DEF 14A

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a)

of the Securities Exchange Act of 1934

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Check the appropriate box:

 

  Preliminary Proxy Statement
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  Definitive Proxy Statement
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Qorvo, 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 all boxes that apply):
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LOGO


 

LOGO

June 27, 2022

Dear Stockholders:

You are cordially invited to attend Qorvo’s 2022 Annual Meeting of Stockholders, which will be held on August 9, 2022, at 8:00 a.m. Central Daylight Time at the Hotel Crescent Court, 400 Crescent Court, Dallas, TX 75201. During the annual meeting, we will discuss each item of business described in the Notice of Annual Meeting of Stockholders and Proxy Statement.

On or about June 27, 2022, we began mailing to certain stockholders a Notice of Internet Availability of Proxy Materials containing instructions on how to access our proxy materials, including our 2022 Annual Report, via the Internet. The Notice of Internet Availability of Proxy Materials also contains instructions on how to receive a paper copy of the proxy materials. Stockholders who did not receive the Notice of Internet Availability of Proxy Materials will receive a paper copy of the Notice of Annual Meeting of Stockholders, Proxy Statement, Form of Proxy and 2022 Annual Report, which we also began mailing on or about June 27, 2022. Copies of these materials are available at www.proxyvote.com.

Your vote is important to us. It is important that your shares of common stock be represented at the annual meeting so that a quorum may be established. Even if you plan to attend the annual meeting in person, we encourage you to read the proxy materials carefully and vote your proxy as soon as possible. You may vote over the Internet, by telephone or by mailing a completed proxy card or voting instruction form. Additional information about the annual meeting is provided in the proxy materials. Thank you for your continued interest in Qorvo.

Sincerely,

 

 

LOGO

Jason K. Givens

Secretary


TABLE OF CONTENTS

 

NOTICE OF 2022 ANNUAL MEETING OF STOCKHOLDERS

     i  

2022 PROXY STATEMENT SUMMARY

     ii  

PROPOSAL 1 – ELECTION OF DIRECTORS

     1  

Nominees for Election of Directors

     1  

Director Nominees – Qualifications, Skills and Experience

     5  

Board Diversity Matrix

     6  

CORPORATE GOVERNANCE

     7  

Corporate Governance Guidelines

     7  

Independent Directors

     7  

Board Leadership Structure

     7  

Risk Oversight

     8  

Risk Oversight in Compensation Programs

     8  

Code of Ethics

     9  

Committees and Meetings

     9  

Audit Committee

     9  

Compensation Committee

     10  

Corporate Development Committee

     11  

Governance and Nominating Committee

     11  

Meeting Attendance

     11  

Executive Sessions

     11  

Corporate Social Responsibility and Environmental, Social and Governance Highlights

     12  

Whistleblower Policy

     13  

Prohibition on Hedging and Pledging

     13  

Pre-Approval Policies and Procedures

     13  

Procedures for Director Nominations

     13  

Stockholder Communications with Directors

     15  

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

     16  

EXECUTIVE OFFICERS

     16  

PROPOSAL 2 – APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

     18  

EXECUTIVE COMPENSATION

     19  

Compensation Discussion and Analysis

     19  

Executive Summary

     19  

Executive Compensation Program

     21  

Compensation Decision-Making Processes

     22  

Elements of Compensation

     25  

Change in Control Agreements

     29  

Conclusion

     30  

Compensation Committee Report

     30  

Summary Compensation Table

     31  

2022 Grants of Plan-Based Awards Table

     32  

Equity Compensation Plans

     33  

Outstanding Equity Awards at Fiscal 2022 Year-End Table

     34  

2022 Option Exercises and Stock Vested Table

     35  

2022 Nonqualified Deferred Compensation Table

     35  

Potential Payments upon Termination or Change-In-Control

     36  

Equity Awards

     36  

401(k) Savings Plan; Deferred Compensation Plan

     36  

Employee Stock Purchase Plan

     36  

Medical Benefits

     36  

Employment Agreement with Mr. Bruggeworth

     36  

Change in Control Agreements

     38  

Potential Payments Upon a Qualifying Termination after a Change in Control

     39  

Other Potential Payments Upon Resignation, Termination for Cause, Termination without Cause, Retirement or Constructive Termination

     39  

CEO Pay Ratio Disclosure

     41  

Director Compensation

     41  

Director Compensation Philosophy

     41  

Director Compensation for Fiscal Year Ended April  2, 2022

     42  

Schedule of Director Fees for Fiscal Year Ended April  2, 2022

     43  

Equity Compensation

     43  

Other Compensation

     43  

EQUITY COMPENSATION PLAN INFORMATION

     44  

2015 Inducement Stock Plan

     44  

PROPOSAL 3 – APPROVAL OF THE QORVO, INC. 2022 STOCK INCENTIVE PLAN

     45  

Summary of the Proposal

     45  

Background and Purpose of the 2022 Plan

     45  

Eligibility

     45  

Summary of Key 2022 Plan Provisions and Other Compensation Practices

     45  

Shares Reserved for Issuance Under the 2022 Plan

     47  

Responsible Plan Practices and Historical Share Usage

     49  

Administration

     49  

Amendment and Termination

     50  

Awards

     50  

Change of Control

     51  

Transferability

     52  

Forfeiture and Recoupment

     52  

Certain United States Federal Income Tax Consequences

     52  

New Plan Benefits

     54  

PROPOSAL 4 – RATIFICATION OF APPOINTMENT OF QORVO’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

     55  

Independent Registered Public Accounting Firm Fee Information

     55  

Report of the Audit Committee

     56  

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     57  

RELATED PERSON TRANSACTIONS

     59  

Related Person Transactions Policy

     59  

VOTING AND OTHER INFORMATION

     60  

PROPOSALS FOR THE 2023 ANNUAL MEETING

     60  

GENERAL INFORMATION

     61  

Record Date and Shares Entitled to Vote

     61  

Quorum Requirements

     61  

How to Attend the Annual Meeting

     61  

Proxy Costs

     61  

Householding and Delivery of Proxy Materials

     61  

How to Vote Your Shares

     62  

Votes Required, Non-Votes, Abstentions, and Revocations

     62  

APPENDIX A – QORVO, INC. 2022 STOCK INCENTIVE PLAN

     A-1  
 

 

Website addresses and hyperlinks are included for reference only. The information contained on or available through websites referred to and/or linked to in this proxy statement (other than the Company’s website to the extent specifically referred to herein as required by SEC rules) is not part of this proxy solicitation and is not incorporated by reference into this proxy statement or any other proxy materials.

 

LOGO     2022 Proxy Statement


 

LOGO

NOTICE OF 2022 ANNUAL MEETING OF STOCKHOLDERS

Dear Qorvo Stockholders:

We hereby give notice that the 2022 Annual Meeting of Stockholders of Qorvo, Inc. (“Qorvo”) will be held on Tuesday, August 9, 2022, at 8:00 a.m. Central Daylight Time at the Hotel Crescent Court, 400 Crescent Court, Dallas, TX 75201, for the following purposes:

 

  (1)

To elect the nine director nominees named in the accompanying proxy statement to serve a one-year term and until their respective successors are duly elected and qualified or until their earlier resignation or removal.

 

  (2)

To approve, on an advisory basis, the compensation of our Named Executive Officers (as defined in the proxy statement).

 

  (3)

To approve the Qorvo, Inc. 2022 Stock Incentive Plan.

 

  (4)

To ratify the appointment of Ernst & Young LLP as Qorvo’s independent registered public accounting firm for the fiscal year ending April 1, 2023.

 

  (5)

To transact such other business that may properly come before the meeting.

Under Delaware law, only stockholders of record at the close of business on the record date, June 16, 2022, are entitled to notice of and to vote at the annual meeting or any adjournment thereof. A list of the stockholders entitled to vote at the meeting will be available for examination by stockholders during the annual meeting.

By Order of the Board of Directors,

 

LOGO

Jason K. Givens

Secretary

June 27, 2022

Important Notice Regarding the Availability of Proxy Materials for the Stockholders Meeting to be held on August 9, 2022:

The Notice of Annual Meeting of Stockholders, Proxy Statement, Form of Proxy and 2022 Annual Report to Stockholders are available at www.proxyvote.com.

 

LOGO     2022 Proxy Statement    i


LOGO

7628 Thorndike Road

Greensboro, North Carolina 27409-9421

2022 Proxy Statement Summary

This summary highlights information contained elsewhere in this proxy statement for Qorvo, Inc., which we sometimes refer to as the “Company” or “Qorvo.” This summary does not contain all the information that you should consider, and you should read the entire proxy statement carefully before voting.

 

 

Annual Meeting of Stockholders

 

  Time and Date    8:00 a.m. Central Daylight Time, August 9, 2022
  Place   

Hotel Crescent Court

400 Crescent Court

Dallas, TX 75201

  Record Date    June 16, 2022
  Voting    Stockholders as of the record date are entitled to vote. Each share of common stock is entitled to one vote for each director nominee and one vote for each of the other proposals.
  Entry    Stockholders attending the meeting in person will need to present valid photo identification and, if you are not a registered holder, proof of ownership of Qorvo common stock. See page 62 for further instructions.

How to Vote

Although stockholders may vote in person at the annual meeting, we strongly encourage all stockholders to vote their shares prior to the meeting using one of the voting methods below:

 

 

 

  LOGO     LOGO     LOGO  
 

Mail

You may vote by signing, dating

and mailing the enclosed proxy

card or the voting instruction

form you received.

   

Telephone

Please call toll-free

1-800-690-6903 and follow the

instructions on the proxy card or

voting instruction form.

   

Internet

Please go to

www.proxyvote.com and

follow the instructions on the

website.

 

 

 

Meeting Agenda

 

  Proposal    Description    Board Recommendation    Page
1    Election of the nine director nominees named in this Proxy Statement    Vote FOR ALL    1
2    To approve, on an advisory basis, of the compensation of our Named Executive Officers    Vote FOR    18
3    To approve the Qorvo, Inc. 2022 Stock Incentive Plan    Vote FOR    45
4    Ratification of Ernst & Young LLP as Qorvo’s independent registered public accounting firm for fiscal 2023    Vote FOR    55

 

ii     LOGO     2022 Proxy Statement


2022 Proxy Statement Summary

 

 

Board Nominees

The following table provides summary information about each director nominee. The nominees receiving a majority of the votes cast at the meeting will be elected as directors.

 

  Name    Age   

Director

Since

   Occupation    Independent    AC    CC    CDC    GNC

  Ralph G. Quinsey

    

 

66

    

 

2015

  

Chairman of the Board of Qorvo; Secretary and

Treasurer of Dry Fly Distilling

    

 

X

    

 

X

         

 

X

    

 

C

  Robert A. Bruggeworth

    

 

61

    

 

2013

  

President and CEO of Qorvo

                   

 

X

    

  Judy Bruner

    

 

63

    

 

2021

  

Former Executive Vice President, Administration and Chief Financial Officer, SanDisk Corporation

    

 

X

    

 

X

              

 

X

  Jeffery R. Gardner

    

 

62

    

 

2015

  

President and CEO of CalAmp Corp.

    

 

X

    

 

C

              

 

X

  John R. Harding

    

 

67

    

 

2015

  

General Partner of Harding Partners, LP

    

 

X

    

 

X

         

 

C

    

  David H. Y. Ho

    

 

63

    

 

2015

  

Chairman and Founder of Kiina Investment Ltd.

    

 

X

         

 

X

    

 

X

    

  Roderick D. Nelson

    

 

62

    

 

2015

  

Founder and Principal of Nelson Technology Partners, Inc.

    

 

X

         

 

X

    

 

X

    

 

X

  Dr. Walden C. Rhines

    

 

75

    

 

2015

  

President and CEO of Cornami, Inc.

    

 

X

         

 

C

         

 

X

  Susan L. Spradley

    

 

61

    

 

2017

  

CEO of Motion Intelligence

    

 

X

               

 

X

    

 

X

    

 

X

 

AC   Audit Committee
GNC   Governance and Nominating Committee
CC   Compensation Committee
C   Committee Chair
CDC   Corporate Development Committee
 

 

Fiscal 2022 Executive Compensation Elements

Base salary and short-term incentive compensation opportunities account for approximately 27% of each Named Executive Officer’s target total direct compensation, as further described below.

Long-term equity-based compensation, which accounts for approximately 73% of each Named Executive Officer’s target total direct compensation, consists of performance-based and service-based restricted stock unit awards, as further described below.

With the exception of compensation paid to Mr. Philip J. Chesley, who was hired effective November 1, 2021 and therefore did not receive a grant of Objectives-based RSUs for fiscal 2022, approximately 87% of each Named Executive Officer’s target total direct compensation mix for fiscal year 2022 is “at-risk” and approximately 56% is tied to performance.

 

Type    Form    Terms

Base Salary

   Cash    Generally eligible for annual increase.

 

Short-Term Incentive Awards

  

 

Cash or equity

  

 

Based on attainment of Company performance metrics. Form of payment is determined by Compensation Committee.

Long-Term Equity-Based Incentive Awards

   Restricted Stock Units (RSUs)   
  

 

Company Objectives-Based RSUs

  

 

Based on achievement of Company performance objectives. Earned at the end of a specified performance period, with 50% vesting upon certification of the level of achievement, and the remaining 50% vesting in equal installments over the following two years.

  

Service-Based RSUs

   Vest in increments of 25% per year over four years.

Other Employee Benefits

   Health & Disability Insurance, 401(k) Plan, Employee Stock Purchase Plan & Deferred Compensation Plan    Eligible to participate in the same employee benefit plans generally available to all employees.

 

LOGO     2022 Proxy Statement    iii


2022 Proxy Statement Summary

 

 

Fiscal 2022 Compensation Decisions

Effective as of the start of fiscal 2022, we made the following compensation decisions with respect to our Named Executive Officers:

 

 

Base salaries for our Named Executive Officers increased modestly reflecting the Company’s continuing solid financial performance during the pandemic and consideration of competitive market data as well as the individual performance and the roles and responsibilities of each Named Executive Officer.

 

 

Based on our financial performance in the first half and second half of fiscal 2022, the Named Executive Officers received short-term cash incentive awards at 148.3% and 54.3%, respectively, of their fiscal 2022 target percentage based on their base salary paid during the applicable six-month performance period.

 

 

Our Named Executive Officers earned (i) Company Objectives-based RSUs at 79% of the targeted number of units (based on the objectives measurable as of May 2022), and (ii) Service-based RSUs in amounts consistent with our equity-based compensation practices.

 

 

Short-term and long-term incentive objectives were not adjusted despite the ongoing market uncertainties created by the COVID-19 pandemic.

We believe our executive compensation program provides a balanced and stable foundation to reward our Named Executive Officers for achieving our corporate objectives. Our compensation philosophy emphasizes team effort, which we believe fosters rapid adjustment and adaptation to fast-changing market conditions and helps not only to achieve our short-term and long-term goals, but also to align the interests of our management team with those of Qorvo and our stockholders.

Sound Corporate Governance and Compensation Practices

 

  Accountability

 

   Approximately 89% of our directors are considered independent

 

   Our Chairman of the Board is an independent director, as are the Chairs of each Board Committee

 

   Majority voting for director elections in uncontested elections

 

   Annual elections for all directors

 

   Require CEO stock ownership equal to 5x salary, to align with the interests of our stockholders

 

   Robust stock ownership requirements for directors equal to 5x their annual retainer

 

   Annual Board and Committee self-evaluations

 

   Individual director peer evaluations conducted on a biennial basis

 

   Our independent directors regularly meet in executive sessions without management, with the Chair of the Governance and Nominating Committee or the Lead Independent Director presiding

 

   Eligible stockholders may nominate their own director nominees to be included in the Company’s proxy materials

 

  Board Diversity

 

   Approximately 33% of our directors are women or ethnic minorities

 

   Women comprise approximately 22% of the Board

 

  Compensation

 

   Aligns Company performance with compensation of our Named Executive Officers

 

   Prohibitions on backdating and repricing of equity awards and options

 

   We do not provide perquisites to our executive officers

 

   We impose certain “clawback” restrictions in our senior officer equity awards

 

   We prohibit the hedging or pledging of Qorvo securities

 

   We provide change-in-control agreements with a “double trigger” for acceleration of equity awards requiring a qualifying termination of employment following a change in control

 

 

iv     LOGO     2022 Proxy Statement


2022 Proxy Statement Summary

 

Cautionary Note Regarding Forward-Looking Statements

This proxy statement includes “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about our plans, objectives and representations, and typically are identified by use of terms such as “may,” “will,” “should,” “could,” “expect,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” and similar words. Actual results and developments may be materially different from those expressed or implied by any of these forward-looking statements. You should not place undue reliance on any forward-looking statement and should consider the risks and uncertainties described in Qorvo’s most recent Annual Report on Form 10-K and in other reports and statements filed with the Securities and Exchange Commission.

 

LOGO     2022 Proxy Statement    v


Proposal 1 – Election of Directors

 

 

PROPOSAL 1 – ELECTION OF DIRECTORS

Nominees for Election of Directors

We are asking you to elect each of the nine director nominees listed below to serve on our Board of Directors for a one-year term expiring at the annual meeting of stockholders in 2023. Under our bylaws, each director nominee receiving a majority of the votes cast at the annual meeting will be elected to another term as director. Directors will serve for a one-year term expiring at the 2023 annual meeting of stockholders or until his or her earlier resignation or removal.

All nine nominees presently serve as directors. Although we expect that each of the nominees will be available for election, if any vacancy in the slate of nominees occurs, we expect that shares of common stock represented by proxies will be voted for the election of a substitute nominee or nominees recommended by the Governance and Nominating Committee and approved by the Board of Directors. The names of the nine nominees for election to the Board, their principal occupations and qualifications are set forth below.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH
OF THE DIRECTOR NOMINEES LISTED BELOW.

 

 

  Ralph G. Quinsey

  Age: 66

Director Since: 2015

Committees:

Audit

Corporate Development

Governance and Nominating (Chair)

  

 

Mr. Quinsey has served as Chairman of the Board of Qorvo since January 2015 and as Lead Independent Director for Qorvo since August 2018. He was the President and Chief Executive Officer and a director of TriQuint Semiconductor, Inc. (“TriQuint”) from 2002 until TriQuint’s combination with RF Micro Devices, Inc. (“RFMD”) in a merger of equals to form Qorvo, effective January 1, 2015. From September 1999 to January 2002, Mr. Quinsey was Vice President and General Manager of the Analog Division of ON Semiconductor, a manufacturer of semiconductors for a wide array of applications. From 1979 to September 1999, Mr. Quinsey held various positions at Motorola, a manufacturer of semiconductors and communications equipment, including Vice President and General Manager of the RF/IF Circuits Division, which developed both silicon and GaAs technologies for wireless phone applications. Mr. Quinsey is the Secretary, Treasurer and a board member of Dry Fly Distilling, a privately held craft distiller, a board member of Perfect Company, a privately held Internet of Things (“IoT”)-based company, and an officer, board member and co-founder of Orcorazon, a privately held medical devices company. As the former Chief Executive Officer of TriQuint, Mr. Quinsey brings to the Board his deep institutional knowledge regarding our company, with an exceptional understanding of our company’s strengths, challenges and opportunities. Additionally, Mr. Quinsey has significant experience leading a public company through various phases of growth and brings to the Board his extensive knowledge of and breadth of experience with our business resulting from over 40 years in the semiconductor industry. Mr. Quinsey’s strong leadership skills and unique perspective as the long-time leader of TriQuint make him a tremendous asset to the Board.

 

 

  Robert A. Bruggeworth

Age: 61

Director Since: 2013

Committees:

Corporate Development

  

 

Mr. Bruggeworth has served as our President and Chief Executive Officer and as a director since Qorvo’s incorporation in December 2013. Prior to becoming a director of Qorvo, he was RFMD’s President and Chief Executive Officer and a director from January 2003 until January 2015, having previously served in several senior management positions at RFMD beginning in September 1999. From July 1983 to April 1999, Mr. Bruggeworth held several manufacturing and engineering positions at AMP Inc. (now TE Connectivity LTD), a supplier of electrical and electronic connection devices, most recently as Divisional Vice President of Global Computer and Consumer Electronics based in Hong Kong. Since 2007, Mr. Bruggeworth has served on the board of directors, including as lead independent director since May 2017, of MSA Safety Incorporated, a publicly traded global leader in the development, manufacture and supply of safety products that protect people and facility infrastructures. In November 2020, the board of directors of the Semiconductor Industry Association elected Mr. Bruggeworth to serve as its 2021 Chair after serving as its Vice Chair in 2020. As our President and Chief Executive Officer, Mr. Bruggeworth understands our business and the challenges and issues that we face and brings to the Board strong leadership skills and substantial global business experience. Mr. Bruggeworth also has over 30 years of experience with respect to manufacturing, marketing and material sourcing for semiconductors and other electronic products.

 

LOGO     2022 Proxy Statement    1


Proposal 1 – Election of Directors

 

 

 

  Judy Bruner

  Age: 63

Director Since: 2021

Committees:

Audit

Governance and Nominating

  

 

Ms. Bruner served as the Executive Vice President, Administration and Chief Financial Officer of SanDisk Corp, a supplier of flash storage products, from June 2004 until its acquisition by Western Digital in May 2016. Ms. Bruner was Senior Vice President and Chief Financial Officer of Palm, Inc., a provider of handheld computing and communications solutions, from September 1999 until June 2004. Prior to that, she held financial management positions at 3Com Corporation, Ridge Computers and Hewlett-Packard Company. Ms. Bruner has served as a member of the boards of directors of Applied Materials, Inc., a publicly traded semiconductor equipment manufacturer, since July 2016, Rapid7, Inc., a security data and analytics solutions provider, since October 2016, and Seagate Technology plc, a publicly traded provider of storage solutions, since January 2018. She previously served on the boards of directors of Brocade Communications Systems, Inc. from January 2009 to November 2017 and Varian Medical Systems, Inc. from August 2016 to April 2021. Ms. Bruner brings to the Board semiconductor industry leadership and significant experience in financial management and board roles with a range of publicly traded technology companies.

 

 

  Jeffery R. Gardner

  Age: 62

Director Since: 2015

Committees:

Audit (Chair)

Governance and Nominating

  

 

Mr. Gardner has served on the Board of Directors since January 2015. From 2004 until 2015, he served as a director of RFMD. Mr. Gardner has served as President and Chief Executive Officer of CalAmp Corp., a publicly traded company that is a leading provider of wireless communications solutions for a broad array of applications to customers globally, since July 2020 (after having served in that interim role since March 2020) and has served as a member of its board of directors since January 2015. From September 2015 through February 2020, Mr. Gardner served as President and Chief Executive Officer of Brinks Home Security, one of the largest home security monitoring companies in the U.S., which was an affiliate of Ascent Capital Group, Inc. through August 2019. Mr. Gardner served as Executive Vice President of Ascent from September 2015 to August 2019 and as a director of Ascent from November 2016 until August 2019. From 2005 until December 2014, Mr. Gardner was President and Chief Executive Officer of Windstream Corporation, a leading provider of advanced network communications and technology solutions, including cloud computing and managed services. Mr. Gardner also served as a director of Windstream from 2005 until February 2015. Prior to Windstream, Mr. Gardner held several positions at ALLTEL, including Executive Vice President and Chief Financial Officer. He is a National Association of Corporate Directors (NACD) Leadership Fellow, having completed the NACD’s program for corporate directors. Mr. Gardner is a former member of the Business Roundtable, an association of chief executive officers of leading U.S. companies. He also served as Chairman of the United States Telecom Association, a telecommunications trade association. Mr. Gardner has been in the communications industry since 1986 and brings to the Board and its committees valuable industry insight, including extensive knowledge regarding the requirements of downstream customers, resulting from his experience as a CEO and CFO of public companies in the wireless telecommunications industry. Additionally, Mr. Gardner has specific expertise in the areas of strategic development, finance, financial reporting and accounting and internal controls.

 

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Proposal 1 – Election of Directors

 

 

 

  John R. Harding

  Age: 67

Director Since: 2015

Committees:

Audit

Corporate Development (Chair)

  

 

Mr. Harding has served on the Board of Directors since January 2015. From 2006 until 2015, he served as a director of RFMD. Since January 2020, Mr. Harding has served as a consultant in the fabless semiconductor design and manufacturing field as the General Partner of Harding Partners, LP. Mr. Harding co-founded eSilicon Corporation, a privately held company that designed and manufactured complex, custom chips for a broad portfolio of large and small firms. He served as President and Chief Executive Officer of eSilicon from its inception in May 2000 until it was acquired by Inphi Corporation (and concurrently sold certain assets to Synopsys, Inc.) in January 2020. Before starting eSilicon Corporation, Mr. Harding served as President, Chief Executive Officer and a director of publicly traded Cadence Design Systems, Inc., which acquired his former employer, Cooper & Chyan Technology, Inc. Mr. Harding held a variety of senior management positions at Zycad Corporation, and his career also includes positions with TXL and IBM Corporation. From 2012 to 2016, Mr. Harding served on the board of directors of Advanced Micro Devices, Inc. Mr. Harding has also held leadership roles at Drew University, where he was Vice Chairman of the Board of Trustees, and Indiana University, where he was a member of the Advisory Board for the School of Public and Environmental Affairs. In addition, Mr. Harding has served as a member of the Steering Committee at the U.S. Council on Competitiveness and was a former member of the National Academies Committee for Software, Growth and the Future of the U.S. Economy. From 2004 to 2020, Mr. Harding served as a member of the board of directors of the Global Semiconductor Alliance. Mr. Harding currently serves on the board of directors of SandFirst, Inc., an Electronic Design Automation (EDA) company launched in April 2021. He is a frequent international speaker on the topics of innovation, entrepreneurship and semiconductor trends and policies. Mr. Harding brings to the Board and its committees a deep understanding of the challenges facing semiconductor companies gained from his experience as Chairman and Chief Executive Officer of eSilicon Corporation. Additionally, Mr. Harding has substantial operational experience, business acumen and expertise in corporate strategy development.

 

 

  David H. Y. Ho

  Age: 63

Director Since: 2015

Committees:

Compensation

Corporate Development

  

 

Mr. Ho has served on the Board of Directors since January 2015. From 2010 until 2015, he served as a director of TriQuint. Mr. Ho is Chairman and Founder of Kiina Investment Ltd., a venture capital firm that invests in start-up companies in the technology, media and telecommunications industries. Additionally, Mr. Ho previously served as a senior advisor for Permira Advisors LLC, a private equity buyout fund, Chairman of Greater China for Nokia Siemens Networks, President of Greater China for Nokia Corporation and Senior Vice President of the Nokia Networks Business Group. He has also held senior leadership roles with Nortel Networks and Motorola in China and Canada. Mr. Ho currently serves as a member of the board of Sun Life Financial, Inc. (since 2021) in Canada; Air Products and Chemicals, Inc. (since 2013) in the United States; and DBS Bank (Hong Kong) Limited, a subsidiary of DBS Group Holdings, a leading financial services group located in Singapore. Mr. Ho previously was a director of China COSCO Shipping Corporation, the world’s largest shipping conglomerate, from 2016 through 2021, China Mobile Communications Corporation, the world’s largest mobile communications carrier, from 2016 to 2020; Pentair plc from 2007 until 2018 when it spun off its electrical business into nVent Electric plc; nVent Electric plc from 2018 until 2020; Dong Fang Electric Corporation from 2009 through 2015; 3Com Corporation from 2008 through 2010; Owens-Illinois Inc. from 2008 to 2012; and Sinosteel Corporation from 2008 until 2012. Mr. Ho brings to the Board and its committees extensive experience and business knowledge of global markets in diversified industries, with a strong track record in establishing and building mobile handset and infrastructure businesses in China. He also has significant management expertise in operations, mergers, acquisitions and joint ventures in Asia.

 

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Proposal 1 – Election of Directors

 

 

 

  Roderick D. Nelson

  Age: 62

Director Since: 2015

Committees:

Compensation

Corporate Development Governance and
Nominating

  

 

Mr. Nelson has served on the Board of Directors since January 2015. From 2012 until 2015, he served as a director of TriQuint. An expert in wireless technology, in 2022 Mr. Nelson founded and is principal of Nelson Technology Partners, Inc., providing strategic and operational advice to communications companies. Since 2009, he has been the co-founder and principal of Tritech Sales and Services, LLC, a strategic product, business development and sales function consulting firm. In 2017, he co-founded Geoverse, LLC, a company which designs, deploys and manages in-building cellular LTE systems, and served as its Chief Executive Officer from June 2018 through April 2022. Mr. Nelson served as the Chief Technology Officer for Globetouch, Inc., a privately held global provider of 3G and LTE mobile broadband services for connected devices and IoT applications, from January 2015 to August 2017. He served as Executive Vice President and Chief Technology Officer of AT&T Wireless Services where, over a twenty-year career, he led the Technology Development Group responsible for the development and deployment of the first 3G networks in the United States. During his career, Mr. Nelson has worked closely with both national and international regulators and standards bodies on the creation of wireless specifications and standards. Mr. Nelson holds numerous patents covering broad and fundamental aspects of wireless communications. Mr. Nelson brings to the Board and its committees substantial experience in the wireless communications industry, including his extensive knowledge regarding the requirements of downstream customers. He also has significant technical expertise, such as his standards development experience, 4G and 5G network deployment experience, and a deep understanding of the regulatory environment applicable to our business.

 

 

  Dr. Walden C. Rhines

  Age: 75

Director Since: 2015 Committees:

Compensation (Chair)

Governance and
Nominating

  

 

Dr. Rhines has served on the Board of Directors since January 2015. From 1995 until 2015, he served as a director of TriQuint. Since March 2020, he has served as President and Chief Executive Officer of Cornami, Inc., a semiconductor processor company focused on fully homomorphic encryption. Since October 2019, he has served as Chief Executive Officer of Rhines Consultants, a consulting firm in the semiconductor, integrated circuit design and manufacturing fields. Dr. Rhines was also CEO Emeritus of Mentor, a Siemens business, an electronic design automation company, until October 2020, having previously served as President and Chief Executive Officer of Mentor from its acquisition by Siemens Industry, Inc. in March 2017 until October 2018. He previously served as Chief Executive Officer of Mentor Graphics Corporation from 1993 and chairman of its board of directors from 2000 until the acquisition of Mentor Graphics by Siemens in 2017. Prior to joining Mentor Graphics, he spent 21 years at Texas Instruments, a leading global semiconductor and technology company, with his most recent position as the Executive Vice President of its Semiconductor Group with responsibility for its worldwide semiconductor business. Dr. Rhines also served as a director of Cirrus Logic, Inc., a semiconductor company, from 1995 to 2009, as a director of Electronic System Design Alliance, a trade association for electronic design companies, from 1994 to 2019, and as a director of Semiconductor Research Corporation, a technology research consortium from 2002 until 2020. Dr. Rhines served as a director of PTK Acquisition Corp., a special purpose acquisition company, in 2020 and 2021 and as a consultant to the Defense Advanced Research Projects Agency (DARPA), a research investment arm of the U.S. government. In 2021, Dr. Rhines was the recipient of the 2021 Global Semiconductor Alliance’s highest honor, the Dr. Morris Chang Exemplary Leadership Award, which recognizes individuals for their exceptional contributions and leadership within the semiconductor industry. Dr. Rhines brings to the Board and its committees over 45 years of experience in the semiconductor industry, including substantial operating experience and management expertise as a CEO of a publicly traded technology company. He also brings strong leadership skills and a significant understanding of international markets.

 

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Proposal 1 – Election of Directors

 

 

 

  Susan L. Spradley

  Age: 61

Director Since: 2017 Committees:

Compensation

Corporate Development

Governance and Nominating

  

 

Ms. Spradley has served on the Board of Directors since January 2017. She has served as Chief Executive Officer of Motion Intelligence, a privately held software-as-a-service company, since January 2018. Previously, she was principal of Spradley Consulting LLC, a consulting firm that she founded, from February 2017 until January 2020, and a partner in the TAP Growth Group, a senior executive consulting firm, from August 2017 to June 2019. From January 2013 until January 2017, she served in various roles at Viavi Solutions Inc. (formerly JDS Uniphase), most recently as Executive Vice President and General Manager–Network and Service Enablement. Prior to joining Viavi Solutions Inc., Ms. Spradley served as executive director at US-Ignite from April 2011 to December 2012. Prior to that, Ms. Spradley was President of the North America region at Nokia Siemens Networks from 2007 to 2011, responsible for regional profit and loss, sales and service. From 1997 to 2005, she held executive positions at Nortel Networks Corporation. Ms. Spradley has served on the board of directors of Avaya Holdings Corp., a publicly traded communications applications provider, since December 2017, and NetScout Systems, Inc., a publicly traded real-time operational intelligence and performance analytics company, since April 2018. She previously served on the board of directors of publicly traded EXFO Inc. from October 2011 through November 2012. Ms. Spradley brings to the Board and its committees more than 25 years of experience in the wireless telecommunications industry, including broad operating experience in sales, product portfolio management, and research and development for multiple global communications-related companies. She also has extensive public company executive leadership experience.

Director Nominees – Qualifications, Skills and Experience

 

Experience/Expertise

                  Number of Directors

Governance/Public Company Experience

   Experience with public company governance issues and Board policies and oversight responsibilities

  

 

 

 

     9    

 

LOGO    LOGO    LOGO    LOGO    LOGO    LOGO    LOGO    LOGO    LOGO

Accounting or Financial Experience

   Experience analyzing financial statements and overseeing our accounting and financial reporting processes

  

 

 

 

     5    

 

LOGO    LOGO    LOGO    LOGO    LOGO    LOGO    LOGO    LOGO    LOGO

Semiconductor/Wireless Communication Experience

   Knowledge of key industry-related issues impacting our Company

  

 

 

 

     9    

 

LOGO    LOGO    LOGO    LOGO    LOGO    LOGO    LOGO    LOGO    LOGO

International Experience

   Global perspective of the Company’s operations and related risks

                 7    

 

LOGO    LOGO    LOGO    LOGO    LOGO    LOGO    LOGO    LOGO    LOGO

Strategic Planning

   Experience navigating a changing competitive landscape

  

 

 

 

     5    

 

LOGO    LOGO    LOGO    LOGO    LOGO    LOGO    LOGO    LOGO    LOGO

CEO or Executive Leadership Experience

   Served in significant leadership positions and have strong abilities to motivate and manage others

  

 

 

 

     9    

 

LOGO    LOGO    LOGO    LOGO    LOGO    LOGO    LOGO    LOGO    LOGO

Cybersecurity and Information Technology

   Understanding of technology and the efforts and tools needed to protect the security of our data

  

 

 

 

     4    

 

LOGO    LOGO    LOGO    LOGO    LOGO    LOGO    LOGO    LOGO    LOGO

Manufacturing/Operations

   Understanding of the semiconductor industry and from a manufacturing and logistics perspective

    

 

 

 

 

 

     5    

 

LOGO    LOGO    LOGO    LOGO    LOGO    LOGO    LOGO    LOGO    LOGO

 

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Proposal 1 – Election of Directors

 

 

Board Diversity Matrix

The following matrix includes all directors serving as of June 27, 2022.

 

  Board Diversity Matrix

  Total Number of Directors

  

9

  Part I: Gender Identity

  

Female

  

Male    

  Directors

  

2

  

7

  Part II: Demographic Background

           

  Asian

     

1

  White

  

2

  

6

 

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Corporate Governance

 

 

CORPORATE GOVERNANCE

The Board of Directors regularly reviews Qorvo’s corporate governance program, taking into consideration good governance practices, recent developments and applicable laws and regulations. Stockholders may visit our website at https://ir.qorvo.com/corporate-governance to view the following corporate governance documents, which are not incorporated into this proxy statement by reference:

 

 

Corporate Governance Guidelines

 

 

Code of Business Conduct and Ethics

 

 

Whistleblower Policy

 

 

Charters for each of the Company’s Board Committees

Stockholders may also request a copy of any of these documents by contacting our Investor Relations Department at 7628 Thorndike Road, Greensboro, North Carolina 27409-9421.

Corporate Governance Guidelines

Qorvo’s Corporate Governance Guidelines provide a framework for the Board’s corporate governance duties and responsibilities, taking into consideration good corporate governance practices, recent developments and applicable laws and regulations. The Corporate Governance Guidelines address a number of matters applicable to directors, including but not limited to director qualification standards, director independence requirements, stock ownership guidelines, Board responsibilities, Board committees, prohibitions on pledging and hedging of our securities, management succession and the role of the Lead Independent Director.

Independent Directors

In accordance with the listing standards of The Nasdaq Stock Market LLC, or Nasdaq, and our Corporate Governance Guidelines, the Board of Directors must be comprised of a majority of independent directors. The Board has determined that Messrs. Gardner, Harding, Ho, Nelson, and Quinsey, Dr. Rhines and Mmes. Bruner and Spradley each satisfy the definition of “independent director” under the Nasdaq listing standards. The Board, in concert with its Governance and Nominating Committee, performed a review to determine the independence of its members and made the determination as to each of these independent directors that no transactions, relationships or arrangements exist that, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director of Qorvo. In making these determinations, the Board reviewed the information provided by the directors and Qorvo regarding each director’s business and personal activities as they may relate to Qorvo and its management. In addition, each member of the Audit Committee, the Compensation Committee and the Governance and Nominating Committee has been determined by the Board to be “independent” in accordance with Nasdaq listing standards.

Board Leadership Structure

As described in the Corporate Governance Guidelines, the Board has a general policy that the roles of Chairman of the Board and Chief Executive Officer should be separated and that the independent directors should be led by a Lead Independent Director, who would be the Chairman of the Board unless the Chairman is not independent. The Board believes this separation of roles promotes communication between the Board, the Chief Executive Officer and other senior management and enhances the Board’s oversight of management.

We believe our leadership structure provides increased accountability of our Chief Executive Officer to the Board and encourages balanced decision-making. We also separate the Chairman and Chief Executive Officer roles in recognition of the differences in the roles. While the Chief Executive Officer is responsible for day-to-day leadership of Qorvo and the setting of strategic direction, the Chairman of the Board provides guidance to the Chief Executive Officer and coordinates and manages the operation of the Board and its committees. Ralph G. Quinsey, an independent director, currently serves as the Chairman of the Board.

The duties of the Chairman of the Board include presiding at meetings of the Board, establishing, with the Chief Executive Officer, the agenda for each Board meeting and exercising such other powers and performing other duties as may from time to time be assigned to him by the Board.

Under our Corporate Governance Guidelines, the Lead Independent Director is responsible for coordinating the activities of the independent directors, including, but not limited to: (a) determining appropriate schedules of and agendas for Board and committee meetings; (b) advising the Board as to the quality, quantity and timeliness of the flow of information that is necessary

 

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Corporate Governance

 

 

for the independent directors to effectively and responsibly perform their duties; and (c) coordinating, developing the agenda for and moderating executive sessions of the independent directors. The Board believes our current leadership structure with a non-employee Chairman of the Board is appropriate for Qorvo and provides many advantages for the effective operation of the Board.

Risk Oversight

The Board and its committees have general oversight responsibility for corporate risk management, including oversight of management’s implementation and application of risk management policies, practices and procedures. The Board directly oversees strategic risks such as those relating to competitive dynamics, market trends, global operations and developments and changes in macroeconomic conditions. While the Board is responsible for risk oversight, management is ultimately responsible for assessing and managing material risk exposures. Our senior management reports to the Board or one of its committees on key enterprise risk topics, including cybersecurity, quality assurance, global trade matters, financial risks, environmental, social and governance (“ESG”)-related matters and disaster recovery. The Board and its committees receive these reports at regularly scheduled Board and committee meetings and through telephone briefings and other communications from management when potentially significant risks develop. Directors use these communications with management to develop a shared understanding of the potential severity of key risks and management’s strategies for addressing these risks. In addition, the Board evaluates our strategic goals and objectives to determine how they may be affected by particular risk exposures. The committees of the Board also exercise oversight in certain areas of risk management related to their respective charters.

The Audit Committee discusses certain material risks and exposures with our independent registered public accounting firm and receives reports from our accounting and internal audit management personnel regarding such risks or exposures and how management has attempted to minimize Qorvo’s risk. The Audit Committee’s primary focus is financial risk, including our internal control over financial reporting. Particular areas of focus by the Audit Committee include risks associated with material litigation, regulatory matters, taxes, foreign exchange, liquidity, investments, global operations and information technology security. As part of its oversight role, the Audit Committee reviews global insurance coverage, oversees Qorvo’s investment policy and works with management to develop policies and practices to mitigate risks in its areas of focus, including finance and accounting, information technology, fraud and anti-corruption. As part of its oversight of information technology, the Audit Committee receives regular reports, including quarterly reports from Qorvo’s Chief Information Officer, on actions Qorvo is taking to enhance the protection of its IT networks and assets and to mitigate global cybersecurity risks.

The Compensation Committee makes a specific determination regarding risks associated with our compensation policies and practices as described below under “Risk Oversight in Compensation Programs.” The Compensation Committee also evaluates risks associated with equity “overhang” and regulatory and other legal risks in regard to our equity and retirement plans. This includes receiving reports from Qorvo’s Retirement Plan Committee on matters related to its 401(k) and non-qualified deferred compensation plans.

The Governance and Nominating Committee performs risk oversight in the areas of management succession and corporate governance. This includes adoption and administration of our Code of Business Conduct and Ethics, development of succession plans for our Chief Executive Officer and other senior management positions, conducting full Board and individual director assessments, addressing governance-related matters raised by our stockholders and serving as the Board’s primary independent decision-making authority for assessing and resolving matters, such as potential conflicts of interest, that fall within the broader category of corporate governance. The Governance and Nominating Committee also provides oversight to our ESG initiatives, reviewing with management and reporting to the Board of Directors on ESG-related matters.    

Each of the above committees reports to the full Board with respect to the risk categories it oversees. These ongoing reports enable the Board, and other committees, to monitor our exposure and evaluate the mitigation of risks Qorvo faces.

Risk Oversight in Compensation Programs

The Compensation Committee reviews our incentive compensation structure annually and does not believe that any risks arising from our compensation structure and practices are reasonably likely to have a material adverse effect on our Company. The risk assessment process included a review of program policies and practices, focusing on programs with variable compensation provisions and identifying the risks related to the programs. The Compensation Committee determined that our compensation programs contain multiple compensation elements, including base salary, short-term and long-term compensation elements and encourage an appropriate level of risk in the performance of our business, but do not encourage or incentivize excessive risk-taking. The Compensation Committee monitors our compensation programs on an ongoing basis to properly balance risks associated with our compensation policies and practices.

 

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Corporate Governance

 

 

Code of Ethics

Our Code of Business Conduct and Ethics provides guidance on maintaining our commitment to high ethical standards and applies to all employees, officers, directors, agents, independent contractors and other personnel of Qorvo and our subsidiaries. Any waivers or substantive amendments of the Code of Business Conduct and Ethics applicable to our directors and certain of our executive officers will be disclosed on our website at https://ir.qorvo.com/corporate-governance.

Committees and Meetings

The Board maintains four standing committees: the Audit Committee, the Compensation Committee, the Corporate Development Committee, and the Governance and Nominating Committee. Each committee operates under its own written charter, which sets forth the requirements and responsibilities of each committee.

The Committees must be comprised of no fewer than three members, each of whom must satisfy membership requirements imposed by the applicable committee charter and, where applicable, Nasdaq listing standards and SEC rules and regulations. Each of the members of the Audit Committee, the Compensation Committee and the Governance and Nominating Committee has been determined by the Board to be independent under applicable Nasdaq listing standards and, in the case of the Audit Committee and the Compensation Committee, under the independence requirements established by the SEC. A majority of the members of the Corporate Development Committee has been determined by the Board to be independent under applicable Nasdaq listing standards. A brief description of the current membership and the responsibilities of each of these committees follows.

 

     Committee Membership
  Director    Audit    Compensation    Corporate
Development
   Governance
and
Nominating

  Ralph G. Quinsey

       X             X        C

  Robert A. Bruggeworth

                 X     

  Judy Bruner

       X                  X

  Jeffery R. Gardner

       C                  X

  John R. Harding

       X             C     

  David H. Y. Ho

            X        X     

  Roderick D. Nelson

            X        X        X

  Dr. Walden C. Rhines

            C             X

  Susan L. Spradley

            X        X        X

  C = Committee Chair

                                           

Audit Committee

The Audit Committee is appointed by the Board to assist the Board in its duty to oversee our accounting, financial reporting and internal control functions and the audit of our financial statements. The Committee’s responsibilities include, but are not limited to:

 

 

the appointment, compensation, retention, oversight and termination (if necessary) of our independent registered public accounting firm, which reports directly to the Audit Committee;

 

 

establishing policies and procedures for the review and pre-approval by the Committee of, and approving or pre-approving, all auditing services and permissible non-audit services to be performed by the independent registered public accounting firm, and any non-audit services to be performed by any other accounting firm;

 

 

periodically reviewing major issues regarding accounting principles and financial statement presentations, including any significant changes in our selection or application of accounting principles;

 

 

oversight of information technology and cybersecurity matters;

 

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Corporate Governance

 

 

 

approving the report of the Audit Committee required by SEC rules to be included in our proxy statement;

 

 

discussing with management policies regarding risk assessment and risk management, including our major financial risk exposures and the steps management has taken to monitor and control such exposures; and

 

 

establishing and overseeing procedures for the receipt, retention and treatment of complaints received by Qorvo regarding accounting, internal accounting controls or auditing matters and for the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.

The current members of the Audit Committee are Ms. Bruner and Messrs. Gardner (Chair), Harding and Quinsey, none of whom is an employee of Qorvo and each of whom is independent under existing Nasdaq listing standards and SEC requirements. The Board has examined the SEC’s definition of “audit committee financial expert” and determined that Ms. Bruner and Messrs. Gardner, Harding and Quinsey each satisfy this definition.

Compensation Committee

The Compensation Committee is appointed by the Board to exercise the Board’s authority concerning compensation of our officers and employees and administration of our incentive compensation plans. In fulfilling its duties, the Compensation Committee’s authority includes, but is not limited to:

 

 

evaluating and setting the compensation of our officers, including our Chief Executive Officer, in accordance with our compensation philosophy;

 

 

preparing the Compensation Committee report that SEC rules require to be included in our Annual Report on Form 10-K or proxy statement;

 

 

evaluating and making recommendations to the Board concerning compensation of non-employee directors;

 

 

periodically reviewing, and modifying if necessary, our philosophy concerning executive compensation and the components of executive compensation;

 

 

reviewing and discussing with management our Compensation Discussion and Analysis disclosure and formally recommend to the Board that it be included in our Annual Report on Form 10-K or our proxy statement;

 

 

making the determination required under SEC rules regarding risks associated with our compensation policies and practices;

 

 

overseeing our compliance with SEC rules and regulations regarding stockholder approval of certain executive compensation matters, including advisory votes on named executive officer compensation and the frequency of such votes;

 

 

retaining (or obtaining the advice of) a compensation consultant, independent legal counsel or other adviser to assist the Compensation Committee with the discharge of its duties under the charter, after taking into consideration factors and criteria required by applicable law;

 

 

reviewing and discussing with management our key human capital management strategies and programs, including diversity and inclusion initiatives; and

 

 

discharging certain other responsibilities generally relating to the administration of our incentive and employee benefit plans.

The Compensation Committee regularly consults with members of our executive management team regarding our executive compensation program. Our executive compensation program, including the level of participation by our executive officers in assisting with establishing compensation, is discussed below under “Compensation Discussion and Analysis.” The Compensation Committee may condition its approval of any compensation matter on ratification by the Board if Board action is required by applicable law or otherwise deemed appropriate.

The Board or the Compensation Committee has the discretion to delegate certain areas of authority that are reserved to the Board or the Compensation Committee, respectively, under our equity compensation plans. The Board has delegated to the Chief Executive Officer the authority to grant equity awards: (a) generally to Company employees for promotion or retention purposes provided that such employees are not directors or executive officers; (b) to Company employees to promote, reward and recognize outstanding engineering performance and other technical achievements; and (c) to individuals who become Company employees as a result of an acquisition by the Company. Pursuant to these delegations, no equity awards may be granted to persons who report directly to the Chief Executive Officer or are subject to Section 16 under the Exchange Act. Additionally, these delegations are subject to predetermined limits per individual and in the aggregate, as established by the Board or the Compensation Committee, and are subject to all terms and conditions of the applicable plan. The Chief Executive Officer is required to report all equity awards granted under these delegations to the Compensation Committee at its next regularly scheduled meeting following such grants.

 

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Corporate Governance

 

 

The current members of the Compensation Committee are Messrs. Ho and Nelson, Dr. Rhines (Chair), and Ms. Spradley, none of whom is an employee of Qorvo and each of whom is independent under existing Nasdaq listing standards and SEC requirements.

Corporate Development Committee

The Corporate Development Committee’s responsibilities include but are not limited to:

 

 

assisting the Board in fulfilling its responsibilities for overseeing and facilitating the development, implementation and monitoring of our business strategies and plans; and

 

 

exercising the Board’s authority with respect to the review, evaluation and approval of certain strategic transactions, subject to the limitations and requirements of applicable law and our governance documents.

The members of the Corporate Development Committee are appointed by the Board of Directors and currently include Messrs. Bruggeworth, Harding (Chair), Ho, Nelson and Quinsey and Ms. Spradley. Other than Mr. Bruggeworth, these committee members are each independent under existing Nasdaq listing standards.

Governance and Nominating Committee

The Governance and Nominating Committee’s responsibilities include, but are not limited to:

 

 

assisting the Board in identifying individuals qualified to become Board and committee members and recommending to the Board the director nominees;

 

 

developing and recommending to the Board the policies and guidelines relating to, and generally overseeing matters of, corporate governance and conflicts of interest;

 

 

leading the Board in its annual review of the performance of the Board and its committees;

 

 

reviewing, discussing with management, and periodically reporting to the Board regarding the Company’s policies, initiatives and disclosures with respect to ESG matters; and

 

 

carrying out the duties and responsibilities delegated by the Board relating to any matters required by the federal securities laws.

The members of the Governance and Nominating Committee are appointed by the Board of Directors and currently include Mmes. Bruner and Spradley, Messrs. Gardner, Nelson, and Quinsey (Chair), and Dr. Rhines, none of whom is an employee of Qorvo and each of whom is independent under existing Nasdaq listing standards.

Meeting Attendance

Under our Corporate Governance Guidelines, all directors are expected to make every effort to attend meetings of the Board, assigned committees and annual meetings of stockholders. All of our directors who were then in office attended the 2021 annual meeting of stockholders. During the fiscal year ended April 2, 2022, all of our directors then in office attended at least 75% of the aggregate of the Board meetings and assigned committee meetings that were held. During fiscal 2022, the Board held 8 meetings, the Audit Committee held 7 meetings, the Compensation Committee held 7 meetings, the Corporate Development Committee held 3 meetings, and the Governance and Nominating Committee held 3 meetings.

Executive Sessions

Pursuant to our Corporate Governance Guidelines, independent directors are expected to meet in executive session at all regularly scheduled meetings of the Board with no members of management present. The Chair of the Governance and Nominating Committee or the Lead Independent Director presides at each executive session unless the independent directors determine otherwise. During fiscal 2022, the independent directors met in executive session at all the regularly scheduled Board meetings and Mr. Quinsey presided over these sessions.

 

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Corporate Governance

 

 

Corporate Social Responsibility and Environmental, Social and Governance Highlights

We believe Qorvo thrives when we prioritize corporate social responsibility (“CSR”) and consideration of ESG factors in the management of both risk and opportunity.

We pride ourselves on the success of our CSR programs and strive to create products that are not only valued by our customers but produced responsibly. In that regard, we hold ourselves accountable for the impact of our actions on people, local and extended communities and the environment. An overview of our CSR and ESG oversight and some of our initiatives is provided below.

CSR and ESG Oversight

Ultimate oversight for CSR and ESG resides with our Board of Directors and its Governance and Nominating Committee. Day-to-day oversight and leadership for these matters sits with our senior leadership team. We also have an Environmental, Social and Governance Steering Committee that coordinates our ESG and CSR initiatives. Directors are regularly briefed on CSR and ESG matters by our senior leadership team.

Embracing Diversity and Inclusion

At Qorvo, we value the uniqueness that an inclusive and diverse global team brings to our company, and we are focused on creating an environment that leverages the perspectives and contributions of each employee. Diversity, equity and inclusion principles are included in our workplace training, activities, guidelines, processes and programs. Employees are equipped with the knowledge and capabilities to welcome and embrace diversity and advocate for inclusion. Through executive sponsored, employee-driven groups called Qorvo Employee Networks, our employees have an opportunity to connect through shared interests and goals, and spur growth through professional and personal development. Through our Inclusivity at Qorvo resource group, we aim to create forums and presentations where open dialogue and a willingness to learn is encouraged. These and other efforts help foster an inclusive workplace of talented employees, drive employee engagement and help attract and retain important talent.

Workforce Engagement

We are committed to recruiting, hiring, retaining, promoting and engaging a diverse workforce to best serve our global customers. We have established relationships with professional associations and industry groups to proactively attract talent, and we partner with universities to recruit undergraduate and graduate students for our internship program and entry level positions. We also invest in employee development programs to provide employees with the training and education they need to help achieve their career goals, build relevant skills, and lead their organizations.

We believe our competitive compensation and benefit programs, along with career growth and development opportunities offered by us, promote longer employee tenure and reduce turnover. We monitor employee turnover rates as our success depends upon retaining and investing in our highly skilled manufacturing and technical staff. Our global attrition rate has consistently been below the technology industry average.

Employee Health and Safety

We are a member of the Responsible Business Alliance (“RBA”), an industry coalition dedicated to driving sustainable value for workers in global supply chains, among other things. As an RBA member, we have adopted the RBA Code of Conduct, which establishes standards with respect to safe working conditions, the respectful treatment of employees, and environmentally and ethically responsible business operations. Elements of the RBA Code of Conduct have been reflected in our other employee policies and procedures.

As always, we prioritize safe working conditions. We are committed to an injury free workplace and provide dedicated workplace training and leadership support to reduce or eliminate health and safety risks. In fiscal 2022, we achieved a recordable injury rate well below industry average.

Operating Sustainably

We are committed to growing our business in a sustainable and responsible manner. We believe minimizing environmental impacts is in the long-term best interests of Qorvo and our society. We are focused on greenhouse gas emission reduction projects including abatement (Scope 1), infrastructure redesign and process improvements (Scope 2) across multiple locations. We also reduced our waste to landfill through site specific initiatives.

We have published on our website our energy usage, greenhouse gas emissions, waste and water usage. As part of our commitment to transparency, we also voluntarily participate in CDP reporting for climate change and water.

We Contribute to Our Communities

Qorvo and its employees actively contribute to the communities in which we do business.

 

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Corporate Governance

 

 

Our Qorvo Cares Community Engagement program provides our employees opportunities to engage with our communities and spread kindness, generosity and support. The program focuses on three main areas: STEM Education, aimed at inspiring the next generation; Good Neighbor Relations, for strengthening our communities; and Environmental Stewardship, helping shape a better future.

More Information

For more details about our CSR program please refer to the material available at www.qorvo.com/about-us/corporate-social-responsibility/our-program. The website information is provided for convenience only, and the content on the website is not incorporated by reference into this proxy statement.

Whistleblower Policy

The Audit Committee has adopted procedures for receiving and handling complaints from employees and third parties regarding conduct, events or other matters with respect to Qorvo or our officers, directors or employees concerning suspected misconduct related to accounting, internal accounting controls or auditing matters, or suspected violations of law or other Company policies, including procedures for confidential, anonymous reports of concerns regarding the foregoing matters. Employees may report their concerns to their supervisor or, in cases where it might be inappropriate or uncomfortable for an employee to discuss a concern with his or her supervisor, or if the supervisor does not address the issue to the employee’s satisfaction, employees may report their concerns by contacting our Compliance Officer at 7628 Thorndike Road, Greensboro, North Carolina 27409-9421, or by e-mail or telephone. Alternatively, employees may discuss their concerns with our Chief Human Resources Officer or any other Company officer. Third parties may report concerns by contacting our Compliance Officer. If the Compliance Officer is the subject of the concern or the employee or third party otherwise believes that the Compliance Officer has not given or will not give proper attention to his or her concerns, the employee or third party may report his or her concerns directly to the Chair of the Audit Committee. An employee or third party also may forward concerns on a confidential and/or anonymous basis to the Compliance Officer by calling Qorvo’s toll-free Ethics and Compliance hotline, which is operated by a third-party agency to enable confidentiality, or by delivering a written statement setting forth his or her concerns to the Chair of the Audit Committee.

Prohibition on Hedging and Pledging

Our securities trading policy and Corporate Governance Guidelines prohibit any hedging of our securities by our directors and employees. This includes engaging in any type of short sale or purchasing any financial instrument (including prepaid variable forward contracts, equity swaps, collars and exchange traded funds) or engaging in any transaction that, in either case, hedges or offsets, or is designed to hedge or offset, any decrease in the market value of our common stock. Additionally, directors and employees may not pledge Company securities as collateral for a loan; however, this prohibition does not apply to any broker-assisted “cashless” exercise or settlement of awards granted under a Company equity incentive plan. Directors and employees may engage in other derivative transactions only if it is determined, to the satisfaction of the Company’s Compliance Officer, that such transaction is consistent with applicable rules, laws and our securities trading policy.

Pre-Approval Policies and Procedures

The Audit Committee has established a pre-approval policy for certain audit and non-audit services, up to a specified amount, for each identified service that may be provided by the independent registered public accounting firm. The pre-approval fee levels for all services to be provided by the independent registered public accounting firm are reviewed annually by the Audit Committee. The Audit Committee has authorized management to engage accounting firms other than Ernst & Young LLP to perform certain audit-related, tax and other non-audit services, as set forth in the policy. The Audit Committee has delegated to the Chair of the Audit Committee the authority to approve, in between meetings of the Audit Committee, certain audit, audit-related, tax and other permissible non-audit services to be provided by Ernst & Young LLP in an amount not to exceed $50,000.

Procedures for Director Nominations

Criteria for Director Nominees

In accordance with our Corporate Governance Guidelines, Directors are expected to collectively possess a broad and diverse range of skills, industry and other knowledge and expertise, and business and other experience useful for the effective oversight of our business. The Governance and Nominating Committee is responsible for identifying, screening and recommending to the Board qualified candidates for membership. When searching for new director candidates, the Board will actively seek highly qualified women and individuals from minority groups to include in the pool of director candidates from which nominees are selected. Three of the nine director nominees standing for election at the annual meeting have gender, racial or ethnic diversity. All candidates must meet the minimum qualifications and other criteria established from time to time by the Board, and potential nominees will

 

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Corporate Governance

 

 

also be evaluated based on the other criteria identified in the Corporate Governance Guidelines. These minimum qualifications include, but are not limited to:

 

 

having substantial or significant business or professional experience or an understanding of technology, finance, marketing, financial reporting, international business or other disciplines relevant to Qorvo’s business; and

 

 

being free from any conflict of interest that would violate any applicable law or regulation or having any other relationship that, in the opinion of the Board, would interfere with the exercise of the individual’s judgment as a member of the Board or of a Board committee.

We also consider the following criteria, among others, in our selection of directors:

 

 

economic, technical, scientific, academic, financial and other expertise, skills, knowledge and achievements useful to the oversight of our business;

 

 

integrity, demonstrated sound business judgment and high moral and ethical character;

 

 

diversity of viewpoints, backgrounds, experiences and other demographics;

 

 

business or other relevant professional experience;

 

 

capacity and desire to represent the balanced, best interests of Qorvo and its stockholders as a whole and not primarily a special interest group or constituency;

 

 

ability and willingness to devote time to the affairs and success of Qorvo and to fulfill the responsibilities of a director; and

 

 

the extent to which the interplay of the candidate’s expertise, skills, knowledge and experience with that of other Board members will build a Board that is effective, collegial and responsive to the needs of Qorvo.

The Governance and Nominating Committee is authorized to develop and review on a periodic basis policies regarding Board size, composition and member qualification.

The Governance and Nominating Committee evaluates suggestions concerning possible candidates for election to the Board submitted to Qorvo, including those submitted by Board members, stockholders and third parties. All candidates, including those submitted by stockholders, will be similarly evaluated by the Governance and Nominating Committee using the Board membership criteria described above and in accordance with applicable procedures. Once candidates have been identified, the Governance and Nominating Committee will determine whether such candidates meet the minimum qualifications for director nominees established in the Corporate Governance Guidelines. The Board, taking into consideration the recommendations of the Governance and Nominating Committee, is responsible for selecting the nominees for director and for appointing directors to fill vacancies, with primary emphasis on the criteria set forth in the Corporate Governance Guidelines.

Stockholder Nominees for Director

As noted above, the Governance and Nominating Committee will consider qualified director nominees recommended by stockholders when such recommendations are submitted in accordance with applicable SEC requirements, our bylaws and Corporate Governance Guidelines and any other applicable law, rule or regulation regarding director nominations. Under our bylaws, nominations of persons for election to the Board may be made at an annual meeting of stockholders by any Qorvo stockholder who: (a) was a stockholder of record at the time of giving of the notice provided for in our bylaws and at the time of the annual meeting; (b) is entitled to vote at the meeting; and (c) provides timely notice and otherwise complies with the procedures set forth in our bylaws. Any stockholder desiring to present a nomination for consideration by the Governance and Nominating Committee must do so in accordance with our bylaws and policies. See “Proposals for the 2023 Annual Meeting” below.

Advance Notice Provisions

To be timely, a stockholder’s notice pursuant to the advance notice provisions of our bylaws must be delivered to our Secretary at our principal executive offices not later than the close of business on the 90th day and not earlier than the close of business on the 120th day prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the stockholder must be delivered not earlier than the close of business on the 120th day prior to the date of such annual meeting and not later than the close of business on the 90th day prior to the date of such annual meeting, or by the 10th day following the notice date for such meeting if the first public announcement of the date of the annual meeting is less than 100 days prior to the date of such annual meeting.

 

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To be in proper form, a stockholder’s notice pursuant to the advance notice provisions of our bylaws must set forth, as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination is made:

 

 

the name and address of such stockholder, as they appear on our books, and of such beneficial owner, if any;

 

 

the number of shares of our common stock that are, directly or indirectly, owned beneficially and of record by such stockholder and such beneficial owner;

 

 

any derivative instruments with respect to our common stock directly or indirectly owned beneficially by such stockholder;

 

 

any proxy, contract, arrangement, understanding or relationship pursuant to which such stockholder has a right to vote any of our securities;

 

 

any short interest in any of our securities;

 

 

any rights to dividends on the shares of our common stock owned beneficially by such stockholder that are separated or separable from the underlying shares of our common stock;

 

 

any proportionate interest in shares of our common stock or derivative instruments held, directly or indirectly, by a general or limited partnership in which such stockholder is a general partner or, directly or indirectly, beneficially owns an interest in a general partner;

 

 

any performance-related fees (other than an asset-based fee) that such stockholder is entitled to based on any increase or decrease in the value of shares of our common stock or derivative instruments, if any, as of the date of such notice; and

 

 

any other information relating to such stockholder and beneficial owner, if any, that would be required to be disclosed in a proxy statement or other filings required to be made pursuant to applicable federal securities laws.

The stockholder’s notice must also set forth, as to each nominee whom the stockholder proposes to nominate for election to the Board, together with a completed and signed questionnaire, representation and agreement from such person:

 

 

all information relating to such nominee that would be required to be disclosed in a proxy statement or other filings required to be made pursuant to applicable federal securities laws; and

 

 

a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between or among such stockholder and beneficial owner, if any, and their respective affiliates and associates, or others acting in concert therewith, on the one hand, and the nominee, and his or her respective affiliates and associates or others acting in concert therewith, on the other hand.

Proxy Access Provisions

Pursuant to our bylaws, a stockholder, or a group of up to 20 stockholders, that has owned at least 3% of our outstanding voting shares continuously for at least three years can nominate and include in our proxy materials up to the greater of two directors or 20% of the number of directors then in office, provided that the stockholder(s) and the stockholder nominee(s) satisfy the requirements specified in the bylaws. Such requirements include the timely delivery of a stockholder’s notice to our Secretary.

To be timely, a stockholder’s notice pursuant to the proxy access provisions must be delivered to our Secretary at our principal executive offices not later than the close of business on the 120th day before the first anniversary of the date the definitive proxy statement was first sent to stockholders in connection with the preceding year’s annual meeting and not earlier than the close of business on the 150th day before such anniversary; provided, however, that in the event that the date of the annual meeting is more than 30 days before or more than 60 days after the anniversary of the preceding year’s annual meeting, or if no annual meeting was held in the preceding year, the notice must be delivered not earlier than the close of business on the 150th day prior to such annual meeting and not later than the close of business on the later of the 120th day prior to such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made. To be in proper form, a stockholder’s notice pursuant to the proxy access provisions of our bylaws must satisfy the specific information required by Section 2.5 of our bylaws.

Stockholder Communications with Directors

Any stockholder desiring to contact the Board, or any specific director(s), may send written communications to our Board of Directors or any individual director c/o Qorvo’s Secretary, 7628 Thorndike Road, Greensboro, North Carolina 27409-9421. Any proper communication so received will be processed by the Secretary. If it is unclear from the communication received whether it was intended or appropriate for the Board, the Secretary will (subject to any applicable regulatory requirements) determine whether such communication should be conveyed to the Board or, as appropriate, to the member(s) of the Board named in the communication.

 

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Executive Officers

 

 

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The members of the Compensation Committee during some or all of fiscal year 2022 were: Messrs. Ho and Nelson, Dr. Rhines, and Ms. Spradley. None of these individuals has ever served as an officer or employee of Qorvo or had any relationship during the year ended April 2, 2022 that would be required to be disclosed pursuant to SEC regulations. No interlocking relationships exist between our current Board of Directors or Compensation Committee and the board of directors or compensation committee of any other company.

EXECUTIVE OFFICERS

Qorvo’s current executive officers are as follows:

 

  Name    Age      Title

  Robert A. Bruggeworth

  

 

61

 

  

President and Chief Executive Officer

  Grant A. Brown

  

 

45

 

  

Interim Chief Financial Officer and Vice President of Treasury

  Steven E. Creviston

  

 

58

 

  

Corporate Vice President and President of Mobile Products

  Philip J. Chesley

  

 

51

 

  

Corporate Vice President and President of Infrastructure and Defense Products

  Paul J. Fego

  

 

65

 

  

Corporate Vice President of Global Operations

  Gina B. Harrison

  

 

54

 

  

Vice President and Corporate Controller

Additional information with respect to our executive officers is provided below. Officers are appointed to serve at the discretion of the Board. Information regarding Mr. Bruggeworth is included in the director profiles set forth above.

Grant A. Brown has served as Interim Chief Financial Officer since April 2022 and Vice President of Treasury since October 2018. He is responsible for finance, investor relations and regulatory reporting at Qorvo. In addition, he serves as our Vice President of Business Transformation, overseeing information technology matters for Qorvo. Prior to that, he served as Qorvo’s Director of Corporate Financial Planning & Analysis. Mr. Brown has also served as Business Unit Controller and Director of Strategic Marketing at Qorvo. Prior to the formation of Qorvo, he served as Director, Investor Relations, and Manager, Financial Planning & Analysis, at TriQuint Semiconductor. He began his career working in the capital markets after receiving a B.S. Industrial Engineering (now Management Science and Engineering) from Stanford University. Mr. Brown is currently a CFA charterholder.

Steven E. Creviston has served as Corporate Vice President and President of Mobile Products since January 2015. He served as Corporate Vice President and President of Cellular Products Group, or CPG, for RFMD from August 2007 to January 2015. From May 2002 to August 2007, he served as Corporate Vice President of CPG, which was known as Wireless Products until 2004, for RFMD. Prior to 2002, he held various positions of increasing responsibilities at RFMD. Mr. Creviston has served as a director of LightPath Technologies, Inc., a publicly traded designer, developer, manufacturer and distributor of optical components and assemblies, since March 2021.

Philip J. Chesley joined Qorvo in November 2021 as Corporate Vice President and President of Qorvo’s Infrastructure and Defense Products (IDP). From February 2017 through October 2021, Mr. Chesley served as Vice President and General Manager, Industrial and Communications Business Unit at Renesas Electronics, a leading supplier of advanced semiconductor solutions, where he managed over 500 engineers across Asia and the United States in businesses developing RF, optical, industrial power / motor control, and military and radiation hardened analog products into 5G RF wireless infrastructure, optical communications, industrial power management, and radiation hardened satellite markets. From January 2004 to February 2017, Mr. Chesley served in several positions of increasing responsibility at Intersil Corporation, a leader in analog, mixed-signal and power management semiconductors prior to its acquisition by Renesas Electronics, most recently as Senior Vice President and General Manager of the Automotive, Mil/Aero and Analog Product Group.

Paul J. Fego has served as Corporate Vice President of Global Operations since July 2018. From January 2005 through August 2017, he served as Vice President and Manager, Worldwide Manufacturing Technology & Manufacturing Group of Texas Instruments, a leading global semiconductor and technology company, where he managed all of its wafer fabrication, assembly

 

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Executive Officers

 

 

and test operations in nine countries. Previously, Mr. Fego served in several positions of increasing responsibility at Photronics, Inc., a global leader in photomask solutions for companies that manufacture semiconductors, flat panel displays and other electronic components, most recently as President and Chief Operating Officer from March 2002 to January 2005. Prior to joining Photronics to become its Chief Operating Officer in 1996, Mr. Fego served as Operations Director at ST Microelectronics Inc. from September 1989 to November 1996. Prior to joining ST Microelectronics, Mr. Fego served in various positions with Texas Instruments from 1980 to 1989.

Gina B. Harrison has served as Vice President and Corporate Controller since November 2015. She is a certified public accountant with over 30 years of progressive leadership experience in corporate and public accounting. She joined RFMD in 2000 and held roles of increasing responsibility in financial reporting through March 2005. She served as RFMD’s Director of Financial Reporting and Sarbanes-Oxley Compliance from April 2005 to December 2014 and served in that same role at Qorvo from January 2015 to October 2015. Prior to joining RFMD, Ms. Harrison held financial and accounting positions at Sara Lee Hosiery from 1992 to 2000 and at Price Waterhouse from 1990 to 1992.

 

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Proposal 2 – Approval of the Compensation of our Named Executive Officers

 

 

PROPOSAL 2 – APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

We are asking our stockholders to approve, on a non-binding, advisory basis, the compensation of our Named Executive Officers (“NEOs”) as disclosed in the “Compensation Discussion and Analysis” section of this proxy statement that follows. This proposal, commonly known as a “say-on-pay” proposal, gives our stockholders the opportunity to express their views on our NEOs’ compensation as a whole.

The vote on Proposal 2 is not intended to address any specific item of compensation or any specific NEO, but rather the overall compensation of all of our NEOs and the philosophy, policies and practices described in this proxy statement. The say-on-pay vote is advisory, and therefore not binding on the Company, the Compensation Committee or the Board. The say-on-pay vote will, however, provide information to us regarding stockholder sentiment about our executive compensation philosophy, policies and practices, which the Compensation Committee will consider when setting executive compensation for the remainder of the current fiscal year and beyond. Our Board of Directors and our Compensation Committee value the opinion of our stockholders, and to the extent there is any significant vote against the NEO compensation as disclosed in this proxy statement, the Compensation Committee will evaluate whether any actions are necessary to address those concerns.

We believe that the information provided within the “Compensation Discussion and Analysis” section of this proxy statement demonstrates that our executive compensation program is appropriately designed in order to align management’s interests with those of our stockholders’ in order to support long-term value creation.

Accordingly, we are asking our stockholders support our executive compensation program through the following resolution:

“RESOLVED, that the compensation paid to the Company’s Named Executive Officers, as disclosed in the proxy statement for the Company’s 2022 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the compensation tables and related narrative discussion, is hereby APPROVED.”

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THIS PROXY STATEMENT.

 

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Executive Compensation

 

 

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Executive Summary

This Compensation Discussion and Analysis provides information with respect to the following persons who, pursuant to SEC rules, constitute our Named Executive Officers, or NEOs for fiscal 2022:

 

 

Robert A. Bruggeworth, President and Chief Executive Officer (“CEO”)

 

 

Mark J. Murphy, former Chief Financial Officer (Mr. Murphy resigned from Qorvo, effective April 18, 2022)

 

 

Steven E. Creviston, Corporate Vice President and President of Mobile Products

 

 

Philip J. Chesley, Corporate Vice President and President of Infrastructure and Defense Products

 

 

Paul J. Fego, Corporate Vice President of Global Operations

This Compensation Discussion and Analysis highlights the key components and structure of the compensation paid to our NEOs and discusses the objectives and philosophy underlying our compensation program.

Fiscal 2022 Financial Performance Highlights

 

 

In fiscal 2022, our revenue increased 15.7% to $4,646 million as compared to $4,015 million in fiscal 2021, driven primarily by higher demand for our 5G mobile solutions and our power management, automotive and broadband products, partially offset by lower demand for our base station and defense and aerospace products.

 

 

In fiscal 2022, our gross margin increased to 49.2% as compared to 46.9% in fiscal 2021, primarily due to lower intangible amortization expense as well as lower unit costs on higher volume and productivity. The increase in gross margin was partially offset by average selling price erosion.

 

 

Our operating income in fiscal 2022 was $1,226 million as compared to $907 million in fiscal 2021, primarily due to higher revenue and favorable gross margin, partially offset by higher operating expenses. Operating expenses increased primarily due to higher personnel costs, a goodwill impairment charge and increased product development spend, partially offset by lower intangible amortization expense and lower incentive-based compensation.

 

 

Net income per diluted share was $9.26 for fiscal 2022, compared to net income per diluted share of $6.32 for fiscal 2021.

Compensation Program Highlights

The Compensation Committee seeks to provide target total direct compensation for each of our NEOs that rewards strong operating performance seeking the completion of key initiatives that drive profitability and stockholder value over the longer term.

Compensation to our NEOs consists of the components set forth below. Percentages provided for our NEOs exclude Mr. Chesley, who was hired effective November 1, 2021 and therefore did not receive a grant of Objectives-based RSUs for fiscal 2022:

 

 

Base salary. Base salary accounts for approximately 9% of our CEO’s target total direct compensation and approximately 13% of each of our other NEO’s target total direct compensation.

 

 

Short-term incentive awards. Short-term incentive award opportunities account for approximately 15% of our CEO’s target total direct compensation and approximately 14% of each of our other NEO’s target total direct compensation. Short-term incentive award opportunities are based on corporate performance relative to financial goals established by the Committee on a semi-annual basis and may be paid, at the Committee’s discretion, in cash or in equity.

 

 

Long-term equity-based incentive awards. Long-term equity-based incentive award opportunities consist of performance-based and service-based restricted stock unit awards, or RSUs, and account for approximately 76% of our CEO’s target total direct compensation and approximately 70% of each of our other NEO’s target total direct compensation.

 

 

Performance-based awards. Performance-based RSU awards (“Objectives-based RSUs”) are granted in May of each fiscal year and generally account for 60% of the target total equity compensation of our NEOs. Objectives-based RSUs linked to Company performance objectives approved by the Committee are earned based on the achievement of annual business goals that drive long-term stockholder value. To support retention and reinforce long-term performance objectives, half of the award vests upon certification of achievement by the Committee, and the remaining 50% vests in equal annual installments over each of the following two years.

 

 

Service-based awards. Service-based RSU awards (“Service-based RSUs”) are granted in August of each fiscal year and generally account for 40% of the target total equity compensation of our NEOs. These awards provide important retention and medium-term and long-term incentives for our NEOs as they vest over a four-year period.

 

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Executive Compensation

 

 

The following charts show the components of our NEOs’ average target total direct compensation mix and average target long-term equity-based incentive awards for fiscal 2022 (excluding Mr. Chesley):

 

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The compensation packages of our CEO and our other NEOs are closely aligned with performance. A substantial majority of the target total direct compensation mix is at-risk and performance-based, with 61% of our CEO’s and 56% of our other NEOs’ target total direct compensation (excluding Mr. Chesley) being tied to performance, as illustrated below:

 

LOGO    LOGO

The Compensation Committee believes that Qorvo’s executive compensation program provides a strong foundation for achieving the Company’s intended objectives, while seeking increased value for our stockholders. Our compensation philosophy emphasizes team effort, which we believe fosters quick adjustment and adaptation to the rapidly changing market conditions we routinely face in our industry. The focus on company, rather than individual, performance measures in our incentive compensation programs not only helps us achieve our short-term and long-term goals, but also further aligns the interests of our executive officers with those of the Company and our stockholders.

The Compensation Committee considers comparative industry data and other factors to establish each NEO’s range of base salary, short-term incentive award opportunities and long-term equity-based incentive award opportunities. Our executive compensation program also incorporates strong governance practices that support sound risk management, including the following:

 

 

We prohibit the backdating or spring-loading of equity awards.

 

 

We prohibit the repricing of stock options or stock appreciation rights without stockholder approval.

 

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Executive Compensation

 

 

 

We do not provide “perquisites” to our executive officers.

 

 

We prohibit any hedging or pledging of our securities by our directors, executive officers and other employees.

 

 

We have established stock ownership guidelines for our directors and our executive officers.

 

 

We provide change-in-control agreements with a “double trigger” for acceleration of equity awards requiring a qualifying termination of employment following a change in control.

 

 

We impose “clawback” restrictions in our senior officer equity awards in the event of certain prohibited conduct, including violation of restrictive covenants following termination of employment and misconduct.

Fiscal 2021 Say-on-Pay Vote and Say-on-Frequency Vote

In 2021, at Qorvo’s annual meeting, our stockholders approved an advisory vote on the compensation of our NEOs for fiscal 2021 with more than 94% of the votes cast in favor of the advisory proposal. The Compensation Committee considered the results of these votes and the strong approval level expressed by our stockholders and did not make any material changes to the elements or objectives of our executive compensation program for fiscal 2022 and determined to continue holding an annual say-on-pay vote until the next advisory vote on the frequency of future “say-on-pay” votes.    

Fiscal 2022 Compensation Highlights

Base Salary

Base salaries of each of the NEOs were increased by between 6% and 8% from fiscal 2021. These adjustments reflected the Company’s continuing solid financial performance during the pandemic and consideration of competitive market data as well as the individual performance and the roles and responsibilities of each NEO.

Short-Term Incentive Awards

Each of our NEOs was eligible to earn short-term incentive awards based on our financial performance during fiscal 2022. The Compensation Committee made no changes to the target short-term incentive award opportunities for fiscal 2022 for the NEOs other than to increase Mr. Bruggeworth’s short-term incentive award opportunity from 150% to 160% of his base salary after consideration of Mr. Bruggeworth’s performance, consultation with the Committee’s compensation consultant and competitive market data.

The short-term incentive award earned was tied to our achievement of revenue and non-GAAP operating income goals, as described below, during two six-month performance periods during the year. Short-term incentive objectives for the first half of fiscal 2022 were not adjusted despite the continuing business and market uncertainties created by the pandemic. As a result of our financial performance in the first half and second half of fiscal 2022, the NEOs received short-term incentive awards in amounts equal to 148.3% and 54.3%, respectively, of their target short-term incentive award opportunities (determined as a percentage of their base salary paid during the applicable six-month performance period).

Long-Term Equity-Based Incentive Awards

Our NEOs were granted long-term equity-based incentive awards in the form of Objectives-based RSUs, granted in May 2021, and Service-based RSUs, granted in August 2021. Vesting of Objectives-based RSUs, which represented about 60% of the total long-term incentive award value granted to our NEOs, was tied to achievement of Compensation Committee-approved Company performance objectives. Specifically, the performance objectives related to securing specific design wins; making specific R&D-related improvements; implementing operational improvements; developing, expanding or qualifying specific product and process technologies; implementing specific manufacturing-related improvements; updating the Company’s governance framework and related monitoring and disclosure to support the Company’s ESG program; and developing and expanding the business application of advanced analytics.

For the Objectives-based RSUs granted in fiscal 2022, we fully achieved eight of the pre-established Company performance objectives, while obtaining partial achievement of two additional performance objectives (as discussed in more detail below). The Committee noted that performance could not yet be measured for certain fiscal 2022 performance objectives with performance dates ending during the first and second quarters of fiscal 2023. As a result, in May 2022, the Committee determined that performance on the measurable fiscal 2022 performance objectives resulted in achievement of 79% of target performance. The Objectives-based RSUs earned by the NEOs vest over a specified period, with 50% vesting upon certification of the level of achievement of the awards and the remaining 50% vesting in equal annual installments over each of the following two years.

Executive Compensation Program

Executive Compensation Program Objectives and Philosophy

The objectives of Qorvo’s executive compensation program are to enhance our ability to recruit and retain qualified management, motivate our executive officers and other employees, and create a strong alignment between the financial interests of our

 

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Executive Compensation

 

 

executive officers and our stockholders. We believe the competition in our industry for qualified executives, including our NEOs, is extremely strong. To attract and retain highly qualified employees, we must maintain an overall compensation package that is competitive with the compensation offered by the companies in our peer group and other competitors within our industry.

The Compensation Committee bases short-term incentive awards and long-term performance-based equity awards on the achievement of corporate financial and operational goals established by the Committee. While this structure places focus on the performance of the executive management team as a group and overall Company performance, the operational goals established are often assigned to specific members of management. The Compensation Committee does consider these operational goals in evaluating individual performance in its compensation decisions.

We also believe that substantial equity ownership provides important medium-term and long-term incentives and encourages our NEOs to take actions favorable to the long-term interests of Qorvo and our stockholders. Accordingly, long-term equity-based incentive compensation makes up a significant portion of the overall target total direct compensation of our NEOs. Additionally, our NEOs and other executive officers, are required to own shares of our common stock in accordance with our stock ownership guidelines, as described in more detail under “Compensation Decision-Making Processes – Stock Ownership Guidelines below.

Fiscal 2022 Executive Compensation Program Design

Our fiscal 2022 executive compensation program consists of base salary, short-term incentive awards and long-term equity-based incentive awards. For our NEOs, base salary generally accounts, on average, for approximately 13% of their target total direct compensation. In addition, short-term incentive award opportunities, which may be paid in cash or equity at the Committee’s discretion, generally account for approximately 14% of their target total direct compensation, while long-term equity-based incentive award opportunities are comprised of performance- and service-based RSUs and generally account for approximately 73% of their target total direct compensation. Our executive compensation philosophy emphasizes team effort, which we believe fosters rapid adjustment and adaptation to fast-changing market conditions. We believe that our combination of short-term incentive awards and long-term performance- and service-based RSUs helps us achieve our long-term goals and will continue to align the interests of our executive officers, including our NEOs, with those of Qorvo and our stockholders.

For our NEOs, approximately 60% of their target total long-term equity-based incentive awards are performance-based, while the balance is service-based. The Objectives-based RSU awards are linked to the achievement of Company performance objectives, with 50% vesting upon certification of the level of achievement by the Committee for the applicable portion of the Objectives-based RSUs, and the remaining 50% vesting in equal annual installments over each of the following two years. These performance-based awards are “at-risk” and do not contain any minimum guaranteed award.

The Compensation Committee has also made annual performance-based and service-based equity awards to our NEOs that have extended vesting periods or award terms. The purpose of these awards, which are discussed in more detail below, is to motivate and reward strong corporate performance and to retain valued executives. We also use long-term equity-based incentive awards to attract and recruit qualified executives. We believe that equity awards serve to align the interests of our NEOs with those of our stockholders by rewarding them for stock price growth. Because a significant percentage of our NEOs target total direct compensation is in the form of equity awards with long-term vesting requirements and no guarantee of being earned, we believe our NEOs are motivated to take actions that will benefit the Company and our stockholders in the long term. The Company also offers a tax-qualified defined contribution 401(k) plan and nonqualified deferred compensation plan to each of our NEOs.

Compensation Decision-Making Processes

Role of the Compensation Committee

The Compensation Committee is appointed by the Board to exercise the Board’s authority to set compensation of our officers (including our NEOs), to make recommendations to the Board regarding compensation of our non-employee directors and to administer our incentive compensation plans. The Committee holds several regularly scheduled meetings each year, in addition to special meetings, as needed to fulfill its obligations. Meeting agendas are established by the Chair of the Compensation Committee after consultation with our Chief Human Resources Officer, other members of the Committee and our CEO.

Role of the Compensation Consultant

The Compensation Committee has retained the compensation consulting firm Compensia, Inc. to assist it with executive, equity and non-employee director compensation matters. The Committee also received advice from Compensia relating to the Company’s executive compensation performance metrics for fiscal 2022. The Committee selected Compensia based primarily on its principals’ depth of experience in the technology industry and its prior performance as the Committee’s compensation consultant. Compensia supported the Committee in reviewing and finalizing the fiscal 2022 compensation of our NEOs. In addition, Compensia worked with the Committee to help develop compensation practices appropriate for our industry. Compensia also provided an analysis of non-employee director compensation and provided input on executive officer base salary and our short-term and long-term incentive plans. Compensia’s recommendations to the Committee generally included suggested ranges for compensation or descriptions of policies that Compensia currently considers best practices in our industry.

 

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Executive Compensation

 

 

During fiscal 2022, Compensia worked only for the Committee and performed no additional services for Qorvo or any of our NEOs. The Committee approved the engagement of Compensia, including the scope of work to be performed and the proposed budget. During fiscal 2022, neither the Committee nor our management used the services of any other compensation consultant other than Compensia. All the work performed by Compensia is performed at the direction of the Committee. In connection with its engagement of Compensia, the Committee considered the factors set forth in the listing standards of Nasdaq and the relevant SEC rules on advisor independence and determined that Compensia was independent and that its engagement did not present any conflicts of interest.

Role of Executives in Establishing Compensation

During fiscal 2022, our CEO, other members of executive management (particularly our Chief Human Resources Officer), Compensia and the Compensation Committee met numerous times regarding compensation considerations. Each of these parties was and continues to be encouraged to propose ideas or issues for the Compensation Committee to consider and evaluate with respect to our compensation structure and philosophy.

The Committee, following consultation with Compensia, establishes the annual base salary, short-term incentive award opportunities and long-term equity-based incentive award opportunities for our CEO, Mr. Bruggeworth. Mr. Bruggeworth recommends to the Committee the annual base salary, short-term incentive award opportunities and long-term equity-based incentive award opportunities for the other members of the executive management team, including the other NEOs, for the Committee’s review, modification and approval.

To assist the Committee in overseeing compensation practices, the Committee periodically requests that the Human Resources, Finance and Legal Departments’ personnel present information on compensation-related topics. Therefore, certain members of the executive management team or other employees attended portions of some Committee meetings during fiscal 2022 to fulfill these requests. Our CEO attended all of the Committee’s meetings during fiscal 2022 but did not attend any portion of any meeting where his own compensation was being determined. The Committee held a portion of certain meetings during fiscal 2022, in executive session with only Committee members and, in some cases, Committee advisors present.

Use of Industry Comparative Data

We operate in a highly competitive industry in which retention of qualified personnel is a critical factor in operating a successful business. As such, we try to understand as much as possible about the total compensation levels and practices at other companies in our industry. In consultation with Compensia, our CEO and our Chief Human Resources Officer, the Compensation Committee has developed a peer group of companies to better understand the competitive market for executive talent that it reviews at least annually and, when appropriate, adjusts periodically. The Committee made changes to the peer group as compared to fiscal 2021 in light of consolidation within the semiconductor industry and changes to the revenue and market capitalization of our peer group companies. The companies included in this peer group generally have revenue ranging from one-half to two and one-half times our annual revenue, market capitalizations ranging from one-third to three times our market capitalization and are in the semiconductor, semiconductor equipment, electrical equipment and instrument, and communications equipment business sectors. The peer group is constructed such that the median revenue and market capitalization are at or close to our financial profile. At the time the peer group was determined, Qorvo was at the 57th percentile of revenue and the 51st percentile of market capitalization of these companies.

The peer group used in fiscal 2022 consisted of the following companies:

 

   Analog Devices, Inc.

   Ciena Corporation

   Cirrus Logic, Inc.

   Cree, Inc.

   Flir Systems, Inc.

   Keysight Technologies, Inc.

  

   KLA Corporation

   Marvell Technology Group Ltd.

   Maxim Integrated Products

   Microchip Technology Inc.

   MKS Instruments, Inc.

   ON Semiconductor Corporation

  

   Skyworks Solutions, Inc.

   Teradyne, Inc.

   Trimble, Inc.

   Xilinx, Inc.

   Zebra Technologies  Corporation

The Compensation Committee utilizes peer group data to help establish base salaries and target short-term incentive award opportunities for each NEO. When reviewing peer group data in setting compensation, the Compensation Committee also considers each NEO’s performance, level of responsibility in comparison to the other NEOs, and internal equity and other considerations and makes adjustments to compensation as it deems appropriate.

 

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Executive Compensation

 

 

Incentive-Based Compensation Policies

With the assistance of the Compensation Committee, Compensia and the executive management team, we have developed the policies discussed below:

 

   

Short-term incentive award opportunities are linked to pre-established objective metrics for our financial performance during two six-month periods each fiscal year. As discussed in more detail below under “Elements of Compensation – Short-Term Incentive Opportunities,” each target short-term incentive award opportunity is expressed as a percentage of the NEO’s base salary that is paid during the applicable performance period. The short-term incentive program is structured so that as the level of an NEO’s responsibility at Qorvo increases, the target short-term incentive award opportunity as a percentage of his total base salary and target short-term incentive award opportunity will also increase, resulting in a greater percentage of his short-term incentive compensation being at-risk and linked to our operating performance.

 

   

A substantial amount of each NEO’s total long-term equity-based incentive compensation is performance-based. For fiscal 2022, our long-term performance-based equity awards were linked to our performance as measured against pre-established Company objectives. While each individual compensation component was set with reference to comparable data drawn from the peer group, taking into account the observations of Compensia as to best practices in our industry, the Committee established a policy that approximately 60% of the value of each NEO‘s potential long-term equity awards should be performance-based. See “Elements of Compensation – Performance-Based Restricted Stock Unit Awards” below for more information.

 

   

Targeted levels of equity awards (including both performance-based and service-based awards) for each NEO, as is the case with base salary and short-term incentive award opportunities, are established after consideration of (a) comparable data drawn from the peer group; (b) each executive officer’s base salary and short-term incentive award opportunity; (c) past accomplishments and performance; (d) overall responsibilities and anticipated performance required for the upcoming fiscal year; and (e) internal equity and other considerations.

 

   

Our fiscal 2022 long-term performance-based equity awards were linked to achievement during the year of key Company projects or initiatives that the Committee believed had a strong potential to impact long-term stockholder value creation.

 

   

We do not provide “perquisites” to our executive officers.

Other Equity Award Grant Practices

We also employ the following practices with respect to equity awards:

 

   

As part of the Committee’s regular process for determining whether performance-based compensation goals have been met, our Internal Audit Department reviews our performance against the applicable metrics for short-term incentive award opportunities and long-term performance-based equity compensation, confirms the level of achievement of the applicable metrics and issues a report to the Committee certifying the applicable calculations.

 

   

To encourage our executive officers to maintain a longer-term perspective of the Company as they approach retirement and to augment retirement savings, both Objectives-based RSUs and Service-based RSUs generally will remain outstanding and capable of being earned and/or of vesting in accordance with their terms following an executive officer’s termination of employment unless such employment is terminated for cause, in which case any unearned or unvested portion of the award will be forfeited. Continuation of the award is conditioned on the departing executive officer’s agreement to refrain from working for another company during the remaining vesting period and compliance with specified non-disclosure, confidentiality and other covenants. If the individual fails to satisfy these obligations, the remaining unearned or unvested portion of the award will be forfeited and any underlying shares of common stock that were earned and vested following termination and any gain from the sale of such shares will be subject to recoupment, or “clawback,” by Qorvo.

 

   

In order to support the surviving family of an executive officer in the event of his or her death, both performance-based and service-based long-term equity awards will be treated as earned (at target levels if applicable) and fully vested in the event of the death of the executive officer prior to the end of the applicable performance or vesting period. In the event of the death of the executive officer on or after the end of a performance period, long-term performance-based equity awards will be eligible to be fully earned, based on actual performance and to the extent performance goals are met, with such earned awards being deemed fully vested as of the date of termination.

 

   

We prohibit the backdating or spring-loading of equity awards. To further that goal, we generally grant Service-based RSUs and Objectives-based RSU opportunities once a year to existing employees.

 

   

We prohibit the repricing of stock options or stock appreciation rights without stockholder approval.

 

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Executive Compensation

 

 

The Committee also has additional responsibilities with respect to our compensation policies and practices, which are set forth in its charter and described in more detail under “Corporate Governance – Committees and Meetings – Compensation Committee,” above.

Prohibition Against Hedging and Pledging

Our securities trading policy and Corporate Governance Guidelines prohibit any hedging of our securities by directors or employees, including our executive officers. This includes engaging in any type of short sale or purchasing any financial instrument (including prepaid variable forward contracts, equity swaps, collars and exchange traded funds) or engaging in any transaction that, in either case, hedges or offsets, or is designed to hedge or offset any risk of decrease in the market value of our common stock. Accordingly, none of our directors or executive officers has engaged in any hedging transaction with respect to our common stock.

Our securities trading policy and Corporate Governance Guidelines also prohibit any pledging of our securities by directors or employees, including our executive officers. Accordingly, none of our directors or executive officers has pledged our common stock.

Stock Ownership Guidelines

Under our Corporate Governance Guidelines, we have established stock ownership guidelines for our non-employee directors, CEO and other executive officers, which provide that within five years of first becoming a director or executive officer, as applicable, they must own shares of our common stock with a specified value in the following amounts: for directors, 5x their annual cash retainers; for the CEO, 5x his base salary; and for other executive officers, 1x their base salaries. We recently revised our Corporate Governance Guidelines to clarify that only common stock, time-vested restricted stock and time-vested restricted stock units owned directly by a director or executive officer, held indirectly by a trust or owned by an immediate family member residing in the same household will be counted toward the ownership requirements. The Compensation Committee believes these ownership requirements help ensure that our directors and officers have meaningful equity stakes that help align their economic interests with those of our stockholders.

Elements of Compensation

Compensation arrangements for our NEOs under our fiscal 2022 executive compensation program are composed of four elements: (a) base salary; (b) performance-based short-term incentive awards; (c) equity incentive awards in the form of performance-based and service-based RSUs; and (d) other compensation and employee benefits generally available to our eligible employees, such as health insurance, group life and disability insurance and participation in our 401(k) plan, our nonqualified deferred compensation plan and our Employee Stock Purchase Plan, or ESPP. We believe our overall and individual incentive award grant practices contain performance-based elements that are designed to reward performance and support our strategic objectives.

Base Salaries

The Committee reviews and establishes individual base salaries for our executive officers, including our NEOs, annually. In determining individual base salaries, the Committee considers peer group data, overall responsibilities and anticipated performance, past accomplishments and performance, labor market conditions and our overall annual budget guidelines for merit and performance increases. The base salaries for our NEOs are as shown in the table below:

 

  Name    Base Salary (1)  

  Robert A. Bruggeworth

  

 

$920,332    

 

  Mark J. Murphy

  

 

$555,379    

 

  Philip J. Chesley

  

 

$465,000    

 

  Steven E. Creviston

  

 

$539,259    

 

  Paul J. Fego

  

 

$490,435    

 

 

  (1)

Effective on the first day of fiscal 2022 (April 4, 2021) for each of Messrs. Bruggeworth, Murphy, Creviston and Fego, and on November 1, 2021 for Mr. Chesley. The base salaries for each of Messrs. Bruggeworth, Murphy, Creviston and Fego represent increases of 6% to 8% from fiscal 2021.

Short-Term Incentive Award Opportunities

A significant portion of each NEOs annual target total direct compensation is designed to be at-risk and linked to our operating performance. Short-term incentives for our NEOs are awarded pursuant to our Short-Term Incentive Plan only when earned and are not guaranteed.

 

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Executive Compensation

 

 

The target short-term incentive award opportunity for each NEO is expressed as a percentage of the base salary that is paid during the applicable performance period. The short-term incentive program is structured so that as an NEO’s responsibility at Qorvo increases, the target short-term incentive award opportunity as a percentage of base salary will also increase. In March 2021, the Committee set the fiscal 2022 target short-term incentive award opportunity for Mr. Bruggeworth at 160% of his base salary (an increase from 150% in fiscal 2021) and for each of Messrs. Murphy, Creviston and Fego at 90% of their respective base salary. In November 2021, the Committee set the fiscal 2022 target short-term incentive award opportunity for Mr. Chesley at 90% of his base salary. The short-term incentive award opportunities reflect the Committee’s view that Mr. Bruggeworth, as our CEO, bears overall management responsibility for Qorvo, while our other NEOs have more narrow responsibilities tied to a particular business unit or function.

For fiscal 2022, the short-term incentive award opportunities were based on two separate six-month performance periods. The metrics used to measure performance were (1) revenue and (2) non-GAAP operating income. The Compensation Committee chose these metrics because it believes that these are important factors driving stockholder value.

For purposes of the short-term incentive awards, “non-GAAP operating income” was calculated excluding stock-based compensation expense, amortization of intangible assets, acquisition and integration related costs, gain or loss on assets, asset impairments, start-up costs, restructuring related charges and certain non-cash expenses. The revenue and non-GAAP operating income metrics had pre-established threshold, target and maximum levels, and each constituted 50% of the total short-term incentive award opportunity during each six-month performance period. Each NEO had the opportunity to earn a short-term incentive award in an amount between 30% and 200% of the target short-term incentive award opportunity, depending on our actual level of revenue and non-GAAP operating income during the performance period. No minimum bonus was guaranteed. In addition, the fiscal 2022 short-term incentive awards are subject to the fiscal year award limitation of $5,000,000 per participant applicable under the Short-Term Incentive Plan. Our short-term incentive compensation targets are intended to reward actual performance measured against our Board-approved operating plan.

The short-term incentive award earned for each metric was determined on a linear basis for performance between the threshold and maximum levels for such metric. For the first six months of fiscal 2022, the target levels for revenue and non-GAAP operating income were approximately 100% of the corresponding amounts in our annual operating plan as approved by the Board. As a result of our performance in the first six months of fiscal 2022, our NEOs earned short-term incentive awards equal to 148.3% of their target short-term incentive award opportunity for this semi-annual performance period. The following table sets forth the short-term incentive metrics and the actual results achieved for the first six-month performance period:

First Half of Fiscal 2022 Short-Term Incentive Components, Performance Range and Results Achieved

 

  Performance Metric  

Threshold

(30%
Payout)

   

Target

(100%
Payout)

   

Maximum

(200%
Payout)

   

Achieved

Results

   

Short-Term

Incentive
Percentage
Achieved

    Weighting     Payout %
Factor
 

  Revenue

 

$

1,885.6M

 

 

$

2,218.3M

 

 

$

2,551.0M

 

 

$

2,362.4M

 

 

 

143.3%

 

 

 

50%

 

 

 

71.6

%  

  Non-GAAP Operating Income

 

$

484.9M

 

 

$

692.7M

 

 

$

900.5M

 

 

$

803.6M

 

 

 

153.4%

 

 

 

50%

 

 

 

76.7

%  

                                                   

 

148.3

%  

We used a similar methodology to set our short-term incentive award targets for the second half of fiscal 2022 based on our forecast prepared in October 2021 for the same period, as approved by the Board. For the second six months of fiscal 2022, the target level for revenue and non-GAAP operating income was approximately 100% of the corresponding amount in our forecast. Based on our performance in the second six months of fiscal 2022, our NEOs earned short-term incentive awards equal to 54.3% of their target short-term incentive award opportunity for this semi-annual performance period. The following table sets forth the short-term incentive metrics and the actual results achieved for the second six-month performance period:

Second Half of Fiscal 2022 Short-Term Incentive Components, Performance Range and Results Achieved

 

  Performance Metric  

Threshold

(30%
Payout)

    Target
(100%
Payout)
   

Maximum

(200%
Payout)

   

Achieved

Results

   

Short-Term

Incentive
Percentage
Achieved

    Weighting     Payout %
Factor
 

  Revenue

 

$

2,193.4M

 

 

$

2,580.5M

 

 

$

2,967.6M

 

 

$

2,265.7M

 

 

 

43.0%

 

 

 

50%

 

 

 

21.5

%  

  Non-GAAP Operating Income

 

$

614.5M

 

 

$

877.8M

 

 

$

1,141.1M

 

 

$

748.1M

 

 

 

65.6%

 

 

 

50%

 

 

 

32.8

%  

                                                   

 

54.3

%  

 

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Executive Compensation

 

 

Performance-Based Restricted Stock Unit Awards

For fiscal 2022, the NEOs received a performance-based RSU award opportunity to be earned based on our achievement of certain pre-established Company performance objectives. No minimum level of equity award was guaranteed. These Objectives-based RSUs are designed so that approximately 60% of the total target value of each NEO’s annual long-term equity-based incentive opportunity is linked to project milestones or key initiatives that the Compensation Committee believed had a strong potential to impact long-term stockholder value creation.

The Objectives-based RSUs granted in fiscal 2022 were eligible to be earned based on our actual performance as measured against ten performance objectives approved by the Compensation Committee. The number of RSUs earned is determined by the objectives met and the specific payout percentage that was assigned to each of those objectives. Depending on the number of objectives met, each NEO could have earned up to 150% of the target number of Objectives-based RSUs. We believe the Objectives-based RSUs advance our achievement of long-term financial and operational goals and help support our continued performance as an industry leader. These goals were Company-based, and the performance achieved applied to the executive management team as a group. The following table describes the performance objectives for fiscal 2022, along with the rationale, weighting, performance assessment and payout for each:

 

  Performance

  Objective (1)

  

Rationale for

Selection of Objective

  Weighting (2)  

Performance

Assessment

 

Percent

Payout

 

  Secure specific Mobile Product design wins

  

 

Increase revenue, expand margins, address customer requirements and develop key technologies

 

 

 

  45%

 

 

Partial (3)

 

 

19%

 

  Secure specific Infrastructure and Defense Products design wins

  

 

Increase revenue, expand margins, address customer requirements and develop key technologies

 

 

  15%

 

 

Not achieved (3)

 

 

0%

 

  Complete development and launch of specific advanced technology in new markets

  

 

Increase revenues and develop key technologies

 

 

  15%

 

 

Partial (3)

 

 

5%

 

  Implement new tools to increase margins

  

 

Improve operations efficiency and expand margins

 

 

  10%

 

 

Achieved

 

 

10%

 

  Automate certain business activities

  

 

Reduce transactional costs

 

 

  10%

 

 

Achieved

 

 

10%

 

  Implement new product technology for select applications

  

 

Improve performance and competitiveness

 

 

  10%

 

 

Achieved

 

 

10%

 

  Further enhance new product technology for select applications

  

 

Improve performance and competitiveness

 

 

  10%

 

 

Not achieved (3)

 

 

0%

 

  Implement new processes to improve manufacturing productivity

  

 

Improve manufacturing operations including cycle time and yield

 

 

  10%

 

 

Not achieved (3)

 

 

0%

 

  Achieve certain DE&I and ESG program goals

  

 

Drive sustainability and enhance DE&I initiatives

 

 

  15%

 

 

Achieved

 

 

15%

 

  Implement new costing tools

  

 

Enhance visibility of costs and improve reporting

 

 

  10%

 

 

Achieved

 

 

10%

     Total:   150%      

 

79%

 

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  (1)

Three of the objectives contained related sub-objectives that carried separate weightings and could be individually met.

 

  (2)

Weightings are assigned based on the perceived strategic importance of each objective.

 

  (3)

The performance period was our fiscal year ended April 2, 2022, except for five objectives/sub-objectives that had performance periods ending between April 30, 2022 and September 30, 2022. In May 2022, the Committee determined the Company’s actual performance with respect to those objectives with performance periods that ended prior to the Committee’s assessment.

Based on our actual performance against the pre-established performance objectives that the Compensation Committee was able to measure at the time of its assessment, our NEOs earned 79% of the target number of Objectives-based RSUs, as shown in the following table:

 

  Name    Target Number
of Objectives-
Based RSUs
     Maximum
Number of
Objectives-
Based RSUs
    

Actual Number of
Objectives-

Based RSUs
Earned (1)

 

  Robert A. Bruggeworth

  

 

26,684

 

  

 

40,026

 

  

 

21,079

 

  Mark J. Murphy

  

 

10,465

 

  

 

15,698

 

  

 

8,267

 

  Philip J. Chesley (2)

  

 

 

  

 

 

  

 

 

  Steven E. Creviston

  

 

8,023

 

  

 

12,035

 

  

 

6,338

 

  Paul J. Fego

  

 

8,023

 

  

 

12,035

 

  

 

6,338

 

 

  (1)

Due to rounding, the actual number of RSUs earned may vary slightly from the calculated payout multiplied by the target number of RSUs.

 

  (2)

Mr. Chesley joined Qorvo as President of Infrastructure and Defense Products, effective November 1, 2021, and was not granted Objectives-based RSUs for fiscal 2022.

The number of RSUs earned by our NEOs listed above vest over a specified period, with 50% having vested upon certification of the level of achievement of the awards and the remaining 50% vesting in equal annual installments over each of the following two years.

We believe that the level of performance required to satisfy the objectives and reach the target award level should not be easily achievable. When the Committee established the performance objectives for fiscal 2022, it assigned an expected degree of difficulty of achieving each objective or sub-objective, as applicable, as either “low,” “medium” or “high.” With the exception of two objectives rated as low difficulty, each of the objectives listed above were rated at either a high or medium difficulty to accomplish. The Committee believes that earning any awards equal to or greater than the target level of 100% should be difficult, but still possible, to achieve. We recognize, however, that the likelihood of achievement of any level of award in any given performance period may vary from prior performance periods and believe that the amount of the award should be appropriate for the performance. No minimum level of award is guaranteed. In addition, the Committee believes it is inherently difficult to predict whether these performance objectives will be met. The Committee believes that one of the most important benefits to Qorvo from the use of the Objectives-based RSUs is the focused emphasis by all participating employees on attaining the objectives as a team.

 

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Executive Compensation

 

 

Service-Based Restricted Stock Unit Awards

For fiscal 2022, the Compensation Committee granted Service-based RSUs to our executive officers, including our NEOs. The amount of each award was determined by the Committee in August 2021 upon consideration of (a) peer group data, (b) each executive officer’s base salary, short-term incentive award opportunities and performance-based RSU opportunities, (c) overall responsibilities and anticipated performance required for the upcoming fiscal year, and (d) past accomplishments and performance. Consistent with the Committee’s philosophy of promoting performance-based compensation, Service-based RSUs generally approximate 40% of the total target value of all annual long-term equity-based incentive opportunities. The RSUs generally are expected to vest over a four-year period, with 25% vesting on each anniversary of the grant date. The following table sets forth the number of Service-based RSUs granted to each NEO, with additional detail regarding the awards set forth in the “2022 Grants of Plan-Based Awards Table.”

 

  Name   

Service-

Based RSUs

 

  Robert A. Bruggeworth

  

 

15,804

 

  Mark J. Murphy

  

 

6,198

 

  Philip J. Chesley

  

 

20,012

 (1)     

  Steven E. Creviston

  

 

4,752

 

  Paul J. Fego

  

 

4,752

 

 

  (1)

The amount shown for Mr. Chesley reflects a grant made in December 2021, following his appointment as President of Infrastructure and Defense Products.

Other Employee Benefits

Our NEOs are eligible to participate in the same employee benefit plans generally available to all our employees, including health insurance, group life and disability insurance, 401(k) and our ESPP. We also maintain a non-qualified deferred compensation plan under which eligible employees, including our NEOs, may elect to defer the receipt of a portion of their base salary and some of their short-term incentive compensation, to the extent paid in cash. We do not provide matching contributions under our deferred compensation plan, nor do we guarantee a minimum rate of return.

Perquisites

Our executive officers do not receive perquisites or other personal benefits. The Compensation Committee believes that such benefits are not necessary to implement our current executive compensation philosophy and structure.

Tax Considerations

Under Section 162(m) of the Internal Revenue Code of 1986, as amended, or the Code, compensation paid to each of the Company’s “covered employees” that exceeds $1 million per taxable year is generally non-deductible unless the compensation qualifies for certain grandfathered exceptions (including the “performance-based compensation” exception) for certain compensation payable pursuant to a written binding contract in effect on November 2, 2017 and not materially modified on or after such date.

Although the Compensation Committee will continue to consider tax implications as one factor in determining executive compensation, the Committee believes that it needs to continue to consider all relevant factors that attract, retain and reward talent. Therefore, the Committee will continue to maintain the flexibility to award compensation that may not be tax deductible.

Employment Agreement

Our CEO, Mr. Bruggeworth, currently has an employment agreement with Qorvo. The terms of Mr. Bruggeworth’s employment agreement are described in more detail below in the section entitled “Potential Payments upon Termination or Change-in-Control.”

Change in Control Agreements

We have entered into change-in-control agreements with each of our NEOs and certain other members of our executive management team. We entered into these arrangements to acknowledge the respective employee’s importance to us and our stockholders and to attempt to avoid the distraction and loss of key management personnel that may occur in connection with rumored or actual fundamental corporate organizational changes. As more fully described in the section entitled “Potential

 

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Executive Compensation

 

 

Payments Upon Termination or Change-in-Control” below, these agreements entitle each of our NEOs to payments and benefits only if his employment is terminated without “cause,” or by him for “good reason,” within the two-year period following the change in control (which will include the 90 days prior to the date of the change in control in the case of a termination without cause). The Compensation Committee believes that this “double-trigger” structure provides an appropriate balance between the corporate objectives described above and the potential compensation payable upon a qualifying termination following a change of control.

Conclusion

The Compensation Committee believes that Qorvo’s executive compensation program provides a balanced and stable foundation for rewarding our NEOs and providing them incentives to achieve corporate objectives that align with the interests of our stockholders. Based on our financial performance in fiscal 2022, our NEOs received short-term incentive awards at 148.3% of their fiscal 2022 target percentage of base salary paid in the first six months of fiscal 2022 and 54.3% of their fiscal 2022 target percentage of base salary paid in the second six months of fiscal 2022. These earned incentive awards reflect operating performance by the Company above the threshold performance level required for an award, with the first six-month period of fiscal 2022 demonstrating strong performance that exceeded the target levels approved by the Committee. The Committee believes the award levels match the Company’s performance against its annual operating plan and forecast in fiscal 2022. In addition, based on the performance objectives measurable at the time of the Compensation Committee’s assessment in May 2022, our NEOs earned their Objectives-based RSUs at 79% of target.

Our executive compensation philosophy emphasizes team effort, which we believe fosters rapid adjustment and adaptation to fast-changing market conditions. We believe that our combination of short-term incentive awards and long-term performance- and service-based RSUs helps us achieve our long-term goals and will continue to align the interests of our executive officers, including our NEOs, with those of Qorvo and our stockholders.

Compensation Committee Report

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis that accompanies this report with our management. Based on such review and discussions, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement and incorporated by reference into our Annual Report on Form 10-K for the year ended April 2, 2022.

The Compensation Committee

Walden C. Rhines (Chair)

David H. Y. Ho

Roderick D. Nelson

Susan L. Spradley

 

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Executive Compensation

 

 

Summary Compensation Table

The following table summarizes the compensation of the NEOs for the fiscal years ended April 2, 2022, April 3, 2021 and, March 28, 2020. We use a 52- or 53-week fiscal year ending on the Saturday closest to March 31 of each year.

 

  Name & Principal Position

 

  

Year

 

    

Salary

($)

 

    

Stock
Awards
($) (1)

 

    

Non-Equity
Incentive Plan
Compensation
($) (2)

 

  

All Other
Compensation
($) (3)

 

  

Total
Compensation
($)

 

  Robert A. Bruggeworth

  President and Chief

  Executive Officer

  

 

2022

 

  

 

920,332

 

  

 

7,649,886

 

  

1,491,674

  

10,792

  

10,072,684

  

 

2021

 

  

 

884,934

 

  

 

6,758,964

 

  

2,123,597

  

11,122

  

  9,778,617

  

 

2020

 

  

 

851,204

 

  

 

5,999,956

 

  

1,459,189

  

10,000

  

  8,320,349

  Mark J. Murphy

  Former Chief Financial Officer (4)

  

 

2022

 

  

 

555,379

 

  

 

3,000,141

 

  

   506,339

  

  8,704

  

  4,070,563

  

 

2021

 

  

 

539,009

 

  

 

2,002,639

 

  

   776,084

  

10,481

  

  3,328,213

  

 

2020

 

  

 

518,465

 

  

 

1,650,059

 

  

   533,271

  

  9,722

  

  2,711,517

  Philip J. Chesley

  Corporate Vice President and President of

  Infrastructure and Defense Products (5)

  

 

2022

 

  

 

180,635

 

  

 

2,999,999

 

  

     91,772

  

  6,260

  

  3,278,665

                 
                 

  Steven E. Creviston

  Corporate Vice President

  and President of Mobile Products

  

 

2022

 

  

 

539,259

 

  

 

2,300,117

 

  

   491,642

  

10,438

  

  3,341,456

  

 

2021

 

  

 

528,302

 

  

 

2,002,639

 

  

   760,666

  

10,660

  

  3,302,267

  

 

2020

 

  

 

508,165

 

  

 

2,000,008

 

  

   522,677

  

  9,920

  

  3,040,770

  Paul J. Fego

  Corporate Vice President of Global

  Operations

  

 

2022

 

  

 

490,435

 

  

 

2,300,117

 

  

   447,130

  

10,452

  

  3,248,134

  

 

2021

 

  

 

475,979

 

  

 

1,602,114

 

  

   685,330

  

10,592

  

  2,774,015

  

 

2020

 

  

 

457,837

 

  

 

1,499,987

 

  

   470,912

  

  9,908

  

  2,438,644

 

  (1)

Represents the aggregate grant date fair value of performance-based and service-based restricted stock units granted during the fiscal years shown calculated in accordance with Financial Accounting Standards Board, or FASB, Accounting Standards Codification Topic 718, Compensation-Stock Compensation, or ASC Topic 718, rather than an amount paid to or realized by the NEO, disregarding the estimate of forfeitures related to performance-based and service-based, as applicable, vesting conditions. The aggregate grant date fair value is the amount we expect to expense in our financial statements over the award’s vesting schedule. See “Stock-Based Compensation” in Note 15 of the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended April 2, 2022 (the “10-K”) for the assumptions used to calculate grant date fair value. The actual amounts, if any, ultimately realized may differ from the ASC Topic 718 grant date fair value amounts. See the “2022 Grants of Plan-Based Awards Table” below for information on grants awarded in fiscal year 2022.

 

  (2)

Represents amounts earned under our Short-Term Incentive Plan and the disclosure for fiscal 2021 and 2022 reflects a revision from our 2020 disclosure to show, in line with SEC guidance, amounts earned in the years referenced rather than amounts actually paid in such years. See “Compensation Discussion and Analysis – Elements of Compensation – Short-Term Incentive Opportunities” for information on the Short-Term Incentive Plan.

 

  (3)

Represents company matching contributions to the accounts of the NEOs under our 401(k) plan.

 

  (4)

Mr. Murphy resigned as Chief Financial Officer effective April 18, 2022.

 

  (5)

Mr. Chesley joined Qorvo as President of Infrastructure and Defense Products, effective November 1, 2021.

 

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Executive Compensation

 

 

2022 Grants of Plan-Based Awards Table

The following table provides information on restricted stock unit awards and plan-based short-term incentive awards granted to or earned by each of our NEOs with respect to fiscal year 2022. The actual amounts, if any, ultimately realized may differ from the amounts set forth in the “Grant Date Fair Value of Stock and Option Awards” column.

 

        Estimated Possible
Payouts Under
Non-Equity Incentive
Plan  Awards
(2)
     

Estimated Possible
Payouts Under
Equity Incentive

Plan Awards (3)

  All Other
Stock
Awards:
Number of
Shares of
Stock or
Units (4)
(#)
  Grant Date
Fair Value
of Stock
and Option
Awards
($) (5)
  Name   Grant Date
(1)
  Threshold
($)
  Target
($)
  Maximum
($)
       Threshold
(#)
  Target
(#)
  Maximum
(#)

  Robert A. Bruggeworth

   

 

N/A 

   

 

0

 

   

 

1,472,531

   

 

2,945,062

                       
   

 

5/11/2021

                   

 

267

   

 

26,684

   

 

40,026

       

 

4,589,916

   

 

 

8/10/2021

 

 

                               

 

 

15,804

 

 

   

 

 

3,059,970

 

 

  Mark J. Murphy (6)

   

 

N/A 

   

 

0

 

   

 

499,841

   

 

999,682

                       
   

 

5/11/2021

                   

 

105

   

 

10,465

   

 

15,698

       

 

1,800,084

   

 

 

8/10/2021

 

 

                               

 

 

6,198

 

 

   

 

 

1,200,057

 

 

  Philip J. Chesley

   

 

N/A 

   

 

0

 

   

 

418,500

   

 

837,000

                       
   

 

12/5/2021

                               

 

20,012 

(7)

   

 

2,999,999

                                       

  Steven E. Creviston

   

 

N/A 

   

 

0

 

   

 

485,334

   

 

970,668

                       
   

 

5/11/2021

                   

 

80

   

 

8,023

   

 

12,035

       

 

1,380,035

   

 

 

8/10/2021

 

 

                               

 

 

4,752

 

 

   

 

 

920,082

 

 

  Paul J. Fego

   

 

N/A 

   

 

0

 

   

 

441,392

   

 

882,784

                       
   

 

5/11/2021

                   

 

80

   

 

8,023

   

 

12,035

       

 

1,380,035

     

 

8/10/2021

                                                                         

 

4,752

   

 

920,082

 

  (1)

Equity awards granted to the NEOs were made pursuant to our 2012 Stock Incentive Plan (the “2012 Plan”). See “Equity Compensation Plans – 2012 Stock Incentive Plan – Qorvo, Inc.,” below for more information. The grant date above is determined in accordance with ASC Topic 718.

 

  (2)

Each NEO participates in our Short-Term Incentive Plan. The short-term incentive award earned by each NEO is shown in the Summary Compensation Table under the column captioned “Non-Equity Incentive Plan Compensation.” Short-term incentive awards are earned based on attainment of Company operating performance goals based on two six-month performance periods. The short-term incentive opportunities available under the Short-Term Incentive Plan are described in greater detail under “Compensation Discussion and Analysis – Elements of Compensation – Short-term Incentive Opportunities.”

 

  (3)

Information in these rows reflect the Objectives-based RSU awards granted under our 2012 Plan. Objectives-based RSUs are earned, if at all, at the end of a specified performance period based on achievement of pre-established performance goals, with 50% vesting at the end of the performance period and the remaining 50% vesting in equal installments over each of the following two years. In the event of termination of employment other than for cause, these performance-based RSU awards granted to an NEO will continue to be capable of being earned and vest over the original vesting term as if the NEO had remained an employee of Qorvo subject to the NEO’s compliance with certain restrictive covenants and other conditions. For a detailed discussion of the performance-based RSU awards, see “Compensation Discussion and Analysis – Elements of Compensation – Performance-Based Restricted Stock Unit Awards,” above.

 

  (4)

These service-based RSU awards were granted under our 2012 Plan and vest in increments of 25% per year over a period of four years, with the exception of the December 2021 grant to Mr. Chesley, which vests ratably over a three-year period. In the event of termination of employment other than for cause, the service-based RSU awards granted to an NEO generally will continue to vest over the original vesting term as if the NEO had remained an employee of Qorvo subject to the NEO’s compliance with certain restrictive covenants and other conditions. For a detailed discussion of the service-based RSU awards, see “Compensation Discussion and Analysis – Elements of Compensation – Service-Based Restricted Stock Unit Awards.”

 

  (5)

These amounts do not reflect compensation actually received by the NEO. Amounts presented represent the aggregate grant date fair value calculated in accordance with ASC Topic 718 of our common stock awards granted during the fiscal year. See “Stock-Based Compensation” in Note 15 of the Notes to the Consolidated Financial Statements set forth in the

 

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  Company’s Form 10-K for the assumptions used to calculate the grant date fair value of the awards. The actual amount of the stock award ultimately realized upon vesting may differ from the aggregate grant date fair value.

 

  (6)

As a result of his resignation effective April 18, 2022, Mr. Murphy forfeited all unvested equity awards.

 

  (7)

The amount shown reflects a grant made in December 2021, following Mr. Chesley’s appointment as President of Infrastructure and Defense Products.

Equity Compensation Plans

The discussion that follows describes the material terms of our principal equity compensation plans in which the NEOs participate. The material terms of Mr. Bruggeworth’s employment agreement and the change in control arrangements applicable to our NEOs are described under “Potential Payments Upon Termination or Change-in-Control” below.

2012 Stock Incentive Plan – Qorvo, Inc.

The Company currently grants equity awards to eligible employees, directors and independent contractors under its current principal stock incentive plan, the 2012 Plan, which was approved by RFMD’s shareholders on August 16, 2012. Under the 2012 Plan, the Company is permitted to grant stock options and other types of equity incentive awards, such as stock appreciation rights, restricted stock awards, performance shares and performance units. The maximum number of shares issuable under the 2012 Plan may not exceed the sum of (a) 4.3 million shares, plus (b) any shares of common stock (i) remaining available for issuance as of the effective date of the 2012 Plan under the Company’s prior plans and (ii) subject to an award granted under a prior plan, which awards are forfeited, canceled, terminated, expire or lapse for any reason. As of April 2, 2022, approximately 2.6 million shares were available for issuance under the 2012 Plan.

For a discussion of the fiscal 2022 grants of performance-based RSU awards, which are capable of being earned based on objective performance goals, see “Compensation Discussion and Analysis – Elements of Compensation – Performance-Based Restricted Stock Unit Awards.” For a discussion of the methodology with respect to the grants of service-based RSU awards, see “Compensation Discussion and Analysis – Elements of Compensation – Service-Based Restricted Stock Unit Awards.” For a discussion of our NEOs’ equity award compensation in proportion to their total compensation, see “Compensation Discussion and Analysis – Executive Compensation Program – Fiscal 2022 Executive Compensation Program Design.”

2013 Incentive Plan – Qorvo, Inc.

The Company assumed the TriQuint Semiconductor, Inc. 2013 Incentive Plan (the “2013 Incentive Plan”), originally adopted by TriQuint, allowing Qorvo to issue awards under this plan. The 2013 Incentive Plan provides for the grant of stock options, restricted stock units, stock appreciation rights and other stock or cash awards to employees, officers, directors, consultants, agents, advisors and independent contractors of TriQuint and its subsidiaries and affiliates. Former employees, officers and directors of RFMD are not eligible for awards under the 2013 Incentive Plan. The options granted thereunder must have an exercise price per share no less than 100% of the fair market value per share on the date of grant. The terms of each grant under the 2013 Incentive Plan may not exceed ten years. As of April 2, 2022, approximately 500,000 shares were available for issuance under the 2013 Incentive Plan.

Employee Stock Purchase Plan – Qorvo, Inc.

The Company assumed the TriQuint Employee Stock Purchase Plan (“ESPP”), which is intended to qualify as an “employee stock purchase plan” under Section 423 of the Code. All regular full-time employees of the Company (including officers) and all other employees who meet the eligibility requirements of the plan may participate in the ESPP. The ESPP provides eligible employees an opportunity to acquire the Company’s common stock at 85% of the lower of the closing price per share of the Company’s common stock on the first or last day of each six-month purchase period. As of April 2, 2022, approximately 3.0 million shares were available for future issuance under this plan. The Company makes no cash contributions to the ESPP but bears the expenses of its administration.

 

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Executive Compensation

 

 

Outstanding Equity Awards at Fiscal 2022 Year-End Table

The following table shows the number of shares of our common stock covered by unvested restricted stock unit awards held by our NEOs on April 2, 2022. As of April 2, 2022, our NEOs did not have any outstanding option awards.

 

              Stock Awards
  Name    Grant Date
(1)
       

Number of
Shares of
Units of
Stock That
Have Not
Vested

(#)

  Market Value
of Shares or
Units of Stock
That Have Not
Vested
($) (2)

  Robert A. Bruggeworth

    

 

8/10/2021 

(3)

        

 

15,804

   

 

$1,920,344

    

 

5/11/2021 

(5)

        

 

26,684

   

 

3,242,373

    

 

8/5/2020 

(3)

        

 

15,429

   

 

1,874,778

    

 

6/30/2020 

(4)

        

 

1,007

   

 

122,361

    

 

5/13/2020 

(4)

        

 

28,666

   

 

3,483,206

    

 

8/6/2019 

(3)

        

 

17,608

   

 

2,139,548

    

 

5/10/2019 

(4)

        

 

14,970

   

 

1,819,005

    

 

 

8/7/2018 

 

(3)

 

        

 

 

7,043

 

 

   

 

 

855,795

 

 

  Mark J. Murphy (6)

    

 

8/10/2021 

(3)

        

 

6,198

   

 

753,119

    

 

5/11/2021 

(5)

        

 

10,465

   

 

1,271,602

    

 

8/5/2020 

(3)

        

 

4,572

   

 

555,544

    

 

6/30/2020 

(4)

        

 

299

   

 

36,331

    

 

5/13/2020 

(4)

        

 

8,496

   

 

1,032,349

    

 

8/6/2019 

(3)

        

 

4,843

   

 

588,473

    

 

5/10/2019 

(4)

        

 

4,118

   

 

500,378

    

 

 

8/7/2018 

 

(3)

 

        

 

 

1,937

 

 

   

 

 

235,365

 

 

  Philip J. Chesley

    

 

 

12/5/2021 

 

(3)

 

        

 

 

20,012 

 

(7)

 

   

 

 

2,431,658

 

 

 

  Steven E. Creviston

    

 

8/10/2021 

(3)

        

 

4,752

   

 

577,416

    

 

5/11/2021 

(5)

        

 

8,023

   

 

974,875

    

 

8/5/2020 

(3)

        

 

4,572

   

 

555,544

    

 

6/30/2020 

(4)

        

 

299

   

 

36,331

    

 

5/13/2020 

(4)

        

 

8,496

   

 

1,032,349

    

 

8/6/2019 

(3)

        

 

5,870

   

 

713,264

    

 

5/10/2019 

(4)

        

 

4,993

   

 

606,699

    

 

 

8/7/2018 

 

(3)

 

        

 

 

2,348

 

 

   

 

 

285,305

 

 

  Paul J. Fego

    

 

8/10/2021 

(3)

        

 

4,752

   

 

577,416

    

 

5/11/2021 

(5)

        

 

8,023

   

 

974,875

    

 

8/5/2020 

(3)

        

 

3,657

   

 

444,362

    

 

6/30/2020 

(4)

        

 

238

   

 

28,919

    

 

5/13/2020 

(4)

        

 

6,796

   

 

825,782

    

 

8/6/2019 

(3)

        

 

6,603

   

 

802,331

    

 

5/10/2019 

(4)

        

 

2,497

   

 

303,410

    

 

8/7/2018 

(3)

        

 

1,174

   

 

142,653

      

 

 

8/5/2018 

 

(4)

 

              

 

 

3,861

 

 

   

 

 

469,150

 

 

 

  (1)

The grant date is determined in accordance with ASC Topic 718.

 

  (2)

Based upon $121.51 per share, which was the closing price of our common stock as reported by Nasdaq on April 1, 2022, the last trading day of fiscal 2022, multiplied by the number of shares subject to restricted stock unit awards that had not yet vested.

 

  (3)

Service-based restricted stock unit awards generally vest in increments of 25% per year over a period of four years, except for Mr. Chesley’s award granted on December 5, 2021, which vests in increments of 33.3% per year over three years.

 

  (4)

Performance-based restricted stock unit awards, if earned, generally vest over a period of three years, with 50% vesting at upon certification of achievement by the Committee and the remaining 50% vesting in equal annual installments over the following two years.

 

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  (5)

Performance-based restricted stock unit awards with performance objectives not yet certified by the Compensation Committee as of April 2, 2022 are shown at target.

 

  (6)

As a result of his resignation effective April 18, 2022, Mr. Murphy forfeited all unvested equity awards.

 

  (7)

Reflects a grant made following Mr. Chesley’s appointment as President of Infrastructure and Defense Products effective November 1, 2021.

2022 Option Exercises and Stock Vested Table

The table below shows the number of shares of our common stock acquired by the NEOs during fiscal year 2022 upon the vesting of restricted stock unit awards. During fiscal year 2022, the NEOs did not exercise any stock options.

 

     Stock Awards  
  Name    Number of Shares
Acquired on
Vesting
(#) (1)
     Value Realized
on Vesting
($) (2)
 

  Robert A. Bruggeworth

  

 

86,379       

 

  

 

15,654,461       

 

  Mark J. Murphy

  

 

33,472       

 

  

 

6,190,864       

 

  Philip J. Chesley (3)

  

 

–       

 

  

 

–       

 

  Steven E. Creviston

  

 

27,795       

 

  

 

5,049,638       

 

  Paul J. Fego

  

 

21,236       

 

  

 

3,888,455       

 

 

  (1)

Share amounts are represented on a pre-tax basis. Our stock plans permit withholding of shares upon vesting to satisfy applicable withholding taxes.

 

  (2)

Values represent the market value of our common stock on the vesting date multiplied by the number of shares vested, rounded to the nearest dollar.

 

  (3)

Mr. Chesley was appointed as President of Infrastructure and Defense Products effective November 1, 2021.

2022 Nonqualified Deferred Compensation Table

The following table provides information relating to nonqualified deferred compensation of the NEOs for the fiscal year ended April 2, 2022. Mr. Fego is the only NEO who has elected to participate in our nonqualified deferred compensation plan.

 

  Name    Executive
Contributions
in Last Fiscal Year
($)
   Registrant
Contributions
in Last Fiscal
Year ($)
   Aggregate
Earnings in
Last Fiscal
Year
($)
   Aggregate
Withdrawals/
Distributions
($)
   Aggregate Balance
at Last Fiscal Year
End ($)

  Paul J. Fego

  

–  

  

–  

    

 

1.14

    

 

29,878

    

 

–  

Under our nonqualified deferred compensation plan, the NEOs may defer a portion of their cash compensation up to a maximum of 50% of base salary and 85% of bonuses payable pursuant to the short-term incentive plan and commissions payable pursuant to the sales incentive plan. All amounts deferred under the plan will be credited to the respective NEO’s accounts under the plan and treated as though invested in eligible investment options selected by the officer from among the options available under the plan. The available investment options are selected by Qorvo’s retirement plan committee. Each officer’s account will be adjusted for notional investment returns based on the performance of the investment funds selected by the officer.

Each participant must elect, at the time the participant files his or her deferral election for any plan year, to have compensation deferrals for that plan year paid or commence to be paid: following the participant’s separation from service, death or disability; following a change in control of Qorvo; or on a specified date that occurs earlier. In addition, each participant must elect from the following forms of payment: lump sum cash payment; 20 quarterly installments; 40 quarterly installments; or 60 quarterly installments. A participant can also withdraw amounts from his or her account if the participant experiences an unforeseeable

 

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Executive Compensation

 

 

emergency. A participant may change his or her elections as to the time and form of payment, provided the participant does so at least 12 months before payment would have been made or would have commenced to be made and the change results in the payment (or commencement of payment) being delayed for at least five years after the scheduled date, and meets certain other requirements established by Code Section 409A. If a participant who is a “specified employee,” as defined in Code Section 409A, at the time of his or her separation from service has elected to have any portion of his or her account paid or commence to be paid upon his or her separation from service, then such payments will be delayed until six months after the participant’s separation from service. If a participant dies prior to the complete distribution of his or her account, any remaining amounts will be distributed to the participant’s beneficiary in accordance with the payment elections made by the participant.

Potential Payments upon Termination or Change-In-Control

As described above under “Compensation Discussion and Analysis – Elements of Compensation – Employment Agreement,” Mr. Bruggeworth has an employment agreement with Qorvo which is discussed below under the heading “Employment Agreement with Mr. Bruggeworth.”

The information below describes and quantifies certain compensation that would become payable under existing plans and arrangements if our NEOs’ employment had terminated on April 2, 2022 and the price per share of our common stock on the date of termination was $121.51, which was the closing price of our common stock on April 1, 2022 (the last trading day of fiscal 2022). These benefits are in addition to benefits available generally to employees, such as distributions under our 401(k) plan and deferred compensation plan, disability benefits and accrued vacation pay.

Due to the number of factors that affect the nature and amount of any benefits provided upon the events discussed below, any actual amounts paid or distributed may be different. Factors that could affect these amounts include the timing during the year of any such event and our stock price.

Equity Awards

Under our equity incentive plans, unvested restricted stock unit awards are generally forfeited upon termination. However, restricted stock unit awards granted to the NEOs under the 2012 Plan generally will continue to vest pursuant to the same vesting schedule in the event of termination of employment, other than death or for cause, as if such individual had remained an employee of Qorvo, subject to certain restrictive covenants, clawback provisions and other conditions.

Under our equity incentive plans, an option holder generally has three months to exercise vested options after the date employment ends (other than for death or disability). The option holder or his or her estate in the case of death may exercise the option upon the holder’s respective disability or death (excluding unvested amounts) for a period of one year.

401(k) Savings Plan; Deferred Compensation Plan

The Company maintains a 401(k) plan and a deferred compensation plan for certain eligible U.S. employees, including each of our NEOs. We match 100% of the first 1%, and 50% of the next 5%, of each employee’s eligible earnings contributed to the 401(k) plan, and employees immediately vest in our contributions. Under the deferred compensation plan, employees who are eligible to participate are provided with the opportunity to defer a specified percentage of their base salary and short-term incentive awards paid in cash, which the Company will be obligated to deliver on a future date.

Employee Stock Purchase Plan

Upon termination of employment, all amounts in a participant’s ESPP account are not used for purchases and instead are returned to the participant.

Medical Benefits

All medical insurance benefits terminate effective at midnight on the last day of the month in which employment is terminated. Health care continuation coverage rules, commonly referred to as COBRA, require us to provide employees enrolled in our health, dental and vision plans with an opportunity to purchase continued health care coverage at their own expense upon the occurrence of a qualifying event, such as termination of employment for reasons other than gross misconduct, reduction in hours worked, divorce, death or loss of dependency status.

Employment Agreement with Mr. Bruggeworth

Pursuant to this employment agreement, the term of the employment agreement continues until the earliest of (a) November 11, 2010 (as extended as described in the following sentence); (b) Mr. Bruggeworth’s death; (c) termination by Qorvo for “Cause,” as

 

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defined in the employment agreement or otherwise upon 30 days’ notice; (d) termination by Mr. Bruggeworth for “Good Reason,” as defined in the employment agreement or otherwise on 30 days’ notice; or (e) the end of any 180-day Disability Period, as defined in the employment agreement. The employment agreement is subject to automatic daily extension of the two-year term until notice of non-extension is given in accordance with the terms of the employment agreement.

Under the employment agreement, Mr. Bruggeworth is entitled to a specified annual base salary, which amount is reviewed annually by the Compensation Committee and may be increased or reduced by the Compensation Committee if part of a salary reduction plan for similarly situated officers. Mr. Bruggeworth also is eligible to receive the following compensatory benefits:

 

 

A bonus opportunity under the Short-Term Incentive Plan for each performance period during the term of the employment agreement. The target annual bonus opportunity in each performance period cannot be less than 100% of Mr. Bruggeworth’s base salary.

 

 

The opportunity to receive periodic grants of equity compensation under the Company’s equity plans, in the Compensation Committee’s discretion, so long as he is treated similarly to other senior executive officers.

 

 

The right to participate in other bonus or incentive plans, paid time off and other retirement plans and welfare benefits in which other senior executive officers may participate in accordance with our policies as in effect from time to time.

If the employment agreement is terminated, Mr. Bruggeworth would be entitled to be compensated in the following manner:

 

 

Termination for any reason: Mr. Bruggeworth would be entitled to receive (a) base salary through the date of termination; (b) any previously earned but unpaid bonus under the Short-Term Incentive Plan for a completed performance period; (c) rights under equity plans, retirement plans and welfare benefit plans, which would be determined based on respective plan terms; and (d) unpaid paid time off per our policy.

 

 

Termination due to death or total disability: Mr. Bruggeworth, or, in the case of his death, his beneficiary, would be entitled to receive the benefits described above under “Termination for any reason” plus the greater of Mr. Bruggeworth’s accrued annual bonus or accrued target bonus for the performance period in which the termination date occurs, in each case pro-rated based on the termination date.

 

 

Termination by Qorvo without cause or by Mr. Bruggeworth with good reason: Mr. Bruggeworth would be entitled to receive the benefits described above under “Termination for any reason” plus (a) salary continuation equal to two times base salary; (b) his accrued annual bonus (payable after end of performance period), pro-rated based on the termination date; (c) a special bonus equal to two times his target annual bonus; (d) continuation coverage of health care benefits (or substantially identical individual coverage, plus special health care benefit) for two years; (e) equity awards (other than performance-based equity awards), which will be governed by terms of the respective equity plan and individual equity award agreement (including the right of the Compensation Committee to determine if post-termination vesting and/or exercise rights apply); (f) performance- based equity awards and any previously earned equity-based awards, which will be deemed earned, if at all, on a pro rata basis only if performance goals are met during the performance period, with such earned awards being deemed fully vested at grant or as of the date of termination in the case of previously earned awards; and (g) eligibility to participate in other welfare benefit plans on the same terms and conditions as available to active employees.

 

 

Termination by Qorvo for cause or by Mr. Bruggeworth without good reason: Mr. Bruggeworth would be entitled to receive the benefits described above under “Termination for any reason.”

 

 

Change of Control: Benefits (if any) paid under Mr. Bruggeworth’s existing change in control agreement would offset benefits (if any) paid under the employment agreement following Mr. Bruggeworth’s termination.

The employment agreement also establishes certain employment and post-termination obligations for Mr. Bruggeworth. He is required to assist in any Qorvo litigation and also is required to comply with certain confidentiality, nondisparagement, noncompetition and nonsolicitation covenants contained in the employment agreement.

Further, the employment agreement provides that if independent accountants determine that part or all of the payments and benefits to be paid to Mr. Bruggeworth under the employment agreement and all other plans or arrangements of Qorvo (a) constitute “parachute payments” under Code Section 280G, and (b) will more likely than not cause Mr. Bruggeworth to incur an excise tax under Code Section 4999 as a result of such payments or other benefits, Qorvo will pay a gross-up payment so that the net amount Mr. Bruggeworth will receive after payment of any excise tax equals the amount that he would have received if the excise tax had not been imposed. If the excise tax would not apply if the total payments to Mr. Bruggeworth were reduced by an amount less than 5%, then the amounts payable will be so reduced and gross-up payments would not be made to Mr. Bruggeworth.

The employment agreement also contains certain forfeiture and recoupment rights. Generally, during the term of the employment agreement and the 24-month period following the expiration thereof, if Mr. Bruggeworth engages in a “Prohibited Activity,” then

 

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(a) any equity awards granted or subject to vesting during the Prohibited Activity Term would be forfeited; (b) any and all shares issued to Mr. Bruggeworth under an equity award granted during the Prohibited Activity Term would be forfeited (without payment of consideration); (c) any gain realized by Mr. Bruggeworth with respect to any shares issued pursuant to an equity award granted during the Prohibited Activity Term would be required to be immediately paid to Qorvo; (d) any cash/incentive payments made during the Prohibited Activity Term would be required to be returned to Qorvo; and (e) any rights to future cash/incentive payments granted during the Prohibited Activity Term would be forfeited. Qorvo also has an offset right to recover such amounts against amounts otherwise due to Mr. Bruggeworth. For purposes of the employment agreement, “Prohibited Activity” includes (a) violation of certain restrictive covenants; (b) Mr. Bruggeworth’s engaging in willful conduct that results in an obligation to reimburse Qorvo under Section 304 of the Sarbanes-Oxley Act of 2002; or (c) Mr. Bruggeworth’s engaging in fraud, theft, misappropriation, embezzlement or dishonesty to the material detriment of Qorvo. “Prohibited Activity Term” means the period starting when Mr. Bruggeworth first engaged in Prohibited Activity conduct and without time limitation.

Change in Control Agreements

We have entered into change in control agreements with each of our NEOs. The change in control agreements will end on the earliest of: (a) the first anniversary of the effective date, subject to automatic renewal for additional one-year periods unless we give notice to the officer that we do not wish to extend it; (b) the termination of the officer’s employment with us for any reason during the period from the effective date until the date that is ninety (90) days prior to a change in control; (c) the termination of the officer’s employment with us by the officer without good reason or by us with cause; or (d) the end of a two-year period following a change in control and the fulfillment by us and the officer of all obligations under the agreement.

Under these agreements, if a change in control occurs while the officer is our employee, and a qualifying termination of his employment with us occurs within the two-year period following the change in control (which will include the ninety (90) days prior to the date of the change in control in the case of a termination by us without cause), then he or she (or his or her legal representative) is entitled to certain compensation payments and benefits provided he or she has executed a general release of claims. A “qualifying termination” means: (a) our termination of the officer’s employment for a reason other than death, disability or cause; (b) the officer’s termination of his or her employment for good reason; or (c) the termination of the officer’s employment due to death following delivery of a notice of good reason by the officer, which condition constituting good reason remains uncured by us.

A “change in control” is deemed to have occurred under the change in control agreements on the earliest of the following dates: (a) the acquisition by a person or entity of voting control over more than forty percent (40%) of the total voting power of our then outstanding voting stock; (b) a merger, consolidation or reorganization of us, in which holders of our common stock immediately prior to the transaction have voting control over less than sixty percent (60%) of the voting securities of the surviving corporation immediately after the transaction; (c) the sale or disposition of all or substantially all of our assets; or (d) a change in a majority of the Board within a 12-month period unless the nomination for election by our stockholders of each new director was approved by the vote of two-thirds of the members of the Board then still in office who were in office at the beginning of the 12-month period.

The agreements provide that, upon a qualifying termination after a change in control, we will pay a severance benefit to the officer. The severance benefit is equal to the sum of: (a) one times the highest annual rate of the officer’s base salary during the 12-month period before termination (two times in the case of Messrs. Bruggeworth and Murphy) plus (b) one times the officer’s target annual bonus opportunity based on the officer’s target bonus opportunity for the period in which the termination occurs (two times in the case of Messrs. Bruggeworth and Murphy).

In addition, the agreements provide that upon a qualifying termination after a change in control, all of our stock options, stock appreciation rights or similar stock-based awards held by the officer will be accelerated and exercisable in full, and all restrictions on any restricted stock, performance stock or similar stock-based awards granted by us will be removed and such awards will be fully vested. If the officer receives any payments or benefits under the agreement or under any other arrangement with us that may separately or in the aggregate constitute “parachute payments” within the meaning of Section 280G of the Code and it is determined that any of such payments will be subject to any excise tax pursuant to applicable provisions of the Code, we will pay to the officer either: (i) the full amount of such payments; or (ii) an amount equal to such payments reduced by the minimum amount necessary to prevent any portion of such payments from being an “excess parachute payment” (within the meaning of the Code), whichever amount results in the officer’s receipt, on an after-tax basis, of the greatest amount of payments notwithstanding that all or some portion of the payments may be subject to the excise tax (that is, there is no gross up provision). The agreements also provide that if the officer elects continuation coverage through our health plan, we will reimburse the officer for the difference between the monthly COBRA premium paid by the officer and the monthly premium amount required to be paid by our active employees for the same level of coverage under our health plan for a one-year period following termination (a two-year period in the case of Messrs. Bruggeworth and Murphy). We will also provide an annual payment equal to the amount necessary to pay any taxes imposed on the officer as a result of the officer’s receipt of health care reimbursements from us.

 

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The agreements also provide that the officer is subject to certain confidentiality, nonsolicitation and noncompetition provisions. In the event the officer fails to comply with any of these provisions, he or she will not be entitled to receive any payment or benefits under the agreement. These payments also are subject to “clawback” restrictions in the event of certain prohibited conduct. The following table sets forth information about potential payments to the NEOs, assuming that their employment was terminated following a change in control of Qorvo as of April 2, 2022, using the closing price per share of our common stock on April 1, 2022 (the last trading day of fiscal 2022) of $121.51. The table also assumes prior payment of any remaining accrued annual bonus in accordance with the terms of our Short-Term Incentive Plan and any portion of base salary that would have been accrued but not yet paid as of April 2, 2022.

Potential Payments Upon a Qualifying Termination after a Change in Control

 

  Name           Robert A.
Bruggeworth
     Mark J.
Murphy (1)
     Philip J.
Chesley
     Steven E.
Creviston
     Paul J.
Fego

  Base Salary

     (2   $ 1,914,290      $ 1,155,188      $ 478,950      $ 560,829      $ 500,244    

  Bonus

     (3     3,062,864        1,039,669        431,055        504,746        450,220  

  Stock Awards

     (4     15,457,409        4,973,161        2,431,658        4,781,783        4,568,898  

  Benefits Continuation

     (5     55,703        66,804        9,060        27,851        21,847  

  Accrued Vacation

     (6     88,493        53,402        19,818        20,961        19,110  

  Total

           $ 20,578,759      $ 7,288,224      $ 3,370,541      $ 5,896,170      $ 5,560,319  

 

  (1)

Mr. Murphy resigned effective April 18, 2022, following our fiscal year end.

 

  (2)

For Messrs. Bruggeworth and Murphy, the amount represents two times the highest annual rate of base salary during the twelve-month period before termination. For the other NEOs, the amount represents one times the highest annual rate of base salary during the twelve-month period before termination. A portion of these amounts would be payable in a lump sum within 30 days following the date of termination, with the remainder to be paid in periodic installments, in accordance with our normal payroll practices, over a two-year period for Messrs. Bruggeworth and Murphy, and over a one-year period for the other NEOs.

 

  (3)

For Messrs. Bruggeworth and Murphy, the amount represents two times the target annual bonus opportunity as defined in our Short-Term Incentive Plan for the year of termination. For the other NEOs, the amount represents one times the target annual bonus opportunity as defined in our Short-Term Incentive Plan for the year of termination. The bonus amounts shown are calculated using the fiscal 2022 base salary rates. A portion of these amounts would be payable in a lump sum within 30 days following the date of termination, with the remainder to be paid in periodic installments, in accordance with our normal payroll practices, over a two-year period for Messrs. Bruggeworth and Murphy, and over a one-year period for the other NEOs.

 

  (4)

Represents the intrinsic value of unvested performance- and service-based restricted stock units as of April 2, 2022.

 

  (5)

Represents the value of continuing health and welfare based on the monthly premiums paid by Qorvo at April 2, 2022 (for two years with respect to Messrs. Bruggeworth and Murphy, and one year with respect to the other NEOs).

 

  (6)

Represents accrued vacation earned but not utilized, which would be payable in a lump sum within 30 days following the date of termination. The accrued vacation amounts shown are calculated using the fiscal 2022 base salary rates.

Other Potential Payments Upon Resignation, Termination for Cause, Termination without Cause, Retirement or Constructive Termination

Other than potential receipt of a cash payment worth up to 26 weeks of base salary under our general severance program following an involuntary termination, Messrs. Murphy, Chesley, Creviston and Fego are not entitled to any cash payments from Qorvo in the event of their resignation, termination with or without cause, retirement or constructive termination without a change in control. However, their unvested restricted stock units listed below may be subject to acceleration or may continue to vest if and as provided in individual agreements.

 

  Name    Mark J.
Murphy
    

Philip J.

Chesley

     Steven E.
Creviston
     Paul J.
Fego
 

  Stock Awards (1)

   $ 4,973,161      $ 2,431,658      $ 4,781,783      $ 4,568,898   

 

  (1)

Represents the intrinsic value of service-based restricted stock units for these NEOs at April 2, 2022.

 

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In accordance with the terms of his employment agreement, Mr. Bruggeworth would have been entitled to the following payments from Qorvo upon the occurrence of any of the termination events described in the table below as of April 2, 2022. The table below assumes prior payment of any portion of base salary that would have been accrued but not yet paid as of April 2, 2022. Although Mr. Bruggeworth is also entitled to change of control benefits under his employment agreement, pursuant to the terms of his employment agreement, any benefits payable under his change in control agreement with Qorvo offset any benefits paid under his employment agreement following his termination. As of April 2, 2022, the benefits payable under his change in control agreement, as set forth in the above table, would have been equal to the change in control benefits payable under his employment agreement.

 

  Robert A. Bruggeworth          Termination for
Any Reason ($)
     Termination
Due to
Death or
Total
Disability ($)
     Termination
without
Cause or
for Good
Reason ($)
     Termination
for Cause ($)
     Termination
without
Good
Reason ($)
 

 

  Base Salary

 

 

 

 

 

 

(1

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

  

 

 

 

 

1,914,290

 

 

 

 

  

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

  Accrued Annual Bonus

 

 

 

 

 

 

(2

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

  Special Bonus

 

 

 

 

 

 

(3

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

  

 

 

 

 

3,062,864

 

 

 

 

  

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

  Stock Awards

 

 

 

 

 

 

(4

 

 

 

 

 

 

 

 

15,457,409

 

 

 

 

  

 

 

 

 

15,457,409

 

 

 

 

  

 

 

 

 

15,457,409

 

 

 

 

  

 

 

 

 

 

 

 

 

  

 

 

 

 

15,457,409

 

 

 

 

 

  Benefits Continuation

 

 

 

 

 

 

(5

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

  

 

 

 

 

55,703

 

 

 

 

  

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

  Accrued Vacation

 

 

 

 

 

 

(6

 

 

 

 

 

 

 

 

88,493

 

 

 

 

  

 

 

 

 

88,493

 

 

 

 

  

 

 

 

 

88,493

 

 

 

 

  

 

 

 

 

88,493

 

 

 

 

  

 

 

 

 

88,493

 

 

 

 

 

  Total

 

         

 

 

 

 

15,545,902

 

 

 

 

  

 

 

 

 

15,545,902

 

 

 

 

  

 

 

 

 

20,578,759

 

 

 

 

  

 

 

 

 

88,493

 

 

 

 

  

 

 

 

 

15,545,902

 

 

 

 

 

  (1)

With respect to the “Termination without Cause or for Good Reason” column, the amount shown represents two times base salary and would be payable in equal periodic installments, in accordance with the payroll schedule for our salaried personnel, over a two-year period. The base salary amount shown is calculated using the fiscal 2023 base salary rate.

 

  (2)

Represents previously earned but unpaid bonus under our Short-Term Incentive Plan for a completed performance period, which would be payable in a lump sum within 30 days of the termination date. With respect to the “Termination Due to Death or Total Disability” column, the amount payable is the greater of the accrued annual bonus or the accrued target bonus, in each case for the performance period in which the termination date occurs, which would be payable in a lump sum within 45 days following the end of the performance period in which the termination date occurs. With respect to the “Termination without Cause or for Good Reason” column, the amount shown represents the accrued annual bonus, which would be payable within 45 days following the end of the performance period in which the termination date occurs. Under these severance scenarios, all or a portion of the accrued annual bonus may have already been paid or would nevertheless be payable without regard to the nature of Mr. Bruggeworth’s termination.

 

  (3)

With respect to the “Termination without Cause or for Good Reason” column, the Special Bonus amount shown represents two times the target annual bonus opportunity as defined in our Short-Term Incentive Plan for the year in which the termination occurs, which would be payable in equal periodic installments, in accordance with the payroll schedule for our salaried personnel, over a two-year period. The bonus amount shown is calculated using the fiscal 2023 base salary rate. Mr. Bruggeworth is not entitled to a Special Bonus under the other severance scenarios set forth in the above table.

 

  (4)

Represents the intrinsic value of unvested performance- and service-based restricted stock units as of April 2, 2022. With respect to the “Termination for Any Reason,” “Termination Due to Death or Total Disability,” “Termination Without Cause or For Good Reason” and “Termination Without Good Reason” columns, the amount shown: (a) reflects the value of unvested service-based restricted stock units which shall continue to vest if and as provided in an individual award agreement and (b) reflects that if and to the extent performance goals are deemed met, Mr. Bruggeworth shall be deemed to have earned a pro-rata number of performance-based restricted stock units for the relevant performance period. With respect to the “Termination for Cause” column, the amount shown: (a) reflects that Mr. Bruggeworth’s unvested service-based restricted stock units will be forfeited unless the Compensation Committee determines otherwise and (b) reflects that Mr. Bruggeworth’s unvested performance-based restricted stock units will be forfeited unless the Compensation Committee determines otherwise.

 

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  (5)

Represents the value of continuing health, welfare and other benefits through April 2, 2022, based on the monthly premiums paid by Qorvo at April 2, 2022.

 

  (6)

Represents accrued vacation earned but not utilized, which would be payable in a lump sum within 30 days following the date of termination. The accrued vacation amount shown is calculated using the fiscal 2022 base salary rate.

CEO Pay Ratio Disclosure

As required by Item 402(u) of Regulation S-K, we are providing the ratio of the annual total compensation of our CEO to the annual total compensation of our median employee. This ratio is a reasonable estimate calculated in a manner consistent with SEC rules. Because SEC rules for identifying the median employee allow companies to adopt a variety of methodologies, apply certain exclusions, and make reasonable estimates and assumptions that reflect their compensation practices, the pay ratio reported by other companies may not be comparable to the pay ratio reported below, as other companies have different employment and compensation practices, and may use different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.

In calculating the pay ratio for 2022, we determined that the median employee used in 2021 had variances in their compensation during fiscal 2022 as compared to fiscal 2021, which would have resulted in a significant change in the pay ratio disclosure. As permitted by SEC rules, we selected another employee whose compensation is substantially similar to the original median employee based on the compensation measure used to select the original median employee.

We used total cash compensation, consisting of base pay, annual incentive compensation and Company contributions to retirement plans for the 12-month period from February 1, 2021 through January 31, 2022, as our consistently applied compensation measure, and annualized compensation for all permanent employees who did not work for the entire measurement period.

Using the methodology described above, we calculated this new median employee’s annual total compensation for fiscal 2022, which was $57,510, in accordance with the same requirements for calculation of the annual total compensation of our NEOs for the Summary Compensation Table. With respect to the annual total compensation of our CEO, we used the amount reported for our CEO in the “Total” column for fiscal 2022 in the Summary Compensation Table, which was $10,072,684.

Based on this information, for fiscal 2022, the ratio of our CEO’s annual total compensation to the median employee was 175 to 1. The pay ratio identified is a reasonable estimate calculated in a manner consistent with SEC rules. Pay ratios that are reported by our peers may not be directly comparable to ours because of differences in the composition of each company’s workforce, as well as the assumptions and methodologies used in calculating the pay ratio, as permitted by SEC rules.

Director Compensation

Director Compensation Philosophy

Our philosophy is to provide competitive compensation necessary to attract and retain high-quality non-employee directors. The Board believes that a substantial portion of our non-employee directors’ compensation should consist of equity-based compensation to assist in aligning directors’ interests with the interests of our stockholders. The Compensation Committee periodically reviews our director compensation program and makes recommendations to the Board for changes to our program.

Mr. Bruggeworth, our Chief Executive Officer, receives no additional compensation for his services as a director, and his compensation is reflected in the 2022 Summary Compensation Table discussed earlier. The following table summarizes the annual compensation paid to our non-employee directors for the year ended April 2, 2022.

 

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Director Compensation for Fiscal Year Ended April 2, 2022

 

  Name    Fees Earned
or Paid in
Cash
($)
   Stock Awards
($) (1)
  

       Total       

($)

 

  Judy Bruner (2)

 

    

 

 

 

 

74,890

 

 

 

    

 

 

 

 

266,567

 

 

 

    

 

 

 

 

341,457

 

 

 

 

  Jeffery R. Gardner

 

    

 

 

 

 

113,242

 

 

 

    

 

 

 

 

219,952

 

 

 

    

 

 

 

 

333,194

 

 

 

 

  John R. Harding

 

    

 

 

 

 

93,242

 

 

 

    

 

 

 

 

219,952

 

 

 

    

 

 

 

 

313,194

 

 

 

 

  David H. Y. Ho

 

    

 

 

 

 

83,242

 

 

 

    

 

 

 

 

219,952

 

 

 

    

 

 

 

 

303,194

 

 

 

 

  Roderick D. Nelson

 

    

 

 

 

 

83,242

 

 

 

    

 

 

 

 

219,952

 

 

 

    

 

 

 

 

303,194

 

 

 

 

  Ralph G. Quinsey

 

    

 

 

 

 

148,000

 

 

 

    

 

 

 

 

219,952

 

 

 

    

 

 

 

 

367,952

 

 

 

 

  Walden C. Rhines

 

    

 

 

 

 

103,242

 

 

 

    

 

 

 

 

219,952

 

 

 

    

 

 

 

 

323,194

 

 

 

 

  Susan L. Spradley

 

    

 

 

 

 

83,242

 

 

 

    

 

 

 

 

219,952

 

 

 

    

 

 

 

 

303,194

 

 

 

 

  Walter H. Wilkinson, Jr. (3)

 

    

 

 

 

 

33,668

 

 

 

    

 

 

 

 

 

 

 

    

 

 

 

 

33,668

 

 

 

 

  (1)

These amounts represent the aggregate grant date fair value for restricted stock unit awards granted to the indicated director in fiscal 2022 computed in accordance with ASC Topic 718, excluding the effect of any estimated forfeitures. A summary of the assumptions we apply in calculating these amounts is set forth in Note 15 of the Notes to the Consolidated Financial Statements included in the 10-K. The aggregate number of shares that were outstanding and granted during the fiscal year ended April 2, 2022 for each of the directors were as follows:

 

  Name    Aggregate
Number of
Restricted Stock
Unit
Awards
Outstanding at
April 2, 2022
(#)
  

Number of
Restricted Stock
Unit

Awards

Granted in

FY22

(#)

   Aggregate
Number of
Option
Awards
Outstanding at
April 2, 2022
(#)

 

  Judy Bruner

 

    

 

 

 

 

1,136

 

 

 

    

 

 

 

 

1,407

 

 

 

    

 

 

 

 

 

 

 

 

  Jeffery R. Gardner

 

    

 

 

 

 

1,136

 

 

 

    

 

 

 

 

1,136

 

 

 

    

 

 

 

 

 

 

 

 

  John R. Harding

 

    

 

 

 

 

1,136

 

 

 

    

 

 

 

 

1,136

 

 

 

    

 

 

 

 

7,850

 

 

 

 

  David H. Y. Ho

 

    

 

 

 

 

1,136

 

 

 

    

 

 

 

 

1,136

 

 

 

    

 

 

 

 

 

 

 

 

  Roderick D. Nelson

 

    

 

 

 

 

1,136

 

 

 

    

 

 

 

 

1,136

 

 

 

    

 

 

 

 

9,522

 

 

 

 

  Ralph G. Quinsey

 

    

 

 

 

 

1,136

 

 

 

    

 

 

 

 

1,136

 

 

 

    

 

 

 

 

 

 

 

 

  Walden C. Rhines

 

    

 

 

 

 

1,136

 

 

 

    

 

 

 

 

1,136

 

 

 

    

 

 

 

 

12,471

 

 

 

 

  Susan L. Spradley

 

    

 

 

 

 

1,136

 

 

 

    

 

 

 

 

1,136

 

 

 

    

 

 

 

 

 

 

 

 

  Walter H. Wilkinson, Jr.

 

    

 

 

 

 

 

 

 

    

 

 

 

 

 

 

 

    

 

 

 

 

 

 

 

 

      

The outstanding restricted stock unit awards vest on the earlier of (a) one year following the grant date or (b) the day before the Company’s first annual meeting of stockholders occurring after the grant date, in each case subject to continued service as of such date.

 

42     LOGO     2022 Proxy Statement


Executive Compensation

 

 

  (2)

Includes a pro rata portion of the annual award of restricted stock units that the Company provides to its non-employee directors granted to Ms. Bruner in connection with her election to the Board in May 2021.

 

  (3)

Mr. Wilkinson retired as a director at the 2021 Annual Meeting of Stockholders.

Schedule of Director Fees for Fiscal Year Ended April 2, 2022

 

  Compensation Item    Amount ($)  

 

  Annual Retainers

 

  

 

Chairman of the Board

 

  

 

 

 

 

148,000

 

 

 

 

 

Board Service

 

  

 

 

 

 

85,000

 

 

 

 

 

Lead Director (Additional Fee) (1)

 

  

 

 

 

 

20,000

 

 

 

 

 

Audit Committee Chair (Additional Fee)

 

  

 

 

 

 

30,000

 

 

 

 

 

Compensation Committee Chair (Additional Fee)

 

  

 

 

 

 

20,000

 

 

 

 

 

Governance and Nominating Committee Chair (Additional Fee) (1)

 

  

 

 

 

 

15,000

 

 

 

 

 

Corporate Development Committee Chair (Additional Fee)

 

  

 

 

 

 

10,000

 

 

 

 

 

  (1)

Mr. Quinsey declined to receive the additional fees to which he was entitled as the Lead Director and Chair of the Governance and Nominating Committee for fiscal 2022.

Equity Compensation

In fiscal 2022, each participating non-employee director who was re-elected received an annual restricted stock unit award, which we refer to as the annual RSU, pursuant to the 2012 Plan, with a value of $219,952 on the grant date. These annual RSUs vest on the earlier of (a) the first anniversary of the grant date or (b) the day before the Company’s first annual meeting of stockholders occurring after the grant date, in each case subject to continued service as of such date. See “Equity Compensation Plans – 2012 Stock Incentive Plan – Qorvo, Inc.,” above for more information.

Non-employee directors are also eligible to receive discretionary stock-based awards, which may be granted under the 2012 Plan. See “Equity Compensation Plans – 2012 Stock Incentive Plan – Qorvo, Inc.,” above. No discretionary equity awards were granted to non-employee directors in fiscal 2022.

Other Compensation

We reimburse all non-employee directors for expenses incurred in their capacity as non-employee directors. Directors may defer all or a portion of their cash retainers by participating in our nonqualified deferred compensation plan. Directors may also elect to defer receipt of shares of our common stock upon vesting. In addition, we offer participation in our group medical insurance program to any non-employee director who agrees to pay the full amount of the premium.

 

LOGO     2022 Proxy Statement    43


Equity Compensation Plan Information

 

 

EQUITY COMPENSATION PLAN INFORMATION

The following table summarizes information as of April 2, 2022 relating to our equity compensation plans, under which grants of stock options, restricted stock and other rights to acquire shares of our common stock may be made from time to time.

 

     (a)      (b)      (c)
  Plan Category   

Number of securities to be
issued upon exercise of

outstanding warrants and
rights (1)

     Weighted average
exercise
price of outstanding
options, warrants
and rights (2)
    

Number of securities remaining
available for future issuance
under equity plans (excluding
securities reflected in

column (a) (3)

 

  Equity compensation plans approved by security holders

 

     1,883,684                    $15.67                  6,154,264

 

  Equity compensation plans not approved by security holders (4)

 

     –                    –                     254,189

 

  Total

 

     1,883,684                           6,408,453

 

  (1)

Includes shares subject to issuance pursuant to outstanding stock options and restricted stock unit awards if certain performance-based and service-based conditions are met. For more detailed information, see “Performance-Based Restricted Stock Unit Awards” and “Service-Based Restricted Stock Unit Awards” under “Compensation Discussion and Analysis – Elements of Compensation,” above.

 

  (2)

The weighted-average exercise price does not take into account restricted stock unit awards because such awards do not have an exercise price.

 

  (3)

The total shares available for future issuance in column (c) may be the subject of awards other than options, warrants or rights granted under our 2012 Plan and 2013 Incentive Plan. For a more detailed discussion of these and other equity plans that have been approved by our stockholders, see “Equity Compensation Plans,” above. The number of securities remaining available for future issuance also includes securities that may be issued pursuant to the ESPP.

 

  (4)

See “2015 Inducement Stock Plan” below for more details about our only equity compensation plan not approved by security holders.

2015 Inducement Stock Plan

Effective January 1, 2015, the Company adopted the 2015 Inducement Stock Plan (the “2015 Plan”). The 2015 Plan is intended to comply with Nasdaq Listing Rule 5635(c)(4), which provides an exception to the stockholder approval requirements for the grant of equity awards as a material inducement to an individual entering into employment with the Company.

The purposes of the 2015 Plan are to provide a material inducement for the best available persons to become employees of the Company or its affiliates, to attract and retain such employees, and to align the interests of such persons with the interests of the Company and its stockholders. The 2015 Plan authorizes the grant of nonstatutory stock options, restricted stock, restricted stock units, stock appreciation rights, performance awards, phantom stock awards and other stock or cash awards at the discretion of the compensation committee to new employees. No awards were made under the 2015 Plan during fiscal 2022. We have proposed that the stockholders approve a new stock incentive plan. See “Proposal 3 – Approval of the Qorvo, Inc. 2022 Stock Incentive Plan.” If the new plan is approved by the stockholders, no further awards will be made under the 2015 Plan or other existing stock incentive plans.

 

44     LOGO     2022 Proxy Statement


Proposal 3 – Approval of the Qorvo, Inc. 2022 Stock Incentive Plan

 

 

PROPOSAL 3 – APPROVAL OF THE QORVO, INC. 2022 STOCK INCENTIVE PLAN

Summary of the Proposal

The Board of Directors, upon a recommendation from the Compensation Committee, has unanimously approved the adoption of the Qorvo, Inc. 2022 Stock Incentive Plan (the “2022 Plan”), subject to stockholder approval. We are asking our stockholders to approve the new 2022 Plan to replace several of our existing equity incentive plans, including our current principal incentive plan, which expires on August 19, 2022. If our stockholders approve the 2022 Plan, no further grants will be made under the following plans as of the expected effective date (August 15, 2022) of the 2022 Plan (the “Effective Date”):

 

 

the Qorvo, Inc. 2012 Stock Incentive Plan (the “2012 Plan”);

 

 

the Qorvo, Inc. 2013 Incentive Plan (the “2013 Plan”);

 

 

the Qorvo, Inc. 2012 Incentive Plan (the “TriQuint 2012 Plan”); and

 

 

the Qorvo, Inc. 2015 Inducement Stock Plan (the “2015 Plan”, and together with the 2012 Plan, the 2013 Plan, the TriQuint 2012 Plan and any other stock incentive plans currently maintained by us, the “Prior Plans”).

The following summary discussion describes the principal features of the 2022 Plan. This summary, however, does not purport to be a complete description of all of the provisions of the 2022 Plan. It is qualified in its entirety by reference to the full text and terms of the 2022 Plan, a copy of which is attached hereto as Appendix A.

Background and Purpose of the 2022 Plan

The Board believes that our equity compensation program, as implemented under the Prior Plans and furthered under the 2022 Plan, is critical to our continued ability to attract and retain motivated employees, directors and independent contractors capable of achieving consistently superior business results. In fiscal 2022, long-term equity-based incentive award opportunities accounted for approximately 76% of our Chief Executive Officer’s target total direct compensation and approximately 70% of each of our other NEO’s target total direct compensation (excluding Mr. Chesley, who was hired effective November 1, 2021 and therefore did not receive a grant of Objectives-based RSUs for fiscal 2022). Approval of the 2022 Plan will promote a closer alignment of the interests of our employees, directors and independent contractors with those of Qorvo and our stockholders and provide Qorvo the necessary flexibility to compete for their services. The Board also believes that the 2022 Plan effectively aligns the interests of plan participants with those of our stockholders by linking a portion of the participants’ compensation directly to increases in stockholder value. We have a long history of linking pay to our long-term stock performance for a broad group of employees. If the 2022 Plan is approved by the stockholders, no further awards may be granted under the Prior Plans after August 19, 2022. The Board believes that approval of the 2022 Plan is essential to continue to motivate and attract employees, directors and other service providers. If the 2022 Plan is not approved by the stockholders, the Company will not have an incentive plan in place for issuing shares of our common stock to achieve our recruiting and retention objectives, which are essential to our continued success.

Eligibility

Awards under the 2022 Plan may be granted to selected employees, directors and independent contractors of Qorvo or its affiliates in the discretion of the Administrator (as defined below under “Administration”). As of April 2, 2022, approximately 8,900 employees, eight non-employee directors, and a small number of independent contractors, were eligible to be selected to participate in the 2022 Plan.

Summary of Key 2022 Plan Provisions and Other Compensation Practices

Qorvo’s compensation practices include a number of features that the Board believes reflect responsible compensation and governance practices and promote the interests of stockholders. Approval of the 2022 Plan will position us to continue and expand these “best practices,” including the following:

 

 

Prudent Share Request and Efficient Use of Equity. Under the terms of the 2022 Plan, no more than 4,454,000 total shares of common stock will be authorized for issuance under the plan (subject to adjustment for anti-dilution purposes). We are committed to the efficient use of equity awards and are mindful to ensure that our equity compensation program does not overly dilute our existing stockholders. To that end, the Compensation Committee considers potential stockholder dilution, including burn rate and overhang, in the design and administration of equity awards.

 

 

No Discounted Stock Options or SARs and Limit on Option and SAR Terms. Stock options and stock appreciation rights, or SARs, must have an exercise price or base price, as applicable, equal to or greater than the fair market value (which is generally defined to be the closing sale price on the trading day immediately preceding the date of grant) of Qorvo common stock on the date of grant, consistent with current practices under the 2012 Plan. In addition, the term of an option or SAR cannot exceed 10 years.

 

LOGO     2022 Proxy Statement    45


Proposal 3 – Approval of the Qorvo, Inc. 2022 Stock Incentive Plan

 

 

 

No Annual “Evergreen” Provision. The 2022 Plan requires stockholder approval of any additional authorization of shares (other than adjustments for anti-dilution purposes) and does not permit an annual replenishment of shares under a plan “evergreen” provision.

 

 

No Stock Option or SAR Repricings Without Stockholder Approval. The 2022 Plan prohibits the repricing of stock options or SARs without the approval of stockholders. This 2022 Plan provision applies to (i) direct repricings (lowering the exercise price of an option or the base price of an SAR), (ii) indirect repricings (exchanging an outstanding option or SAR that is underwater in exchange for cash, for options or SARs with an option price or base price less than that applicable to the original option or SAR, or for another equity award), and (iii) any other action that would be treated as a repricing under applicable stock exchange rules (subject to anti-dilution adjustments).

 

 

Vesting and Award Practices. Historically, employee equity awards under the 2012 Plan have consisted of (i) performance- and service-based restricted stock units (“RSUs”) and (ii) service-based RSUs. For the fiscal year ended April 2, 2022, performance- and service-based RSUs and service-based RSUs represented 60% and 40%, respectively, of our NEOs’ (excluding Mr. Chesley, who was hired effective November 1, 2021 and therefore did not receive a grant of Objectives-based RSUs for fiscal 2022) long-term incentive award opportunities, which is consistent with recent prior year grant practices. Although the Committee retains discretion to determine the vesting periods for awards and the types of awards that Qorvo may grant, typically, our performance- and service-based RSUs are earned and vested over a three-year period and our service-based RSUs vest over a four-year period. We believe that our vesting and award practices are responsible and further Qorvo’s incentive and retention objectives, and we currently intend to carry forward similar vesting terms with respect to awards under the 2022 Plan.

 

 

Automatic Exercise of Expiring “In-the-Money” Options and SARs. The 2022 Plan provides for the automatic exercise of any portion of expiring options or SARs for which the exercise price is less than fair market value, and the participant will receive the net number of shares or compensation payable, as applicable, resulting from the net settlement of the exercise price and any applicable withholding taxes due.

 

 

Prudent Change of Control Provisions. The 2022 Plan includes prudent “change of control” triggers such as requiring a change in beneficial ownership of more than 50% of our voting stock or consummation (rather than stockholder approval) of a significant merger or other transaction in order for a “change of control” to be deemed to have occurred. In addition, the 2022 Plan generally provides that awards will vest upon a change of control only if (i) awards are not assumed, substituted or continued, or (ii) even if such awards are assumed, substituted or continued, a participant’s employment is terminated without cause or for good reason within specified time periods related to the change of control, unless an employment agreement, change in control agreement, award agreement or similar arrangement provides otherwise.

 

 

Forfeiture and Clawback. The 2022 Plan authorizes the Administrator to require forfeiture and/or recoupment of plan benefits if a participant engages in certain types of detrimental conduct and to require that a participant be subject to any compensation recovery policy or similar policies that may apply to the participant or be imposed under applicable laws. In addition, our senior officer equity awards under the 2012 Plan impose “clawback” restrictions in the event of certain prohibited conduct, including violation of restrictive covenants following termination of employment and misconduct to the extent required under the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, and we currently intend to continue such restrictions under 2022 Plan award agreements.

 

 

Stock Ownership Guidelines. Qorvo’s directors and executive officers are subject to minimum stock ownership guidelines.

 

 

Independent Committee. The 2022 Plan will be administered by the Committee. All members of the Committee qualify as “independent” under Nasdaq listing standards and as “non-employee directors” under Rule 16b-3 adopted under the Exchange Act.

 

 

No Dividends or Dividend Equivalents on Unearned Awards. Like the 2012 Plan, dividends and dividend equivalents on awards issued under the 2022 Plan may only be paid if and to the extent the award has vested or been earned.

 

 

Limits on Transferability of Awards. The 2022 Plan does not permit options or other awards to be transferred for value or other consideration.

 

 

Conservative Share Counting Provisions for Options and SARs. The 2022 Plan imposes conservative counting and share recycling provisions for options and SARs. For instance, shares subject to options and SARs that are tendered or withheld to satisfy tax withholding requirements, or payment of an option or SAR exercise price or in connection with net settlement of an SAR will not be added back for reuse under the 2022 Plan, nor will any shares repurchased on the open market with the proceeds of an option price.

 

 

Limitation on Non-Employee Director Awards. The 2022 Plan provides that the maximum number of shares subject to awards during any 12-month period to a non-employee director, together with any cash fees paid during the 12-month period for service as a non-employee director may not exceed $750,000 in total value (calculating the value of awards based on the fair market value per share on the grant date).

 

46     LOGO     2022 Proxy Statement


Proposal 3 – Approval of the Qorvo, Inc. 2022 Stock Incentive Plan

 

 

 

Prohibition Against Hedging and Pledging. Qorvo’s employees, directors and independent contractors are prohibited under our insider trading policy from engaging in pledging or hedging transactions involving Qorvo securities (other than broker-assisted “cashless” exercise or settlement of awards granted under our equity incentive plans).

Shares Reserved for Issuance Under the 2022 Plan

The maximum aggregate number of shares that we may issue pursuant to awards granted under the 2022 Plan may not exceed 4,454,000 shares (subject to adjustment for anti-dilution purposes as described below). Of the amount described in the preceding sentence, no more than 4,454,000 shares may be issued under the 2022 Plan pursuant to the grant of incentive stock options (subject to adjustment for anti-dilution purposes as described below).

In addition, under the 2022 Plan, in any 12-month period, the maximum number of shares of common stock subject to awards granted to any non-employee director will not exceed $750,000 in total value (taken together with any cash fees paid during such 12-month period to such non-employee director).

If an award is canceled, terminates, expires, is forfeited or lapses for any reason, any such unissued or forfeited shares subject to the award will again be available for issuance pursuant to awards granted under the 2022 Plan. The following also are not included in calculating the 2022 Plan share limitations described above: (a) awards which are settled in cash, (b) dividends, including dividends paid in shares, or dividend equivalents paid in cash in connection with outstanding awards, and (c) any shares withheld or used to satisfy any tax withholding requirements in connection with the vesting or earning of an award other than an option or a SAR in accordance with plan terms. If the full number of shares subject to an award other than an option or a SAR is not issued for any reason, only the number of shares issued and delivered will be considered for purposes of determining the number of shares remaining available for issuance pursuant to awards granted under the 2022 Plan.

The following shares may not again be made available for issuance as awards under the 2022 Plan: any shares (a) withheld or delivered to satisfy the tax withholding requirements for or pay the exercise price related to an option or SAR, (b) not issued or delivered as a result of the net settlement of an option or SAR, or (c) repurchased on the open market with proceeds of an option price of an option. In addition, (i) shares issued under the 2022 Plan through the settlement, assumption or substitution of outstanding awards granted by another entity or obligations to grant future awards as a condition of or in connection with a merger, acquisition or similar transaction involving Qorvo acquiring another entity will not reduce the maximum number of shares available for delivery under the 2022 Plan, and (ii) available shares under a stockholder approved plan of an acquired company (as appropriately adjusted to reflect the transaction) may be used for awards under the 2022 Plan and will not reduce the maximum number of shares available under the 2022 Plan, subject, in the case of both (i) and (ii), to applicable stock exchange listing requirements.

The number of shares reserved for issuance under the 2022 Plan, the participant award limitations and the terms of outstanding awards may be adjusted in the event of an adjustment in the capital structure of Qorvo (such as adjustments due to a merger, stock split, stock dividend or similar event), as provided in the 2022 Plan.

On June 17, 2022, the closing sales price of the common stock as reported on Nasdaq was $95.13 per share.

 

LOGO     2022 Proxy Statement    47


Proposal 3 – Approval of the Qorvo, Inc. 2022 Stock Incentive Plan

 

 

Additional Information Regarding Equity Awards

Outstanding Awards and Share Reserves. As noted above, if the 2022 Plan is approved by the stockholders, no awards will be granted under any of the Prior Plans after the Effective Date. Awards granted under the Prior Plans that are outstanding on the Effective Date will continue in accordance with their terms, and thus shares subject to such awards will be issued if and to the extent provided under such award terms. The following table provides additional information regarding outstanding equity awards and shares available for future awards under the Prior Plans as of April 2, 2022 (determined, in the case of outstanding performance-based awards, based upon the maximum number of shares that may be delivered). As of April 2, 2022, there were a total of 106,303,000 shares of common stock outstanding.

 

  Name of Equity Plan    Total
Shares
Underlying
Outstanding
Stock
Options (#)
   Weighted
Average
Exercise
Price of
Outstanding
Stock
Options ($)
   Weighted
Average
Remaining
Contractual
Life of
Outstanding
Stock
Options
(Years)
   Total
Shares
Underlying
Outstanding
Unearned/
Unvested
RSUs (1)
(#)
   Total
Shares
Currently
Available
for Grant
Under Prior
Plans (#)

 

  2012 Plan

 

    

 

 

 

 

7,850

 

 

 

    

 

$

 

 

47.96

 

 

 

    

 

 

 

 

2.39

 

 

 

    

 

 

 

 

742,430

 

 

 

    

 

 

 

 

2,621,766

 

 

 

 

  2013 Plan

 

    

 

 

 

 

110,169

 

 

 

    

 

$

 

 

17.58

 

 

 

    

 

 

 

 

1.21

 

 

 

    

 

 

 

 

797,039

 

 

 

    

 

 

 

 

548,495

 

 

 (2)

 

 

  TriQuint 2012 Plan (3)

 

    

 

 

 

 

139,639

 

 

 

    

 

$

 

 

12.35

 

 

 

    

 

 

 

 

0.83

 

 

 

    

 

 

 

 

 

 

 

    

 

 

 

 

 

 

 

 

  2015 Plan

 

    

 

 

 

 

 

 

 

    

 

 

 

 

 

 

 

    

 

 

 

 

 

 

 

    

 

 

 

 

 

 

 

    

 

 

 

 

254,189

 

 

 

 

  Totals:

 

    

 

 

 

 

257,658

 

 

 

    

 

$

 

 

15.67

 

 

 

    

 

 

 

 

1.04

 

 

 

    

 

 

 

 

1,539,469

 

 

 

    

 

 

 

 

3,424,450

 

 

 

 

  (1)

Number includes shares subject to both outstanding performance-based and outstanding service-based RSUs.

 

  (2)

Includes shares rolled into the 2013 Plan from both the TriQuint 2012 Plan and TriQuint 2009 Incentive Plan, a predecessor plan to the 2012 plan.

 

  (3)

Includes options outstanding under the TriQuint 2009 Incentive Plan.

As noted above, the 2012 Plan expires on August 19, 2022 and no further awards may be granted under the 2012 Plan after August 19, 2022. Prior to the Effective Date of the 2022 Plan, no further awards may be issued under the 2012 Plan or any other Prior Plan, other than awards for up to 1.5 million shares (the “Reserved Grants”) in respect of awards previously planned to be granted under the 2012 Plan and/or the 2013 Plan prior to August 15, 2022 consistent with standard grant practices. In addition, no awards will be granted under the Prior Plans after August 15, 2022 unless the 2022 Plan is not approved by the stockholders.

 

48     LOGO     2022 Proxy Statement


Proposal 3 – Approval of the Qorvo, Inc. 2022 Stock Incentive Plan

 

 

Responsible Plan Practices and Historical Share Usage

Historical Annual Share Usage. The following table provides, for each of the past three fiscal years, detail regarding (a) full-value, performance-based equity awards granted, vested, and forfeited/canceled; (b) full-value, time-based equity awards granted, vested, and forfeited; and (c) appreciation awards (stock options and SARs) granted, exercised, and forfeited. The table provides aggregate share totals for all such awards from all plans to all plan participants (including, but not limited to, our executive officers).

 

     

Shares Underlying
Full-Value Equity
Awards (in
thousands) (1)

(#)

 

Shares Underlying
Option Awards

(#)

 

Granted in FY 2020

 

    

 

 

 

 

1,146

 

 

          

 

   

 

 

 

 

 

 

          

 

 

Vested/Exercised in FY 2020

 

    

 

 

 

 

(936

 

 

)

 

   

 

 

 

 

(917

 

 

)

 

 

Forfeited/Canceled in FY 2020

 

    

 

 

 

 

(113

 

 

)

 

   

 

 

 

 

(2

 

 

)

 

 

  Non-Vested as of March 28, 2020

 

    

 

 

 

 

2,091

 

 

 

   

 

 

 

 

967

 

 

 

 

Granted in FY 2021

 

    

 

 

 

 

799

 

 

 

   

 

 

 

 

 

 

 

 

Vested/Exercised in FY 2021

 

    

 

 

 

 

(965

 

 

)

 

   

 

 

 

 

(503

 

 

)

 

 

Forfeited/Canceled in FY 2021

 

    

 

 

 

 

(66

 

 

)

 

   

 

 

 

 

(6

 

 

)

 

 

  Non-Vested as of April 3, 2021

 

    

 

 

 

 

1,859

 

 

 

   

 

 

 

 

458

 

 

 

 

Granted in FY 2022

 

    

 

 

 

 

670

 

 

 

   

 

 

 

 

 

 

 

 

Vested/Exercised in FY 2022

 

    

 

 

 

 

(874

 

 

)

 

   

 

 

 

 

(193

 

 

)

 

 

Forfeited/Canceled in FY 2022

 

    

 

 

 

 

(116

 

 

)

 

   

 

 

 

 

(7

 

 

)

 

 

  Non-Vested as of April 2, 2022

 

    

 

 

 

 

1,539

 

 

 

   

 

 

 

 

258

 

 

 

 

  (1)

The shares reflected in this column are subject to performance- and service-based RSUs and include those performance awards that also contain a time-vesting component. The shares indicated represent the number of shares that the participants will earn under the associated RSU agreements.

Burn Rate. Burn rate provides a measure of the potential dilutive impact of our annual equity award program. Our burn rate for fiscal 2022 was 0.61%, while our three-year average burn rate was 0.76%.

Overhang. Our overhang (a measure of shares subject to stock-based awards outstanding or reserved for future grants as a percentage of shares outstanding) as of April 2, 2022 (adjusted to account for the Reserved Grants), was 3.1%, and less than all companies in our peer group. This percentage assumes an expected issuance of awards for no more than an aggregate of 1.5 million shares under the 2012 Plan and the 2013 Plan on a combined basis and does not include the shares available under any other Prior Plans. If the 4,454,000 shares proposed to be authorized for grant under the 2022 Plan are included in the calculation, our overhang would be 7.3%, which is in the 22nd percentile of our 2022 peer group, representing a lower dilution to stockholders from employee compensation than the large majority of our peers.

Administration

The 2022 Plan will be administered by the Committee unless the Board elects to administer the 2022 Plan in whole or in part. As a matter of practice, the Committee will administer the 2022 Plan, subject to Board oversight. Each member of the Committee is independent under applicable SEC Rule 16b-3 and Nasdaq listing standards. The Board and the Committee are also referred to in this discussion collectively as the “Administrator.”

Subject to the terms of the 2022 Plan, the Administrator’s authority includes but is not limited to the authority to: (a) determine all matters relating to awards, including selection of individuals to be granted awards, the types of awards, the number of shares of

 

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Proposal 3 – Approval of the Qorvo, Inc. 2022 Stock Incentive Plan

 

 

common stock, if any, subject to an award, and the terms, conditions, restrictions and limitations of an award; (b) prescribe the form or forms of agreements evidencing awards granted under the 2022 Plan; (c) establish, amend and rescind rules and regulations for the administration of the 2022 Plan; (d) correct any defect, supply any omission or reconcile any inconsistency in the 2022 Plan or in any award or award agreement; and (e) construe and interpret the 2022 Plan, awards and award agreements made under the 2022 Plan, interpret rules and regulations for administering the 2022 Plan and make all other determinations deemed necessary or advisable for administering the 2022 Plan. The Administrator also has the authority to adjust or modify performance factors, criteria, terms or conditions of awards in response to or in anticipation of extraordinary items, transactions, events or developments impacting Qorvo or its financial statements, or changes in applicable law. In certain circumstances, the Administrator may delegate to one or more officers of Qorvo or a subcommittee comprised of one or more Committee members the authority to grant awards, and to make other determinations under the 2022 Plan with respect to such awards, to persons who are not directors or officers subject to Section 16 under the Exchange Act.

Amendment and Termination

The 2022 Plan and awards may be amended or terminated at any time by the Board, subject to the following: (a) stockholder approval is required of any 2022 Plan amendment if approval is required by applicable law, rule or regulation; and (b) an amendment or termination of an award may not materially adversely affect the rights of a participant without the participant’s consent (except as otherwise provided in the 2022 Plan). In addition, except for anti-dilution adjustments or in connection with a change in control, stockholder approval is required to amend the terms of outstanding options or SARs to reduce the option price or base price of such outstanding options or SARs; exchange outstanding options or SARs for cash, for options or SARs with an option price or base price that is less than the option price or base price of the original option or SAR, or for other equity awards at a time when the original option or SAR has an option price or base price, as the case may be, above the fair market value of the common stock; or take other action with respect to options or SARs that would be treated as a repricing under the rules of the principal stock exchange on which shares of our common stock are listed. The Administrator may adjust awards upon the occurrence of certain events, if the Administrator determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the 2022 Plan, if necessary or appropriate to comply with applicable laws, rules or regulations or as otherwise provided in the 2022 Plan.

Awards

The types of awards authorized under the 2022 Plan are described below and include: restricted awards in the form of restricted stock awards and RSUs; options in the form of incentive options and/or nonqualified options; SARs in the form of freestanding SARs and/or related SARs; performance awards in the form of performance shares and performance units; phantom stock awards; other stock-based awards; and dividend equivalent awards. Subject to the terms of the 2022 Plan, the Administrator has broad authority to determine the terms and conditions of awards.

Restricted Awards. Under the terms of the 2022 Plan, the Administrator may grant restricted awards to participants in such numbers, upon such terms and at such times as the Administrator determines. Restricted awards may be in the form of restricted stock awards or RSUs that are subject to certain conditions, which conditions must be met in order for such award to vest or be earned, in whole or in part, and no longer subject to forfeiture. Restricted stock awards are payable in shares of common stock. RSUs may be payable in cash or shares of common stock, or partly in cash and partly in shares of common stock, in accordance with the terms of the 2022 Plan and the discretion of the Administrator.

Performance Awards. Under the terms of the 2022 Plan, the Administrator may grant performance awards to participants upon such terms and conditions and at such times as the Administrator determines. Performance awards may be in the form of performance shares or performance units. An award of a performance share is a grant of a right to receive shares of common stock or the cash value thereof (or a combination of both) that is contingent upon the achievement of performance or other objectives during a specified period and that has a value on the date of grant equal to the fair market value (as determined in accordance with the 2022 Plan) of a share of common stock. An award of a performance unit is a grant of a right to receive shares of common stock or a designated dollar value amount of common stock that is contingent upon the achievement of performance or other objectives during a specified period, and that has an initial value established by the Administrator at the time of grant.

Options. The 2022 Plan authorizes the grant of both incentive options and nonqualified options, both of which are exercisable for shares of our common stock, although incentive options may only be granted to our employees. The Administrator will determine the option price at which a participant may exercise an option. The option price must be no less than 100% of the fair market value per share of our common stock on the date of grant, or 110% of the fair market value with respect to incentive options granted to an employee who owns stock representing more than 10% of the total voting power of all classes of our stock or stock of our parent or subsidiary corporation, if any (except for certain options assumed or substituted in a merger or other transaction where the option price is adjusted in accordance with applicable tax regulations).

 

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