DEFC14A 1 2024_definitive_proxy.htm DEFC14A DEFC14A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a)

of the Securities Exchange Act of 1934 (Amendment No. )

Filed by the Registrant Filed by a Party other than the Registrant

Check the appropriate box:

Preliminary Proxy Statement

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

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material Pursuant to Section 240.14a-12

XPERI 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):

No fee required

Fee paid previously with preliminary materials

 

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

 

 

 


 

 

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XPERI INC.

2190 Gold Street

San Jose, CA 95002

 

Notice of AnnUal Meeting of Stockholders

 

To Be Held on May 24, 2024

 

Dear Stockholder:

 

You are cordially invited to attend the 2024 Annual Meeting of Stockholders (the “Annual Meeting”) of XPERI INC., a Delaware corporation (“Xperi,” the “Company,” “we,” “our,” or “us”). The meeting will be held on May 24, 2024, at 8:00 a.m. Eastern Daylight Time and will be held virtually on the internet at www.cesonlineservices.com/xper24_vm for the following purposes:

To elect five (5) directors to hold office until the 2025 annual meeting of stockholders, and until their respective successors shall have been duly elected and qualified;
To ratify the appointment of Deloitte & Touche LLP as the independent registered public accounting firm of the Company for its fiscal year ending December 31, 2024;
To amend the Company’s Amended and Restated Certificate of Incorporation to eliminate supermajority voting requirements to amend (a) our Amended and Restated Bylaws and (b) certain provisions of our Amended and Restated Certificate of Incorporation; and
To conduct any other business properly brought before the Annual Meeting.

 

These items of business are more fully described in the Proxy Statement accompanying this Notice.

 

Your vote will be especially important at this years Annual Meeting. As you may be aware, Rubric Capital Master Fund LP and certain of its affiliates (collectively, “Rubric Capital”) have nominated two nominees (the “Rubric Nominees”) for election as directors at the Annual Meeting on the white proxy card in opposition to certain of the five director nominees recommended by the Board of Directors (the “Board”), Darcy Antonellis, Laura J. Durr, David C. Habiger, Jon E. Kirchner, and Christopher Seams.

 

The Board does not endorse the Rubric Nominees and unanimously recommends that you vote “FOR” the election of the five directors nominated by the Board (Darcy Antonellis, Laura J. Durr, David C. Habiger, Jon E. Kirchner, and Christopher Seams), “FOR” the ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm, and “FOR” each of the proposed amendments to our Amended and Restated Certificate of Incorporation to eliminate supermajority voting requirements, using the BLUE proxy card.

 

You may receive a proxy statement, white proxy card and other solicitation materials from Rubric Capital and other participants in their solicitation (collectively, “Rubric”). Since Rubric has the option to choose which of our stockholders will receive its proxy solicitation materials, you may or may not receive them. The Company is not responsible for the accuracy of any information provided by, or relating to, Rubric or its nominees contained in any proxy solicitation materials filed or disseminated by, or on behalf of, Rubric or any other statements that Rubric may otherwise make.

 

The Board strongly urges you to discard and not to sign or return any white proxy card sent to you by Rubric. If you have previously submitted a white proxy card sent to you by Rubric, you have every right to change it and we strongly urge you to revoke that proxy by voting for the Board’s nominees and on the other matters to be voted on at the Annual Meeting by using the enclosed BLUE proxy card and returning it in the postage-paid return envelope or by voting via Internet by following the instructions on your BLUE proxy card or BLUE voting


instruction form. Only your latest dated proxy will be counted, and any proxy may be revoked at any time prior to its exercise at the Annual Meeting as described in the accompanying proxy statement. Even if you would like to elect one or both of the Rubric Nominees, we strongly recommend you use the Company’s BLUE proxy card to do so.

 

PLEASE NOTE THAT THIS YEAR, YOUR PROXY CARD LOOKS DIFFERENT. SECURITIES AND EXCHANGE COMMISSION RULES REQUIRE US TO USE A “UNIVERSAL PROXY CARD.” THIS MEANS THE COMPANY’S BLUE PROXY CARD IS REQUIRED TO LIST THE RUBRIC NOMINEES IN ADDITION TO THE BOARD’S NOMINEES. AS SUCH, IT HAS MORE NAMES ON IT THAN THERE ARE SEATS UP FOR ELECTION. PLEASE MARK YOUR CARD CAREFULLY AND ONLY VOTE “FOR” THE NOMINEES AND OTHER PROPOSAL RECOMMENDED BY THE BOARD.

 

We strongly encourage you to read the accompanying proxy statement carefully and to use the enclosed BLUE proxy card to vote FOR the Board’s nominees and FOR the other proposal, as soon as possible. It is important that your shares be represented at the Annual Meeting, regardless of the number of shares you hold. If you have any questions or require any assistance with voting your shares, please contact Morrow Sodali LLC, our proxy solicitor assisting us in connection with the Annual Meeting:

 

Morrow Sodali LLC
430 Park Avenue, 14th Floor
New York, NY 10022
Call toll-free (800) 662-5200
or (203) 658-9400
Email: XPER@info.morrowsodali.com

 

The record date for the Annual Meeting is March 28, 2024. Only stockholders of record at the close of business on that date may vote at the Annual Meeting or any continuation, adjournment or postponement thereof. A complete list of such stockholders will be open to the examination of any stockholder for a period of ten days prior to the Annual Meeting for a purpose germane to the Annual Meeting during ordinary business hours at the Company’s principal executive offices. The list of these stockholders will also be available during the Annual Meeting to those stockholders that have pre-registered and attend the Annual Meeting online.

 

By Order of the Board of Directors
Xperi Inc.

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David C. Habiger
Chair of the Board

San Jose, California
April 17, 2024

 

 


 

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR
THE STOCKHOLDER MEETING TO BE HELD ON MAY 24, 2024

 

The Proxy Statement and our Annual Report on Form 10-K for the year ended December 31, 2023 are available at investor.xperi.com

 

This Notice of the Annual Meeting is not a form for voting and presents only an overview of the important information contained in the accompanying Proxy Statement and Annual Report on Form 10-K, which are available on the internet at the address above. Please review the proxy materials before voting.

 

You are cordially invited to attend the Annual Meeting virtually on the internet. Whether or not you expect to attend the Annual Meeting, please vote your shares by signing, dating, and mailing the enclosed BLUE proxy card, or over the internet as instructed in these materials, as promptly as possible to ensure your representation at the Annual Meeting. Even if you have voted by proxy, you may still be able to change your vote virtually during the Annual Meeting if you attend. Please note, however, that if your shares are held of record by a broker, bank, or other nominee and you wish to vote at the Annual Meeting, you must obtain a legal proxy issued in your name from that record holder.

 

If you plan to attend the Annual Meeting virtually, please follow the registration instructions as outlined in the Proxy Statement accompanying this Notice.

 

 

 

 


 

Table of Contents

 

BOARD OF DIRECTORS

2

Who We Are

2

How We Are Selected and Elected

8

How We Govern and Are Governed

9

How We Communicate with and Listen to You

15

How Non-Employee Directors Are Paid

15

 

 

COMPANY

18

Who We Are

18

How We Did

20

How We Do It

20

 

 

Security Ownership of Certain Beneficial Owners and Management

22

 

 

TRANSACTIONS WITH RELATED PERSONS

24

Related Person Transactions

24

Indemnification Agreements

24

Relationship with Chief Content Officer

25

Procedures for Approval of Related Person Transactions

25

 

 

EXECUTIVE COMPENSATION AND RELATED INFORMATION

27

Compensation Philosophy and Objectives

27

Summary of Certain Executive Compensation Practices

28

Summary Compensation of Named Executive Officers

29

Employment Contracts, Termination of Employment Arrangements, and Change in Control Arrangements

35

Pension and Other Benefits

38

Nonqualified Deferred Compensation

38

 

 

EQUITY COMPENSATION PLAN INFORMATION

39

 

 

OUR PROPOSALS

40

Proposal 1 – Election of Directors

40

Proposal 2 – Ratification of Independent Registered Public Accounting Firm

43

Proposals 3(a) and 3(b) – Amendment to the Amended and Restated Certificate of Incorporation to Eliminate Supermajority Voting Requirements

45

 

 

REPORT OF THE AUDIT COMMITTEE

48

 

 

BACKGROUND OF THE SOLICITATION

49

 

 

QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING

54

 

 

HOUSEHOLDING OF PROXY MATERIALS

64

 

 

OTHER MATTERS

65

 

 

ANNEX A – SUPPLEMENTAL INFORMATION REGARDING PARTICIPANTS IN THE SOLICITATION

66

 

 

 

 


 

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XPERI INC.

2190 Gold Street

San Jose, CA 95002

 

PROXY STATEMENT FOR THE 2024 ANNUAL MEETING

OF STOCKHOLDERS

TO BE HELD ON MAY 24, 2024

 

 

This proxy statement is furnished in connection with the solicitation by the Board of Directors (the “Board”) of Xperi Inc. (together with its subsidiaries, herein referred to as the “Company,” “we,” or “Xperi”) of proxies to be voted at the 2024 Annual Meeting of Stockholders (the “Annual Meeting”) to be held on May 24, 2024 at 8:00 a.m. Eastern Daylight Time at www.cesonlineservices.com/xper24_vm and at any continuation, adjournments or postponements thereof for the following purposes:

To elect five (5) directors to hold office until the 2025 annual meeting of stockholders, and until their respective successors shall have been duly elected and qualified;
To ratify the appointment of Deloitte & Touche LLP as the independent registered public accounting firm of the Company for its fiscal year ending December 31, 2024;
To amend our Amended and Restated Certificate of Incorporation to eliminate supermajority voting requirements to amend (a) the Amended and Restated Bylaws and (b) certain provisions of the Amended and Restated Certificate of Incorporation; and
To conduct any other business properly brought before the Annual Meeting.

This Notice of Annual Meeting and the accompanying Proxy Statement and our Annual Report on Form 10-K for the year ended December 31, 2023 (the "2023 Annual Report") are being made available to stockholders beginning on or about April 17, 2024.

 

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR
THE STOCKHOLDER MEETING TO BE HELD ON MAY 24
, 2024

 

The Proxy Statement and our 2023 Annual Report are available at investor.xperi.com

 

 

 

 

 

XPERI - Proxy Statement

 

 

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BOARD OF DIRECTORS

WHO WE ARE

 

Xperi’s Board consists of five directors. The directors are: Darcy Antonellis; Laura J. Durr; David C. Habiger; Jon E. Kirchner; and Christopher Seams. The Board, upon the recommendation of its Nominating and Corporate Governance Committee, has unanimously nominated the five directors listed below for re-election to the Board at the Annual Meeting.

 

Director Nominees

 

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Darcy Antonellis

Age: 61

Director since: 2022

 

Committees:

- Audit

- Compensation

- Nominating & Corporate Governance (Chair)

EXPERIENCE

2023 – present:

Operating Advisor, TMT (technology, media, and telecom) Sectors, at ABS Capital Partners, a private equity firm focused on emerging growth software and tech-enabled services with data foundations.

2021 – 2023:

Executive Advisor at Amdocs Inc., a software and services company for communications, media, financial and digital enterprises.

2018 – 2021:

Division President of Amdocs Inc.; and CEO, Vubiquity Inc. (acquired by Amdocs in 2018).

2014 – 2018:

CEO of Vubiquity Inc., a global media and entertainment distribution technology and services provider.

1998 – 2013:

President, Technical Operations, and Chief Technology Officer at Warner Bros Entertainment Inc., a global entertainment company.

OTHER PUBLIC COMPANY BOARDS

Cinemark Holdings Inc. (since 2015)

Bango plc (since 2023)

PRIOR PUBLIC COMPANY BOARDS

Xperi Holding Corporation (2020 – 2022)

Xperi Corporation (2018 – 2020)

 

 

QUALIFICATIONS/EXPERTISE

Experienced public and private company director and adept leader with decades of experience in media technology, operations, and content monetization.
As CEO of Vubiquity, led the company transition from North America content licensing focus to global technology and services provider; led sale and integration into Amdocs.
Led strategy and execution of Warner Bros.' digital transformation, enabling new consumer services and revenue streams; responsibilities included multi-billion dollar partner contracts.

 

 

 

 

 

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Board member at Vionlabs AB, an AI-based content metadata solutions company for monetization and enhanced multiplatform viewing experiences.
Three-time Emmy recipient for achievements in platform engineering and technical production; inducted into the Academy of Motion Pictures Arts & Sciences as a voting member.
Fellow, Society of Motion Picture Television Engineers (SMPTE).
Certified Director, NACD; NACD/Carnegie Mellon University CERT Certificate in Cybersecurity Oversight.

 

 

 

 

 

 

 

 

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Laura J. Durr

Age: 63

Director since: 2022

 

Committees:

- Audit (Chair)

- Nominating & Corporate Governance

EXPERIENCE

2004 – 2018:

Executive Vice President and Chief Financial Officer, Chief Accounting Officer, and various other leadership roles at Polycom, Inc., a multinational video, voice and communication technology company

Prior:

Various executive roles in finance and administration at QuickSilver Technology, C Speed Corporation, Lucent Technologies and Price Waterhouse

OTHER PUBLIC COMPANY BOARDS

Owlet, Inc. (since 2021)

NETGEAR, Inc. (since 2020)

PRIOR PUBLIC COMPANY BOARDS

Xperi Holding Corporation (2020 – 2022)

TiVo Corporation (2019 – 2020)

QUALIFICATIONS/EXPERTISE

Decades of experience managing complex financial strategy and accounting for various sized technology companies.
Extensive executive leadership, board service, operational and advisory experience at a range of public and private media and consumer technology companies.
As CFO of Polycom, oversaw its $2 billion sale to Plantronics Inc. in 2018, and its acquisition by a private equity firm in 2016.

 

 

 

 

 

 

 

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David C. Habiger

Age: 55

Board Chair since: 2022

 

Committees:

- Compensation

EXPERIENCE

2018 – present:

President and CEO: J.D. Power, an automotive SAAS and global consumer data / analytics company

2012 – 2016:

Board Member, and from May 2015 to June 2016, CEO: Textura Corporation, a global construction management software platform and payments company

2011 – 2012:

CEO: NDS Group Ltd., a television software, connected TV, streaming and security company for satellite and cable audio video content

1992 – 2011:

President and CEO (among other roles): Sonic Solutions, Media Platform for Consumer Electronics - Audio/Video CODECs company

OTHER PUBLIC COMPANY BOARDS

Reddit, Inc. (since 2022)

 

PRIOR PUBLIC COMPANY BOARDS

Xperi Holding Corporation (2020 – 2022)

Xperi Corporation (2016 – 2020)

Noble Rock Acquisition Corporation (SPAC) (2021 – 2022)

Echo Global Logistics, Inc. (2012 – 2021)

Stamps.com Inc. (2016 – 2021)

GrubHub, Inc. (2016 – 2021)

Control 4 Corporation (2012 – 2019)

Enova International, Inc (2014 – 2017)

Immersion Corporation (2014 – 2017)

DTS, Inc. (2014 – 2016)

Textura Corporation (2012 – 2016)

RealD Inc. (2011 – 2016)

Sonic Solutions (2010 – 2011)

QUALIFICATIONS/EXPERTISE

Seasoned consumer and technology sector executive with particular expertise in digital media and automotive software, with service on more than 12 public company boards.
Track record of leading technology companies through strategic transactions, including initial public offerings and M&A; he led Textura Corporation when it was sold to Oracle for $663 million, Sonic Solutions when it was sold to Rovi for $720 million, and NDS Group Ltd. when it was sold to Cisco Systems for $5 billion.
Between 2009 and 2011, led Sonic Solutions’ transition from traditional media to streaming services and TV OS.
Board member of the Federal Reserve Bank of Chicago since 2020; member of its System Activities, Bank Operations and Risk (SABOR) Committee; past chair and member of its Governance and Human Resources Committee; served as the co-chair of its Presidential Search Committee.

 

 

 

 

 

 

 

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Jon E. Kirchner

Age: 56

Director since: 2022

 

Committees:

None

EXPERIENCE

2017 – present:

Chief Executive Officer of Xperi Inc. (and former affiliates Xperi Holding Corporation and Xperi Corporation)

1993 – 2016:

Chief Executive Officer and Board Chair at DTS, Inc., a publicly-traded company (and now an Xperi subsidiary) focused on audio technologies for movies, music and video, among other roles

1989 – 1993:

Senior Consultant at Price Waterhouse, an accounting firm, among other roles

OTHER PUBLIC COMPANY BOARDS

None

 

PRIOR PUBLIC COMPANY BOARDS

Xperi Holding Corporation (2020 – 2022)

Xperi Corporation (2017 – 2020)

DTS, Inc. (2002 – 2016)

QUALIFICATIONS/EXPERTISE

Leader in the technology space for 30 years, with extensive experience building licensing and international growth businesses.
Held numerous senior leadership roles at DTS, culminating with Chief Executive Officer, and led the company through significant growth and transformation from a small startup to a global industry leader generating over $150 million in licensing revenue.
Recognized as a “Leader in Emerging Entertainment” by the Producers Guild of America for significant contributions to the advancement of digital entertainment and storytelling.

 

 

 

 

 

 

 

 

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Christopher Seams

Age: 61

Director since: 2022

 

Committees:

- Audit

- Compensation (Chair)

- Nominating & Corporate Governance

EXPERIENCE

2013 – 2016:

Chief Executive Officer, Deca Technologies, a subsidiary of Cypress Semiconductor Corporation

1990 – 2013:

Various roles, including Executive Vice President of Sales and Marketing, Cypress Semiconductor Corporation, a company focused on semiconductor design and manufacturing

OTHER PUBLIC COMPANY BOARDS

ONTO Innovation Inc. (since 2019)

PRIOR PUBLIC COMPANY BOARDS

Xperi Holding Corporation (2020 – 2022)

Xperi Corporation (2016 – 2020)

QUALIFICATIONS/EXPERTISE

Experienced public company director and electronics industry executive with deep expertise in product management, sales and marketing and operations.
Spent 20+ years at Cypress Semiconductor, serving in several executive positions and managing the company’s manufacturing.
Prior to joining Cypress, worked in process development for Advanced Micro Devices and Philips Research Laboratories.
Senior member, Institute of Electrical and Electronics Engineers (IEEE).
Certified Director, NACD; Professional Certificate in Advanced Computer Security from Stanford University.

 

 

 

 

 

 

 

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HOW WE ARE SELECTED AND ELECTED

 

Nomination to the Board of Directors

 

Candidates for nomination to the Board are selected by the Board based on the recommendation of the Nominating and Corporate Governance Committee in accordance with the committee’s charter, the amended and restated certificate of incorporation ("Charter") and amended and restated bylaws ("Bylaws"), the Corporate Governance Guidelines and the criteria approved by the Board regarding director candidate qualifications.

 

The Nominating and Corporate Governance Committee evaluates each individual in the context of the Board as a whole, with the objective of assembling a Board that can best perpetuate the success of the Company and represent stockholder interests through the exercise of sound judgment using its diversity of experience.

 

Prior to each annual meeting of stockholders at which directors are to be elected, and whenever there is otherwise a vacancy on the Board of Directors, the Nominating and Corporate Governance Committee will consider incumbent Board members and other well-qualified individuals as potential director nominees. To facilitate the search process, the Nominating and Corporate Governance Committee may solicit current directors and executives of the Company for the names of potentially qualified candidates or ask directors and executives to pursue their own business contacts for the names of potentially qualified candidates. The Nominating and Corporate Governance Committee may also consult with outside advisors or retain search firms to assist in the search for qualified candidates, or consider director candidates recommended by our stockholders. If the Nominating and Corporate Governance Committee determines to retain an executive search firm to identify Board candidates, it will identify the search firm and approve the search firm’s fees and other retention terms and will specify for the search firm the criteria to use in identifying potential candidates, consistent with the director qualification criteria described below. The Nominating and Corporate Governance Committee will review the backgrounds of each potential candidate, evaluate candidates’ independence from the Company and potential conflicts of interest and determine if candidates meet the qualifications desired by the Nominating and Corporate Governance Committee for candidates for election as a director. Management may assist the committee in the review process at the Nominating and Corporate Governance Committee’s direction. The committee will select the candidate or candidates it believes are the most qualified to recommend to the Board for selection as a director nominee.

 

The Nominating and Corporate Governance Committee will consider candidates recommended by our stockholders by following substantially the same process and applying substantially the same criteria as it follows for candidates identified by others. Such recommendations must be submitted in writing to the Chair of the Nominating and Corporate Governance Committee, c/o Corporate Secretary, Xperi Inc., 2190 Gold Street, San Jose, California 95002, in accordance with the Company's Bylaws. Candidates recommended by the stockholders are evaluated in the same manner as candidates identified by a Nominating and Corporate Governance Committee member.

Director Qualifications

The director qualifications developed to date focus on what the Board believes to be essential competencies to effectively serve on the Board. The Nominating and Corporate Governance Committee takes into account a number of factors when considering director nominees, including but not limited to the following:

independence from management;
relevant business experience;
age, gender, race, ethnicity, sexual orientation and gender identity;
educational and professional background;
judgment, skill, integrity, ethics, value and reputation;
existing commitments to other businesses and service on other boards;
potential conflicts of interest with other pursuits;

 

 

 

 

 

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legal considerations such as antitrust issues;
the needs of the Board and the Company with respect to the particular talents, experience and diversity of its directors;
corporate governance expertise, to enable the committee to determine whether the candidate would be suitable for Nominating and Corporate Governance Committee membership;
financial and accounting expertise, to enable the committee to determine whether the candidate would be suitable for Audit Committee membership;
executive compensation expertise, to enable the committee to determine whether the candidate would be suitable for Compensation Committee membership; and
the size and composition of the existing Board.

Board Diversity

The Board believes that board diversity is important to serving the long-term interests of stockholders. The Board currently includes two female and one LGBTQ+ directors. To reflect its commitment to diversity, if the Board uses a third-party search firm to identify potential director candidates, the Nominating and Corporate Governance Committee will instruct the search firm to include in its initial list of candidates qualified candidates who reflect diverse backgrounds, including diversity of gender and race or ethnicity.

Planned Board Refreshment

The Board has been actively planning to expand its membership. It has engaged in recruiting efforts to identify two new directors whose skills and expertise would be complementary to the incumbent directors. The Board identified two diverse candidates, one with deep experience in the automotive and audio industry and one with advertising monetization expertise. The Board was considering the expansion of the Board and appointment of these candidates prior to the 2024 Annual Meeting when Rubric nominated its candidates to the Board. In light of Rubric’s nominations, and the fact that the Board’s views on Board expansion and the particular skills that would be needed or complementary may change depending upon which director candidates are elected at the Annual Meeting, the Board determined that it should wait before making a final decision on its expansion.

 

HOW WE GOVERN AND ARE GOVERNED

Pursuant to the Delaware General Corporation Law and the Company’s bylaws, our business, property and other affairs are managed by or under the direction of the Board and its committees. Members of the Board are kept informed of our business through discussions with the Chief Executive Officer and other officers and advisors, by reviewing materials provided to them and by participating in meetings of the Board and its committees.

Governance Highlights

 

We are committed to high standards of corporate governance. The Company’s corporate governance program features the following:

a strong, independent chair of the Board;
a Board consisting solely of independent directors, other than the CEO;
majority voting for election of directors in uncontested elections;
annually elected directors;
a diverse Board consisting of directors with broad industry experience, relevant backgrounds, and technical and financial expertise;

 

 

 

 

 

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no stockholder rights plan;
a single voting class;
regularly updated charters for each of the Board’s committees, which clearly establish the roles and responsibilities of each such committee;
regular executive sessions among the non-employee and independent directors, with the Chair of the Board presiding at each executive session;
a Board that enjoys unrestricted access to the Company’s management, employees and professional advisors;
a clear Code of Business Conduct and Ethics that is reviewed regularly for best practices;
a clear set of Corporate Governance Guidelines that is reviewed regularly for best practices;
an anti-corruption policy that applies to all employees and directors, to ensure compliance with the U.S. Foreign Corrupt Practices Act and all other applicable anti-corruption and anti-bribery laws;
a policy prohibiting hedging, pledging or shorting of company stock by all employees and directors;
the Compensation Committee’s direct engagement of Compensia, Inc., an independent compensation consultant to review and advise on director and executive compensation; and
minimum stock ownership requirement of 5 times base salary for the CEO, 1.5 times base salary for other executive officers, and 3 times annual cash retainer (excluding committee and chair retainers) for directors, to ensure that executive officers and directors remain aligned with the interests of the Company and its stockholders.

Corporate Governance Guidelines

 

The Board has adopted Corporate Governance Guidelines that set forth expectations for directors, director independence standards, Board committee structure and functions, and other policies for the governance of the Company. The Nominating and Corporate Governance Committee periodically reviews the Corporate Governance Guidelines, and recommends changes to the Board as warranted. The Corporate Governance Guidelines mandate, and the Nominating and Corporate Governance Committee annually conducts, a thorough Board and Board committee self-evaluation process. The Corporate Governance Guidelines are available on the “Investor Relations” section of our website, which is located at investor.xperi.com, by clicking “Governance Documents” in the “Governance” section of our website.

Independence of Directors

 

The listing rules of the New York Stock Exchange ("NYSE") generally require that a majority of the members of a listed company’s board of directors be independent. In addition, the NYSE rules generally require that, subject to specified exceptions, each member of a listed company’s audit, compensation and nominating and corporate governance committees be independent.

 

In addition, audit committee members must satisfy the independence criteria set forth in Rule 10A-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). To be considered independent for purposes of Rule 10A-3, a member of an audit committee of a listed company may not, other than in his or her capacity as a member of the audit committee, the board of directors or any other board committee: accept, directly or indirectly, any consulting, advisory or other compensatory fee from the listed company or any of its subsidiaries, or be an affiliated person of the listed company or any of its subsidiaries.

The Board has determined that all of the Company’s directors nominated for election, other than Mr. Kirchner, qualify as independent directors in accordance with the applicable NYSE rules. In making these determinations, the Board reviewed and discussed information provided by the directors and the Company with regard to each director’s business and personal activities and relationships as they may relate to the Company and our management, including that Mr. Habiger is the CEO of J.D. Power, with which we have a commercial relationship. The Board determined that the Company's relationship with J.D. Power does not compromise Mr. Habiger’s independence under the NYSE rules. Furthermore, the Board has determined that each member of the Audit Committee meets the

 

 

 

 

 

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enhanced independence standards for serving on an audit committee under Rule 10A-3 and the NYSE rules, and that each member of the Compensation Committee meets the NYSE’s heightened independence standards for members of a compensation committee and qualifies as a "non-employee director" as defined in Rule 16b-3 of the Exchange Act.

There are no family relationships between any of the Company's directors or executive officers and any of the other directors or executive officers.

 

Board Leadership Structure

 

The Corporate Governance Guidelines provide that the Board shall be free to choose its chairperson in any way that it considers in the best interests of the Company.

 

We believe that separating the roles of Chief Executive Officer and Chair of the Board is in the best interests of the Company and its stockholders because it provides the appropriate balance between strategy development and oversight and accountability of management. However, the Corporate Governance Guidelines do not require the separation of the offices of the Chair of the Board and the Chief Executive Officer. If the Chair is not an "independent director" as such term is defined in applicable NYSE rules, pursuant to the Corporate Governance Guidelines, the Company’s independent directors will designate one of the independent directors on the Board to serve as a lead independent director.

The responsibilities of the lead independent director include:

serving as a liaison between the Company’s management and independent directors;
facilitating discussion and open dialogue among the independent directors during Board meetings, executive sessions and outside of Board meetings, with the Chair of the Board presiding at each such executive session;
calling meetings of the independent directors;
working with the Chair to develop and approve Board meeting agendas, materials and schedules, including to ensure that there is sufficient time for discussion of all agenda items; and
ensuring availability for consultation and direct communication with significant stockholders of the Company, if requested and in coordination with management.

Board Role in Risk Management

The Board oversees an enterprise-wide approach to risk management, designed to support the achievement of organizational objectives, including strategic objectives, to improve long-term organizational performance and enhance stockholder value. Risk management includes not only understanding company-specific risks and the steps management implements to manage those risks, but also what level of risk is acceptable and appropriate for the Company. Management is responsible for establishing our business strategy, identifying and assessing the related risks and implementing appropriate risk management practices. The Board reviews our business strategy and management’s assessment of the related risk, and discusses with management the appropriate level of risk for the Company. For example, the Board annually reviews management’s enterprise risk management assessment, which is designed to (i) identify risks that can negatively impact the Company’s ability to achieve its business objectives; (ii) estimate the magnitude of the potential risks; and (iii) determine approaches to mitigate the identified risks. In addition, during the Company’s quarterly Board meetings, the Board advises and directs management with respect to strategic business risks, litigation risks, and risks related to the Company’s acquisition strategy, among others. The Board also delegates oversight to Board committees to oversee selected elements of risk.

The Audit Committee oversees the Company's major financial risk exposures, including monitoring the integrity of the Company’s financial condition and investments, the integrity of the Company's financial statements, accounting matters, planning regarding business continuity and cybersecurity. The Audit Committee receives periodic internal controls and related assessments from the Company’s finance department, internal audit function and, if applicable, an annual attestation report on internal control over financial reporting from the Company’s independent registered public accounting firm. The Audit Committee also assists the Board in fulfilling its oversight responsibility with respect to compliance matters and meets at least quarterly with our finance department, internal auditor, independent registered public accounting firm and internal or external legal counsel to discuss risks related to our financial

 

 

 

 

 

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reporting function. In addition, the Audit Committee ensures that the Company’s business is conducted with the highest standards of ethical conduct in compliance with applicable laws and regulations by monitoring the Code of Business Conduct and Ethics Policy, and our corporate compliance hotline. The Audit Committee also discusses other risk assessment and risk management policies of the Company periodically with management.

The Compensation Committee reviews the Company's compensation arrangements for employees to evaluate whether incentive and other forms of pay encourage unnecessary or excessive risk taking, and reviews the relationship between risk management policies and practices, corporate strategy and the Company's compensation arrangements.

The Nominating and Corporate Governance Committee oversees governance-related risks by working with management to establish and maintain corporate governance guidelines applicable to the Company, and making recommendations regarding director nominees, the determination of director independence, Board leadership structure, membership on Board committees and succession planning. The Nominating and Corporate Governance Committee also oversees the evaluation of the Board as a whole.

Committees of the Board of Directors

The Board currently has the following three standing committees, with the following members:

 

Member

 

Audit

 

Compensation

 

Nominating and
Corporate Governance

David C. Habiger img157911729_8.jpg

 

img157911729_9.jpg

Darcy Antonellis

img157911729_9.jpg

img157911729_9.jpg

img157911729_10.jpg

Laura J. Durr img157911729_11.jpg

img157911729_12.jpg 

 

img157911729_13.jpg 

Christopher Seams

img157911729_9.jpg 

img157911729_14.jpg 

img157911729_13.jpg 

 

img157911729_15.jpg 

 = Chair

img157911729_16.jpg 

 = Member

img157911729_17.jpg 

 = Financial Expert

img157911729_18.jpg 

 = Chair of Board

 

The Board of Directors has a standing Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee. The Audit Committee has been established in accordance with Section 3(a)(58)(A) of the Exchange Act. Each of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee is composed entirely of independent directors in accordance with the applicable NYSE rules. Furthermore, each member of the Audit Committee meets the enhanced independence standards for serving on an audit committee under Rule 10A-3 promulgated under the Exchange Act and the NYSE rules. The members of the Audit Committee meet the requirements for financial literacy under the applicable NYSE rules. In addition, the Board has further determined that Ms. Durr, Chair of the Audit Committee, qualifies as an “Audit Committee Financial Expert,” as such term is defined in Item 407(d)(5) of Regulation S-K promulgated by the Securities and Exchange Commission (the “SEC”). No Audit Committee member currently serves on the audit committee of more than three public companies. All members of the Compensation Committee meet the NYSE’s heightened independence standards for members of a compensation committee and each member of the Compensation Committee qualifies as a “non-employee director” as defined in Rule 16b-3 of the Exchange Act. The Board has adopted a written charter for each of these committees. Copies of the committee charters and the Corporate Governance Guidelines are available, free of charge, on our website at investor.xperi.com.

AUDIT COMMITTEE

 

The principal duties and responsibilities of the Audit Committee include:

being directly responsible for the appointment, compensation, retention and oversight of the work of any registered public accounting firm, engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company;

 

 

 

 

 

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reviewing and, in its sole discretion, approving in advance the independent auditor’s annual engagement letter, including the proposed fees contained therein, as well as all audit and permitted non-audit engagements and relationships between the Company and the independent auditor;
reviewing the performance of the independent auditor and evaluating the independent auditor’s independence;
reviewing the annual audit plan, the results of the independent audit, and the report and recommendations of the independent auditor;
reviewing the adequacy and effectiveness of the Company’s accounting and internal control policies and procedures on a regular basis;
discussing guidelines and policies governing the process by which senior management of the Company and the relevant departments of the Company, including the internal auditing department, assess and manage the Company’s exposure to risk and major financial risk exposures, including monitoring the Company’s financial condition and investments, the integrity of the Company’s financial statements, accounting matters, planning regarding business continuity and cybersecurity, and the steps management has taken to monitor and control such exposures;
reviewing with management the progress and results of all internal audit projects;
periodically reviewing the Company’s information technology security/cybersecurity policies, risk mitigation and recovery plans and other programs and activities;
overseeing the policies and procedures in the Company’s Related Person Transactions Policy and conducting prior review of proposed transactions or courses of dealings requiring approval or ratification under such policy;
preparing the audit committee report required to be included in the Company’s annual proxy statement; and
reviewing the Company’s program to monitor compliance with the Company’s Code of Business Conduct and Ethics Policy.

COMPENSATION COMMITTEE

The principal duties and responsibilities of the Compensation Committee include:

reviewing at least annually the goals and objectives of the Company’s executive compensation plans, and amending, or recommending that the Board amend, these goals and objectives if the Committee deems it appropriate;
reviewing at least annually the Company’s executive compensation plans in light of the Company’s goals and objectives with respect to such plans, and, if the Compensation Committee deems it appropriate, adopting, or recommending that the Board adopt, new, or amend existing, executive compensation plans;
evaluating annually the performance of the Chief Executive Officer in light of the goals and objectives of the Company’s executive compensation plans, and determining and approving the Chief Executive Officer’s compensation level based on this evaluation;
evaluating annually the performance of the other executive officers of the Company in light of the goals and objectives of the Company’s executive compensation plans, determining and approving the compensation of such other executive officers;
evaluating biennially the appropriate level of compensation for Board and Committee service by non-employee directors;
reviewing and approving the terms of any compensation “clawback” or similar policy (including as may be required by applicable law) or agreement between the Company and its executive officers or other employees subject to Section 16 of the Exchange Act for recovering incentive-based compensation; and
adopting stock ownership guidelines for executive officers and non-employee directors and overseeing compliance with such guidelines.

 

 

 

 

 

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NOMINATING AND CORPORATE GOVERNANCE COMMITTEE

The principal duties and responsibilities of the Nominating and Corporate Governance Committee include:

assisting in identifying, recruiting and, if appropriate, interviewing candidates to fill positions on the Board, including persons suggested by stockholders or others;
reviewing the background and qualifications of individuals being considered as director candidates;
recommending to the Board individuals to be nominated as directors (including evaluation of new candidates as well as evaluation of current directors; in evaluating the current directors, the committee conducts a thorough self-evaluation process, which may include the use of questionnaires);
making recommendations to the Board regarding the size and composition of each standing committee of the Board, including the identification of individuals qualified to serve as members of a committee;
reviewing and recommending to the Board changes to the Company's Charter and Bylaws, as needed;
developing and recommending to the Board of Directors the Corporate Governance Guidelines, as well as reviewing and recommending any desirable changes to the Board on a regular basis; and
developing and recommending to the Board for approval a management succession plan and reviewing such plan periodically, developing and evaluating potential candidates for executive positions and recommending to the Board any changes to, and any candidates for succession, under the developed succession plan.

OTHER COMMITTEES

 

 

The Board may establish other committees as it deems necessary or appropriate from time to time.

Board and Committee Meetings and Attendance

 

During the fiscal year ended December 31, 2023, the Board held a total of eight meetings; the Audit Committee held five meetings; the Compensation Committee held five meetings; and the Nominating and Corporate Governance Committee held six meetings.

 

Each director attended at least 75% of the aggregate of the total number of Board meetings and total number of meetings of Board committees on which such director served during the time he or she served on the Board or committees. Directors are encouraged to attend the Annual Meeting of Stockholders. All members of the Board attended our 2023 Annual Meeting of Stockholders in their capacity as directors of the Company.

Code of Business Conduct and Ethics

 

We have adopted a Code of Business Conduct and Ethics that applies to all the members of the Board, officers and employees. The Code of Business Conduct and Ethics is posted on the “Investor Relations” section of our website, which is located at investor.xperi.com under “Governance Documents” in the “Governance” section of our website. We intend to satisfy the disclosure requirement under applicable SEC and NYSE disclosure requirements regarding amendments to, or waivers of, a provision of the Code of Business Conduct and Ethics by posting such information on our website at the address and location specified above.

Anti-Hedging Policy

 

The Company has an Insider Trading Policy that prohibits all directors, officers, employees and consultants of the Company (including any entities whose securities trading decisions they control or influence) from purchasing the Company's stock on margin, pledging the Company’s stock to secure margin or other loans, engaging in short sales of the Company's stock, buying or selling put or call options on the Company's stock, entering into other derivative contracts or hedging transactions, and placing standing or limit orders on the Company's securities.

 

 

 

 

 

 

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HOW WE COMMUNICATE WITH AND LISTEN TO YOU

We believe that effective corporate governance includes year-round engagement with our stockholders and other stakeholders. We meet regularly with our stockholders to discuss our business strategy, performance, compensation philosophy, corporate governance, and environmental and social topics. We engage with many of our large stockholders multiple times a year, both on an ad hoc basis and regularly in conjunction with our quarterly earnings announcements. Our Investor Relations team also has touchpoints with smaller stockholders each year. We find it beneficial to have ongoing dialogue with our stockholders throughout the year on a full range of topics (instead of engaging with stockholders only prior to our annual meeting on issues to be voted on in the proxy statement).

Our direct engagement with stockholders helps us better understand our stockholders’ priorities, perspectives, and issues of concern, allows us to elaborate on our many initiatives and practices, and informs the Board’s deliberations. We take insights from this feedback into consideration and regularly share them with the Board as we review and evolve our practices and disclosures.

The Board has created a number of other ways for interested parties to contact us and provide input, including:

Attending the Annual Meeting and submitting questions to be addressed during the meeting;
Attending quarterly earnings calls, investor conferences and other similar opportunities;
Calling the Company number, at +1-408-519-9100;
Sending an email to an individual director, a committee, or the full Board at IR@xperi.com;
Mailing a letter to an individual director, a committee, or the full Board at 2190 Gold Street, San Jose, California 95002, Attn: Corporate Secretary; or
Requesting a stockholder engagement meeting via one of the means outlined here.

The Corporate Secretary will review all correspondence addressed to the Board, or any individual Board member, for any inappropriate correspondence and any correspondence more suitably directed to management. However, the Corporate Secretary will summarize all correspondence not forwarded to the Board and make the correspondence available to the Board for its review at the Board’s request. The Corporate Secretary will forward appropriate correspondence from interested parties, including stockholders, communications to the Board prior to the next regularly scheduled meeting of the Board following the receipt of the correspondence.

 

HOW NON-EMPLOYEE DIRECTORS ARE PAID

Fiscal 2023 Director Compensation

 

Non-Employee Director CASH Compensation

Under the Company's director compensation program, we pay each of the non-employee directors an annual cash retainer of $50,000. We pay the non-executive Chair of the Board an additional annual cash retainer of $50,000. In addition, we pay each of the non-employee directors the following annual cash retainers for their service as a

 

 

 

 

 

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member, or chair, as applicable, of the Board committees:

 

Annual Retainers for Committee Members:

 

 

 

Audit Committee

 

$

12,000

 

Compensation Committee

 

$

8,000

 

Nominating and Corporate Governance Committee

 

$

6,000

 

Annual Retainers for Committee Chairs:

 

 

 

Audit Committee

 

$

25,000

 

Compensation Committee

 

$

20,000

 

Nominating and Corporate Governance Committee

 

$

15,000

 

 

All Board and committee retainers are paid in equal quarterly installments over the course of each year of a director’s service on the Board or applicable committee. The Chief Executive Officer does not receive any additional compensation for serving as a director.

 

Non-Employee Director Equity Compensation

 

In addition, on an annual basis, each non-employee director who continues to serve as a non-employee director following each annual meeting of stockholders will receive an annual grant of restricted stock units ("RSU") covering shares of our common stock under our stockholder-approved equity plan. The number of shares of common stock subject to the RSU award will be determined by dividing $190,000 by the fair market value per share of our common stock on the date of grant. A non-employee director who is initially appointed after any annual meeting of stockholders will receive an RSU award on the date of such director's initial appointment to the Board of Directors equal to the pro-rated amount of the annual grant. These annual RSU awards (or any pro-rated grants for directors initially appointed between annual meetings) will vest on the earlier to occur of the first anniversary of the date of grant or the next annual meeting of stockholders.

 

OTHER COMPENSATION

 

Non-employee directors receive no other form of remuneration, perquisites or benefits for their service as members

of the Board, but we do reimburse the non-employee directors for reasonable travel and other expenses related to Company meetings as well as reasonable expenses associated with director education programs.

2023 DIRECTOR COMPENSATION TABLE

 

The following table shows compensation information for the non-employee directors for fiscal year 2023.

 

 

Name

 

Fees
Earned
or Paid
in Cash
($)

 

 

Stock
Awards
($)(1)

 

 

Total
($)

 

 

Darcy Antonellis

 

$

85,000

 

 

$

189,990

 

 

$

274,990

 

 

Laura J. Durr

 

$

81,000

 

 

$

189,990

 

 

$

270,990

 

 

David C. Habiger

 

$

111,000

 

 

$

189,990

 

 

$

300,990

 

 

Christopher Seams

 

$

88,000

 

 

$

189,990

 

 

$

277,990

 

 

(1)
The amounts reflected in this column represent the aggregate grant date fair value for stock awards granted to the non-employee directors in 2023, measured in accordance with ASC 718, excluding the effect of estimated forfeitures, and do not reflect whether the recipient has actually realized a financial benefit from these awards. For the methodology of how the aggregate grant date fair value amount is calculated, please see Note 13 of the Notes to Consolidated Financial Statements included in the Company's 2023 Annual Report on Form 10-K filed with the SEC on March 1, 2024. The aggregate number of shares subject to unvested RSU awards outstanding for each non-employee director at December 31, 2023 was: Ms. Antonellis: 19,978; Ms. Durr: 19,978; Mr. Habiger: 19,978; and Mr. Seams: 19,978. None of the non-employee directors held any stock options as of December 31, 2023.

 

Stock Ownership Guidelines

 

We maintain a stock ownership policy for the non-employee directors. The stock ownership policy requires the non-employee directors to acquire and hold a number of shares of the Company’s common stock equal in value to three times the director’s annual cash retainer for regular service on the Board (excluding any annual cash retainer for

 

 

 

 

 

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serving on a committee or as chair) until such director’s service on the Board ceases. Each non-employee director has until the fifth anniversary of the latest of his or her initial election or appointment to the Board, the effective date of the policy, or any amendment to the applicable ownership threshold, to attain the required ownership level. The Compensation Committee may make exceptions in situations where the non-compliance occurs as a result of transactions made pursuant to a hardship exception or bona fide gift. As of December 31, 2023, all of the incumbent non-employee directors have either achieved the recommended ownership level or are expected to achieve the recommended ownership level within five years of their initial election or appointment to the Board.

 

 

 

 

 

 

 

 

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COMPANY

 

XPERI AT A GLANCE

 

Xperi is a leading consumer and entertainment technology company. Through our brands (DTS®, HD Radio™, and TiVo®) and our startup Perceive, we create extraordinary experiences at home and on the go for millions of consumers around the world, enabling audiences to connect with content in a way that is intelligent, immersive, and personal. Further, pursuant to a consumer electronics device certification and licensing program operated by IMAX Corporation and DTS, Inc., we offer consumers worldwide the ability to experience an IMAX® Enhanced immersive movie experience with IMAX® Enhanced content from leading studios.

 

Powering smart devices, connected cars, entertainment experiences and more, we bring together ecosystems designed to reach highly engaged consumers, allowing us and our ecosystem partners to uncover significant new business opportunities. Our technologies are integrated into consumer devices and a variety of media platforms worldwide, extending to 30 million streaming households, 90 million cars, and billions of consumer devices.

 

WHO WE ARE

 

Headquartered in Silicon Valley with operations around the world, our employees have diverse skill sets and backgrounds, and a shared passion for developing and delivering technology that creates extraordinary experiences.

 

As of December 31, 2023, our executive officers were Jon Kirchner, Robert Andersen, Becky Marquez, Matt Milne, and Geir Skaaden. Set forth below are the name, age, and title of each of our executive officers as of April 17, 2024.

 

Name

Age

Position(s)

Jon E. Kirchner

56

Chief Executive Officer and President, Director

Robert Andersen

60

Chief Financial Officer

Rebecca K. Marquez

52

Chief Legal Officer and Corporate Secretary

Matt Milne

56

Chief Revenue Officer

Geir Skaaden

57

Chief Products and Services Officer

 

The following are biographical summaries of our executive officers other than Mr. Kirchner, for whom a biographical summary is set forth under “Board of Directors—Who We Are” above.

 

img157911729_19.jpg 

Robert Andersen

Chief Financial Officer
Age: 60
Joined Company in 2022
B.A. (Economics), University of California, Davis
M.B.A., University of California, Los Angeles

 

Robert Andersen has served as the Chief Financial Officer of Xperi Inc. since its spin-off from its former parent Adeia Inc. (f/k/a Xperi Holding Corporation) in October 2022. Prior to the spin-off, he served as CFO of Xperi Holding Corporation beginning in 2020, when Xperi Corporation merged with TiVo Corporation. Prior to that, he served as Executive Vice President and CFO of Xperi Corporation beginning in 2016.

 

 

 

 

 

 

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img157911729_20.jpg 

Becky Marquez

Chief Legal Officer and Corporate Secretary
Age: 52
Joined Company in 2022
B.A. (Communication Studies), University of California, Los Angeles
J.D., University of California, Los Angeles

 

 

Becky Marquez has served as the Chief Legal Officer and Corporate Secretary of Xperi Inc. since December 2022. Prior to joining the Company, Ms. Marquez was General Counsel at Ring LLC (acquired by Amazon.com, Inc. in 2018), a manufacturer of home security and smart home devices.

 

 

img157911729_21.jpg 

Matt Milne

Chief Revenue Officer
Age: 56
Joined Company in 2022
B.A. (Business), California State University, Fullerton
M.B.A., California State Polytechnic University, Pomona

 

 

 

Matt Milne has served as the Chief Revenue Officer of Xperi Inc. since its spin-off from its former parent Adeia Inc. (f/k/a Xperi Holding Corporation) in October 2022. Prior to the spin-off, he served as Chief Revenue Officer of Xperi Holding Corporation beginning in 2020, when Xperi Corporation merged with TiVo Corporation. Prior to that, he served as TiVo’s Chief Revenue Officer beginning in January 2017. Mr. Milne currently serves on the board of directors of IPG Inc., a joint venture between Xperi's subsidiary Rovi Product Corporation and Dentsu Group Inc. Mr. Milne is one of Xperi's representatives on IPG's board.

 

 

img157911729_22.jpg 

Geir Skaaden

Chief Products and Services Officer
Age: 57
Joined Company in 2022
B.A. (Finance), University of Oregon
Business degree, Norwegian School of Management
M.B.A., University of Washington

 

Geir Skaaden has served as the Chief Products and Services Officer of Xperi Inc. since its spin-off from its former parent Adeia Inc. (f/k/a Xperi Holding Corporation) in October 2022. Prior to the spin-off, he served as Chief Products and Services Officer of Xperi Holding Corporation beginning in 2020, when Xperi Corporation merged with TiVo Corporation. Prior to that, he served as Chief Products and Services Officer of Xperi Corporation beginning in 2016. He previously served on the board of Onkyo Pioneer Corporation from 2018 to 2020.

 

 

 

 

 

 

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HOW WE DID

 

In our first full fiscal year as a standalone public company, we delivered solid financial results with improved profitability, made significant business and operational progress, and advanced our ongoing cost transformation efforts. We remain focused on increasing profitability, improving cash flow, and achieving our three-year targets for Xperi's independent media platforms.

 

Financial and Business Highlights

Total annual revenue increased by 3.8% year over year to $521.3 million in fiscal 2023.
Vestel began shipping Smart TVs Powered by TiVo into Europe.
Signed four additional Smart TV OEMs to integrate the TiVo Operating System in their TV lineup.
BMW began deploying DTS AutoStage Video Service, Powered by TiVo, in their 5-Series, with plans to expand the deployment more broadly across their portfolio.
TiVo's IPTV solutions grew 38% year over year, generating approximately $60 million in revenue and ending 2023 with 1.9 million subscribers.
Signed several important multi-year DTS:X and IMAX® Enhanced license agreements with major consumer electronics manufacturers.
Signed transaction agreement for divestiture of AutoSense and related imaging businesses.
Signed license agreement with a Big Tech partner for Perceive technology, and began recognizing revenue. Began exploring strategic alternatives for Perceive.

 

 

HOW WE DO IT

 

Our Culture and Employees

 

As of December 31, 2023, we had approximately 2,100 employees working in North America, Europe, and Asia. We also employ individuals on a temporary basis and use the services of contractors as necessary. At Xperi, we are dedicated to creating a workplace where all our employees have a voice, feel safe and valued, and are acknowledged for their unique contributions to our business outcomes. Driven by our vision, mission, and values, our culture shapes the standards that influence our performance and the way we work.

 

Our Values

Customers - Hear Their Voice
Performance - Hit the Mark
People - Achieve Better Together
Innovation - Harness Our Imaginations

 

In 2023, we worked to embed our values into our learning and development policies and processes, further strengthening our culture. We continued to hold twice-a-year employee listening sessions to hear directly from our employees about our cultural strengths and areas for improvement. This feedback informed our culture, strategy, and programming for the year. We also launched “Leader Led Session Toolkits” to encourage and enable our people managers to champion our values directly with their teams.

 

Talent Retention and Attraction

 

We provide our employees with competitive compensation packages and a range of benefits. These benefits include flexible paid time off, a generous rewards and recognition program, training and development opportunities, tuition reimbursement, wellness initiatives, local discounts, and more.

 

 

 

 

 

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Career Performance and Development

 

We continued to roll out our Xperi Management “Xperience Program” for all people managers. We also launched our “Xtraordinary Leadership Program” for our executive population. These programs are supported by regular manager connect sessions and leadership meetings, and by a robust online resource library to bolster our managers and leaders as they support our employees and nurture our culture.

 

Employee Health and Wellness

 

Xperi offers numerous resources to support employee wellness globally. These resources include free access to the mindfulness app, Headspace, as well as access to Xperi's virtual fitness program, XFit. We also offer Employee Assistance Programs (EAPs) and additional resources and tools to support our employees’ overall mental health, such as access to podcasts, videos, and “Mindful Leadership” toolkits for people managers.

 

Diversity, Equity & Inclusion

 

At Xperi, we value diversity and seek to create an environment where all can contribute and succeed. As part of this effort, we created the Diversity, Equity and Inclusion ("DEI") Council, which helps identify and address topics related to diversity, equity and inclusion at Xperi.

 

We have numerous employee resource groups ("ERGs") that are employee-led, voluntary communities for employees who share similar backgrounds or identities. ERGs develop programming throughout the year supporting culture and belonging, encourage diversity, and empower employees to achieve their personal and career goals. Our ERGs include:

Asian and Pacific Islanders @ Xperi [new in 2023]
Early Professionals @ Xperi [new in 2023]
Mahogany @ Xperi
PRIDE @ Xperi
Veterans @ Xperi
Women in Tech

 

In 2023, we achieved a score of 95 out of 100 on the Human Rights Campaign Foundation’s Corporate Equality Index ("CEI"), a 12% increase since we last completed the survey in 2021. The CEI is a national benchmarking survey and report, measuring corporate policies, practices and benefits of lesbian, gay, bisexual, transgender and queer employees related to workplace equality.

 

ESG Highlights

 

At Xperi, we understand our investment in ESG plays a role in our ongoing success, which is why we aim to understand and address our ESG risks with flexibility, transparency, and accountability. Our goal is to enable extraordinary experiences for millions of people around the world and that starts with a commitment to a

brighter future for everyone.

 

We started our ESG journey in 2021 with the completion of our inaugural materiality assessment.

 

In 2022, we set targets within each of the focus areas of our ESG program: Culture and Belonging, Resilience, and Community Impact.

 

In 2023, we continued working toward achieving our external ESG targets. We completed our 2022 and 2023 greenhouse gas inventories and established a strategy to reduce our emissions.

 

Our ESG strategy will help Xperi combat future risks, while allowing us to identify potential opportunities for growth. As our ESG program continues to evolve and mature, we will report against our targets, disclosures, and progress annually. Please visit our website at xperi.com/esg for more information on ESG at Xperi.

 

 

 

 

 

 

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Security Ownership of Certain Beneficial Owners and Management

The following table sets forth information as of March 1, 2024, with respect to the beneficial ownership of shares of the Company's common stock by (i) each person or group of affiliated persons known to us to beneficially own more than 5% of the outstanding shares of our common stock, (ii) each of the directors and director nominees, (iii) each named executive officer ("NEO") for fiscal year 2023, and (iv) all of the directors and executive officers as a group. Applicable percentage ownership is based on 45,030,023 shares of our common stock outstanding as of March 1, 2024.

We have determined beneficial ownership in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities. In addition, the rules include (a) shares of common stock underlying options held by the person or entity that are immediately exercisable or exercisable within 60 days of March 1, 2024, and (b) shares of common stock underlying RSUs held by the person or entity that are currently vested or will vest within 60 days of March 1, 2024. These shares are deemed to be outstanding and beneficially owned by the person holding those options, warrants or RSUs for the purpose of computing the percentage ownership of that person, but they are not treated as outstanding for the purpose of computing the percentage ownership of any other person. Unless otherwise indicated, the persons or entities identified in this table have sole voting and investment power with respect to all shares shown as beneficially owned by them, subject to applicable community property laws.

Except as otherwise noted below, the address for persons listed in the table is c/o Xperi Inc., 2190 Gold Street, San Jose, California 95002.

 

Name of Beneficial Owner

 

Number of
 Shares

 

 

Percentage
Ownership

 

Five Percent Stockholders

 

 

 

 

 

 

BlackRock, Inc. (1)

 

 

7,061,687

 

 

 

15.7

%

The Vanguard Group, Inc. (2)

 

 

4,607,899

 

 

 

10.2

%

Rubric Capital Management LP/David Rosen/Thomas Lacey (3)

 

 

4,047,952

 

 

 

9.0

%

Neuberger Berman Group LLC (4)

 

 

3,026,375

 

 

 

6.7

%

 

 

 

 

 

 

 

Directors and Named Executive Officers

 

 

 

 

 

 

Jon E. Kirchner (5)

 

 

187,931

 

 

*

 

Robert Andersen

 

 

74,066

 

 

*

 

Geir Skaaden (6)

 

 

62,233

 

 

*

 

Christopher Seams (7)

 

 

53,395

 

 

*

 

David C. Habiger (7)

 

 

47,616

 

 

*

 

Darcy Antonellis (7)

 

 

38,232

 

 

*

 

Laura J. Durr (7)

 

 

35,687

 

 

*

 

All directors and current executive officers as a group (9 persons) (8)

 

 

582,473

 

 

 

1.3

%

 

* Represents beneficial ownership of less than 1% of the outstanding shares of our common stock.

 

(1)
The address for BlackRock, Inc. is 50 Hudson Yards, New York, NY 10001. BlackRock, Inc. has sole voting power as to 6,975,069 shares and sole dispositive power as to 7,061,687 shares. The shares are held by various BlackRock subsidiaries. The information in

 

 

 

 

 

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this table and footnote is based solely on information contained in Schedule 13G/A filed with the SEC on January 22, 2024 by BlackRock, Inc.
(2)
The address for The Vanguard Group, Inc. is 100 Vanguard Blvd., Malvern, PA, 19355. The Vanguard Group, Inc. has shared voting power as to 26,406 shares, sole dispositive power as to 4,539,051 shares and shared dispositive power as to 68,848 shares. The information in this table and footnote is based solely on information contained in Schedule 13G/A filed with the SEC on February 13, 2024 by The Vanguard Group, Inc.
(3)
The address for Rubric Capital Management LP (“Rubric Capital Management”) is 155 East 44th St., Suite 1630, New York, NY 10017. Rubric Capital Management has shared voting and shared dispositive power as to 4,043,744 shares. David Rosen has shared voting and shared dispositive power as to 4,043,744 shares. Deborah S. Conrad owns 0 shares, and Thomas A. Lacey has sole voting power as to 4,208 shares. Rubric Capital Management is the investment adviser to certain investment funds and/or accounts (collectively, “Rubric Funds”) that hold the shares of our common stock, and David Rosen is Managing Member of Rubric Capital Management GP LLC, the general partner of Rubric Capital Management. Each of Rubric Capital Management, David Rosen, Deborah Conrad, and Thomas Lacey (each a "Reporting Person" and together, "Reporting Persons") may be deemed to be a member of a “group” with the other Reporting Persons for the purposes of Section 13(d)(3) of the Exchange Act, and such group may be deemed to beneficially own the 4,047,952 shares beneficially owned in the aggregate by all of the Reporting Persons. The information in this table and footnote is based solely on information contained in Schedule 13D/A filed with the SEC on February 21, 2024 by Rubric Capital and David Rosen.
(4)
The address for Neuberger Berman Group LLC is 1290 Avenue of the Americas, New York, NY 10104. Neuberger Berman Group LLC has shared voting power as to 2,155,074 shares and shared dispositive power as to 2,632,541 shares. Neuberger Investment Advisers LLC has shared voting power as to 2,117,042 shares and shared dispositive power as to 2,549,798 shares. Neuberger Berman Group LLC and its affiliates may be deemed to be beneficial owners of securities because they or certain affiliated persons have shared power to retain, dispose of or vote the securities of unrelated clients. The information in this table and footnote is based solely on information contained in Schedule 13G/A filed with the SEC on February 12, 2024 by Neuberger Berman Group LLC and Neuberger Berman Investment Advisers LLC.
(5)
Includes 12,607 shares issuable upon exercise of outstanding options held by Mr. Kirchner, exercisable within 60 days of March 1, 2024.
(6)
Includes 3,566 shares issuable upon exercise of outstanding options held by Mr. Skaaden, exercisable within 60 days of March 1, 2024.
(7)
For each of Ms. Antonellis, Ms. Durr, Mr. Habiger, and Mr. Seams, includes 19,978 shares subject to RSUs that will vest and settle within 60 days of March 1, 2024. For Ms. Durr, includes 1,000 shares held by the Durr Revocable Trust. For Mr. Habiger, includes 6,900 shares held by the David C. Habiger Family Trust.
(8)
Includes 16,173 shares issuable upon exercise of outstanding options held by current officers and directors as a group, exercisable within 60 days of March 1, 2024, and 79,912 shares subject to RSUs that will vest and settle within 60 days of March 1, 2024.

 

 

 

 

 

 

 

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Since January 1, 2023, there has not been, nor is there currently planned, any transaction or series of similar transactions to which we were or are a party in which the amount involved exceeds $120,000 and in which any director, nominee for director, executive officer or holder of more than 5% of our capital stock or any member of their immediate families had or will have a direct or indirect material interest other than the compensatory transactions described above and the agreements and transactions described below.

 

Indemnification Agreements

As permitted by the Delaware General Corporation Law, we have adopted provisions in the amended and restated Charter that limit or eliminate the personal liability of the directors to us for monetary damages for a breach of their fiduciary duty as a director, except for liability for:

 

any breach of the director’s duty of loyalty to us or our stockholders;
any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;
any unlawful payments related to dividends or unlawful stock repurchases, redemptions or other distributions; or
any transaction from which the director derived an improper personal benefit.

 

Pursuant to the amended and restated Charter and Bylaws, we are obligated, to the maximum extent permitted by Delaware law, to indemnify each of our directors and officers against expenses (including attorneys’ fees), judgments, fines, settlements and other amounts actually and reasonably incurred in connection with any proceeding, arising by reason of the fact that such person is or was an agent of the corporation. A “director” or “officer” includes any person who is or was a director or officer of the Company, is or was serving at our request as a director or officer of another enterprise or was a director or officer of a corporation which was a predecessor corporation of the Company or of another enterprise at the request of the predecessor corporation. Pursuant to the amended and restated Charter and Bylaws, we also have the power to indemnify our employees to the extent permitted under Delaware law. Our amended and restated Charter and Bylaws provide that the Board may authorize the advancement of expenses for the defense of any action for which indemnification is required or permitted. Our amended and restated Charter and Bylaws permit us to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Company or, at our request, served in such a capacity for another enterprise.

We have entered into indemnification agreements with each of the directors and officers that are, in some cases, broader than the specific indemnification provisions permitted by Delaware law, and that may provide additional procedural protection. The indemnification agreements require us, among other things, to:

 

 

indemnify officers and directors against certain liabilities that may arise because of their status as officers or directors; and
advance expenses, as incurred, to officers and directors in connection with a legal proceeding, subject to limited exceptions.

 

At present, there is no pending litigation or proceeding involving any of the directors, officers or employees in which indemnification is sought, nor are we aware of any threatened litigation or proceeding that may result in claims for indemnification.

 

 

 

 

 

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Relationship with Chief Content Officer

Bill Neighbors serves as the Chief Content Officer and is the brother-in-law of Chief Executive Officer and director, Jon E. Kirchner. During the year ended December 31, 2023, Mr. Neighbors received compensation of approximately $343,852 in base salary, $128,368 in bonus, $9,900 in cash incentives, and RSU grants with an aggregate grant date fair value of $109,100. Mr. Neighbors’ current base annual salary is $350,100 and he is eligible for a target bonus of 45% of his base annual salary for fiscal year 2024.

 

PROCEDURES FOR APPROVAL OF RELATED PERSON TRANSACTIONS

The Company recognizes that Related Person Transactions ("RPT"s) can present potential or actual conflicts of interest and may raise questions among stockholders as to whether those transactions are consistent with the best interests of the Company and its stockholders. The Company maintains a written RPT policy to enter into RPTs only when the Board, acting through the Audit Committee, reviews and approves or ratifies such transaction.

The RPT policy defines “Related Person Transaction” as a transaction, arrangement or relationship (or any series of similar transactions, arrangements or relationships) in which the Company (including any of its subsidiaries) was, is or will be a participant and the amount involved exceeds $120,000, and in which any Related Person (as defined below) had, has or will have a direct or indirect material interest. A "Related Person" includes a director, director nominee, or executive officer of the Company, any person who is known to be the beneficial owner of more than 5% of any class of the Company’s voting securities, or any immediate family member of such person, as well as any entity in which any of the foregoing persons is employed or is a partner or principal or in which such person has a 5% or greater beneficial ownership interest.

The Company’s RPT policy requires that all directors or executive officers provide notice to the Company’s Chief Legal Officer of the relevant facts and circumstances prior to entering into a potential RPT. The Chief Legal Officer will assess whether the proposed transaction is a RPT for purposes of the policy and provide the material facts of the transaction to the Audit Committee if she determines that the proposed transaction is an RPT.

The disinterested members of the Audit Committee will approve or ratify only those RPTs that are in the best interests of the Company and its stockholders, as the committee determines in good faith. The Audit Committee will consider all of the relevant facts and circumstances available, including, among other factors it deems appropriate, the following:

the Related Person’s interest in the transaction;
the availability of other sources for comparable products or services;
the terms of the transaction;
the purpose of, and the potential benefits to the Company of, the transaction; and
any other information regarding the RPT or the Related Person that would be material to investors in light of the circumstances of the particular transaction.

In the event the Company becomes aware of an RPT that has not been approved under the RPT Policy, the matter must be reviewed by the Audit Committee. The Audit Committee will consider all of the relevant facts and circumstances with respect to such transaction, including the items listed above, and will evaluate all options available to the Company, including ratification, revision or termination of such transaction, and will take such course of action as the committee deems appropriate under the circumstances.

The RPT Policy is posted on the “Investor Relations” section of our website, which is located at investor.xperi.com under “Governance Documents” in the “Governance” subsection.

 

 

 

 

 

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In addition to the RPT Policy, the Code of Business Conduct and Ethics Policy requires that all directors, officers and employees make appropriate disclosure of any situation that could give rise to a conflict of interest to the Company’s Chief Legal Officer.

 

 

 

 

 

 

 

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INTRODUCTION

The NEOs for fiscal year 2023 are:

Jon E. Kirchner – Chief Executive Officer
Robert Andersen – Chief Financial Officer
Geir Skaaden – Chief Products and Services Officer

 

The following section provides compensation information pursuant to the scaled disclosure rules applicable to “emerging growth companies” under the rules of the SEC, including reduced narrative and tabular disclosure obligations regarding executive compensation.

 

The historical compensation for periods prior to October 1, 2022 shown in the tables below was determined by the Company's former parent Adeia Inc. (f/k/a Xperi Holding Corporation) ("Former Parent"). On October 1, 2022, we completed our spin-off from the Former Parent and became an independent publicly-traded company (the "Separation"). Prior to the Separation, we were part of the Former Parent, and therefore, compensation of the executive officers was determined based on the design and objectives of the Former Parent's executive compensation programs. Following our Separation from the Former Parent, the compensation levels of our executive officers were determined based on the compensation policies, programs and procedures established by the Compensation Committee.

 

In connection with the Separation, the outstanding Former Parent equity awards held by our executive officers were converted into either Company equity awards or both a Former Parent equity award and a Company equity award. The converted Company equity awards are subject to the same terms and conditions applicable prior to the Separation as adjusted in connection with the Separation, and in the case of certain performance-based equity awards, with adjusted targets. Other compensation agreements described below, including employment and severance terms, were assigned by the Former Parent and continued by the Company following the Separation.

 

COMPENSATION PHILOSOPHY AND OBJECTIVES

 

We have designed the executive compensation program to attract, retain and motivate top-tier talent in a highly competitive marketplace and to maximize long-term stockholder value by rewarding the executive officers, including the NEOs, for strong strategic and financial performance. The NEOs' compensation is comprised of base salaries, short-term performance-based cash incentives, and long-term incentives delivered in the form of equity compensation that is earned over a multi-year period. Our approach to short-term compensation is to pay for current results and strategic actions taken that are expected to translate into improved future financial performance. Combined with our emphasis on long-term equity compensation, we believe this approach appropriately motivates, rewards, and retains the executives, while providing strong alignment with our stockholders. Our goal is to “pay for performance” to drive business results and maximize long-term stockholder value. As a result, executive compensation is highly incentive-based and weighted towards long-term equity compensation. We hold the executives to stringent performance standards and, as a result, the executive compensation plans are designed to

 

 

 

 

 

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pay competitively if strategic and financial performance objectives are met – and less so if these objectives are not achieved. Below is an overview of the Company's compensation programs and practices along with the fiscal year 2023 NEO compensation.

 

SUMMARY OF CERTAIN EXECUTIVE COMPENSATION PRACTICES

 

We endeavor to maintain sound executive compensation governance practices. We have adopted the following policies and practices with respect to executive compensation programs in which the NEOs participate:

WHAT WE DO

WHAT WE DON’T DO

img157911729_23.jpg 

Pay for Performance: We link pay to performance and stockholder interests by heavily weighting total direct compensation to the achievement of strong financial performance and a balanced mix of performance metrics established in advance by the Compensation Committee.

img157911729_24.jpg 

No Tax Gross-Ups: We do not provide tax gross-ups to our named executive officers for excess parachute payments or other benefits.

img157911729_23.jpg 

Independent Compensation Advisor: The Compensation Committee selects and engages its own independent advisor.

img157911729_24.jpg 

No “Single Trigger” Severance Payments: We do not have “single trigger” severance payments payable solely on account of the occurrence of a change of control event.

img157911729_23.jpg 

Thoughtful Peer Group Analysis: The Compensation Committee reviews external market data when making compensation decisions and regularly reviews our peer group with its independent compensation advisor.

img157911729_24.jpg 

No Special Perquisites: We do not generally provide special perquisites for executives, such as club memberships, supplemental executive retirement plans or supplemental executive health benefits.

img157911729_23.jpg 

Compensation Committee Independence and Experience: The Compensation Committee is comprised solely of independent directors who have extensive experience.

img157911729_24.jpg 

No Pledging of Company Securities: Our executives and directors are prohibited from pledging Company securities.

img157911729_23.jpg 

Stock Ownership Guidelines: Executives and directors are subject to stock ownership guidelines equal to a multiple of their respective annual base salaries (5x for the CEO and 1.5x for other executives) or Board retainers (3x for directors).

img157911729_24.jpg 

No Guaranteed Bonuses: We do not provide guaranteed minimum bonuses or uncapped incentives under our annual bonus plan.

img157911729_23.jpg 

“Clawback” Policy: Our clawback policy requires recovery of incentive compensation erroneously awarded to an executive officer, in accordance with Section 10D of the Securities and Exchange Act of 1934, as amended, and applicable NYSE listing standards.

img157911729_24.jpg 

No Re-Pricing or Discounted Options / SARs: We do not re-price underwater awards and do not provide discounted stock options or stock appreciation rights. Further, the Company’s 2022 Equity Incentive Plan prohibits repricing of stock options or stock appreciation rights without stockholder approval.

img157911729_23.jpg 

Negative Discretion: The Compensation Committee has the right to exercise negative discretion over executive incentive plan payments.

img157911729_24.jpg 

No Dividends Paid or Accrued on Awards Prior to Vesting

 

 

 

 

 

 

 

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SUMMARY COMPENSATION OF NAMED EXECUTIVE OFFICERS

 

Emphasis on Pay-for-Performance

 

Our Chief Executive Officer’s compensation reflects a strong connection between pay and performance. The table below shows the compensation of our Chief Executive Officer and compares the reported values in the Summary Compensation Table to his earned compensation for 2023.

 

img157911729_25.jpg 

 

 

Below is a discussion of the key components of the NEOs' pay-for-performance programs for 2023, as reflected in the Summary Compensation Table below.

 

Annual Performance-Based Cash Incentive Bonuses

 

The NEOs are eligible to receive an annual cash incentive bonus under our annual bonus plan, which we refer to as the MBO Plan. Bonuses paid to the NEOs under the MBO Plan are based on our achievement of specific pre-established corporate performance goals and upon an evaluation of the individual officer’s performance for their efforts tied to the corporate and operational goals for the year. The NEOs may receive a smaller award (or no award) if we do not achieve a target level of performance and a larger award (capped) if we exceed the target level of performance.

 

The corporate performance goals for 2023 were a combination of financial goals related to revenue and non-GAAP operating profit (as each such financial metric was defined in the MBO Plan, “MBO Revenue” and “MBO Non-GAAP Operating Profit”, respectively) and strategic and operational goals (“MBO Goals”) that were directly supportive of our short-term and long-term strategic plans. The target level of attainment for the financial goals was $531.5 million for MBO Revenue and 5.6% for MBO Non-GAAP Operating Profit. The MBO Goals were generally designed to reduce organizational complexity and advance strategic and growth initiatives. The actual performance under the MBO Plan was $517.7 million for MBO Revenue and 4.7% for MBO Non-GAAP Operating Profit. MBO Revenue was calculated as the Company's total revenue, excluding revenue of Perceive Corporation. MBO Non-GAAP Operating Profit was

 

 

 

 

 

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calculated as MBO Revenue, less total operating expenses (excluding from expenses the following: stock-based compensation, amortization of intangibles, restructuring and one-time charges, the costs of any acquisitions or divestitures, other non-operating expenses, and direct costs for Perceive Corporation), divided by MBO Revenue. The annual cash incentive bonuses under the MBO Plan paid to the NEOs were as follows:

 

Executive Officer

Bonus Target

Bonus Target as % of Base Salary

Financial Goals Weighting

MBO Goals Weighting

Bonus Achievement

Bonus Payment

Jon E. Kirchner

$ 750,000

100%

80%

20%

59%

$ 442,500

Robert Andersen

$ 337,500

75%

60%

40%

59%

$ 200,205

Geir Skaaden

$ 337,500

75%

60%

40%

74%

$ 248,805

 

 

Long-Term Compensation

 

Our long-term equity incentive compensation program is intended to provide the NEOs with opportunities to participate in the appreciation of our stock price and to create unvested equity award value that will provide a financial incentive for executives to remain with and work for organization's continued success.

 

2023 Equity Grants

 

The Compensation Committee determined that the annual equity awards granted to the NEOs in 2023 should consist of time-vesting RSU grants and performance-based PSU grants. The performance-based PSU grants awarded in March 2023 as part of our NEOs’ annual awards represent 60% of the total award value for our Chief Executive Officer, and 50% of the total award value for the other NEOs. The Compensation Committee determined that these two types of equity awards provided the appropriate balance of long-term incentives for the NEOs in 2023. The Compensation Committee set rigorous performance award goals that ultimately serve to align management and our stockholders’ interests, as further described below. The target was set at a level the Compensation Committee determined to be competitively challenging, with the maximum metric requiring a higher level of performance. Further, the vesting of the PSUs is conditioned upon the NEOs remaining employed with the Company through the awards' performance certification date. The RSUs granted to the NEOs vest over a four-year vesting schedule in annual installments following the grant date. The RSU and PSU awards granted to the NEOs are subject to acceleration of vesting pursuant to agreements entered into with the NEOs as described below in the “Employment Contracts, Termination of Employment Arrangements, and Change of Control Arrangements” section. The PSU awards are reflected in the table below, assuming target performance.

 

Annual March 2023 RSU and PSU Awards

Executive Officer

PSU Award Weighting
(as a % of Total Award)

PSUs (at Target)

RSUs

Jon E. Kirchner

60%

258,736

172,490

Robert Andersen

50%

93,920

93,921

Geir Skaaden

50%

100,990

100,989

 

The March 2023 PSU awards are structured to be based entirely on a three-year performance period (2023-2025) and are eligible to vest on a cliff basis, if at all, after three years based upon the achievement of a three-year stock price appreciation target along with a revenue growth goal. Depending on the level of achievement, no shares will be issuable if performance is below the threshold, and twice the number of target shares will be issuable if the maximum performance level is achieved. Shares will vest upon the Compensation Committee’s certification of stock price performance and revenue growth at the end of the performance period, subject to each participant’s continued employment with the Company through the award’s performance certification date.

 

July 2023 PSU Awards

 

In July 2023, the Compensation Committee, after considering the recommendation of its independent compensation advisor, approved an additional award for our executive team to drive and recognize specific performance, support retention, and continue to lead our transformation post-separation. In addition to the retention element that the award provides, the July PSU award incorporates a challenging stock price appreciation target, a product deployment goal, and a non-GAAP operating margin goal to be achieved over an 18-month performance period. This award is 100% performance-based to emphasize pay for performance and strengthens our commitment to creating shareholder value. The PSU awards are reflected in the table below, assuming target performance.

 

 

 

 

 

 

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Executive Officer

PSUs (at Target)

Jon E. Kirchner

133,000

Robert Andersen

30,000

Geir Skaaden

30,500

 

The July 2023 PSU awards are structured to be based entirely on an 18-month performance period and are eligible to vest on a cliff basis, if at all, after 18 months based upon the achievement of an 18-month stock price appreciation target, a product deployment goal, and a non-GAAP operating margin goal. Non-GAAP operating margin is calculated as the Company's total revenue, less total operating expenses (excluding from expenses the following: stock-based compensation, amortization of intangibles, restructuring and one-time charges, the costs of any acquisitions or divestitures, and other non-operating expenses), divided by total revenue. Depending on the level of achievement, no shares will be issuable if performance is below the threshold, and 150% of the target number of shares will be issuable if the maximum performance level is achieved. Shares will vest upon the Compensation Committee’s certification of stock price performance, product deployment achievement, and non-GAAP operating margin attainment at the end of the performance period, subject to each participant’s continued employment with the Company through the award’s performance certification date.

 

Forfeiture of 2020 PSU Awards

 

No shares were earned by the NEOs under the 2020 PSU awards. The 2020 PSU awards were structured to be based entirely on a three-year performance period (2020-2023) and were eligible to vest on a cliff basis, if at all, after three years based upon the achievement of a three-year stock price appreciation target. At the end of the performance period in 2023, the Compensation Committee determined that the level of stock price appreciation attained for the three-year performance period did not meet the minimum threshold performance target.

 

Executive Officer

2020 PSUs Forfeited (at Target)

Jon E. Kirchner

106,079

Robert Andersen

24,510

Geir Skaaden

24,510

 

The NEOs also forfeited the corresponding portion of the 2020 PSU awards that remained as Former Parent PSUs in connection with the Separation.

 

Summary Compensation Table

The table below sets forth, for the fiscal years ended December 31, 2023 and 2022, the compensation paid to the NEOs. The reported compensation includes compensation earned pursuant to compensation programs adopted by the Former Parent for Messrs. Kirchner, Andersen and Skaaden prior to the Separation on October 1, 2022, and compensation earned under compensation programs adopted by the Company after October 1, 2022 for the NEOs.

 

 

Name and Principal
Position (1)

 

Year

 

Salary ($)(2)

 

 

Stock
Awards
($)(3)

 

 

Non-Equity
Incentive Plan
Compensation
($)(4)

 

 

All Other
Compensation
($)(5)

 

 

Total($)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Jon E. Kirchner

 

2023

 

 

750,000

 

 

 

8,799,977

 

 

 

442,500

 

 

 

10,944

 

 

 

10,003,421

 

 

Chief Executive Officer

 

2022

 

 

750,102

 

 

 

8,491,645

 

 

 

643,500

 

 

 

10,152

 

 

 

9,895,399

 

 

Robert Andersen

 

2023

 

 

447,500

 

 

 

3,167,093

 

 

 

200,205

 

 

 

10,944

 

 

 

3,825,742

 

 

Chief Financial Officer

 

2022

 

 

430,936

 

 

 

2,813,692

 

 

 

279,923

 

 

 

10,152

 

 

 

3,534,703

 

 

Geir Skaaden

 

2023

 

 

450,000

 

 

 

3,386,825

 

 

 

248,805

 

 

 

10,944

 

 

 

4,096,574

 

 

Chief Products and Services Officer

 

2022

 

 

443,436

 

 

 

3,069,503

 

 

 

289,575

 

 

 

10,152

 

 

 

3,812,666

 

 

(1)
All the NEOs were appointed executive officers of the Company effective October 1, 2022, the effective date of the Separation. Prior to the Separation, Messrs. Kirchner, Andersen and Skaaden were executive officers of the Former Parent.
(2)
The amounts reported in 2022 reflect the NEOs’ annual salary earned during the fiscal year paid by the Former Parent prior to the Separation and by the Company after the Separation. The amounts reported also include amounts deferred under the Company’s 401(k) Plan and the Former Parent's 401(k) Plan, as applicable, each a qualified deferred compensation plan under section 401(k) of the Internal Revenue Code.
(3)
The dollar amount reported in the Stock Awards column is equal to (i) the aggregate grant-date fair value of the time-based and performance-based RSU awards ("PSUs") granted to the NEOs during each reported fiscal year, (ii) the incremental fair value as of October 1, 2022 of the PSUs related to the conversion of the Former Parent equity awards in connection with the Separation under the Employee Matters Agreement (the “EMA”) between the Former Parent and the Company, and (iii) the incremental fair value as of April 26, 2023 of the 2022 PSUs as the Company modified certain vesting conditions related to those PSUs in accordance with the EMA following the Separation, in each case calculated in accordance with FASB ASC Topic 718 without taking into account any estimated

 

 

 

 

 

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forfeitures related to service-vesting conditions. The assumptions used in the calculation of the FASB ASC Topic 718 grant-date fair value of each such award are set forth in Note 13 of the Notes to Consolidated Financial Statements included in the Company's 2023 Annual Report on Form 10-K. The assumptions used in the calculation of the award modifications described above in clauses (ii) and (iii) for the PSUs tied to market conditions, as determined utilizing the Monte-Carlo valuation model, were as follows: October 1, 2022: expected life of 0.8 – 2.6 years, risk-free interest rate of 4.0% - 4.3%, dividend yield of 0%, and expected volatility of 43.2% - 50.8%; April 26, 2023: expected life of 2.0 years, risk-free interest rate of 3.8%, dividend yield of 0%, and expected volatility of 44.6%. For time-based RSUs, the grant-date fair value was determined using the closing share price of the Company’s, or prior to the Separation, the Former Parent’s, common stock on the date of grant. For PSUs that vest based on company-designated performance targets, the grant-date fair value (or incremental fair value as of the date of modification) was determined using the closing share price of the Company’s, or prior to the Separation, the Former Parent’s, common stock on the date of grant (or the date of modification), as adjusted based on the probability of achievement on the date of grant (or the date of modification). The PSUs granted in 2022 were market-condition based, and for the PSUs granted in 2023 based on company-designated performance targets, the probability was deemed to be achievable at 100% levels on the date of grant (and as of the date of modification, if applicable). The grant-date fair value (or incremental fair value as of the date of modification) of PSUs that vest based on Company stock price appreciation was estimated utilizing the Monte Carlo valuation model, using the fair value of the Company’s, or prior to the Separation, the Former Parent's, common stock with the effect of market conditions on the date of grant (or the date of modification), and assumes the performance goals will be attained. The grant-date fair values of the 2023 PSUs assuming maximum attainment of the performance goals are as follows:

 

March 2023 PSUs

Grant Date Fair Value at Maximum Attainment ($)

Jon E. Kirchner

7,001,396

Robert Andersen

2,541,475

Geir Skaaden

2,732,789

 

 

July 2023 PSUs

Grant Date Fair Value at Maximum Attainment ($)

Jon E. Kirchner

2,868,145

Robert Andersen

646,950

Geir Skaaden

657,733

 

(4) Represents the annual cash incentive compensation earned by the NEOs with respect to the applicable year, which was based on the level of attainment of corporate performance goals payable under the MBO Plan (as described below).

(5) The amounts in the “All Other Compensation” column for fiscal year 2023 consist of the following payments and benefits paid by the Company to or on behalf of each NEO: 401(k) employer match - $9,900; life insurance premiums - $1,044.

 

 

 

 

 

 

 

 

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Outstanding Equity Awards at Fiscal Year-End

The table below sets forth information concerning the number and value of unexercised stock options and unvested stock awards of Xperi Inc. held by the NEOs at December 31, 2023:

 

 

Name

 

Grant Date

 

Option Awards (1)

 

Stock Awards

 

 

 

 

 

 

Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)

 

Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)

 

Option
Exercise
Price ($)

 

Option
Expiration
Date

 

Number of
Shares or
Units of
Stock That
Have Not
Vested (#)
(2)

 

Market Value
of Shares or
Units of
Stock That
Have Not
Vested ($)
(3)

 

Equity
Incentive
Plan Awards:
Number of
Unearned
Shares or
Units or
Other Rights
That Have
Not Vested
(#)(4)

 

Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares,
Units or
Other Rights
That Have
Not Vested
($) (3)

 

 

Jon E.

 

3/13/2014

 

12,607

 

 

21.15

 

3/13/2024

 

 

 

 

 

 

Kirchner

 

7/28/2020

 

 

 

 

 

11,366

 

125,253

 

 

 

 

 

 

3/1/2021

 

 

 

 

 

21,924

 

241,602

 

102,312

(5)

1,127,478

(5)

 

 

 

4/29/2022

 

 

 

 

 

32,476

 

357,886

 

229,861

 

2,533,068

 

 

 

 

3/1/2023

 

 

 

 

 

172,490

 

1,900,840

 

258,736

 

2,851,271

 

 

 

 

7/26/2023

 

 

 

 

 

 

 

133,000

 

1,465,660

 

 

Robert

 

1/2/2014

 

15,600

 

 

21.69

 

1/1/2024

 

 

 

 

 

 

Andersen

 

7/28/2020

 

 

 

 

 

6,127

 

67,520

 

 

 

 

 

 

3/1/2021

 

 

 

 

 

9,490

 

104,580

 

18,982

(5)

209,182

(5)

 

 

 

4/29/2022

 

 

 

 

 

19,846

 

218,703

 

60,202

 

663,426

 

 

 

 

3/1/2023

 

 

 

 

 

93,921

 

1,035,009

 

93,920

 

1,034,998

 

 

 

 

7/26/2023

 

 

 

 

 

 

 

30,000

 

330,600

 

 

Geir

 

3/13/2014

 

3,566

 

 

21.15

 

3/13/2024

 

 

 

 

 

 

Skaaden

 

7/28/2020

 

 

 

 

 

6,127

 

67,520

 

 

 

 

 

 

3/1/2021

 

 

 

 

 

13,287

 

146,423

 

26,575

(5)

292,857

(5)

 

 

 

4/29/2022

 

 

 

 

 

21,651

 

238,594

 

65,675

 

723,739

 

 

 

 

3/1/2023

 

 

 

 

 

100,989

 

1,112,899

 

100,990

 

1,112,910

 

 

 

 

7/26/2023

 

 

 

 

 

 

 

30,500

 

336,110

 

 

(1)
Prior to the Separation, Messrs. Kirchner, Andersen and Skaaden were granted option awards by the Former Parent. Option awards listed for Messrs. Kirchner, Andersen and Skaaden with a grant date prior to June 1, 2020 were granted by Xperi Corporation, then were assumed by the Former Parent in connection with Xperi Corporation's merger with TiVo Corporation. In connection with the Separation, each of these option awards was converted into both Xperi and Former Parent option awards, with certain adjustments to the underlying shares and terms of outstanding awards to preserve the aggregate intrinsic value of each award immediately after the Separation when compared to the aggregate intrinsic value immediately prior to the Separation. This table reflects the converted Xperi option awards granted under the Xperi 2022 Equity Incentive Plan. Stock option awards have a ten-year term from the grant date. All stock option awards vested as follows: 25% of the shares subject to the equity awards vested annually following the grant date, to the extent the NEO was employed with or retained as a consultant by the Company on the vesting dates. As of March 14, 2024, all outstanding option awards have expired.
(2)
Each RSU award vests as follows: 25% of the shares subject to the equity awards will vest annually following the grant date, to the extent the NEO continues in service as an employee, consultant or director of the Company on the vesting dates. All time-based RSU awards are subject to acceleration of vesting pursuant to agreements entered into with the respective NEO as described and referenced below in the “Employment Contracts, Termination of Employment Arrangements, and Change of Control Arrangements” section. Equity awards listed for Messrs. Kirchner, Andersen and Skaaden with a grant date prior to October 1, 2022 were granted by the Former Parent. In connection with the Separation, each award was converted into either both Xperi and Former Parent equity awards or an equity award of only Xperi stock, with certain adjustments to the underlying shares and terms of outstanding awards to preserve the aggregate intrinsic value of each award immediately after the Separation when compared to the aggregate intrinsic value immediately prior to the Separation. For all pre-Separation awards, this table reflects the converted Xperi RSU awards granted under the Xperi 2022 Equity Incentive Plan.
(3)
This value is based on the December 29, 2023 closing price (the last trading day in 2023) of our common stock of $11.02 as reported by the New York Stock Exchange.
(4)
Represents PSUs granted to the NEOs with a three-year cliff vesting period, and an 18-month cliff vesting period solely for the PSUs with a grant date of July 26, 2023. The value and the vesting of such PSUs are generally linked to one or more performance goals and/or certain market conditions determined by the Company, or prior to the Separation, the Former Parent, in each case on a specified date or over 18 months or three years, and may range from zero to 200% of the target number of shares under the award (and from zero to 150% of the target number of shares solely for the July 2023 PSUs). The PSUs are reported in the table above based on achieving “target” performance. The PSUs are subject to acceleration of vesting pursuant to agreements entered into with the NEOs as described below in the “Employment Contracts, Termination of Employment Arrangements and Change of Control Arrangements” section.
(5)
No shares were earned by the NEOs under the 2021 PSU awards as the Compensation Committee determined that the level of stock price appreciation attained for the three-year performance period did not meet the minimum threshold performance target. As a result, all of these awards were forfeited in March 2024.

 

 

 

 

 

 

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Former Parent Equity Awards. In addition to the Company awards set forth above, each of Messrs. Kirchner, Andersen and Skaaden have vested Former Parent option awards and unvested Former Parent RSU awards that were granted by the Former Parent prior to the Separation. In connection with the Separation, these awards were converted into both Xperi (reflected in the table above) and Former Parent awards (reflected in the table below), with certain adjustments to the underlying shares and terms of outstanding awards to preserve the aggregate intrinsic value of each award immediately after the Separation when compared to the aggregate intrinsic value immediately prior to the Separation. Although these awards are issued in Former Parent equity, vesting of the awards is based on continued service with Xperi Inc.

 

 

Name

 

Grant Date

 

Option Awards(1)

 

Stock Awards

 

 

 

 

 

 

Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)

 

Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)

 

Option
Exercise
Price ($)

 

Option
Expiration
Date

 

Number of
Shares or
Units of
Stock That
Have Not
Vested (#)(2)

 

Market Value
of Shares or
Units of
Stock That
Have Not
Vested ($)
(3)

 

Equity
Incentive
Plan Awards:
Number of
Unearned
Shares or
Units or
Other Rights
That Have
Not Vested
(#)(4)

 

Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares,
Units or
Other Rights
That Have
Not Vested
($) (3)

 

 

Jon E.

 

3/13/2014

 

31,518

 

 

10.75

 

3/13/2024

 

 

 

 

 

 

Kirchner

 

7/28/2020

 

 

 

 

 

28,414

 

352,049

 

 

 

 

 

 

3/1/2021

 

 

 

 

 

 

54,809

 

679,084

 

255,778

(5)

3,169,089

(5)

 

 

 

4/29/2022

 

 

 

 

 

81,190

 

1,005,944

 

 

 

 

Robert

 

7/28/2020

 

 

 

 

 

15,318

 

189,790

 

 

 

 

Andersen

 

3/1/2021

 

 

 

 

 

23,726

 

293,965

 

47,454

(5)

587,955

(5)

 

 

 

4/29/2022

 

 

 

 

 

49,616

 

614,742

 

 

 

 

Geir

 

7/28/2020

 

 

 

 

 

15,318

 

189,790

 

 

 

 

Skaaden

 

3/1/2021

 

 

 

 

 

33,218

 

411,571

 

66,436

(5)

823,142

(5)

 

 

 

4/29/2022

 

 

 

 

 

54,127

 

670,634

 

 

 

 

(1)
Stock option awards have a ten-year term from the grant date. All stock option awards vested as follows: 25% of the shares subject to the equity awards vested annually following the grant date, to the extent the NEO was employed with or retained as a consultant by the Company on the vesting dates.
(2)
Each RSU award vests as follows: 25% of the shares subject to the equity awards will vest annually following the grant date, to the extent the NEO continues in service as an employee, consultant or director of the Company on the vesting dates. All time-based RSU awards are subject to acceleration of vesting pursuant to agreements entered into with the respective NEO as described and referenced below in the “Employment Contracts, Termination of Employment Arrangements, and Change of Control Arrangements” section.
(3)
This value is based on the December 29, 2023 (the last trading day in 2023) closing price of Former Parent common stock of $12.39 as reported by NASDAQ Global Select Market.
(4)
Represents PSU awards granted to the NEOs with a three-year cliff vesting period. The value and the vesting of such PSU awards are generally linked to one or more performance goals or certain market conditions determined by the Former Parent, in each case on a specified date or over three years, and may range from zero to 200% of the target number of shares under the award. The PSU awards are subject to acceleration of vesting pursuant to agreements entered into with the NEOs as described below in the “Employment Contracts, Termination of Employment Arrangements, and Change of Control Arrangements” section. The PSU awards are reflected in the table above assuming target performance.
(5)
No shares were earned by the NEOs under the 2021 PSU awards as the Compensation Committee of the Former Parent determined that the level of stock price appreciation attained for the three-year performance period did not meet the minimum threshold performance target. As a result, all of these awards were forfeited in March 2024.

 

 

 

 

 

 

 

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Employment Contracts, Termination of Employment Arrangements, and Change of Control Arrangements

The Company provides for certain severance payments and benefits if an executive officer’s employment is involuntarily or constructively terminated. In addition, the Company provides enhanced severance payments and benefits if such a termination of employment occurs in connection with a change in control of the Company. Such severance payments and benefits are designed to alleviate the financial impact of an involuntary termination of employment through salary, bonus and health benefit continuation and with the intent of providing for a stable work environment. The Company believes that reasonable severance payments and benefits for those NEOs with whom we have entered into severance agreements are important because it may be difficult for these NEOs to find comparable employment within a short period of time following certain qualifying terminations of employment. The Company also believes these payments and benefits are a means of reinforcing and encouraging the continued attention and dedication of key executives of the Company to their duties of employment without personal distraction or a conflict of interest in circumstances which could arise from the occurrence of a change in control of the Company. We believe that the interests of stockholders will be best served if the interests of our senior management are aligned with them, and providing change in control payments and benefits should eliminate, or at least reduce, the reluctance of senior management to pursue potential change in control transactions that may be in the best interests of stockholders.

 

The Company extends change in control payments and benefits because they are essential to help the Company fulfill its objectives of attracting and retaining key managerial talent. These arrangements are intended to be competitive within our industry and company size and are necessary to attract highly qualified individuals and encourage them to remain employed with the Company. In making the decision to extend the benefits, the Compensation Committee relied on the assurances of its independent advisor that the programs are representative of market practice, both in terms of design and cost.

 

Employment Agreement with Jon Kirchner

 

Mr. Kirchner and the Former Parent's predecessor entity entered into an Employment and Severance Agreement effective as of April 28, 2017 (the “Employment Agreement”) in connection with his appointment as its CEO. The Employment Agreement established his base salary, incentive bonus and initial equity compensation and an initial term through June 1, 2020, with a 12-month automatic renewal subject to timely notice of non-renewal, and severance payments and benefits in connection with certain terminations. Effective as of September 29, 2020, the Former Parent and Mr. Kirchner entered into an amendment to the Employment Agreement. The amendment extended the term until June 1, 2024 with a 12-month automatic renewal subject to timely notice of non-renewal, and provided an increase to his annual base salary and eligibility for additional stock awards. In connection with the Separation, effective as of October 1, 2022, the Employment Agreement was assigned to the Company.

 

The Compensation Committee believes that the Employment Agreement provides the Company with reasonable contractual protections and that making severance commitments to the Company’s CEO leads to stronger retention than if such payments and benefits were not offered.

 

The Employment Agreement provides the Company a balance of contractual protections in exchange for severance for Mr. Kirchner in the event of his termination of employment without cause and resignation for good reason, each as defined below. The Employment Agreement does not contain a single trigger provision that would generally allow him to voluntarily terminate his employment because of a change of control of the Company, nor does it entitle him to receive severance payments and benefits under the Employment Agreement solely as a result of change of control of the Company. The Employment Agreement was structured in this fashion so he would not be eligible for such payments and benefits absent other factors, such as a termination of employment without cause or resignation for good reason.

 

 

 

 

 

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The Employment Agreement provides that, if Mr. Kirchner’s employment is terminated by the Company without cause or if he resigns for good reason, he will be entitled to receive the following severance payments and benefits:

a lump sum cash payment equal to 200% of his annual base salary;
200% multiplied by his target annual bonus for the calendar year in which termination occurs (which bonus will be prorated for the portion of the calendar year that has elapsed prior to the date of termination if such termination occurs more than 60 days prior to or more than 18 months following a change in control of the Company);
continuation of health benefits for a period of up to 24 months following the date of termination;
immediate acceleration of vesting of his outstanding equity awards that would have vested over the 12-month period following the date of his separation from service had he remained continuously employed during such period (with any performance awards that are eligible to be earned vesting based on performance for the fiscal year in which his termination occurs vesting at target), provided that if such termination occurs within 60 days prior to or within 18 months following a change in control of the Company, all of Mr. Kirchner’s unvested equity awards will vest (with performance awards vesting at target) on the later of the date of his termination or the date of the change in control; and
a post-termination exercise period for his outstanding stock options of 12 months from the date of termination, or, if earlier, the remaining life of the equity grants.

The post-employment payments and benefits described above will be paid upon Mr. Kirchner’s execution of a general release of claims in favor of the Company and will be subject to his continued compliance with the confidentiality and proprietary rights covenant set forth in the Employment Agreement.

Non-renewal of the term by the Company so that the term is not extended for the additional 12 month renewal period will be deemed a termination of employment without cause and will result in the payments and benefits described above, while expiration of the term under any other circumstances will not be deemed a termination of employment without cause and will not give rise to any payments or benefits. The term of the Employment Agreement will automatically be extended for 18 months following a change in control of the Company if the term would otherwise have expired during such 18-month period.

In the event that the severance pay and other benefits provided for in the Employment Agreement or otherwise payable to Mr. Kirchner constitute "parachute payments" under Section 280G of the Internal Revenue Code and would be subject to excise taxes, then such benefits will either be delivered in full or delivered as to such lesser extent which would result in no portion of such severance pay and other benefits being subject to excise taxes, whichever results in the receipt by the executive of the greatest amount of benefits.

Severance Agreements

The Former Parent entered into severance agreements with Messrs. Andersen and Skaaden, which were assigned to the Company in connection with the Separation. The terms of the agreements are through September 2023 plus a one-year automatic renewal, or, if earlier, the date on which all payments or benefits required thereunder have been paid or provided in their entirety. Each term may be renewed by mutual agreement between the Company and the NEO.

Each of the severance agreements provides that, if the NEO’s employment is terminated by us without cause or if the executive resigns for good reason more than 60 days prior or more than 18 months following a change in control, the executive will be entitled to receive the following payments and benefits:

a lump sum cash payment equal to 100% of the NEO’s annual base salary;
the NEO’s target annual bonus for the calendar year in which termination occurs (which bonus will be prorated for the portion of the calendar year that has elapsed prior to the date of termination); and
continuation of health benefits for a period of 12 months following the date of termination.

The severance payments and benefits described above will be paid upon the NEO’s execution of a general release of claims in favor of the Company and will be subject to the NEO’s continued compliance with the confidentiality and proprietary rights covenant set forth in the severance agreement.

 

 

 

 

 

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Change in Control Severance Agreements with Robert Andersen and Geir Skaaden

The Former Parent entered into change in control severance agreements with Messrs. Andersen and Skaaden which were assigned to the Company in connection with the Separation. The terms of the agreements are through September 2023 plus a one-year automatic renewal, or, if earlier, the date on which all payments or benefits required thereunder have been paid or provided in their entirety; provided, that the term of each agreement will automatically be extended for 18 months following a change in control of the Company if the term would otherwise have expired during such period.

Each of the change in control severance agreements provide that, if the NEO’s employment is terminated by us without cause or if the executive resigns for good reason, in either case, within 60 days prior to or within 18 months following a change in control, the executive will be entitled to receive the following payments:

a lump sum cash payment equal to 100% of the NEO’s annual base salary;
the NEO’s target annual bonus for the calendar year in which termination occurs;
continuation of health benefits for a period of up to 12 months following the date of termination; and
immediate acceleration of vesting of the NEO’s outstanding equity awards (with any performance-based awards vesting at target, except to the extent alternative acceleration is specifically provided for pursuant to the grant documents) as of the later of the date of termination or the date of such change in control.

The severance benefits described above will be reduced by any severance benefits payable under their severance agreements, will be paid upon the NEO’s execution of a general release of claims in favor of the Company, and will be subject to the NEO’s continued compliance with the confidentiality and proprietary rights covenant set forth in the change in control severance agreement.

Defined Terms

For purposes of the Employment Agreement, the severance agreements, and the change in control severance agreements, “cause” means, generally, an executive’s gross negligence or willful misconduct in the performance of his duties, the executive’s willful and habitual neglect of or failure to perform his duties, the executive’s commission of any material act of fraud, dishonesty or financial or accounting impropriety with respect to the Company which results in a personal benefit to the executive, the executive’s failure to cooperate with us in any investigation or formal proceeding initiated by a governmental authority or otherwise approved by the Board or the Audit Committee, the executive’s conviction of or plea of guilty or nolo contendere to felony criminal conduct (other than moving vehicle violations), the executive’s material violation of his confidentiality and proprietary rights agreement or any similar agreement with the Company, or the executive’s material breach of any obligation or duty under the agreement or any written employment or other written policies of the Company.

For purposes of the Employment Agreement, the severance agreements, and the change in control severance agreements, “good reason” means, generally, a material diminution in the executive’s authority, duties or responsibilities, a material diminution in the executive’s base compensation or target bonus opportunity, unless such a reduction is imposed across-the-board to senior management, a material change in the geographic location at which the executive must perform his duties at the Company's request and without the employee's written consent, or any other action that constitutes a material breach of the agreement by the Company.

For purposes of the Employment Agreement and the change in control severance agreements, “change in control” is generally defined as:

a merger or consolidation in which the Company is a party, or the sale of all or substantially all of the Company’s assets, in either case other than a transaction that results in the Company's outstanding voting securities immediately before the transaction continuing to represent a majority of the voting power of the acquiring company’s outstanding voting securities; or
the acquisition by any person of beneficial ownership of the Company’s securities representing more than 50% of the total combined voting power of the Company.

 

 

 

 

 

 

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2022 Equity Incentive Plan

We routinely grant our executive officers stock awards pursuant to our 2022 Equity Incentive Plan. In the event of a change of control, if the successor corporation refuses to assume the awards, or to substitute substantially equivalent awards, the vesting of each outstanding award shall be subject to accelerated vesting such that 100% of the awards will become vested and exercisable or payable, as applicable.

 

Pension AND OTHER Benefits

We do not offer any plans that provide for specified retirement payments and benefits other than a tax-qualified 401(k) plan generally available to all employees. The NEOs participate in other employee benefits that are generally available to all employees, which include health benefits.

 

Nonqualified Deferred Compensation

We do not offer a non-qualified deferred compensation plan to any of our employees.

 

 

 

 

 

 

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Equity Compensation Plan Information

We have two equity compensation plans that have been approved by our stockholders: the 2022 Equity Incentive Plan and the Amended and Restated 2022 Employee Stock Purchase Plan ("ESPP"). The following table sets forth the number and weighted-average exercise price of securities to be issued upon exercise of outstanding options, RSUs and PSUs, and the number of securities remaining available for future issuance under all of our equity compensation plans, at December 31, 2023:

 

Plan Category

 

Number of Securities to
be Issued upon Exercise of
Outstanding Options,
Warrants and Rights
(a)

 

 

Weighted-Average
Exercise Price of
Outstanding Options,
Warrants and Rights
(b)

 

 

Number of Securities
Remaining Available for
Future Issuance under
Equity Compensation Plans
(Excluding Securities
Reflected in Column (a))
(c)

 

Equity compensation
   plans approved by
   security holders

 

7,173,010 (1)

 

 

$

26.87

 

 

7,842,515 (2)

 

Equity compensation
   plans not approved
   by security holders

 

0

 

 

0

 

 

0

 

Totals

 

 

7,173,010

 

 

 

 

 

 

7,842,515

 

 

 

 

(1)
The number under column (a) includes 106,316 shares issuable upon the exercise of outstanding options with a weighted average exercise price of $26.87, and 7,066,694 shares issuable upon the vesting of outstanding RSU awards and PSU awards at target levels. Excludes outstanding purchase rights under the ESPP.

 

(2)
Includes 4,180,392 shares remaining available for future issuance under the 2022 Equity Incentive Plan, and 3,662,123 shares remaining available for future issuance under the ESPP (of which 3,662,123 shares were eligible for purchase during the offering period in effect on December 31, 2023).

 

 

 

 

 

 

 

 

 

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OUR PROPOSALS

Proposal 1—Election of Directors

The Board, upon the recommendation of the Nominating and Corporate Governance Committee, has unanimously nominated the five directors listed below for re-election to the Board at the Annual Meeting:

 

Name

Age

Director since

Principal occupation in last 5 years and previous positions

Darcy Antonellis

61

2022

Director of the Company
Director at Cinemark Holdings, Inc., Bango, plc,
and Vionlabs AB
Operating Advisor at ABS Capital Partners
Former Executive Advisor of Amdocs, Inc.
Former Division President of Amdocs, Inc.
Former CEO of Vubiquity, Inc.

Laura J. Durr

63

2022

Director of the Company
Director of NETGEAR, Inc. and Owlet, Inc.

David C. Habiger

55

2022

Chair of the Company's Board
President and CEO of J.D. Power
Chair of the Board at Reddit, Inc.
Director at Federal Reserve Bank of Chicago

Jon E. Kirchner

56

2022

CEO and Director of the Company
Former CEO of Xperi Holding Corporation
Former CEO of Xperi Corporation
Former CEO of DTS, Inc.

Christopher Seams

61

2022

Director of the Company
Chair of the Board at ONTO Innovation Inc.

 

If elected at the Annual Meeting, each of these nominees will serve until the 2025 annual meeting of stockholders and until a successor has been duly elected and qualified, or, if sooner, until the director’s death, resignation or removal. All the foregoing nominees are currently serving on the Board and have consented to being named in this proxy statement and to serve if elected.

 

Required Vote and Board of Directors' Recommendation

 

Rubric Capital has stated its intention to nominate two candidates for election to the Board at the Annual Meeting and wage a proxy contest in support of such candidates and in opposition to certain of the Board’s candidates. The Company's Bylaws provide that, if the Board determines that the number of nominees exceeds the number of directors to be elected at the meeting (a “contested election”), whether or not the election becomes an uncontested election after such determination, each of the directors to be elected at the Annual Meeting will be elected based on the plurality of the votes cast. As a result of Rubric Capital’s nomination of two candidates to our Board, the Board has determined that the election of directors at the Annual Meeting will be considered a contested election. As a result, the “majority voting” policy previously adopted by the Board will not apply to such contested election, and instead, the directors will be elected on a plurality basis.

 

Under the plurality voting standard, you may vote “FOR” or “WITHHOLD” authority to vote for up to five nominees, and the five nominees receiving the greatest number of votes cast “FOR” their election will be elected, regardless of whether they were nominated by the Board or by Rubric Capital. Votes to “WITHHOLD” with respect to any nominee will not be counted as votes cast and will result in the applicable nominee(s) receiving fewer votes cast “FOR” such nominee(s). A vote to withhold with respect to either of the Rubric Nominees on the white proxy card will revoke any

 

 

 

 

 

XPERI - Proxy Statement

 

 

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BLUE proxy card or BLUE voting instruction form you may have previously submitted. For example, this means that if you have submitted a validly executed proxy on the Company’s BLUE proxy card voting “FOR” the nominees recommended by the Board but later submit a validly executed proxy on Rubric’s white proxy card withholding your votes from the Rubric Nominees, your prior vote in favor of the nominees recommended by the Board will not be counted. We recommend you support the Board’s nominees by voting “FOR” all of the Board’s nominees, which registered stockholders can do by marking “FOR” all of the Board's nominees on the Company's BLUE proxy card.

 

The Corporate Governance Guidelines (the “Guidelines”) include a director resignation policy providing that, in an uncontested election, a director candidate, nominee or appointee who receives more votes "against" election than votes "for" election is expected to tender promptly a written offer of resignation to the Board. The Nominating and Corporate Governance Committee will promptly consider the director's offer of resignation, and recommend to the Board whether to accept or reject it. The Board will act on the Nominating and Corporate Governance Committee's recommendation within 90 days following receipt of the recommendation.

 

The Board of Directors recommends
that the stockholders vote “
FOR” the election of each of:

 

Darcy Antonellis