PROPOSAL ONE
ELECTION OF TWELVE DIRECTORS
In accordance with the requirements of the Corporations By-Laws, the Board recommends
the number of Directors be fixed at twelve and has nominated all of the Nominees named below for election to the Board. All of the Nominees except Ms. Lavie and Dr. Shen presently serve as Directors of the Corporation. Ms. Lavie and Dr. Shen
were initially recommended to serve as Directors by Dr. Vinciarelli.
If elected, each Nominee will serve until the 2023 Annual Meeting of
Stockholders and until his or her respective successor is duly elected and qualified or until his or her death, resignation, or removal. Properly executed Proxy Cards will be voted FOR the Nominees unless otherwise specified. Each Nominee has
consented to stand for election and the Board anticipates each of the Nominees, if elected, will serve as a Director.
However, if any
person nominated by the Board is unable to serve or, for good cause, will not serve, proxies solicited hereby will be voted for the election of another person designated by the Board, if one is nominated.
A plurality of the votes cast for a Nominee by the Stockholders of Common Stock and Class B Common Stock, voting together as a single
class, shall elect such Nominee. Accordingly, abstentions, broker non-votes (if any), and votes withheld from any Nominee will have no effect on this proposal. There is no cumulative voting.
Dr. Vinciarelli beneficially owned, as of March 31, 2022, 9,592,017 shares of Common Stock, 273,394 of which Dr. Vinciarelli
has the right to acquire upon exercise of options to purchase Common Stock within 60 days of March 31, 2022, and 11,023,648 shares of Class B Common Stock, together representing 79.9% of the voting power of the outstanding stock of the
Corporation, sufficient to elect each of the Nominees named below. He has stated an intention to vote in favor of fixing the number of Directors at twelve and in favor of the election of all Nominees.
Information Regarding Nominees and Qualifications
The following sets forth certain information as of April 29, 2022, with respect to the twelve Nominees for election to the Board. The
information presented includes information each Director or Nominee has provided us about age, all positions held, principal occupations and business experience for the past five years, and the names of other publicly-held companies for which the
Director or Nominee currently serves as a director or has served as a director during the past five years. In addition, the information presented below describes each Nominees specific experience, qualifications, and skills that led the Board
as a whole to conclude the Nominee possessed the necessary attributes to serve as a Director. In addition to the experience, qualifications, and skills of each Nominee, the Board as a whole also considers each Nominees reputation for
integrity, honesty, and adherence to high ethical standards.
Information regarding the beneficial ownership of shares of the capital
stock of the Corporation by such persons is set forth in the section of this Proxy Statement entitled Principal and Management Stockholders. See also Certain Relationships and Related Party Transactions. There is no family
relationship among any of the Directors, Nominees and/or executive officers of the Corporation.
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Nominee |
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Age |
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Director Since |
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Background and Qualifications |
Samuel J. Anderson |
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65 |
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2001 |
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Mr. Anderson has been the Chairman of the Board, President, and Chief Executive Officer of IceMOS Technology Corporation, a privately-held developer and manufacturer of specialized semiconductor substrates, as well as high
voltage power switching devices utilizing its proprietary technology, since 2002. Mr. Anderson was the |
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Nominee |
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Background and Qualifications |
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Chairman of the Board, President, and Chief Executive Officer of Great Wall Semiconductor Corporation (GWS), of which the
Corporation was an owner of non-voting convertible preferred stock, from 2002 to September 2015, when GWS was acquired by Intersil Corporation. Previously, Mr. Anderson was Vice President of Corporate
Business Development of ON Semiconductor Corporation, a supplier of semiconductors (from 1999 to 2001) and held various positions within the semiconductor operations of Motorola, Inc., the predecessor organization (from 1984 to 1999).
Mr. Anderson also served, from 2001 to 2011, as non-executive Chairman of the Board of Directors of Advanced Analogic Technologies Inc., a supplier of power management semiconductors, when the company was
acquired by Skyworks Solutions, Inc. Mr. Anderson holds numerous U.S. patents for semiconductor technologies. He received an M.S. in Microelectronics from Arizona State University, an M.S. in Physics from Queens University of Belfast, and
a B.S. in Electronics from the University of Ulster. Mr. Anderson is qualified
to serve on our Board given his acknowledged technical expertise, his understanding of power conversion technologies, and his experience as an executive and director of other companies in the semiconductor and power management
industries. |
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M. Michael Ansour |
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68 |
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2021 |
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Mr. Ansour has served as Managing Partner of March Partners LLC, an event driven investment firm based in New York, NY, since 1992 and as a director of The Hertz Foundation, for which he also serves as chairman of the
Foundations Investment Committee, since 2008. He has also served as a member of the board of Servco Pacific Inc., one of the largest private companies in Hawaii, since 2000. Servco Pacific Inc. is the distributor of Toyota and Lexus
automobiles in Hawaii and owns dealerships in Hawaii and Australia. Previously, Mr. Ansour worked in mergers and acquisitions at The First Boston Corporation, was an associate at Cleary, Gottlieb, Steen & Hamilton, and clerked for the
Honorable John J. Gibbons of the United States Court of Appeals. Mr. Ansour is a Life Member of the Council on Foreign Relations. He received a B.A. in math and physics and a Ph.D. in mathematical physics from the Massachusetts Institute of
Technology, a Masters of Mathematics (Part III of the Maths Tripos (Cosmology)) from Cambridge University, and a law degree from Harvard Law School. |
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Mr. Ansour previously served as a director of the Corporation from June 1993 through June 2007. He is qualified to serve on our Board given his familiarity with |
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the Corporation, his investment and legal expertise, and his considerable experience as an investor in companies in the power management and semiconductor industries. |
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Jason L. Carlson |
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60 |
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2008 |
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Mr. Carlson retired from congatec AG on December 31, 2021. Mr. Carlson was the Chief Executive Officer of congatec AG, a
technology and service provider for embedded computing solutions, from 2015 through 2021. Previously, Mr. Carlson was President and Chief Executive Officer, as well as a member of the Board of Directors, of QD Vision, Inc., a privately-held
developer of nanomaterial-based solutions for advanced display and lighting applications, from 2010 to 2015. From 2010 to 2011, Mr. Carlson also served as a member of the Board of Directors of Advanced Analogic Technologies, Inc., a
publicly-traded developer of power management semiconductors, which was acquired by Skyworks Solutions, Inc. in January 2012. From 2006 until joining QD Vision in 2010, he was President and Chief Executive Officer of Emo Labs, Inc., a privately-held
developer of innovative audio speaker technology. From 2002 to 2005, Mr. Carlson was President and Chief Executive Officer of Semtech Corporation, a publicly-traded vendor of analog and mixed-signal semiconductors, with an emphasis on power
management applications. From 1999 to 2002, he was Vice President & General Manager for the Crystal Product Division and the Consumer Products & Data Acquisition Division of Cirrus Logic, Inc., a
publicly-traded vendor of analog and mixed-signal semiconductors for consumer and industrial applications. Mr. Carlson joined Cirrus Logic in 1999 when that company acquired AudioLogic, Inc., of which he
had been Chief Executive Officer. He began his career as a founder of ReSound Corporation, a pioneering developer of digital hearing aids, which completed its initial public offering in 1993.
Mr. Carlsons qualifications to serve on our Board include his experience as
both a public company executive and an entrepreneur, his experience as a director of other companies, his understanding of the evolution of technical innovation in the semiconductor and power conversion industries, and his financial expertise.
Mr. Carlson has served as Chairman of the Audit Committee of the Board since joining the Board in 2008. |
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Philip D. Davies |
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62 |
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2019 |
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Mr. Davies has served as our Corporate Vice President, Global Sales and Marketing, since February 2011. Prior to joining the Corporation, Mr. Davies was employed by the Solid State Light Engine business unit of OSRAM
Sylvania as Business Creation Team Leader from September 2010 to February 2011. From 2006 to 2010, Mr. Davies held the |
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position of Vice President, Sales and Marketing, with NoblePeak Vision Corporation, a developer of night vision camera cores. From 1995 to
2006, Mr. Davies served in various positions with Analog Devices, Inc., a manufacturer of high-performance analog, mixed signal and digital signal processing integrated circuits, most recently as Director of World Wide Business Development.
From 1987 to 1995, Mr. Davies served in a number of positions with Allegro MicroSystems, Inc., a manufacturer of high-performance power and sensor integrated circuits, most recently as Vice President, Engineering. Mr. Davies received a
B.S.E.E. and a Masters degree in Power Electronics from the University of Glamorgan.
Mr. Davies is qualified to serve on our Board, given his leadership of the Corporations sales and marketing organization, his expertise in
competitive and go-to-market matters, and his experience as an executive of other companies in the semiconductor and power management industries. |
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Andrew T. DAmico |
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61 |
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2020 |
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Mr. DAmico has served in the role of general counsel for intellectual property matters for the Corporation since January 2006.
Prior to his engagement by the Corporation, Mr. DAmico had 18 years of private practice experience in the field of patent law, including patent litigation, patent licensing and patent prosecution, as well as counseling in diverse
technological areas, most recently in the New York office of Fish & Richardson P.C. Mr. DAmico received a law degree from The George Washington Universitys National Law Center and an electrical engineering degree (B.S.E.E.,
Magna Cum Laude) from the N.J. Institute of Technology. Prior to entering law school, Mr. DAmico was a design engineer in the aerospace industry.
Mr. DAmicos qualifications to serve on our Board include his long-standing service as general counsel for intellectual property matters and
his considerable experience in the field of patent law, including patent litigation, patent licensing and patent prosecution, as well as counseling in diverse technological areas. |
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Estia J. Eichten |
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75 |
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1981 |
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Dr. Eichten, an early investor who contributed to the founding of the Corporation, has held various positions with the Fermi National Accelerator Laboratory since 1981, being named a Senior Scientist in 1989. Since October
2019, Dr. Eichten has been a Distinguished Scientist Emeritus. Earlier, he had been an Associate Professor of Physics at Harvard University. Dr. Eichten received both his B.S. and Ph.D. in Physics from
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Massachusetts Institute of Technology. He has been an Alfred P. Sloan Foundation Research Fellow and currently is a Fellow of the American
Physical Society and the American Association for the Advancement of Science. In 2011, Dr. Eichten and three collaborators were awarded the prestigious J. J. Sakurai Prize for Theoretical Particle Physics in acknowledgement of outstanding
achievement in particle physics theory. While a Director of the Corporation, he served as a Director of VLT, Inc., a wholly-owned subsidiary of the Corporation and previous owner of a majority of the Corporations patents, from July 2000 until
August 2020, at which time VLT, Inc. was merged with and into the Corporation.
Dr. Eichtens qualifications to serve on our Board include his extensive knowledge of electronics and power conversion, as well as the deep
understanding of our products and organization acquired in his 41 years of service as a Director. |
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Zmira Lavie |
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56 |
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Nominee |
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Ms. Lavie has been a Partner of M&T Semiconductor, a consulting firm serving professionals and organizations throughout the
semiconductor ecosystem, since January 2020. Previously, Ms. Lavie was with Tower Semiconductor, a manufacturer of integrated circuits using specialty process technologies, from 1988 to 2019. Ms. Lavie was appointed Tower
Semiconductors Senior Vice President and General Manager of Transfer, Optimization and development Process Services (TOPS) in 2018, after serving as Vice President of Process Engineering R&D and General Manager of TOPS since
2007. During her tenure, she grew TOPS from inception to annual revenues of approximately $200 million. Ms. Lavie was a member of the Board of Directors of Tower Partners Semiconductor Co., Ltd. (TPSCo), a semiconductor manufacturing firm,
from 2014 to 2019. Ms. Lavie has over 30 years of experience within the semiconductor industry, including leading diverse business initiatives, R&D complex projects and processes development. She has expertise in thin films metallization
and process integration and holds several patents within this area. Ms. Lavie received a B.S. in chemical engineering from Technion Israel Institute of Technology, Haifa, Israel.
Ms. Lavies qualifications to serve on our Board include her extensive
experience in the semiconductor industry, including leading diverse business initiatives and complex R&D projects, her significant R&D process development expertise, including technology development and transfers management in diverse fields
(CMOS, sensors, MEMS, discrete, etc.) within the semiconductor industry and her |
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experience as a director. Ms. Lavie was recommended as a director Nominee by Dr. Vinciarelli. Ms. Lavies election to our Board would enhance the diversity of our Board. |
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Michael S. McNamara |
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61 |
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2019 |
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Mr. McNamara has served as our Corporate Vice President, General Manager, Operations, since 2015. Mr. McNamara held the positions
of Corporate Vice President, Quality and Technical Operations, from 2011 to 2015, Vice President, Quality and Technical Operation of the Corporations Brick Business Unit from 2008 to 2011, Vice President, Quality of the Corporations
Brick Business Unit from 2006 to 2008, Senior Director of Quality from 2001 to 2008, Manager of Quality, Data and Analysis from 1999 to 2001 and Senior Quality Engineer from 1995 to 1999. Prior to joining the Corporation in 1995, Mr. McNamara
was employed by Alpha Industries Inc., the predecessor to Skyworks Solutions, Inc. Mr. McNamara received a B.S. in Industrial Technology from the University of Lowell (now the University of Massachusetts Lowell).
Mr. McNamara is qualified to serve on our Board given his leadership of the
Corporations manufacturing organization and his important contributions to the operational success of the Corporation. |
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James F. Schmidt |
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61 |
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2021 |
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Mr. Schmidt has been our Corporate Vice President, Chief Financial Officer, Treasurer, and Corporate Secretary since June 2021. Prior to joining the Corporation, Mr. Schmidt served in a variety of leadership roles in
Finance, Engineering, Operations and Sales at Analog Devices, Inc., a manufacturer of high-performance analog, mixed-signal and digital signal processing integrated circuits. From 2017 to 2020,
Mr. Schmidt served Analog Devices, Inc. as Vice President, Global Broad Market & Sales Operations, and from 2013 to 2017, as Senior Director, Global Business Controller. Beginning his career in wafer fabrication in 1984,
Mr. Schmidt held positions of increasing responsibility in Quality Assurance, Operations, Finance, Sales Operations and culminating in his position as Vice-President, Global Broad Market, Channel Sales
and Sales Operations. Mr. Schmidt has a B.S. in Chemical Engineering from the University of Cincinnati and an M.B.A. from the University of North Carolina at Greensboro. |
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Mr. Schmidt is qualified to serve on our Board given his leadership of the Corporations finance organization and his experience as an executive of other companies in the semiconductor
industry. |
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John Shen |
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57 |
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Nominee |
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Dr. Shen has been a Professor and Director at the School of Mechatronic Systems Engineering of Simon Fraser University, in British
Columbia, Canada, since January 2022. Previously, Dr. Shen had been the Grainger Endowed Chair Professor of the Illinois Institute of Technology from January 2013 to December 2021. Earlier, he held various positions, including Senior
Principal Staff Engineer, with Motorola Inc. from 1994 to 1999. He was on the faculty of the University of Central Florida from 2004 to 2012 and the University of Michigan-Dearborn from 1999 to 2004. Dr. Shen served as Chief Scientist and
member of the Board of Directors of the Great Wall Semiconductor Corporation (now a division of Renesas Electronics) from 2002 to 2012, during which time he invented the worlds first sub-mW lateral power MOSFET for ultrahigh density DC/DC power converters. He served the IEEE Power Electronics Society (PELS), a professional society with over 10,000 members, in various capacities including as
Vice President of Products, AdCom member at large, general chair, technical program chair, and/or organizing committee member of over 30 international conferences. He is Fellow of the U.S. National Academy of Inventors and Fellow of IEEE.
Dr. Shen has 32 years of academic, industrial, and entrepreneurial experience in power electronics, power semiconductor devices, renewable energy systems, microgrids, transportation electrification, sensors and actuators. He has published over
300 journal and conference papers and several book chapters, received two Institute of Electrical and Electronics Engineers (IEEE) Transaction Prize Paper awards and holds 18 U.S. patents. Dr. Shen received his B.S. from Tsinghua University,
Beijing, China, and M.S. and doctorate from Rensselaer Polytechnic Institute, Troy, New York, all in electrical engineering.
Dr. Shens qualifications to serve on our Board include his extensive knowledge of electronics and power conversion, his understanding of the
evolution of technical innovation in the semiconductor and power conversion industries and his experience as a director. Dr. Shen was recommended as a director Nominee by Dr. Vinciarelli. Dr. Shens election to our Board would
enhance the diversity of our Board. |
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Claudio Tuozzolo |
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59 |
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2007 |
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Mr. Tuozzolo has been President of Vicor Power Components, an organization within the Corporation, since May 2018. Previously, he had been President of Picor Corporation, a subsidiary of the Corporation prior to its merger with
and into the Corporation in May 2018, since 2003. In addition, he previously had been Director |
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of Integrated Circuit Engineering for the Corporation, from February 2003 to November 2003, and Manager of Integrated Circuit Design, from
2001 to February 2003. Before joining the Corporation in 2001, Mr. Tuozzolo was a Principal Design Engineer for SIPEX Corporation, from 1999 to 2001. Mr. Tuozzolo has authored nine U.S. patents in semiconductor design. He attended the
University of Rome and holds B.S. and M.S. degrees in Electrical Engineering from the University of Rhode Island.
Mr. Tuozzolo is qualified to serve on our Board given his leadership role within the Corporation, his extensive experience in the semiconductor and power
management industries, and his technical expertise regarding our products. |
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Patrizio Vinciarelli |
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75 |
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1981 |
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Dr. Vinciarelli founded the Corporation in 1981 and has been Chairman of the Board, President, and Chief Executive Officer since that
time. Prior to founding the Corporation, from 1977 until 1980, he was a Fellow at the Institute for Advanced Study and an Instructor at Princeton University in Princeton, New Jersey. From 1973 through 1976, he was a Fellow at the European
Organization for Nuclear Research (CERN), in Geneva, Switzerland. Dr. Vinciarelli received his doctorate in Physics from the University of Rome, Italy. Dr. Vinciarelli holds more than 150 patents for power conversion technology.
Dr. Vinciarelli is qualified to serve on our Board given his role as the
Corporations founder, President, and Chief Executive Officer, his role in the development of our patents and proprietary technologies and the design of our products, and his standing as the leading innovator in the power conversion
industry. |
The Board unanimously recommends a vote FOR fixing the number of Directors at twelve and the election of all of the
Nominees.
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CORPORATE GOVERNANCE
Status as a Controlled Company
As of
March 31, 2022, there were 32,208,168 shares of Common Stock and 11,758,218 shares of Class B Common Stock of the Corporation outstanding and entitled to vote. Our Common Stock is listed for trading on the NASDAQ Global Select Market (NASDAQ-GS) and, as such, we are subject to the listing requirements set forth in the Marketplace Rules of the NASDAQ Stock Market LLC (the Nasdaq Rules). The Corporation is a
controlled company in accordance with the governance provisions of the Nasdaq Rules, because Dr. Vinciarelli, Chairman of the Board, President, and Chief Executive Officer, holds more than 50% of the voting power of our outstanding
capital stock. Accordingly, the Corporation relies on certain exemptions from corporate governance requirements available to us under the Nasdaq Rules for a controlled company (Nasdaq Rule 5615(c)(2)).
Dr. Vinciarelli beneficially owned, as of March 31, 2022, 9,592,017 shares of our Common Stock, 273,394 of which
Dr. Vinciarelli has the right to acquire upon exercise of options to purchase Common Stock within 60 days of March 31, 2022, and 11,023,648 shares of our Class B Common Stock. Each share of Class B Common Stock entitles the
holder thereof to 10 votes per share and is exchangeable on a one for one basis into a share of Common Stock, which entitles the holder thereof to one vote per share. As of March 31, 2022, Dr. Vinciarelli beneficially owned 29.9% of our
Common Stock and 93.8% of our Class B Common Stock, which together represent 79.9% of total voting power, giving him effective control of our governance.
Because of the Corporations status as a controlled company, we are not required to comply with listing standards requiring a majority of
independent Directors on our Board, the determination of the compensation of our executive officers solely by independent Directors, and the recommendation of nominees for Director solely by independent Directors. Upon consideration of the
independence criteria under the Nasdaq Rules, the Board has determined that six of the twelve Nominees (four of which are current Directors: Mr. Anderson, Mr. Ansour, Mr. Carlson, and Dr. Eichten and two of which are not yet
Directors: Ms. Lavie and Dr. Shen) are independent, as defined by the Nasdaq Rules.
While we do rely on an exemption, as a
controlled company, from the Nasdaq Rules requirement that our Board be comprised of a majority of independent Directors, the Nasdaq Rules nevertheless require our Board to have an Audit Committee comprised of no fewer than three Directors, all of
whom are independent. The Nasdaq Rules further require that all members of the Audit Committee have the ability to read and understand fundamental financial statements and that at least one member of the Audit Committee possess financial
sophistication (i.e., qualify to be identified as an audit committee financial expert under Item 407(d)(5)(ii) and (iii) of Regulation S-K). Mr. Ansour, Mr. Carlson, and
Dr. Eichten are standing for re-election to the Board and, if re-elected, intend to serve as members of the Audit Committee for the
upcoming one-year term. The Board has determined each of these Directors, as well as Mr. Anderson who served as a member of the Audit Committee during 2021 and until February 2022, is
independent under the Nasdaq Rules, including the Nasdaq Rules applicable to audit committee members. The Board also has determined that Mr. Carlson qualifies as an audit committee financial expert under Item 407(d)(5)(ii) and
(iii) of Regulation S-K.
We rely on an exemption, as a controlled company, from the Nasdaq
Rules requirement that the compensation of our executive officers, including Dr. Vinciarelli, our Chief Executive Officer, be determined solely by independent Directors. However, Mr. Ansour, Mr. Carlson, and Dr. Eichten, all
considered to be independent Directors under the Nasdaq Rules, including the Nasdaq Rules applicable to compensation committee members, are standing for re-election to the Board and, if re-elected, intend to serve as members of the Compensation Committee for the upcoming one-year term. Mr. Anderson, who served as a member of the Compensation
Committee during 2021 and until February 2022, has also been determined by the Board to be independent under the Nasdaq Rules, including the Nasdaq Rules applicable to compensation committee members. The Compensation Committee is solely responsible
for the administration of the Corporations stock option plans, with authority delegated by the Board to approve all recommended stock option awards.
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We also rely on an exemption, as a controlled company, from the Nasdaq Rules requirement
that nominees for Director be selected or recommended solely by independent Directors (or a committee comprised solely of independent Directors). The Board believes it, as a whole, is in the best position to evaluate potential candidates for
nomination as Director and, therefore, the full Board (including Directors who are not independent) performs the function of such a committee. Of the current Directors, Dr. Vinciarelli, Mr. Tuozzolo, Mr. Schmidt, Mr. McNamara,
Mr. Davies and Mr. DAmico are not independent Directors under applicable Nasdaq Rules.
James A. Simms, who served as a
Director until the 2021 Annual Meeting of Stockholders and as our Corporate Vice President, Chief Financial Officer, Treasurer, and Corporate Secretary until his resignation on April 16, 2021, was not an independent Director under applicable
Nasdaq Rules.
Finally, while we rely on the exemptions from certain Nasdaq Rules requirements described above, we are not exempt from the
requirement that independent Directors have regularly scheduled meetings at which only independent Directors are present. At each meeting of the Board, the independent Directors conduct such executive sessions, frequently with our
outside counsel as an invited guest. In addition, at each meeting of the Audit Committee, which is comprised solely of three independent Directors, the independent Directors conduct private meetings with representatives of our independent registered
public accounting firm, KPMG LLP (KPMG).
The Board and Its Committees
The Board held no in-person meetings but acted by written consent in lieu of meetings on
three occasions during 2021. Our Board has two standing committees: the Audit Committee and the Compensation Committee.
Information
regarding the functions performed by the Audit Committee is set forth in the section of this Proxy Statement entitled Report of the Audit Committee. The Audit Committee is governed by a written charter, which was updated and approved by
the Board on February 11, 2022 and is reviewed each year. As stated above, the Board has determined that Mr. Ansour, Mr. Carlson, and Dr. Eichten are independent, and that Mr. Carlson meets the definition of audit
committee financial expert as defined by Item 407(d) of Regulation S-K. Mr. Ansour, Mr. Carlson, and Dr. Eichten have agreed, if
re-elected, to serve on the Audit Committee. The charter of the Audit Committee is posted on the Corporations website, www.vicorpower.com, under the heading About the Company and the
subheading Corporate Governance. The Audit Committee held five meetings during 2021.
The Compensation Committee is
responsible for approving, based on the recommendation of Dr. Vinciarelli, the compensation for the executive officers of the Corporation, approving all grants of stock options by the Corporation and its subsidiaries, and administering the
Corporations stock option plans pursuant to authority delegated to it by the Board. The Compensation Committee is governed by a written charter, which was approved by the Board on October 18, 2013 and is subject to review each year. The
Compensation Committee held five meetings during 2021 and acted by written consent in lieu of meeting on 15 other occasions to approve stock option awards granted during 2021. The Compensation Committee charter is posted on the Corporations
website, www.vicorpower.com, under the heading About the Company and the subheading Corporate Governance.
Each of
the Directors attended 75% or more of the total number of meetings of the Board and meetings of the committees thereof on which such Director serves. Directors are expected to attend each years Annual Meeting in person unless doing so is
impracticable due to unavoidable conflicts. All of the Directors attended the 2021 Annual Meeting of Stockholders.
Board Leadership and Role in Risk
Management
Given the Corporations status as a controlled company and Dr. Vinciarellis leadership of the Corporation
since its founding, he fulfills both the roles of Chairman of the Board and Chief Executive Officer. As Chairman
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of the Board, Dr. Vinciarelli presides over meetings of the Board and, in collaboration with the Corporate Secretary, establishes an agenda for each meeting. The Board does not have a lead
independent Director. As Chief Executive Officer, Dr. Vinciarelli is responsible for setting the strategic direction of the Corporation, the leadership of the organization, and the operational and financial performance of the Corporation.
The Board advises and oversees executive management, which, under Dr. Vinciarellis leadership, is responsible for the day-to-day operations of the Corporations affairs. The Board reviews, assesses, and directs our long-term strategic plans and provides oversight and guidance on all
matters influencing the Corporations well-being.
The Board has an active role, as a whole and also at the committee level, in
overseeing identification, analysis, and management of the Corporations risks. The Board regularly reviews information regarding the Corporations strategy, operations, financial performance and position, and legal and regulatory affairs,
addressing the risks associated with each. To date, Messrs. Davies, McNamara, Schmidt, and Tuozzolo, in their capacities as Corporate Vice President, Global Sales and Marketing, Corporate Vice President, General Manager, Operations, Chief Financial
Officer, and President of Vicor Power Components, respectively, provide first-hand information and insight to the Board regarding enterprise risk. Messrs. Anderson and Carlson, as semiconductor industry executives with extensive, valuable
experience, provide important external perspectives on a range of challenges facing the Corporation, including evolving technology and intensifying competition. Dr. Eichten, an early investor in the Corporation, who has served on the Board for
41 years, provides important perspectives on technology trends, as well as a historical perspective on corporate strategy. Mr. DAmico provides input on patent matters, including risk related to potential patent litigation, given his
considerable experience in the field of patent law, including patent litigation, patent licensing and patent prosecution. Mr. Ansour provides investment and legal expertise and has considerable experience as an investor in companies in the
power management and semiconductor industries. The independent Directors, given their breadth of experience and expertise, as well as their governance responsibilities as the sole members of the Audit Committee and the Compensation Committee,
contribute to an ongoing assessment of the integrity of our financial reporting processes and systems and the appropriateness and effectiveness of our compensation programs.
While the Board is ultimately responsible for the Corporations risk management, the Audit Committee, comprised of independent Directors,
plays a primary and important role in assisting the Board in overseeing such responsibilities, with particular focus, as mandated by the Sarbanes-Oxley Act of 2002, on the integrity and effectiveness of the Corporations financial reporting
processes. The Audit Committee reviews our guidelines and policies on management of enterprise risks, including assessment and management of the Corporations major financial exposures and managements monitoring and control of such
exposures. At each meeting of the Audit Committee, members of management, led by the Corporations Chief Financial Officer, present information addressing issues related to risk identification, analysis, and mitigation. Also at each meeting of
the Audit Committee, the committee members meet privately with representatives of our independent auditors, KPMG.
In addition to the risk
oversight role undertaken by the Audit Committee, the Compensation Committee assists the Board in overseeing the Corporations compensation policies and practices as they relate to the Corporations risk management and risk-taking
incentives. The Compensation Committee has determined that the compensation policies and practices for the Corporations employees are not reasonably likely to have a material adverse effect on the Corporation, as the incentives of the
Corporations compensation programs are believed to be aligned with our strategic, operational, and financial goals and the interest of our Stockholders.
Board Diversity
The table below provides
certain self-identified personal characteristics of our Directors in the format required by Nasdaq Rules 5605(f) and 5606, and each of the categories listed in the table has the meaning as it is used within the rules.
16
Board Diversity Matrix for Vicor Corporation
As of April 29, 2022
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Total Number of Directors: |
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10 |
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Female |
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Male |
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Non-Binary |
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Did Not
Disclose Gender |
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Part I: Gender Identity |
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Directors |
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10 |
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Part II: Demographic Background |
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African American or Black |
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Alaskan Native or Native American |
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Asian |
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Hispanic or Latinx |
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Native Hawaiian or Pacific Islander |
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White |
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10 |
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Two or More Races or Ethnicities |
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LGBTQ+ |
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Did Not Disclose Demographic Background |
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Director Nomination Process
As indicated above, the full Board performs the Director nomination function for the Corporation. The Board does not have a charter governing
the Director nomination process, although it has established Director nomination procedures setting forth the process for identifying and evaluating Director nominees. The Corporations By-Laws require
that our Stockholders approve the number of Directors for the coming year at each Annual Meeting of Stockholders, although the By-Laws also allow the Board to reduce the number of Directors in the event of a
vacancy on the Board and to increase the number of Directors at any time by majority vote of the Directors then serving.
Board
Membership Criteria At a minimum, the Board must be satisfied each candidate for nomination has high personal and professional integrity, has demonstrated exceptional ability and judgment, and is expected, in the judgment of the Board, to
be highly effective, in collaboration with the other nominees to the Board, in collectively serving the interests of the Corporation and our Stockholders. In addition to the minimum qualifications set forth above, the Board seeks to select for
nomination persons possessing relevant industry or technical experience and, in order to maintain compliance with the Nasdaq Rules regarding the independence of Audit Committee members, persons meeting the independence requirements of the Nasdaq
Rules and Securities and Exchange Commission (SEC) regulations.
Identifying and Evaluating Nominees The Board
may solicit recommendations from any sources it deems appropriate. The Board will evaluate all candidates for nomination in the same manner, evaluating the qualifications of any recommended candidate and conducting inquiries it deems appropriate,
without discrimination on the basis of race, religion, national origin, sexual orientation, disability, or any other basis. In identifying and evaluating candidates for nomination, the Board may consider, in addition to the minimum professional
qualifications discussed above and other criteria for Board membership approved by the Board from time to time, all facts and circumstances it deems appropriate or advisable, including, among other things, the breadth of experience, geographic
representation, and backgrounds of other nominees. Based on these considerations, the Board may nominate a candidate it believes will, together with the other nominees, best serve the interests of the Corporation and our Stockholders.
Ms. Lavie and Dr. Shen, Nominees for election at the Annual Meeting, were initially recommended to serve as Directors by
Dr. Vinciarelli. In determining to nominate Ms. Lavie and Dr. Shen and each other Nominee at this Annual Meeting, the Board evaluated each Nominee in accordance with our standard review process for director candidates as described
above.
17
Stockholder Recommendations The Boards policy is to review and consider,
in accordance with the procedures described above, any candidates for nomination recommended by Stockholders entitled to vote for the election of Directors. All Stockholder recommendations of candidates for nomination must be submitted to our
Corporate Secretary, at the address of the Corporation set forth above.
All Stockholder recommendations for Director candidates must
include the following information:
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the name and address of record of the Stockholder; |
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a representation that the Stockholder is a record holder of shares of capital stock of the Corporation entitled
to vote in the election of Directors, or if the Stockholder is not a record holder, evidence of ownership in accordance with Rule 14a-8(b)(2) promulgated under the Securities Exchange Act of 1934, as amended (
the Exchange Act); |
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the name, age, business and residential address, educational background, current principal occupation or
employment, and principal occupation or employment for the preceding five full years of the candidate for nomination; |
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a description of the qualifications and background of the candidate for nomination that addresses the minimum
qualifications and other criteria for Board membership approved by the Board from time to time; |
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a description of all arrangements or understandings between the Stockholder and the candidate for nomination;
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the written consent of the candidate for nomination (a) to be named in the proxy statement relating to the
Corporations next annual meeting and (b) to serve as a Director if elected at such annual meeting; and |
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any other information regarding the candidate for nomination required to be included in a proxy statement filed
pursuant to the rules of the SEC. |
Any stockholder seeking to present a Director nomination at an annual meeting must
comply with the notice procedures in our By-Laws as described herein under Stockholder Proposals.
Communications with the Board
If a
Stockholder wishes to communicate with any Director or the Board as a whole, he or she may do so by addressing such communications to: [Name(s) of Director(s)/Board of Directors of Vicor Corporation], c/o James F. Schmidt, Corporate
Secretary, Vicor Corporation, 25 Frontage Road, Andover, MA 01810. All correspondence should be sent via certified U.S. mail, return receipt requested. All correspondence received will be forwarded promptly to the addressee(s).
Code of Business Conduct
The Corporation
has established and adopted a Code of Business Conduct (which applies to all of our employees, including our executive officers). This Code of Business Conduct is posted on the Corporations website, www.vicorpower.com, under the heading
About the Company and the subheading Corporate Governance.
Hedging
We do not have a policy that specifically prohibits our employees and directors from hedging the economic risk of ownership of our stock.
18
Executive Officers
Executive officers of the Corporation (designated as our corporate officers in accordance with our
By-Laws) are appointed annually by the Board and hold office until the first meeting of the Board following the next annual meeting of Stockholders and until their successors are elected and qualified, or
until their earlier death, resignation, or removal. The following persons are the Corporations executive officers:
Patrizio
Vinciarelli, Ph.D., 75, Chairman of the Board, President, and Chief Executive Officer. Dr. Vinciarellis background and experience is contained in the section of this Proxy Statement entitled Information Regarding Nominees and
Qualifications.
Sean Crilly, 64, Corporate Vice President, Engineering, Power Systems since June 2015. From
December 2012 to May 2015, Mr. Crilly served as Vice President, Engineering, VI Chip Corporation (VI Chip). From 2006 to 2012, Mr. Crilly held the position of Director of Sustaining Engineering, and, from 2000 to
2006, the position of Manager, Test Engineering. Previously, Mr. Crilly held the positions of Project Manager, from 1996 to 2000, and Senior Test Engineer, from 1993 to 1996. Prior to joining the Corporation in 1993, Mr. Crilly was Vice
President of Applications Engineering at Intepro Systems, specializing in power electronics test equipment. Earlier, he was employed in engineering roles at Schaffner and Nixdorf Computer. Mr. Crilly received a B.Eng. in Electronics from the
Limerick Institute of Technology, Limerick, Ireland.
Philip D. Davies, 62, Corporate Vice President, Global Sales and Marketing.
Mr. Daviess background and experience is contained in the section of this Proxy Statement entitled Information Regarding Nominees and Qualifications.
Alvaro Doyle, 54, Corporate Vice President and Chief Information Officer since September 2020. From 2017 to 2020, Mr. Doyle served
as Vice President of Application Development and Business Analytics, also assuming the role of Chief Compliance Officer in 2020. Over the course of his career at Vicor starting in 1998, he has held various leadership roles including Director of
Application Development, Senior Technical Manager, Manager of Manufacturing Systems, Principal Software Engineer, and Senior Software Engineer. Prior to Vicor, Mr. Doyle worked as a software engineer at the UMass Medical Schools
PeopleSoft integration group. Mr. Doyle received a B.S. in Information Systems Management from the University of San Francisco.
Quentin A. Fendelet, 50, Corporate Vice President and Chief Accounting Officer since March 2022. Prior to joining Vicor,
Mr. Fendelet served as a Senior Financial Consultant with Fenway Consulting Group and CBIZ Private Equity Advisory, transaction and transformation solutions partners for middle-market private equity firms, from October 2020 to February 2022.
Prior to his Senior Financial Consulting roles, Mr. Fendelet served as Vice President Controller of Wheelabrator Technologies, Inc., an environmental services company, from November 2015 to March 2020. Prior to Wheelabrator, Mr. Fendelet
served as Vice President of Finance of Courier Corporation, a publicly traded media company, from April 2014 to June 2015. In his previous positions, Mr. Fendelet was responsible for overseeing finance and accounting operations, systems
implementations and guiding strategic financial and business decisions. Mr. Fendelet holds a Bachelor of Science Accounting from Merrimack College and a Master of Business Administration from Bentley University. He is a Certified Public
Accountant and a Chartered Global Management Accountant.
Robert Gendron, 57, Corporate Vice President, Product Management and
Development since September 2021. From 2017 to September 2021, Mr. Gendron served as Corporate Vice President, Product Marketing and Technical Resources. From 2014 to 2017, Mr. Gendron served as Vice President of Marketing and
Business Development for the Picor Corporation (Picor) and VI Chip subsidiaries of the Corporation. From 2011 to 2014, he served as Vice President of Marketing and Business Development for Picor. Prior to joining Picor,
Mr. Gendron held senior marketing and sales roles at various semiconductor companies including Analog Devices, STMicroelectronics, Fairchild Semiconductor, International Rectifier, and Volterra. Mr. Gendron also serves on the Industrial
Advisory Board for the University of New Hampshire Department of
19
Electrical and Computer Engineering. He holds a B.S. in Electrical Engineering from Clarkson University, a M.S. in Electrical Engineering from Northeastern University, and a M.B.A. from the
Whittemore School of Business at the University of New Hampshire, and is a registered Professional Engineer by the Commonwealth of Massachusetts.
Nancy L. Grava, 51, Corporate Vice President, Human Resources, since July 2015. From 2009 to June 2015, Ms. Grava held the
position of Director, Human Resources. From 2002 to 2009, Ms. Grava held the position of Senior Manager, Compensation and Benefits and, from 1999 to 2002, she held the position of Manager, Compensation and Benefits. Prior to that time,
Ms. Grava held various other positions within Human Resources since joining the Corporation in 1993. Ms. Grava received a B.A. from the Massachusetts School of Liberal Arts and an M.B.A. from Bentley University.
Alex Gusinov, 58, Corporate Vice President, Engineering, Power Components since June 2015. From 2006 to 2015, Mr. Gusinov served
as Vice President of Design Engineering for Picor. He joined Picor in 2004 as Director of IC Design. Prior to joining Picor, Mr. Gusinov was employed by SIPEX Corporation from 1996 to 2004, most recently as Vice President of Design
Engineering, Power Management. From 1986 to 1996, he was employed by Analog Devices, Inc., developing integrated circuits for telecom, fiber optics, video, and related applications. Mr. Gusinov received a B.S.E.E. from Boston University
and an M.S. in Engineering Management from Gordon Institute of Tufts University.
Michael S. McNamara, 61, Corporate Vice
President, General Manager, Operations. Mr. McNamaras background and experience is contained in the section of this Proxy Statement entitled Information Regarding Nominees and Qualifications.
James F. Schmidt, 61, Corporate Vice President, Chief Financial Officer, Treasurer, and Corporate Secretary. Mr. Schmidts
background and experience is contained in the section of this Proxy Statement entitled Information Regarding Nominees and Qualifications.
Claudio Tuozzolo, 59, Corporate Vice President and President of Vicor Power Components. Mr. Tuozzolos background and
experience is contained in the section of this Proxy Statement entitled Information Regarding Nominees and Qualifications.
PRINCIPAL AND MANAGEMENT STOCKHOLDERS
The following table sets forth the beneficial ownership of the Corporations Common Stock and Class B Common Stock held by
(1) each person or entity known to the Corporation to be the beneficial owner of more than five percent of the outstanding shares of either class of the Corporations common stock, (2) each Director and Nominee, (3) each named
executive officer of the Corporation (as defined in Item 402(a)(3) of Regulation S-K and named in the Summary Compensation Table for Fiscal 2021 below), and (4) all Directors and executive officers as a
group, in each case based on representations of the Directors, Nominees and executive officers as of March 31, 2022, and a review of corporate records and filings on Schedules 13D and 13G under the Exchange Act. Except as otherwise specified,
the named beneficial owner has sole voting and investment power over the shares set forth opposite such beneficial owners name. The information in the table reflects shares outstanding of each of the two classes of common stock on
March 31, 2022, and does not, except as otherwise indicated below, take into account conversions after such date, if any, of shares of Class B Common Stock into Common Stock, which, if they were to occur, would increase the voting control
of persons who retain shares of Class B Common Stock.
The percentages shown have been determined as of March 31, 2022, in
accordance with Rule 13d-3 under the Exchange Act, and are based on a total of 43,966,386 shares of common stock that were outstanding on such date, of which 32,208,168 were shares of Common Stock and
11,758,218 were shares of Class B Common Stock. Each share of Common Stock entitles the holder thereof to one vote per share, and each share of Class B
20
Common Stock entitles the holder thereof to 10 votes per share. Each share of Class B Common Stock is convertible into one share of Common Stock at any time upon the election of the holder
thereof.
Pursuant to the provisions of our certificate of incorporation, shares of Class B Common Stock are transferrable only under
the limited circumstances set forth therein and must be converted into shares of Common Stock in order to be sold. Such conversion may be effected by the delivery of the certificate(s) representing shares of Class B Common Stock, accompanied by
a written notice of the election by the record holder thereof to convert, to James F. Schmidt, Corporate Secretary, c/o Vicor Corporation, 25 Frontage Road, Andover, MA 01810, or to the then-current transfer
agent for our Common Stock. Any transfer of shares of Class B Common Stock not permitted under the provisions of our certificate of incorporation will result in the automatic conversion of those shares of Class B Common Stock into an equal
number of shares of Common Stock.
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Name of Beneficial Owner (1) |
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Total Number of Shares Beneficially Owned (2) (3) (4) (11) |
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Percent of Common Stock Beneficially Owned |
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Percent of Class B Common Stock Beneficially Owned |
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Percent of Voting Power |
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Patrizio Vinciarelli |
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20,889,059 |
(5) |
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29.9 |
% |
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93.8 |
% |
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79.9 |
% |
Estia J. Eichten |
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956,322 |
(6) |
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0.8 |
% |
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5.9 |
% |
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4.8 |
% |
Sean Crilly |
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69,184 |
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* |
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* |
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* |
Claudio Tuozzolo |
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47,760 |
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* |
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* |
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* |
Philip D. Davies |
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45,540 |
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* |
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* |
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* |
Michael S. McNamara |
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28,324 |
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* |
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* |
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* |
Andrew T. DAmico |
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17,565 |
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* |
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* |
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* |
Alex Gusinov |
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15,734 |
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* |
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* |
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* |
James A. Simms (7) |
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6,866 |
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* |
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* |
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* |
Alvaro Doyle |
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5,853 |
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* |
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* |
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* |
Nancy L. Grava |
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4,091 |
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* |
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* |
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* |
Samuel J. Anderson |
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2,888 |
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* |
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* |
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* |
Robert Gendron |
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2,481 |
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* |
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* |
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* |
Jason L. Carlson |
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1,429 |
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* |
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* |
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* |
Richard J. Nagel, Jr. (8) |
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1,243 |
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* |
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* |
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* |
James F. Schmidt |
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291 |
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* |
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* |
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* |
M. Michael Ansour |
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* |
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* |
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* |
Quentin A. Fendelet |
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* |
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* |
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* |
Zmira Lavie |
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* |
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* |
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* |
John Shen |
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* |
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* |
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* |
All Directors and executive officers as a group (16 persons) |
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22,086,521 |
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31.3 |
% |
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99.6 |
% |
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84.9 |
% |
BlackRock, Inc. (9)
55 East 52nd Street New
York, NY 10055 |
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2,257,308 |
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|
6.9 |
% |
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* |
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|
1.5 |
% |
The Vanguard
Group-23-1945930 (10) 100 Vanguard Blvd. Malvern, PA
19355 |
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2,099,616 |
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6.4 |
% |
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* |
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* |
(1) |
The address for each of the beneficial owners named in the table, but not specified therein, is: c/o Vicor
Corporation, 25 Frontage Road, Andover, MA 01810. |
21
(2) |
Includes shares issuable upon the exercise of options to purchase Common Stock that are exercisable or will
become exercisable within 60 days of March 31, 2022, in the following amounts: |
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Name of Beneficial Owner |
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Shares |
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Patrizio Vinciarelli |
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273,394 |
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Sean Crilly |
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65,950 |
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Philip D. Davies |
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45,540 |
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Michael S. McNamara |
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28,257 |
|
Estia J. Eichten |
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18,148 |
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Andrew T. DAmico |
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17,565 |
|
Alvaro Doyle |
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5,786 |
|
Nancy L. Grava |
|
|
4,091 |
|
Samuel J. Anderson |
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|
2,888 |
|
Claudio Tuozzolo |
|
|
2,803 |
|
Robert Gendron |
|
|
2,481 |
|
Jason L. Carlson |
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|
1,429 |
|
Richard J. Nagel, Jr. |
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|
1,243 |
|
Alex Gusinov |
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|
444 |
|
(3) |
Includes shares of Common Stock purchased through the Vicor Corporation 2017 Employee Stock Purchase Plan.
|
(4) |
The calculation of the total number of shares beneficially owned includes 11,023,648 shares of Class B
Common Stock owned by Dr. Vinciarelli and 690,700 shares of Class B Common Stock owned by Dr. Eichten. No other executive officer, Director, Nominee or 5.0% stockholder owns shares of Class B Common Stock. |
(5) |
Includes 171,125 shares of Common Stock held by the Patrizio Vinciarelli Irrevocable Trust U/A, of which
Dr. Vinciarelli is a trustee. |
(6) |
Includes 12,145 shares of Common Stock held by the Belle S. Feinberg Memorial Trust, of which Dr. Eichten
is a trustee. |
(7) |
Mr. Simms resigned from his positions as Corporate Vice President, Chief Financial Officer, Treasurer, and
Corporate Secretary on April 16, 2021. |
(8) |
Mr. Nagel retired from his positions as Corporate Vice President and Chief Accounting Officer on March 11,
2022. |
(9) |
Information reported is based upon a Schedule 13G/A filed with the SEC on February 1, 2022, reflecting
holdings as of December 31, 2021. All shares are held by BlackRock, Inc., which holds sole voting power with regard to 2,236,724 shares and sole dispositive power with regard to 2,257,308 shares. |
(10) |
Information reported is based upon a Schedule 13G/A filed with the SEC on February 10, 2022, reflecting
holdings as of December 31, 2021. All shares are held by The Vanguard Group -23-1945930 which holds sole voting power with regard to 0 shares, sole dispositive
power with regard to 2,040,136 shares, shared voting power with regard to 40,087 shares and shared dispositive power with regard to 59,480 shares. |
(11) |
Dr. Vinciarelli, Mr. Crilly, Mr. McNamara, Ms. Grava, and Mr. Doyle held,
respectively, 5,500,000, 530,000, 125,000, 30,000, and 10,000 options to purchase VI Chip capital stock, which, in connection with the merger of VI Chip with and into the Corporation on June 28, 2019 (the VI Chip Merger), were
exchanged, respectively, for 779,885, 75,151, 17,724, 4,253, and 1,417 options to purchase Common Stock of the Corporation. The options to purchase Common Stock of the Corporation are reflected in this table. See below under the heading
Compensation Discussion and AnalysisStock Option Awards for more information regarding the VI Chip Merger and the conversion of the VI Chip options. |
|
Mr. Tuozzolo and Mr. Gusinov held 163,198 and 2,968 shares of Picor capital stock, respectively,
which were exchanged for 8,299 and 150 shares of Common Stock of the Corporation, respectively, in connection with the merger of Picor with and into the Corporation (the Picor Merger). Mr. Tuozzolo, Mr. Gusinov, and
Mr. Gendron held, respectively, 2,622,584, 1,020,000, and 450,000 options to purchase Picor capital stock, which, in connection with the Picor Merger, were exchanged, respectively, for 133,369, 51,869, and 22,885 options to purchase Common
Stock of the Corporation. These shares of Common Stock of the Corporation and options to purchase Common Stock of the Corporation are reflected in this table. |
22
COMPENSATION DISCUSSION AND ANALYSIS
This section provides information about our overall compensation program elements and objectives, with a particular focus on the compensation
decisions made during 2021 with respect to our Named Executive Officers (as defined in Item 402(a)(3) of Regulation S-K), which were the following individuals for 2021: Dr. Vinciarelli, our
President and Chief Executive Officer; Mr. Schmidt, our Chief Financial Officer; Mr. Simms, our former Chief Financial Officer who served until his resignation on April 16, 2021; Mr. Nagel, who served as our Interim Principal
Financial Officer from April 16, 2021 until Mr. Schmidts appointment was effective in June 2021, as well as our Chief Accounting Officer until his retirement in March 2022; and Messrs. Davies, McNamara and Tuozzolo, each of whom is a
Corporate Vice President of the Corporation.
Philosophy
The primary objective of the Corporations compensation programs is to attract, motivate, and retain highly qualified and productive
employees using a combination of cash and equity based rewards intended to motivate and reward superior performance. Salaries and, in appropriate circumstances, cash bonuses encourage effective performance relative to current plans and objectives,
while stock options may be utilized to attract new employees, reward outstanding performers, promote longer-term focus, and more closely align the interests of employees with those of Stockholders.
Stockholder Advisory Vote on Executive Compensation
At the 2017 annual meeting of Stockholders, Stockholders cast an advisory vote on the frequency of future advisory votes on the compensation of
our Named Executive Officers (Say on Pay votes). The option receiving the highest number of votes was a frequency of every three years, and, in accordance with the outcome of that advisory vote, our Board determined to hold a Say on Pay
advisory vote every three years. The Corporations most recent Say on Pay vote occurred at the Corporations 2020 annual meeting of Stockholders, and Stockholders approved, on an advisory basis, the compensation of our Named Executive
Officers as disclosed in our proxy statement for that annual meeting. The Compensation Committee believes this affirmed our Stockholders support of the Corporations approach to executive compensation and, therefore, did not change its
approach during 2021. The next advisory vote on the frequency of future Say on Pay votes will occur at the 2023 annual meeting of Stockholders.
Overview of Executive Compensation
Dr. Vinciarelli, with input from Ms. Grava, our Corporate Vice President, Human Resources, makes periodic recommendations to the
Compensation Committee with respect to the compensation of executives including the Named Executive Officers (other than himself) and other employees in leadership positions.
Potential elements of compensation for our executive officers include: a base salary, cash bonuses, stock option awards through the
Corporations stock option plans, the option to purchase Common Stock of the Corporation through the 2017 Employee Stock Purchase Plan (ESPP), subsidized participation in group health, disability, and life insurance, cash
contributions to a 401(k) tax-qualified retirement saving plan sponsored by the Corporation and certain perquisites. All employees, including our Named Executive Officers, are employees-at-will and, as such, do not have employment contracts with the Corporation.
Each
component of compensation is described in the following table:
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|
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Component |
|
Characteristics/Frequency |
|
Objective |
Base Salary |
|
Salaries are established for a new hire based on the qualifications of the individual, the talents and skills sought for the position, and the comparable market level of salaries paid by position and/or geography. Salaries are |
|
We seek to attract and retain the best available individual talent. We structure salaries to provide a fixed amount of annual compensation reflecting (a) the individuals performance, and (b) the performance of
the |
23
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|
|
Component |
|
Characteristics/Frequency |
|
Objective |
|
|
reviewed and revised annually, based on the performance of the individual. Each year a target percentage for an organization-wide merit increase in salaries, based on the Corporations performance and an assessment of increases
in the cost of living, is presented to Dr. Vinciarelli for approval. |
|
Corporation and the business unit within which the individual is employed. |
|
|
|
Cash Bonus
(Contingent) |
|
Certain senior sales and marketing personnel, including Mr. Davies, are eligible to participate in sales incentive programs, with cash bonuses paid based on achievement of various objectives. These programs generally are
structured annually, with payments made quarterly. The Corporation does not have a policy regarding or a program involving discretionary cash bonuses for personnel outside of the sales or marketing functions. The details of Mr. Davies
cash bonus for 2021 can be found in footnote 3 to the Summary Compensation Table. |
|
We seek to provide short-term, tangible motivation for certain senior sales and marketing personnel to meet objectives, whether these objectives involve dollar volumes, market penetration, or other defined quantitative
objectives. |
|
|
|
Stock Option
Awards
(Contingent) |
|
We generally award non-qualified stock options to a new employee upon hiring. From time to time, existing employees will be rewarded for superior performance through the award of stock
options. We also may make stock option incentive grants in conjunction with merit increases for eligible employees. |
|
We seek to motivate and retain recipients of stock option awards to contribute to achieving longer-term performance goals, potentially contributing to an increase in the value of the shares underlying the stock option awards,
thereby aligning economic interests of recipients with Stockholders. |
|
|
|
ESPP Participation
(Elective) |
|
Under the ESPP, established in 2017, eligible employees who elect to participate on the first day of an offering period of approximately six months are able to purchase shares of the Corporations Common Stock at the end of
that offering period at a purchase price equal to 85% of the lesser of the fair market value of a share of Common Stock either on the first trading day or last trading day of that offering period. The purchase of shares is funded by means of
periodic payroll deductions. |
|
We seek to motivate and retain U.S. employees through their purchase, using after tax funds, of shares of the Corporations Common Stock at an advantageous price. Under the provisions of the ESPP, shares purchased and held past
the first anniversary of the purchase are eligible for long-term capital gains tax treatment when sold. |
|
|
|
Fringe
Benefits |
|
We offer a package of fringe benefits to all employees, including all Named Executive Officers, and their dependents, portions of which are paid for, in whole or in part, by the employee. The benefits we offer include: life, health,
dental, vision, and long-term care insurance; disability and workers compensation insurance; healthcare |
|
We seek to provide a competitive package of benefits addressing the health and welfare needs of employees, reflecting our overall compensation philosophy of attracting and retaining talented
individuals. |
24
|
|
|
|
|
Component |
|
Characteristics/Frequency |
|
Objective |
|
|
reimbursement accounts; tuition reimbursement; and paid time off. |
|
|
|
|
|
Retirement Benefits |
|
The Corporation sponsors a 401(k) tax-qualified retirement saving plan that is open to all employees. In any plan year, the Corporation will make a matching contribution equal to 50% of the
first 6% of the participants compensation that has been contributed to the plan, up to a maximum matching contribution of $6,525. Participants received up to $6,525 in matching funds in 2021 from the Corporation. All Named Executive Officers,
with the exception of Dr. Vinciarelli, participated in the 401(k) plan and received matching contributions. The Corporation does not provide any defined benefit plans, nonqualified deferred compensation plans, retirement health insurance, or
other post-employment benefits. |
|
We seek to provide retirement benefits that are competitive with other companies of our size and industry focus, reflecting our overall compensation philosophy of attracting and retaining talented individuals. |
|
|
|
Perquisites |
|
Executive officers, including all Named Executive Officers, are eligible to participate in supplemental health, dental, and vision insurance, and receive a fixed cash automobile allowance, as well as reimbursement for fuel expenses.
Amounts associated with automobile allowances and fuel expense reimbursements are considered taxable current income by the recipient. |
|
The limited perquisites we currently offer are intended to provide benefits to our executives comparable to those received by executives of other companies of our size and industry focus, or, as is the case with automobile
allowances and fuel reimbursement, to support business purposes. |
Stock Option Awards
Discretionary awards of stock options have been a component of our compensation for executives and employees that Dr. Vinciarelli
considers to be important contributors to the Corporations success. The Compensation Committee approves all stock option grants. We generally award a limited number of non-qualified stock options to a
new employee upon hiring. From time to time, existing employees may also be rewarded for superior performance through the award of additional stock options. Stock options may also be granted to eligible employees in conjunction with annual merit
increases.
The Corporation does not have a policy regarding the composition or frequency of discretionary awards of stock options or
other forms of equity-based compensation. In 2021, Mr. Schmidt, Mr. Davies, Mr. McNamara and Mr. Tuozzolo each received an award of stock options due to their service on the Board, as described below under the section entitled
Directors Compensation For Fiscal 2021. Mr. Schmidt also received an award in connection with his appointment as the Corporations Corporate Vice President, Chief Financial Officer, Treasurer and Corporate Secretary. In
addition, Mr. Davies, Mr. Nagel, Mr. McNamara and Mr. Tuozzolo each received an award of stock options as part of an annual merit increase.
During 2021, as was also the case in 2020 and 2019, options for the purchase of the Corporations Common Stock were awarded under the
Vicor Corporation Amended and Restated 2000 Stock Option and Incentive Plan, as amended and restated (the Vicor 2000 Plan). The exercise price of stock options for the purchase of the Corporations Common Stock is set at the closing
price of a share of the Corporations Common Stock on the
25
NASDAQ-GS on the effective date of the grant. Generally, these option grants vest evenly each quarter over five years and have a 10-year term. In certain circumstances, options have been awarded with vesting provisions based on the achievement of specific financial performance targets, as defined in the award agreement associated with those
options.
Prior to the VI Chip Merger in June 2019, options for the purchase of VI Chip common stock were awarded under the VI Chip
Corporation Amended and Restated 2007 Stock Option and Incentive Plan (the 2007 VI Chip Plan). In connection with the VI Chip Merger, the Corporation assumed the 2007 VI Chip Plan and any outstanding stock options thereunder. All
outstanding options under the 2007 VI Chip Plan have been converted into options for the purchase of Common Stock of the Corporation. The 2007 VI Chip Plan, which was previously approved by the Corporations stockholders at the 2017 Annual
Meeting of Stockholders, was amended and restated on June 28, 2019 in connection with the VI Chip Merger. The assumed 2007 VI Chip Plan, as amended and restated, is referred to herein as the Assumed VI Chip Plan.
Prior to 2018, options for the purchase of Picor common stock were awarded under the Amended and Restated Picor Corporation 2001 Stock Option
and Incentive Plan (the 2001 Picor Plan). In connection with the merger of Picor with and into the Corporation in May 2018 (the Picor Merger), the Corporation assumed the 2001 Picor Plan, as well as any outstanding stock
option awards under the 2001 Picor Plan. All outstanding options under the 2001 Picor Plan were converted into options for the purchase of Common Stock of the Corporation. The 2001 Picor Plan, which was previously approved by the Corporations
stockholders at the 2017 Annual Meeting of Stockholders, was amended and restated on May 30, 2018 in connection with the Picor Merger. The assumed 2001 Picor Plan, as amended and restated, is referred to herein as the Assumed Picor
Plan.
SUMMARY COMPENSATION TABLE FOR FISCAL 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Named Executive Officer (1) |
|
Year |
|
|
Salary (2) |
|
|
Bonus (3) |
|
|
Option Awards (4) (5) |
|
|
All Other Compensation (6) |
|
|
Total |
|
Patrizio Vinciarelli |
|
|
2021 |
|
|
$ |
408,309 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
55,903 |
|
|
$ |
464,212 |
|
Chairman of the Board, President, and Chief Executive Officer |
|
|
2020 |
|
|
|
123,077 |
|
|
|
|
|
|
|
|
|
|
|
20,418 |
|
|
|
143,495 |
|
|
|
2019 |
|
|
|
396,607 |
|
|
|
|
|
|
|
|
|
|
|
54,357 |
|
|
|
450,964 |
|
|
|
|
|
|
|
|
James F. Schmidt |
|
|
2021 |
|
|
|
219,154 |
|
|
|
|
|
|
|
1,097,038 |
|
|
|
21,570 |
|
|
|
1,337,762 |
|
Corporate Vice President, Chief Financial Officer, Treasurer, and Corporate Secretary (7) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James A. Simms |
|
|
2021 |
|
|
|
123,869 |
|
|
|
|
|
|
|
|
|
|
|
14,330 |
|
|
|
138,199 |
|
Former Corporate Vice President, Chief Financial Officer, Treasurer, and Corporate Secretary (7) |
|
|
2020 |
|
|
|
387,692 |
|
|
|
|
|
|
|
22,466 |
|
|
|
42,339 |
|
|
|
452,497 |
|
|
|
2019 |
|
|
|
369,587 |
|
|
|
|
|
|
|
23,280 |
|
|
|
42,494 |
|
|
|
435,361 |
|
|
|
|
|
|
|
|
Richard J. Nagel, Jr. |
|
|
2021 |
|
|
|
289,887 |
|
|
|
|
|
|
|
47,427 |
|
|
|
36,752 |
|
|
|
374,066 |
|
Former Corporate Vice President, Chief Accounting Officer, Interim Principal Financial Officer and Interim Corporate
Secretary (7) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Philip D. Davies |
|
|
2021 |
|
|
|
372,058 |
|
|
|
60,413 |
|
|
|
176,807 |
|
|
|
41,237 |
|
|
|
650,515 |
|
Corporate Vice President, Global Sales and Marketing |
|
|
2020 |
|
|
|
373,441 |
|
|
|
|
|
|
|
111,777 |
|
|
|
40,542 |
|
|
|
525,760 |
|
|
|
2019 |
|
|
|
354,249 |
|
|
|
103,237 |
|
|
|
167,665 |
|
|
|
38,425 |
|
|
|
663,576 |
|
26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Named Executive Officer (1) |
|
Year |
|
|
Salary (2) |
|
|
Bonus (3) |
|
|
Option Awards (4) (5) |
|
|
All Other Compensation (6) |
|
|
Total |
|
Michael S. McNamara |
|
|
2021 |
|
|
|
363,114 |
|
|
|
|
|
|
|
154,401 |
|
|
|
37,486 |
|
|
|
555,001 |
|
Corporate Vice President, and General Manager, Operations |
|
|
2020 |
|
|
|
340,230 |
|
|
|
|
|
|
|
413,762 |
|
|
|
31,249 |
|
|
|
785,241 |
|
|
|
2019 |
|
|
|
322,861 |
|
|
|
|
|
|
|
23,280 |
|
|
|
30,541 |
|
|
|
376,682 |
|
|
|
|
|
|
|
|
Claudio Tuozzolo |
|
|
2021 |
|
|
|
407,533 |
|
|
|
|
|
|
|
169,970 |
|
|
|
41,808 |
|
|
|
619,311 |
|
Corporate Vice President and President of Vicor Power Components |
|
|
2020 |
|
|
|
411,550 |
|
|
|
|
|
|
|
101,030 |
|
|
|
39,027 |
|
|
|
551,607 |
|
|
|
2019 |
|
|
|
390,096 |
|
|
|
|
|
|
|
23,280 |
|
|
|
37,658 |
|
|
|
451,034 |
|
(1) |
As defined by Item 402 of Regulation S-K, our Named Executive
Officers for 2021 are: (a) our principal executive officer; (b) all individuals who served as our principal financial officer at any point during the year; and (c) our three most highly compensated executives (other than the
principal executive officer and principal financial officer) serving as executives at the end of the last completed fiscal year. |
(2) |
The amounts shown reflect the actual salary amounts paid to the Named Executive Officers in each respective
year. In 2020, Dr. Vinciarelli only collected a salary through early April 2020 as a cost cutting measure due to the onset of the COVID-19 pandemic. |
(3) |
The amounts shown reflect bonus amounts paid to the Named Executive Officers in each respective year.
Mr. Davies received a cash bonus in 2021 based on the Corporations revenue growth and profitability during 2020. |
(4) |
The amounts shown reflect the aggregate grant date fair value of stock option awards in each year presented.
These values have been determined under the principles used to calculate the grant date fair value of equity awards for purposes of the Corporations financial statements. These amounts do not correspond to the actual value that may be
recognized by each Named Executive Officer. Refer to Note 11, Stock-Based Compensation and Employee Benefit Plans, in the Notes to Consolidated Financial Statements included in our Annual Report on Form
10-K for the year ended December 31, 2021, filed on March 1, 2022, for the relevant assumptions used to determine the valuation of the Corporations option awards. |
(5) |
Of the option award values for Mr. Schmidt, Mr. Davies, Mr. McNamara, and Mr. Tuozzolo in
2021, each included $45,085 associated with the annual award to Directors of non-qualified stock options as compensation for service on the Corporations Board of Directors. Mr. Schmidt also received
an award in connection with his appointment as the Corporations Corporate Vice President, Chief Financial Officer, Treasurer, and Corporate Secretary. In addition, Mr. Nagel, Mr. Davies, Mr. McNamara, and Mr. Tuozzolo each
received an award of stock options as part of an annual merit increase in 2021. |
(6) |
All Other Compensation amounts include car allowance, fuel allowance, supplemental health, dental
and vision insurance, the taxable portion of life insurance benefits, and the Corporations matching 401(k) plan contribution for each Named Executive Officer shown. Dr. Vinciarellis car allowance is $10,800. |
(7) |
Mr. Schmidt joined the Corporation on June 1, 2021 as Corporate Vice President, Chief Financial
Officer, Treasurer and Corporate Secretary. From 2008 to April 2021, Mr. Simms held the positions of Corporate Vice President, Chief Financial Officer, Treasurer and Corporate Secretary. From April 2021 to June 2021, Mr. Nagel, in addition
to serving as Corporate Vice President and Chief Accounting Officer, assumed the roles of Interim Principal Financial Officer and Interim Corporate Secretary. Mr. Nagel retired from his positions as Corporate Vice President and Chief Accounting
Officer on March 11, 2022. |
EQUITY COMPENSATION PLAN INFORMATION
Stock Option Plan Information
The
following table sets forth certain aggregated information for the Corporation as of December 31, 2021 regarding equity securities underlying stock option awards made under the Vicor 2000 Plan, the Assumed Picor Plan, and the Assumed VI Chip
Plan. All equity compensation plans of the Corporation have been approved by Stockholders.
27
As shares of the Corporations Common Stock are issuable upon the exercise of options
granted under the Vicor 2000 Plan, the Assumed Picor Plan, and the Assumed VI Chip Plan, we refer to the Vicor 2000 Plan, the Assumed Picor Plan, and the Assumed VI Chip Plan collectively as the Vicor Plans in the tables below.
The first column of the first row of the table below sets forth the total number of shares of stock to be issued upon exercise of outstanding
stock options awarded under the Vicor Plans, which, as the sum of all vested and unvested stock option awards, represents the maximum number of shares potentially issued pursuant to the Vicor Plans, if all such awards are exercised. The second
column of the first row of the table below sets forth the weighted average exercise price of outstanding stock options awarded under the Vicor Plans. This figure represents the weighted average exercise price for all outstanding stock option awards
under the Vicor Plans (calculated as the quotient of (A) divided by (B), with (A) representing the cumulative sum of (C) the product of (D) each outstanding awards number of underlying shares (reflecting the one-to-one relationship in each of the Vicor Plans between a stock option and an underlying share of stock) and (E) the exercise price at which that individual option may
be exercised to purchase a share of stock pursuant to the applicable Vicor Plan, with (B) representing the total number of shares to be issued upon exercise of outstanding stock options shown in the first column for the Vicor Plans). Such
exercise prices were established at the time of each stock option award and, accordingly, do not represent the value, as of December 31, 2021 or as of any time subsequent to the time of each stock option award. The third column of the first row
of the table below sets forth the number of shares remaining available for issuance under the Vicor Plans. This figure represents (X) the difference between (Y) the total number of shares authorized for issuance under the Vicor Plans and
the respective number of shares to be issued upon exercise of outstanding stock options shown in the first column.
Stock options issued
under the Vicor 2000 Plan, the Assumed Picor Plan, and the Assumed VI Chip Plan carry a change in control provision that automatically accelerates vesting and makes unvested options fully exercisable upon a change of control, as defined in the
applicable plan.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Shares to be Issued Upon Exercise of Outstanding Stock Options |
|
|
Weighted-Average Exercise Price of Outstanding Stock Options |
|
|
Number of Shares Remaining Available for Issuance under Stock Option Plans |
|
Equity Compensation Plans Approved by Security Holders (1) |
|
|
1,677,661 |
|
|
$ |
33.48 |
|
|
|
6,155,718 |
|
Equity Compensation Plans Not Approved by Security Holders |
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Includes the Vicor Plans, which as described above, includes the Vicor 2000 Plan, the Assumed Picor Plan and
the Assumed VI Chip Plan. Following the VI Chip Merger, option awards originally granted under the 2007 VI Chip Plan are exercisable for shares of Common Stock of the Corporation under the Assumed VI Chip Plan. 810,815 shares of the
Corporations Common Stock are available for issuance under the Assumed VI Chip Plan solely upon the exercise of the options assumed by the Corporation in connection with the VI Chip Merger. No additional awards or any other types of awards may
be granted under the Assumed VI Chip Plan. Following the Picor Merger, option awards originally granted under the 2001 Picor Plan are exercisable for shares of Common Stock of the Corporation under the Assumed Picor Plan. 14,109 shares of the
Corporations Common Stock are available for issuance under the Assumed Picor Plan solely upon the exercise of the options assumed by the Corporation in connection with the Picor Merger. No additional awards or any other types of awards may be
granted under the Assumed Picor Plan. |
28
GRANTS OF PLAN-BASED AWARDS FOR FISCAL 2021
The following table presents the Corporations grants of plan-based awards to Named Executive Officers during 2021. All such
grants were made under the Vicor 2000 Plan. No grants were made during 2021 to Dr. Vinciarelli or Mr. Simms.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Named Executive Officer |
|
Grant Date (1) |
|
|
Underlying Option Award |
|
|
Exercise Price per Share of Option Award |
|
|
Grant Date Fair Value of Option Award (2) |
|
James F. Schmidt |
|
|
6/1/2021 |
|
|
|
25,000 |
|
|
$ |
93.33 |
|
|
$ |
1,051,953 |
|
|
|
|
6/25/2021 |
|
|
|
1,000 |
|
|
$ |
100.00 |
|
|
$ |
45,085 |
|
|
|
|
|
|
Richard J. Nagel, Jr. |
|
|
5/12/2021 |
|
|
|
1,645 |
|
|
$ |
75.43 |
|
|
$ |
47,427 |
|
|
|
|
|
|
Philip D. Davies |
|
|
5/12/2021 |
|
|
|
4,569 |
|
|
$ |
75.43 |
|
|
$ |
131,722 |
|
|
|
|
6/25/2021 |
|
|
|
1,000 |
|
|
$ |
100.00 |
|
|
$ |
45,085 |
|
|
|
|
|
|
Michael S. McNamara |
|
|
5/12/2021 |
|
|
|
3,792 |
|
|
$ |
75.43 |
|
|
$ |
109,316 |
|
|
|
|
6/25/2021 |
|
|
|
1,000 |
|
|
$ |
100.00 |
|
|
$ |
45,085 |
|
|
|
|
|
|
Claudio Tuozzolo |
|
|
5/12/2021 |
|
|
|
4,332 |
|
|
$ |
75.43 |
|
|
$ |
124,885 |
|
|
|
|
6/25/2021 |
|
|
|
1,000 |
|
|
$ |
100.00 |
|
|
$ |
45,085 |
|
(1) |
The awards granted on June 25, 2021 were associated with the annual award to Directors, excluding
Dr. Vinciarelli, of non-qualified stock options as compensation for service on the Corporations Board of Directors. |
(2) |
Refer to Note 11, Stock-Based Compensation and Employee Benefit Plans, in the Notes to Consolidated
Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2021, filed on March 1, 2022, for the relevant assumptions used to determine the valuation of option
awards. For the options granted on June 25, 2021, the formula used to calculate the number of stock options annually awarded to Directors, excluding Dr. Vinciarelli, is $100,000 divided by the closing price of a share of Common Stock as
reported on the NASDAQ-GS on the day of the 2021 Annual Meeting of Stockholders. Accordingly, on June 25, 2021, the Named Executive Officers who also served as Directors were awarded non-qualified stock options to purchase up to 1,000 shares of Common Stock at an exercise price of $100.00 per share. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 2021
The following tables present the outstanding equity awards at December 31, 2021 held by our Named Executive Officers under the Vicor
Plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Named Executive Officer |
|
Number of Shares Underlying Unexercised Options Exercisable (1) (3) |
|
|
Number of Shares Underlying Unexercised Options Unexercisable (1) (2) (3) |
|
|
Option Exercise Price per Share ($) |
|
|
Option Expiration Date |
|
Patrizio Vinciarelli |
|
|
273,394 |
|
|
|
155,977 |
|
|
|
6.77 |
|
|
|
7/21/2024 |
|
|
|
|
|
|
James F. Schmidt |
|
|
|
|
|
|
25,000 |
|
|
|
93.33 |
|
|
|
6/1/2031 |
|
|
|
|
|
|
|
|
1,000 |
|
|
|
100.00 |
|
|
|
6/25/2031 |
|
|
|
|
|
|
Richard J. Nagel, Jr |
|
|
1,951 |
|
|
|
708 |
|
|
|
6.77 |
|
|
|
7/21/2024 |
|
|
|
|
|
|
|
|
1,645 |
|
|
|
75.43 |
|
|
|
5/12/2028 |
|
|
|
|
|
|
|
|
1,165 |
|
|
|
69.04 |
|
|
|
6/24/2030 |
|
29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Named Executive Officer |
|
Number of Shares Underlying Unexercised Options Exercisable (1) (3) |
|
|
Number of Shares Underlying Unexercised Options Unexercisable (1) (2) (3) |
|
|
Option Exercise Price per Share ($) |
|
|
Option Expiration Date |
|
Philip D. Davies |
|
|
39,257 |
|
|
|
|
|
|
|
11.42 |
|
|
|
10/23/2024 |
|
|
|
|
|
|
|
|
4,569 |
|
|
|
75.43 |
|
|
|
5/12/2028 |
|
|
|
|
645 |
|
|
|
966 |
|
|
|
31.05 |
|
|
|
6/28/2029 |
|
|
|
|
4,000 |
|
|
|
6,000 |
|
|
|
30.98 |
|
|
|
9/6/2029 |
|
|
|
|
577 |
|
|
|
2,305 |
|
|
|
69.04 |
|
|
|
6/24/2030 |
|
|
|
|
147 |
|
|
|
584 |
|
|
|
68.48 |
|
|
|
6/26/2030 |
|
|
|
|
|
|
|
|
1,000 |
|
|
|
100.00 |
|
|
|
6/25/2031 |
|
|
|
|
|
|
Michael S. McNamara |
|
|
5,000 |
|
|
|
|
|
|
|
6.29 |
|
|
|
6/17/2023 |
|
|
|
|
5,000 |
|
|
|
|
|
|
|
8.38 |
|
|
|
6/17/2023 |
|
|
|
|
14,180 |
|
|
|
3,544 |
|
|
|
6.77 |
|
|
|
7/21/2024 |
|
|
|
|
|
|
|
|
3,792 |
|
|
|
75.43 |
|
|
|
5/12/2028 |
|
|
|
|
645 |
|
|
|
966 |
|
|
|
31.05 |
|
|
|
6/28/2029 |
|
|
|
|
526 |
|
|
|
2,100 |
|
|
|
69.04 |
|
|
|
6/24/2030 |
|
|
|
|
2,000 |
|
|
|
8,000 |
|
|
|
69.04 |
|
|
|
6/24/2030 |
|
|
|
|
147 |
|
|
|
584 |
|
|
|
68.48 |
|
|
|
6/26/2030 |
|
|
|
|
|
|
|
|
1,000 |
|
|
|
100.00 |
|
|
|
6/25/2031 |
|
|
|
|
|
|
Claudio Tuozzolo |
|
|
|
|
|
|
1,272 |
|
|
|
12.19 |
|
|
|
7/21/2024 |
|
|
|
|
|
|
|
|
516 |
|
|
|
19.35 |
|
|
|
6/16/2027 |
|
|
|
|
|
|
|
|
4,332 |
|
|
|
75.43 |
|
|
|
5/12/2028 |
|
|
|
|
637 |
|
|
|
424 |
|
|
|
47.15 |
|
|
|
6/15/2028 |
|
|
|
|
645 |
|
|
|
966 |
|
|
|
31.05 |
|
|
|
6/28/2029 |
|
|
|
|
507 |
|
|
|
2,028 |
|
|
|
69.04 |
|
|
|
6/24/2030 |
|
|
|
|
147 |
|
|
|
584 |
|
|
|
68.48 |
|
|
|
6/26/2030 |
|
|
|
|
|
|
|
|
1,000 |
|
|
|
100.00 |
|
|
|
6/25/2031 |
|
(1) |
Generally, stock options with time-based vesting provisions awarded under the Vicor Plans become exercisable in
five equal annual installments, beginning on the first anniversary of the date of grant. |
|
(2) The unexercisable option vesting schedule under the Vicor Plans as of
December 31, 2021, is as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Named Executive Officer |
|
Grant Date |
|
|
Underlying Shares |
|
|
Vesting Date |
|
Patrizio Vinciarelli |
|
|
6/28/2019 |
|
|
|
155,977 |
|
|
|
7/21/2022 |
|
|
|
|
|
James F. Schmidt |
|
|
6/1/2021 |
|
|
|
5,000 |
|
|
|
6/1/2022 |
|
|
|
|
6/1/2021 |
|
|
|
5,000 |
|
|
|
6/1/2023 |
|
|
|
|
6/1/2021 |
|
|
|
5,000 |
|
|
|
6/1/2024 |
|
|
|
|
6/1/2021 |
|
|
|
5,000 |
|
|
|
6/1/2025 |
|
|
|
|
6/1/2021 |
|
|
|
5,000 |
|
|
|
6/1/2026 |
|
|
|
|
6/25/2021 |
|
|
|
200 |
|
|
|
6/25/2022 |
|
|
|
|
6/25/2021 |
|
|
|
200 |
|
|
|
6/25/2023 |
|
|
|
|
6/25/2021 |
|
|
|
200 |
|
|
|
6/25/2024 |
|
|
|
|
6/25/2021 |
|
|
|
200 |
|
|
|
6/25/2025 |
|
|
|
|
6/25/2021 |
|
|
|
200 |
|
|
|
6/25/2026 |
|
|
|
|
|
Richard J. Nagel, Jr. |
|
|
6/28/2019 |
|
|
|
708 |
|
|
|
7/21/2022 |
|
|
|
|
6/24/2020 |
|
|
|
292 |
|
|
|
6/24/2022 |
|
|
|
|
6/24/2020 |
|
|
|
291 |
|
|
|
6/24/2023 |
|
30
|
|
|
|
|
|
|
|
|
|
|
|
|
Named Executive Officer |
|
Grant Date |
|
|
Underlying Shares |
|
|
Vesting Date |
|
|
|
|
6/24/2020 |
|
|
|
291 |
|
|
|
6/24/2024 |
|
|
|
|
6/24/2020 |
|
|
|
291 |
|
|
|
6/24/2025 |
|
|
|
|
5/12/2021 |
|
|
|
329 |
|
|
|
5/12/2022 |
|
|
|
|
5/12/2021 |
|
|
|
329 |
|
|
|
5/12/2023 |
|
|
|
|
5/12/2021 |
|
|
|
329 |
|
|
|
5/12/2024 |
|
|
|
|
5/12/2021 |
|
|
|
329 |
|
|
|
5/12/2025 |
|
|
|
|
5/12/2021 |
|
|
|
329 |
|
|
|
5/12/2026 |
|
|
|
|
|
Philip D. Davies |
|
|
6/28/2019 |
|
|
|
322 |
|
|
|
6/28/2022 |
|
|
|
|
6/28/2019 |
|
|
|
322 |
|
|
|
6/28/2023 |
|
|
|
|
6/28/2019 |
|
|
|
322 |
|
|
|
6/28/2024 |
|
|
|
|
9/6/2019 |
|
|
|
2,000 |
|
|
|
9/6/2022 |
|
|
|
|
9/6/2019 |
|
|
|
2,000 |
|
|
|
9/6/2023 |
|
|
|
|
9/6/2019 |
|
|
|
2,000 |
|
|
|
9/6/2024 |
|
|
|
|
6/24/2020 |
|
|
|
577 |
|
|
|
6/24/2022 |
|
|
|
|
6/24/2020 |
|
|
|
576 |
|
|
|
6/24/2023 |
|
|
|
|
6/24/2020 |
|
|
|
576 |
|
|
|
6/24/2024 |
|
|
|
|
6/24/2020 |
|
|
|
576 |
|
|
|
6/24/2025 |
|
|
|
|
6/26/2020 |
|
|
|
146 |
|
|
|
6/26/2022 |
|
|
|
|
6/26/2020 |
|
|
|
146 |
|
|
|
6/26/2023 |
|
|
|
|
6/26/2020 |
|
|
|
146 |
|
|
|
6/26/2024 |
|
|
|
|
6/26/2020 |
|
|
|
146 |
|
|
|
6/26/2025 |
|
|
|
|
5/12/2021 |
|
|
|
914 |
|
|
|
5/12/2022 |
|
|
|
|
5/12/2021 |
|
|
|
914 |
|
|
|
5/12/2023 |
|
|
|
|
5/12/2021 |
|
|
|
914 |
|
|
|
5/12/2024 |
|
|
|
|
5/12/2021 |
|
|
|
914 |
|
|
|
5/12/2025 |
|
|
|
|
5/12/2021 |
|
|
|
913 |
|
|
|
5/12/2026 |
|
|
|
|
6/25/2021 |
|
|
|
200 |
|
|
|
6/25/2022 |
|
|
|
|
6/25/2021 |
|
|
|
200 |
|
|
|
6/25/2023 |
|
|
|
|
6/25/2021 |
|
|
|
200 |
|
|
|
6/25/2024 |
|
|
|
|
6/25/2021 |
|
|
|
200 |
|
|
|
6/25/2025 |
|
|
|
|
6/25/2021 |
|
|
|
200 |
|
|
|
6/25/2026 |
|
|
|
|
|
Michael S. McNamara |
|
|
6/28/2019 |
|
|
|
322 |
|
|
|
6/28/2022 |
|
|
|
|
6/28/2019 |
|
|
|
322 |
|
|
|
6/28/2023 |
|
|
|
|
6/28/2019 |
|
|
|
322 |
|
|
|
6/28/2024 |
|
|
|
|
6/28/2019 |
|
|
|
3,544 |
|
|
|
7/21/2022 |
|
|
|
|
6/24/2020 |
|
|
|
525 |
|
|
|
6/24/2022 |
|
|
|
|
6/24/2020 |
|
|
|
525 |
|
|
|
6/24/2023 |
|
|
|
|
6/24/2020 |
|
|
|
525 |
|
|
|
6/24/2024 |
|
|
|
|
6/24/2020 |
|
|
|
525 |
|
|
|
6/24/2025 |
|
|
|
|
6/24/2020 |
|
|
|
2,000 |
|
|
|
6/24/2022 |
|
|
|
|
6/24/2020 |
|
|
|
2,000 |
|
|
|
6/24/2023 |
|
|
|
|
6/24/2020 |
|
|
|
2,000 |
|
|
|
6/24/2024 |
|
|
|
|
6/24/2020 |
|
|
|
2,000 |
|
|
|
6/24/2025 |
|
|
|
|
6/26/2020 |
|
|
|
146 |
|
|
|
6/26/2022 |
|
|
|
|
6/26/2020 |
|
|
|
146 |
|
|
|
6/26/2023 |
|
|
|
|
6/26/2020 |
|
|
|
146 |
|
|
|
6/26/2024 |
|
|
|
|
6/26/2020 |
|
|
|
146 |
|
|
|
6/26/2025 |
|
|
|
|
5/12/2021 |
|
|
|
759 |
|
|
|
5/12/2022 |
|
31
|
|
|
|
|
|
|
|
|
|
|
|
|
Named Executive Officer |
|
Grant Date |
|
|
Underlying Shares |
|
|
Vesting Date |
|
|
|
|
5/12/2021 |
|
|
|
759 |
|
|
|
5/12/2023 |
|
|
|
|
5/12/2021 |
|
|
|
758 |
|
|
|
5/12/2024 |
|
|
|
|
5/12/2021 |
|
|
|
758 |
|
|
|
5/12/2025 |
|
|
|
|
5/12/2021 |
|
|
|
758 |
|
|
|
5/12/2026 |
|
|
|
|
6/25/2021 |
|
|
|
200 |
|
|
|
6/25/2022 |
|
|
|
|
6/25/2021 |
|
|
|
200 |
|
|
|
6/25/2023 |
|
|
|
|
6/25/2021 |
|
|
|
200 |
|
|
|
6/25/2024 |
|
|
|
|
6/25/2021 |
|
|
|
200 |
|
|
|
6/25/2025 |
|
|
|
|
6/25/2021 |
|
|
|
200 |
|
|
|
6/25/2026 |
|
|
|
|
|
Claudio Tuozzolo |
|
|
6/16/2017 |
|
|
|
516 |
|
|
|
6/16/2022 |
|
|
|
|
5/30/2018 |
|
|
|
1272 |
|
|
|
7/21/2022 |
|
|
|
|
6/15/2018 |
|
|
|
212 |
|
|
|
6/15/2022 |
|
|
|
|
6/15/2018 |
|
|
|
212 |
|
|
|
6/15/2023 |
|
|
|
|
6/28/2019 |
|
|
|
322 |
|
|
|
6/28/2022 |
|
|
|
|
6/28/2019 |
|
|
|
322 |
|
|
|
6/28/2023 |
|
|
|
|
6/28/2019 |
|
|
|
322 |
|
|
|
6/28/2024 |
|
|
|
|
6/24/2020 |
|
|
|
507 |
|
|
|
6/24/2022 |
|
|
|
|
6/24/2020 |
|
|
|
507 |
|
|
|
6/24/2023 |
|
|
|
|
6/24/2020 |
|
|
|
507 |
|
|
|
6/24/2024 |
|
|
|
|
6/24/2020 |
|
|
|
507 |
|
|
|
6/24/2025 |
|
|
|
|
6/26/2020 |
|
|
|
146 |
|
|
|
6/26/2022 |
|
|
|
|
6/26/2020 |
|
|
|
146 |
|
|
|
6/26/2023 |
|
|
|
|
6/26/2020 |
|
|
|
146 |
|
|
|
6/26/2024 |
|
|
|
|
6/26/2020 |
|
|
|
146 |
|
|
|
6/26/2025 |
|
|
|
|
5/12/2021 |
|
|
|
867 |
|
|
|
5/12/2022 |
|
|
|
|
5/12/2021 |
|
|
|
867 |
|
|
|
5/12/2023 |
|
|
|
|
5/12/2021 |
|
|
|
866 |
|
|
|
5/12/2024 |
|
|
|
|
5/12/2021 |
|
|
|
866 |
|
|
|
5/12/2025 |
|
|
|
|
5/12/2021 |
|
|
|
866 |
|
|
|
5/12/2026 |
|
|
|
|
6/25/2021 |
|
|
|
200 |
|
|
|
6/25/2022 |
|
|
|
|
6/25/2021 |
|
|
|
200 |
|
|
|
6/25/2023 |
|
|
|
|
6/25/2021 |
|
|
|
200 |
|
|
|
6/25/2024 |
|
|
|
|
6/25/2021 |
|
|
|
200 |
|
|
|
6/25/2025 |
|
|
|
|
6/25/2021 |
|
|
|
200 |
|
|
|
6/25/2026 |
|
(3) |
In connection with the VI Chip Merger, all outstanding VI Chip stock options granted under the 2007
VI Chip Plan were converted into an equivalent value of Vicor stock options pursuant to the assumption by the Corporation of the 2007 VI Chip Plan and the options outstanding thereunder. As a result of the VI Chip Merger, Mr. Nagel
received 3,544 options to purchase Common Stock of the Corporation, Mr. McNamara received 17,724 options to purchase Common Stock of the Corporation and Dr. Vinciarelli received 779,885 options to purchase Common Stock of the Corporation
under the Assumed VI Chip Plan, of which 1,951 options, 14,180 options, and 273,394 options, respectively, were exercisable as of December 31, 2021. In connection with the Picor Merger, all outstanding Picor stock options granted under the 2001
Picor Plan were converted into an equivalent value of Vicor stock options pursuant to the assumption by the Corporation of the 2001 Picor Plan and the options outstanding thereunder. As a result of the Picor Merger, Mr. Tuozzolo received
133,369 options to purchase Common Stock of the Corporation under the Assumed Picor Plan, of which 0 options were exercisable as of December 31, 2021. |
32
OPTIONS EXERCISES AND STOCK VESTED FOR FISCAL 2021
The following table presents option exercises by our Named Executive Officers during 2021. Mr. Schmidt did not exercise any options
during 2021. All options exercised by our Named Executive Officers during 2021 were under the Vicor Plans as follows:
|
|
|
|
|
|
|
|
|
Named Executive Officer |
|
Number of Shares Acquired upon Exercise |
|
|
Value Realized upon Exercise (1) |
|
Patrizio Vinciarelli |
|
|
38,560 |
|
|
$ |
4,264,750 |
|
Jamie A. Simms |
|
|
65,717 |
|
|
|
5,940,285 |
|
Richard J. Nagel, Jr. |
|
|
823 |
|
|
|
61,952 |
|
Philip D. Davies |
|
|
39,250 |
|
|
|
5,692,500 |
|
Michael S. McNamara |
|
|
50,401 |
|
|
|
6,923,433 |
|
Claudio Tuozzolo |
|
|
17,116 |
|
|
|
1,591,502 |
|
(1) |
Represents the difference between the exercise price and the fair market value of the underlying
Common Stock on the date of exercise. |
POTENTIAL PAYMENTS UPON TERMINATION, UPON A CHANGE OF CONTROL, AND
UPON TERMINATION FOLLOWING A CHANGE OF CONTROL
As all of our employees are employees-at-will, no amounts
become due or payable to any of our executives upon termination of employment, regardless of whether a change of control has occurred. However, the Vicor Plans each provide that all unvested options thereunder will become vested and exercisable as
of a change of control, as defined in each of the plans. Accordingly, our Named Executive Officers would have received the amounts set forth below based on the vesting of their unvested options if a change of control of the Corporation had occurred
on December 31, 2021.
|
|
|
|
|
|
|
|
|
Named Executive Officer |
|
Number of Unvested Options as of December 31, 2021 |
|
|
Intrinsic Value of Unvested Options as of December 31, 2021 (1) |
|
Patrizio Vinciarelli |
|
|
155,977 |
|
|
$ |
18,749,995 |
|
James F. Schmidt |
|
|
26,000 |
|
|
|
868,230 |
|
Richard J. Nagel, Jr. |
|
|
3,518 |
|
|
|
237,409 |
|
Philip D. Davies |
|
|
15,424 |
|
|
|
1,098,896 |
|
Michael S. McNamara |
|
|
19,986 |
|
|
|
1,360,508 |
|
Claudio Tuozzolo |
|
|
11,122 |
|
|
|
730,026 |
|
(1) |
Calculated as the aggregate amount by which the fair market value as of December 31, 2021 of the shares
underlying the unvested options (i.e., the product of the closing price of a share of Common Stock as reported on the NASDAQ-GS on that date, $126.98, and the number of unvested options) exceeded the aggregate
exercise price of the unvested options as of that date. |
Upon Mr. Simmss resignation in April 2021, he did
not receive any accelerated vesting of any option awards, nor did he receive any other severance payments or other benefits in connection with his resignation.
CHIEF EXECUTIVE OFFICER PAY RATIO
As required by Item 402(u) of Regulation S-K, we are providing the following information about the
ratio of the median annual total compensation of our employees and the annual total compensation of Patrizio Vinciarelli, our Chief Executive Officer. For the year ended December 31, 2021:
|
|
|
the annual total compensation of our median employee was reasonably estimated to be $66,899; and
|
33
|
|
|
the annual total compensation of Dr. Vinciarelli was $464,212. |
Based on this information, the ratio of the annual total compensation of our Chief Executive Officer to the annual total compensation of our
median employee is estimated to be 7 to 1.
We identified our median employee using a multi-step process. First, we examined the base
salaries and wages of all individuals employed by us on December 31, 2021 (other than Dr. Vinciarelli), whether full-time, part-time, or on a seasonal basis to identify the median base salary of all our employees. We annualized wages and
salaries for all permanent employees who were hired after January 1, 2021, as permitted by SEC rules, and converted all employees salaries or wages into U.S. dollars based on the applicable foreign exchange rate on December 31, 2021.
We selected the individual within such group whose total compensation was at the median to serve as our median employee whose compensation is disclosed above. After we identified our median employee, we calculated such employees total annual
compensation in the same way that we calculate the annual total compensation of our named executive officers in the Summary Compensation Table.
DIRECTORS COMPENSATION FOR FISCAL 2021
Overview of Director Compensation
The
level of compensation of non-employee Directors is reviewed on an annual basis by the Board as a whole. To determine the appropriateness of the current level of compensation for
non-employee Directors, the Board reviews data from a number of different sources including publicly available data describing director compensation in peer companies.
Non-employee Directors are compensated through a combination of cash payments and awards of options
for the purchase of our Common Stock. Each non-employee Director receives a quarterly retainer of $7,500 for his services. Expenses incurred by non-employee Directors in
attending Board and committee meetings are reimbursed by the Corporation.
Directors who are employees do not receive cash compensation
for service on the Board.
Each Director (including Directors that are employees), other than any Director holding in excess of 10% of the
total number of shares of the capital stock of the Corporation (i.e., Dr. Vinciarelli), receives an annual grant of non-qualified stock options following the Annual Meeting of Stockholders under the Vicor
2000 Plan. Currently, the formula to calculate the stock option award is $100,000 divided by the closing price of a share of Common Stock as reported on the NASDAQ-GS on the day of the Annual Meeting of
Stockholders. Accordingly, on June 25, 2021, each Director, other than Dr. Vinciarelli, was awarded non-qualified stock options to purchase up to 1,000 shares of Common Stock at an exercise price of
$100.00 per share. Stock options granted to Directors as compensation for their service on the Board vest at a rate of 20% per year on each of five successive anniversaries of the date of award.
The table below reflects Director compensation for fiscal 2021:
|
|
|
|
|
|
|
|
|
|
|
|
|
Director |
|
Fees Earned or Paid in Cash |
|
|
Option Awards (1) (2) |
|
|
Total Compensation |
|
Samuel J. Anderson |
|
$ |
30,000 |
|
|
$ |
45,085 |
|
|
$ |
75,085 |
|
Jason L. Carlson |
|
|
30,000 |
|
|
|
45,085 |
|
|
|
75,085 |
|
Estia J. Eichten |
|
|
30,000 |
|
|
|
45,085 |
|
|
|
75,085 |
|
M. Michael Ansour (3) |
|
|
15,000 |
|
|
|
45,085 |
|
|
|
60,085 |
|
Andrew T. DAmico (4) |
|
|
|
|
|
|
45,085 |
|
|
|
45,085 |
|
(1) |
These amounts reflect the aggregate grant date fair value of stock option awards granted during 2021. Refer to
Note 11, Stock-Based Compensation and Employee Benefit Plans, in the Notes to Consolidated |
34
|
Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2021, filed on March 1, 2022, for the relevant
assumptions used to determine the valuation of option awards. |
(2) |
Option awards granted to Philip D. Davies, James F. Schmidt, Michael S. McNamara and Claudio Tuozzolo, who are
both employees and Directors, are described in the Grants of Plan-Based Awards for Fiscal 2021 table. |
(3) |
M. Michael Ansour was elected a Director on June 25, 2021. |
(4) |
Andrew T. DAmico did not receive cash compensation for his services in 2021. |
The table below reflects the aggregate grant date fair value and aggregate number of stock options awarded and outstanding as of
December 31, 2021:
|
|
|
|
|
|
|
|
|
Name |
|
Grant Date Fair Value of Stock Options |
|
|
Number of Awards Outstanding |
|
Samuel J. Anderson |
|
$ |
130,674 |
|
|
|
6,378 |
|
M. Michael Ansour |
|
|
45,085 |
|
|
|
1,000 |
|
Jason L. Carlson |
|
|
120,268 |
|
|
|
4,919 |
|
Estia J. Eichten |
|
|
216,127 |
|
|
|
21,638 |
|
Andrew T. DAmico (1) |
|
|
621,825 |
|
|
|
25,733 |
|
(1) |
Mr. DAmico was awarded 1,000 shares in connection with his service as a Director in 2021. The
remaining stock options reflected in this table were not awarded to Mr. DAmico in connection with his service as a Director. |
35
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis (CD&A) required by
Item 402(b) of Regulation S-K for the year ended December 31, 2021, with management. Based on the reviews and discussions referred to above, the Compensation Committee recommended to the Board that
the CD&A be included in this Proxy Statement and be incorporated by reference into our Annual Report on Form 10-K for the year ended December 31, 2021, for filing with the SEC and distribution to
Stockholders.
Submitted by the Compensation Committee:
Jason L. Carlson, Chairman
M.
Michael Ansour
Estia J. Eichten
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Carlson, Ansour and Eichten currently serve on the Compensation Committee and Messrs. Carlson, Anderson, and Eichten served on the
Compensation Committee in 2021. Mr. Ansour replaced Mr. Anderson on the Compensation and Audit Committees as of February 11, 2022. Messrs. Carlson, Anderson, Ansour and Eichten are independent Directors and the Board is not aware of
any committee interlocks or other relationships that would require disclosure pursuant to Item 407(e)(4) of Regulation S-K or Item 404 of Regulation S-K.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee oversees the Corporations financial reporting process on behalf of the Board. Management has the primary
responsibility for the financial statements and the reporting process including the systems of internal controls. In fulfilling its oversight responsibilities, the Audit Committee reviewed and discussed the audited financial statements in the Annual
Report with management, including a discussion of the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments, and the clarity of disclosures in the financial statements.
The Audit Committee reviewed and discussed with our independent registered public accounting firm, KPMG, which is responsible for performing
an independent integrated audit of the Corporations consolidated financial statements and effectiveness of internal control over financial reporting and issuing an opinion as to whether the consolidated financial statements conform with
accounting principles generally accepted in the United States of America and an opinion as to the effectiveness of internal control over financial reporting, the quality, not just the acceptability, of the Corporations accounting principles
and such other matters as are required to be discussed with the Audit Committee in accordance with standards established by the Public Company Accounting Oversight Board (PCAOB). In addition, the Audit Committee has discussed with KPMG
the auditors independence from management and the Corporation, including the matters in the written disclosures from the independent auditors required by applicable requirements of the PCAOB regarding the independent accountants
communications with the audit committee concerning independence. The Audit Committee discussed with KPMG the overall scope and plans for its audit. The Audit Committee has also discussed with KPMG the matters required to be discussed by the
applicable requirements of the PCAOB and the SEC. The Audit Committee periodically meets with KPMG, with and without management present, to discuss the results of its audit, its evaluation of the Corporations internal controls and the overall
quality of the Corporations financial reporting.
36
Based on the reviews and discussions referred to above, the Audit Committee recommended to
the Board (and the Board approved) that the audited financial statements be included in the Corporations Annual Report on Form 10-K for the year ended December 31, 2021, for filing with the SEC,
which occurred on March 1, 2022.
Submitted by the Audit Committee:
Jason L. Carlson, Chairman
M.
Michael Ansour
Estia J. Eichten
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Related Party Transactions
Mr. DAmico, one of our Directors and Nominees, also serves in the role of general counsel for the Corporation for intellectual
property matters. Pursuant to an informal compensation agreement between the Corporation and Mr. DAmico (the Agreement), in exchange for his services as general counsel, the Corporation has agreed to pay
Mr. DAmico a fee of $31,000 per month (subject to annual adjustment), as well as reimbursement of expenses incurred in connection with his provision of services to the Corporation. Also pursuant to the Agreement, Mr. DAmico is
entitled to an incentive fee equal to 3% of the royalties received by the Corporation pursuant to certain license agreements negotiated by Mr. DAmico on behalf of the Corporation. The aggregate amount of such incentive fees is limited to
$1,000,000, although this amount may be increased by mutual agreement in certain circumstances, including the negotiation of additional license agreements by Mr. DAmico. As of March 31, 2022, incentive fees of $412 were payable to
Mr. DAmico. The Corporation expects to continue the Agreement, under the same terms and conditions, for the remainder of 2022.
In connection with this arrangement, during the year ended December 31, 2021, Mr. DAmico received aggregate compensation and
reimbursement from the Corporation of $4,018,255, consisting of total monthly compensation of $372,000 (i.e., compensation of $31,000 per month for 12 months), income associated with license-based incentive fees of $6,186, income related to
exercises during the year of non-qualified stock options awarded under the Vicor 2000 Plan of $3,596,491, and cumulative expense reimbursement of $43,578. From January 1, 2022 through
March 31, 2022, Mr. DAmico has received aggregate compensation and reimbursement from the Corporation of $111,420, consisting of total monthly compensation of $93,000 (i.e., compensation of $31,000 per month for 3 full months), and
cumulative expense reimbursement of $18,420.
During the year ended December 31, 2021, Mr. DAmico was awarded stock
options under the Vicor 2000 Plan to purchase an aggregate of 3,825 shares of the Corporations Common Stock, at a weighted average exercise price of $81.85. As of December 31, 2021, Mr. DAmico had 25,733 stock options
outstanding under the Vicor 2000 Plan, at a weighted average exercise price range of $10.07 $100.00. From January 1, 2022 through March 31, 2022, no stock options have been awarded to Mr. DAmico.
Of the options awarded to Mr. DAmico in 2021 (described in the paragraph above), options to purchase 1,000 shares were awarded in
connection with his service as a Director and are included in the Directors Compensation for Fiscal 2021 table. None of the other amounts or stock option awards described in this Related Party Transactions section were paid or
awarded to Mr. DAmico in connection with his service as a Director.
Review and Approval of Related Party Transactions
The Corporations policy and procedures with respect to the review, approval, and/or ratification of related party transactions are set
forth in the Charter of the Audit Committee and, in summary, require the Audit Committee to review and approve all related party transactions required to be disclosed pursuant to Item 404 of Regulation
S-K, and to discuss with management the business rationale for the transactions, whether the transactions are on terms that are fair to the Corporation, and whether appropriate disclosures have been made.
37
DELINQUENT SECTION 16(a) REPORTS
Section 16(a) of the Exchange Act requires the Corporations executive officers and Directors, and persons who own more than 10% of
a registered class of the Corporations equity securities (collectively, Insiders) to file reports of ownership and changes in ownership with the SEC. Insiders are required by SEC regulations to furnish the Corporation with copies
of all Section 16(a) forms they file. To the Corporations knowledge, based solely on a review of copies of such reports and written representations that no other reports were required during the fiscal year ended December 31, 2021,
all transactions in the Corporations securities that were engaged in by Insiders, and therefore required to be disclosed pursuant to Section 16(a) of the Exchange Act, were timely reported, except that, due to inadvertent administrative
error, a Form 5 was filed by Mr. Doyle on February 14, 2022 to report a transaction dated May 12, 2021 that should have been reported on a Form 4; a late Form 3 was filed by Mr. Ansour on July 16, 2021; a late Form 4 was
filed by Mr. DAmico on June 28, 2021 relating to a transaction dated May 12, 2021; and late Forms 4 were filed on June 29, 2021 relating to transactions dated May 12, 2021 by each of Ms. Grava and Messrs. Doyle,
Tuozzolo, Davies, McNamara, Gusinov, Nagel, Crilly, and Gendron.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee, acting under authorization of the Board of Directors, pursuant to the Audit Committee Charter, and following the
Corporations By-Laws, selected KPMG as the independent registered public accounting firm for the Corporation for the fiscal year ended December 31, 2021. A representative of KPMG is expected to be
present at the Annual Meeting and will be given the opportunity to make a statement. The representative is expected to be available to respond to appropriate questions from Stockholders.
The following table summarizes the fees for services rendered by KPMG for the fiscal years ended December 31, 2021 and 2020 in each of the following
categories:
|
|
|
|
|
|
|
|
|
Name |
|
2021 |
|
|
2020 |
|
Audit Fees |
|
$ |
1,423,000 |
|
|
$ |
1,515,000 |
|
Audit Related Fees |
|
|
|
|
|
|
|
|
Tax Fees |
|
|
219,000 |
|
|
|
235,000 |
|
All Other Fees |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Fees |
|
$ |
1,642,000 |
|
|
$ |
1,750,000 |
|
|
|
|
|
|
|
|
|
|
Audit Fees include fees for services provided in connection with the audit of the Corporations
consolidated financial statements (including internal control reporting under Section 404 of the Sarbanes-Oxley Act of 2002), the reviews of the Corporations quarterly reports on Form 10-Q, review
of documents filed with the SEC, and statutory audits required internationally.
Tax Fees include fees for services provided in
connection with tax compliance, tax advice, tax planning, and assistance with tax audits.
Pursuant to the provisions of the Charter of
the Audit Committee, the Audit Committee must pre-approve all auditing services and the terms thereof and non-audit services (other than
non-audit services prohibited under Section 10A(g) of the Exchange Act or the applicable rules of the SEC or the PCAOB) to be provided to the Corporation by our independent registered public accounting
firm. Under the Charter, preapproval authority may be delegated to the Audit Committee Chair, who is required to present all decisions to pre-approve an activity to the full Audit Committee at its first
meeting following such decision. The Audit Committee approved all audit and non-audit services provided to the Corporation by KPMG for fiscal years 2021 and 2020.
The Audit Committee has selected KPMG as the Corporations independent registered public accounting firm for the fiscal year ending
December 31, 2022.
38
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the 2023 Annual Meeting of Stockholders must be received by the Corporation on or before
January 9, 2023, in order to be considered for inclusion in the Corporations proxy statement and form of proxy. These proposals must also comply with the rules of the SEC governing the form and content of proposals in order to be included
in the Corporations proxy statement and form of proxy and should be directed to: James F. Schmidt, Corporate Secretary, Vicor Corporation, 25 Frontage Road, Andover, Massachusetts 01810. It is suggested that any Stockholder proposal be
transmitted by certified mail, return receipt requested.
In addition, our By-Laws provide that,
for any Stockholder proposal or Director nomination to be properly presented at the 2023 Annual Meeting of Stockholders, but not for inclusion in our proxy statement and form of proxy, the Stockholder proposal or Director nomination must comply with
the requirements set forth in our By-Laws and we must receive notice of the matter not less than 90 nor more than 120 days prior to June 24, 2023. However, in the event that the date of the 2023 Annual
Meeting is advanced by more than 30 days before or delayed by more than sixty days after the anniversary of the 2022 Annual Meeting, and instead, such meeting is scheduled to be held on a date outside that period, notice of a Stockholder proposal or
Director nomination, to be timely, must be received by our Corporate Secretary not earlier than the close of business on the 120th day prior to such other meeting date and not later than 90 days
prior to such other meeting date or 10 days following the date such other meeting date is first publicly announced or disclosed.
Notwithstanding the foregoing notice deadlines under our By-Laws, in the event that the number of
Directors to be elected to our Board at the 2023 Annual Meeting of Stockholders is increased and either all of the nominees for Director at the 2023 Annual Meeting of Stockholders or the size of the increased Board is not publicly announced or
disclosed by us by March 31, 2023, notice will be considered timely, but only with respect to nominees for any new positions created by such increase, if the notice is delivered to our Corporate Secretary no later than 10 days following the
first date all such nominees or the size of the increased Board is publicly announced or disclosed.
In addition to satisfying the
foregoing requirements under our By-Laws, to comply with the universal proxy rules of the Securities and Exchange Commission (once effective), stockholders who intend to solicit proxies in support of director
nominees other than the Corporations nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than March 19, 2023.
Proxies solicited by the Board will confer discretionary voting authority with respect to Stockholder proposals, other than proposals to be
considered for inclusion in the Corporations proxy statement described above, that the Corporation receives at the above address after March 25, 2023. These proxies will also confer discretionary voting authority with respect to
Stockholder proposals, other than proposals to be considered for inclusion in the Corporations proxy statement described above, that the Corporation receives on or before March 25, 2023, subject to SEC rules governing the exercise of this
authority.
39
VICOR VOTE 000004 ENDORSEMENT_LINE SACKPACK MR A SAMPLE DESIGNATION (IF ANY) ADD 1 ADD 2 ADD 3 ADD 4 ADD 5 ADD 6 C123456789
000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext Your vote matters heres how to vote! You may vote online instead of mailing this card. Online Go to
www.investorvote.com/VICR or scan the QR code login details are located in the shaded bar below. Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. [X] Save paper, time
and money! Sign up for electronic delivery at www.investorvote.com/VICR Annual Meeting Proxy Card COMMON STOCK 1234 5678 9012 345 IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. IMPORTANT NOTICE REGARDING THE
AVAILABILITY OF PROXY MATERIALS FOR THE STOCKHOLDER MEETING TO BE HELD ON JUNE 24, 2022: The Notice of Annual Meeting, Proxy Statement, Proxy Card and Annual Report are available at www.vicorpower.com. A Proposals The Board of Directors
recommends a vote FOR Proposal 1 and all the nominees listed below. 1. To fix the number of Directors at twelve and to elect the following nominees as Directors to hold office until the 2023 Annual Meeting of Stockholders and until their respective
successors are duly elected and qualified. For Withhold For Withhold For Withhold 01 - Samuel J. Anderson [ ] [ ] 02 - M. Michael Ansour [ ] [ ] 03 - Jason
L. Carlson [ ] [ ] 04 - Philip D. Davies [ ] [ ] 05 - Andrew T. DAmico [ ] [ ] 06 - Estia J. Eichten
[ ] [ ] 07 - Zmira Lavie [ ] [ ] 08 - Michael S. McNamara [ ] [ ] 09 - James F. Schmidt
[ ] [ ] 10 - John Shen [ ] [ ] 11 - Claudio Tuozzolo 12 - Patrizio Vinciarelli 2. In his discretion, the proxy is authorized to vote upon any other business
that may properly come before the Annual Meeting or any adjournments or postponements thereof. B Authorized Signatures This section must be completed for your vote to be counted. Date and Sign Below Please sign exactly as your name(s)
appear(s) on the books of the Corporation. Joint owners should each sign personally. Trustees and other fiduciaries should indicate the capacity in which they sign, and where more than one name appears, a majority must sign. If a corporation, this
signature should be that of an authorized officer who should state his or her title. Date (mm/dd/yyyy) Please print date below. Signature 1 Please keep signature within the box. Signature 2 Please keep signature within the box.
C 1234567890 J N T 1UPX 541298 MR A SAMPLE (THIS AREA IS SET UP TO ACCOMMODATE 140 CHARACTERS) MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND 03MUCC +
Dear Stockholder, Please take note of the important information enclosed with this Proxy Card, which includes issues related to the
management and operation of your Corporation that require your immediate attention. These are discussed in detail in the enclosed proxy materials. Your vote counts, and you are strongly encouraged to exercise your right to vote your shares. Please
mark the boxes on this Proxy Card to indicate how your shares will be voted. Then sign the card, detach it and return your proxy vote in the enclosed postage paid envelope. Thank you in advance for your prompt consideration of these matters.
Sincerely, Vicor Corporation The 2022 Annual Meeting of Stockholders of Vicor Corporation will be held on Friday, June 24, 2022 at 9:00 a.m., Eastern Time, virtually via live audio webcast at meetnow.global/M2Y4YNL. To access and vote at the virtual
meeting, you must have the information that is printed in the shaded bar located on the reverse side of this form. Small steps make an impact. Help the environment by consenting to receive electronic delivery, sign up at www.investorvote.com/VICR IF
VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. Proxy Vicor Corporation COMMON + PROXY FOR ANNUAL MEETING OF STOCKHOLDERS JUNE 24, 2022 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
AND MAY BE REVOKED PRIOR TO ITS EXERCISE. The undersigned hereby constitutes and appoints Patrizio Vinciarelli as Proxy of the undersigned, with full power to appoint his substitute, and authorizes him to represent and to vote all shares of Common
Stock of Vicor Corporation (the Corporation) held by the undersigned at the close of business on April 29, 2022, at the Annual Meeting of Stockholders to be held virtually via live audio webcast, on Friday, June 24, 2022 at 9:00 a.m.,
Eastern Time, and at any adjournments or postponements thereof. To participate in the Annual Meeting of Stockholders, please visit meetnow.global/M2Y4YNL and enter the information printed in the shaded bar located on the reverse side of this form.
Questions may be forwarded to invrel@vicorpower.com. When properly executed, this proxy will be voted in the manner directed herein by the undersigned stockholder(s). IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR THE PROPOSAL TO FIX THE
NUMBER OF DIRECTORS AT TWELVE AND THE ELECTION OF ALL OF THE NOMINEES FOR DIRECTOR, AND IN THE DISCRETION OF THE PROXY UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING. A stockholder wishing to vote in accordance with the Board of
Directors recommendation need only sign and date this proxy and return it in the envelope provided. The undersigned hereby acknowledges receipt of a copy of the accompanying Notice of Annual Meeting of Stockholders, the Proxy Statement with
respect thereto and the Corporations 2021 Annual Report to Stockholders and hereby revokes any proxy or proxies heretofore given. This proxy may be revoked at any time before it is exercised. PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN
PROMPTLY IN THE ENCLOSED ENVELOPE. C Non-Voting Items Change of Address Please print new address below. +
VICOR VOTE 000004 ENDORSEMENT LINE SACKPACK MR A SAMPLE DESIGNATION (IF ANY) ADD 1 ADD 2 ADD 3 ADD 4 ADD 5 ADD 6 C123456789
000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext Your vote matters heres how to vote! You may vote online instead of mailing this card. Online Go to
www.investorvote.com/VICR or scan the QR code login details are located in the shaded bar below. Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. [X] Save paper, time
and money! Sign up for electronic delivery at www.investorvote.com/VICR Annual Meeting Proxy Card CLASS B COMMON STOCK 1234 5678 9012 345 IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. IMPORTANT NOTICE
REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE STOCKHOLDER MEETING TO BE HELD ON JUNE 24, 2022: The Notice of Annual Meeting, Proxy Statement, Proxy Card and Annual Report are available at www.vicorpower.com. A Proposals The Board of
Directors recommends a vote FOR Proposal 1 and all the nominees listed below. 1. To fix the number of Directors at twelve and to elect the following nominees as Directors to hold office until the 2023 Annual Meeting of Stockholders and until their
respective successors are duly elected and qualified. For Withhold For Withhold For Withhold 01 - Samuel J. Anderson [ ] [ ] 02 - M. Michael Ansour [ ] [ ]
03 - Jason L. Carlson [ ] [ ] 04 - Philip D. Davies [ ] [ ] 05 - Andrew T. DAmico [ ] [ ] 06 - Estia J.
Eichten [ ] [ ] 07 - Zmira Lavie [ ] [ ] 08 - Michael S. McNamara [ ] [ ] 09 - James F. Schmidt
[ ] [ ] 10 - John Shen [ ] [ ] 11 - Claudio Tuozzolo [ ] [ ] 12 - Patrizio Vinciarelli
[ ] [ ] 2. In his discretion, the proxy is authorized to vote upon any other business that may properly come before the Annual Meeting or any adjournments or postponements thereof. B Authorized
Signatures This section must be completed for your vote to be counted. Date and Sign Below Please sign exactly as your name(s) appear(s) on the books of the Corporation. Joint owners should each sign personally. Trustees and other
fiduciaries should indicate the capacity in which they sign, and where more than one name appears, a majority must sign. If a corporation, this signature should be that of an authorized officer who should state his or her title. Date (mm/dd/yyyy)
Please print date below. Signature 1 Please keep signature within the box. Signature 2 Please keep signature within the box. / / C 1234567890 J N T 1UPX 541298 MR A SAMPLE (THIS AREA IS SET UP TO ACCOMMODATE 140 CHARACTERS) MR A
SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND + 03MUEC
Dear Stockholder, Please take note of the important information enclosed with this Proxy Card, which includes issues related to the
management and operation of your Corporation that require your immediate attention. These are discussed in detail in the enclosed proxy materials. Your vote counts, and you are strongly encouraged to exercise your right to vote your shares. Please
mark the boxes on this Proxy Card to indicate how your shares will be voted. Then sign the card, detach it and return your proxy vote in the enclosed postage paid envelope. Thank you in advance for your prompt consideration of these matters.
Sincerely, Vicor Corporation The 2022 Annual Meeting of Stockholders of Vicor Corporation will be held on Friday, June 24, 2022 at 9:00 a.m., Eastern Time, virtually via live audio webcast at meetnow.global/M2Y4YNL. To access and vote at the virtual
meeting, you must have the information that is printed in the shaded bar located on the reverse side of this form. Small steps make an impact. Help the environment by consenting to receive electronic delivery, sign up at www.investorvote.com/VICR IF
VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. Proxy Vicor Corporation CLASS B COMMON + PROXY FOR ANNUAL MEETING OF STOCKHOLDERS JUNE 24, 2022 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS AND MAY BE REVOKED PRIOR TO ITS EXERCISE. The undersigned hereby constitutes and appoints Patrizio Vinciarelli as Proxy of the undersigned, with full power to appoint his substitute, and authorizes him to represent and to vote all shares
of Class B Common Stock of Vicor Corporation (the Corporation) held by the undersigned at the close of business on April 29, 2022, at the Annual Meeting of Stockholders to be held virtually via live audio webcast, on Friday, June 24,
2022 at 9:00 a.m., Eastern Time, and at any adjournments or postponements thereof. To participate in the Annual Meeting of Stockholders, please visit meetnow.global/M2Y4YNL and enter the information printed in the shaded bar located on the reverse
side of this form. Questions may be forwarded to invrel@vicorpower.com. When properly executed, this proxy will be voted in the manner directed herein by the undersigned stockholder(s). IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR THE
PROPOSAL TO FIX THE NUMBER OF DIRECTORS AT TWELVE AND THE ELECTION OF ALL OF THE NOMINEES FOR DIRECTOR, AND IN THE DISCRETION OF THE PROXY UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING. A stockholder wishing to vote in accordance
with the Board of Directors recommendation need only sign and date this proxy and return it in the envelope provided. The undersigned hereby acknowledges receipt of a copy of the accompanying Notice of Annual Meeting of Stockholders, the Proxy
Statement with respect thereto and the Corporations 2021 Annual Report to Stockholders and hereby revokes any proxy or proxies heretofore given. This proxy may be revoked at any time before it is exercised. PLEASE VOTE, DATE AND SIGN ON
REVERSE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. C Non-Voting Items Change of Address Please print new address below. +
Vicor (NASDAQ:VICR)
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