Fabrinet : 2023 Proxy Statement

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a)

of the Securities Exchange Act of 1934

Filed by the Registrant ☒

Filed by a party other than the Registrant □

Check the appropriate box:

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

• Definitive Proxy Statement

• Definitive Additional Materials
• Soliciting Material Pursuant to Section 240.14a-12

FABRINET

(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 all boxes that apply):

• No fee required

• Fee paid previously with preliminary materials
• Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

PROXY STATEMENT

2023

NOTICE OF 2023 ANNUAL MEETING OF SHAREHOLDERS

Annual Meeting Date and Time

Tuesday, December 12, 2023 at 9:00 a.m. Pacific Standard Time

Location and Meeting Admission

We have adopted a virtual format for our 2023 Annual Meeting of Shareholders (the ''Annual Meeting'') to provide a consistent experience to all our shareholders regardless of location. There will be no physical location for shareholders to attend the Annual Meeting.

You are entitled to attend the Annual Meeting online, vote and submit questions during the meeting by visiting www.virtualshareholdermeeting.com/FN2023 and entering the 16-digit control number included on your Notice of Internet Availability of Proxy Materials, voting instruction form or proxy card (if you requested printed materials). You will only be entitled to vote and submit questions at the Annual Meeting if you are a shareholder as of the record date.

More details on how to participate in this year's virtual meeting can be found in the section of the accompanying proxy statement entitled ''Questions and Answers about the Annual Meeting and Procedural Matters.''

In the event of a technical malfunction or other situation that at the discretion of the Chairman of the Board of Directors may affect the ability of the Annual Meeting to satisfy the requirements for a meeting of shareholders to be held, the Chairman or Corporate Secretary of Fabrinet will convene the meeting at 11:00 a.m. Pacific Standard Time on the same date and at the website specified above solely for the purpose of holding the adjourned meeting at this later time.

Items of Business

1. Elect two Class II directors named in the proxy statement and recommended by Fabrinet's board of directors to serve for a term of three years and until their respective successors have been duly elected and qualified or until their earlier death, resignation or removal;
2. Ratify the appointment of PricewaterhouseCoopers ABAS Ltd. as Fabrinet's independent registered public accounting firm for Fabrinet's fiscal year ending June 28, 2024;
3. Hold a non-binding, advisory vote to approve the compensation of Fabrinet's named executive officers, as disclosed in the proxy statement;
4. Hold a non-binding, advisory vote to determine shareholders' preferred frequency of holding future advisory votes to approve the compensation of Fabrinet's named executive officers; and
5. Conduct any other business as may properly come before the meeting or any adjournment or postponement thereof.

These items of business are more fully described in the proxy statement accompanying this notice. Any action on the items of business described above may be considered at the Annual Meeting at the time and on the date specified above, or at any time and date to which the Annual Meeting may be properly adjourned or postponed.

Record Date

Only shareholders of record at the close of business on October 17, 2023 are entitled to notice of, and to vote at, the Annual Meeting or any postponement or adjournment thereof.

Voting

Your vote is very important. Even if you plan to attend the Annual Meeting online, we encourage you to read the proxy statement and submit your proxy or voting instructions as quickly as possible, to ensure your vote is recorded. For specific instructions on how to vote your shares, please follow the procedures outlined in your Notice of Internet Availability of Proxy Materials, or refer to the section of the proxy statement entitled ''Questions and Answers About the Annual Meeting and Procedural Matters.''

If you have any questions or require any assistance with completing your proxy, please contact Kingsdale Advisors by telephone at [phone](toll-free within North America) or [phone] (call collect outside North America), or by email at [e-mail].

Thank you for your ongoing support of Fabrinet.

By order of the Board of Directors, /s/ David T. Mitchell

David T. Mitchell

Chairman of the Board of Directors

Grand Cayman, Cayman Islands

October 24, 2023

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting

of Shareholders to Be Held on Tuesday, December 12, 2023

The proxy statement and our Fiscal 2023Annual Report to Shareholders are available at www.proxyvote.com.

TABLE OF CONTENTS
	Page
2023 PROXY STATEMENT SUMMARY	1
2023 Annual Meeting	1
Matters to Be Voted on at the Annual Meeting	1
Business and Financial Highlights	2
Governance Highlights	3
Executive Compensation Program Highlights	4
QUESTIONS AND ANSWERS ABOUT
THE ANNUAL MEETING AND
PROCEDURAL MATTERS	7
How can I attend the Annual Meeting?	7
Can shareholders ask questions during the
Annual Meeting?	7
Who is entitled to vote at the Annual Meeting?	7
Why did I receive a one-page notice in the mail
regarding the Internet availability of proxy
materials instead of a full set of proxy materials? ..	7
What proposals will be voted on at the Annual
Meeting?	8
How does the Board of Directors recommend that
I vote?	8
What is the voting requirement to approve each of
the proposals and how are votes counted?	8
How many shares must be present or
represented to conduct business at the Annual
Meeting?	9
How can I vote my shares during the Annual
Meeting?	9
How can I vote my shares without attending the
Annual Meeting?	9
What is the difference between holding shares as
a shareholder of record and as a beneficial
owner?	9
What happens if additional matters are presented
at the Annual Meeting?	10
Can I change my vote?	10
What happens if I decide to attend the Annual
Meeting but I have already voted or submitted a
proxy card covering my shares?	10
What should I do if I receive more than one set of
voting materials?	10
Is my vote confidential?	10
Where can I find the voting results of the Annual
Meeting?	11
Who will bear the cost of soliciting votes for the
Annual Meeting?	11
What is the deadline to propose actions for
consideration at next year's annual meeting of
shareholders or to nominate individuals to serve
as directors?	11
How may I obtain a separate set of proxy
materials or the Fiscal 2023 Annual Report?	12
Whom do I contact if I have questions?	12

	Page
FISCAL YEAR END	13
PROPOSAL ONE: ELECTION OF
DIRECTORS	14
General	14
Nominees for Director	14
Recommendation of the Board of Directors	14
Biographical Information	15
DIRECTOR COMPENSATION	20
Annual Non-Employee Director Compensation
Elements	19
Fiscal 2023 Director Compensation Table	20
Director Share Ownership Guidelines	20
CORPORATE GOVERNANCE
MATTERS	21
Corporate Governance Guidelines	21
Code of Business Conduct	21
Majority Voting Director Resignation Policy in
Uncontested Elections	21
Board Leadership Structure	21
Risk Oversight	22
Information Security Risk Oversight and
Management	22
Director Independence	23
Board Meetings and Committees	23
Attendance at Annual Meetings of Shareholders
by the Board of Directors	24
Contacting the Board of Directors	24
Share Ownership Guidelines	25
Prohibited Transactions in Our Securities	25
Compensation Committee Interlocks and Insider
Participation	25
Process for Recommending Candidates for
Election to the Board of Directors	26
ENVIRONMENTAL, SOCIAL AND
GOVERNANCE (ESG) PRACTICES
AND POLICIES	27
General	27
Environmental	27
Social	28
Governance	29
PROPOSAL TWO: RATIFICATION OF
APPOINTMENT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING
FIRM	30
General	30
Recommendation of the Board of Directors	30
Accounting Fees	30
Auditor Independence	30
Pre-Approval of Audit and Non-Audit Services	30

	Page
PROPOSAL THREE: ADVISORY
VOTE TO APPROVE COMPENSATION
OF NAMED EXECUTIVE OFFICERS	31
General	31
Recommendation of the Board of Directors	31
PROPOSAL FOUR: ADVISORY VOTE
TO DETERMINE PREFERRED
FREQUENCY OF FUTURE ADVISORY
VOTES TO APPROVE
COMPENSATION OF NAMED
EXECUTIVE OFFICERS	32
General	32
Recommendation of the Board of Directors	32
AUDIT COMMITTEE REPORT	33
EXECUTIVE OFFICERS	34
EXECUTIVE COMPENSATION	35
Compensation Discussion and Analysis	35
Compensation and Risk Assessment	46
Compensation Committee Report	46
Summary Compensation Table	47
Grants of Plan-Based Awards in Fiscal 2023	49
Outstanding Equity Awards at Fiscal 2023
Year-End	50
Option Exercises and Shares Vested in
Fiscal 2023	51
Potential Payments Upon Termination or Change
of Control	52

	Page
ADDITIONAL COMPENSATION
MATTERS	59
CEO Pay Ratio	59
Pay Versus Performance Disclosure	59
CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS	63
Related Party Transactions	63
Policy for Approval of Related Party
Transactions	63
SECURITY OWNERSHIP BY
PRINCIPAL SHAREHOLDERS AND
MANAGEMENT	64
EQUITY COMPENSATION PLAN
INFORMATION	65
DELINQUENT SECTION 16(a)
REPORTS	65
OTHER MATTERS	65
APPENDIX A - GAAP TO NON-GAAP
RECONCILIATION	A-1

2023 PROXY STATEMENT SUMMARY

2023 Annual Meeting

Date:	Tuesday, December 12, 2023
Time:	9:00 a.m. Pacific Standard Time
Location:	Online via the Internet at www.virtualshareholdermeeting.com/FN2023
Record Date:	October 17, 2023
Voting:	Shareholders as of the record date are entitled to vote. Shareholders may cast one vote for
	each ordinary share held by them as of the record date on all matters properly presented at the
	Annual Meeting. At the close of business on the record date, there were 36,330,858 ordinary
	shares outstanding and entitled to vote at the Annual Meeting, as well as 3,100,494 ordinary
	shares outstanding and held as treasury shares (which are not entitled to vote).
Admission to Meeting:	You are entitled to attend the Annual Meeting online, vote and submit questions during
	the meeting by visiting www.virtualshareholdermeeting.com/FN2023 and entering the
	16-digit control number included on your Notice of Internet Availability of Proxy Materials,
	voting instruction form or proxy card (if you requested printed materials). You will only be
	entitled to vote and submit questions at the Annual Meeting if you are a shareholder as of the
	record date.

Matters to Be Voted on at the Annual Meeting

	Board	Page Reference for
Matter	Recommendation	More Information
Proposal 1: Election of two Class II directors	''FOR'' each	Page 14
	nominee
Proposal 2: Ratification of the appointment of PricewaterhouseCoopers	''FOR''	Page 30
ABAS Ltd. as Fabrinet's independent auditor for the fiscal
year ending June 28, 2024
Proposal 3: Advisory vote to approve named executive officer	''FOR''	Page 31
compensation

Proposal 4: Advisory vote to determine preferred frequency of holding future advisory votes to approve named executive officer compensation

To hold future	Page 32
advisory votes
every ''1 YEAR''

Class II Director Nominees: Terms to Expire in 2026

Name	Director Since	Experience and Qualifications	Board Committees
Seamus Grady	2017	CEO experience and deep industry	None
		knowledge
Thomas F. Kelly	2010	Extensive managerial and operational	Audit (Chair)
		experience; audit and financial	Compensation
		reporting expertise

2023 PROXY STATEMENT

1

2023 PROXY STATEMENT SUMMARY

Business and Financial Highlights

In 2023, we achieved our third successive fiscal year of record revenue, net income and net income per diluted share. During fiscal 2023, we also repurchased 488,477 ordinary shares under our share repurchase program for an aggregate purchase price of $47.6 million, which offset dilution from issuances under our equity incentive plans.

The following table illustrates select fiscal 2023 and fiscal 2022 results, as well as the closing share price of our ordinary shares following announcement of our fiscal 2023 and fiscal 2022 year-end results:

	Fiscal 2023(1)	Fiscal 2022	% Change
Revenue	$2,645.2 million	$2,262.2 million	16.9%
GAAP gross margin	12.7%	12.3%	3.3%
Non-GAAP gross margin(2)	13.0%	12.6%	3.2%
Operating margin	9.5%	9.0%	5.6%
Non-GAAP operating margin(2)	10.8%	10.3%	4.9%
Net income	$247.9 million	$200.4 million	23.7%
Non-GAAP net income(2)	$282.7 million	$229.2 million	23.3%
Net income per diluted share	$6.73	$5.36	25.6%
Non-GAAP net income per diluted share(2)	$7.67	$6.13	25.1%
Closing share price (on business day following
announcement of fiscal year-end results)	$153.66	$115.75	32.8%

1. Please see the section titled ''Management's Discussion and Analysis of Financial Condition and Results of Operations'' in our Annual Report on Form 10-K for our fiscal year ended June 30, 2023 (filed with the Securities and Exchange Commission on August 22, 2023), for a more detailed discussion of our fiscal 2023 financial results.
2. Please refer to Appendix A for a reconciliation of this non-GAAP financial measure to the most directly comparable financial measure calculated in accordance with generally accepted accounting principles in the United States (''GAAP'').

2	2023 PROXY STATEMENT

2023 PROXY STATEMENT SUMMARY

Governance Highlights

Our commitment to good corporate governance is illustrated by the following practices:

Board independence (5 out of 7 directors are independent)

Separate Chairman and Chief Executive Officer

Independent directors regularly meet in executive sessions without management present

Directors attended, on average, 99% of all Board and Committee meetings in fiscal 2023

Diversity of Board skills and experience

Annual Board and Committee evaluations

Strong corporate governance guidelines and policies

Majority voting director resignation policy for uncontested elections

Share ownership guidelines for executive officers and directors

Succession planning process

Shareholder outreach program

Board risk oversight and assessment

Board Composition at a Glance

AGE	GENDER DIVERSITY	INDEPENDENCE	TENURE
2	2	2	1
50-59	women	non-independent	<5 years
		2	1
4		5-9 years
	20+ years
70+
1
60-69
	5	5	3
	10-19 years
	men	independent

Director Skills Summary

Our Board members bring diverse experience and perspectives to areas critical to our business. Their collective knowledge ensures appropriate management and risk oversight and supports our strategy of long-term sustainable value creation for shareholders.

						Business		Other Public
	Executive		Operational		Global	Development	Information	Co. Board
Director Name	Leadership Industry Manufacturing	Finance Leadership	& Strategy	Security	Experience
David T. (Tom) Mitchell	•	•	•	•	•	•		•
Seamus Grady	•	•	•	•	•	•
Dr. Homa Bahrami				•	•	•		•
Thomas F. Kelly	•			•	•	•	•	•
Darlene S. Knight	•		•	•	•	•		•
Dr. Frank H. Levinson	•	•	•	•	•	•		•
Rollance E. Olson	•		•	•		•

2023 PROXY STATEMENT

3

2023 PROXY STATEMENT SUMMARY

Executive Compensation Program Highlights

Our executive compensation program is designed to be heavily weighted towards compensating our executives based on company performance. To that end, we have implemented executive compensation policies and practices that reinforce our pay-for-performance philosophy and align with commonly viewed best practices and sound governance principles.

• What We Do

Pay-for-performance, with significant portion of compensation at risk

Caps on performance-based incentive compensation

Multi-year performance periods

Clawback policy on cash and equity incentive compensation

Share ownership guidelines for executive officers and directors

100% independent directors on the Compensation Committee

Independent compensation consultant engaged by the Compensation Committee

Annual review and approval of our compensation strategy

Engagement with shareholders

Annual shareholder advisory vote on executive compensation

• What We Don't Do

No targeting specific percentiles

No guaranteed bonus

No changing of multi-year targets after they are set

No repricing or buyouts of equity awards

No share ''recycling''

No short sales, hedging, or pledging of our ordinary shares

No transactions involving derivatives of our ordinary shares

No paying dividends or dividend equivalents on unvested equity awards

Shareholder Engagement and Advisory Vote on Executive Compensation

We have conducted shareholder outreach annually since 2016 and have provided shareholders with an annual say-on-pay advisory vote on compensation of our named executive officers since 2012. We are very pleased that shareholders have expressed their continued support of our compensation practices since our 2016 annual meeting of shareholders.

		Recent Say-on-Pay Votes
		99%				96%
83%				82%
17%			18%
			1%			4%
FY22	FY21		FY20	FY19
			For		Against

4	2023 PROXY STATEMENT