| Item 2.02 | Results of Operations and Financial Condition. |
On August 17, 2020, Fabrinet (“Fabrinet” or the “Company”) issued a press release regarding its financial results for the fiscal quarter and year ended June 26, 2020. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Fiscal 2021 Executive Incentive Plan
On August 11, 2020, the Compensation Committee (the “Compensation Committee”) of the board of directors of Fabrinet adopted an executive incentive plan (the “Cash Bonus Plan”) for the Company’s fiscal year ending June 25, 2021 (“fiscal 2021”). The Cash Bonus Plan is an incentive program designed to motivate participants to achieve the Company’s financial objectives, and to reward them for their achievements when those objectives are met. All of the Company’s executive officers pursuant to Section 16 of the Securities Exchange Act of 1934 are eligible to participate in the Cash Bonus Plan (individually, a “Participant,” and collectively, the “Participants”). The Cash Bonus Plan provides for a target bonus amount, as set forth in the table below. The maximum bonus that a Participant may receive under the Cash Bonus Plan is such Participant’s target bonus.
| | | | |
Name | | Fiscal 2021 Target Bonus | |
Seamus Grady | | $ | 1,075,000 | |
Dr. Harpal Gill | | $ | 1,300,000 | |
Csaba Sverha | | $ | 352,500 | |
Toh-Seng Ng | | $ | 865,000 | * |
| * | This amount represents a target bonus for the full fiscal year and is subject to proration in connection with Mr. Ng’s retirement. |
The amount of bonus actually paid to a Participant under the Cash Bonus Plan will be based 50% on achievement of a fiscal 2021 revenue target and 50% on achievement of a fiscal 2021 non-GAAP operating margin 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 a Participant to receive any credit for that factor. If the Company achieves 100% or more of a target financial metric, bonuses would be paid out at 100% of target with respect to that financial metric component. Achievement of the fiscal 2021 revenue target at a level between 90% and 100% will result in a bonus amount for that metric that is scaled from 20% to 100% in a linear fashion. Achievement of the fiscal 2021 non-GAAP operating margin target at a level between 90% and 100% will result in a bonus amount for that metric that is scaled from 20% to 100% in a linear fashion.
Equity Award Grants
On August 11, 2020, the Compensation Committee approved the grant, effective as of August 20, 2020 (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 and principal financial officer of the Company as a component of their fiscal 2021 compensation:
| | | | | | | | | | | | |
Name | | Grant Date Value of
RSUs | | | Grant Date Value of
PSUs | | | Grant Date Value of
“Stretch” PSUs | |
Seamus Grady | | $ | 1,950,000 | | | $ | 1,950,000 | | | $ | 1,950,000 | |
Dr. Harpal Gill | | $ | 1,250,000 | | | $ | 1,560,000 | | | $ | 1,560,000 | |
Csaba Sverha | | $ | 700,000 | | | $ | 700,000 | | | $ | 700,000 | |
Toh-Seng Ng | | $ | 381,667 | | | $ | 1,360,000 | | | $ | 1,360,000 | |
