Equity Award Grants
On August 14, 2018, the Compensation Committee approved the grant, effective as of August 23, 2018 (the “Grant Date”), of the following dollar value of restricted share units (“RSUs”), performance share units (“PSUs”) and “stretch” PSUs (“Stretch PSUs”), rounded down to the nearest whole share, to the following named executive officers of the Company as a component of their fiscal 2019 compensation:
| | | | | | | | | | | | |
Executive Officer | | Grant Date Value of
RSUs | | | Grant Date Value of
PSUs | | | Grant Date Value of
Stretch PSUs | |
Seamus Grady | | $ | 1,500,000 | | | $ | 1,750,000 | | | $ | 1,750,000 | |
Dr. Harpal Gill | | $ | 1,200,000 | | | $ | 1,500,000 | | | $ | 1,500,000 | |
Toh-Seng Ng | | $ | 1,100,000 | | | $ | 1,300,000 | | | $ | 1,300,000 | |
The grants will be made under the Company’s Amended and Restated 2010 Performance Incentive Plan. The RSUs will vest in equal annual installments over a period of three years on the anniversary date of the Grant Date, subject to the individual’s continued service with the Company through each such vesting date.
The PSUs will vest, if at all, following a2-year performance period, on the date the Compensation Committee certifies achievement of the performance criteria set forth below, subject to the individual’s continued service with the Company through such vesting date. Vesting of the PSUs will be based 50% on achievement of a cumulative fiscal 2019 and fiscal 2020 revenue target (the “PSU Revenue Target”) and 50% on achievement of a cumulative fiscal 2019 and fiscal 2020non-GAAP gross margin target (the “PSU GM Target”). As achievement of each financial target is considered independently from the other, the Company must meet a threshold for each factor in order for an individual to receive any credit for that factor. If the Company achieves 100% or more of a target financial metric, the PSUs will vest at 100% of target with respect to that financial metric component. Achievement of the PSU Revenue Target at a level between approximately 94.0% and 100% will result in a number of shares vesting for that metric that is scaled from 0% to 100% in a linear fashion. Achievement of the PSU GM Target at a level between approximately 97.9% and 100% will result in a number of shares vesting for that metric that is scaled from 0% to 100% in a linear fashion.
The Stretch PSUs will vest, if at all, following a2-year performance period, on the date the Compensation Committee certifies achievement of the performance criteria set forth below, subject to the individual’s continued service with the Company through such vesting date. Vesting of the Stretch PSUs will be based 50% on achievement of a cumulative fiscal 2019 and fiscal 2020 revenue target that is higher than the PSU Revenue Target (the “Stretch PSU Revenue Target”) and 50% on achievement of a cumulative fiscal 2019 and fiscal 2020non-GAAP gross margin target that is higher than the PSU GM Target (the “Stretch PSU GM Target”). As achievement of each financial target is considered independently from the other, the Company must meet a threshold for each factor in order for an individual to receive any credit for that factor. If the Company achieves 100% or more of a target financial metric, the Stretch PSUs will vest at 100% of target with respect to that financial metric component. Achievement of the Stretch PSU Revenue Target at a level between the PSU Revenue Target and 100% will result in a number of shares vesting for that metric that is scaled from 0% to 100% in a linear fashion. Achievement of the Stretch PSU GM Target at a level between the PSU GM Target and 100% will result in a number of shares vesting for that metric that is scaled from 0% to 100% in a linear fashion.
Departure of Named Executive Officer
On August 14, 2018, Dr. Hong Hou, the Company’s Executive Vice President, Chief Technical Officer, resigned from his position with the Company, effective August 25, 2018.
In connection with Dr. Hou’s resignation, on August 20, 2018, the Company entered into a Separation Agreement and Release (the “Separation Agreement”) with Dr. Hou. As consideration fornon-disparagement,non-solicitation andnon-competition obligations to the Company and Fabrinet USA, Inc. and a full release of all claims related to Dr. Hou’s employment with the Company, Dr. Hou will receive: (1) a lump sum cash payment in the amount of $525,000; (2) a lump sum cash payment in the amount of $60,000, representing reimbursement for health care insurance premiums under COBRA for a period of twelve months; (3) accelerated vesting with respect to an aggregate of 22,926 unvested restricted share units; and (4) payment of accrued vacation, if any.
