o | Preliminary Proxy Statement | |
o | Confidential, for Use of the Commission Only (as permitted by Rule 14a 6 (e) (2)) | |
þ | Definitive Proxy Statement | |
o | Definitive Additional Materials | |
o | Soliciting Material Pursuant to Section 240.14a 11 (c) or Section 240.14a 12 |
þ | No fee required. | |
o | Fee computed per Exchange Act Rules 14a 6 (i) (4) and 0 11. | |
o | Fee paid previously with preliminary materials. | |
o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11 (a) (2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
Time and Date:
|
Thursday, May 15, 2008 at 4:30 p.m., Pacific time. | |
Place:
|
Intevacs principal executive offices, located at: 3560 Bassett Street, Santa Clara, California 95054. | |
Items of Business:
|
(1) To elect directors to serve for the ensuing year or
until their respective successors are duly elected and qualified.
|
|
(2) To approve an amendment to the 2004 Equity Incentive
Plan to increase the number of shares reserved for issuance
thereunder by 500,000.
|
||
(3) To ratify the appointment of Grant Thornton LLP as
Intevacs independent public accountants for the fiscal
year ending December 31, 2008.
|
||
(4) To transact such other business as may properly come
before the Annual Meeting.
|
||
These items of business are more fully described in the proxy statement accompanying this notice. | ||
Adjournments and
Postponements: |
Any action on the items of business described above may be considered at the Annual Meeting at the time and on the date specified above or at any time and date to which the Annual Meeting may be properly adjourned or postponed. | |
Record Date:
|
You are entitled to vote if you were a stockholder of record as of the close of business on March 26, 2008. | |
Voting:
|
Your vote is very important. Whether or not you plan to attend the Annual Meeting, we encourage you to read the proxy statement and submit your proxy card or vote on the Internet or by telephone as soon as possible. For specific instructions on how to vote your shares, please refer to the section entitled Questions and Answers About Procedural Matters and the instructions on the enclosed proxy card. |
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38 |
Q: | Why am I receiving these proxy materials? | |
A: | The Board of Directors of Intevac, Inc. is providing these proxy materials to you in connection with the solicitation of proxies for use at the 2008 Annual Meeting of Stockholders (the Annual Meeting) to be held Thursday, May 15, 2008 at 4:30 p.m., Pacific time, or at any adjournment or postponement thereof for the purpose of considering and acting upon the matters set forth herein. The notice of Annual Meeting, this proxy statement and accompanying form of proxy card are being distributed to you on or about April 4, 2008. | |
Q: | Where is the Annual Meeting? | |
A: | The Annual Meeting will be held at Intevacs principal executive offices, located at 3560 Bassett Street, Santa Clara, California 95054. The telephone number at that location is 408-986-9888. | |
Q: | Can I attend the Annual Meeting? | |
A: | You are invited to attend the Annual Meeting if you were a stockholder of record or a beneficial owner as of March 26, 2008. You should bring photo identification for entrance to the Annual Meeting. The meeting will begin promptly at 4:30 p.m., Pacific time. |
Q: | What is the difference between holding shares as a stockholder of record and as a beneficial owner? | |
A: | Stockholders of record If your shares are registered directly in your name with Intevacs transfer agent, Computershare Trust Company, N.A., you are considered, with respect to those shares, the stockholder of record. These proxy materials have been sent directly to you by Intevac. | |
Beneficial owners Many Intevac stockholders hold their shares through a broker, trustee or other nominee, rather than directly in their own name. If your shares are held in a brokerage account or by a bank or another nominee, you are considered the beneficial owner of shares held in street name. The proxy materials have been forwarded to you by your broker, trustee or nominee, who is considered, with respect to those shares, the stockholder of record. | ||
As the beneficial owner, you have the right to direct your broker, trustee or other nominee on how to vote your shares. For directions on how to vote shares beneficially held in street name, please refer to the voting instruction card provided by your broker, trustee or nominee. Since a beneficial owner is not the stockholder of record, you may not vote these shares in person at the Annual Meeting unless you obtain a legal proxy from the broker, trustee or nominee that holds your shares, giving you the right to vote those shares at the Annual Meeting. |
Q: | How many shares must be present or represented to conduct business at the Annual Meeting? | |
A: | The presence of the holders of a majority of the shares of Common Stock entitled to vote at the Annual Meeting is necessary to constitute a quorum at the Annual Meeting. Such stockholders are counted as present at the meeting if they (1) are present in person at the Annual Meeting or (2) have properly submitted a proxy. |
Under the General Corporation Law of the State of Delaware, abstentions and broker non-votes are counted as present and entitled to vote and are, therefore, included for purposes of determining whether a quorum is present at the Annual Meeting. | ||
A broker non-vote occurs when a nominee holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power with respect to that item and has not received instructions from the beneficial owner. | ||
Q: | Who is entitled to vote at the Annual Meeting? | |
A: | Holders of record of Intevacs common stock, par value $0.001 per share (the Common Stock) at the close of business on March 26, 2008 (the Record Date) are entitled to receive notice of and to vote their shares at the Annual Meeting. Such stockholders are entitled to cast one vote for each share of Common Stock held as of the Record Date. | |
At the Record Date, we had 21,676,198 shares of our Common Stock outstanding and entitled to vote at the Annual Meeting, held by 124 stockholders of record. We believe that approximately 8,200 beneficial owners hold shares through brokers, fiduciaries and nominees. No shares of Intevacs preferred stock were outstanding. | ||
Q: | How can I vote my shares in person at the Annual Meeting? | |
A: | Shares held in your name as the stockholder of record may be voted in person at the Annual Meeting. Shares held beneficially in street name may be voted in person at the Annual Meeting only if you obtain a legal proxy from the broker, trustee or other nominee that holds your shares giving you the right to vote the shares. Even if you plan to attend the Annual Meeting, we recommend that you also submit your proxy card or voting instructions as described below, so that your vote will be counted if you later decide not to attend the meeting. | |
Q: | How can I vote my shares without attending the Annual Meeting? | |
A: | Whether you hold shares directly as the stockholder of record or beneficially in street name, you may direct how your shares are voted without attending the Annual Meeting. If you are a stockholder of record, you may vote by submitting a proxy. If you hold shares beneficially in street name, you may vote by submitting voting instructions to your broker, trustee or nominee. For instructions on how to vote, please refer to the instructions below and those included on your proxy card or, for shares held beneficially in street name, the voting instructions provided to you by your broker, trustee or nominee. | |
By mail Stockholders of record of Intevac Common Stock may submit proxies by completing, signing and dating their proxy cards and mailing them in the accompanying pre-addressed envelopes. Proxy cards submitted by mail must be received by the time of the meeting in order for your shares to be voted. Intevac stockholders who hold shares beneficially in street name may vote by mail by completing, signing and dating the voting instructions provided by their brokers, trustees or nominees and mailing them in the accompanying pre-addressed envelopes. | ||
By Internet Stockholders of record of Intevac Common Stock with Internet access may submit proxies by following the Vote by Internet instructions on their proxy cards until 11:00 p.m., Pacific time, on May 14, 2008. Most Intevac stockholders who hold shares beneficially in street name may vote by accessing the web site specified in the voting instructions provided by their brokers, trustees or nominees. Please check the voting instructions for Internet voting availability. | ||
By telephone Stockholders of record of Intevac Common Stock who live in the United States, Puerto Rico or Canada may submit proxies by following the Vote by Phone instructions on their proxy cards until 11:00 p.m., Pacific time, on May 14, 2008. Most Intevac stockholders who hold shares beneficially in street name may vote by phone by calling the number specified in the voting instructions provided by their brokers, trustees or nominees. Please check the voting instructions for telephone voting availability |
2
Q: | What proposals will be voted on at the Annual Meeting? | |
A: | At the Annual Meeting, stockholders will be asked to vote on: | |
(1) The election of directors to serve for the ensuing year
or until their respective successors are duly elected and
qualified;
|
||
(2) An amendment to the 2004 Equity Incentive Plan to
increase the number of shares reserved for issuance thereunder
by 500,000; and
|
||
(3) The ratification of the appointment of Grant Thornton
LLP as independent public accountants of Intevac for the fiscal
year ending December 31, 2008.
|
||
Q: | What is the voting requirement to approve each of the proposals? | |
A: | Proposal One A plurality of the votes cast is required for the election of directors. You may vote FOR or WITHHOLD on each of the six nominees for election as director. The six nominees for director receiving the highest number of affirmative votes will be elected as directors of Intevac to serve for a term of one year or until their respective successors have been duly elected and qualified. Abstentions and broker non-votes will not affect the outcome of the election. | |
Proposal Two The affirmative vote of a majority of votes represented and voting at the Annual Meeting votes cast is required for approval of the amendment to add an additional 500,000 shares to the Intevac 2004 Equity Incentive Plan. You may vote FOR, AGAINST or ABSTAIN on this proposal. Abstentions are deemed to be votes cast and have the same effect as a vote against this proposal. However, broker non-votes are not deemed to be votes cast and, therefore, are not included in the tabulation of the voting results on this proposal. | ||
Proposal Three The affirmative vote of a majority of votes cast is required to ratify the appointment of Grant Thornton LLP as Intevacs independent public accountants. You may vote FOR, AGAINST or ABSTAIN on this proposal. Abstentions are deemed to be votes cast and have the same effect as a vote against this proposal . However, broker non-votes are not deemed to be votes cast and, therefore, are not included in the tabulation of the voting results on this proposal. | ||
Stockholder ratification of the selection of Grant Thornton LLP as Intevacs independent public accountants is not required by our Bylaws or other applicable legal requirements. However, the Board is submitting the selection of Grant Thornton LLP to the stockholders for ratification as a matter of good corporate practice. If the stockholders fail to ratify the selection, the Audit Committee will reconsider whether or not to retain that firm. Even if the selection is ratified, the Audit Committee in its discretion may direct the appointment of a different independent accounting firm at any time during the year, if it determines that such a change would be in the best interests of Intevac and its stockholders. | ||
Q: | How does the Board of Directors recommend that I vote? | |
A: | The Board of Directors recommends that you vote your shares: | |
FOR the election of all of the nominees
as director listed in Proposal One;
|
||
FOR the adoption of the amendment to add
an additional 500,000 shares to the Intevac 2004 Equity
Incentive Plan; and
|
||
FOR the proposal to ratify the selection
of Grant Thornton LLP as Intevacs independent public
accountants for the fiscal year ending December 31, 2008.
|
||
Q: | If I sign a proxy, how will it be voted? | |
A: | All shares entitled to vote and represented by properly executed proxy cards received prior to the applicable deadlines described above (and not revoked) will be voted at the Annual Meeting in accordance with the instructions indicated on those proxy cards. If no instructions are indicated on a properly executed proxy card, the shares represented by that proxy card will be voted as recommended by the Board of Directors. |
3
Q: | What happens if additional matters are presented at the Annual Meeting? | |
A: | If any other matters are properly presented for consideration at the Annual Meeting, including, among other things, consideration of a motion to adjourn the Annual Meeting to another time or place (including, without limitation, for the purpose of soliciting additional proxies), the persons named in the enclosed proxy card and acting thereunder will have discretion to vote on those matters in accordance with their best judgment. Intevac does not currently anticipate that any other matters will be raised at the Annual Meeting. | |
Q: | Can I change or revoke my vote? | |
A: | Subject to any rules and deadlines your broker, trustee or nominee may have, you may change your proxy instructions at any time before your proxy is voted at the Annual Meeting. | |
If you are a stockholder of record, you may change your vote by (1) filing with Intevacs Secretary, prior to your shares being voted at the Annual Meeting, a written notice of revocation or a duly executed proxy card, in either case dated later than the prior proxy card relating to the same shares, or (2) by attending the Annual Meeting and voting in person (although attendance at the Annual Meeting will not, by itself, revoke a proxy). A stockholder of record that has voted on the Internet or by telephone may also change his or her vote by making a timely and valid later Internet or telephone vote. | ||
If you are a beneficial owner of shares held in street name, you may change your vote (1) by submitting new voting instructions to your broker, trustee or other nominee or (2) if you have obtained a legal proxy from the broker, trustee or other nominee that holds your shares giving you the right to vote the shares, by attending the Annual Meeting and voting in person. | ||
Any written notice of revocation or subsequent proxy card must be received by Intevacs Secretary prior to the taking of the vote at the Annual Meeting. Such written notice of revocation or subsequent proxy card should be hand delivered to Intevacs Secretary or should be sent so as to be delivered to Intevacs principal executive offices, Attention: Corporate Secretary. | ||
Q: | Who will bear the cost of soliciting votes for the Annual Meeting? | |
A: | Intevac will bear all expenses of this solicitation, including the cost of preparing and mailing these proxy materials. Intevac may reimburse brokerage firms, custodians, nominees, fiduciaries and other persons representing beneficial owners of Common Stock for their reasonable expenses in forwarding solicitation material to such beneficial owners. Directors, officers and employees of Intevac may also solicit proxies in person or by other means of communication. Such directors, officers and employees will not be additionally compensated but may be reimbursed for reasonable out-of-pocket expenses in connection with such solicitation. Intevac may engage the services of a professional proxy solicitation firm to aid in the solicitation of proxies from certain brokers, bank nominees and other institutional owners. Our costs for such services, if retained, will not be significant. | |
Q: | Where can I find the voting results of the Annual Meeting? | |
A: | We intend to announce preliminary voting results at the Annual Meeting and will publish final results in our quarterly report on Form 10-Q for the second quarter of fiscal 2008. |
Q: | What is the deadline to propose actions for consideration at next years annual meeting of stockholders or to nominate individuals to serve as directors? | |
A: | You may submit proposals, including director nominations, for consideration at future stockholder meetings. | |
Requirements for stockholder proposals to be considered for inclusion in Intevacs proxy materials Stockholders may present proper proposals for inclusion in Intevacs proxy statement and for consideration at the next annual meeting of its stockholders by submitting their proposals in writing to Intevacs Secretary in a timely manner. In order to be included in the proxy statement for the 2009 annual meeting of stockholders, stockholder proposals must be received by Intevacs Secretary no later than December 5, 2008, and must otherwise comply with the requirements of Rule 14a-8 of the Securities Exchange Act of 1934, as amended (the Exchange Act). |
4
Requirements for stockholder proposals to be brought before an annual meeting In addition, Intevacs bylaws establish an advance notice procedure for stockholders who wish to present certain matters before an annual meeting of stockholders. In general, nominations for the election of directors may be made by (1) the Board of Directors, (2) the Nominating and Governance Committee or (3) any stockholder entitled to vote who has delivered written notice to Intevacs Secretary no later than the Notice Deadline (as defined below), which notice must contain specified information concerning the nominees and concerning the stockholder proposing such nominations. | ||
Intevacs bylaws also provide that the only business that may be conducted at an annual meeting is business that is (1) specified in the notice of meeting given by or at the direction of the Board of Directors, (2) properly brought before the meeting by or at the direction of the Board of Directors or (3) properly brought before the meeting by a stockholder who has delivered written notice to the Secretary of Intevac no later than the Notice Deadline (as defined below). | ||
The Notice Deadline is defined as that date which is 120 days prior to the one year anniversary of the date on which Intevac first mailed its proxy materials to stockholders for the previous years annual meeting of stockholders. As a result, the Notice Deadline for the 2009 annual meeting of stockholders is December 5, 2008. | ||
If a stockholder who has notified Intevac of his or her intention to present a proposal at an annual meeting does not appear to present his or her proposal at such meeting, Intevac need not present the proposal for vote at such meeting. | ||
If a stockholder intends to raise a proposal at our 2008 Annual Meeting of Stockholders that is not eligible for inclusion in the proxy statement relating to the meeting and the stockholder has failed to give us notice in accordance with the requirements set forth in the Securities Exchange Act by February 21, 2008 and the bylaw notice requirements set forth above are inapplicable or waived, the proxy holders will be allowed to use their discretionary authority when and if the proposal is raised at our 2008 Annual Meeting. | ||
Q: | How may I obtain a copy of the bylaw provisions regarding stockholder proposals and director nominations? | |
A: | A copy of the full text of the bylaw provisions discussed above may be obtained by writing to the Secretary of Intevac. All notices of proposals by stockholders, whether or not included in Intevacs proxy materials, should be sent to Intevacs principal executive offices, Attention: Secretary. |
Q: | How can I obtain electronic copies of the proxy materials for the 2008 Annual Meeting? | |
A: | This proxy statement and Intevacs Annual Report on Form 10-K for Fiscal 2007 are available electronically at the Investor Relations page of our website at www.intevac.com. | |
Q: | What should I do if I receive more than one set of proxy materials? | |
A: | You may receive more than one set of proxy materials, including multiple copies of this proxy statement and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you may receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a stockholder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each Intevac proxy card or voting instruction card that you receive to ensure that all your shares are voted. | |
Q: | How may I obtain a separate set of proxy materials or the 2007 Annual Report? | |
A: | If you share an address with another stockholder, each stockholder may not receive a separate copy of the proxy materials and 2007 Annual Report. | |
Stockholders who do not receive a separate copy of the proxy materials and 2007 Annual Report may request to receive a separate copy of the proxy materials and 2007 Annual Report by calling 408-986-9888 or by writing to Investor Relations at Intevacs principal executive offices. Alternatively, stockholders who share an address and |
5
receive multiple copies of our proxy materials and 2007 Annual Report can request to receive a single copy by following the instructions above, although each stockholder of record or beneficial owner must still submit a separate proxy card. | ||
Q: | What is the mailing address for Intevacs principal executive offices? | |
A: | Intevacs principal executive offices are located at 3560 Bassett Street, Santa Clara, California 95054. | |
Any written requests for additional information, additional copies of the proxy materials and 2007 Annual Report, notices of stockholder proposals, recommendations for candidates to the Board of Directors, communications to the Board of Directors or any other communications should be sent to this address. |
Name of Nominee
|
Position(s) with Intevac
|
Age | ||||
Norman H. Pond
|
Chairman of the Board | 69 | ||||
Kevin Fairbairn
|
President and Chief Executive Officer | 54 | ||||
David S. Dury
|
Director | 59 | ||||
Stanley J. Hill
|
Director | 66 | ||||
Robert Lemos
|
Director | 67 | ||||
Ping Yang
|
Director | 55 |
6
7
8
9
10
11
12
Number of
|
Average Per
|
|||||||
Shares
|
Share Exercise
|
|||||||
Name of Individual or Group
|
Granted | Price | ||||||
Kevin Fairbairn
|
75,000 | $ | 16.13 | |||||
Charles B. Eddy III(1)
|
| N/A | ||||||
Jeffrey Andreson
|
50,000 | 20.20 | ||||||
Michael Barnes
|
25,000 | 16.13 | ||||||
Luke Marusiak
|
25,000 | 16.13 | ||||||
Joseph Pietras
|
25,000 | 16.13 | ||||||
All executive officers, as a group
|
232,500 | 17.13 | ||||||
All directors who are not executive officers, as a group
|
30,000 | 20.10 | ||||||
All employees who are not executive officers, as a group
|
487,500 | 17.87 |
(1) | Mr. Eddy retired as our CFO in August 2007 and did not receive an option grant during the year. |
13
A-1
A-2
A-3
A-4
A-5
A-6
A-7
A-8
A-9
A-10
A-11
A-12
A-13
A-14
A-15
A-16
A-17
A-18
A-19
selection of Grant Thornton LLP as Intevacs independent
registered public
accounting firm for the fiscal year ending December 31,
2008.
2007
2006
$
996,645
$
944,823
192,039
255,035
$
1,188,684
$
1,199,858
(1)
Audit fees consist of fees billed for professional services
rendered for the audit of our annual consolidated financial
statements and review of the interim consolidated financial
statements included in our Quarterly Reports on
Form 10-Q
and fees for services that are normally provided by Grant
Thornton LLP in connection with statutory and regulatory filings
or engagements. In addition, audit fees included those fees
related to Grant Thorntons audit of the effectiveness of
our internal controls over financial reporting pursuant to
Section 404 of the Sarbanes-Oxley Act.
(2)
Tax fees consisted of fees billed for tax compliance,
consultation and planning services, and include fee associated
with a research and development tax credit study.
14
Table of Contents
Overseeing the accounting and financial reporting processes and
audits of our financial statements;
Assisting the Board in overseeing and monitoring (i) the
integrity of our financial statements, (ii) our compliance
with legal and regulatory requirements related to financial
statements or accounting matters, (iii) our independent
auditors qualifications, independence and performance, and
(iv) our internal accounting and financial controls;
Preparing the report that the rules of the SEC require be
included in this proxy statement;
Periodically providing the Board with the results of its
monitoring and recommendations derived therefrom; and
Providing to the Board additional information and materials as
it deems necessary to make the Board aware of significant
financial matters that require the attention of the Board.
15
Table of Contents
Overseeing the entirety of Intevacs compensation and
benefit policies, plans and programs;
Overseeing the annual report on executive compensation for
inclusion in Intevacs proxy statement; and
Overseeing executive succession planning.
16
Table of Contents
The Nominating and Governance Committee periodically reviews the
current composition, size and effectiveness of the Board.
In its evaluation of director candidates, including the members
of the Board of Directors eligible for re-election, the
Committee seeks to achieve a balance of knowledge, experience
and capability on the Board and considers (1) the current
size and composition of the Board and the needs of the Board and
the respective committees of the Board, (2) such factors as
issues of character, judgment, diversity, age, expertise,
business experience, length of service, independence, other
commitments and the like, (3) the relevance of the
candidates skills and experience to our businesses and
(4) such other factors as the Nominating and Governance
Committee may consider appropriate.
While the Nominating and Governance Committee has not
established specific minimum qualifications for director
candidates, the Nominating and Governance Committee believes
that candidates and nominees must reflect a Board that is
comprised of directors who (1) are predominantly
independent, (2) are of high integrity, (3) have
broad, business-related knowledge and experience at the
policy-making level in business, government or technology,
including an understanding of our industry and our business in
particular, (4) have qualifications that will increase
overall Board effectiveness and (5) meet other requirements
that may be required by applicable laws and regulations, such as
financial literacy or financial expertise with respect to audit
committee members.
With regard to candidates who are properly recommended by
stockholders or by other means, the Nominating and Governance
Committee will review the qualifications of any such candidate,
which review may, in the Nominating and Governance
Committees discretion, include interviewing references for
the candidate, direct interviews with the candidate, or other
actions that the Committee deems necessary or proper.
In evaluating and identifying candidates, the Nominating and
Governance Committee has the authority to retain or terminate
any third party search firm that is used to identify director
candidates, and has the authority to approve the fees and
retention terms of any search firm.
The Nominating and Governance Committee will apply these same
principles when evaluating Board candidates who may be elected
initially by the full Board either to fill vacancies or to add
additional directors prior to the Annual Meeting of Stockholders
at which directors are elected.
After completing its review and evaluation of director
candidates, the Nominating and Governance Committee selects, or
recommends to the full Board of Directors for selection, the
director nominees.
17
Table of Contents
Provide a significant portion of total compensation as a
performance-based annual cash bonus based on Intevacs
overall financial performance relative to its annual financial
plan and executive performance relative to predetermined goals;
Directly tie total performance-based annual cash bonus expense
to profitability metrics, so that bonuses increase with
increasing profits, decrease with decreasing profits and are not
paid when profitability metrics are negative;
Provide equity-based, long-term incentives to further align the
financial interests of the executive officers with those of our
stockholders; and
Offer a total compensation opportunity that takes into
consideration the practices of other companies with which
Intevac competes for executive talent.
Provide a total compensation package that is competitive with
our peer group, but that also takes into account the need to
compete for talent with large equipment companies such as
Applied Materials and LAM Research.
18
Table of Contents
Align compensation with company performance by:
-
Providing a significant portion of total compensation in the
form of a performance-based annual cash bonus dependent on the
Companys profitability and each executives
performance relative to predetermined business objectives and
target financial results set at the beginning of each fiscal
year.
-
Providing another significant portion of total compensation in
the form of stock options, which focus each executive on
creating stockholder value over the vesting period of the
options.
-
Paying executive compensation that will generally be above peer
company executive compensation when Intevacs financial
performance is above peer company financial performance and
below peer company executive compensation when Intevacs
financial performance is below that of peer companies.
Increase the portion of total compensation based on
performance-based annual cash bonuses and stock options relative
to base salary with increasing executive responsibility level.
Align each executives goals with those of other executives
to encourage a team approach to problem solving.
Provide clear guidelines for each compensation element (base
salary, performance-based annual cash bonus and stock options),
but give the Compensation Committee flexibility to make final
decisions based on management recommendations (other than
decisions for the Chief Executive Officer and Chairman, which
are made by the independent members of the Board of Directors),
and other factors such as experience, contribution to business
success and retention needs.
Provide similar benefits to Named Executive Officers as provided
to other employees.
The Executive Incentive Plan for our Named Executive Officers is
the same plan as is used to determine performance-based annual
cash bonuses for all other Intevac vice presidents and
functional directors.
Named Executive Officers participate in the same stock option
and stock purchase plans as other Intevac employees.
19
Table of Contents
Atheros Communications, Inc.
Brooks Automation, Inc.
Cymer, Inc.
Electro Scientific Industries, Inc.
Foundry Networks, Inc.
Micrel, Inc.
Silicon Image, Inc.
Was generally above peer company executive compensation when
Intevacs financial performance was above peer company
financial performance and below peer company executive
compensation when Intevacs financial performance was below
that of peer companies;
Was more variable as a function of performance than the Peer
Group and that it continued to provide strong incentive to
management to optimize Intevacs financial
performance; and
Consistent with our plan design, the cyclical downturn in our
Equipment business, which led to reduced profitability in 2007,
also led to reduced performance-based annual cash bonuses for
our Named Executive Officers in 2007 relative to 2006.
Base salary;
Performance-based annual cash bonus targeted as a percentage of
base salary (Target Bonus Percentage); and
Periodic grants of long-term, equity-based incentives, currently
stock options with four-year annual vesting.
20
Table of Contents
2007 Base Salary
Increase as a % of
2006 Base Salary
2007 Base Salary
2006 Base Salary
$
381,825
$
450,008
17.9
%
N/A
$
250,016
N/A
$
226,616
$
245,897
8.5
%
$
219,461
$
245,814
12.0
%
$
250,016
$
260,021
4.0
%
$
232,034
$
241,322
4.0
%
Target Bonus
Bonus Pool
Management by Objectives
21
Table of Contents
2006 Target Bonus
2007 Target Bonus
as a Percent of
as a Percent of
Base Salary
Base Salary
200
%
200
%
N/A
75
%
70
%
75
%
70
%
75
%
70
%
75
%
70
%
75
%
Business Results:
Goals included achievements
with respect to metrics such as orders, revenues, profitability,
cash management, quality, cycle-time and other finance related
metrics that were targeted for improvement.
Market Development:
Goals included
achievements with respect to metrics such as market share, new
customers gained for particular products, and completion of
comprehensive marketing and sales plans for gaining additional
business and higher gross margins.
Product Excellence:
Goals included
achievements with respect to metrics such as target completion
dates for new products or improved products, material cost and
reliability goals for new products, product yield improvements,
field product performance and other measures as appropriate to
encourage product excellence.
Strategic Initiatives:
Goals included
achievements with respect to metrics such as such as business
process improvements, employee reviews, employee development,
safety goals and other measures needed to support Intevacs
growth.
22
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Target Bonus:
Equal to 2007 base salary
received x Target Bonus Percentage.
Performance against MBO goals:
To the extent a
Named Executive Officers MBO rating was higher, or lower,
than the average for all executives, then the executives
Target Bonus Amount was proportionately increased, or decreased.
Business Unit Performance:
To the extent a
Named Executive Officers business unit MBO rating was
higher, or lower, than the average for other Named Executive
Officers then the executives Target Bonus Amount was
proportionately increased, or decreased.
Executive Incentive Plan Bonus Pool:
After the
above adjustments were made, executive bonuses were then
proportionally adjusted downward to the extent the Executive
Incentive Plan Bonus Pool was smaller than the amount required
to pay Target Bonuses.
% Increase/
(Decrease) in 2007
2007 Target
Bonus vs.
2006 Bonus
Bonus
2007 Bonus
2006 Bonus
$
1,543,705
$
900,000
$
677,465
(56.1
)%
N/A
$
101,250
$
100,000
N/A
$
320,669
$
184,423
$
N/A
$
351,952
$
184,350
$
150,645
(57.3
)%
$
366,585
$
195,000
$
145,463
(60.3
)%
$
121,572
$
180,990
$
136,239
12.1
%
(1)
Mr Andresons 2007 Target Bonus was prorated to reflect his
June 2007 hire date. Mr. Andreson was guaranteed a $100,000
first year bonus in his employment offer letter.
(2)
Mr. Eddy retired prior to the end of the plan year.
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2006 Option Grants
2007 Option Grants
75,000
75,000
N/A
50,000
25,000
25,000
25,000
120,000
25,000
50,000
25,000
24
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Advanced Energy Industries, Inc..
Brooks Automation, Inc.
Cymer, Inc
FEI Company
Formfactor, Inc.
Mattson Technology, Inc.
Rofin Sinar Technologies, Inc.
Sunpower Corporation
% Increase/
(Decrease) in
2008 Base
2007 Base
2008 Base
Salary vs. 2007
Salary
Salary
Base Salary
$
450,008
$
468,021
4.0
%
$
250,016
$
260,021
4.0
%
$
245,897
$
270,400
9.9
%
$
260,021
$
270,442
3.8
%
$
241,322
$
255,091
5.7
%
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2007 Target Bonus
2008 Target Bonus(2)
$
900,000
$
936,042
$
101,250
(1)
$
195,016
$
184,350
$
202,800
$
195,000
$
202,800
$
180,990
$
191,318
(1)
Prorated to reflect June 2007 hire date
(2)
Our current plan does not reflect the profit level required to
pay these amounts
26
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Change in
Pension
Value and
Non-Equity
Nonqualified
Stock
Option
Incentive Plan
Deferred
All Other
Bonus
Awards
Awards
Compensation
Compensation
Compensation
Year
Salary ($)
($)
($)
($)(1)
($)(2)
Earnings ($)
($)(3)
Total ($)
2007
439,518
491,750
677,465
6,296
1,615,029
2006
379,026
213,189
1,543,705
6,164
2,142,084
2007
172,909
142,297
13,211
328,417
2006
225,598
90,263
320,669
6,164
642,694
2007
125,008
50,000
146,967
100,000
2,000
423,975
2006
2007
258,482
377,831
145,463
8,612
790,388
2006
219,245
548,326
366,585
2,000
1,134,156
2007
241,760
169,825
150,645
8,023
570,253
2006
215,078
71,621
351,352
6,164
644,815
2007
239,891
246,147
136,239
2,000
624,277
2006
80,316
92,912
121,572
2,000
296,800
(1)
Amounts shown do not reflect compensation actually received by
the named executive officer. Instead, the amounts shown are the
compensation costs we recognized in fiscal 2007 and 2006 for
option awards as determined pursuant to FAS 123(R). These
compensation costs reflect option awards granted in and prior to
fiscal 2007 and 2006. The assumptions used to calculate the
value of option awards are set forth under Note 3 of the
notes to Consolidated Financial Statements included in our
Annual Report on
Form 10-K
for fiscal 2007 filed with the SEC on March 17, 2008.
(2)
Amounts consist of bonuses earned under Intevacs
Management Incentive Plan for services rendered in fiscal 2007
and paid in 2008, and for services rendered in fiscal 2006 and
paid in 2007.
(3)
Amounts consist of (i) matching contributions we made under
our tax-qualified 401(k) Plan, which provides for broad-based
employee participation, and (ii) of compensation costs we
recognized for participation in our Employee Stock Purchase Plan.
(4)
Mr. Eddy retired as our Chief Financial Officer on
August 10, 2007. Mr. Eddy is still employed by us on a
part-time basis.
(5)
Mr. Andreson was hired on June 18, 2007 and became
Chief Financial Officer upon Mr. Eddys retirement.
Mr. Andreson was paid a bonus upon his hire by Intevac.
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All Other
Grant Date
All Other
Option
Exercise or
Fair Value
Awards:
Awards:
Base
of Stock
Estimated Possible Payouts Under Non-
Number of
Number of
Price of
Option and
Equity Incentive Plan Awards(1)
Shares of
Securities
Option
Option
Grant
Threshold
Target
Maximum
Stock
Underlying
Awards
Awards
Date
($)
($)
($)
or Units (#)
Options (#)
($/Share)
($)(2)
08/30/07
75,000
16.13
674,340
N/A
0
900,000
N/A
06/21/07
50,000
20.20
567,763
N/A
0
101,250
N/A
08/30/07
25,000
16.13
224,780
N/A
0
195,000
N/A
08/30/07
25,000
16.13
224,780
N/A
0
184,350
N/A
08/30/07
25,000
16.13
224,780
N/A
0
180,990
N/A
(1)
Reflects threshold, target and maximum target bonus amounts for
fiscal 2007 performance under the Management Incentive Plan, as
described in Compensation Discussion and
Analysis Compensation Components. The actual
bonus amounts were determined by the Compensation Committee in
February 2008, and are reflected in the Non-Equity
Incentive Plan Compensation column of the 2007
Summary Compensation Table.
(2)
Reflects the grant date fair value of each equity award computed
in accordance with FAS 123(R). The assumptions used to
calculate the value of option awards are set forth under
Note 3 of the notes to Consolidated Financial Statements
included in our Annual Report on
Form 10-K
for fiscal 2007 filed with the SEC on March 17, 2008.
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Option Awards(1)
Equity Incentive
Plan Awards:
Number of
Number of
Number of Securities
Securities
Securities
Underlying
Underlying
Underlying
Option
Option
Unexercised Options
Unexercised Options
Unexercised
Exercise
Expiration
(#) Exercisable
(#) Unexercisable
Unearned Options (#)
Price ($)
Date
174,769
2.63
01/24/2012
50,000
14.00
02/19/2014
50,000
(2)
7.53
02/01/2015
18,750
56,250
(3)
16.13
08/30/2016
75,000
(4)
16.13
08/30/2017
6,668
(5)
4.06
07/22/2014
20,000
(6)
7.72
02/08/2015
6,250
18,750
(7)
16.13
08/30/2016
50,000
(8)
20.20
06/21/2017
2,500
12.66
09/09/2015
30,000
90,000
(9)
15.81
01/19/2016
25,000
(10)
16.13
08/30/2017
39,500
10.01
05/14/2014
20,000
(11)
7.72
02/08/2015
6,250
18,750
(12)
16.13
08/30/2016
25,000
(13)
16.13
08/30/2017
12,500
37,500
(14)
17.00
08/17/2016
25,000
(15)
16.13
08/30/2017
(1)
Reflects options granted under the 2004 Equity Incentive Plan
and the 1995 Stock Option Plan.
(2)
Assuming continued employment with Intevac, the shares will
become exercisable on February 1, 2009.
(3)
Assuming continued employment with Intevac, 18,750 shares
will become exercisable on August 30 of each 2008, 2009 and 2010.
(4)
Assuming continued employment with Intevac, 18,750 shares
will become exercisable on August 30 of each 2008, 2009, 2010
and 2011.
(5)
Assuming continued employment with Intevac, the shares will
become exercisable on July 22, 2008.
(6)
Assuming continued employment with Intevac, the shares will
become exercisable on February 8, 2009.
(7)
Assuming continued employment with Intevac, 6,250 shares
will become exercisable on August 30 of each 2008, 2009 and 2010.
(8)
Assuming continued employment with Intevac, 12,500 shares
will become exercisable on June 21 of each 2008, 2009, 2010 and
2011.
(9)
Assuming continued employment with Intevac, 30,000 shares
will become exercisable on January 19 of each 2008, 2009 and
2010.
(10)
Assuming continued employment with Intevac, 6,250 shares
will become exercisable on August 30 of each 2008, 2009, 2010
and 2011.
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(11)
Assuming continued employment with Intevac, the shares will
become exercisable on February 8, 2009.
(12)
Assuming continued employment with Intevac, 6,250 shares
will become exercisable on August 30 of each 2008, 2009 and 2010.
(13)
Assuming continued employment with Intevac, 6,250 shares
will become exercisable on August 30 of each 2008, 2009, 2010
and 2011
(14)
Assuming continued employment with Intevac, 12,500 shares
will become exercisable on August 17 of each 2008, 2009 and 2010.
(15)
Assuming continued employment with Intevac, 6,250 shares
will become exercisable on August 30 of each 2008, 2009, 2010
and 2011.
Option Awards
Stock Awards
Number of
Shares
Number of Shares
Acquired on
Value Realized on
Acquired on
Value Realized on
Exercise (#)
Exercise ($)(1)
Vesting (#)
Vesting ($)
14,332
233,432
(1)
The value realized equals the difference between the option
exercise price and the fair value of Intevac common stock on the
date of exercise, multiplied by the number of shares for which
the option was exercised.
In the event of the involuntary termination from his position as
President and Chief Executive Officer for any reason not
involving good cause, conditioned upon execution of a waiver and
release of claim, the Company will continue to pay his base
salary for twelve (12) months following such termination.
If Intevac had terminated Mr. Fairbairns employment
without cause on December 31, 2007, the last business day
of our fiscal 2007, Mr. Fairbairn would have received his
base salary of $450,008 over the following 12 months.
In the event of a Change of Control after which Intevac stock
does not exist (such as purchase of the Company for cash), all
of Mr. Fairbairns unvested options outstanding at
that time will immediately vest. If Intevac had undergone such a
Change of Control as of December 31, 2007, stock options to
purchase 181,250 shares would have become immediately
vested. However, 131,250 options shares would be under
water and not provide any benefit to Mr. Fairbairn.
Based on the difference between the weighted average price of
the remaining options and $14.54, the closing price of Intevac
common stock on December 31, 2007, the net value of the
other options would have been $350,500.
In the event of a Change of Control in which Intevac stock
survives, Mr. Fairbairn may elect either to retain his
unvested options or to accelerate vesting as set forth above.
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In the event of a Change of Control in which stock in the
acquiring company is exchanged for Intevac stock and the
acquiring company offers to substitute options in non-Intevac
stock with an economic value equal to all of
Mr. Fairbairns unvested Intevac options, he may
either elect to accept the new stock options or accelerate
vesting as set forth above.
In the event of a Change of Control where the acquiring company
decides to not retain Mr. Fairbairn in his current
position, the Company will pay Mr. Fairbairn an amount
equal to twelve (12) months of his base salary in one lump
sum within thirty days after the consummation of the Change of
Control transaction, which would have been $450,008 as of
December 31, 2007. In the event the acquiring company
requests that Mr. Fairbairn continue as CEO or in an
equivalent position, a contract will be established with the
acquiring company requiring it to pay Mr. Fairbairn an
amount equal to two times his annual salary after twelve
(12) months of employment, which would be $900,016 as of
December 31, 2007.
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Change in
Pension Value
and
Nonqualified
Fees Earned
Non-Equity
Deferred
or Paid in
Stock
Option
Incentive Plan
Compensation
All Other
Cash
Awards
Awards
Compensation
Earnings
Compensation
Total
($)
($)
($)(1)
($)
($)
($)
($)
33,875
117,907(2
)
151,782
27,000
117,907(2
)
144,907
27,000
117,907(2
)
144,907
27,000
225,118(3
)
252,118
(1)
Amounts shown do not reflect compensation actually received by
the director. Instead, the amounts shown are the compensation
costs we recognized in fiscal 2007 for option awards as
determined pursuant to FAS 123(R). The assumptions used to
calculate the value of option awards are set forth under
Note 3 of the notes to Consolidated Financial Statements
included in our Annual Report on
Form 10-K
for fiscal 2007 filed with the SEC on March 17, 2008.
(2)
Reflects the compensation costs recognized by Intevac in fiscal
2007 for stock option grants with the following fair value as of
the grant date: (a) $63,254 for a stock option grant to
purchase 10,000 shares of common stock made on May 24,
2006 at an exercise price of $22.01 per share; (b) $54,653
for a stock option grant to purchase 7,500 shares of common
stock made on May 22, 2007 at an exercise price of $20.10.
The directors had options to purchase the following shares of
common stock outstanding at December 31, 2007:
Mr. Dury: 17,500 shares; Mr. Hill:
35,500 shares; and Mr. Lemos: 37,500 shares.
(3)
Reflects the compensation costs recognized by Intevac in fiscal
2007 for stock option grants with the following fair value as of
the grant date: (a) $170,465 for a stock option grant to
purchase 30,000 shares of common stock made on
March 20, 2006 at an exercise price of $22.40 per share;
(b) $54,653 for a stock option grant to purchase
7,500 shares of common stock made on May 22, 2007 at
an exercise price of $20.10. Mr. Yang had options to
purchase 37,500 shares of common stock outstanding at
December 31, 2007.
A cash payment of $7,500 per quarter for serving as a
director; and
An additional cash payment of $1,875 per quarter for serving as
Lead Director.
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(c)
(a)
(b)
Number of Securities
Number of Securities
Weighted-Average
Remaining
to be Issued Upon
Exercise Price of
Available for
Exercise of
Outstanding
Future Issuance
Outstanding Options,
Options, Warrants
Under Equity
Warrants
and
Compensation
and Rights
Rights
Plans(1)
2,587,854
$
13.37
937,772
$
2,587,854
$
13.37
937,772
(1)
Excludes securities reflected in column (a).
(2)
Included in the column (c) amount are 297,919 shares
available for future issuance under our 2003 Employee Stock
Purchase Plan.
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Common Stock
Percentage
Beneficially
Beneficially
Owned(2)
Owned(3)
2,162,100
10.0
%
1,338,697
6.2
%
2,105,930
9.7
%
2,421,900
11.2
%
261,442
1.2
%
87,190
*
3,750
*
64,034
*
50,171
*
12,500
*
32,500
*
20,500
*
25,500
*
784,485
3.6
%
15,000
*
1,411,812
6.4
%
*
Less than 1%
(1)
Unless otherwise indicated in their respective footnote, the
address for each listed person is
c/o Intevac,
Inc., 3560 Bassett Street, Santa Clara, CA 95054
(2)
The number and percentage of shares beneficially owned is
determined in accordance with Rule 13d-3 of the Exchange Act,
and the information is not necessarily indicative of beneficial
ownership for any other purpose. Under such rule, beneficial
ownership includes any shares over which the individual or
entity has the right to acquire within 60 days of
February 14, 2008, through the exercise of any stock option
or other right. Unless otherwise indicated in the footnotes,
each person or entity has sole voting and investment power (or
shares such powers with his or her spouse) with respect to the
shares shown as beneficially owned.
(3)
The total number of shares of Common Stock outstanding as of
February 14, 2008 was 21,674,698.
(4)
The address of Artisan Partners Limited Partnership is 875 East
Wisconsin Avenue, Suite 800, Milwaukee, WI 53202. This
information was obtained from a filing made with the SEC
pursuant to Section 13(g) of the Exchange Act on
February 14, 2008.
(5)
Includes (i) 710,509 shares beneficially owned by
Barclays Global Investors, NA, (ii) 606,063 shares
beneficially owned by Barclays Global Fund Advisors and
(iii) 22,125 shares beneficially owned by Barclays
Global Investors, LTD. The address of Barclays Global Investors,
NA is 45 Fremont Street, San Francisco, CA 94105. This
information was obtained from a filing made with the SEC
pursuant to Section 13(g) of the Exchange Act on
February 14, 2008.
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(6)
The address of DCM Partners LLC is 909 Third Avenue, 30th Floor,
New York, NY 10022. This information was obtained from a filing
made with the SEC pursuant to Section 13(g) of the Exchange
Act on February 14, 2008.
(7)
These securities are owned by various individual investors and
institutional investors, including T. Rowe Price New Horizons
Fund, Inc. (which owns 1,300,000 shares, representing 6.0%
of the shares outstanding), which T. Rowe Price Associates, Inc.
(Price Associates) serves as investment advisor with power to
direct investment and/or sole power to vote the securities. For
purposes of the reporting requirements of the Securities
Exchange Act of 1934, Price Associates is deemed to be
beneficial owner of such securities; however, Price Associates
expressly disclaims that it is, in fact, the beneficial owner of
such securities. The address of Price Associates is
100 E. Pratt Street, Baltimore, Maryland 21202. This
information was obtained from a filing made with the SEC
pursuant to Section 13(g) of the Exchange Act on
February 14, 2008.
(8)
Includes 243,519 shares subject to options exercisable
within 60 days of February 14, 2008.
(9)
Includes 80,940 shares held by the Eddy Family
Trust DTD 02/09/00, whose trustees are Charles Brown
Eddy III and Melissa White Eddy, and 6,250 shares
subject to options exercisable within 60 days of
February 14, 2008.
(10)
Includes 3,000 shares held by the Jeffrey and Maureen
Andreson Trust DTD 03/16/99, whose trustees are Jeffrey
Andreson and Maureen Andreson.
(11)
Includes 62,500 shares subject to options exercisable
within 60 days of February 14, 2008.
(12)
Includes 45,750 shares subject to options exercisable
within 60 days of February 14, 2008.
(13)
Includes 12,500 shares subject to options exercisable
within 60 days of February 14, 2008.
(14)
Includes 2,500 shares subject to options exercisable within
60 days of February 14, 2008.
(15)
Includes 20,500 shares subject to options exercisable
within 60 days of February 14, 2008.
(16)
Includes 22,500 shares subject to options exercisable
within 60 days of February 14, 2008.
(17)
Includes 759,628 shares held by the Norman Hugh Pond and
Natalie Pond Trust DTD 12/23/80, 22,357 shares held by
the Pond 1996 Charitable Remainder Unitrust, both of whose
trustees are Norman Hugh Pond and Natalie Pond, and
2,500 shares subject to options exercisable within
60 days of February 14, 2008.
(18)
Includes 15,000 shares subject to options exercisable
within 60 days of February 14, 2008.
(19)
Includes 482,269 shares subject to options exercisable
within 60 days of February 14, 2008.
36
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reviewed and discussed the audited financial statements with
Grant Thornton LLP and management;
discussed with Grant Thornton LLP, Intevacs independent
public accountants, the matters required to be discussed by the
Statement on Auditing Standards No. 61, Communication with
Audit Committees, as currently in effect;
received from Grant Thornton LLP the written disclosures and the
letter from the independent auditors required by Independence
Standards Board Standard No. 1, Independence Discussions
with Audit Committees, as currently in effect, and discussed
with Grant Thornton LLP their independence; and
considered whether the provision of services covered by Fees
Paid To Accountants For Services Rendered is compatible with
maintaining the independence of Grant Thornton LLP.
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to attract and retain the best available personnel for positions of
substantial responsibility,
to provide additional incentive to Employees, Directors and Consultants, and
to promote the success of the Companys business.
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1.
The election of all nominees listed below for the Board of Directors, as described in the
Proxy Statement:
Nominees:
Norman H. Pond, Kevin Fairbairn, David S. Dury, Stanley J. Hill, Robert Lemos, and
Ping Yang
FOR
o
WITHHELD
o
2.
Proposal to approve an amendment to increase the maximum number of shares of Common Stock
authorized for issuance under the Companys 2004 Equity Incentive Plan by 500,000 shares:
FOR
o
AGAINST
o
ABSTAIN
o
4.
Proposal to ratify the appointment of Grant Thornton LLP as independent public accountants of
Intevac for the fiscal year ending December 31, 2008:
FOR
o
AGAINST
o
ABSTAIN
o
5.
Transaction of any other business which may properly come before the meeting and any
adjournment or postponement thereof.
USING THE ENCLOSED ENVELOPE.