Severance Agreement
 
 
Letter Agreement for Compensation 
 
 
                      CHANGE OF CONTROL SEVERANCE AGREEMENT
 
                  CHANGE OF CONTROL SEVERANCE AGREEMENT (this "Agreement"), by
and between SYNAPTICS INCORPORATED, a Delaware corporation (the "Company"), and
FRANCIS F. LEE ("Executive") is entered into as of the 22nd day of April, 2003.
 
                                    RECITALS
 
                  A.       The Company is engaged primarily in the business of
the development and supply of custom-designed user interface solutions that
enable people to interact more easily and intuitively with a wide variety of
mobile computing and communications devices (collectively, the "Business").
 
                  B.       Executive currently serves as the Chief Executive
Officer of the Company.
 
                  C.       The Board of Directors of the Company (the "Board")
has determined that it is in the best interests of the Company and its
stockholders to assure that the Company will have the continued dedication of
Executive despite the possibility, threat, or occurrence of a Change of Control
(as defined below) of the Company.
 
                  D.       The Board believes it is imperative to diminish the
inevitable distraction of Executive by virtue of the personal uncertainties and
risks created by a pending or threatened Change of Control, to encourage
Executive's full attention and dedication to the Company currently and in the
event of any threatened or pending Change of Control, and to provide the
Executive with compensation arrangements upon a Change of Control that afford
Executive with a requisite amount of individual financial security and are
competitive with those of other corporations. In order to accomplish these
objectives, the Board has caused the Company to enter into this Agreement.
 
                                    AGREEMENT
 
                  NOW, THEREFORE, in consideration of the mutual promises,
terms, covenants, and conditions set forth herein and the performance of each,
it is hereby agreed as follows:
 
                  1.       CERTAIN DEFINITIONS.
 
                           (a)      EFFECTIVE DATE. The "Effective Date" shall
be the first date during the "Change of Control Period" (as defined below) on
which a Change of Control occurs.
 
                           (b)      CHANGE OF CONTROL PERIOD. The "Change of
Control Period" is the period commencing on the date hereof and ending on the
first anniversary of such date; provided, however, that the Change of Control
Period shall extend automatically for an additional day at the end of each day
during the Change of Control Period so that the Change of Control Period is
always the shorter of one (1) year or Executive's Normal Retirement Date.
 
                           (c)      CHANGE OF CONTROL. For the purpose of this
Agreement, a "Change of Control" shall mean:
 
<PAGE>
 
                                    (i)      CHANGE OF CONTROL. A "Change in
Control" shall mean a change in control of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated
under the Securities Exchange Act of 1934, as amended, or if Item 6(e) is no
longer in effect, any regulations issued by the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934, as amended, which
serve similar purposes; provided further that, without limitation, a Change in
Control shall be deemed to have occurred if and when:
 
                                    (ii)     TURNOVER OF BOARD. The following
individuals no longer constitute a majority of the members of the Board: (A) the
individuals who, as of the date of this Agreement constitute the Board (the
"Current Directors"); (B) the individuals who thereafter are elected to the
Board and whose election, or nomination for election, to the Board was approved
by a vote of all of the Current Directors then still in office (such directors
becoming "Additional Directors" immediately following their election); and (C)
the individuals who are elected to the Board and whose election, or nomination
for election, to the Board was approved by a vote of all of the Current
Directors and Additional Directors then still in office (such directors also
becoming "Additional Directors" immediately following their election);
 
                                    (iii)    TENDER OFFER. A tender offer or
exchange offer is made whereby the effect of such offer is to take over and
control the Company, and such offer is consummated for the equity securities of
the Company representing twenty percent (20%) or more of the combined voting
power of the Company's then outstanding voting securities;
 
                                    (iv)     MERGER OR CONSOLIDATION. The
stockholders of the Company shall approve a merger, consolidation,
recapitalization, or reorganization of the Company, a reverse stock split of
outstanding voting securities, or consummation of any such transaction if
stockholder approval is not obtained, other than any such transaction that would
result in at least 75% of the total voting power represented by the voting
securities of the surviving entity outstanding immediately after such
transaction being beneficially owned by the holders of outstanding voting
securities of the Company immediately prior to the transaction, with the voting
power of each such continuing holder relative to other such continuing holders
not substantially altered in the transaction;
 
                                    (v)      LIQUIDATION OR SALE OF ASSETS. The
stockholders of the Company shall approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or a
substantial portion of the Company's assets to another person, which is not a
wholly owned subsidiary of the Company (i.e., 50% or more of the total assets of
the Company); or
 
                                    (vi)     STOCKHOLDINGS. Any "person" (as
that term is used in Section 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended) is or becomes the "beneficial owner" (as defined in Rule 13d-3
under that act), directly or indirectly of more than twenty percent (20%) of the
total voting power represented by the Company's then outstanding voting
Securities.
 
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<PAGE>
 
                  2.       EMPLOYMENT AND DUTIES.
 
                           (a)      EMPLOYMENT. The Company hereby agrees to
continue Executive in its employ, and the Executive hereby agrees to remain in
the employ of the Company, for the period commencing on the Effective Date and
ending on the first anniversary of the Effective Date (the "Employment Period");
provided, however, that the Employment Period shall extend automatically for an
additional day at the end of each day during the Employment Period on the same
terms and conditions contained herein as in effect as of the time of each
extension, without taking into account any modifications that are not agreed to
by Executive, so that the Employment Period is always one (1) year until
termination as provided herein. Executive agrees to devote Executive's best
efforts and, subject to paragraph 2(d) hereof, substantially all of Executive's
business time and attention to promote and further the business of the Company.
 
                           (b)      POSITION AND DUTIES. During the Employment
Period, Executive's position (including status, offices, titles, and reporting
requirements), authority, duties, and responsibilities shall be at least
commensurate in all material respects with the most significant of those held,
exercised, and assigned at any time during the 180-day period immediately
preceding the Effective Date.
 
                           (c)      POLICIES. Executive shall faithfully adhere
to, execute, and fulfill all lawful policies established by the Company.
 
                           (d)      OTHER ACTIVITIES. Executive shall not,
during the Employment Period, be engaged in any other business activity pursued
for gain, profit, or other pecuniary advantage if such activity interferes in
any material respect with Executive's duties and responsibilities hereunder. The
foregoing limitations shall not be construed as prohibiting Executive from (i)
making personal investments in such form or manner as will neither require
Executive's services in the operation or affairs of the companies or enterprises
in which such investments are made nor subject Executive to any conflict of
interest with respect to Executive's duties to the Company; (ii) serving on any
civic or charitable boards or committees; (iii) delivering lectures or
fulfilling speaking engagements; or (iii) serving, with the written approval of
the Board, as a director of one or more public corporations, in each case so
long as any such activities do not significantly interfere with the performance
of Executive's responsibilities under this Agreement.
 
                           (e)      PLACE OF PERFORMANCE. Executive shall not be
required by the Company or by the performance of Executive's duties under this
Agreement either to perform Executive's principal duties at a work location more
than fifty (50) miles from the Company's current principal executive offices.
 
                  3.       COMPENSATION. For all services rendered by Executive,
the Company shall compensate Executive as follows:
 
                           (a)      BASE SALARY. During the Employment Period,
Executive shall receive a base salary ("Base Salary") at a monthly rate at least
equal to the monthly base salary paid or payable to Executive by the Company on
the Effective Date. During the Employment Period, the Base Salary shall be
reviewed at least annually and shall be increased at any time and
 
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<PAGE>
 
from time to time as shall be substantially consistent with increases in base
salary awarded in the ordinary course of business to other key executives of the
Company and its subsidiaries. Any increase in Base Salary shall not serve to
limit or reduce any other obligation to Executive under this Agreement. Base
Salary shall not be reduced after any such increase.
 
                           (b)      ANNUAL BONUS. In addition to Base Salary,
Executive shall be eligible to receive a bonus or other incentive compensation
as may be determined by the Board or a committee of the Board based upon such
factors as the Board or such committee, in its sole discretion, may deem
relevant, including, without limitation, the performance of Executive and the
Company; provided, however, that the Board or a committee of the Board shall
establish for each fiscal year of the Company either (i) a bonus program in
which Executive shall be entitled to participate, which provides Executive with
a reasonable opportunity, based on the past compensation practices of the
Company and Executive's then base salary, to maintain or increase Executive's
total compensation compared to the previous fiscal year or (ii) a targeted bonus
based on such factors as the Board may determine (the "Targeted Bonus").
Notwithstanding the foregoing, Executive shall be awarded, for each fiscal year
during the Employment Period, an annual bonus (an "Annual Bonus") either
pursuant to any then-established incentive compensation plan(s) of the Company
or otherwise, in cash at least equal to the highest bonus payable to Executive
by the Company and its subsidiaries in respect of any of the two fiscal years
immediately preceding the fiscal year in which the Effective Date occurs.
Nothing in this Agreement shall require the payment of an Annual Bonus prior to
the Effective Date.
 
                           (c)      INCENTIVE, SAVINGS, AND RETIREMENT PLANS. In
addition to Base Salary and Annual Bonus payable as above provided, Executive
shall be entitled to participate during the Employment Period in all incentive,
savings, and retirement plans, practices, policies and programs applicable to
other key executives of the Company (including its successors or assigns) and
its affiliates, in each case comparable to those in effect on the Effective Date
or as subsequently amended. Such plans, practices, policies, and programs, in
the aggregate, shall provide Executive with compensation, benefits, and reward
opportunities at least as favorable as the most favorable of such compensation,
benefits and reward opportunities provided by the Company for Executive under
such plans, practices, policies, and programs as in effect at any time during
the 180-day period immediately preceding the Effective Date or, if more
favorable to Executive, as provided at any time thereafter with respect to other
key executives.
 
                           (d)      WELFARE BENEFIT PLANS. During the Employment
Period, Executive and/or Executive's family who are qualified to participate, as
the case may be, shall be eligible for participation in and shall receive all
benefits under welfare benefit plans, practices, policies, and programs provided
by the Company and its subsidiaries (including, without limitation, medical,
prescription, dental, disability, salary continuance, employee life, group life,
accidental death, and travel accident insurance plans and programs), at least as
favorable as the most favorable of such plans, practices, policies, and programs
in effect at any time during the 180-day period immediately preceding the
Effective Date or, if more favorable to Executive and/or Executive's family, as
in effect at any time thereafter with respect to other key executives.
 
                           (e)      EXPENSES. During the Employment Period,
Executive shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by Executive in connection with the business of the Company in
accordance with the most favorable policies,
 
                                        4
 
<PAGE>
 
practices, and procedures of the Company and its subsidiaries in effect at any
time during the 180-day period immediately preceding the Effective Date or, if
more favorable to the Executive, as in effect at any time thereafter with
respect to other key executives.
 
                           (f)      OFFICE AND SUPPORT STAFF. During the
Employment Period, Executive shall be entitled to an office or offices of a size
and with furnishings and other appointments, and to secretarial and other
assistance, at least equal to the most favorable of the foregoing provided to
Executive by the Company and its subsidiaries at any time during the 180-day
period immediately preceding the Effective Date or, if more favorable to
Executive, as provided at any time thereafter with respect to other key
executives of the Company and its subsidiaries.
 
                           (g)      VACATION. During the Employment Period,
Executive shall be entitled to paid vacation in accordance with the most
favorable plans, policies, programs and practices of the Company and its
subsidiaries as in effect at any time during the 180-day period immediately
preceding the Effective Date or, if more favorable to Executive, as in effect at
any time thereafter with respect to other key executives of the Company and its
subsidiaries.
 
                  4.       NON-COMPETITION AGREEMENT.
 
                           (a)      NON-COMPETITION. Notwithstanding the
provisions of California law, including, without limitation, Bus. & Prof. Code
Secs. 16600 et. seq. and 17200 et. sec., the parties agree that, during
Employment Period, and for a period for which severance payments are being made
by the Company to Executive in accordance with this Agreement, Executive shall
not, directly or indirectly, for himself or on behalf of or in conjunction with
any other person:
 
                                    (i)      OTHER ACTIVITIES. Engage, as an
officer, director, shareholder, owner, principal, partner, lender, joint
venturer, employee, independent contractor, consultant, advisor, or sales
representative, in any Competitive Business within the Restricted Territory,
provided that the ownership of less than 3% of a company shall not be deemed a
violation of this provision;
 
                                    (ii)     SOLICITATION OF EMPLOYEES. Call
upon any person who is, at that time, within the Restricted Territory, an
employee of the Company or any of its subsidiaries, in a managerial or
supervisory capacity for the purpose or with the intent of enticing such
employee away from or out of the employ of the Company or any of its
subsidiaries;
 
                                    (iii)    SOLICITATION OF CUSTOMERS. Call
upon any person who is, at that time, or who has been, within one (1) year prior
to that time, a customer of the Company or any of its subsidiaries, within the
Restricted Territory for the purpose of soliciting or selling products or
services in direct competition with the Company or any of its subsidiaries
within the Restricted Territory;
 
                                    (iv)     SOLICITATION OF ACQUISITION
CANDIDATES. Call upon any prospective acquisition candidate, on Executive's own
behalf or on behalf of any person, which candidate was, to Executive's knowledge
after due inquiry, either called upon by the Company, or for which the Company
made an acquisition analysis, for the purpose of acquiring such candidate.
 
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<PAGE>
 
                           (b)      CERTAIN DEFINITIONS. As used in this
Agreement, the following terms shall have the meanings ascribed to them:
 
                                    (i)      COMPETITIVE Business shall mean any
person that engages in a business the same as, similar to, or in direct
competition with the Business;
 
                                    (ii)     PERSON shall mean any individual,
corporation, limited liability company, partnership, firm, or other business of
whatever nature;
 
                                    (iii)    RESTRICTED Territory shall mean any
jurisdiction in which the Company or any subsidiary of the Company maintains any
facilities, sells any products, or provides any services; and
 
                                    (iv)     SUBSIDIARY shall mean the Company's
consolidated subsidiaries, including corporations, partnerships, limited
liability companies, and any other business organization in which the Company
holds at least a fifty percent (50%) equity interest.
 
                           (c)      ENFORCEMENT. Because of the difficulty of
measuring economic losses to the Company as a result of a breach of the
foregoing covenants in this paragraph 4, and because of the immediate and
irreparable damage that could be caused to the Company for which it would have
no other adequate remedy, Executive agrees that the foregoing covenants may be
enforced by the Company in the event of breach by Executive, by injunctions and
restraining orders.
 
                           (d)      REASONABLE RESTRAINT. In agreeing to the
period of non-competition as set forth herein, Executive acknowledges that he
has had the opportunity to speak with counsel of his choice in connection with
the force and effect of this waiver, and that he is aware that he is waiving
rights under California law to contest the imposition of a non-competition
agreement. In agreeing to be bound hereby, Executive is accepting the
consideration extended to him in exchange for a knowing waiver of his rights,
and as full and complete consideration for this waiver, and acknowledges the
adequacy of such consideration. Both parties agree that Executive's agreement to
this term constitutes a substantial and material term to the Company, without
which the Company would not enter into this Agreement or extend this offer of
employment to Executive. Executive agrees that the Company may seek and secure
an injunction against Executive in order to enforce the terms hereof in the
event that Executive breaches this provision. Executive acknowledges that the
scope of the non-competition clause is reasonable in scope and will not preclude
him from seeking gainful employment in alternative fields. To the extent that
any court of competent jurisdiction determines that the non-competition
provisions are unreasonable, it is the intent of the parties to enforce the
terms hereof to the full extent held reasonable.
 
                           (e)      SEPARATE COVENANTS. The covenants in this
paragraph 4 are severable and separate, and the unenforceability of any specific
covenant shall not affect the provisions of any other covenant. Moreover, in the
event any court of competent jurisdiction shall determine that the scope, time,
or territorial restrictions set forth are unreasonable, then it is the intention
of the parties that such restrictions be enforced to the fullest extent that the
court deems reasonable, and the Agreement shall thereby be reformed.
 
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<PAGE>
 
                           (f)      INDEPENDENT AGREEMENT. Except as otherwise
provided herein, all of the covenants in this paragraph 4 shall be construed as
an agreement independent of any other provision in this Agreement, and the
existence of any claim or cause of action of Executive against the Company,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Company of such covenants. It is specifically
agreed that the period following termination of employment stated at the
beginning of this paragraph 4, during which the agreements and covenants of
Executive made in this paragraph 4 shall be effective, shall be computed by
excluding from such computation any time during which Executive is in violation
of any provision of this paragraph 4.
 
                  5.       TERM; TERMINATION; RIGHTS ON TERMINATION.
 
                           (a)      TERM. The term of Executive's employment
under this Agreement shall be the Employment Period as defined above.
 
                           (b)      TERMINATION. Executive's employment under
this Agreement may be terminated in any one of the followings ways:
 
                                    (i)      DEATH OF EXECUTIVE. The employment
of Executive shall terminate immediately upon Executive's death provided that
the Company shall, for a period of twelve (12) months following such death, pay
to the estate of Executive an amount equal to Executive's base salary and
continue the welfare benefit programs contemplated by paragraph 3(d), including
paying all premiums for coverage for Executive's dependent family members under
all health, hospitalization, disability, dental, life, and other insurance plans
that the Company maintained at the time of Executive's death.
 
                                    (ii)     DISABILITY OF EXECUTIVE. If, as a
result of incapacity due to physical or mental illness or injury, Executive
shall have been absent from Executive's full-time duties hereunder for six (6)
consecutive months, then thirty (30) days after giving written notice to
Executive (which notice may occur before or after the end of such six (6) month
period, but which shall not be effective earlier than the last day of such six
(6) month period), the Company may terminate Executive's employment provided
Executive is unable to resume Executive's full-time duties at the conclusion of
such notice period. Also, Executive may terminate Executive's employment if
Executive's health should become impaired to an extent that makes the continued
performance of Executive's duties hereunder hazardous to Executive's physical or
mental health or Executive's life, provided that Executive shall have furnished
the Company with a written statement from a qualified doctor to such effect and
provided, further, that, at the Company's request made within ten (10) days of
the date of such written statement, Executive shall submit to an examination by
a doctor selected by the Company who is reasonably acceptable to Executive or
Executive's doctor and such doctor shall have concurred in the conclusion of
Executive's doctor. In the event Executive's employment under this Agreement is
terminated as a result of Executive's disability, Executive shall receive from
the Company, in a lump-sum payment due within ten (10) days of the effective
date of such termination, an amount equal to the greater of two (2) times (1)
the average of the base salary and bonus paid to Executive for the two (2) prior
full fiscal years prior to such termination or (2) Executive's base salary and
Targeted Bonus for the fiscal year during which such termination occurs. The
disability benefits
 
                                        7
 
<PAGE>
 
provided for in this Agreement are independent of any disability insurance
benefits that Executive receives.
 
                                    (iii)    TERMINATION BY THE COMPANY FOR GOOD
CAUSE. The Company may terminate Executive's employment upon ten (10) days prior
written notice to Executive for "Good Cause," which shall mean any one or more
of the following: (A) Executive's willful, material, and irreparable breach of
this Agreement; (B) Executive's gross negligence in the performance or
intentional nonperformance (continuing for thirty (30) days after receipt of
written notice of need to cure) of any of Executive's material duties and
responsibilities hereunder; (C) Executive's willful dishonesty, fraud, or
misconduct with respect to the business or affairs of the Company, which
materially and adversely affects the operations or reputation of the Company;
(D) Executive's indictment for, conviction of, or guilty plea to a felony crime
involving dishonesty or moral turpitude whether or not relating to the Company;
or (E) a confirmed positive illegal drug test result. In the event of a
termination by the Company for Good Cause, Executive shall have no right to any
severance compensation.
 
                                    (iv)     TERMINATION BY THE COMPANY WITHOUT
GOOD CAUSE OR BY EXECUTIVE WITH GOOD REASON. The Company may terminate
Executive's employment without Good Cause during the Employment Period upon the
approval of a majority of the members of the Board, excluding Executive if
Executive is a member of the Board. Executive may terminate Executive's
employment under this Agreement for Good Reason upon ten (10) days prior notice
to the Company.
 
                                             (A) RESULT OF TERMINATION BY THE
COMPANY WITHOUT GOOD CAUSE OR BY EXECUTIVE WITH GOOD REASON. Should the Company
terminate Executive's employment without Good Cause or should Executive
terminate Executive's employment with Good Reason during the Employment Period,
the Company shall pay to Executive for one (1) year after such termination, on
such dates as would otherwise be paid by the Company, a pro rata amount based on
the greater of two (2) times (1) the average of the base salary and bonus paid
to Executive for the two (2) prior full fiscal years prior to such termination
or (2) Executive's base salary and Targeted Bonus for the fiscal year during
which such termination occurs. Further, if the Company terminates Executive's
employment without Good Cause or Executive terminates Executive's employment
with Good Reason, (1) the Company shall continue the insurance coverage as
specified in paragraph 3(d) or provide comparable coverage by way of making the
family medical insurance premium payments contemplated by COBRA or otherwise, in
any case for a period of two (2) years after such termination; (2) the Company
shall maintain life insurance coverage, comparable to that provided immediately
prior to termination, for a period of two (2) years thereafter with the
beneficiary designated by Executive; and (3) Executive shall be entitled to
receive all other accrued but unpaid benefits relating to vacations and other
executive perquisites as provided in paragraphs 3(d) and 3(g) through
Executive's last day of employment.
 
                                             (B) DEFINITION OF GOOD REASON.
Executive shall have "Good Reason" to terminate Executive's employment upon the
occurrence of any of the following events without Executive's prior written
approval: (1) Executive is demoted by means of a reduction in authority,
responsibilities, or duties as provided herein; (2) Executive's annual base
salary for a fiscal year as determined pursuant to paragraph 3(a) is reduced or
Executive's
 
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<PAGE>
 
Targeted Bonus is reduced other than as contemplated by paragraph 3(b); (3)
Executive is required to render his or her primary employment services from a
location more than 50 miles from the Company's headquarters as of the time the
Executive began his or her employment with the Company; (4) the Company breaches
a material provision of this Agreement; or (5) the Company fails to obtain the
assumption of this Agreement by any successor or assign of the Company or its
principal business activities. For purposes of this Section 5(b)(iv)(B), any
good faith determination of "Good Reason" made by the Executive shall be
conclusive. Anything in this Agreement to the contrary notwithstanding, a
termination by the Executive for any reason during the 30-day period immediately
following the first anniversary of the Effective Date shall be deemed to be a
termination for Good Reason for all purposes of this Agreement.
 
                                    (v)      RESIGNATION BY EXECUTIVE WITHOUT
GOOD REASON. Executive may, without cause, and without Good Reason terminate
Executive's own employment under this Agreement, effective thirty (30) days
after written notice is provided to the Company or such earlier time as any such
resignation may be accepted by the Company. If Executive resigns or otherwise
terminates Executive's employment without Good Reason, Executive shall receive
no severance compensation.
 
                                    (vi)     CHANGE IN CONTROL OF THE COMPANY.
 
                                             (A) EFFECTIVE DATE OF CHANGE IN
CONTROL. For purposes of applying paragraph 5 hereof, the effective date of
Change in Control will be the closing date of the transaction giving rise to the
Change in Control and all compensation, reimbursements, and lump-sum payments
due Executive must be paid in full by the Company promptly following Executive's
election to terminate Executive's employment following such Change in Control.
 
                                             (B) EFFECT ON STOCK OPTIONS. In the
event of a Change of Control, fifty percent (50%) of all unvested stock options
held by Executive shall vest on the Effective Date and the balance of such
unvested options shall vest as of the day immediately preceding any termination
of Executive's employment by the Company without Good Cause or by Executive for
Good Reason provided that any options granted prior to the date hereof that
included specific provisions regarding accelerated vesting shall be unchanged.
In addition, any vested stock options (including those vested as a result of
this paragraph) held by Executive shall be exercisable during the full term of
the stock options in the event of a Change of Control.
 
                           (c)      PAYMENTS TO TERMINATION DATE. Upon
termination of Executive's employment under this Agreement for any reason
provided above, Executive shall be entitled to receive all compensation earned
and all benefits and reimbursements due through the effective date of
termination. Additional compensation subsequent to termination, if any, will be
due and payable to Executive only to the extent and in the manner expressly
provided above. All other rights and obligations of the Company and Executive
under this Agreement shall cease as of the effective date of termination, except
that the Company's obligations under paragraph 9 (relating to indemnification of
Executive) and Executive's obligations under paragraph 4 (relating to
non-competition and non-solicitation, as applicable), paragraph 6 (relating to
return of Company property), paragraph 7 (relating to inventions), paragraph 8
(relating to trade secrets), and
 
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<PAGE>
 
paragraph 10 (relating to prior agreements) shall survive such termination in
accordance with their terms.
 
                           (d)      FAILURE TO PAY EXECUTIVE. If termination of
Executive's employment arises out of the Company's failure to pay Executive on a
timely basis the amounts to which Executive is entitled under this Agreement or
as a result of any other breach of this Agreement by the Company, as determined
by a court of competent jurisdiction or pursuant to the provisions of paragraph
15, the Company shall pay all amounts and damages to which Executive may be
entitled as a result of such breach, including interest thereon and all
reasonable legal fees and expenses and other costs incurred by Executive to
enforce Executive's rights hereunder. Further, none of the provisions of
paragraph 4 (relating to non-competition) shall apply in the event Executive's
employment under this Agreement is terminated as a result of a breach by the
Company.
 
                  6.       RETURN OF COMPANY PROPERTY. All records, designs,
patents, business plans, financial statements, manuals, memoranda, lists, and
other property delivered to or compiled by Executive by or on behalf of the
Company (or its subsidiaries) or its representatives, vendors, or customers that
pertain to the business of the Company (or its subsidiaries) shall be and remain
the property of the Company and be subject at all times to its discretion and
control. Likewise, all correspondence, reports, records, charts, advertising
materials, and other similar data pertaining to the business, activities, or
future plans of the Company (or its subsidiaries) that is collected by Executive
shall be delivered promptly to the Company without request by it upon
termination of Executive's employment.
 
                  7.       INVENTIONS. Executive shall disclose promptly to the
Company any and all significant conceptions and ideas for inventions,
improvements, and valuable discoveries, whether patentable or not, which are
conceived or made by Executive, solely or jointly with another, during the
period of employment, and which are directly related to the business or
activities of the Company (or its subsidiaries), and which Executive conceives
as a result of Executive's employment by the Company. Executive hereby assigns
and agrees to assign all Executive's interests therein to the Company or its
nominee. Whenever requested to do so by the Company, Executive shall execute any
and all applications, assignments, and other instruments that the Company shall
deem necessary to apply for and obtain Letters Patent of the United States or
any foreign country or to otherwise protect the Company's interest therein.
 
                  8.       TRADE SECRETS. Executive agrees that Executive will
not, during or after the period of employment under this Agreement, disclose the
specific terms of the Company's relationships or agreements with its respective
significant vendors or customers, or any other significant and material trade
secret of the Company, whether in existence or proposed, to any person, firm,
partnership, corporation, or business for any reason or purpose whatsoever.
 
                  9.       INDEMNIFICATION. In the event Executive is made a
party to any threatened, pending, or completed action, suit, or proceeding,
whether civil, criminal, administrative, or investigative (other than an action
by the Company against Executive), by reason of the fact that Executive is or
was performing services under this Agreement, then the Company shall indemnify
Executive against all expenses (including attorneys' fees), judgments, fines,
and amounts paid in settlement, as actually and reasonably incurred by Executive
in
 
                                       10
 
<PAGE>
 
connection therewith to the maximum extent permitted by applicable law. The
advancement of expenses shall be mandatory. In the event that both Executive and
the Company are made a party to the same third-party action, complaint, suit, or
proceeding, the Company agrees to engage competent legal representation, and
Executive agrees to use the same representation, provided that if counsel
selected by the Company shall have a conflict of interest that prevents such
counsel from representing Executive, Executive may engage separate counsel and
the Company shall pay all attorneys' fees of such separate counsel. Further,
while Executive is expected at all times to use Executive's best efforts to
faithfully discharge Executive's duties under this Agreement, Executive cannot
be held liable to the Company for errors or omissions made in good faith if
Executive has not exhibited gross, willful, and wanton negligence and misconduct
or performed criminal and fraudulent acts that materially damage the business of
the Company. Notwithstanding this paragraph 9, the provision of any written
indemnification agreement applicable to the directors and officers of the
Company to which Executive shall be a party shall apply rather than this
paragraph 9 to the extent inconsistent with this paragraph 9. Without limiting
the foregoing, the Company shall continue to maintain coverage for Executive
under any directors' and officers' liability insurance policies for a period of
six (6) years following any termination of Executive's employment by the Company
without Good Cause or by Executive with Good Reason.
 
                  10.      NO PRIOR AGREEMENTS. Executive hereby represents and
warrants to the Company that the execution of this Agreement by Executive and
Executive's employment by the Company and the performance of Executive's duties
hereunder will not violate or be a breach of any agreement with a former
employer, client, or any other person or entity. Further, Executive agrees to
indemnify the Company for any claim, including, but not limited to, attorneys'
fees and expenses of investigation, by any such third party that such third
party may now have or may hereafter come to have against the Company based upon
or arising out of any non-competition, invention, or secrecy agreement between
Executive and such third party that was in existence as of the date of this
Agreement.
 
                  11.      ASSIGNMENT; BINDING EFFECT. Executive understands
that Executive is being employed by the Company on the basis of Executive's
personal qualifications, experience, and skills. Executive agrees, therefore,
Executive cannot assign all or any portion of Executive's performance under this
Agreement. Subject to the preceding two (2) sentences and the express provisions
of paragraph 12 below, this Agreement shall be binding upon, inure to the
benefit of and be enforceable by the parties hereto and their respective heirs,
legal representatives, successors, and assigns.
 
                  12.      COMPLETE AGREEMENT. This Agreement is not a promise
of future employment. Except as specifically provided herein, Executive has no
oral representations, understandings, or agreements with the Company or any of
its officers, directors, or representatives covering the same subject matter as
this Agreement. This written Agreement is the final, complete, and exclusive
statement and expression of the agreement between the Company and Executive and
of all the terms of this Agreement, and it cannot be varied, contradicted, or
supplemented by evidence of any prior or contemporaneous oral or written
agreements. This written Agreement may not be later modified except by a further
writing signed by a duly authorized officer of the Company and Executive, and no
term of this Agreement may be waived except by writing signed by the party
waiving the benefit of such
 
                                       11
 
<PAGE>
 
term. This Agreement hereby supersedes any other employment agreements or
understandings, written or oral, between the Company and Executive.
 
                  13.      NOTICE. Whenever any notice is required hereunder, it
shall be given in writing addressed as follows:
 
                           To the Company:        2381 Bering Drive
                                                  San Jose, California 95131
                                                  Attention: Corporate Secretary
 
                           To Executive:          2381 Bering Drive
                                                  San Jose, California 95131
 
                           In either case with a  Greenberg Traurig, LLP
                           copy to:               2375 East Camelback Road
                                                  Suite 700
                                                  Phoenix, Arizona 85016
                                                  Attention: Robert S. Kant,
                                                  Esq.
 
                  Notice shall be deemed given and effective on the earlier of
three (3) days after the deposit in the U.S. mail of a writing addressed as
above and sent first class mail, certified, return receipt requested, or when
actually received. Either party may change the address for notice by notifying
the other party of such change in accordance with this paragraph 13.
 
                  14.      SEVERABILITY; HEADINGS. If any portion of this
Agreement is held invalid or inoperative, the other portions of this Agreement
shall be deemed valid and operative and, so far as is reasonable and possible,
effect shall be given to the intent manifested by the portion held invalid or
inoperative. The paragraph headings herein are for reference purposes only and
are not intended in any way to describe, interpret, define or limit the extent
or intent of the Agreement or of any part hereof.
 
                  15.      MEDIATION ARBITRATION. All disputes arising out of
this Agreement shall be resolved as set forth in this paragraph 15. If any party
hereto desires to make any claim arising out of this Agreement ("Claimant"),
then such party shall first deliver to the other party ("Respondent") written
notice ("Claim Notice") of Claimant's intent to make such claim explaining
Claimant's reasons for such claim in sufficient detail for Respondent to
respond. Respondent shall have ten (10) business days from the date the Claim
Notice was given to Respondent to object in writing to the claim ("Notice of
Objection"), or otherwise cure any breach hereof alleged in the Claim Notice.
Any Notice of Objection shall specify with particularity the reasons for such
objection. Following receipt of the Notice of Objection, if any, Claimant and
Respondent shall immediately seek to resolve by good faith negotiations the
dispute alleged in the Claim Notice, and may at the request of either party,
utilize the services of an independent mediator. If Claimant and Respondent are
unable to resolve the dispute in writing within ten (10) business days from the
date negotiations began, then without the necessity of further agreement of
Claimant or Respondent, the dispute set forth in the Claim Notice shall be
submitted to binding arbitration (except for claims arising out of paragraphs 3
or 7 hereof), initiated by either Claimant or Respondent pursuant to this
paragraph. Such arbitration
 
                                       12
 
<PAGE>
 
shall be conducted before a panel of three (3) arbitrators in San Jose,
California, in accordance with the National Rules for the Resolution of
Employment Disputes of the American Arbitration Association ("AAA") then in
effect provided that the parties may agree to use arbitrators other than those
provided by the AAA. The arbitrators shall not have the authority to add to,
detract from, or modify any provision hereof. The arbitrators shall have the
authority to order all remedies otherwise available in a civil court, including,
without limitation, back-pay, severance compensation, vesting of options (or
cash compensation in lieu of vesting of options), reimbursement of costs,
including those incurred to enforce this Agreement, and interest thereon in the
event the arbitrators determine that Executive was terminated without Good
Cause, as defined herein, or that the Company has otherwise materially breached
this Agreement. A decision by a majority of the arbitration panel shall be final
and binding. The arbitration shall be conducted consistent with all applicable
law, and the arbitration award shall be in writing, in a form capable of review
if required by applicable law. Judgment may be entered on the arbitrators' award
in any court having jurisdiction. The direct expense of any mediation or
arbitration proceeding and, to the extent Executive prevails, all reasonable
legal fees shall be borne by the Company.
 
                  16.      NO PARTICIPATION IN SEVERANCE PLANS. Except as
contemplated by this Agreement, Executive acknowledges and agrees that the
compensation and other benefits set forth in this Agreement are and shall be in
lieu of any compensation or other benefits that may otherwise be payable to or
on behalf of Executive pursuant to the terms of any severance pay arrangement of
the Company or any affiliate thereof, or any other similar arrangement of the
Company or any affiliates thereof providing for benefits upon involuntary
termination of employment.
 
                  17.      GOVERNING LAW. This Agreement shall in all respects
be construed according to the laws of the state of California, notwithstanding
the conflict of laws provisions of such state.
 
                  18.      COUNTERPARTS; FACSIMILE. This Agreement may be
executed by facsimile and in two (2) or more counterparts, each of which shall
be deemed an original and all of which together shall constitute but one and the
same instrument.
 
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                                       13
 
<PAGE>
 
         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
 
                                          SYNAPTICS INCORPORATED
 
                                          By: /s/   Russell J. Knittel
                                              ----------------------------------
 
                                          Name: Russell J. Knittel
                                                --------------------------------
 
                                          Title: SVP and CFO
                                                 -------------------------------
 
                                          EXECUTIVE:
 
                                          /s/   Francis F. Lee
                                          --------------------------------------
 
 
 
 
                                                                  EXHIBIT 10.18
 
   Change of Control Agreement 
 
 
                       SYNAPTICS INCORPORATED (THE "COMPANY")
                SEVERANCE POLICY FOR PRINCIPAL EXECUTIVE OFFICERS
 
                              Dated April 22, 2003
 
1.       PURPOSE
 
         The purpose of this Severance Policy is to provide a fair framework in
the event of the termination of employment of one or more key executive officers
(each an "Executive") of the Company.
 
2.       COVERED PRINCIPAL EXECUTIVE OFFICERS
 
         This Policy shall be applicable to the Chief Executive Officer and the
President. It shall also apply to each Executive Vice President, each Senior
Vice President, and each other executive officer, if any, as shall be designated
and notified in writing by the Company upon nomination by the Chief Executive
Officer and approval of the Board of Directors or the Compensation Committee of
the Board of Directors.
 
3.       DEFINITIONS
 
         (a)      DISABILITY. Incapacity due to physical or mental illness or
injury that causes Executive to be absent from Executive's full-time duties for
six consecutive months or more.
 
         (b)      GOOD CAUSE. "Good Cause," as it applies to the determination
of the Company to terminate the employment of an Executive, shall mean any one
or more of the following: (A) Executive's willful, material, and irreparable
breach of his or her duties to the Company; (B) Executive's gross negligence in
the performance or intentional nonperformance (continuing for 30 days after
receipt of written notice of need to cure) of any of Executive's material duties
and responsibilities; (C) Executive's willful dishonesty, fraud, or misconduct
with respect to the business or affairs of the Company, which materially and
adversely affects the operations or reputation of the Company; (D) Executive's
indictment for, conviction of, or guilty plea to a felony crime involving
dishonesty or moral turpitude whether or not relating to the Company; or (E) a
confirmed positive illegal drug test result.
 
         (c)      GOOD REASON. "Good Reason," as it applies to the determination
by an Executive to terminate his or her employment shall mean the occurrence of
any of the following events without Executive's prior written approval: (1)
Executive is demoted by means of a reduction in authority or responsibilities or
Executive is required to render his or her primary employment services from a
location more than 50 miles from the Company's headquarters as of the time
Executive began his or her employment with the Company; (2) Executive's annual
base salary for a fiscal year is reduced to a level that is less than 90% of the
base salary paid to Executive during the prior fiscal year; or (3) a change is
made in Executive's bonus (including a reduction in any Targeted Bonus) to a
level that is less than 90% of the Targeted Bonus for Executive during the prior
fiscal year.
 
<PAGE>
 
4.       RESULT OF TERMINATION
 
         (a)      DEATH. Upon Executive's death, the Company shall, for a period
of one year following such death in the case of the CEO and for a period of six
months in the case of any other principal executive officer covered by this
Policy, pay to the estate of Executive an amount equal to Executive's base
salary and Targeted Bonus for the fiscal year during which death occurs and
continue to pay all premiums for coverage for Executive's dependent family
members under all health, hospitalization, disability, dental, life, and other
insurance plans that the Company maintained at the time of Executive's death.
 
         (b)      DISABILITY. In the event Executive's employment is terminated
as a result of Executive's disability, Executive shall receive from the Company,
in a lump-sum payment due within ten days of the effective date of such
termination, an amount equal to Executive's base salary and Targeted Bonus for
the fiscal year during which such termination occurs in the case of the CEO and
an amount equal to fifty percent of Executive's base salary and Targeted Bonus
for the fiscal year during which such termination occurs in the case of any
other principal executive officer covered by this Policy. These disability
benefits are independent of any disability insurance benefits that Executive
receives.
 
         (c)      TERMINATION BY THE COMPANY WITHOUT GOOD CAUSE OR BY EXECUTIVE
WITH GOOD REASON. The following provisions shall apply should the Company
terminate Executive's employment without Good Cause or should Executive
terminate Executive's employment with Good Reason:
 
                           (i)      SALARY AND BONUS. The Company shall pay to
Executive for one year following the event that triggered termination in the
case of the CEO and six months following the event that triggered termination in
the case of any other principal executive officer covered by this Policy, on
such dates as would otherwise be paid by the Company, a pro rata amount based on
Executive's base salary and Targeted Bonus for the fiscal year during which such
termination occurs.
 
                           (ii)     WELFARE BENEFIT PLANS. The Company will
continue, for one year following the event that triggered termination in the
case of the CEO and for six months following the event that triggered
termination in the case of each other principal executive officer covered by
this Policy, all benefits for Executive and Executive's family under all welfare
benefits plans, practices, policies, and programs provided by the Company and
its subsidiaries (including medical, prescription, dental, disability, employee
life, group life, accidental death, and travel accident insurance plans,
practices, policies, and programs) in effect for Executive and Executive's
family as of the date of the triggering event or use its best efforts to provide
comparable coverage at no cost to Executive by way of making the family medical
insurance provision payments contemplated by COBRA or otherwise.
 
                           (iii)    STOCK OPTIONS. All unvested options held by
Executive as of the date of the triggering event shall continue to vest for a
period of one year after such triggering event in the case of the CEO and six
months after such triggering event in the case of any other principal executive
officer covered by this Policy. The above notwithstanding, this provision
 
<PAGE>
 
shall not alter (1) the exercise period of any vested options as of the
triggering event and (2) any specific accelerated vesting provisions included in
Executive's stock option grants.
 
                           (iv)     ACCRUED BENEFITS. Executive shall be
entitled to receive all other accrued but unpaid benefits relating to vacations
and other executive perquisites through Executive's last day of employment,
except that Executive shall not continue to accrue vacation benefits or other
executive perquisites after the event that triggered the termination through the
termination date.
 
5.       MINIMUM EMPLOYMENT TERM
 
                  This Severance Policy shall not be applicable to any executive
officer until that officer has completed a minimum of one full year employment
with the Company.
 
 
 
 
 
 
 
 
 

                                          Francis F. Lee