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PROXY STATEMENT 2021
Table of Contents

Table of Contents

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 (Amendment No.           )

Filed by the Registrant ý

Filed by a Party other than the Registrant o

Check the appropriate box:

o

 

Preliminary Proxy Statement

o

 

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

ý

 

Definitive Proxy Statement

o

 

Definitive Additional Materials

o

 

Soliciting Material under §240.14a-12

 

SKYWORKS SOLUTIONS, INC.
(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

ý

 

No fee required.

o

 

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

 

 

(1)

 

Title of each class of securities to which transaction applies:
  
    (2)   Aggregate number of securities to which transaction applies:
  
    (3)   Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
  
    (4)   Proposed maximum aggregate value of transaction:
  
    (5)   Total fee paid:
  

o

 

Fee paid previously with preliminary materials.

o

 

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

 

(1)

 

Amount Previously Paid:
  
    (2)   Form, Schedule or Registration Statement No.:
  
    (3)   Filing Party:
  
    (4)   Date Filed:
  

 


Table of Contents

GRAPHIC


Table of Contents

LOGO

NOTICE OF 2021 ANNUAL MEETING OF STOCKHOLDERS

GRAPHIC   GRAPHIC   GRAPHIC

Date and Time

 

Location

 

Record Date

May 12, 2021
11:00 a.m. PDT

 

www.virtualshareholdermeeting.com/
SWKS2021

 

March 18, 2021

Items of Business

1.
To elect eight individuals nominated to serve as directors of the Company with terms expiring at the 2022 Annual Meeting of Stockholders and named in the Proxy Statement;

2.
To ratify the selection by the Company's Audit Committee of KPMG LLP as the independent registered public accounting firm for the Company for fiscal year 2021;

3.
To approve, on an advisory basis, the compensation of the Company's named executive officers;

4.
To approve the Company's Amended and Restated 2015 Long-Term Incentive Plan;

5.
To consider one stockholder proposal, if properly presented at the Annual Meeting; and

6.
To transact such other business as may properly come before the Annual Meeting.
Your Vote is Important.

To ensure your representation at the Annual Meeting, please submit your proxy or voting instructions as soon as possible by using any of the following methods, as described in greater detail on your proxy card or voter instruction form.

LOGO   LOGO   LOGO

Internet

 

Phone

 

Mail

The accompanying Proxy Statement includes further information about how to attend the Annual Meeting online,
vote your shares online during the Annual Meeting, and submit questions online during the Annual Meeting.
A complete list of registered stockholders will be available for examination during the Annual Meeting at
www.virtualshareholdermeeting.com/SWKS2021.

By Order of the Board of Directors,

SIGNATURE

Robert J. Terry
Senior Vice President, General Counsel and Secretary
Irvine, California • March 26, 2021


Table of Contents

LOGO

PROXY STATEMENT 2021


Table of Contents


PROXY STATEMENT 2021

Table of Contents

Proxy Statement Summary     1  


General Information


 


 


2


 


Proposal 1: Election of Directors


 


 


8


 


Nominees for Election


 

 


10

 


Corporate Governance


 

 


14

 


Committees of the Board of Directors


 

 


18

 


Role of the Board of Directors in Risk Oversight


 

 


22

 


Compensation Committee Interlocks and Insider Participation


 

 


23

 


Certain Relationships and Related Person Transactions


 

 


23

 


Proposal 2: Ratification of Independent Registered Public Accounting Firm


 


 


24


 


Audit Fees


 

 


25

 


Report of the Audit Committee


 


 


26


 


Proposal 3: Advisory Vote on the Compensation of Our Named Executive Officers ("Say-on-Pay" Vote)


 


 


27


 


Information About Executive and Director Compensation


 


 


28


 


Summary and Highlights


 

 


28

 

Compensation Discussion and Analysis

    31  


Compensation Tables for Named Executive Officers


 

 


44

 


Director Compensation


 

 


56

 


Compensation Committee Report


 


 


58


 


Proposal 4: Approval of the Company's Amended and Restated 2015 Long-Term Incentive Plan


 


 


59


 


Description of the Amended and Restated Plan


 

 


63

 


Plan Benefits


 

 


71

 


Equity Compensation Plan Information


 

 


72

 


Proposal 5: Stockholder Proposal Regarding Simple Majority Voting


 


 


73


 


Statement by the Board of Directors on the Stockholder Proposal


 

 


74

 


Security Ownership of Certain Beneficial Owners and Management


 


 


75


 


Other Proposed Action


 


 


77


 


Other Matters


 


 


77


 


Appendix A: Unaudited Reconciliations of Non-GAAP Financial Measures


 


 


79


 


Discussion Regarding the Use of Non-GAAP Financial Measures


 

 


80

 

Table of Contents

LOGO


PROXY STATEMENT SUMMARY

This summary highlights information generally contained elsewhere in this Proxy Statement. This summary does not contain all of the information that you should consider in advance of the 2021 Annual Meeting of Stockholders, and we encourage you to read the entire Proxy Statement before voting your shares.

2021 Annual Meeting of Stockholders
GRAPHIC   GRAPHIC   GRAPHIC

Date and Time

 

Location

 

Record Date

May 12, 2021
11:00 a.m. PDT

 

www.virtualshareholdermeeting.com/SWKS2021

 

March 18, 2021

Matters to be Voted Upon

Your vote is very important to us. Please cast your vote on all of the proposals to ensure that your shares are represented.

Proposal
Required Vote
for Approval




Board
Recommendation


See
Page
1.   Election of Directors   For each director,
majority of votes cast

 
FOR Each Nominee   GRAPHIC   8
2.   Ratification of Appointment
of KPMG LLP
  Majority of votes present and
entitled to vote
    FOR   GRAPHIC   24
3.   Advisory Vote to Approve Compensation of
Named Executive Officers

 
Majority of votes present and
entitled to vote

 
FOR   GRAPHIC   27
4.   Approve Amended and Restated 2015 Long-
Term Incentive Plan
  Majority of votes present and
entitled to vote
    FOR   GRAPHIC   59
5.   One stockholder proposal, if properly
presented at the Annual Meeting

 
Majority of votes present and
entitled to vote

 
Neutral   GRAPHIC   73

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GENERAL INFORMATION

Q.  How do we refer to Skyworks in this Proxy Statement?

    The terms "Skyworks," "the Company," "we," "us," and "our" refer to Skyworks Solutions, Inc., a Delaware corporation, and its consolidated subsidiaries.

Q.  When and where is our Annual Meeting?

    The Annual Meeting will be held on Wednesday, May 12, 2021, at 11:00 a.m. Pacific Daylight Time. The Annual Meeting will be held in a virtual format. You will be able to attend and participate in the Annual Meeting online by visiting www.virtualshareholdermeeting.com/SWKS2021. We believe that hosting a virtual meeting will facilitate stockholder attendance and participation at our Annual Meeting by enabling stockholders to participate remotely from any location around the world. We have designed the virtual Annual Meeting to provide the same rights and opportunities to participate as stockholders would have at an in-person meeting, including the right to vote and ask questions through the virtual meeting platform.

Q.  What is the purpose of the Annual Meeting?

    At the Annual Meeting, stockholders will consider and vote on the following matters:

    Proposal 1:    The election of the eight nominees named in this Proxy Statement to our Board of Directors to serve until the 2022 Annual Meeting of Stockholders.
    Proposal 2:    The ratification of the selection of KPMG LLP as our independent registered public accounting firm for the fiscal year ending October 1, 2021 ("fiscal year 2021").
    Proposal 3:    The approval, on a non-binding basis, of the compensation of our Named Executive Officers, as described below under

      "Compensation Discussion and Analysis," and in the executive compensation tables and accompanying narrative disclosures in this Proxy Statement.

    Proposal 4:    The approval of the Company's Amended and Restated 2015 Long-Term Incentive Plan.
    Proposal 5:    A non-binding stockholder proposal regarding supermajority voting provisions, if properly presented at the Annual Meeting.

    The stockholders will also act on any other business that may properly come before the meeting.

Q.  What is included in our proxy materials?

    The Company's Annual Report, which includes financial statements and "Management's Discussion and Analysis of Financial Condition and Results of Operation" for the fiscal year ended October 2, 2020 ("fiscal year 2020"), accompanies this Proxy Statement. This Proxy Statement and form of proxy, and/or notice of access thereto, are being first mailed to stockholders on or about March 26, 2021. The Proxy Statement and the Company's Annual Report are available at www.skyworksinc.com/annualreport.

Q.  Who can vote at our Annual Meeting?

    Only stockholders of record at the close of business on March 18, 2021 (the "Record Date"), are entitled to notice of and to vote at the Annual Meeting. As of the Record Date, there were 165,088,091 shares of Skyworks' common stock issued and outstanding. Pursuant to Skyworks' Restated Certificate of Incorporation and By-laws, and applicable Delaware law, each share of common stock entitles the holder of record at the close of business on the Record Date to one vote on each matter considered at the Annual Meeting.

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Q.  Is my vote important?

    Yes. Your vote is important no matter how many shares you own. Please take the time to vote in the way that is easiest and most convenient for you, and cast your vote as soon as possible.

Q.  How do I vote if I am a stockholder of record?

    As a stockholder of record, you may vote in one of the following three ways whether or not you plan to attend the Annual Meeting online: (a) by completing and submitting your proxy via the Internet at the website address listed on the proxy card, (b) by completing and submitting your proxy using the toll-free telephone number listed on the proxy card, or (c) by completing, signing, and dating the proxy card and returning it in the postage-prepaid envelope provided for that purpose. If you attend the Annual Meeting online, you may vote online at the Annual Meeting even if you have previously submitted your proxy by mail or telephone, or via the Internet (and your vote at the Annual Meeting will automatically revoke your previously submitted proxy, although mere virtual attendance at the meeting without voting will not have that result).

Q.  How do I vote if I am a beneficial owner of shares held in "street name"?

    If your shares are held on your behalf by a third party such as your broker or another person or entity who holds shares of the Company on your behalf and for your benefit, which person or entity we refer to as a "nominee," and your broker (or other nominee) is the stockholder of record of such shares, then you are the beneficial owner of such shares and we refer to those shares as being held in "street name." As the beneficial owner of your "street name" shares, you are entitled to instruct your broker (or other nominee) as to how to vote your shares. Your broker (or other nominee) will provide you with information

    regarding how to instruct your broker (or other nominee) as to the voting of your "street name" shares.

Q.  How do I vote if I am a participant in the Skyworks 401(k) Savings and Investment Plan?

    If you are a participant in the Skyworks 401(k) Savings and Investment Plan (the "401(k) Plan"), you will receive an instruction card for the Skyworks shares you own through the 401(k) Plan. That instruction card will serve as a voting instruction card for the trustee of the 401(k) Plan, and your 401(k) Plan shares will be voted as you instruct.

Q.  Can I change my vote after I have voted?

    Any proxy given pursuant to this solicitation may be revoked by the person giving it at any time before it is voted at the Annual Meeting. Proxies may be revoked by (a) delivering to the Secretary of the Company, before the taking of the vote at the Annual Meeting, a written notice of revocation bearing a later date than the proxy, (b) duly completing a later-dated proxy relating to the same shares and delivering it to the Secretary of the Company before the taking of the vote at the Annual Meeting, or (c) attending the Annual Meeting online and voting (although virtual attendance at the Annual Meeting will not in and of itself constitute a revocation of a proxy). Any written notice of revocation or subsequent proxy should be delivered to the Company's executive offices at Skyworks Solutions, Inc., 5260 California Avenue, Irvine, CA 92617, Attention: Secretary, before the taking of the vote at the Annual Meeting. If you vote your shares over the Internet prior to the Annual Meeting, only your latest Internet vote submitted prior to the Annual Meeting will be counted at the Annual Meeting.

Q.  How do I virtually attend the Annual Meeting?

    You are invited to attend the Annual Meeting online by visiting www.virtualshareholdermeeting.com/SWKS2021,

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    where you will be able to listen to the meeting live, submit questions, and vote. The meeting will begin at 11:00 a.m. Pacific Daylight Time. In order to participate in the meeting, you will need the multi-digit number included in your proxy card, voter instruction form, or notice. Instructions on how to attend and participate online, including how to demonstrate proof of stock ownership, will be posted at www.virtualshareholdermeeting.com/SWKS2021.

    Online check-in will begin at 10:45 a.m. Pacific Daylight Time on May 12, 2021, and you should allow ample time for the online check-in proceedings. We will have technicians standing by and ready to assist you with any technical difficulties you may have accessing the virtual meeting starting at 10:45 a.m. Pacific Daylight Time on May 12, 2021. If you encounter any difficulties accessing the virtual meeting during the check-in time or meeting time, please call the phone number that will be listed at that time at www.virtualshareholdermeeting.com/SWKS2021.

Q.  If I vote by proxy, how will my vote be cast?

    The persons named as attorneys-in-fact in this Proxy Statement, Liam K. Griffin and Robert J. Terry, were selected by the Board of Directors and are officers of the Company. As attorneys-in-fact, Messrs. Griffin and Terry will vote any shares represented at the meeting by proxy. Each executed proxy card returned by a stockholder of record or proxy vote recorded via telephone or the Internet by a stockholder of record in the manner provided on the proxy card prior to the taking of the vote at the Annual Meeting will be voted. Where a choice has been specified in an executed proxy

    with respect to the matters to be acted upon at the Annual Meeting, the shares represented by the proxy will be voted in accordance with the choices specified.

Q.  How will my shares be voted if I do not give specific voting instructions when I deliver my proxy?

    If you are a stockholder of record and deliver a proxy but do not give specific voting instructions, then the proxy holders will vote your shares as recommended by the Board of Directors.

    If your shares are held in "street name," your broker (or other nominee) is required to vote those shares in accordance with your instructions. If you do not give instructions to your broker (or other nominee), your broker (or other nominee) will only be entitled to vote your shares with respect to "discretionary" matters, as described below, but will not be permitted to vote the shares with respect to "non-discretionary" matters. If you beneficially own shares that are held in "street name" by your broker (or other nominee), we strongly encourage you to provide instructions to your broker (or other nominee) as to how to vote on the election of directors and all of the Proposals by signing, dating, and returning to your broker (or other nominee) the instruction card provided by your broker (or other nominee).

    If you are a participant in the 401(k) Plan, the trustee of the 401(k) Plan will not vote your 401(k) Plan shares if the trustee does not receive voting instructions from you by 11:59 p.m. Eastern Daylight Time on May 7, 2021, unless otherwise required by law.

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Q.  What is a "broker non-vote"?

    A "broker non-vote" occurs when your broker (or other nominee) submits a proxy for your shares (because the broker (or other nominee) has either received instructions from you on one or more proposals, but not all, or has not received instructions from you but is entitled to vote on a particular "discretionary" matter) but does not indicate a vote "FOR" a particular proposal because the broker (or other nominee) either does not have authority to vote on that proposal and has not received voting instructions from you or has "discretionary" authority on the proposal but chooses not to exercise it. "Broker non-votes" are not counted to determine the number of votes present for the particular proposal, nor are they counted as votes "FOR" or "AGAINST" the proposal in question or as abstentions. We count "broker non-votes" for the purpose of determining a quorum for the Annual Meeting. If your shares are held in "street name" by your broker (or other nominee), please check the instruction card provided by your broker (or other nominee) or contact your broker (or other nominee) to determine whether you will be able to vote by telephone or via the Internet.

Q.  What vote is required for each matter?

    Election of Directors.    Pursuant to the Company's By-laws, a nominee will be elected to the Board of Directors if the votes cast "FOR" the nominee's election at the Annual Meeting exceed the votes cast "AGAINST" the nominee's election (as long as the only director nominees are those individuals set forth in this Proxy Statement). Abstentions and "broker non-votes" will not count as votes "FOR" or "AGAINST." If the shares you own are held in "street name," your broker (or other nominee), as the record holder of your shares, is required to vote your shares according to your instructions. Proposal 1 is not considered to be a "discretionary" matter for certain brokers. If you


do not instruct your broker how to vote with respect to this item, your broker may not vote your shares with respect to the election of directors. In such case, a "broker non-vote" may occur, which will have no effect on the outcome of Proposal 1.


Ratification of Independent Registered Public Accounting Firm.    The affirmative vote of a majority of the shares present, or represented by proxy, at the Annual Meeting, and entitled to vote on such matter at the Annual Meeting, is required to approve Proposal 2. Proposal 2 involves a matter on which a broker (or other nominee) does have "discretionary" authority to vote. If you do not instruct your broker how to vote with respect to this item, your broker may still vote your shares with respect to this proposal in its discretion. With respect to Proposal 2, a vote of "ABSTAIN" will have the same effect as a vote of "AGAINST."


Say-on-Pay Vote; Approval of Amended and Restated 2015 Long-Term Incentive Plan; Stockholder Proposal.    The affirmative vote of a majority of the shares present online, or represented by proxy at the Annual Meeting, and entitled to vote on such matter at the Annual Meeting, is required to approve Proposals 3, 4, and 5. Proposals 3, 4, and 5 are not considered to be "discretionary" matters for certain brokers. If you do not instruct your broker how to vote with respect to these items, your broker may not vote your shares with respect to these proposals. In such case, a "broker non-vote" may occur, which will have no effect on the outcome of Proposals 3, 4, and 5. Votes that are marked "ABSTAIN" are counted as present and entitled to vote with respect to Proposals 3, 4, and 5 and will have the same impact as a vote that is marked "AGAINST" for purposes of Proposals 3, 4, and 5.

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Q.  How does the Board of Directors recommend that I vote?

    The Board of Directors recommends that you vote:

    FOR the election of each of the eight director nominees (Proposal 1).

    FOR the ratification of the selection of KPMG LLP as our independent registered public accounting firm for fiscal year 2021 (Proposal 2).

    FOR the approval, on a non-binding basis, of the compensation of our Named Executive Officers, as described below under "Compensation Discussion and Analysis," and in the executive compensation tables and accompanying narrative disclosures (Proposal 3).

    FOR the approval of the Company's Amended and Restated 2015 Long-Term Incentive Plan (Proposal 4).

    The Board of Directors makes no recommendation regarding how you vote on the approval, on a non-binding basis, of a stockholder proposal regarding supermajority voting provisions (Proposal 5).

Q.  How will the votes cast at our Annual Meeting be counted?

    Broadridge Financial Solutions, Inc., and our independent inspector of elections will tabulate the votes at the Annual Meeting. The vote on each matter submitted to stockholders will be tabulated separately.

Q.  Where can I find the voting results of our Annual Meeting?

    We expect to announce the preliminary voting results at our Annual Meeting. The final voting results will be reported in a Current Report on Form 8-K that will be filed with the Securities and Exchange Commission (the "SEC") within four business days after the end of our Annual Meeting and will be posted on our website.

Q.  Will my vote be kept confidential?

    Yes. We will keep your vote confidential unless (1) we are required by law to disclose your vote (including in connection with the pursuit or defense of a legal or administrative action or proceeding), or (2) there is a contested election for the Board of Directors. The inspector of elections will forward any written comments that you make on the proxy card to management without providing your name, unless you expressly request on your proxy card that your name be disclosed.

Q.  What is the quorum requirement for our Annual Meeting?

    The holders of a majority of the issued and outstanding stock of the Company present either in person or by proxy at the Annual Meeting constitute a quorum for the transaction of business at the Annual Meeting. Shares present virtually during the Annual Meeting will be considered shares of common stock represented in person at the meeting. Shares that abstain from voting on any proposal and "broker non-votes" will be counted as shares that are present for purposes of determining whether a quorum exists at the Annual Meeting. If a "broker non-vote" occurs with respect to any shares of the Company's common stock on any matter, then those shares will be treated as not present and not entitled to vote with respect to that matter (even though those shares are considered entitled to vote for purposes of determining whether a quorum exists because they are entitled to vote on other matters) and will not be voted.

Q.  How do I submit a question at the Annual Meeting?

    If you wish to submit a question, beginning at 10:45 a.m. Pacific Daylight Time on May 12, 2021, you may log into the virtual meeting platform at www.virtualshareholdermeeting.com/SWKS2021, type your question into the "Submit a Question" field, and click "Submit." Our virtual meeting will

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    be governed by our Annual Meeting Rules of Conduct which will include rules on permissible topics for stockholder questions and will be posted at www.virtualshareholdermeeting.com/SWKS2021. Questions received from stockholders during the virtual Annual Meeting that are deemed appropriate under our Annual Meeting Rules of Conduct will be posted, along with the Company's responses, on the Investor Relations portion of the Company's website at www.skyworksinc.com as soon as practicable following the Annual Meeting.

Q.  When will Skyworks next hold an advisory vote on the frequency of "say-on-pay" votes?

    Skyworks currently conducts an annual "say-on-pay" vote. The next advisory vote on the frequency of "say-on-pay" votes is expected to be held at our 2023 Annual Meeting of Stockholders.

Q.  What is "householding"?

    Some brokers (or other nominees) may be participating in the practice of "householding" proxy statements and annual reports. This means that only one copy of this Proxy Statement and our Annual Report may have been sent to multiple stockholders in your household. If you are a stockholder and your household or address has received only one Annual Report and one Proxy Statement, the Company will promptly deliver a


separate copy of the Annual Report and the Proxy Statement to you, upon your written request to Skyworks Solutions, Inc., 5260 California Avenue, Irvine, CA 92617, Attention: Investor Relations, or oral request to Investor Relations at (949) 231-3433. If you would like to receive separate copies of our Annual Report and Proxy Statement in the future, you should direct such request to your broker (or other nominee). Even if your household or address has received only one Annual Report and one Proxy Statement, a separate proxy card should have been provided for each stockholder account. Each individual proxy card should be signed, dated, and returned in the postage-prepaid envelope (or completed and submitted by telephone or via the Internet, as described on the proxy card). If your household has received multiple copies of our Annual Report and Proxy Statement, you can request the delivery of single copies in the future by contacting your broker (or other nominee), or the Company at the address or telephone number above.

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PROPOSAL 1:

ELECTION OF DIRECTORS

Under this Proposal 1, you are being asked to consider eight nominees for election to our Board of Directors to serve until the 2022 Annual Meeting of Stockholders and until their successors are elected and qualified or until their earlier resignation or removal. Each nominee for election has agreed to serve if elected, and the Board of Directors knows of no reason why any nominee should be unable or unwilling to serve. If a nominee is unable or unwilling to serve, the attorneys-in-fact named in this Proxy Statement will vote any shares represented at the meeting by proxy for the election of another individual nominated by the Board of Directors, if any. No nominee or executive officer is related by blood, marriage, or adoption to any other director, nominee, or executive officer. No arrangements or understandings exist between any director or person nominated for election as a director and any other

person pursuant to which such person is to be selected as a director or nominee for election as a director.

David J. Aldrich, age 64, the current Chairman of the Board, has served as a director since 2000 and is not a director nominee up for reelection at the Annual Meeting. As a result, the number of directors constituting the Board of Directors will be reduced from nine (9) to eight (8) effective upon the election of directors at the Annual Meeting. Proxies cannot be voted for a greater number of individuals than the number of nominees named in this Proxy Statement.

The following table lists the eight nominees for election as directors, the year such nominees were first elected as directors of the Company, and their Board committee memberships as of March 18, 2021. The table also lists the number of meetings held by each committee during fiscal year 2020.

  Director
  Committee Memberships
         

Name

  Since   Independent
AC
CC
NCGC

Alan S. Batey

  2019   ·       ·

Kevin L. Beebe

  2004   ·           C

Timothy R. Furey

  1998   ·   ·     ·

Liam K. Griffin

  2016                

Christine King

  2014   ·   ·   C  

David P. McGlade

  2005   ·   C   ·    

Robert A. Schriesheim

  2006   ·   ·   ·  

Kimberly S. Stevenson

  2018   ·           ·

Number of Meetings

          7   5   3

"AC" indicates Audit Committee, "CC" indicates Compensation Committee, "NCGC" indicates Nominating and Corporate Governance Committee, and "C" indicates Committee Chair

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Immediately below this proposal is biographical information about each of the director nominees, including information regarding each nominee's business experience for the past five years, and the names of other public companies for which each nominee has served as a director during the past five years. In addition to the information presented below regarding each nominee's specific experience, qualifications, attributes, and skills that led our Nominating and Corporate Governance Committee and our Board of Directors to conclude that he or she should serve as a director, we also believe that each of our directors has a reputation for integrity, honesty, and adherence to high ethical standards. They have each demonstrated business acumen, an ability to exercise sound judgment, knowledge of our business and industry, and the willingness to devote the time needed to be an effective director.

Majority Vote Standard for Election of Directors

A nominee for election as a director in an uncontested election (an election where the number of nominees for election as directors is equal to or less than the number of directors to be elected) will be elected if the number of votes cast "FOR" such nominee's election exceeds the number of votes cast "AGAINST" the nominee's election. In a contested election (in which the number of nominees for election as directors exceeds the number of directors to be elected at such meeting), directors are elected by a plurality of all votes cast in such election. The election of directors

at this Annual Meeting is uncontested. As a result, each nominee for election as a director at the Annual Meeting will only be elected if the votes cast "FOR" such nominee exceed the number of votes cast "AGAINST" such nominee. As required by our corporate governance guidelines, which are available on the Investor Relations portion of the Company's website at www.skyworksinc.com, each incumbent director who is a nominee for election as a director at the Annual Meeting submitted to the Board of Directors an irrevocable resignation that would become effective if the votes cast "FOR" such nominee's election do not exceed the votes cast "AGAINST" such nominee's election and our Board of Directors determines to accept his or her resignation. Upon such resignation by a nominee and pursuant to the procedures set forth in the corporate governance guidelines, the Nominating and Corporate Governance Committee will evaluate the best interests of our Company and stockholders and will recommend to our Board of Directors the action to be taken with respect to the resignation. The Board of Directors will then decide whether to accept, reject, or modify the Nominating and Corporate Governance Committee's recommendation, and the Company will publicly disclose such decision by the Board of Directors with respect to the director nominee.

Shares represented by all proxies received by the Board of Directors that are properly completed, but do not specify a choice as to the election of directors, will be voted "FOR" the election of all eight of the nominees.

GRAPHIC

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Nominees for Election

Christine King, Lead Independent Director

  Director since: 2014 • Age: 71

Ms. King has been Lead Independent Director since 2019. She served as Executive Chairman of QLogic Corporation (a publicly traded developer of high-performance server and storage networking connectivity products) from August 2015 until August 2016, when it was acquired by Cavium, Inc. Previously, she served as Chief Executive Officer of Standard Microsystems Corporation (a publicly traded developer of silicon-based integrated circuits utilizing analog and mixed-signal technologies) from 2008 until the company's acquisition in 2012 by Microchip Technology, Inc. Prior to Standard Microsystems, Ms. King was Chief Executive Officer of AMI Semiconductor, Inc., a publicly traded company, from 2001 until it was acquired by ON Semiconductor Corp. in 2008.

Qualifications:  We believe that Ms. King's qualifications to serve as a director include her extensive management and operational experience in the high-tech and semiconductor industries as well as her significant strategic and financial expertise.

 
Committee(s)

Audit

Compensation (Chair)

Other Public Company Boards

Current

IDACORP,  Inc.

Allegro MicroSystems, Inc.

Past 5 Years

Cirrus Logic, Inc. (until 2018)

QLogic Corporation
(until 2016)


    

 

 

Liam K. Griffin, President and Chief Executive Officer

  Director since: 2016 • Age: 54

Prior to his appointment as Chief Executive Officer and to the Board of Directors in May 2016, Mr. Griffin had served as President of the Company since May 2014. He served as Executive Vice President and Corporate General Manager from November 2012 to May 2014, Executive Vice President and General Manager, High Performance Analog from May 2011 to November 2012, and Senior Vice President, Sales and Marketing from August 2001 to May 2011. Previously, Mr. Griffin was employed by Vectron International, a division of Dover Corp., as Vice President of Worldwide Sales from 1997 to 2001 and as Vice President of North American Sales from 1995 to 1997.

Qualifications:  We believe that Mr. Griffin's qualifications to serve as a director include his strong relationships with Skyworks' key customers, investors, employees, and other stakeholders, as well as a deep understanding of the semiconductor industry and its competitive landscape gained through serving in several different executive positions at Skyworks.

 
Committee(s)

None

Other Public Company Boards

Current

National Instruments Corporation

Past 5 Years

Vicor Corporation (until 2019)


    

 

 

Alan S. Batey

  Director since: 2019 • Age: 58

Mr. Batey served as Executive Vice President and President of North America for General Motors Company (a publicly traded automotive manufacturer), as well as the Global Brand Chief for Chevrolet, a division of General Motors Company, from 2014 until 2019. His career spans more than 39 years with General Motors where he held various senior management positions in operations, marketing, and sales around the world.

Qualifications:  We believe that Mr. Batey's qualifications to serve as a director include his extensive senior management experience at General Motors, where he developed expertise on a broad set of complex strategic, operational, and technological matters involving the automotive industry, an industry that is expected to be a growth market for the Company.

 
Committee(s)

Nominating and Corporate Governance

Other Public Company Boards

Current

None

Past 5 Years

None

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Kevin L. Beebe

  Director since: 2004 • Age: 62

Mr. Beebe has been President and Chief Executive Officer of 2BPartners, LLC (a partnership that provides strategic, financial, and operational advice to private equity investors and management) since 2007. In 2014, Mr. Beebe became a founding partner of Astra Capital Management (a private equity firm based in Washington, D.C.). Previously, beginning in 1998, he was Group President of Operations at ALLTEL Corporation (a telecommunications services company).

Qualifications:  We believe that Mr. Beebe's qualifications to serve as a director include his two decades of experience as an operating executive in the wireless telecommunications industry as well as his experience and relationships gained from advising leading private equity firms that are transacting business in the global capital markets.

 
Committee(s)

Nominating and Corporate Governance (Chair)

Other Public Company Boards

Current

SBA Communications Corporation

Frontier Communications Corporation

Altimar Acquisition Corporation

Altimar Acquisition Corp. II

Past 5 Years

NII Holdings, Inc. (until 2019)


    

 

 

Timothy R. Furey

  Director since: 1998 • Age: 62

Mr. Furey has been Chief Executive Officer of Integrated Smart Solutions (a provider of cloud-based IoT data analytics and energy management services for global commercial real estate investors and property management firms) since 2020. He also serves as Chairman of the Board of MarketBridge (a provider of digital marketing and predictive analytics solutions for enterprise technology, financial services, and consumer media companies). Mr. Furey founded MarketBridge and served as its Chief Executive Officer from 2000 to 2020. He is also Managing Partner of Decision Technology Group (an advisor and investor in data-driven technology startups).

Qualifications:  We believe that Mr. Furey's qualifications to serve as a director include his experience as Chief Executive Officer of MarketBridge, as well as his engagements with MarketBridge's clients (many of which are Fortune 1000 companies), which provide him with a broad range of knowledge regarding business operations and growth strategies.

 
Committee(s)

Audit

Nominating and Corporate Governance

Other Public Company Boards

Current

None

Past 5 Years

None


    

 

 

David P. McGlade

  Director since: 2005 • Age: 60

Mr. McGlade serves as Chairman of the Board of Intelsat S.A. (a publicly traded worldwide provider of satellite communication services), a position he has held since April 2013. Mr. McGlade served as Executive Chairman of Intelsat from April 2015 to March 2018, prior to which he served as Chairman and Chief Executive Officer. Mr. McGlade joined Intelsat in April 2005 and was the Deputy Chairman of Intelsat from August 2008 until April 2013. Previously, Mr. McGlade served as an Executive Director of mmO2 PLC and as the Chief Executive Officer of O2 UK (a subsidiary of mmO2), a position he held from October 2000 until March 2005.

Qualifications:  We believe that Mr. McGlade's qualifications to serve as a director include his significant operational, strategic, and financial acumen, as well as his knowledge about global capital markets, developed over more than three decades of experience in the telecommunications business.

 
Committee(s)

Audit (Chair)

Compensation

Other Public Company Boards

Current

Intelsat S.A.

Past 5 Years

None

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Robert A. Schriesheim

  Director since: 2006 • Age: 60

Mr. Schriesheim currently serves as chairman of Truax Partners LLC (a consulting firm). He served as Executive Vice President and Chief Financial Officer of Sears Holdings Corporation (a publicly traded nationwide retailer) from August 2011 to October 2016. From January 2010 to October 2010, Mr. Schriesheim was Chief Financial Officer of Hewitt Associates, Inc. (a global human resources consulting and outsourcing company that was acquired by Aon Corporation). From October 2006 until December 2009, he was the Executive Vice President and Chief Financial Officer of Lawson Software, Inc. (a publicly traded ERP software provider).

Qualifications:  We believe that Mr. Schriesheim's qualifications to serve as a director include his extensive knowledge of the capital markets and corporate financial capital structures, his expertise evaluating and structuring merger and acquisition transactions within the technology sector, and his experience gained through leading companies through major strategic and financial corporate transformations.

 
Committee(s)

Audit

Compensation

Other Public Company Boards

Current

Frontier Communications Corporation

Houlihan Lokey, Inc.

Past 5 Years

Forest City Realty Trust (until 2018)

NII Holdings, Inc. (until 2019)


    

 

 

Kimberly S. Stevenson

  Director since: 2018 • Age: 58

In January 2020, Ms. Stevenson became Senior Vice President and General Manager, Foundational Data Services Business Unit, at NetApp, Inc. (a publicly traded provider of cloud data services). From February 2019 to January 2020, she was a venture partner at RIDGE-LANE Limited Partners (a strategic advisory and venture development firm). Previously, Ms. Stevenson served as Senior Vice President and General Manager, Data Center Products and Solutions, at Lenovo Group Ltd. (a publicly traded manufacturer of personal computers, data center equipment, smartphones, and tablets) from May 2017 to October 2018. From September 2009 to February 2017, she served as a Corporate Vice President at Intel Corporation (a publicly traded semiconductor designer and manufacturer), holding various positions including Chief Operating Officer for the Client and Internet of Things Businesses and Systems Architecture Group from September 2016 to February 2017, Chief Information Officer from February 2012 to August 2016, and General Manager, IT Operations and Services, from September 2009 to January 2012.

Qualifications:  We believe that Ms. Stevenson's qualifications to serve as a director include her extensive senior management experience in the semiconductor and technology industries and her expertise on best practices within information systems and operational risk management.

 
Committee(s)

Nominating and Corporate Governance

Other Public Company Boards

Current

Boston Private Financial Holdings, Inc.

Mitek Systems, Inc.

Past 5 Years

None

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The table below summarizes the key qualifications and attributes relied upon by the Board of Directors in nominating eight of our current directors for election. Marks indicate specific areas of focus or expertise

relied on by the Board of Directors. The lack of a mark in a particular area does not necessarily signify a director's lack of qualification or experience in such area.

GRAPHIC

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Corporate Governance

Highlights

The Company has a proven track record of sound and effective corporate governance practices and policies, including those highlighted below.

Corporate Governance Best Practices
Annually Elected Directors   All of our directors are elected annually
Majority Vote Standard   In uncontested elections, directors are elected by a majority of votes cast
Lead Independent Director   Initially established in 2014, the Lead Independent Director role has a robust set of duties set forth in our corporate governance guidelines
Executive Sessions   Our independent directors regularly meet in executive sessions without management, with the Lead Independent Director presiding
Independent Board Committees   All members of the Board's three standing committees are independent directors
Board Refreshment   Our Board has added three new directors in the past six years
Risk Assessment   Our Board and its committees regularly review management's processes for identifying, assessing, and managing risks
Annual Board Assessment   The Nominating and Corporate Governance Committee oversees an annual evaluation of the effectiveness of the Board, each committee, and individual directors
Executive Succession Plan   The Board periodically reviews and approves the executive succession plan in consultation with the Compensation Committee and the Chief Executive Officer
No "Poison Pill"   The Board has not adopted a "poison pill"
Stock Ownership Requirements   All directors and executive officers are subject to robust stock ownership requirements
Prohibition on Pledging   We prohibit our directors and employees from pledging Company securities
Special Meeting Right   Our stockholders have the right to call a special meeting of the Company's stockholders
Proxy Access   Eligible stockholders may nominate their own director nominees to be included in the Company's proxy materials
Stockholder Engagement   We regularly conduct outreach to our stockholders to understand their perspectives on governance matters

Board of Director Meetings

The Board of Directors met six (6) times during fiscal year 2020. During fiscal year 2020, each director attended at least 75% of the aggregate of the total number of meetings of the Board of Directors and the total number of meetings held by all committees of the Board of Directors on which he or she served. The Company's policy with respect to directors' attendance

at the Annual Meeting is included in our corporate governance guidelines, which are available on the Investor Relations portion of the Company's website at www.skyworksinc.com. At the 2020 Annual Meeting, each director then in office was in attendance.

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Director Independence

Each year, the Board of Directors reviews the relationships that each director has with the Company and with other parties. Only those directors who do not have any of the categorical relationships that preclude them from being independent within the meaning of the applicable Listing Rules of the Nasdaq Stock Market LLC (the "Nasdaq Rules") and who the Board of Directors affirmatively determines have no relationships that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director, are considered to be independent directors. The Board of Directors has reviewed a number of factors to evaluate the independence of each of its members. These factors include its members' current and historic relationships with the Company and its competitors, suppliers, and customers; their relationships with management and other directors; the relationships their current and former employers have with the Company; and the relationships between the Company and other companies of which a member of the Company's Board of Directors is a director or executive officer. After evaluating these factors, the Board of Directors has determined that a majority of the members of the Board of Directors, namely, Alan S. Batey, Kevin L. Beebe, Timothy R. Furey, Christine King, David P. McGlade, Robert A. Schriesheim, and Kimberly S. Stevenson, do not have any relationships that would interfere with the exercise of independent judgment in carrying out their responsibilities as directors and that each such director is an independent director of the Company within the meaning of applicable Nasdaq Rules.

Corporate Governance Guidelines

The Board of Directors has adopted corporate governance practices to help fulfill its responsibilities

to the stockholders in overseeing the work of management and the Company's business results. These guidelines are intended to ensure that the Board of Directors has the necessary authority and practices in place to review and evaluate the Company's business operations, as needed, and to make decisions that are independent of the Company's management. In addition, the guidelines are intended to align the interests of directors and management with those of the Company's stockholders. A copy of the Company's corporate governance guidelines is available on the Investor Relations portion of the Company's website at www.skyworksinc.com.

In accordance with these corporate governance guidelines, independent members of the Board of Directors of the Company met in executive session without management present four (4) times during fiscal year 2020. The Lead Independent Director served as presiding director for these meetings.

Code of Ethics

We have adopted a written code of business conduct and ethics that applies to our directors, officers, and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. We make available our code of business conduct and ethics free of charge through our website at www.skyworksinc.com. We intend to disclose any amendments to, or waivers from, our code of business conduct and ethics that are required to be publicly disclosed by posting any such amendment or waivers on our website pursuant to SEC requirements and Nasdaq Rules.

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Executive Officer and Director Stock Ownership Requirements

As described in detail below under "Compensation Discussion and Analysis," we have adopted Executive Officer and Director Stock Ownership programs that require our executive officers (including those Named Executive Officers who are still currently serving as executive officers) and non-employee directors to hold a significant equity interest in Skyworks with the objective of more closely aligning the interests of our executive officers and directors with those of our stockholders. All of our Named Executive Officers and directors have met the stock ownership guidelines as of the date hereof (with the exception of Mr. Batey, who is not required to comply with the guidelines until the fifth anniversary of his appointment to the Board of Directors).

Board Leadership Structure

Our Board of Directors selects the Company's Chairman of the Board and Chief Executive Officer in the manner it determines to be in the best interests of the Company at the time. Our current Chairman of the Board, Mr. Aldrich, the former Chief Executive Officer of the Company, has served as the Chairman of the Board since May 2014. Our current Chief Executive Officer, Mr. Griffin, was appointed by our Board of Directors in May 2016 to succeed Mr. Aldrich as Chief Executive Officer and also to serve as a director. In May 2014, at the time of Mr. Aldrich's appointment as Chairman of the Board, our Board of Directors also first appointed an independent director within the meaning of applicable Nasdaq Rules (see above under "Director Independence") to serve as the Lead Independent Director. Ms. King was appointed in May 2019 to be the current Lead Independent Director.

The duties of the Lead Independent Director, as set forth in our corporate governance guidelines, include the following:

presiding at all meetings of the Board of Directors at which the Chairman of the Board is not present, including executive sessions of the independent directors;
calling meetings of the independent directors, as he or she deems appropriate, and assuring that the independent directors meet independently at least twice each year;
providing leadership to the Board of Directors if circumstances arise in which the Chairman of the Board may be, or may be perceived to be, in conflict with the interests of the Company and its stockholders with regard to a particular matter;
facilitating communications and serving as a liaison, when necessary, between the independent directors and the Chairman of the Board and/or the Chief Executive Officer;
consulting with the Chairman of the Board in the preparation of the schedules, agendas, and information provided to the Board of Directors for each meeting, and ensuring that there is sufficient time at each meeting for discussion of all agenda items;
retaining independent advisors on behalf of the Board of Directors as the Board of Directors or the independent directors may deem necessary or appropriate; and
being available for consultation and direct communication upon the reasonable request of major stockholders.

The Board believes our current leadership structure is appropriate and that the duties of the Lead Independent Director appropriately and effectively complement the duties of the Chairman of the Board.

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Stockholder Engagement

Responsiveness to the Company's stockholders is a critical part of our commitment to good corporate governance. As noted in the list of best practices above, we regularly conduct outreach to our stockholders to understand their perspectives on governance matters. Most recently, we engaged in formal stockholder outreach following the 2020 Annual Meeting. We solicited feedback from approximately thirty institutional stockholders representing approximately 53% of the Company's shares outstanding. Institutions representing approximately 38% of the Company's shares outstanding, including twelve of our largest twenty stockholders, responded to our outreach. Specifically, in addition to covering compensation-related topics during our subsequent conversations, as discussed below under "Compensation Discussion and Analysis," we solicited feedback from institutional stockholders on various timely governance and disclosure topics:

When asked about the four management proposals at the 2020 Annual Meeting that would have eliminated all remaining supermajority voting provisions in our Restated Certificate of Incorporation, as amended, which we refer to as our Charter, but that had not received sufficient stockholder support, our institutional stockholders generally agreed that the Company had taken sufficient steps to remove the supermajority thresholds in our Charter. They noted that given our efforts, such thresholds did not present a significant governance concern.
Many institutional stockholders were supportive of the Company holding a virtual stockholder meeting in 2021, and several expressed a desire that public companies in general continue to hold virtual stockholder meetings in future years, based on those institutions' experience that such meetings have expanded stockholders' ability to participate.
Following questions from multiple stockholders regarding board oversight of the Company's corporate responsibility and sustainability, our Board of Directors in February 2021 amended the Company's Nominating and Corporate Governance Committee Charter to specifically include oversight of such issues in the Nominating and Corporate Governance Committee's stewardship, reflecting existing practice.
Most of our conversations with institutional stockholders also included discussions regarding board refreshment, environmental and sustainability topics, and human capital management practices.

Our Board of Directors values the opinions expressed by our stockholders and will continue to consider the voting results from stockholder meetings, as well as feedback obtained through our stockholder engagement efforts, when making future decisions regarding corporate governance matters.

Stockholder Communications

Our stockholders may communicate directly with the Board of Directors as a whole or to individual directors by letter addressed directly to such individual or individuals at the following address:

c/o Skyworks Solutions, Inc.
5260 California Avenue
Irvine, CA 92617
Attention: Secretary

The Company will forward to each director to whom such communication is addressed, and to the Chairman of the Board in his capacity as representative of the entire Board of Directors, any mail received at the Company's corporate office to the address specified by such director and the Chairman of the Board.

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Committees of the Board of Directors

The Board of Directors has a standing Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee.

Audit Committee

We have established an Audit Committee consisting of the following individuals, each of whom the Board of Directors has determined is "independent" within the meaning of applicable Nasdaq Rules and meets the criteria for independence set forth in Rule 10A-3(b)(1) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"): Mr. McGlade (Chairman), Mr. Furey, Ms. King, and Mr. Schriesheim.

The primary responsibility of the Audit Committee is the oversight of the quality and integrity of the Company's financial statements, the Company's internal financial and accounting processes, and the independent audit process. Additionally, the Audit Committee has the responsibilities and authority necessary to comply with Rule 10A-3 under the Exchange Act. The Audit Committee meets privately with the independent registered public accounting firm, reviews their performance and independence from management, and has the sole authority to retain and dismiss the independent registered public accounting firm. These and other aspects of the Audit Committee's authority are more particularly described in the Company's Audit Committee Charter, which the Board of Directors adopted and is reviewed annually by the committee and is available on the Investor Relations portion of our website at www.skyworksinc.com.

The Audit Committee has adopted a formal policy concerning approval of audit and non-audit services to be provided to the Company by its independent registered public accounting firm, KPMG LLP. The policy requires that all services provided by KPMG LLP, including audit services and permitted audit-related and non-audit services, be preapproved

by the Audit Committee. The Audit Committee preapproved all audit and non-audit services provided by KPMG LLP for fiscal year 2020. The Audit Committee met seven (7) times during fiscal year 2020.

Audit Committee Financial Expert

The Board of Directors has determined that each of Mr. McGlade (Chairman), Ms. King, and Mr. Schriesheim meets the qualifications of an "audit committee financial expert" under SEC rules and the qualifications of "financial sophistication" under the applicable Nasdaq Rules, and qualifies as "independent" as defined under the applicable Nasdaq Rules.

Compensation Committee

We have established a Compensation Committee consisting of the following individuals, each of whom the Board of Directors has determined is "independent" within the meaning of applicable Nasdaq Rules, an outside director within the meaning of Section 162(m) of the Internal Revenue Code ("IRC") (solely for purposes of administering any equity awards that may qualify as grandfathered performance-based compensation), and a non-employee director within the meaning of Rule 16b-3 under the Exchange Act: Ms. King (Chairman), Mr. McGlade, and Mr. Schriesheim. The Compensation Committee met five (5) times during fiscal year 2020. The functions of the Compensation Committee include establishing the appropriate level of compensation, including short- and long-term incentive compensation of the Chief Executive Officer, all other executive officers, and any other officers or employees who report directly to the Chief Executive Officer. The Compensation Committee also administers Skyworks' equity-based compensation plans. The Compensation Committee's authority to grant equity awards to the Company's executive officers may not be delegated to the Company's

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management or others. The Board of Directors has adopted a written charter for the Compensation Committee, and it is available on the Investor Relations portion of the Company's website at www.skyworksinc.com.

The Compensation Committee has engaged Aon/Radford Consulting ("Aon/Radford") to assist it in determining the components and amounts of executive compensation. The consultant reports directly to the Compensation Committee, through its Chairman, and the Compensation Committee retains the right to terminate or replace the consultant at any time. The process and procedures followed by the Compensation Committee in considering and determining executive and director compensation are described below under "Compensation Discussion and Analysis."

Nominating and Corporate Governance Committee

We have established a Nominating and Corporate Governance Committee consisting of the following individuals, each of whom the Board of Directors has determined is "independent" within the meaning of applicable Nasdaq Rules: Mr. Beebe (Chairman), Mr. Batey, Mr. Furey, and Ms. Stevenson. The Nominating and Corporate Governance Committee met three (3) times during fiscal year 2020. The Nominating and Corporate Governance Committee is responsible for evaluating and recommending individuals for election or reelection to the Board of Directors and its committees, including any recommendations that may be submitted by stockholders, as well as the evaluation and recommendation of corporate governance policies. The Nominating and Corporate Governance Committee oversees the annual evaluation process for the Board of Directors, each committee, and individual directors, by soliciting from each director his or her assessment of the effectiveness of the Board of Directors, the committees on which he or she serves, and other individual directors. These and other aspects of the Nominating and Corporate Governance Committee's authority are more particularly described in the

Nominating and Corporate Governance Committee Charter, which the Board of Directors adopted and is available on the Investor Relations portion of the Company's website at www.skyworksinc.com. In February 2021, the Board of Directors amended the Nominating and Corporate Governance Committee Charter to specifically include oversight of matters of corporate responsibility and sustainability, including potential impacts to the Company's business of environmental, social, and governance issues, reflecting existing practice.

Director Nomination Procedures

The Nominating and Corporate Governance Committee evaluates director candidates in the context of the overall composition and needs of the Board of Directors, with the objective of recommending a group that can best manage the business and affairs of the Company and represent the interests of the Company's stockholders using its diversity of experience. The committee seeks directors who possess certain minimum qualifications, including the following:

A director must have substantial or significant business or professional experience or an understanding of technology, finance, marketing, financial reporting, international business, or other disciplines relevant to the business of the Company.
A director (other than an employee-director) must be free from any relationship that, in the opinion of the Board of Directors, would interfere with the exercise of his or her independent judgment as a member of the Board of Directors or of a Board committee.
The committee also considers the following qualities and skills, among others, in its selection of directors and as candidates for appointment to the committees of the Board of Directors:

o
economic, technical, scientific, academic, financial, accounting, legal, marketing, or other expertise applicable to the business of the Company;
o
leadership or substantial achievement in their particular fields;

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    o
    demonstrated ability to exercise sound business judgment;
    o
    integrity and high moral and ethical character;
    o
    potential to contribute to the diversity of viewpoints, backgrounds, or experiences of the Board of Directors as a whole;
    o
    capacity and desire to represent the balanced, best interests of the Company as a whole and not primarily a special interest group or constituency;
    o
    ability to work well with others;
    o
    high degree of interest in the business of the Company;
    o
    dedication to the success of the Company;
    o
    commitment to the responsibilities of a director; and
    o
    international business or professional experience.

The committee believes that our Board of Directors, taken as a whole, should embody a diverse set of skills, experiences, and backgrounds in order to better inform its decisions. The committee considers age, tenure, gender, race, and ethnicity, in addition to business experience and other specific areas of focus or expertise, in its holistic approach to assessing and identifying director nominees. The committee will also take into account the fact that a majority of the Board of Directors must meet the independence requirements of the applicable Nasdaq Rules. The Company expects that a director's existing and future commitments will not materially interfere with such director's obligations to the Company. For candidates who are incumbent directors, the committee considers each director's past attendance at meetings and participation in and contributions to the activities of the Board of Directors. The committee identifies candidates for director nominees in consultation with the Chief Executive Officer of the Company and the Chairman of the Board, through the use of search firms or other advisors or through such other methods as the committee deems to be helpful to identify candidates. Once candidates have been identified, the committee confirms that the candidates meet all of the minimum qualifications for director nominees set forth above through interviews, background checks, or any other

means that the committee deems to be helpful in the evaluation process. The committee then meets to discuss and evaluate the qualities and skills of each candidate, both on an individual basis and taking into account the overall composition and needs of the Board of Directors. Based on the results of the evaluation process, the committee recommends candidates for director nominees for election to the Board of Directors.

Stockholder Nominees

The Nominating and Corporate Governance Committee will consider director candidates recommended by stockholders provided such stockholders follow the procedures set forth below. The committee does not intend to alter the manner in which it evaluates candidates, including the criteria set forth above, based on whether the candidate was recommended by a stockholder or otherwise. Stockholders who wish to nominate director candidates for election at the 2022 Annual Meeting, but who are not to be included in the Company's proxy materials pursuant to the proxy access provisions in our By-laws, may do so in accordance with the provisions of our By-laws by submitting a written recommendation to the Secretary of the Company at the address below no earlier than the close of business on January 12, 2022, and no later than the close of business on February 11, 2022. In the event that the 2022 Annual Meeting is held more than thirty (30) days before or after the first anniversary of the Company's 2021 Annual Meeting, then the required notice must be delivered in writing to the Secretary of the Company at the address below no earlier than 120 days prior to the date of the 2022 Annual Meeting and no later than the later of 90 days prior to the 2022 Annual Meeting or the 10th day following the day on which the public announcement of the date of the 2022 Annual Meeting is first made by the Company. For nominees for election to the Board of Directors proposed by stockholders to be considered, the recommendation for nomination must

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be in writing and must include the following information:

name of the stockholder, whether an entity or an individual, making the recommendation;
a written statement disclosing such stockholder's beneficial ownership of the Company's capital stock;
name of the individual recommended for consideration as a director nominee;
a written statement from the stockholder making the recommendation stating why such recommended candidate would be able to fulfill the duties of a director;
a written statement from the stockholder making the recommendation stating how the recommended candidate meets the independence requirements established by the SEC and the applicable Nasdaq Rules;
a written statement disclosing the recommended candidate's beneficial ownership of the Company's capital stock; and
a written statement disclosing relationships between the recommended candidate and the Company that may constitute a conflict of interest.

A stockholder (or a group of up to twenty stockholders) who has owned at least three percent of the Company's outstanding shares of common stock continuously for at least three years, and has complied with the other requirements in the Company's By-laws,

may nominate and include in the Company's proxy materials a number of director nominees up to the greater of two individuals or 20% of the Board of Directors. Written notice of a proxy access nomination for inclusion in our proxy statement for the 2022 Annual Meeting of Stockholders must be submitted to the Secretary of the Company at the address below no earlier than the open of business on December 13, 2021, and no later than the close of business on January 12, 2022. In the event that the 2022 Annual Meeting is held more than thirty (30) days before, or more than sixty (60) days after, the first anniversary of the Company's 2021 Annual Meeting, then the required notice must be delivered in writing to the Secretary of the Company at the address below no earlier than 150 days prior to the date of the 2022 Annual Meeting and no later than the later of 120 days prior to the 2022 Annual Meeting or the 10th day following the day on which the public announcement of the date of the 2022 Annual Meeting is first made by the Company.

Written notice of proxy access nominations and written recommendations for nomination may be sent to the General Counsel and Secretary of the Company via U.S. mail or expedited delivery service to:

Skyworks Solutions, Inc.
5260 California Avenue
Irvine, California 92617

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Role of the Board of Directors in Risk Oversight

Our Board of Directors oversees our risk management processes directly and through its committees. Our management team is responsible for risk management on a day-to-day basis. The role of our Board of Directors and its committees is to oversee the risk management activities of our management team. They fulfill this duty by discussing with management the policies and practices utilized by management in assessing and managing risks and providing input on those policies and practices. During fiscal year 2020 specifically, at each meeting of the Board of Directors in or after March 2020, Company management updated the Board of Directors on the impacts of COVID-19 on our business and workforce.

In general, our Board of Directors oversees risk management activities relating to business strategy, capital allocation, organizational structure, certain operational risks, and acquisitions; our Audit Committee oversees risk management activities related to financial controls, legal and compliance risks, and cybersecurity risk; our Compensation Committee oversees risk management activities relating to our compensation policies and practices as well as management succession planning; and our Nominating and Corporate Governance Committee oversees risk management activities relating to Board composition as well as matters of corporate responsibility and sustainability. Each committee reports to the Board of Directors on a regular basis, including reports with respect to the committee's risk oversight activities as appropriate. For example, the Board of Directors periodically reviews and approves the executive succession plan in consultation with the Compensation Committee and the Chief Executive Officer. In

addition, since risk issues often overlap, committees from time to time request that the Board of Directors discuss particular risks.

Our Compensation Committee does not believe that any risks arising from our employee compensation policies and practices are reasonably likely to have a material adverse effect on our company. Our Compensation Committee believes that any such risks are mitigated by:

The multiple elements of our compensation packages, including base salary, our annual short-term incentive compensation plan and (for our executive officers and other key employees) equity awards that vest (or are issuable) over multiple years and are intended to motivate employees to take a long-term view of our business.
The structure of our short-term incentive compensation plan (described in greater detail in this Proxy Statement under "Compensation Discussion and Analysis"), which is based on (i) a number of different financial and operating performance metrics to avoid employees placing undue emphasis on any particular performance metric at the expense of other aspects of our business, and (ii) performance targets that we believe are appropriately aggressive yet will not require undue risk-taking to achieve. Further, the structure of the short-term incentive compensation plan aids in driving sustained long-term financial performance as the goals and targets from the prior year's plan are significant factors used in determining goals for the current year's plan.

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Compensation Committee Interlocks and Insider Participation

The Compensation Committee of the Board of Directors currently consists of, and during fiscal year 2020 consisted of, Ms. King (Chairman), Mr. McGlade, and Mr. Schriesheim. No member of this committee was at any time during fiscal year 2020 an officer or employee of the Company, was formerly an officer of the Company or any of its subsidiaries, or had any employment relationship with the Company or any of

its subsidiaries. No executive officer of the Company has served as a director or member of the compensation committee (or other committee serving an equivalent function) of any other entity, where one of such entity's executive officers served as a director of the Company or a member of the Compensation Committee.

Certain Relationships and Related Person Transactions

Other than compensation agreements and other arrangements described below under "Information About Executive and Director Compensation," since September 28, 2019, there has not been a transaction or series of related transactions to which the Company was or is a party involving an amount in excess of $120,000 and in which any director, executive officer, holder of more than five percent (5%) of any class of our voting securities, or any member of the immediate family of any of the foregoing persons, had or will have a direct or indirect material interest. In January 2008, the Board of Directors adopted a written related person transaction approval policy, which was amended in November 2018, and which sets forth the Company's policies and procedures for the review,

approval or ratification of any transaction required to be reported in its filings with the SEC. The Company's policy with regard to related person transactions is that all related person transactions between the Company and any related person (as defined in Item 404 of Regulation S-K) or their affiliates, in which the amount involved is equal to or greater than $120,000, be reviewed by the Company's General Counsel and approved by the Audit Committee. In addition, the Company's Code of Business Conduct and Ethics requires that employees discuss with the Company's Compliance Officer any significant relationship (or transaction) that might raise doubt about such employee's ability to act in the best interest of the Company.

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PROPOSAL 2:

RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee has selected KPMG LLP as the Company's independent registered public accounting firm for fiscal year 2021 and has further directed that management submit the selection of the independent registered public accounting firm for ratification by the stockholders at the Annual Meeting. KPMG LLP was the independent registered public accounting firm for the Company for fiscal year 2020, and has been the independent registered public accounting firm for the Company since 2002. We are asking the stockholders to ratify the selection of KPMG LLP as the Company's independent registered public accounting firm for fiscal year 2021.

Representatives of KPMG LLP are expected to attend the Annual Meeting online. They will have an opportunity to make a statement if they desire to do so and will be available to respond to appropriate stockholder questions.

Stockholder ratification of the selection of KPMG LLP as the Company's independent registered public accounting firm is not required by the Company's By-laws or other applicable legal requirements. However, the Audit Committee is submitting the selection of KPMG LLP to the stockholders for ratification as a matter of good corporate practice. The affirmative vote of a majority of the shares present online or represented by proxy at the Annual Meeting and entitled to vote on such matter at the Annual Meeting is required to approve the selection of KPMG LLP as the Company's independent registered public accounting firm. In the event stockholders fail to ratify the appointment, the Audit Committee may reconsider this appointment. Even if the appointment is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if the Audit Committee determines that such a change would be in the Company's and stockholders' best interests.

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Audit Fees

KPMG LLP provided audit services to the Company consisting of the annual audit of the Company's 2020 consolidated financial statements contained in the Company's Annual Report on Form 10-K and reviews

of the financial statements contained in the Company's Quarterly Reports on Form 10-Q for fiscal year 2020. The following table summarizes the fees of KPMG LLP billed to the Company for the last two fiscal years.

Fee Category


Fiscal Year
2020 ($)


% of
Total (%)


Fiscal Year
2019 ($)


% of
Total (%)

Audit Fees(1)

2,437,150 95.5 2,315,150 93.1

Tax Fees(2)

115,115 4.5 170,500 6.9

Total Fees

2,552,265 100 2,485,650 100
(1)
Audit fees consist of fees for the audit of our annual financial statements, review of the interim financial statements included in our quarterly reports on Form 10-Q, statutory audits and related filings in various foreign locations and audit procedures related to acquisition activity during fiscal years 2020 and 2019. Fiscal year 2020 and 2019 audit fees included fees for services incurred in connection with rendering an opinion under Section 404 of the Sarbanes-Oxley Act. Fiscal year 2020 audit fees also included fees for the review of registration statement auditor consents to incorporate by reference prior year financial statement opinions in Form S-8 filings.

(2)
Tax fees consist of fees for tax compliance, tax advice, and tax planning services. Tax compliance services, which primarily relate to the review of our U.S. tax returns and certain trade and customs forms, accounted for $104,615 and $160,000 of the total tax fees for fiscal years 2020 and 2019, respectively.

In 2003, the Audit Committee adopted a formal policy concerning approval of audit and non-audit services to be provided to the Company by its independent registered public accounting firm, KPMG LLP. The policy requires that all services provided by KPMG LLP, including audit services and permitted

audit-related and non-audit services, be preapproved by the Audit Committee. The Audit Committee preapproved all audit and non-audit services provided by KPMG LLP during fiscal year 2020 and our fiscal year ended September 27, 2019 ("fiscal year 2019").

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REPORT OF THE AUDIT COMMITTEE

The Audit Committee of Skyworks' Board of Directors is responsible for providing independent, objective oversight of Skyworks' accounting functions and internal controls. Five different directors served on the Audit Committee for all or part of fiscal year 2020, each of whom is independent within the meaning of applicable Nasdaq Rules and meets the criteria for independence set forth in Rule 10A-3(b)(1) under the Exchange Act. The Audit Committee operates under a written charter approved by the Board of Directors.

Management is responsible for the Company's internal control and financial reporting process. The Company's independent registered public accounting firm is responsible for performing an independent audit of Skyworks' consolidated financial statements in accordance with generally accepted auditing standards and for issuing a report concerning such financial statements. In addition, the Company's independent registered public accounting firm is responsible for performing an independent audit of the Company's internal controls and for issuing an opinion on the effectiveness thereof. The Audit Committee's responsibility is to monitor and oversee these processes.

In connection with these responsibilities, the Audit Committee met with management and representatives of KPMG LLP, the Company's independent registered public accounting firm, and reviewed and discussed the audited financial statements for fiscal year 2020, results of the internal and external audit examinations, evaluations of the Company's internal controls, and the overall quality of Skyworks' financial reporting. The Audit Committee also discussed with the independent registered public accounting firm the

matters required to be discussed by Auditing Standard No. 1301, "Communications with Audit Committees," issued by the Public Company Accounting Oversight Board. In addition, the Audit Committee has received the written disclosures from its independent registered public accounting firm required by applicable requirements of the Public Company Accounting Oversight Board and the SEC regarding the independent accountant's communications with the Audit Committee concerning independence and has discussed with the independent registered public accounting firm the independent registered public accounting firm's independence from the Company and its management, including the matters in the written disclosures that were received by the committee from such firm.

Based upon the Audit Committee's review and discussions described above, the Audit Committee recommended that the Board of Directors include the audited consolidated financial statements in the Company's Annual Report on Form 10-K for fiscal year 2020, as filed with the SEC.

THE AUDIT COMMITTEE

David P. McGlade, Chairman
Timothy R. Furey
Christine King
Robert A. Schriesheim

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PROPOSAL 3:

ADVISORY VOTE ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS ("SAY-ON-PAY" VOTE)

We are providing our stockholders with the opportunity to vote to approve, on a non-binding basis, the compensation of our Named Executive Officers as described below under "Information About Executive and Director Compensation" pursuant to Section 14A of the Exchange Act. As we describe below under "Compensation Discussion and Analysis," our executive compensation program embodies a pay-for-

performance philosophy that supports our business strategy and aligns the interests of our executives with our stockholders.

Our Board of Directors is asking stockholders to approve a non-binding advisory vote on the following resolution:

As an advisory vote, this proposal is not binding and will not overrule any decision by the Company or the Board of Directors (or any committee thereof), nor will it create or imply any change or addition to the fiduciary duties of the Company or the Board of Directors (or any committee thereof). However, our Compensation Committee and Board of Directors

value the opinions expressed by our stockholders in their vote on this proposal and will consider the outcome of the vote when making future compensation decisions for Named Executive Officers. The next non-binding "say-on-pay" vote is scheduled to be held at our 2022 Annual Meeting of Stockholders.

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INFORMATION ABOUT EXECUTIVE AND DIRECTOR COMPENSATION

Summary and Highlights

Financial Highlights from Fiscal Year 2020

Despite the challenges of the COVID-19 pandemic, the Company delivered strong financial results in fiscal year 2020:

Achieved net revenue of $3.4 billion
Achieved operating margin of 26.6% on a GAAP basis (33.7% on a non-GAAP basis)1
Achieved diluted earnings per share of $4.80 on a GAAP basis ($6.13 on a non-GAAP basis)1
Generated operating cash flow of $1.2 billion
Increased our quarterly dividend from $0.44 per share to $0.50 per share
Returned $955 million to stockholders through repurchasing 6.3 million shares of our common stock for $648 million and through payments of $307 million in cash dividends

Throughout the pandemic, we have remained committed to protecting the health of our employees and of the communities in which we operate. As a result, we implemented certain safety measures at our facilities worldwide, including:

allowing many employees to work remotely,
implementing social distancing, including limiting the number of employees attending meetings,
screening employees when entering facilities,
enhancing preventative and cleaning protocols, and
suspending employee travel.

While some of these measures reduced the overall efficiency of our operations or increased our manufacturing costs, we were better able to safeguard employee health while maintaining key business and manufacturing operations.

Quarterly Dividends:
Fiscal Years 2015 – 2020
  Repurchases under Stock Repurchase Plans:
Fiscal Years 2015 – 2020 ($M)

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1
Please see table on page 79 for a full reconciliation of non-GAAP results to GAAP results.

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Driving Long-Term Stockholder Value

The Company's strong long-term performance is demonstrated in our total stockholder return (TSR), which has significantly outperformed relevant benchmarks over the past ten fiscal years, as displayed in the chart below. The TSR chart, which reflects performance through October 2, 2020, the last day of the Company's fiscal year 2020, does not take into account a meaningful subsequent rise in the Company's stock price, which we believe to be the

result of the Company capitalizing on accelerating overall demand for wireless connectivity products coupled with the onset of technology transitions toward 5G and Wi-Fi 6 solutions. The closing price of the Company's common stock on the Nasdaq Global Select Market on March 18, 2021, was $174.69 per share, approximately 19% higher than the closing price of $146.83 per share on October 2, 2020.

Total Stockholder Return(1)

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(1)
Total stockholder return, for Skyworks and the component companies of the indices, is calculated as share price appreciation plus the cumulative effect of reinvesting cash dividend payments into the respective securities for the one-, three-, and ten-year periods ended October 2, 2020.

Other Accomplishments from Fiscal Year 2020

During fiscal year 2020, we broadened our customer set and expanded our suite of applications. Highlights from the year include:

Accelerated ramp of Sky5® platform supporting the next wave of premium 5G smartphones
Extended market leadership in Wi-Fi 6 and 6E connectivity
Deployed solutions for 5G Massive MIMO and small cell base stations
Shipped Sky5® connected-car solutions to leading automotive OEMs
Delivered new cognitive wireless audio solutions, powering the leading gaming headsets
Supported Tier-1 aerospace and defense OEMs with highly integrated GPS, circulator, and advanced filter solutions
Expanded our unique filter solutions, including TC-SAW and BAW

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Our Pay-for-Performance Philosophy

Under our pay-for-performance philosophy, we believe that executive compensation should be strongly aligned with the interests of our long-term stockholders. As a result, a substantial portion of each Named Executive Officer's annual compensation is tied to Company

performance and stock price performance. The charts below show the target total direct compensation mix for fiscal year 2020 for our Chief Executive Officer and the average for the other Named Executive Officers, in each case reflecting actual salary, target short-term incentive award, and the grant date fair value of long-term stock-based compensation awards.

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Compensation Best Practices

What We Do
GRAPHIC   Heavily weight executive compensation toward "at risk," performance-based compensation

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Balance short-term and long-term incentive compensation

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Use multi-year vesting for executive officer equity awards

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Base half of annual performance share award on three-year relative TSR performance metric

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Maintain robust stock ownership guidelines for executive officers and non-executive directors

GRAPHIC

 

Structure our executive officer compensation program to encourage appropriate risk-taking

GRAPHIC

 

Benchmark pay practices against selected peer companies with whom we compete for executive talent

GRAPHIC

 

Solicit advice from the Compensation Committee's independent compensation consultant

GRAPHIC

 

Hold annual "Say-on-Pay" advisory vote

GRAPHIC

 

Conduct regular engagement with stockholders on compensation-related topics
What We Don't Do
GRAPHIC   Guarantee bonus payments or base salary increases

GRAPHIC

 

Provide single-trigger change-in-control benefits

GRAPHIC

 

Provide excise tax gross-up payments in connection with a change in control of the Company

GRAPHIC

 

Provide excessive perquisites to our executive officers

GRAPHIC

 

Provide retirement or pension benefits to our executive officers that are not available to employees generally

GRAPHIC

 

Permit hedging or other forms of speculative transactions by employees or directors

GRAPHIC

 

Permit pledging by employees or directors

GRAPHIC

 

Allow for the repricing of stock options without stockholder approval

GRAPHIC

 

Pay dividends or dividend equivalents on unearned performance shares or restricted stock units

GRAPHIC

 

Include "evergreen" provisions or "liberal" change-in-control definitions in our equity incentive award plans

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Compensation Discussion and Analysis

Table of Contents

Named Executive Officers

  31

Approach for Determining Form and Amounts of Compensation

 
31

Components of Compensation

 
33

Engagement with Stockholders Regarding Executive Compensation

 
41

Severance and Change-in-Control Benefits

 
41

Executive Officer Stock Ownership Requirements

 
42

Prohibition on Hedging and Certain Other Transactions

 
43

Compliance with Internal Revenue Code Section 162(m)

 
43

Named Executive Officers

This Compensation Discussion and Analysis section discusses the compensation policies and programs for our Chief Executive Officer, our Chief Financial Officer, and our three next most highly paid executive officers during fiscal year 2020, as determined under the rules of the SEC. We refer to this group of executive officers as our "Named Executive Officers."

For fiscal year 2020, our Named Executive Officers were:

Liam K. Griffin, President and Chief Executive Officer;
Kris Sennesael, Senior Vice President and Chief Financial Officer;
Carlos S. Bori, Senior Vice President, Sales and Marketing;
Robert J. Terry, Senior Vice President, General Counsel and Secretary; and
Karilee A. Durham, Senior Vice President, Human Resources.

Approach for Determining Form and Amounts of Compensation

The Compensation Committee, which is described above under "Committees of the Board of Directors," is responsible for determining all components and

amounts of compensation to be paid to our Named Executive Officers, as well as any other executive officers or employees who report directly to the Chief Executive Officer. The Compensation Committee sets compensation for the Named Executive Officers, including base salary, short-term incentives, and long-term stock-based incentives, at levels generally intended to be competitive with the compensation of comparable executives in semiconductor companies with which the Company competes for executive talent and to link the compensation of our Named Executive Officers to improvements in the Company's financial performance and increases in stockholder value.

Compensation Program Objectives

The objectives of our executive compensation program are to attract, retain, and motivate highly qualified executives to operate our business, and to link the compensation of those executives to improvements in the Company's financial performance and increases in stockholder value. Accordingly, the Compensation Committee's goals in establishing our executive compensation program include:

ensuring that our executive compensation program is competitive with a group of companies in the semiconductor industry with which we compete for executive talent;

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providing a base salary that serves as the foundation of a compensation package that attracts and retains the executive talent needed to achieve our business objectives;
providing short-term variable compensation that motivates executives and rewards them for achieving Company financial performance targets;
providing long-term stock-based compensation that aligns the interest of our executives with stockholders by rewarding them for long-term increases in stockholder value; and
ensuring that our executive compensation program is perceived as fundamentally fair to our employees.

Retention of Compensation Consultant

The Compensation Committee has engaged Aon/Radford to assist in determining the components and amount of executive compensation. Aon/Radford reports directly to the Compensation Committee, through its chairman, and the Compensation Committee retains the right to terminate or replace the consultant at any time. The Compensation Committee has considered the relationships that Aon/Radford has with the Company, the members of the Compensation Committee and our executive officers, as well as the policies that Aon/Radford has in place to maintain its independence and objectivity, and has determined that Aon/Radford's work for the Compensation Committee has not raised any conflicts of interest. Company management also purchases published compensation and benefits surveys from Aon/Radford, and on occasion engages certain affiliates of Aon/Radford in various jurisdictions for services unrelated to executive

compensation and benefits, engagements for which the Company's management has not sought the Compensation Committee's approval. The fees paid to Aon/Radford and its affiliates in fiscal year 2020 for these surveys and additional services did not exceed $120,000.

Use of Comparator Group Data

The Compensation Committee annually compares the components and amounts of compensation that we provide to our Chief Executive Officer and each of the other Named Executive Officers with "Comparator Group" data for each position and uses this comparison data to help inform its review and determination of base salaries, short-term incentives, and long-term stock-based compensation awards, as discussed in further detail below under "Components of Compensation." For fiscal year 2020, the Compensation Committee approved Comparator Group data consisting of a 50/50 blend of (i) Aon/Radford survey data of semiconductor companies (where sufficient data was not available in the Aon/Radford semiconductor survey data for a given executive position, the Comparator Group data also included survey data regarding high-technology companies), and (ii) data from the group of 16 publicly traded semiconductor companies listed below. The Company's selected peer group remained unchanged from that used by the Compensation Committee for the prior fiscal year. The peer group includes many business competitors, as well as certain larger semiconductor companies with which the Company competes for executive talent.

Advanced Micro Devices   KLA Corporation   Microchip Technology   Qorvo
Analog Devices   Lam Research   Micron Technology   QUALCOMM
Applied Materials   Marvell Technology   NVIDIA   Texas Instruments
Broadcom   Maxim Integrated Products   ON Semiconductor   Xilinx

 

The Compensation Committee generally seeks to make decisions regarding each Named Executive Officer's compensation that are competitive within the Comparator Group, with consideration given to the executive's role, responsibility, performance, and length

of service. After reviewing the Comparator Group data and considering the input of Aon/Radford, the Compensation Committee established (and the full Board of Directors was advised of) the base salary, short-term incentive target, and stock-based

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compensation for each Named Executive Officer for fiscal year 2020. Aon/Radford advised the Compensation Committee that such components of executive compensation for fiscal year 2020 were competitive for chief executive officers and other executive officers at companies of similar size and complexity in the semiconductor industry.

In determining the compensation of our Chief Executive Officer for fiscal year 2020, the Compensation Committee focused on (i) competitive levels of compensation for chief executive officers who are leading a company of similar size and complexity, (ii) the importance of retaining and incentivizing a chief executive officer with the strategic, financial, and leadership skills necessary to ensure our continued growth and success, (iii) our Chief Executive Officer's role relative to the other Named Executive Officers, (iv) input from the full Board of Directors on our Chief Executive Officer's performance, and (v) the length of our Chief Executive Officer's service to the Company. Our Chief Executive Officer was not present during the voting or deliberations of the Compensation Committee concerning his compensation.

The Compensation Committee considered the recommendations of the Chief Executive Officer regarding the compensation of the other Named Executive Officers and each of his other direct reports. These recommendations were based on an assessment of each individual's responsibilities, experience, performance, and contribution to the Company's performance, and also took into account internal factors such as scope of role and level in the organization, in addition to external factors such as the current environment for attracting and retaining executives.

Components of Compensation

The key elements of compensation for our Named Executive Officers are base salary, short-term incentives, long-term stock-based incentives, and health and welfare benefits. For fiscal year 2020, the Compensation Committee sought to make decisions that would result in each Named Executive Officer's target total direct compensation being competitive within the Comparator Group, with consideration given to the executive's role, responsibility, performance, and length of service.

Base Salary

The Compensation Committee determines a competitive base salary for each executive officer using the Comparator Group data and input provided by Aon/Radford. In order to provide flexibility in consideration of differences in individual executives' scope of responsibilities, length of service, and performance, the Compensation Committee did not target a specific percentile of the Comparator Group for executive officer salaries; however, the salaries of the executive officers were generally near the median of the Comparator Group. The base salary for fiscal year 2020 for each Named Executive Officer, as reflected in the table below, increased on average 5.8% from the Named Executive Officer's base salary in fiscal year 2019, with increases ranging from 5.0% to 6.1%. Salary increases were based on the market-based salary adjustments recommended by Aon/Radford as well as recommendations by the Chief Executive Officer (for Named Executive Officers other than himself).

FY2020
Base Salary ($)


FY2019
Base Salary ($)

Liam K. Griffin

1,029,000 980,000

Kris Sennesael

530,000 500,000

Carlos S. Bori

457,000 431,000

Robert J. Terry

473,000 446,000

Karilee A. Durham

432,000 408,000

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Short-Term Incentives

Overview

Our short-term incentive compensation plan for executive officers is established annually by the Compensation Committee and is intended to motivate and reward executives by tying a significant portion of their total cash compensation to the Company's achievement of pre-established performance goals that are generally one year or less in duration. The Fiscal Year 2020 Executive Incentive Plan (the "Incentive Plan") adopted by the Compensation Committee on December 17, 2019, was based on the Company's achievement of corporate performance goals established on a semi-annual basis during fiscal year 2020.

The Compensation Committee moved to six-month performance periods for fiscal year 2020, as opposed to an annual performance period as in previous years, as a result of market uncertainty that existed in late 2019 related to the U.S.-China trade war, including restrictions on the Company's ability to do business with Huawei Technology Co., Ltd., and certain of its affiliates (the "Trade War"), and its potential impacts on the Company's financial results for fiscal year 2020. The Compensation Committee concluded that establishing performance goals on a semi-annual basis in light of these uncertainties would best enable the Compensation Committee to establish meaningful and appropriate goals for each half of the year. This approach proved to be particularly appropriate for fiscal year 2020, as the performance goals set by the Compensation Committee for the second performance period, as discussed below, also reflected additional uncertainty in the Company's business outlook that had arisen as a result of the COVID-19 outbreak.

Incentive Opportunities

For each executive officer, short-term incentive compensation at the "target" level is designed to be near the median short-term incentive compensation of the Comparator Group. After reviewing Comparator Group data, the Compensation Committee determined that the target incentive under the Incentive Plan, as a

percentage of base salary, for each of the Named Executive Officers should not be increased, as compared to the target incentives under the prior year's short-term incentive plan.

The following table shows the range of short-term incentive compensation that each Named Executive Officer could earn in fiscal year 2020 as a percentage of such executive officer's annual base salary.

Threshold
Target
Maximum

Chief Executive Officer

80 % 160 % 320 %

Chief Financial Officer

50 % 100 % 200 %

Other Executive Officers

40 % 80 % 160 %

Performance Goals

In December 2019 and May 2020, the Compensation Committee established performance goals for the applicable semi-annual performance period, with each executive eligible to earn up to half of his or her annual short-term incentive compensation with respect to each six-month period. Under the Incentive Plan, any unearned amounts with respect to the first performance period were to be forfeited and could not be earned later based on performance during the second performance period or full-year performance. Payments under the Incentive Plan were based on achieving revenue and non-GAAP EBITDA performance goals, each of which was weighted at 50% for each respective performance period. EBITDA, for purposes of the non-GAAP EBITDA performance goal, was calculated by adding depreciation and amortization to the Company's non-GAAP operating income, as publicly reported in the Company's earnings release for the applicable period.

The target level performance goals were established by the Compensation Committee under the Incentive Plan after reviewing the Company's historical operating results and growth rates as well as the Company's expected future results relative to peers and were designed to require significant effort and operational success on the part of our executives and the Company to achieve them. The maximum level

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performance goals established by the Compensation Committee have historically been difficult to achieve and are designed to represent outstanding performance that the Compensation Committee believes should be rewarded. The performance goals established for the second half of fiscal year 2020 were based on the Company's outlook in May 2020 for the remainder of the fiscal year and reflected the significant economic uncertainty associated with the COVID-19 outbreak, including an expectation of revenue for the second half of fiscal year 2020 lower than the Company's original operating plan for the fiscal year.

The performance goals established under the Incentive Plan for fiscal year 2020 were as follows (in millions):

Revenue
Non-GAAP EBITDA

1st Half
2nd Half
1st Half
2nd Half

Threshold

$ 1,400 $ 1,400 $ 590 $ 590

Target

$ 1,550 $ 1,550 $ 665 $ 640

Maximum

$ 1,660 $ 1,600 $ 720 $ 690

The Incentive Plan stipulated that payouts to executives following the end of the fiscal year, under either of the performance metrics, were conditioned upon the Company achieving a nominal level of full-year non-GAAP operating income of $500 million. Non-GAAP operating income, for purposes of the Incentive Plan, is based on the Company's publicly disclosed non-GAAP operating income—which is calculated by excluding from GAAP operating income share-based compensation expense; acquisition-related expenses; amortization of acquisition-related intangibles; settlements, gains, losses, and impairments; restructuring-related charges; and certain deferred executive compensation—after accounting for any incentive award payments, including those to be made under the Incentive Plan.

Calculation of Incentive Plan Payments

Under the Incentive Plan, upon completion of the first six months of the fiscal year, the Compensation Committee determined the extent to which the Company's performance goals for the first

performance period were attained, reviewed the CEO's recommended payouts under the Incentive Plan, and approved the awards to be made under the Incentive Plan with respect to the first performance period. Upon completion of the fiscal year, the Compensation Committee completed the same process with respect to the second performance period. Payments with respect to the first performance period were capped at 100% of the first half target level attributable to the applicable metric, with amounts over the target level held back and paid after the end of the fiscal year upon certification that the Company had achieved its nominal level of non-GAAP operating income for the fiscal year.

Achievement under the performance goals at the "threshold," "target," or "maximum" level corresponds to payment under the Incentive Plan at the "threshold," "target," or "maximum" percentage, as applicable, with such percentage multiplied by the executive's base salary for the six-month period and then multiplied by the weighting assigned to that performance goal. The payout for achievement under the performance goals between either the "threshold" and "target" levels or the "target" and "maximum" levels would be based on linear interpolation between the two relevant amounts.

Each executive's payment under the Incentive Plan is calculated by evaluating achievement of each performance goal individually, determining the portion of the total eligible incentive payment earned with respect to each such performance goal, and totaling the resulting amounts. The Compensation Committee retained the discretion to make payments, upon consideration of recommendations by the Chief Executive Officer, even if the threshold performance metrics were not met or if the nominal level of non-GAAP operating income was not met or to make payments in excess of the maximum level if the Company's performance exceeded the maximum metrics. While the Compensation Committee believed it was appropriate to retain this discretion in order to make short-term incentive compensation awards in appropriate extraordinary circumstances, no such adjustments were actually made.

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Fiscal Year Results

For the first half of fiscal year 2020, the Company's revenue and non-GAAP EBITDA achieved were $1,662 million and $729 million, respectively, resulting in a short-term compensation award for each Named Executive Officer with respect to such performance period equal to his or her maximum payment level, or 200% of the target payment level. A payment of the target amount was made to each Named Executive Officer in May 2020, with the remainder held back for potential payment following the completion of the fiscal year. For the second half of fiscal year 2020, the Company's revenue and non-GAAP EBITDA achieved were $1,694 million and $728 million, respectively, resulting in a short-term compensation award for each Named Executive Officer with respect to such performance period equal to 200% of his or her target payment level. In November 2020, upon certifying that the nominal level of non-GAAP operating income had been achieved for the fiscal year, the Compensation Committee approved payment of the short-term incentive achieved with respect to the second performance period as well as payment of the remaining portion of the short-term incentive achieved with respect to the first performance period, which had been held back. The Compensation Committee did not exercise discretion, either upward or downward, to executives' payments under the Incentive Plan.

Revenue
Non-GAAP EBITDA

(in millions)


1st Half
2nd Half
1st Half
2nd Half

Threshold

$ 1,400 $ 1,400 $ 590 $ 590

Target

$ 1,550 $ 1,550 $ 665 $ 640

Maximum

$ 1,660 $ 1,600 $ 720 $ 690

Achieved

$ 1,662 $ 1,694 $ 729 $ 728

Long-Term Stock-Based Compensation

Overview

The Compensation Committee generally makes long-term stock-based compensation awards to executive officers on an annual basis. Long-term

stock-based compensation awards are intended to align the interests of our executive officers with those of our stockholders and to reward our executive officers for increases in stockholder value over periods of time greater than one year. It is the Company's practice to make stock-based compensation awards to executive officers in November of each year at a prescheduled Compensation Committee meeting. For fiscal year 2020, the Compensation Committee made an annual stock-based compensation award to each of the Named Executive Officers on November 5, 2019, at a regularly scheduled Compensation Committee meeting. At the same meeting, the Compensation Committee also approved the grant of a one-time, non-recurring stock-based compensation award to each of the Named Executive Officers in order to address retention concerns further discussed below and to align the long-term compensation opportunity for each Named Executive Officer with those of peer companies.

Fiscal Year 2020 Stock-Based Compensation Awards

In making annual stock-based compensation awards to executive officers for fiscal year 2020, the Compensation Committee first reviewed the Comparator Group grant data by executive position. The Compensation Committee used that data to inform its determination of a target dollar value for the long-term stock-based award for each executive officer, as set forth in the table below, targeting awards for fiscal year 2020 that were competitive within the Comparator Group. Each executive officer was granted a performance share award ("PSA") and a restricted stock unit ("RSU") award equivalent to sixty percent (60%) and forty percent (40%), respectively, of the dollar value of the executive's fiscal year 2020 stock-based award, calculating the number of shares subject to each award using the fair market value of the Company's common stock on the date of such award and an assumption that the Company would achieve the "target" level of performance required to earn the PSA. The Compensation Committee's rationale for awarding PSAs is to further align the executive's

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interest with those of the Company's stockholders by using equity awards that will vest only if the Company achieves pre-established performance metrics, and we believe the Compensation Committee's decision to

award a portion of the PSAs subject to a performance metric measured over a three-year performance period more closely aligns the executive's interests with those of the Company's stockholders.

Name


Value of FY20
Stock-Based Award(1)


Number of Shares Subject
to PSAs, at Target(2)


Number of Shares
Subject to RSUs(2)

Liam K. Griffin

$ 10,000,000 60,777 40,518

Kris Sennesael

$ 3,200,000 19,448 12,965

Carlos S. Bori

$ 2,700,000 16,410 10,940

Robert J. Terry

$ 2,600,000 15,802 10,534

Karilee A. Durham

$ 1,800,000 10,940 7,293
(1)
The grant date fair values of these stock-based awards as disclosed further below in the "Summary Compensation Table" and the "Grants of Plan-Based Awards Table" differ from the values stated above due to the grant date fair value of the PSAs being computed using a Monte Carlo simulation to value the portion of the award related to TSR percentile ranking, in accordance with the provisions of ASC 718.

(2)
Reflects the dollar value of the award, divided by $98.72 per share, which was the closing price of the Company's common stock on the Nasdaq Global Select Market on November 5, 2019.

After setting award levels by position and evaluating the Company's business needs for the attraction and retention of executives and employees as well as internal and external circumstances impacting the Company and its employees, the Compensation Committee also reviewed the Comparator Group data to set the aggregate number of shares of the Company's common stock that would be made available for annual equity awards to eligible non-executive employees of the Company, as a percentage of the total number of the outstanding shares of the Company's common stock.

FY20 PSAs

The PSAs granted on November 5, 2019 (the "FY20 PSAs"), have both "performance" and "continued employment" conditions that must be met in order for the executive to receive shares underlying the award.

The "performance" condition of the FY20 PSAs compares the Company's performance under three distinct performance metrics during the applicable performance period against a range of pre-established targets, as follows:

Percentage of
Aggregate
Target Level
Shares




Performance
Period

Target Level Shares with Respect to Emerging Revenue Growth Metric(1)

25 % Fiscal Year 2020

Target Level Shares with Respect to Design Win Metric(2)

25 % Fiscal Year 2020

Target Level Shares with Respect to TSR Percentile Ranking Metric(3)

50 % Fiscal Years 2020-2022
(1)
The emerging revenue growth metric measures the Company's year-over-year revenue growth in certain key product categories, each of which represents an identified growth market for the Company.

(2)
The design win metric measures the success of the Company in achieving specific product design wins with a key customer.

(3)
The total stockholder return, or TSR, percentile ranking metric measures the Company's percentile ranking achieved with respect to its peer group. The peer group for purposes of the TSR percentile ranking metric includes each of the companies in the Philadelphia Semiconductor Index as of November 5, 2019, but excludes any such company that during the three-year performance period is acquired by or merged with (or enters into an agreement to be acquired by or merged with) another entity.

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The specific pre-established targets under the emerging revenue growth and TSR percentile ranking metrics are as follows:

Company Metric(1)


Threshold
Target
Maximum

1-year Emerging Revenue Growth (%)

5.0% 15.0 % 30.0 %

3-year TSR Percentile Ranking(2)

25th 50th 90th
(1)
Given both the Company's contractual confidentiality obligations and the proprietary nature of the specific goals, the Company cannot publicly disclose the specific threshold, target, and maximum levels of performance established with respect to the design win metric. The Compensation Committee established the design win goals such that performance at the target level would exceed the Company's performance relative to the prior year's performance.

(2)
For the FY20 PSAs related to TSR percentile ranking, the Compensation Committee changed the threshold percentage at which the award begins to become earned—to the 25th percentile from the 40th percentile as in prior years—after reviewing the practices of peer companies.

The number of shares issuable under the FY20 PSAs corresponds to the level of achievement of the performance goals, as follows (subject to linear interpolation for amounts between "threshold" and "target" or "target" and "maximum"):

Performance Achieved

Threshold
Target
Maximum

% of Target Level Shares Earned with Respect to Emerging Revenue Growth Metric

50 % 100 % 200 %

% of Target Level Shares Earned with Respect to Design Win Metric

50 % 100 % 200 %

% of Target Level Shares Earned with Respect to TSR Percentile Ranking Metric

50 % 100 % 300 %

The "continued employment" condition of the FY20 PSAs provides that, to the extent that the performance metrics are met, the shares earned under such metrics would vest as follows (provided, in each case, that the executive remains employed by the Company through each such vesting date):

 
Anniversary of Grant Date(1)  
     

 
One Year

Two Year
Three Year  

% of Shares Earned with Respect to Emerging Revenue Growth Metric

  50 % 50 %  

% of Shares Earned with Respect to Design Win Metric

    50 %   50 %      

% of Shares Earned with Respect to TSR Percentile Ranking Metric

        100%  
     
(1)
In the event of termination by reason of death or permanent disability, the holder of an FY20 PSA (or the holder's estate) would receive any earned but unissued shares that would have been issuable thereunder during the remaining term of the award.

During fiscal year 2019, the base period against which fiscal year 2020 emerging revenue performance was measured, the Company achieved revenue in the specified key product categories of $199 million. During fiscal year 2020, the Company achieved revenue in the specified key product categories of $442 million, representing emerging revenue growth of 122%, exceeding the "maximum" level of performance and resulting in achievement with respect to such metric of 200% of the target level of shares. Also during fiscal year 2020, the Company achieved design wins with the specified key customer at a level

exceeding the "maximum" level of performance, resulting in achievement with respect to such metric of 200% of the target level of shares. Accordingly, upon the Compensation Committee's certification of the performance results in November 2020, the Company issued 50% of the shares earned by each Named Executive Officer under the FY20 PSAs with respect to the emerging revenue growth and design win performance metrics. The remaining shares earned under such metrics will be issued in November 2021, provided that the Named Executive Officer meets the continued employment condition.

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Outstanding PSAs at the End of Fiscal Year 2020

As summarized in the table below of PSAs granted since our fiscal year ended September 28, 2018 ("fiscal year 2018") (the first year in which the Compensation Committee awarded PSAs subject to a performance metric measured over a three-year performance period), achievement of the TSR percentile ranking performance metric under the FY20 PSAs, which is subject to a three-year performance period, will be determined following the conclusion of

the Company's fiscal year 2022. During the three-year performance period under the fiscal year 2018 PSAs comprising the Company's fiscal years 2018, 2019, and 2020, the Company achieved a TSR of 44% resulting in its ranking in the 28th percentile against the applicable peer group. As a result of failing to achieve the threshold TSR percentile ranking metric, no shares were earned by the Named Executive Officers with respect to such performance metric, and all PSAs with respect to such performance metric were cancelled.

PSA Fiscal Year

Grant Date
Performance Metric
Performance Period
Achieved (% of Target)

FY18

11/7/2017 Non-GAAP EBITDA Growth

3-year TSR Percentile Ranking

FY18

FY18 - FY20

99.8%

0%

FY19

11/6/2018 Non-GAAP EBITDA Growth

3-year TSR Percentile Ranking

FY19

FY19 - FY21

0%

Performance Period in Progress(1)

Emerging Revenue Growth FY20 200%

FY20

11/5/2019 Design Wins FY20 200%

3-year TSR Percentile Ranking FY20 - FY22 Performance Period in Progress(2)
(1)
As of March 18, 2021, performance under this metric during the applicable performance period is at the "threshold" level of performance.

(2)
As of March 18, 2021, performance under this metric during the applicable performance period is between the "target" and "maximum" levels of performance.

One-Time, Non-Recurring Stock-Based Awards

The Compensation Committee also granted each executive officer a one-time, non-recurring stock-based award at its meeting on November 5, 2019. The purpose of these awards was to address significant executive retention concerns that came to light during the Compensation Committee's planning for fiscal year 2020 compensation. More specifically, the Compensation Committee reviewed analyses prepared by Aon/Radford showing that potential future payouts to the executive officers under the Company's long-term incentive program were below the compensation opportunities an executive could expect upon leaving the Company and commencing similar employment at a company in the peer group. In addition, the potential future payouts were below both the median of the peer group and Aon/Radford's recommended level of potential long-term equity

payouts. The Compensation Committee noted that due to aggressive metric setting under the Company's long-term incentive programs—as well as the occurrence of external events beyond the Company's control, including the Trade War—actual payouts under the Company's long-term incentive program had also lagged behind peer companies in recent years (including when adjusting for historical performance). At the same time, the Compensation Committee recognized that competition for executive talent had increased significantly in the semiconductor industry. As a result of its analysis of these various factors, the Compensation Committee determined that it was in the best interests of the Company and its stockholders to enhance retention by making one-time, non-recurring stock-based awards.

For Mr. Griffin, the Company's Chief Executive Officer, the one-time, non-recurring stock-based award consisted of a PSA that, like the FY20 PSAs, has both

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"performance" and "continued employment" conditions that must be met in order for him to receive shares underlying the award, as follows:

Value of
PSA Award


Number of Shares Subject
to PSAs, at Target(1)

$5,000,000

50,648

(1)
Reflects the dollar value of the award, divided by $98.72 per share, which was the closing price of the Company's common stock on the Nasdaq Global Select Market on November 5, 2019.

The "performance" condition of the PSA award measures the Company's non-GAAP EBITDA margin achieved relative to the 16 peer companies listed above during a two-year performance period comprising the Company's fiscal years 2020 and 2021, with half of the total award available to be earned with respect to each fiscal year within the performance period. For purposes of the award, non-GAAP EBITDA margin is calculated by dividing non-GAAP EBITDA by revenue for the applicable fiscal year, where non-GAAP EBITDA is defined as non-GAAP operating income, plus depreciation and amortization, for the applicable fiscal year. With respect to the Company and each peer group company, non-GAAP EBITDA and revenue are calculated based on publicly reported financial information for the applicable fiscal year (which for the peer companies consists of the four-quarter period that ends closest to, but not later than, the end of the Company's applicable fiscal year). When calculating the Company's non-GAAP EBITDA margin, the impact of any acquisition or disposition occurring within the applicable fiscal year is excluded if the revenue attributable to such acquisition or disposition exceeds $50 million during such period. The specific pre-established targets under the PSA award are as follows (subject to linear interpolation for amounts between "threshold" and "target" or "target" and "maximum"):

Threshold
Target
Maximum

Non-GAAP EBITDA Margin Percentile Ranking

25th 50th 75th

% of Target Level Shares Earned

50% 100% 200%

The "continued employment" condition of the PSA award provides that none of the shares earned based on performance would vest until the second anniversary of the grant date and would vest in full on such second anniversary only if Mr. Griffin remains employed by the Company.

During fiscal year 2020, the Company achieved a non-GAAP EBITDA margin of 43%, which put the Company in the 88th percentile of the peer group, resulting in achievement with respect to such metric of 200% of the target level of shares with respect to fiscal year 2020, with such shares to be issued in November 2021, provided that Mr. Griffin meets the continued employment condition.

For the other Named Executive Officers, the one-time, non-recurring stock-based award consisted of an RSU award that vests in two equal installments, with half of the underlying shares vesting on each of the first two anniversaries of the grant date provided the Named Executive Officer remains employed by the Company on the applicable vesting date, as follows:

Name

Value of RSU Award
Number of Shares Subject to RSUs(1)

Kris Sennesael

$ 1,700,000 17,220

Carlos S. Bori

$ 1,500,000 15,194

Robert J. Terry

$ 1,200,000 12,155

Karilee A. Durham

$ 800,000 8,103
(1)
Reflects the dollar value of the award, divided by $98.72 per share, which was the closing price of the Company's common stock on the Nasdaq Global Select Market on November 5, 2019.

Other Compensation and Benefits

We provide other benefits to our executive officers that are intended to be part of a competitive overall compensation program and are not tied to any company performance criteria. Consistent with our objective of having compensation programs that are considered fair to our employees, executive officers are eligible to participate in the Company's medical, dental, vision, life, and disability insurance plans, as well as the Company's 401(k) Savings and Investment

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Plan and Employee Stock Purchase Plan, under the same terms as such benefits are offered to other benefits-eligible employees. The Company does not provide executive officers with any enhanced retirement benefits (i.e., executive officers are subject to the same limits on contributions as other employees, as the Company does not offer any supplemental executive retirement plan or other similar non-qualified deferred compensation plan), and they are eligible for 401(k) company-match contributions under the same terms as other employees.

The Company offered executives the opportunity to participate in a reimbursement program for fiscal year 2020 providing up to an aggregate of $20,000 to each executive for the purchase of financial planning services, estate planning services, personal tax planning and preparation services, and/or an executive physical. No tax gross-up was provided for such reimbursements. In fiscal year 2020, each of the Named Executive Officers received reimbursement in connection with such services.

Engagement with Stockholders Regarding Executive Compensation

At our 2020 Annual Meeting of Stockholders, approximately 89% of the votes cast approved our "say-on-pay" proposal—the annual advisory vote regarding the compensation of the Company's Named Executive Officers. We understood this to mean that stockholders generally approved of our compensation policies and determinations for fiscal year 2019 and that they were generally pleased with the Company's enhanced disclosure of performance metrics and achievement in response to input from our stockholders following our 2019 Annual Meeting of Stockholders, at which our "say-on-pay" proposal was approved by only approximately 72% of the votes cast. Nonetheless, following the 2020 Annual Meeting, we engaged in formal stockholder outreach, soliciting feedback from approximately thirty institutional stockholders representing approximately 53% of the Company's shares outstanding. Institutions

representing approximately 38% of the Company's shares outstanding, including twelve of our largest twenty stockholders, responded to our outreach, and our subsequent conversations covered a variety of governance and compensation-related topics. During these conversations, most institutional stockholders expressed approval of the Company's strategy, performance, and management. In addition, most stockholders indicated support for the Company's compensation policies and plan designs in general, with some stockholders suggesting that going forward the Company modify the metrics and performance period duration for certain long-term stock-based awards. After considering this input from our stockholders, as well as evaluating practices related to executive compensation by public companies generally, and our peer group specifically, our Compensation Committee determined that in general, its existing executive compensation policies and plan designs remained appropriate and in the best interests of the Company and its stockholders.

Severance and Change-in-Control Benefits

None of our executive officers, including the Named Executive Officers, has an employment agreement that provides a specific term of employment with the Company. Accordingly, the employment of any such employee may be terminated at any time. We do provide certain benefits to our Named Executive Officers upon certain qualifying terminations of employment and in connection with terminations of employment under certain circumstances following a change in control. A description of the material terms of our severance and change-in-control arrangements with the Named Executive Officers can be found immediately below and further below under "Potential Payments Upon Termination or Change in Control."

The Compensation Committee believes that severance protections can play a valuable role in recruiting and retaining superior talent. Severance and other termination benefits are an effective way to offer executives financial security to incent them to forego

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an opportunity with another company. These agreements also protect the Company as the Named Executive Officers are bound by non-solicit covenants for a period of twelve (12) months after termination of employment. Outside of the change-in-control context, each Named Executive Officer is entitled to severance benefits if his or her employment is involuntarily terminated by the Company without cause and, in the case of the Chief Executive Officer, if he terminates his own employment for good reason (as defined in the Chief Executive Officer's change-in-control agreement). The level of each Named Executive Officer's cash severance or other termination benefit is generally tied to his or her annual base salary and short-term incentive amounts.

Additionally, each Named Executive Officer would receive enhanced severance benefits and accelerated vesting of equity awards if his or her employment were terminated under certain circumstances in connection with a change in control of the Company. These benefits are described in detail further below under "Potential Payments Upon Termination or Change in Control." The Compensation Committee believes these enhanced severance benefits and accelerated vesting are appropriate because the occurrence, or potential occurrence, of a change-in-control transaction would likely create uncertainty regarding the continued

employment of executive officers that typically occurs in a change-in-control context, and such severance benefits and accelerated vesting encourage the Named Executive Officers to remain employed with the Company through the change-in-control process and to focus on enhancing stockholder value both before and during the process. In addition, the vesting protection helps assure the Named Executive Officers that they will not lose the expected value of their equity awards because of a change in control of the Company.

Executive Officer Stock Ownership Requirements

We have adopted Executive Stock Ownership guidelines with the objective of more closely aligning the interests of our executive officers with those of our stockholders. Under the Executive Officer Ownership guidelines, our Named Executive Officers are each required to hold the lower of (a) the number of shares with a fair market value equal to the applicable multiple of such executive's current base salary, or (b) the applicable number of shares, each as set forth in the table below. All of our Named Executive Officers are in compliance with the stock ownership guidelines as of the date hereof.

Multiple of Annual
Base Salary(1)


Shares

Chief Executive Officer

6 137,200

Chief Financial Officer

2.5 29,400

Senior Vice President, Sales and Marketing

2.5 25,400

Senior Vice President and General Counsel

2.5 26,300

Senior Vice President, Human Resources

2.5 24,000
(1)
For purposes of the Executive Stock Ownership guidelines, the fair market value of the Company's common stock is the average closing price per share of the Company's common stock as reported on the Nasdaq Global Select Market (or if the common stock is not then traded on such market, such other market on which the common stock is traded) for the twelve (12) month period ending with the determination date.

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Prohibition on Hedging and Certain Other Transactions

We prohibit our directors, officers, and employees (or any of their designees) from directly or indirectly engaging in the following transactions with respect to securities of the Company:

selling short, including short sales "against the box";
buying or selling put or call options; or
purchasing financial instruments (including prepaid variable forward contracts, equity swaps, collars, and exchange funds), or otherwise engaging in transactions, that hedge or offset, or are designed to hedge or offset, any decrease in the market value of securities of the Company, whether through the use of traded securities, privately negotiated derivative securities or synthetic financial instruments.

In addition, we prohibit our directors, officers, and employees from purchasing Company securities on margin, borrowing against Company securities held in a margin account, or pledging Company securities as collateral for a loan.

Compliance with Internal Revenue Code Section 162(m)

For fiscal year 2020, with the exception of compensation grandfathered pursuant to certain transition rules, the Company will be unable to deduct compensation in excess of $1 million paid to certain executive officers, including the Chief Financial Officer, as specified under Section 162(m) of the IRC. The Compensation Committee uses its judgment to authorize compensation payments that may be subject to the limit when the Compensation Committee believes such payments are appropriate and in the best interests of the Company and its stockholders.

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Compensation Tables for Named Executive Officers

Summary Compensation Table

The following table summarizes compensation earned by, or awarded or paid to, our Named Executive Officers for fiscal year 2020, fiscal year 2019, and fiscal year 2018.

Name and Principal Position

Year
Salary ($)(1)
Stock Awards ($)(2)
Non-Equity Incentive Plan Compensation ($)(3)
All Other Compensation ($)(4)
Total ($)

Liam K. Griffin

2020 1,043,888 17,430,589 3,292,800 33,162 21,800,439

President and Chief

2019 972,000 11,658,937 1,011,257 18,399 13,660,593

Executive Officer

2018 894,808 7,150,399 1,284,664 12,242 9,342,113

Kris Sennesael

2020 537,192 5,677,593 1,060,000 18,591 7,293,376

Senior Vice President and

2019 496,000 3,264,443 322,467 15,352 4,098,262

Chief Financial Officer

2018 456,366 2,491,910 369,341 13,075 3,330,692

Carlos S. Bori

2020 463,189 4,856,262 731,200 15,444 6,066,095

Senior Vice President,

2019 428,200 3,147,860 222,373 12,561 3,810,994

Sales and Marketing

2018 398,535 2,491,910 251,669 12,346 3,154,460

Robert J. Terry

2020 479,396 4,431,833 756,800 15,994 5,684,023

Senior Vice President,

2019 442,700 1,981,920 230,112 15,287 2,670,019

General Counsel and Secretary

2018 409,054 1,557,371 257,914 12,466 2,236,805

Karilee A. Durham(5)

2020 437,908 3,037,435 691,200 16,531 4,183,074

Senior Vice President,

           

Human Resources

           
(1)
The amount paid to each Named Executive Officer for each two-week pay period is calculated by dividing the Named Executive Officer's annual base salary by 26. Whereas fiscal years 2018 and 2019 each consisted of 52 weeks, fiscal year 2020 consisted of 53 weeks, resulting in total salary payments for each Named Executive Officer to be higher than the annual base salary for such executive set forth above under "Components of Compensation—Base Salary."

(2)
The amounts in the Stock Awards column represent the grant date fair values, computed in accordance with the provisions of FASB ASC Topic 718—Compensation—Stock Compensation ("ASC 718"), of PSAs and RSUs granted during the applicable fiscal year, without regard to estimated forfeiture rates. For fiscal years 2018, 2019, and 2020, assuming the highest level of performance achievement with respect to the PSAs, the grant date fair values of the Stock Awards would be as follows: Mr. Griffin (FY 2018: $9,216,421; FY 2019: $14,658,935; FY 2020: $25,430,512), Mr. Sennesael (FY 2018: $3,211,920; FY 2019: $4,104,438; FY 2020: $6,637,546), Mr. Bori (FY 2018: $3,211,920; FY 2019: $3,957,856; FY 2020: $5,666,259), Mr. Terry (FY 2018: $2,007,357; FY 2019: $2,491,891; FY 2020: $5,211,819), and Ms. Durham (FY 2020: $3,577,434). For a description of the assumptions used in calculating the fair value of equity awards in 2020 under ASC 718, see Note 9 of the Company's financial statements included in the Company's Annual Report on Form 10-K filed with the SEC on November 17, 2020.

(3)
Reflects amounts paid to the Named Executive Officers pursuant to the executive incentive plan adopted by the Compensation Committee for each year indicated.

(4)
"All Other Compensation" includes the Company's contributions to the executive's 401(k) Plan account, the cost of group term life insurance premiums, and financial planning benefits. For fiscal year 2020, it specifically includes $11,400 in Company contributions to each Named Executive Officer's 401(k) Plan account, as well as $19,119 in financial planning benefits for Mr. Griffin.

(5)
Ms. Durham was not a Named Executive Officer prior to fiscal year 2020.

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Grants of Plan-Based Awards Table

The following table summarizes all grants of plan-based awards made to the Named Executive Officers in fiscal year 2020, including incentive awards payable under our Fiscal Year 2020 Executive Incentive Plan.

  Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1)
Estimated Future Payouts Under Equity Incentive Plan Awards
All Other Stock Awards: Number of Stock Or
Grant Date Fair Value of Stock and Option

Name

Grant Date
Threshold
($)


Target
($)


Maximum
($)


Threshold
(#)


Target
(#)


Maximum
(#)


Units
(#)


Awards
($)

Liam K. Griffin

823,200 1,646,400 3,292,800

11/5/2019 (2)       30,388 60,777 151,942   8,430,682 (5)

11/5/2019 (3)             40,518 3,999,937 (6)

11/5/2019 (4)       25,324 50,648 101,296   4,999,971 (7)

Kris Sennesael

265,000 530,000 1,060,000

11/5/2019 (2)       9,724 19,448 48,620   2,697,729 (5)

11/5/2019 (3)             12,965 1,279,905 (6)

11/5/2019 (8)             17,220 1,699,958 (6)

Carlos S. Bori

182,800 365,600 731,200

11/5/2019 (2)       8,205 16,410 41,025   2,276,313 (5)

11/5/2019 (3)             10,940 1,079,997 (6)

11/5/2019 (8)             15,194 1,499,952 (6)

Robert J. Terry

189,200 378,400 756,800

11/5/2019 (2)       7,901 15,802 39,505   2,191,974 (5)

11/5/2019 (3)             10,534 1,039,916 (6)

11/5/2019 (8)             12,155 1,199,942 (6)

Karilee A. Durham

172,800 345,600 691,200

11/5/2019 (2)       5,470 10,940 27,350   1,517,542 (5)

11/5/2019 (3)             7,293 719,965 (6)

11/5/2019 (8)             8,103 799,928 (6)
(1)
The amounts shown represent the potential value of awards earned under the Incentive Plan. The amounts actually paid to the Named Executive Officers under the Incentive Plan are shown above in the "Summary Compensation Table" under "Non-Equity Incentive Plan Compensation." For a more complete description of the Incentive Plan, please see description above under "Components of Compensation—Short-Term Incentives."

(2)
The amounts shown represent shares potentially issuable pursuant to the FY20 PSAs granted on November 5, 2019, under the Company's 2015 Long-Term Incentive Plan, as described above under "Components of Compensation—Long-Term Stock-Based Compensation."

(3)
Represents shares underlying RSU awards granted under the Company's 2015 Long-Term Incentive Plan. The RSU award vests over four years at a rate of twenty-five percent (25%) per year commencing one year after the date of grant and on each subsequent anniversary of the grant date for the following three years, provided the executive remains employed by the Company through each such vesting date.

(4)
The amounts shown represent shares potentially issuable pursuant to the one-time, non-recurring PSA award granted to Mr. Griffin on November 5, 2019, under the Company's 2015 Long-Term Incentive Plan, as described above under "Components of Compensation—Long-Term Stock-Based Compensation."

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(5)
Reflects the grant date fair value of the FY20 PSAs, computed in accordance with the provisions of ASC 718, using (a) a Monte Carlo simulation (which weights the probability of multiple potential outcomes) to value the portion of the award related to TSR percentile ranking, and (b) a price of $98.72 per share, which was the closing sale price of the Company's common stock on the Nasdaq Global Select Market on November 5, 2019, to value the portion of the award related to emerging revenue growth and design wins, assuming performance at the "target" level. For a description of the assumptions used in calculating the fair value of equity awards granted in fiscal year 2020 under ASC 718, see Note 9 of the Company's financial statements included in the Company's Annual Report on Form 10-K filed with the SEC on November 17, 2020.

(6)
Reflects the grant date fair value of the RSUs granted on November 5, 2019, computed in accordance with the provisions of ASC 718 using a price of $98.72 per share, which was the closing price of the Company's common stock on the Nasdaq Global Select Market on November 5, 2019.

(7)
Reflects the grant date fair value of the one-time, non-recurring PSA award granted to Mr. Griffin on November 5, 2019, computed in accordance with the provisions of ASC 718 using a price of $98.72 per share, which was the closing price of the Company's common stock on the Nasdaq Global Select Market on November 5, 2019, and assuming performance at the "target" level.

(8)
Represents shares underlying RSU awards granted under the Company's 2015 Long-Term Incentive Plan. The one-time, non-recurring RSU award vests over two years at a rate of fifty percent (50%) per year, as described above under "Components of Compensation—Long-Term Stock-Based Compensation."

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Outstanding Equity Awards at Fiscal Year End Table

The following table summarizes the unvested stock awards and all stock options held by the Named Executive Officers as of the end of fiscal year 2020.

 
Option Awards

Stock Awards  
               

Name

 
Number of Securities Underlying Unexercised Options (#) Exercisable

Number of Securities Underlying Unexercised Options (#) Unexercisable

Option Exercise Price ($)

Option Expiration Date

Number 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)  

Liam K. Griffin

    13,211 (2) 77.66   11/9/2023   60,778 (3) 8,924,034   9,290 (9) 1,364,051  

                            50,648 (4)   7,436,646     108,906 (10)   15,990,668  

                            3,862 (5)   567,057     91,164 (11)   13,385,610  

                            12,387 (6)   1,818,783     12,662 (12)   1,859,161  

                            36,301 (7)   5,330,076              

                            40,518 (8)   5,949,258              

Kris Sennesael

  40,000     75.22   8/29/2023   19,448 (3) 2,855,550   3,238 (9) 475,436  

    9,578     3,192 (2)   77.66     11/9/2023     933 (5)   136,992     30,492 (10)   4,477,140  

                            4,316 (6)   633,718     29,172 (11)   4,283,325  

                            10,164 (7)   1,492,380              

                            12,965 (8)   1,903,651              

                            17,220 (13)   2,528,413              

Carlos S. Bori

  1,500     60.97   11/10/2021   16,410 (3) 2,409,480   3,238 (9) 475,436  

    5,191         84.89     11/9/2022     901 (5)   132,294     29,403 (10)   4,317,242  

    6,165     3,082 (2)   77.66     11/9/2023     4,316 (6)   633,718     24,615 (11)   3,614,220  

                            9,801 (7)   1,439,081              

                            10,940 (8)   1,606,320              

                            15,194 (13)   2,230,935              

Robert J. Terry

    2,252 (14) 75.91   11/10/2023   15,802 (3) 2,320,208   2,023 (9) 297,037  

                            658 (15)   96,614     18,513 (10)   2,718,264  

                            2,698 (6)   396,147     23,703 (11)   3,480,311  

                            6,171 (7)   906,088              

                            10,534 (8)   1,546,707              

                            12,155 (13)   1,784,719              

Karilee A. Durham

          10,940 (3) 1,606,320   1,239 (9) 181,922  

                            8,852 (16)   1,299,739     11,979 (10)   1,758,877  

                            3,993 (7)   586,292     16,410 (11)   2,409,480  

                            7,293 (8)   1,070,831              

                            8,103 (13)   1,189,763              
(1)
Reflects a price of $146.83 per share, which was the closing sale price of the Company's common stock on the Nasdaq Global Select Market on October 2, 2020.

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(2)
These options were granted on November 9, 2016, and vested at a rate of twenty-five percent (25%) per year on each anniversary of the grant date until they became fully vested on November 9, 2020.

(3)
Represents shares issuable under the FY20 PSAs (awarded on November 5, 2019, as described above under "Components of Compensation—Long-Term Stock-Based Compensation") with respect to two performance metrics measured over a one-year performance period consisting of the Company's fiscal year 2020, assuming achievement at the "maximum" level of performance. Fifty percent (50%) of the shares earned under the FY20 PSAs with respect to such metrics were issued on November 5, 2020, and the remaining fifty percent (50%) of the shares earned with respect to such metrics will be issued on November 5, 2021, provided that the executive meets the continued employment condition.

(4)
Represents shares issuable under the one-time, non-recurring stock-based award granted to Mr. Griffin on November 5, 2019 (as described above under "Components of Compensation—Long-Term Stock-Based Compensation"), with respect to a non-GAAP EBITDA margin metric measured over the Company's fiscal year 2020, assuming achievement at the "maximum" level of performance. The shares earned under this award will be issued on November 5, 2021, provided that Mr. Griffin meets the continued employment condition.

(5)
Represents shares issuable under an RSU award granted on November 9, 2016, under the Company's 2015 Long-Term Incentive Plan. The RSU award vested at a rate of twenty-five percent (25%) per year on each anniversary of the grant date until they became fully vested on November 9, 2020.

(6)
Represents shares issuable under an RSU award granted on November 7, 2017, under the Company's 2015 Long-Term Incentive Plan. The RSU award vests at a rate of twenty-five percent (25%) per year on each anniversary of the grant date through November 7, 2021.

(7)
Represents shares issuable under an RSU award granted on November 6, 2018, under the Company's 2015 Long-Term Incentive Plan. The RSU award vests at a rate of twenty-five percent (25%) per year on each anniversary of the grant date through November 6, 2022.

(8)
Represents shares issuable under an RSU award granted on November 5, 2019, under the Company's 2015 Long-Term Incentive Plan. The RSU award vests at a rate of twenty-five percent (25%) per year on each anniversary of the grant date through November 5, 2023.

(9)
Represents shares issuable under the fiscal year 2018 PSAs ("FY18 PSAs") with respect to a TSR percentile ranking performance metric, assuming achievement at the "threshold" level of performance. This portion of the FY18 PSAs, which was subject to a three-year performance period and originally scheduled to vest on November 7, 2020, was cancelled upon the Compensation Committee's determination on October 20, 2020, that the performance condition had not been satisfied.

(10)
Represents shares issuable under the fiscal year 2019 PSAs ("FY19 PSAs") with respect to the TSR percentile ranking performance metric, assuming achievement at the "maximum" level of performance. This portion of the FY19 PSAs, which is subject to a three-year performance period, will be issued on November 6, 2021, to the extent earned and provided that the executive meets the continued employment condition.

(11)
Represents shares issuable under the FY20 PSAs (awarded on November 5, 2019, as described above under "Components of Compensation—Long-Term Stock-Based Compensation") with respect to the TSR percentile ranking performance metric, assuming achievement at the "maximum" level of performance. This portion of the FY20 PSAs, which is subject to a three-year performance period, will be issued on November 5, 2022, to the extent earned and provided that the executive meets the continued employment condition.

(12)
Represents shares issuable under the one-time, non-recurring stock-based award granted to Mr. Griffin on November 5, 2019 (as described above under "Components of Compensation—Long-Term Stock-Based Compensation"), with respect to a non-GAAP EBITDA margin metric measured over the Company's fiscal year 2021, assuming achievement at the "threshold" level of performance. The shares earned under this award will be issued on November 5, 2021, provided that Mr. Griffin meets the continued employment condition.

(13)
Represents shares issuable under an RSU award granted on November 5, 2019, under the Company's 2015 Long-Term Incentive Plan. The RSU award vests at a rate of fifty percent (50%) per year on each anniversary of the grant date through November 5, 2021.

(14)
These options were granted on November 10, 2016, and vested at a rate of twenty-five percent (25%) per year on each anniversary of the grant date until they became fully vested on November 10, 2020.

(15)
Represents shares issuable under an RSU award granted on November 10, 2016, under the Company's 2015 Long-Term Incentive Plan. The RSU award vested at a rate of twenty-five percent (25%) per year on each anniversary of the grant date until they became fully vested on November 10, 2020.

(16)
Represents shares issuable under an RSU award granted on April 9, 2018, under the Company's 2015 Long-Term Incentive Plan. The RSU award vests at a rate of twenty-five percent (25%) per year on each anniversary of the grant date through April 9, 2022.

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Option Exercises and Stock Vested Table

The following table summarizes the Named Executive Officers' option exercises and stock award vesting during fiscal year 2020.

 
Option Awards

Stock Awards  
       

Name

 
Number of Shares Acquired on Exercise (#)

Value Realized on Exercise ($)(1)

Number of Shares Acquired on Vesting (#)
Value Realized on Vesting ($)(2)  

Liam K. Griffin

  95,172   3,391,429   84,285   8,471,587  

Kris Sennesael

            27,163     2,987,558  

Carlos S. Bori

      20,374   2,028,413  

Robert J. Terry

    7,471     130,998     13,987     1,393,526  

Karilee A. Durham

      6,988   650,156  
(1)
The value realized on exercise is based on the amount by which the market price of a share of the Company's common stock on the dates of exercise exceeded the applicable exercise price per share of the exercised option.

(2)
The value realized upon vesting is determined by multiplying (a) the number of shares underlying the stock awards that vested, by (b) the closing price of the Company's common stock on the Nasdaq Global Select Market on the applicable vesting date.

Potential Payments Upon Termination or Change in Control

Mr. Griffin

On May 11, 2016, in connection with the appointment of Mr. Griffin as Chief Executive Officer, the Company entered into an amended and restated Change in Control / Severance Agreement with Mr. Griffin (the "Griffin Agreement"). The Griffin Agreement sets out severance benefits that become payable if, while employed by the Company, other than following a change in control, Mr. Griffin either (i) is terminated without cause, or (ii) terminates his employment for good reason. The severance benefits provided to Mr. Griffin under either of these circumstances would consist of: (i) a lump-sum payment equal to two (2) times the sum of (A) his then-current annual base salary immediately prior to such termination and (B) the Bonus Amount (as defined below); (ii) full acceleration of the vesting of all of Mr. Griffin's outstanding stock options, which stock options would become exercisable for a period of two (2) years after the termination date (but not beyond the expiration of their respective maximum terms), full acceleration of the vesting of all outstanding restricted stock awards, and the right to receive the number of performance shares under outstanding PSAs that are earned but

unissued and that he would have earned had he remained employed through the end of the applicable performance period; and (iii) provided he is eligible for and timely elects to continue receiving group medical coverage, certain COBRA continuation for him and his eligible dependents ("COBRA continuation") for up to fifteen (15) months after the termination date. The Bonus Amount is an amount equal to the greater of (x) the average of the short-term cash incentive awards received for the three (3) years prior to the year in which the termination occurs, and (y) the target annual short-term cash incentive award for the year in which the termination occurs.

The Griffin Agreement also sets out severance benefits that become payable if, within the period of time commencing three (3) months prior to and ending two (2) years following a change in control, Mr. Griffin's employment is either (i) terminated by the Company without cause, or (ii) terminated by him for good reason (a "Qualifying Termination"). The severance benefits provided to Mr. Griffin in such circumstances would consist of the following: (i) a lump-sum payment equal to two and one-half (21/2) times the sum of (A) his annual base salary immediately prior to the change in control, and

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(B) the CIC Bonus Amount (as defined below); (ii) all of Mr. Griffin's then-outstanding stock options would become exercisable for a period of thirty (30) months after the termination date (but not beyond the expiration of their respective maximum terms); and (iii) COBRA continuation for up to eighteen (18) months after the termination date. The CIC Bonus Amount is an amount equal to the greater of (x) the average of the annual short-term cash incentive awards received for the three (3) years prior to the year in which the change of control occurs and (y) the target annual short-term cash incentive award for the year in which the change of control occurs.

The Griffin Agreement also provides that in the event of a Qualifying Termination, Mr. Griffin is entitled to full acceleration of the vesting of all of his outstanding equity awards (including stock options, restricted stock awards, RSU awards, and all earned but unissued performance-based equity awards). At the time of a change in control, all such outstanding equity awards would continue to be subject to the same time-based vesting schedule to which the awards were subject prior to the change in control (including performance-based equity awards that are deemed earned at the time of the change in control as described below). For performance-based equity awards where the change in control occurs prior to the end of the performance period, such awards would be deemed earned as to the greater of (i) the target level of shares for such awards, or (ii) the number of shares that would have been earned pursuant to the terms of such awards based upon performance up through and including the day prior to the date of the change in control. In the event that the successor or surviving company does not agree to assume, or to substitute for, such outstanding equity awards on substantially similar terms with substantially equivalent economic benefits as exist for such award immediately prior to the change in control, then such awards would accelerate in full as of the change in control.

In the event of Mr. Griffin's death or permanent disability (within the meaning of Section 22(e)(3) of the IRC), the Griffin Agreement provides for full

acceleration of the vesting of all then-outstanding equity awards subject to time-based vesting (including stock options, restricted stock awards, RSU awards, and all performance-based equity awards where the performance period has ended and the shares are earned but unissued). The Griffin Agreement also provides that if Mr. Griffin's death or permanent disability occurs prior to the end of the performance period of a performance-based equity award, each such award would be deemed earned as to the greater of (i) the target level of shares for such award, or (ii) the number of shares that would have been earned pursuant to the terms of such award had he remained employed through the end of the performance period, and such earned shares would become vested and issuable to him after the performance period ends. In addition, all outstanding stock options would be exercisable for a period of twelve (12) months following the termination of employment (but not beyond the expiration of their respective maximum terms).

The Griffin Agreement is intended to be exempt from or compliant with Section 409A of the IRC and has an initial two (2) year term from May 11, 2016, and thereafter renews automatically on an annual basis for up to five (5) additional years unless either the Company or Mr. Griffin timely provides a notice of non-renewal to the other prior to the end of the then-current term. The payments due to Mr. Griffin under the Griffin Agreement are subject to potential reduction in the event that such payments would otherwise become subject to excise tax incurred under Section 4999 of the IRC, if such reduction would result in his retaining a larger amount, on an after-tax basis, than if he had received all of the payments due.

Additionally, the Griffin Agreement requires that Mr. Griffin sign a release of claims in favor of the Company before he is eligible to receive any benefits under the Griffin Agreement and contains a non-solicitation provision applicable to Mr. Griffin while he is employed by the Company and for twelve (12) months following the termination of his employment.

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The terms "change in control," "cause," and "good reason" are each defined in the Griffin Agreement. Change in control means, in summary: (i) the acquisition by a person or a group of 40% or more of the outstanding stock of the Company; (ii) a change, without approval by the Board of Directors, of a majority of the Board of Directors of the Company; (iii) the acquisition of the Company by means of a reorganization, merger, consolidation, or asset sale; or (iv) stockholder approval of a liquidation or dissolution of the Company. Cause means, in summary: (i) deliberate dishonesty that is significantly detrimental to the best interests of the Company; (ii) conduct constituting an act of moral turpitude; (iii) willful disloyalty or insubordination; or (iv) incompetent performance or substantial or continuing inattention to or neglect of duties. Good reason means, in summary: (i) a material diminution in his base compensation, authority, duties, responsibilities, or budget over which he retains authority; (ii) a requirement that Mr. Griffin report to a corporate officer or employee instead of reporting directly to the Board of Directors; (iii) a material change in his office location; or (iv) any action or inaction constituting a material breach by the Company of the terms of the agreement.

Mr. Sennesael, Mr. Bori, Mr. Terry, and Ms. Durham

The Company entered into Change in Control / Severance Agreements with each of Mr. Sennesael, Mr. Bori, Mr. Terry, and Ms. Durham on August 29, 2016, November 9, 2016, November 10, 2016, and April 13, 2018, respectively. Each such Change in Control / Severance Agreement is referred to herein as a "CIC Agreement."

Each CIC Agreement sets out severance benefits that become payable if, within the period of time commencing three (3) months prior to and ending twelve (12) months following a change in control, the executive officer's employment is either (i) terminated by the Company without cause, or (ii) terminated by

the executive for good reason (for each such executive, a "Qualifying Termination"). The severance benefits provided to the executive in such circumstances would consist of the following: (i) a lump sum payment equal to one and one-half (11/2) times the sum of (A) his or her annual base salary immediately prior to the change in control, and (B) the CIC Bonus Amount; (ii) all of the executive's then-outstanding stock options would remain exercisable for a period of eighteen (18) months after the termination date (but not beyond the expiration of their respective maximum terms); and (iii) COBRA continuation for up to eighteen (18) months after the termination date.

Each CIC Agreement also provides that in the event of a Qualifying Termination, the executive is entitled to full acceleration of the vesting of all of his or her outstanding equity awards (including stock options, restricted stock awards, RSU awards, and all earned but unissued performance-based equity awards). At the time of a change in control, all such outstanding equity awards would continue to be subject to the same time-based vesting schedule to which the awards were subject prior to the change in control (including performance-based equity awards that are deemed earned at the time of the change in control as described below). For performance-based equity awards where the change in control occurs prior to the end of the performance period, such awards would be deemed earned as to the greater of (i) the target level of shares for such awards, or (ii) the number of shares that would have been earned pursuant to the terms of such awards based upon performance up through and including the day prior to the date of the change in control. In the event that the successor or surviving company does not agree to assume, or to substitute for, such outstanding equity awards on substantially similar terms with substantially equivalent economic benefits as exist for such award immediately prior to the change in control, then such awards would accelerate in full as of the change in control.

Each CIC Agreement also sets out severance benefits outside a change in control that become payable if the

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executive's employment is terminated by the Company without cause. The severance benefits provided to the executive under such circumstance would consist of the following: (i) biweekly compensation continuation payments for a period of twelve (12) months, with each such compensation continuation payment being equal to the aggregate payment amount divided by twenty-six (26), where the aggregate payment is equal to the sum of (x) his or her annual base salary, and (y) any short-term cash incentive award then due; (ii) all then-vested outstanding stock options would remain exercisable for a period of twelve (12) months after the termination date (but not beyond the expiration of their respective maximum terms); and (iii) COBRA continuation coverage for up to twelve (12) months after the termination date.

In the event of the executive's death or permanent disability (within the meaning of Section 22(e)(3) of the IRC), each CIC Agreement provides for full acceleration of the vesting of all then-outstanding equity awards subject to time-based vesting (including stock options, restricted stock awards, RSU awards, and all performance-based equity awards where the performance period has ended and the shares are earned but unissued). Each CIC Agreement also provides that for a performance-based equity award where the executive's death or permanent disability occurs prior to the end of the performance period, such award would be deemed earned as to the greater of (i) the target level of shares for such award, or (ii) the number of shares that would have been earned pursuant to the terms of such award had the executive remained employed through the end of the performance period, and such earned shares would become vested and issuable to the executive after the performance period ends. In addition, all outstanding stock options would remain exercisable for a period of twelve (12) months following the termination of employment (but not beyond the expiration of their respective maximum terms).

Each CIC Agreement is intended to be exempt from or compliant with Section 409A of the IRC and has an initial two (2) year term, and thereafter renews

automatically on an annual basis for up to five (5) additional years unless either the Company or the executive timely provides a notice of non-renewal to the other prior to the end of the then-current term. The payments due to each executive under his or her CIC Agreement are subject to potential reduction in the event that such payments would otherwise become subject to excise tax incurred under Section 4999 of the IRC, if such reduction would result in the executive retaining a larger amount, on an after-tax basis, than if he or she had received all of the payments due.

Additionally, each CIC Agreement requires that the executive sign a release of claims in favor of the Company before he or she is eligible to receive any benefits under the agreement. Each CIC Agreement also contains non-solicitation provisions applicable to the executive while he or she is employed by the Company and for a period of twelve (12) months following the termination of his or her employment.

The terms "change in control," "cause," and "good reason" are each defined in the CIC Agreements. Change in control means, in summary: (i) the acquisition by a person or a group of 40% or more of the outstanding stock of the Company; (ii) a change, without approval by the Board of Directors, of a majority of the Board of Directors of the Company; (iii) the acquisition of the Company by means of a reorganization, merger, consolidation, or asset sale; or (iv) stockholder approval of a liquidation or dissolution of the Company. Cause means, in summary: (i) deliberate dishonesty that is significantly detrimental to the best interests of the Company; (ii) conduct constituting an act of moral turpitude; (iii) willful disloyalty or insubordination; or (iv) incompetent performance or substantial or continuing inattention to or neglect of duties. Good reason means, in summary: (i) a material diminution in the executive's base compensation, authority, duties, or responsibilities; (ii) a material diminution in the authority, duties, or responsibilities of the executive's supervisor; (iii) a material change in the executive's office location; or (iv) any action or inaction constituting a material breach by the Company of the terms of the agreement.

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The following table summarizes the payments and benefits that would be made to the Named Executive Officers as of October 2, 2020, in the following circumstances as of such date:

termination without cause outside of a change in control;
termination without cause or for good reason in connection with a change in control; and
in the event of a termination of employment because of death or disability.

The accelerated equity values in the table reflect a price of $146.83 per share, which was the closing sale price of the Company's common stock on the Nasdaq Global Select Market on October 2, 2020. The table does not reflect any equity awards made after October 2, 2020.

Name

  Benefit

Termination w/o Cause Outside Change in Control ($)(1)

Termination w/o Cause or for Good Reason, After Change in Control ($)
Death/Disability ($)  

Liam K. Griffin(2)

  Salary and Short-Term Incentive   5,350,800 (3) 6,688,500 (4)  

  Accelerated Options   913,805   913,805   913,805  

  Accelerated RSUs   13,665,174   13,665,174   13,665,174  

  Accelerated PSAs(5)   43,476,510   43,476,510   43,476,510