to any gross-ups for excise taxes. Instead, the CIC Severance Plan provides for a "best net" treatment of change-in-control payments and benefits, where any NEO who would be subject to an excise tax will receive the greater of (i) the after-tax benefit, net of any excise taxes or (ii) the maximum benefit possible up to a payment cap at which no excise tax would be applied, with benefits in excess of the payment cap cut back so as to fall under the payment cap.
The following table shows the potential payments and other benefits that each of the NEOs would have been entitled to receive upon a change-in-control on December 31, 2021, both with and without a termination.
  Change-in-Control Only (Single-Trigger)
($)		Involuntary Termination Following a Change-in-Control (Double-Trigger)
($)
Jeffrey Niew
  Cash severance— 2,860,000 (1) 
  Unvested restricted stock/RSUs— 3,087,991 (2) 
  Vested Stock options/SSARs11,041,212 (3) 11,041,212 (3) 
  Unvested stock options— 958,285 (4) 
  Unvested PSUs— 4,766,062 (5) 
  Retirement plan payments554,117 (6) 554,117 (6) 
  Deferred comp plans311,381 (7) 311,381 (7) 
  Health and welfare benefits— 13,951 (8) 
  Total:11,906,710 23,592,999 
John Anderson
  Cash severance— 1,407,600 (1) 
  Unvested restricted stock/RSUs— 919,920 (2) 
  Vested Stock options/SSARs1,760,622 (3) 1,760,622 (3) 
  Unvested stock options— 281,856 (4) 
  Unvested PSUs— 1,290,111 (5) 
  Retirement plan payments30,580 (6) 30,580 (6) 
  Deferred comp plans395,144 (7) 395,144 (7) 
  Health and welfare benefits— 19,844 (8) 
  Total:2,186,346 6,105,677 
Raymond Cabrera
Cash severance— 1,072,000 (1)
Unvested restricted stock/RSUs— 551,970 (2)
Vested Stock options/SSARs1,287,084 (3)1,287,084 (3)
Unvested stock options— 169,114 (4)
Unvested PSUs— 774,053 (5)
Retirement plan payments23,964 (6)23,964 (6)
Deferred comp plans— — 
Health and welfare benefits— 19,702 (8)
Total:1,311,048 3,897,887 
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  Change-in-Control Only (Single-Trigger)
($)		Involuntary Termination Following a Change-in-Control (Double-Trigger)
($)
Daniel Giesecke
  Cash severance— 1,360,000 (1)
  Unvested restricted stock/RSUs— 718,270 (2) 
  Vested Stock options/SSARs1,850,646 (3) 1,850,646 (3) 
  Unvested stock options— 211,396 (4) 
  Unvested PSUs— 995,901 (5) 
  Retirement plan payments— — 
  Deferred comp plans123,122 (7) 123,122 (7) 
  Health and welfare benefits— 19,987 (8) 
  Total:1,973,768 5,279,322 
Robert Perna
  Cash severance— 1,376,000 (1) 
  Unvested restricted stock/RSUs— 637,502 (2) 
  Vested Stock options/SSARs170,670 (3) 170,670 (3) 
  Unvested stock options— 182,101 (4) 
  Unvested PSUs— 903,061 (5) 
  Retirement plan payments— — 
  Deferred comp plans167,214 (7) 167,214 (7) 
  Health and welfare benefits— 20,041 (8) 
  Total:337,884 3,456,589 
__________
(1)Represents a lump sum payment equal to 2.0 multiplied by the sum of (i) the executive’s annual salary on the termination date or the change-in-control date, whichever is higher, and (ii) his target annual incentive bonus for the year in which the termination or the date of the change-in-control occurs, whichever is higher.
(2)All unvested restricted stock or RSUs will immediately become vested in accordance with the terms of the appropriate restricted stock or RSU agreement under the Equity and Cash Incentive Plan. The amounts are based on the December 31, 2021 stock closing price of $23.35 per share.
(3)The officers hold vested but unexercised options and/or SSARs as of December 31, 2021. The amounts reflect the intrinsic (in-the-money) value of vested stock options and SSARs as of December 31, 2021 based on the December 31, 2021 closing stock price of $23.35 per share.
(4)All outstanding unvested stock options will immediately become exercisable in accordance with the terms of the appropriate stock option agreement under the Equity and Cash Incentive Plan. The officers hold unvested options as of December 31, 2021 and the amounts are based on the December 31, 2021 stock closing price of $23.35 per share.
(5)All unvested performance shares or PSUs will immediately become vested in accordance with the terms of the appropriate performance share or PSU agreement under the Equity and Cash Incentive Plan. The amounts are based on the December 31, 2021 stock closing price of $23.35 per share.
(6)Reflects benefits accrued under the Knowles PRP as of December 31, 2021.
(7)These amounts reflect compensation deferred by the executive and earnings accrued thereon under the Knowles deferred compensation plan as of December 31, 2021; no increase in such benefits would result from the termination event.
(8)Reflects a lump sum payment equal to the then cost of COBRA health continuation coverage, based on the level of health care coverage in effect on the termination date, if any, for one year.

Pay Ratio
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the following disclosure about the relationship of the annual total compensation of our employees to the annual total compensation of Mr. Niew, our CEO. To help understand this disclosure, we think it is important to give context to our operations. Approximately 81% of our employees work in Asia, as of December 31, 2021. The majority of these employees work in one of our manufacturing operations. Our ratio, which includes this employee population, is impacted by our strategy to in-source our core manufacturing in Asia and the relationship between competitive pay practices in the region compared to the United States, whereas our peers generally outsource their manufacturing to contract manufacturers in the same region. We believe our in-house manufacturing provides a competitive advantage, especially relative to executing on new product launches.
For 2021,
a.The median of the annual total compensation of all of our employees, other than Mr. Niew, was $9,086;
b.Mr. Niew's annual total compensation, as reported in the Total column of the Summary Compensation Table, was $8,999,264; and
56

c.Based on this information, the ratio of the annual total compensation of Mr. Niew to the median of the annual total compensation of all employees is estimated to be 990 to 1.

Supplemental Pay Ratio
As disclosed above in the notes to the 2021 Summary Compensation Table, in order to comply with compensation reporting rules, we are required to include as part of 2021 compensation the incremental value ($2,852,505) associated with the modifications made to the previously granted 2019 and 2020 PSUs for Mr. Niew. Because the CEO pay ratio is intended to provide greater transparency to annual CEO pay and how it compares to the pay of the median employee, we are providing a supplemental pay ratio that excludes the incremental value. The resulting 2021 supplemental pay ratio is 677 to 1, which we believe is a more realistic representation of the actual pay ratio.

    Identification of Median Employee
We selected December 1, 2021 as the date on which to determine our median employee. As of that date, we had approximately 7,000 employees, of which approximately 1,000 were located inside the United States. For purposes of identifying the median employee, we considered base salary and target cash incentive for each of our employees, as compiled from the Company's payroll records. We selected base salary and target cash incentive as they represent the Company's principal broad-based compensation elements.
Using this methodology, we determined that our median employee was a manufacturing employee working in Malaysia. In determining the annual total compensation of the median employee, we calculated such employee's compensation in accordance with Item 402(c)(2)(x) of Regulation S-K as required pursuant to SEC executive compensation disclosure rules. This calculation is the same calculation used to determine total compensation for purposes of the Summary Compensation Table with respect to each of the NEOs.

57

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Directors and Executive Officers
The following table sets forth certain information regarding the beneficial ownership, as of March 1, 2022 (except as otherwise stated), of our common stock by:
•Each of our directors, director nominees, and NEOs named in the Summary Compensation Table; and
•All of our directors and executive officers as a group.
The beneficial ownership set forth in the table is determined in accordance with SEC rules. The percentage of beneficial ownership is based on 92,564,132 shares of common stock outstanding on March 1, 2022. In computing the number of shares beneficially owned by any shareholder and the percentage ownership of such shareholder, shares of common stock subject to options or stock settled stock appreciation rights ("SSARs") held by that person that are currently exercisable or exercisable within 60 days of March 1, 2022, and restricted stock units ("RSUs") and restricted stock held by that person that vest within 60 days of March 1, 2022 have been included. Such shares, however, are not deemed to be outstanding for purposes of computing the percentage ownership of any other person. Any fractional shares held in a 401(k) account have been rounded down.
Unless otherwise indicated in the footnotes below, the persons named in the table have sole voting and investment power as to all shares beneficially owned.
Name of Beneficial Owner
Number of
Shares(1)
Percentage
Directors (except Mr. Niew):
Donald Macleod118,553 (2)*
Keith Barnes67,674 (3)*
Hermann Eul75,853 *
Didier Hirsch97,980 *
Ye Jane Li30,709 *
Cheryl Shavers46,388 *
Michael Wishart28,136 *
Named Executive Officers:
Jeffrey Niew1,509,366 (4)1.63%
John Anderson335,539 (5)*
Daniel Giesecke277,611 (6)*
Robert Perna94,779 (7)*
Raymond Cabrera229,981 (8)*
Directors and executive officers as a group (12 persons)2,912,569 3.15%
__________
*Less than one percent.
(1)Includes the number of shares of Company common stock subject to restricted stock awards held by that person that will vest within 60 days of March 1, 2022 as follows: Mr. Macleod – 8,004 shares; Mr. Barnes – 8,004 shares; Dr. Eul – 8,004 shares; Mr. Hirsch – 8,004 shares; Ms. Li – 8,004 shares; Dr. Shavers – 8,004 shares; and Mr. Wishart – 8,004 shares. Also included are the number of shares of Company common stock subject to the stock options held by that person that are currently exercisable or will become exercisable within 60 days of March 1, 2022 as follows: Mr. Niew – 1,077,526 shares; Mr. Anderson – 219,092 shares; Mr. Giesecke – 209,545 shares; Mr. Cabrera - 151,155 shares and Mr. Perna – 37,420 shares.
(2)Includes 10,356 shares, the receipt of which has been deferred until after the termination of Mr. Macleod's service as a director upon his retirement from the Board.
(3)Includes 10,808 shares, the receipt of which has been deferred to April 28, 2022; and 19,901 shares, the receipt of which has been deferred until after the termination of Mr. Barnes's service as a director upon his retirement from the Board.
(4)Includes 75,254 shares in respect of SSARs and 4,402 shares held under Knowles' 401(k) plan.
(5)Includes 30,099 shares in respect of SSARs; 93 shares held under Knowles' 401(k) plan; and 4,045 vested RSUs, the receipt of which has been deferred to January 31, 2026.
(6)Includes 15,051 shares in respect of SSARs.
(7)Includes 12,619 vested RSUs, the receipt of which has been deferred until Mr. Perna's separation from service with Knowles.
(8)Includes 22,577 shares in respect of SSARs.
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Certain Other Shareholders
The following table sets forth the shares beneficially owned as of December 31, 2021 by each shareholder known to us to beneficially own more than five percent (5%) of our outstanding common stock (based solely on our review of Schedules 13D and 13G filed with the SEC). The percentage of ownership indicated in the following table is based on 91,894,980 shares of common stock outstanding as of December 31, 2021.
Name of Beneficial Owner
Number of
Shares
Percentage
BlackRock, Inc.
55 East 52nd Street
New York, NY 10055
17,678,656 (1)19.24%
The Vanguard Group, Inc.
100 Vanguard Blvd.
Malvern, PA 19355
10,134,084 (2)11.03%
Franklin Mutual Advisers, LLC
101 John F. Kennedy Parkway
Short Hills, NJ 07078
9,011,534 (3)9.81%
Dimensional Fund Advisors LP
6300 Bee Cave Road, Building One
Austin, TX 78746
6,457,823 (4)7.03%

(1)As reported in a Schedule 13G/A filed with the SEC on January 27, 2022, BlackRock Inc. beneficially owned 17,678,656 shares with sole dispositive power and 17,110,102 shares with sole voting power as of December 31, 2021.
(2)As reported in a Schedule 13G/A filed with the SEC on February 10, 2022, The Vanguard Group, Inc. beneficially owned no shares with sole voting power, 9,971,032 shares with sole dispositive power, 163,052 shares with shared dispositive power and 84,346 shares with shared voting power as of December 31, 2021.
(3)As reported in a Schedule 13G filed with the SEC on February 2, 2022, Franklin Mutual Advisers, LLC beneficially owned 9,011,534 shares with sole dispositive power and 8,538,442 shares with sole voting power as of December 31, 2021.
(4)As reported in a Schedule 13G/A filed with the SEC on February 8, 2022, Dimensional Fund Advisors LP beneficially owned 6,457,823 shares with sole dispositive power and 6,341,017 shares with sole voting power as of December 31, 2021. Dimensional Fund Advisors LP furnishes investment advice to four investment companies, and serves as investment manager or sub-adviser to certain other commingled funds, group trusts and separate accounts (collectively referred to as the "Funds"). In certain cases, subsidiaries of Dimensional Fund Advisors LP may act as an adviser or sub-adviser to certain Funds. In its role as investment advisor, sub-advisor and/or manager, Dimensional Fund Advisors LP or its subsidiaries may possess voting and/or investment power over the shares that are owned by the Funds, and may be deemed to be the beneficial owner of the shares held by the Funds. However, all shares are owned by the Funds. Dimensional Fund Advisors LP disclaims beneficial ownership of such shares.



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INFORMATION ABOUT THE 2022 ANNUAL MEETING
1.Who can vote at the 2022 Annual Meeting?
The record date for determining shareholders eligible to vote at the 2022 Annual Meeting is March 1, 2022. Holders of our common stock at the close of business on the record date may vote at the 2022 Annual Meeting. As of the close of business on that date, we had outstanding 92,564,132 shares of common stock. Each share of common stock is entitled to one vote on each matter and shareholders may not cumulate their votes.
2.How do I attend the 2022 Annual Meeting?
The 2022 Annual meeting will be held virtually only, via live webcast, on Tuesday, April 26, 2022 at 9:00 a.m., Central Time. There will be no in-person meeting. If you were a stockholder at the close of business on March 1, 2022, you may attend the virtual annual meeting. You will be able to participate in the annual meeting online and submit your questions during the meeting by visiting www.virtualshareholdermeeting.com/KN2022. You also will be able to vote your shares electronically at the virtual annual meeting. If you hold shares beneficially in street name through a bank, broker or other nominee, you can attend the annual meeting by visiting www.virtualshareholdermeeting.com/KN2022 and entering the 16-digit control number listed on your Notice of Internet Availability of Proxy Materials or voting instruction form. Beneficial shareholders may need to obtain a control number and instructions by contacting their account representative at the bank, broker, or other nominee that holds their shares. If you are a stockholder of record, you can attend the annual meeting by visiting www.virtualshareholdermeeting.com/KN2022 and entering the 16-digit control number listed on your Notice of Internet Availability of Proxy Materials or proxy card. You do not need to attend the virtual annual meeting to vote. Even if you plan to attend the virtual annual meeting, please submit your vote in advance as instructed herein. The virtual annual meeting webcast will begin promptly at 9:00 a.m., Central Time. We encourage you to access the virtual annual meeting website prior to the start time. Online check-in will begin at 8:45 a.m., Central Time, and you should allow ample time to ensure your ability to access the meeting.
3.How do I ask questions at the 2022 Annual Meeting?
You will be able to submit questions online during the 2022 Annual Meeting by visiting www.virtualshareholdermeeting.com/KN2022 and submitting your questions during the designated question and answer period. We will answer as many questions during the meeting as time permits, but if there are any questions that cannot be addressed due to time constraints or for any other reason, we will post answers to such questions on our website following the meeting. If we receive substantially similar questions, we may group them together and provide a single response to avoid repetition. Only questions that are relevant to the purpose of the 2022 Annual Meeting or our business will be answered.
4.How many votes do I have?
You have one vote for each share of our common stock that you owned at the close of business on the record date. These shares include shares held by you as a "shareholder of record" and as a "beneficial owner."
5.What is the difference between holding shares as a "shareholder of record" and as a "beneficial owner"?
If your shares are registered directly in your name with our transfer agent, you are considered the shareholder of record of those shares, and the proxy materials are being sent directly to you.
Most holders of our common stock hold their shares beneficially through a bank, broker or other nominee rather than of record directly in their own name. If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the beneficial owner of the shares held in "street name," and these proxy materials are being forwarded to you by your bank, broker or other nominee who is considered the shareholder of record of those shares. As the beneficial owner, you have the right to direct your bank, broker or other nominee on how to vote your shares and you are also invited to attend the 2022 Annual Meeting. Your bank, broker or other nominee has enclosed a voting instruction form for you to use in directing them how to vote your shares. You must follow these instructions in order for your shares to be voted. Your broker is required to vote those shares in accordance with your instructions. We urge you to instruct your bank, broker or other nominee, by following the instructions on the enclosed voting instruction form, to vote your shares in line with the Board's recommendations.



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6.What is a proxy?
A proxy is your legal designation of another person to vote the stock you own. That other person is called a proxy. If you designate someone as your proxy in a written document, that document is also called a proxy or a proxy card. We have designated three of our officers as the Company's proxies for the 2022 Annual Meeting. These officers are Jeffrey S. Niew, John S. Anderson and Robert J. Perna.
7.Who pays for the solicitation of proxies?
This solicitation is being made by Knowles. Accordingly, Knowles will bear the cost of soliciting proxies. Knowles and our officers, directors, and employees may solicit proxies by mail, telephone, e-mail, fax, or in person. No additional compensation will be paid to our officers, directors or employees for such services. We will reimburse brokerage firms and other custodians, nominees, and fiduciaries for their reasonable out-of-pocket expenses for sending proxy materials to stockholders and obtaining their votes.
8.How can I vote my shares?
Shareholders of Record. Shareholders of record may vote their shares online during the 2022 Annual Meeting or by proxy without attending the 2022 Annual Meeting. For additional information on how to attend the 2022 Annual Meeting, please refer to "How do I attend the 2022 Annual Meeting" above. Even if you plan to attend the 2022 Annual Meeting, we encourage you to vote your shares by proxy. Shareholders of record may submit a proxy to have their shares voted by one of the following methods:
•By Internet — You may submit your proxy online via the Internet by following the instructions provided on the enclosed proxy card.
•By Phone — You may submit your proxy by touch-tone telephone by calling the toll-free number on the enclosed proxy card.
•By Mail — You may submit your proxy by marking, signing, dating and returning your proxy card promptly in accordance with the voting instructions on your proxy card.
•Electronically at the 2022 Annual Meeting — If you attend the virtual 2022 Annual Meeting and plan to vote electronically at the 2022 Annual Meeting, you can vote by following the instructions provided when you log in to the online virtual 2022 Annual Meeting platform. If you are a shareholder of record, you have the right to vote electronically at the 2022 Annual Meeting. If you are the beneficial owner of shares held in street name, you may also vote electronically at the 2022 Annual Meeting if you follow the instructions from your broker, bank or other nominee to vote those shares.
Beneficial Owners. If you are the beneficial owner of your shares (that is, you hold your shares in "street name" through an intermediary such as a bank, broker or other nominee), you will receive instructions from your bank, broker or other nominee as to how to vote your shares or submit a proxy to have your shares voted.
Your bank, broker or other nominee may not be able to vote your shares on any matters at the 2022 Annual Meeting unless you provide them instructions on how to vote your shares. You should instruct your bank, broker or other nominee how to vote your shares by following the directions provided by your bank, broker or other nominee. Alternatively, you may attend the virtual 2022 Annual Meeting and vote your shares electronically. To participate, you will need the 16-digit control number included on your voting instruction form or as provided by your bank, broker or other nominee.
General. If you submit your proxy using any of the methods above, Mr. Niew, Mr. Anderson or Mr. Perna will vote your shares in the manner you indicate. You may specify whether your shares should be voted for all, some, or none of the nominees for director; and for, against or abstain from voting on Proposals 2 and 3, and any other proposals properly introduced at the 2022 Annual Meeting. If you vote by telephone or Internet and choose to vote with the recommendation of our Board of Directors, or if you vote by mail, sign your proxy card, and do not indicate specific choices, your shares will be voted: "FOR" the election of all eight director nominees recommended by the Board as set forth on the proxy card (Proposal 1); "FOR" the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm (Proposal 2); and "FOR" the approval, on a non-binding, advisory basis of named executive officer ("NEO") compensation (Proposal 3).
If a matter to be considered at the 2022 Annual Meeting is timely submitted pursuant to Rule 14a-4(c)(1) promulgated under the Exchange Act, your proxy will authorize Jeffrey S. Niew, John S. Anderson, or Robert J. Perna to vote your shares in their discretion with respect to any such matter subsequently raised at the 2022 Annual Meeting. At the time this Proxy Statement was filed, we know of no matters to be considered at the 2022 Annual Meeting other than those referenced in this Proxy Statement.

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9.If I have already voted by proxy on one or more proposals, can I change my vote?
Yes. To change your vote by proxy, simply sign, date and return the enclosed proxy card or voting instructions form in the accompanying postage pre-paid envelope, or vote by proxy via telephone or the Internet in accordance with the instructions on the proxy card or voting instruction form. Only your latest dated proxy will count.
10.What if I sign and date my proxy but do not provide voting instructions?
If you sign and return your proxy card with no votes marked, your shares will be voted as follows:
•FOR the election of all nominees for director as identified in this Proxy Statement;
•FOR the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2022; and
•FOR the approval, on a non-binding, advisory basis compensation of the named executive officers.
11.What constitutes a quorum?
For purposes of the 2022 Annual Meeting, there will be a quorum if the holders of a majority of the outstanding shares of our common stock are present in person or by proxy. Votes withheld, abstentions and broker non-votes will be counted for purposes of determining whether a quorum is present at the 2022 Annual Meeting. In the absence of a quorum, the 2022 Annual Meeting may be adjourned by the chair of the 2022 Annual Meeting.
12.What is the effect of abstentions and broker non-votes?
If you specify that you wish to "abstain" from voting on an item, then your shares will not be voted on that particular item. Abstentions will count as a vote against the proposals, other than for the election of directors (Proposal 1). Abstentions will not have an effect on the election of directors because abstentions are not considered votes cast for or against a nominee, although abstentions will result in directors receiving fewer votes. Because the approval of a majority of shares present and entitled to vote is required to ratify the appointment of PricewaterhouseCoopers LLP ("PwC") as our independent public accounting firm (Proposal 2), and to approve the Company's NEO compensation (Proposal 3), abstentions will have the effect of a vote against those proposals.
Broker non-votes occur when brokers do not have discretionary voting authority to vote certain shares held in "street name" on particular "non-routine" proposals and the "beneficial owner" of those shares has not instructed the broker to vote on those proposals. Shares registered in the name of a broker, bank or other nominee, for which proxies are voted on some, but not all matters, will be considered to be represented at the 2022 Annual Meeting and voted only as to those matters for which the broker, bank or other nominee has authority to vote. Broker non-votes will have no direct effect on the outcome of the election of directors, or on the advisory resolution on executive compensation.

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13.What vote is required to approve each matter and how are the voting results determined?
ProposalVote Required for ApprovalAbstentions and Broker
Discretionary Voting
Proposal 1
Election of directors
Majority of votes castAbstentions have no effect on the outcome of the proposal. Broker discretionary voting is not permitted. Broker non-votes have no effect on the outcome.
Proposal 2
Ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm
The affirmative vote of a majority of shares present in person or by proxy and entitled to vote on the proposal is required to approve the proposal.Abstentions have the same effect as a vote against the proposal. Broker discretionary voting permitted.
Proposal 3
Approval, on an advisory, non-binding basis, of named executive officer compensation
The affirmative vote of a majority of shares present in person or by proxy and entitled to vote on the proposal is required to approve the proposal.Abstentions have the same effect as a vote against the proposal. Broker discretionary voting is not permitted. Broker non-votes have no effect on the outcome.
14.How do I find out the results of the vote?
We expect to report preliminary results on a Form 8-K within four business days of the 2022 Annual Meeting. We will report final results as certified by the independent inspector of elections as soon as practicable on a Form 8-K. You can access both Form 8-Ks and our other reports we file with the SEC at our website at http://investor.knowles.com/financial-information/sec-filings or at the SEC's website at www.sec.gov. The information provided on these websites is for informational purposes only and is not incorporated by reference into this Proxy Statement.
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OTHER MATTERS

Shareholder Proposals and Director Nominations for the 2023 Annual Meeting
In order for shareholder proposals to be included in our Proxy Statement for the 2023 Annual Meeting pursuant to Rule 14a-8 under the Exchange Act, we must receive them at our principal executive offices, 1151 Maplewood Drive, Itasca, Illinois 60143, Attention: Secretary, by November 11, 2022, 120 days prior to the date of the first anniversary of the date of our Proxy Statement for the 2022 Annual Meeting. In accordance with our By-Laws, all other shareholder proposals, including nominations for directors, to be voted on at the 2023 Annual Meeting must be received by us not earlier than December 27, 2022 and not later than January 26, 2023 being, respectively, 120 days and 90 days prior to the date of the first anniversary of the 2022 Annual Meeting. In the event that the 2023 Annual Meeting is called for a date that is not within 30 days before or after the anniversary date of the 2022 Annual Meeting, notice by a shareholder, in order to be timely, must be so received not later than the close of business on the 10th day following the day on which notice of the date of the 2023 Annual Meeting is mailed or public disclosure of the date of the 2023 Annual Meeting is made, whichever first occurs.
Form 10-K and Other Filings
Upon written request and at no charge, we will provide a copy of our filings with the SEC, including our Annual Report on Form 10-K, with financial statements and schedules for our most recent fiscal year. We may impose a reasonable fee for expenses associated with providing copies of separate exhibits to the report when such exhibits are requested. These documents are also available on our website at http://investor.knowles.com/financial-information/sec-filings, and the website of the SEC at www.sec.gov.
Shareholders Sharing the Same Address
SEC rules permit us to deliver only one copy of our proxy materials to multiple shareholders of record who share the same address and have the same last name, unless we have received contrary instructions from one or more of the shareholders. This delivery method, called "householding," helps to reduce the environmental impact of our annual meetings and reduces our printing and mailing costs. Shareholders who participate in householding will continue to receive separate proxy cards.
If you are a shareholder of record who currently receives a single copy of our proxy materials and wishes to receive a separate copy of our proxy materials or if you are currently receiving multiple copies of our proxy materials at the same address and wish to receive only a single copy, please write to or call the Secretary of Knowles Corporation at 1151 Maplewood Drive, Itasca, Illinois 60143, telephone: 630-250-5100.
Beneficial owners sharing an address who are currently receiving multiple copies of our proxy materials and wish to receive only a single copy in the future, or who currently receive a single copy and wish to receive separate copies in the future, should contact their bank, broker or other nominee to request that only a single copy or separate copies, as the case may be, be delivered to all shareholders at the shared address in the future.
Forward-Looking Statements
This Proxy Statement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Exchange Act and the Private Securities Litigation Reform Act of 1995. All statements relating to events or results that may occur in the future are forward-looking statements.
Forward-looking statements generally can be identified by words such as "believe," "expect," "project," "will," "change," "intend," "target," "future," "potential," "estimate," "anticipate," "to be" and similar expressions. These statements are based on numerous assumptions and involve known and unknown risks, uncertainties and other factors that could significantly affect the Company's operations and may cause the Company's actual actions, results, financial condition, performance or achievements to be substantially different from any future actions, results, financial condition, performance or achievements expressed or implied by any such forward-looking statements. Those factors include, but are not limited to, the risks, uncertainties and factors indicated from time to time in the Company's reports and filings with the SEC, including, without limitation, the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2021, under the heading "Item 1A — Risk Factors" and the heading "Item 7 — Management's Discussion and Analysis of Financial Condition and Results of Operations."
Unless required by law, the Company does not intend, and undertakes no obligation, to update or publicly release any revision to any such forward-looking statements, whether as a result of the receipt of new information, the occurrence of subsequent events, a change in circumstances or otherwise. Each forward-looking statement contained in this Proxy Statement is specifically qualified in its entirety by the aforementioned factors. Readers are advised to carefully read this Proxy Statement in conjunction with the important disclaimers set forth above prior to reaching any conclusions or making any investment decisions, and not to place undue reliance on these forward-looking statement, which apply only as of the date of this Proxy Statement.
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APPENDIX A

Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures
The Company provides certain non-GAAP financial measures in this Proxy Statement that are not in accordance with, or alternatives for, generally accepted accounting principles in the United States. The Company believes these measures assist it with comparing its performance between various reporting periods on a consistent basis, as these measures remove from operating results the impact of items that, in the Company's opinion, do not reflect its core operating performance including, for example, stock-based compensation, intangibles amortization expense, impairment charges, restructuring charges, production transfer costs, and other charges which management considers to be outside its core operating results. The GAAP measures most directly comparable to non-GAAP gross profit and adjusted earnings from continuing operations before interest and income taxes are gross profit and earnings from continuing operations, respectively. The Company believes that its presentation of non-GAAP financial measures is useful because it provides investors and securities analysts with the same information that the Company uses internally for purposes of assessing its core operating performance.
Years Ended December 31,
(in millions)202120202019
Gross profit$359.5 $271.2 $328.0 
Gross profit margin41.4 %35.5 %38.4 %
Stock-based compensation expense1.6 1.7 1.6 
Restructuring charges— 2.3 1.7 
Production transfer costs (1)
— 0.2 2.3 
Other (2)
1.0 — — 
Non-GAAP gross profit$362.1 $275.4 $333.6 
Non-GAAP gross profit margin41.7 %36.0 %39.0 %
Earnings from continuing operations$150.2 $2.9 $49.7 
Interest expense, net14.2 16.4 14.5 
(Benefit from) provision for income taxes(45.6)8.4 16.6 
Earnings from continuing operations before interest and income taxes118.8 27.7 80.8 
Stock-based compensation expense32.1 17.3 25.2 
Intangibles amortization expense15.9 13.0 7.0 
Impairment charges4.0 7.6 — 
Restructuring charges0.5 12.3 6.0 
Production transfer costs (1)
— 0.2 2.3 
Other (2)
3.0 1.2 5.6 
Adjusted earnings from continuing operations before interest and income taxes$174.3 $79.3 $126.9 

(1) Production transfer costs represent duplicate costs incurred to migrate manufacturing to facilities primarily in Asia.
(2)    In 2021, Other expenses represent the ongoing net lease cost (income) related to facilities not used in operations and expenses related to the acquisition of Integrated Microwave Corporation by the Precision Devices segment. In 2020, Other expenses represent the ongoing net lease cost (income) related to facilities not used in operations and expenses related to shareholder activism. In 2019, Other expenses of $4.4 million represent expenses related to shareholder activism and the remaining Other expenses relate to the acquisition of the MEMS Microphone Application-specific integrated circuit Design Business from ams AG by the Audio segment and the acquisition of DITF Interconnect Technology, Inc. by the Precision Devices segment.

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