| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Appointment of Director
On February 26, 2019, the Board of Directors (the “Board”) of Fabrinet (the “Company”) appointed Gregory P. Dougherty to serve on the Board as a Class I director (with a term expiring at the 2019 Annual Meeting of Shareholders) until his successor is duly elected and qualified or his earlier death, resignation or removal. In addition, Mr. Dougherty was appointed as a member of the Audit Committee of the Board, effective immediately.
Mr. Dougherty served as Chief Executive Officer of Oclaro, Inc., a maker of optical components and modules for the long-haul, metro and data center markets, from June 2013 and served as a director of Oclaro from April 2009, until its December 2018 acquisition by Lumentum Holdings Inc. Previously, Mr. Dougherty served as a director of Avanex Corporation, a leading global provider of intelligent photonic solutions, from April 2005 to April 2009, when Avanex and Bookham merged to create Oclaro. He also served as a board member of the Ronald McDonald House at Stanford from January 2004 to December 2009, and the Bay AreaMake-A-Wish Foundation.
From February 2001 until September 2002, Mr. Dougherty was the Chief Operating Officer at JDS Uniphase Corporation, an optical technology company. Prior to JDS, he was the Chief Operating Officer of SDL, Inc., a maker of laser diodes, from March 1997 to February 2001 when they were acquired by JDS. Mr. Dougherty currently serves as a director of IPG Photonics and Infinera. Mr. Dougherty received a bachelor’s degree in optics in 1983 from the University of Rochester.
Mr. Dougherty will be compensated for his service on the Board in accordance with the Company’s standard compensation policy fornon-employee directors, the terms of which were described in the Company’s proxy statement for its 2018 annual meeting of shareholders. There is no arrangement or understanding between Mr. Dougherty and any other persons pursuant to which Mr. Dougherty was elected as a director. In addition, Mr. Dougherty will enter into the Company’s standard form of indemnification agreement, a copy of which was previously filed on January 28, 2010 as Exhibit 10.12 to the Company’s Registration Statement on FormS-1 (FileNo. 333-163268).
We have a commercial relationship with Oclaro, one of our significant customers, of which Mr. Dougherty served as Chief Executive Officer from June 2013 until December 2018. The commercial relationship includes the assembly of products and the fabrication of customized optics. The services we provided to Oclaro were pursuant to arrangements entered into in the ordinary course of business and have been conducted on an arms-length basis, and Mr. Dougherty did not have a direct or indirect material interest in such transactions.
A copy of the Company’s February 28, 2019 press release announcing Mr. Dougherty’s appointment to the Board is attached hereto as Exhibit 99.1 and is incorporated by reference.
Change-in-Control and Severance Agreement
Following a review of competitive compensation data prepared by the independent compensation consultant to our Compensation Committee, our Compensation Committee approved the following modifications to our severance and change-in-control benefits:
On February 26, 2019, our Compensation Committee approved a change in control and severance agreement (the “CIC Agreement”) for Seamus Grady, the Company’s Chief Executive Officer. The CIC Agreement has an initial term of three years following its effective date and renews automatically annually thereafter unless either party provides notice ofnon-renewal at least 90 days before the date of the scheduled renewal. The CIC Agreement supersedes the severance payments and benefits set forth in Mr. Grady’s offer letter with the Company dated September 20, 2017 (the “Offer Letter”).
