UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A

PROXY STATEMENT PURSUANT TO SECTION 14 (a)

OF THE SECURITIES EXCHANGE ACT OF 1934

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☐	Preliminary Proxy Statement

 

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☒	Definitive Proxy Statement

 

☐	Definitive Additional Materials

 

☐	Soliciting Material Under Section 240.14a-12

INTEVAC, INC.

(Exact Name of Registrant as Specified in its Charter)

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

 

April 12, 2023

Dear Stockholder:

You are cordially invited to attend the 2023 Annual Meeting of Stockholders of Intevac, Inc., a Delaware corporation, which will be held Wednesday, May 17, 2023 at 3:30 p.m., Pacific daylight time, at our principal executive offices located at 3560 Bassett Street, Santa Clara, California 95054. The accompanying notice of Annual Meeting, proxy statement and form of proxy card are being distributed to you on or about April 12, 2023.

Details regarding admission to the Annual Meeting and the business to be conducted are described in the accompanying proxy materials. Also included is a copy of our 2022 Annual Report. We encourage you to read this information carefully.

Your vote is important. Whether or not you plan to attend the Annual Meeting, we hope you will vote as soon as possible. You may vote over the Internet, by telephone or by mailing a proxy card. Voting over the Internet, by telephone or by written proxy will ensure your representation at the Annual Meeting regardless of whether or not you attend in person. Please review the instructions on the proxy card regarding each of these voting options.

Thank you for your ongoing support of Intevac. We look forward to seeing you at the Annual Meeting. Please notify Elizabeth De La Torre at (408) 986-9888 if you plan to attend.

Sincerely yours,

 

Nigel Hunton

President and Chief Executive Officer

 

INTEVAC, INC.

3560 Bassett Street

Santa Clara, California 95054

NOTICE OF ANNUAL MEETING

FOR 2023 ANNUAL MEETING OF STOCKHOLDERS

 

 

 

Time and Date:		Wednesday, May 17, 2023 at 3:30 p.m., Pacific daylight time.
Location:		Intevac’s principal executive offices, located at: 3560 Bassett Street, Santa Clara, California 95054.
Items of Business:		(1)   To elect five directors to serve until Intevac’s next annual meeting of stockholders or until their respective successors are duly elected and qualified.
		(2)   To approve the amended Intevac 2003 Employee Stock Purchase Plan to increase the number of shares reserved for issuance thereunder by 300,000 shares.
		(3)   To approve the amended Intevac 2020 Equity Incentive Plan to increase the number of shares reserved for issuance thereunder by 850,000 shares.
		(4)   To ratify the appointment of BPM LLP as Intevac’s independent public accountants for the fiscal year ending December 30, 2023.
		(5)   To approve, on a non-binding, advisory basis, compensation paid to Intevac’s named executive officers. (6)   To approve, on a non-binding, advisory basis, the frequency of future advisory votes on the compensation paid to Intevac’s named executed officers.
		(7)   To transact such other business as may properly come before the Annual Meeting or any postponement, adjournment or other delay thereof.
		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 28, 2023.
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.

By Order of the Board of Directors,

 

JAMES MONIZ

Executive Vice President, Finance and

Administration, Chief Financial Officer, Secretary and

Treasurer

This notice of Annual Meeting, proxy statement and accompanying form of proxy card are first being distributed on or about April 12, 2023.

 

TABLE OF CONTENTS

 

		Page
Questions and Answers About Procedural Matters			1
Annual Meeting			1
Stock Ownership			1
Quorum and Voting			2
Stockholder Proposals and Director Nominations			6
Additional Information about the Proxy Materials			6
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE STOCKHOLDERS’ MEETING TO BE HELD ON MAY 17, 2023			7
Proposal One – Election of Directors			8
Majority Voting Standard			8
Nominees			8
Business Experience and Qualifications of Nominees for Election as Directors			8
Proposal Two – Approval of the Amended Intevac 2003 Employee Stock Purchase Plan to Increase the Number of Shares Reserved for Issuance Thereunder by 300,000 Shares			11
Summary of the 2003 Employee Stock Purchase Plan			11
Federal Income Tax Aspects			13
Amendment and Termination of the 2003 ESPP			13
2003 ESPP Transactions for Certain Individuals and Groups			14
Proposal Three – Approval of the Amended Intevac 2020 Equity Incentive Plan to Increase the Number of Shares Reserved for Issuance Thereunder by 850,000 Shares			15
Summary of the 2020 Equity Incentive Plan			16
Federal Tax Aspects			21
Number of Awards Granted to Employees, Consultants, and Directors			23
Proposal Four – Ratification of Independent Public Accountants			24
Principal Accountant Fees and Services			24
Pre-Approval of Audit and Permissible Non-Audit Services			24
Proposal Five – Advisory Vote to Approve Executive Compensation			25
Compensation Program and Philosophy			25
Proposal Six – Frequency of Advisory Votes on Executive Compensation			26
Corporate Governance Matters			27
Code of Business Conduct and Ethics			27
Environment, Social and Governance			27
Human Capital Management			28
Cybersecurity			28
Independence of the Board			28
Board Meetings and Committees			28
Attendance at Annual Stockholder Meetings by the Board			30
Contacting the Board			32
Executive Compensation and Related Information			34
Compensation Discussion and Analysis			34
2022 Summary Compensation Table			49
Outstanding Equity Awards at 2022 Fiscal Year-End			50
Executive Employment Agreements and Arrangements			51
Potential Payments upon Termination of Employment or Change of Control			51
2022 Pay Versus Performance Table			54
Compensation of Directors			59
Equity Compensation Plan Information			61
Security Ownership of Certain Beneficial Owners and Management			62
Certain Relationships and Related Party Transactions			64
Audit Committee Report			65
Other Business			66

INTEVAC, INC.

3560 Bassett Street

Santa Clara, California 95054

PROXY STATEMENT

FOR 2023 ANNUAL MEETING OF STOCKHOLDERS

 

 

QUESTIONS AND ANSWERS ABOUT PROCEDURAL MATTERS

Annual Meeting

 

Q:	Why am I receiving these proxy materials?

 

A:

The Board of Directors (the “Board”) of Intevac, Inc. (“we,” “us,” “Intevac” or the “Company”) is providing these proxy materials to you in connection with the solicitation by the Board of proxies for use at Intevac’s 2023 Annual Meeting of Stockholders (the “Annual Meeting”) to be held Wednesday, May 17, 2023 at 3:30 p.m. Pacific daylight 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 12, 2023.

 

Q:	Where will the Annual Meeting be held?

 

A:	The Annual Meeting will be held at Intevac’s principal executive offices, located at 3560 Bassett Street, Santa Clara, California 95054.

 

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 28, 2023 (the “Record Date”). You should bring photo identification for entrance to the Annual Meeting and proof of your holdings. The meeting will begin promptly at 3:30 p.m. Pacific daylight time.

Stock Ownership

 

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 Intevac’s 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.” In this case the proxy materials will 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, and if you do not do so then most of the proposals will not receive the benefit of your vote. 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.

 

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Quorum and Voting

 

Q:	How many shares must be present in person or represented by proxy to conduct business at the Annual Meeting?

 

A:

The presence of the holders of a majority of the shares of Intevac’s common stock, par value $0.001 per share (the “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.

 

Q:	What is a broker non-vote?

 

A:	A broker non-vote on a proposal 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 Intevac’s Common Stock at the close of business on 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.

On the Record Date, there were 25,923,780 shares of our Common Stock outstanding and entitled to vote at the Annual Meeting, held by 73 stockholders of record. We believe that approximately 3,711 beneficial owners hold shares through brokers, fiduciaries and nominees. No shares of Intevac’s preferred stock were outstanding.

A list of stockholders entitled to vote at the Annual Meeting will be available for examination by any stockholder who is present at the Annual Meeting.

 

Q:	What shares may I vote?

 

A:

You may vote all of the Intevac shares owned by you as of the close of business on the Record Date. Each stockholder is entitled to one vote for each share held as of the Record Date on all matters presented at the Annual Meeting. Stockholders are not entitled to cumulate their votes in the election of directors.

 

Q:	How many directors may I vote for?

 

A:	Stockholders may vote for up to five nominees for director. The Board recommends that you vote “FOR” all five of the Board’s nominees for director.

 

Q:	How can I vote my shares in person during 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 by mail, Internet or telephone. 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.

 

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By mail – Stockholders of record 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 following the voting instructions provided by their brokers, trustees or nominees and mailing them in the accompanying pre-addressed envelopes.

By Internet – Stockholders of record with Internet access may submit proxies by following the “Vote by Internet” instructions on their proxy cards until 11:59 p.m., Eastern daylight time, on Tuesday, May 16, 2023. Most Intevac stockholders who hold shares beneficially in street name may vote by accessing the website specified in the voting instructions provided by their brokers, trustees or nominees. Beneficial owners should check their 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 11:59 p.m., Eastern daylight time, on Tuesday, May 16, 2023. 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. Beneficial owners should check their voting instructions for telephone voting availability.

 

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 five directors to serve until Intevac’s next annual meeting of stockholders or until their respective successors are duly elected and qualified;

 

(2)

The approval of the amended Intevac 2003 Employee Stock Purchase Plan to increase the number of shares reserved for issuance thereunder by 300,000 shares;

 

(3)

The approval of the amended Intevac 2020 Equity Incentive Plan to increase the number of shares reserved for issuance thereunder by 850,000 shares;

 

(4)

The ratification of the appointment of BPM LLP as independent public accountants of Intevac for the fiscal year ending December 30, 2023;

 

(5)

The approval, on a non-binding, advisory basis, of the compensation paid to Intevac’s named executive officers (“NEOs”); and

 

(6)

The approval, on a non-binding, advisory basis, of the frequency of future advisory votes on the compensation paid to Intevac’s NEOs.

 

Q:	What is the voting requirement to approve each of the proposals?

 

A:

Election of Directors (Proposal One): Under our Bylaws and our corporate governance guidelines, in an uncontested election (i.e., one in which the number of candidates for election does not exceed the number of directors to be elected) a nominee for election or reelection must receive more votes cast “FOR” such nominee than “AGAINST” such nominee. You may vote “FOR,” “AGAINST” or “ABSTAIN” on each of the five nominees for election as director. The Board has nominated only those candidates who have tendered an irrevocable resignation effective upon (i) such candidate’s failure to receive the required vote in an uncontested election and (ii) acceptance of such resignation by the Board. If an incumbent director does not receive more votes cast “FOR” than “AGAINST” his or her election in an uncontested election, the Nominating and Governance Committee is required to make a recommendation to the Board as to whether it should accept or reject such resignation. Thereafter, the Board is required to decide whether to accept or reject such resignation. In a contested election, the required vote would be a plurality of votes cast. Nominees elected as directors of Intevac shall serve for a term of one year or until their respective successors have been duly elected and qualified.

Equity Plan Proposals (Proposals Two and Three): Approval of (1) the amended Intevac 2003 Employee Stock Purchase Plan (Proposal Two) and (2) the amended Intevac 2020 Equity Incentive Plan (Proposal Three) each requires the affirmative vote of holders of a majority of the shares of Common Stock present in person or represented by proxy at the meeting and entitled to vote on the proposal. You may vote “FOR,” “AGAINST” or “ABSTAIN” for each of these proposals.

 

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Ratification of BPM LLP (Proposal Four): Although stockholder ratification of the selection of BPM LLP as Intevac’s independent public accountants is not required by our Bylaws or other applicable legal requirements, the Board is submitting the selection of BPM 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. Ratification of the selection of BPM LLP requires the affirmative vote of a majority of the shares of Common Stock present in person or represented by proxy at the meeting and entitled to vote on the proposal. You may vote “FOR,” “AGAINST” or “ABSTAIN” on this proposal.

Advisory Vote on Executive Compensation (Proposal Five): The affirmative vote of a majority of the shares of Common Stock present in person or represented by proxy at the meeting and entitled to vote on the proposal is required to approve, on a non-binding, advisory basis, the compensation of Intevac’s NEOs. You may vote “FOR,” “AGAINST” or “ABSTAIN” on this proposal. Because your vote is advisory, it will not be binding on us or the Board. However, the Board will review the voting results and take them into consideration when making future decisions regarding executive compensation.

Advisory Vote on Frequency of Advisory Votes on Executive Compensation (Proposal Six) – The frequency of the advisory vote on compensation of our NEOs – every year, every two years or every three years – receiving the highest number of votes at the Annual Meeting will be the frequency approved by the stockholders. You may vote “1 YEAR,” “2 YEARS or “3 YEARS” or “ABSTAIN” on this proposal. Because your vote is advisory, it will not be binding on us or the Board. However, the Board will review the voting results and take them into consideration when making future decisions regarding the frequency of holding future advisory votes on the compensation of Intevac’s NEOs.

 

Q:	What effect do abstentions and broker non-votes have on the proposals?

 

A:	Shares voted “ABSTAIN” and shares not represented at the meeting will have no effect on the election of directors or the advisory vote on the frequency of advisory votes on the compensation of Intevac’s NEOs. For each of the other proposals, abstentions have the same effect as “AGAINST” votes.

If you are a beneficial holder and do not provide specific voting instructions to your broker or other nominee, the broker or other nominee that holds your shares will not be able to vote your shares, which will result in “broker non-votes” on proposals other than the ratification of the appointment of BPM LLP as Intevac’s independent auditor for the current fiscal year. Consequently, if you do not submit any voting instructions to your broker or other nominee, your broker or other nominee may exercise its discretion to vote your shares on Proposal Four to ratify the appointment of BPM LLP. Broker non-votes will not be counted in the tabulation of the voting results on any of the proposals.

 

Q:	How does the Board recommend that I vote?

 

A:	The Board unanimously 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 300,000 shares to the Intevac 2003 Employee Stock Purchase Plan;

 

•

“FOR” the adoption of the amendment to add an additional 850,000 shares to the Intevac 2020 Equity Incentive Plan;

 

•

“FOR” the ratification of the selection of BPM LLP as Intevac’s independent public accountants for the fiscal year ending December 30, 2023;

 

•

“FOR” the approval, on a non-binding, advisory basis, of the compensation of Intevac’s NEOs; and

 

•

“1 YEAR” as the frequency of holding advisory votes on the compensation of Intevac’s NEOs.

 

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.

 

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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 Intevac’s 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) attending the Annual Meeting in person and voting your shares during the meeting. Attending the Annual Meeting will not cause your previously granted proxy to be revoked unless you specifically make that request at the meeting. 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 in accordance with the instructions set forth above, by attending the Annual Meeting and voting your shares during the meeting.

Any written notice of revocation or subsequent proxy card must be received by Intevac’s Secretary prior to the taking of the vote at the Annual Meeting. Such written notice of revocation or subsequent proxy card should be sent so as to be delivered to Intevac’s principal executive offices, Attention: Secretary, by May 16, 2023.

 

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:	How do I attend the Annual Meeting?

 

A:

Attendance at the Annual Meeting will be limited to stockholders and the Company’s invited guests. Each stockholder may be asked to present a valid picture identification, such as a driver’s license or passport. Stockholders holding shares of Common Stock in brokerage accounts or through a bank or other nominee may be required to show a brokerage statement or account statement reflecting stock ownership. Cameras, recording devices and other electronic devices will not be permitted at the Annual Meeting. You may contact the Company at 1-408-986-9888 for directions to the Annual Meeting.

If you are a stockholder of record as of the Record Date, you may vote your shares in person by ballot at the Annual Meeting. If you hold your shares through a bank, broker or other nominee, you will not be able to vote in person by ballot at the Annual Meeting unless you have obtained a “legal proxy” from your bank, broker or nominee giving you the right to vote the shares at the Annual Meeting and present it at the meeting.

 

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 a Form 8-K within four business days after the Annual Meeting.

 

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PROPOSAL FIVE

ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION

The Company asks that you indicate your support for its executive compensation policies and practices as described in the Company’s Compensation Discussion and Analysis, accompanying tables and related narrative contained in this proxy statement. This proposal is required by Section 14A of the Exchange Act and is commonly known as a “say-on-pay” proposal, and gives our stockholders the opportunity to express their views on the compensation of our NEOs. Your vote is advisory and so will not be binding on the Board. However, the Board will review the voting results and take them into consideration when making future decisions regarding executive compensation. We currently hold “say-on-pay” votes annually, and expect that the next “say-on-pay” vote will be held at our 2024 annual meeting of stockholders.

Compensation Program and Philosophy

As described in detail under the headings “Executive Compensation and Related Information” and “Compensation Discussion and Analysis,” our NEO compensation program is designed to attract, retain, motivate and reward high-caliber executives who are critical to our success while maintaining strong and direct links between executive pay, individual performance, the Company’s financial performance and performance for our stockholders. The Human Capital Committee believes that the Company’s executive compensation programs should support the Company’s objective of creating value for its stockholders.

Accordingly, the Human Capital Committee believes that our NEOs should have a significant interest in the Company’s stock performance, and compensation programs should link executive compensation to stockholder value. One of the ways that the Company has sought to accomplish these goals is by making a significant portion of individual NEO compensation performance-based, such as through a performance-based annual bonus dependent on each NEO’s performance relative to financial and other strategic objectives awarding a portion of the annual grants to NEOs in the form of performance-based restricted stock units (PRSUs), which, for grants made in 2022, vest based on the achievement of certain stock price hurdles during the performance period, as described in more detail under the headings “Executive Compensation And Related Information” and “Compensation Discussion and Analysis.” In addition, in 2022, the Company made a portion of its annual grants to NEOs in the form of time-based restricted stock units, which promote retention of key leadership talent.

The Human Capital Committee will continue to emphasize compensation arrangements that align the financial interests of Intevac’s NEOs with the long-term interests of stockholders. Please refer to the section of this proxy statement entitled “Executive Compensation and Related Information” for a detailed discussion of Intevac’s executive compensation practices and philosophy.

We are asking our stockholders to indicate their support for our NEO compensation as described in this proxy statement. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our NEOs and the philosophy, policies and practices described in this proxy statement. Accordingly, we ask our stockholders to vote “FOR” the following resolution at the 2023 Annual Meeting:

“RESOLVED, that the Company’s stockholders approve, on a non-binding, advisory basis, the compensation of the named executive officers, as disclosed in the Company’s Proxy Statement for the 2023 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the tabular disclosure regarding such compensation and the accompanying narrative disclosure.”

The Board unanimously recommends a vote “FOR” the approval, on a non-binding, advisory basis, of the compensation of the Company’s NEOs.

Required Vote

The affirmative vote of the holders of a majority of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote on the proposal will be required to approve, on a non-binding, advisory basis, the compensation of the Company’s NEOs.

 

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PROPOSAL SIX

FREQUENCY OF ADVISORY VOTES ON EXECUTIVE COMPENSATION

The Dodd-Frank Wall Street Reform and Consumer Protection Act requires us to provide an advisory stockholder vote to determine how often to present the advisory stockholder vote to approve the compensation of Intevac’s NEOs (the “say-on-pay vote”). Accordingly, we are asking our stockholders to indicate whether they would prefer an advisory vote every one, two or three years. Alternatively, stockholders may abstain from casting a vote.

The Board values the opinion of our stockholders and welcomes communication regarding Intevac’s executive compensation policies and practices. After taking into account various considerations described below, the Board believes that a vote every year will provide stockholders with the ability to express their views on Intevac’s executive compensation policies and practices while providing the Board with an appropriate amount of time to consult with the stockholders, to consider their input, to follow consistent compensation programs and to allow such programs to be effective.

Intevac’s executive compensation program is administered by the Human Capital Committee, as described in this proxy statement. Compensation decisions are complex and, with respect to Intevac’s NEOs, are disclosed in the proxy statement. Since 2017, Intevac has held an annual advisory vote on executive compensation, and the Board believes that continuing to maintain a one-year time frame for holding stockholder advisory votes on executive compensation will encourage stockholder communication and allow the Company to engage with and respond to stockholders, in terms of expressed concerns or other feedback.

Although, as an advisory vote, this vote is not binding upon the Company, the Human Capital Committee or the Board, the Board will carefully consider the stockholder vote on this matter, along with all other expressions of stockholder views it receives on this matter.

The Board unanimously recommends that you vote “1 YEAR” as the frequency to hold future advisory votes on executive compensation.

Required Vote

Stockholders may vote as to whether the say-on-pay vote should occur every 1, 2 or 3 years, or may abstain from voting on the matter. The frequency (every 1, 2 or 3 years) that receives the highest number of votes will be deemed to be the recommendation of the stockholders.

 

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CORPORATE GOVERNANCE MATTERS

Code of Business Conduct and Ethics

We have adopted a Code of Business Conduct and Ethics that applies to all of our employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, and persons performing similar functions. We have also adopted a Director Code of Ethics that applies to all of our directors. You can find both our Code of Business Conduct and Ethics and our Director Code of Ethics on our website at www.intevac.com. We post on our website any amendments to the Code of Business Conduct and Ethics and the Director Code of Ethics, as well as any waivers, that are required to be disclosed by the rules of either the Securities and Exchange Commission or Nasdaq.

Corporate Governance Guidelines

We have adopted Corporate Governance Guidelines and periodically update them. The guidelines address, among other things, director qualifications, the structure and composition of the Board and its committees, director responsibilities, and director continuing education. The guidelines are posted on our website at www.intevac.com.

Environment, Social and Governance

We are committed to being a responsible corporate citizen in advancing environmental, social and governance initiatives. We endeavor to protect the environment by conserving energy and material resources. Our social commitment is reflected through our employees, talent acquisition programs and our corporate culture. We endeavor to create a culture of innovation and inspiration where employees feel a strong sense of community and collective pride in the Company’s success. With respect to governance, our strong corporate governance policies are noted throughout this proxy statement. Our Audit Committee oversees our environmental, social and governance activities and programs.

Environment

We are committed to operating our business sustainably, recognizing our environmental responsibility to our customers, stockholders, suppliers, employees and society at large. We strive to act in an environmentally responsible manner by promoting and managing recycling programs to reduce waste in our offices, retrofitting our office spaces for energy efficiency, using energy efficient lighting, enabling our employees to work from home, as well as promoting video conferencing to reduce work-related travel. We recognize that this is a constant commitment, and we endeavor to improve the environmental sustainability of our operations continually.

Social

We recognize that our employees and other key stakeholders are vital to our success. Our organizational culture is open, interactive and team-oriented. We strive to advance diversity and inclusion through various talent acquisition programs to attract, retain and develop a diverse, highly-skilled work force. Particularly, we are committed to equal opportunity employment and strive to reflect the diversity of the communities where we do business. We invest in building diverse talent pools and providing training to improve skill levels, where appropriate.

We are committed to fair and decent workplace values and treating our employee and non-employee workers with dignity, fairness and respect. Elements of this philosophy are:

 

•

Fair and Transparent Business Ethics: Pursuant to our Code of Business Conduct and Ethics, we strive to ensure that all of our employees and those acting on our behalf are aware of the standards of ethical behavior and integrity that are expected of them in their business dealings with us to ensure, among other things, the ethical handling of actual or apparent conflicts of interest, compliance with applicable governmental laws, rules and regulations, and accountability for adherence to the code.

 

•

Non-Discrimination: We uphold a strict policy of non-discrimination in the workplace, including ensuring a workplace that is free of harassment. We do not engage in any forms of discrimination based on race, color, age, gender, sexual orientation, gender identity and expression, ethnicity or national origin, disability, pregnancy, religion, political affiliation, veteran status, protected genetic information or marital status in our hiring and employment practices, including wages, promotions, rewards and access to training. All of our employees are provided with reasonable accommodations for exercising their religious practices.

 

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•

Compliance with Labor Laws: We are committed to upholding for our employees and suppliers all relevant labor laws in our countries of operation.

 

•

Human Rights: We are committed to protecting human rights and conducting business in an ethical and responsible manner. Our commitment to human rights is detailed in our Human Rights Statement of Principles and various other company policies and statements, including our Code of Business Conduct and Ethics, Director Code of Ethics and Corporate Sustainability Statement, all of which are available in the corporate governance section of our website. These policies and statements formalize our policies for training and accountability encompassing our global workforce, along with the enforcement mechanisms for any non-compliance.

 

•

Employee Safety: We are also committed to a respectful work environment free of physical and verbal harassment. We work to minimize the risks associated with the tasks our employees perform, and we take our responsibility for our employees’ health and safety very seriously. We work to identify, assess and prepare for any emergency situation in order to minimize impact to our employees and improve response times.

Community Involvement

We recognize and welcome our obligation to be a responsible member of our community. We strive to align with employees on initiatives that matter most. Initiatives have included fund-raising for cancer research, military outreach, food drives, family giving trees, and school back packs for local children’s charities. Our employees are committed to making a difference in the community by actively volunteering and fundraising for many charities.

Human Capital Management

Company culture is critical to our business and long-term success. Our engagement with our employees, as well as the reward principles we apply to compensation and promotion decisions and our various talent development initiatives, reinforce our commitment to a positive company culture. We conduct employee surveys to provide on-going feedback on how we are doing against our commitment to treat all employees fairly and provide equal opportunity in an environment free of discrimination. Our Board periodically reviews management succession. More broadly, the Board is regularly updated and consulted on key talent hires, as well as the Company’s human capital strategy. This strategy is continuously refined based on business initiatives and the overall environment for talent in the United States, Singapore and China.

Cybersecurity

We take various measures to ensure the integrity of our systems, including implementation of security controls and regular training of our employees with respect to measures we can take to thwart cybersecurity attacks. While the full Board has the ultimate oversight responsibility for risk management, our Audit Committee reviews our risk management processes relating to cybersecurity on a regular basis. Further, all of our employees are trained at least annually on our information security procedures.

Independence of the Board

The Board has determined that, with the exception of Mr. Hunton, all of its members are “independent directors” as that term is defined in the listing standards of Nasdaq.

Board Meetings and Committees

During 2022, the Board held a total of 8 meetings (including regularly scheduled and special meetings) and also took certain actions by written consent. All members of the Board during fiscal 2022 attended at least seventy-five percent of the aggregate of the total number of meetings of the Board held during the fiscal year and the total number of meetings held by all committees of the Board on which each such director served (based on the time that each member served on the Board and the committees). The Board has an Audit Committee, a Human Capital Committee and a Nominating and Governance Committee.

Audit Committee

The Audit Committee, which has been established in accordance with Section 3(a)(58)(A) of the Exchange Act, currently consists of Ms. Hayes (chair), Mr. Barber, and Mr. Dury, each of whom is “independent” as such term is defined for audit

 

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committee members by the rules of the SEC and Nasdaq listing standards. The Board has determined that Ms. Hayes, Mr. Barber and Mr. Dury are each “audit committee financial experts” as defined under the rules of the SEC and are “financially sophisticated” for purposes of the Nasdaq listing standards. The Audit Committee met 8 times during 2022.

The Audit Committee is responsible for:

 

•

Appointing, approving the compensation of, and assessing the independence of our independent registered public accounting firm;

 

•

Overseeing our accounting and financial reporting processes and audits of our financial statements;

 

•

Overseeing the work of our independent registered public accounting firm, including through the receipt and consideration of reports from such firm;

 

•

Reviewing and discussing with management and the independent registered public accounting firm our annual and quarterly financial statements and related disclosures;

 

•

Monitoring our internal controls over financial reporting, disclosure controls and procedures, and Code of Business Conduct and Ethics;

 

•

Reviewing our risk-management policies, data security programs and procedures as well as monitoring cybersecurity risks and the Company’s compliance with its data privacy obligations;

 

•

Establishing policies and procedures for the receipt and resolution of accounting-related complaints and concerns;

 

•

Meeting independently with our independent registered public accounting firm and management;

 

•

Reviewing and approving or ratifying any related-person transactions;

 

•

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;

 

•

Oversight of our environmental, social and governance, or “ESG,” programs; 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.

The Audit Committee has adopted a written charter approved by the Board, which is available on Intevac’s website at www.intevac.com under “Investors — Corporate Governance.”

The Audit Committee Report is included in this proxy statement on page 65.

Human Capital Committee

The Human Capital Committee (formerly the Compensation Committee) currently consists of Mr. Barber (chair), Ms. Hayes, and Ms. Klein, each of whom is (i) “independent” as such term is defined by the Nasdaq listing standards and the rules of the SEC and (ii) is a “non-employee director,” as defined in Rule 16b-3 promulgated under the Exchange Act. The Human Capital Committee met 5 times during 2022.

The Human Capital Committee is responsible for:

 

•

Overseeing the entirety of our compensation and benefit policies, plans and programs;

 

•

Overseeing the annual report on executive compensation for inclusion in our proxy statement;

 

•

Annually reviewing and approving corporate goals and objectives used to set Chief Executive Officer compensation, and reviewing the performance of the Chief Executive Officer relative to such goals and objectives;

 

•

Making recommendations to our Board with respect to our Chief Executive Officer’s compensation;

 

•

Reviewing and approving, or making recommendations to our Board with respect to, the compensation of our other executive officers;

 

•

Overseeing the evaluation of the competitiveness of the compensation of our senior executives;

 

•

Administering our equity incentive plans, including approving equity awards granted to employees, overseeing the Company’s annual equity budget and monitoring equity metrics and performance relative to that of our peer group and the market;

 

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•

Overseeing and administering our short and long-term incentive programs;

 

•

Reviewing and making recommendations to our Board with respect to director compensation;

 

•

Reviewing, approving and recommending our “Compensation Discussion and Analysis” disclosure for inclusion in our annual report on Form 10-K or annual proxy statement, to the extent required by SEC rules;

 

•

Overseeing executive succession planning; and

 

•

Reviewing employee engagement and how diversity, equity, and inclusion are a part of the workplace and culture at the Company.

See “Executive Compensation — Compensation Discussion and Analysis” and “Executive Compensation — Compensation of Directors” below for a description of Intevac’s processes and procedures for the consideration and determination of executive and director compensation.

The Human Capital Committee has adopted a written charter approved by the Board, a copy of which is available on Intevac’s website at www.intevac.com under “Investors — Corporate Governance.”

Nominating and Governance Committee

The Nominating and Governance Committee currently consists of Mr. Dury (chair) and Ms. Klein, each of whom is “independent” as such term is defined by the Nasdaq listing standards. The Nominating and Governance Committee met 3 times during 2022.

The primary focus of the Nominating and Governance Committee is on the broad range of issues surrounding the composition and operation of the Board. The Nominating and Governance Committee provides assistance to the Board, the Chairman and the CEO in the areas of membership selection, committee selection and rotation practices, evaluation of the overall effectiveness of the Board, and review and consideration of developments in corporate governance practices. The Nominating and Governance Committee’s goal is to ensure that the composition, practices, and operation of the Board contribute to value creation and effective representation of Intevac stockholders.

The Nominating and Governance Committee will consider recommendations of candidates for the Board submitted by the stockholders of Intevac; for more information, see “Policy Regarding Board Nominees” below.

The Nominating and Governance Committee is responsible for:

 

•

Identifying individuals qualified to become members of our Board;

 

•

Recommending to our Board of Directors the persons to be nominated for election as directors and to each Board committee;

 

•

Reviewing and making recommendations to our Board with respect to management succession planning;

 

•

Developing and recommending corporate governance principles to our Board; and

 

•

Overseeing an annual evaluation of our Board.

The Nominating and Governance Committee has adopted a written charter approved by the Board, a copy of which is available on Intevac’s website at www.intevac.com under “Investors — Corporate Governance.”

Attendance at Annual Stockholder Meetings by the Board

We encourage members of the Board to attend the annual meeting of stockholders, but do not have a policy requiring attendance. All of our then current directors attended our 2022 annual meeting of stockholders.

Board Leadership Structure

Our Company is led by Mr. Hunton, our CEO. Mr. Dury, who was formerly our lead independent director, currently serves as the Chairman of our Board. The Company believes the stockholders are best served by this structure, which provides us with a dynamic leader and a strong independent voice.

 

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As further discussed above under “Board Meetings and Committees”, the Board has three standing committees—Audit Committee, Human Capital Committee, and Nominating and Governance Committee. Each of the Board committees is comprised solely of independent directors, with each of the three committees having a separate chair. In accordance with our corporate governance guidelines, our non-employee directors meet regularly in an executive session without members of management present. We also have a mechanism for stockholders to communicate directly with independent directors as a group or with any individual director. See “Contacting the Board” below.

Our directors bring a broad range of leadership experience to the Board and regularly contribute to the oversight of the Company’s business and affairs. We believe that all Board members are well engaged in their responsibilities and that all Board members express their views and consider the opinions expressed by other directors. On an annual basis as part of our governance review, the Board (led by the Nominating and Governance Committee) evaluates our leadership structure to ensure that it remains the optimal structure for the Company and its stockholders.

We believe that our leadership structure has been effective for the Company. We believe that having an independent chairman and independent chairs for each of our Board committees provides the right amount of independence for the Company. We have a strong leader and independent chairman, and oversight of Company operations by experienced independent directors who have appointed committee chairs.

Lead Independent Director

If we have a chairman of the board that is not an independent director in the future, the Board will appoint a lead independent director to schedule and chair meetings of the independent directors and execute any other duties that the independent directors designate.

Policy Regarding Board Nominees

The Nominating and Governance Committee will consider recommendations for candidates to the Board from stockholders. Stockholder recommendations of candidates for election to the Board should be directed in writing to: Intevac, Inc., 3560 Bassett Street, Santa Clara, California, 95054, and must include the candidate’s name, home and business contact information, detailed biographical data and qualifications, information regarding any relationships between the candidate and the Company within the last three years, and evidence of the nominating person’s ownership of Company stock. Stockholder nominations to the Board must also meet the requirements set forth in the Company’s Bylaws. The Nominating and Governance Committee also reviews materials provided by professional search firms and other parties in connection with a nominee who is not proposed by a stockholder. In evaluating such nominations, the Nominating and Governance Committee seeks to achieve a balance of knowledge, experience and capability on the Board.

The Nominating and Governance Committee’s criteria and process for identifying and evaluating the candidates that it selects, or recommends to the full Board for selection, as director nominees are as follows:

 

•

The Nominating and Governance Committee regularly reviews the composition, size and effectiveness of the Board.

 

•

In its evaluation of director candidates, including the members of the Board eligible for reelection, the Nominating and Governance 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 candidate’s skills and experience to our business 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 rules, such as financial literacy or financial expertise with respect to Audit Committee members.

 

•

The Board will nominate for election or reelection only those candidates who agree to tender, promptly following such candidate’s election or reelection, an irrevocable resignation effective upon (1) such candidate’s failure to receive the

 

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required vote for election at the next meeting at which they would stand for election and (2) acceptance of such resignation by the Board. In addition, the Board will fill director vacancies and new directorships only with candidates who agree to tender the same form of resignation promptly following their election to the Board.

 

•

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 Committee’s 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 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 to fill vacancies or to expand the Board 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 for selection, the director nominees.

 

•

The Nominating and Governance Committee, after considering all factors, will decide whether or not to nominate and recommend a nominee to the full Board.

Director Qualifications and Review of Director Nominees

The Nominating and Governance Committee makes recommendations to the Board regarding the size and composition of the Board. The Committee reviews annually with the Board the composition of the Board as a whole. The Committee is responsible for ensuring that the composition of the Board accurately reflects the needs of the Company’s business and, in furtherance of this goal, proposing the addition of members and the necessary resignation of members for purposes of obtaining the appropriate members and skills. The specific qualifications of each director are set forth along with their biographical information under “Business Experience and Qualifications of Nominees for Election as Directors” starting on page 8 of this proxy statement.

Intevac does not maintain a formal diversity policy with respect to its Board. As noted above, however, Intevac does consider diversity to be a relevant consideration, among others, in the process of evaluating and identifying director candidates. Intevac believes each director brings a strong and unique background and set of skills to the Board that contributes to the Board’s competence and experience in a wide variety of areas. When identifying director candidates, we take into account the present and future needs of the Board and the committees of the Board. For instance, depending on the composition of the Board at a given time, a candidate capable of meeting the requirements of an audit committee financial expert might be a more attractive candidate than a candidate with significantly more technology industry expertise, or vice versa. We also consider the character, judgment and integrity of director candidates, which we evaluate through reference checks, background verification and reputation in the business community. We believe all of our directors to be of high character, good judgment and integrity. Our principal goal with respect to director qualifications is to seat directors who are able to increase the overall effectiveness of the Board and increase stockholder value. The Nominating and Governance Committee and the Board are currently examining ways to enhance the representation of individuals from underrepresented communities on the Board.

Contacting the Board

Any stockholder who desires to contact our Chairman of the Board or the other members of our Board may do so by writing to: Board of Directors, c/o the Nominating and Governance Committee Chair, Intevac, Inc., 3560 Bassett Street, Santa Clara, California, 95054. Communications received by the Nominating and Governance Committee Chair will be communicated to the Chairman of the Board or the other members of the Board as appropriate depending on the facts and circumstances outlined in the communication received.

Risk Assessment

Our Board is responsible for overseeing enterprise risk in general, while our Audit Committee is responsible for overseeing risk management of financial matters and the adequacy of our risk-related internal controls and our Human Capital Committee oversees risk related to compensation policies. Both the Audit and Human Capital Committees report their findings to the full Board. In addition, at each of its regularly scheduled meetings, the Board discusses the risks that we are currently facing. We believe that our directors provide effective oversight of the risk management function.

 

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The full Board oversees assessment of major risks facing Intevac, determining the extent to which such risks are applicable and, to the extent the Board deems it appropriate, evaluating mitigation measures. The risks that the Board routinely considers relate to financial, strategic, regulatory, competitive, reputational, and operational risks.

The full Board oversees risk management by the CEO and our senior management team, by reviewing major financial objectives, critical strategies, and long-term plans, including allocation of capital, significant proposed business acquisitions and divestitures, operating performance, and stockholder returns.

Our senior management team has developed a comprehensive strategic planning and enterprise risk management process for identifying, assessing, and managing risk. Through this process, we identify key risks through an annual corporate-level risk mapping exercise, which involves the CEO and other members of Intevac senior management. From time to time, the process also includes facilitated workshops with Intevac executives.

Our executive leadership team oversees this risk identification process and monitors the implementation of mitigation processes. Our executive leadership team updates the Board at least annually as risks that could impact the implementation of the Company’s strategy are identified or evolve.

Compensation Consultant

The Human Capital Committee has engaged Aon’s Human Capital Solutions practice, a division of Aon plc (“Aon”) (otherwise known as Radford) to provide independent advice and recommendations on the amount and form of executive and director compensation. In 2022, the cost of Radford’s consulting services directly related to Human Capital Committee support was approximately $77,000. In addition, in 2022, our human resources department participated in various human resources and compensation surveys and obtained general benchmarking survey data from Radford at a cost of approximately $23,000 and engaged Radford to provide valuation services for our PRSU awards and provide advisory services regarding the new Pay for Performance disclosure included in this proxy statement at a cost of $45,000. The decision to engage the compensation consultant or its affiliates for these other services was made by management.

 

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EXECUTIVE COMPENSATION AND RELATED INFORMATION

Compensation Discussion and Analysis

The following Compensation Discussion & Analysis (“CD&A”) describes the philosophy, objectives and structure of our executive compensation program for fiscal year 2022 (the year ended December 31, 2022). This CD&A is intended to be read in conjunction with the tables following this section which provide further historical compensation information for our named executive officers (“NEOs”) as identified below. The Company is a smaller reporting company (“SRC”) under the rules promulgated by the SEC and, as a result, the Company has fewer NEOs than a non-SRC. Under the SEC rules and regulations related to SRCs, Messrs. Hunton, Moniz, and Dickinson, each of whom was an executive officer at the end of the fiscal year, and Mr. Blonigan, who was no longer serving as an executive officer at the end of the fiscal year, were the Company’s NEOs for fiscal year 2022:

 

Name OF NEO		Position
Nigel Hunton		President and Chief Executive Officer
James Moniz		Executive Vice President and Chief Financial Officer
John Dickinson		Vice President of Operations
Wendell Blonigan *		Former President and Chief Executive Officer

 

*	Mr. Blonigan retired from Intevac on January 18, 2022.

This CD&A is not required to be included in this proxy statement under the scaled disclosure requirements applicable to SRCs. However, we have chosen to include this section to provide our stockholders with robust information regarding the NEO compensation decisions made for fiscal year 2022 and to outline the reasoning behind these decisions. The tables following this CD&A reflect the scaled disclosure available to SRCs.

Executive Summary

In fiscal 2022 we exceeded financial performance objectives for the year, with $36 million in revenues, 42% gross margins, and solid cash flow performance, resulting in $113 million in total cash, cash equivalents, restricted cash, and investments at year end. Fiscal 2022 had record-level orders of $133 million for the year, contributing to year-end backlog of $122 million, establishing the foundation for future revenue growth. In fiscal 2022 we entered into a joint development agreement with a leading provider of glass and glass ceramic materials, adding a significant new revenue opportunity in the consumer electronics display industry. The agreement includes approximately $100 million in system revenue, in order for our customer to maintain exclusive access to the TRIO platform for each of its consumer electronic device markets. The record level of orders and backlog for our HDD business in 2022 established a solid foundation for growth for the next several years, and we look forward to gaining momentum in both businesses in 2023 in order to position Intevac for a major growth year in 2024, which is when we expect to return to a full year of profitable and cash-flow positive results. Finally, the strength of our balance sheet remains critically important to our customers, partners, suppliers, and stockholders, and we are pleased to report a net use of cash of only $8 million over the course of 2022. We will continue to maintain a strong balance sheet as we make the necessary investments for transformational growth ahead.

Intevac previously designed, developed and marketed manufacturing equipment for the photovoltaic (“PV”) solar cell and advanced semiconductor packaging (“ASP”) industries. In March 2022, the Company’s management approved a restructuring plan to realign the Company’s operational focus, scale the business and improve costs. The restructuring program includes (i) reducing the Company’s headcount and (ii) eliminating several research and development (“R&D”) programs and product offerings. As part of this realignment effort, the Company ceased its efforts to develop and market several of its manufacturing platforms for the DCP, PV and ASP industries.

We must continue to be focused strategically, as our business will continue to be characterized by rapidly changing technology and customer requirements, intense competition, fluctuating revenues and significant competition for management talent.

Leadership Change

On January 18, 2022, Mr. Blonigan, the Company’s then-current President and Chief Executive Officer (“Former CEO”), retired from his position with the Company and as a member of the Board. On January 19, 2022, the Board appointed Nigel Hunton to serve as the Company’s President and Chief Executive Officer, and as a member of the Board.

 

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How Our Recent Performance Has Affected Pay

 

 

Years 2018-2021 represents Mr. Blonigan’s compensation. 2022 represents Mr. Hunton’s compensation.

Our plans, and our pay levels, reflect our performance. Our stock price performance and other recent operational challenges have underscored the fact that our pay program has properly aligned executive pay and performance, in both the short-term and the longer-term.

2022 Pay Decisions and Outcomes

In 2022, the Human Capital Committee worked diligently with management to make prudent decisions with regards to our executive compensation throughout the year that was considerate and reflective of strongly supportive stockholder feedback, including the support of approximately 85% of votes cast for our say-on-pay proposal last year. The key decisions and outcomes included:

 

•

CEO New Hire Compensation Package: In designing Mr. Hunton’s compensation package, our Human Capital Committee, advised by its independent compensation consultant Aon, sought to deliver a competitive level of compensation that aligns with our desired pay-for-performance culture and objectives. Our Human Capital Committee reviewed, with input from Aon, market data among companies in our compensation peer group as well as new-hire equity compensation among recently hired Chief Executive Officers of comparable public companies. In addition to market data, our Human Capital Committee considered the highly competitive market for a talented, experienced technology executive and the relevance of Mr. Hunton’s background and experience.

 

•

Enhanced Performance-based Equity Program: In 2022, all of our NEOs, including our CEO, received awards of performance-based restricted stock units (“PRSUs”). The PRSU Awards are eligible to be earned based on achievement of certain stock prices based on the average closing price of the Company’s stock over a 30-day period (the “Company Stock Price Hurdle”) during a performance period commencing on the grant date and ending on May 31, 2025. The PRSU Awards will vest, if at all, in five possible tranches. Each of the five tranches will vest only if the applicable Company Stock Price Hurdle is achieved within the Performance Period, and each tranche may only be achieved once during the Performance Period. If a Company Stock Price Hurdle is not achieved within the Performance Period, the corresponding PRSUs will not vest, and all unvested PRSUs at the end of the Performance Period will immediately be forfeited. The actual number of shares that may vest under each PRSU grant can range from zero to 200% of the number of shares that may vest at target performance.

 

•

Increased percentage of the CEOs performance-based equity: In 2022, we increased the long-term equity award mix of PRSUs from 60% in 2021 to 67% in 2022.

 

•

Please see below for a summary of paid compensation as reflected in our Summary Compensation Table:

 

($ in thousands)		2021 Base				2022 Base				2021 AIP				2022 AIP				2021 Equity				2022 Equity				2021 Other				2022 Other				2021 Total Direct Compensation				2022 Total Direct Compensation
Nigel Hunton		$	—			$	514.0			$	—			$	687.5			$	—			$	3,797.0			$	—			$	22.0			$	—			$	5,020.6
James Moniz		$	357.7			$	360.0			$	87.8			$	—			$	259.8			$	1,047.3			$	2.0			$	2.0			$	707.3			$	1,409.3
John Dickinson		$	—			$	106.3			$	—			$	100.0			$	—			$	502.9			$	—			$	1.6			$	—			$	710.7
Wendell Blonigan		$	585.4			$	38.6			$	125.4			$	—			$	941.3			$	—			$	2.0			$	678.0			$	1,654.1			$	716.6

 

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Compensation Program Highlights

The Human Capital Committee has structured our executive compensation program to ensure that our NEOs are compensated in a manner consistent with stockholder interests, competitive pay practices and applicable requirements of regulatory bodies. The following are important features of the design and operation of our executive compensation program:

 

Element		Performance Period		Objective		Performance Measured/Rewarded
Base Salary		Annual		Recognizes an individual’s role and responsibilities and serves as an important retention vehicle.		•  Reviewed annually and set based on market competitiveness, individual performance and internal equity considerations.
Annual Bonus		Annual		Rewards achievement of annual financial objectives and individual performance goals.   The annual incentive plan (“AIP”) was suspended for 2022 other than for Mr. Hunton and Mr. Dickinson.		•  Corporate Financial Performance   •  Individual Performance Goals
Time-based Restricted Stock Units (“RSUs”)		Long-Term		Aligns the interests of management and stockholders and serves as an important retention vehicle.		•  Typically vest annually over 3 years based on continued service. Certain one-time special RSU grants to Mr. Hunton and Mr. Moniz vest after 1 year of continued service.
Performance-based RSUs (“PRSUs”)		Long-Term		Aligns the interests of management and stockholders, rewarding key contributors for significant stock price appreciation and the creation of stockholder value.		•  Granted in 2022 to all NEOs, the PRSUs were issued with five tranches with a three-year performance period.   •  The PRSU Awards are eligible to be earned based on achievement of certain stock prices based on the average closing price of the Company’s stock over a 30-day period (the “Company Stock Price Hurdle”) during the performance period. The actual number of shares that may vest under each PRSU grant can range from zero to 200% of the number of shares that may vest at target performance.

 

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2022 Target Pay Mix

Our executive compensation program is predominantly performance-based. As an executive’s ability to impact operational performance increases, so does the proportion of his or her at-risk compensation. Target long-term incentive compensation grows proportionately as job responsibilities increase, which encourages our officers to focus on the Company’s long-term success and aligns with the long-term interests of our stockholders. The graphics below illustrate the mix of fixed, annual and long-term target incentive compensation we provided to our CEO and other NEOs for 2022. At risk compensation for the CEO (previously Mr. Blonigan and currently Mr. Hunton) increased from 71% in 2021 to 89% in 2022 and at risk compensation for the other NEOs increased from 57% in 2021 to 74% in 2022:

 

 

Compensation Governance

The Human Capital Committee regularly reviews and incorporates best practices in executive compensation to competitively pay our executives while ensuring alignment of management and stockholder interests. Some highlights include:

 

•

Pay-for-performance philosophy and culture

 

•

Compensation mix of base salary, short-term and long-term incentives provides a variety of time horizons to balance our near-term and long-term strategic goals

 

•

Anti-hedging policies

 

•

Responsible use of shares under our long-term incentive program

 

•

No supplemental executive retirement plans

 

•

No perquisites

Say on Pay Vote

At our 2022 annual meeting of stockholders, approximately 85% of the votes cast by our stockholders supported our advisory vote on executive compensation (the “say-on-pay”) proposal. While the “say-on-pay” vote is non-binding, the Human Capital Committee pays close attention to the results and given the strong level of support evidenced by last year’s say-on-pay vote, the Human Capital Committee determined that our stockholders were quite supportive of our current executive compensation philosophy and program. The Company and the Human Capital Committee generally believe that our existing executive compensation program properly encourages and rewards the achievement of financial results that promote long-term stockholder value creation and is appropriate for a company of our size and in our industry, and, in line with the level of support shown by stockholders for our current approach, has continued to take meaningful steps toward further cementing this alignment between stockholder interests and executive compensation, as summarized in the table below.

We conduct an ongoing stockholder outreach program to maintain an open and regular dialogue with our institutional stockholders to understand their views and concerns regarding our strategic direction. During 2022, we consulted with over 25

 

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of our top institutional stockholders, representing over 60% of our outstanding shares to discuss their views with respect to our strategic direction. Topics discussed with stockholders included the new CEO, new company initiatives, including diversification of revenue, performance-based vesting criteria and metrics, past business challenges, capital allocation and board composition. Our stockholder outreach was performed by our CEO, CFO and Investor Relations consultant. The Company and the Human Capital Committee intend to continue to expand this outreach program by increasing the frequency of its outreach efforts.

Recent Actions Taken Based on Stockholder and Proxy Advisor Feedback

The following table summarizes various concerns that have been expressed by stockholders and proxy advisors and how we have addressed the issues:

 

What We Heard		How We Have Responded
•  Emphasis on performance-based equity awards		•  In 2022 and 2021, a portion of the NEOs’ equity grants were issued in PRSUs.
•  Importance of stockholder engagement   The majority of investors surveyed commented that stockholder engagement was important to them and they appreciated our reaching out to them for their input.		•  We continued to perform shareholder outreach in the 2022- 2023 timeframe.

Executive Compensation Philosophy and Objectives

Our compensation structure is designed to attract, retain, motivate, and reward high-performing executives. The guiding principles of our executive compensation plan are as follows:

 

•

Provide a total compensation opportunity that is competitive with our peer group, but that also takes into account the need to compete for talent with much larger equipment and imaging companies.

 

•

Align compensation with the Company’s performance by:

 

•

Providing a significant portion of total compensation in the form of a performance-based annual bonus dependent on each executive’s performance relative to predetermined financial and other strategic objectives set at the beginning of each fiscal year. Our AIP for 2022 was suspended other than for Mr. Hunton and Mr. Dickinson, due to budgetary constraints and forecasted business conditions, which suspension showcases our commitment to aligning compensation with Company performance. Providing performance-based annual bonuses remains an important part of our executive compensation approach.

 

•

Providing long-term, significant equity incentives. In 2022, these incentives were in the form of a combination of time-based RSUs and performance-based RSUs (“PRSUs”), in order to retain those individuals with the leadership abilities necessary for increasing long-term stockholder value while aligning the interests of our NEOs with those of our long-term stockholders.

 

•

Our 2022 PRSUs contain a three-year performance period and vest based on achievement of certain stock prices based on the average closing price of the Company’s stock over a 30-day period.

 

•

Set challenging performance goals for our NEOs and provide a short-term incentive through an incentive compensation plan that is based upon achievement of these goals. As noted, we suspended our AIP for 2022 in order to respond appropriately to Company budget constraints and forecasted business conditions. Therefore, Mr. Moniz received no bonus for 2022, while Mr. Hunton received a bonus based in part on the minimum bonus provided for in his offer letter and in part on his individual performance, and Mr. Dickinson received only the AIP bonuses guaranteed to him for 2022 in his offer letter.

 

•

Increase the portion of total compensation based on performance-based annual bonuses and stock-based awards relative to base salary with increasing executive responsibility level.

 

•

Align each executive’s goals with those of other executives to encourage a team approach to problem solving.

 

•

Provide clear guidelines for each compensation element relative to market practices (base salary, performance-based annual incentives and annual equity grants), while allowing the Human Capital Committee flexibility to make final

 

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decisions based on management recommendations (other than decisions for the CEO, which are made by the independent members of the Board), and other factors such as performance, experience, contribution to business success and retention needs.

Compensation Determination Process

Role of the Human Capital Committee

The Human Capital Committee oversees, reviews and approves the compensation and benefit policies, plans and programs for the entire Company, including our NEOs. The Human Capital Committee develops goals and objectives for the CEO and reviews his performance relative to his established goals and objectives. The Human Capital Committee recommended Mr. Blonigan’s separation agreement and release to the Board for approval. The Human Capital Committee also recommended the principal elements of Mr. Hunton’s new hire compensation package as CEO to the Board for approval. The Human Capital Committee reviewed with Mr. Hunton and, prior to his departure, with Mr. Blonigan and approved the principal elements of compensation for the NEOs (other than Mr. Hunton and Mr. Blonigan, respectively). The Human Capital Committee also reviewed with Mr. Hunton and approved merit increases, as well as discretionary bonuses and equity grants for non-NEO employees. The Human Capital Committee also annually reviews the compensation of the members of the Board and recommends any changes to the Board. Final approval of compensation for Mr. Blonigan, Mr. Hunton and the members of the Board was given by the independent members of the Board in executive session. The Human Capital Committee also reviews and approves executive succession planning, incentive compensation plans, and equity compensation plans.

Role of the CEO

During 2022, Mr. Hunton provided recommendations to the Human Capital Committee with respect to base salary amounts, target bonus percentages, goals and objectives, bonus payments, and stock-based awards for each NEO (other than himself). For Mr. Moniz, this compensation recommendation was based on market data reviewed by the Human Capital Committee and a review by Mr. Hunton of Mr. Moniz’s overall performance and contribution to the Company during the prior year. Mr. Hunton also recommended Mr. Dickinson’s new hire package to the Human Capital Committee. While the Human Capital Committee considered the recommendations of Mr. Hunton with respect to these elements of compensation, the Human Capital Committee independently evaluated the recommendations and made all final compensation decisions. Mr. Hunton did not make any recommendations as to his own compensation and such decisions were made solely by the independent members of the Board (without Mr. Hunton present), after recommendations were made to the Board by the Human Capital Committee.

Role of Our Independent Advisor

The Human Capital Committee retained Aon’s Human Capital Solutions practice, a division of Aon plc (“Aon”) (otherwise known as Radford) to assist it in evaluating 2022 executive compensation programs and to provide advice and recommendations on the amount and form of executive compensation, and the allocation of compensation across the compensation components described below. The instructions provided to Radford included assessing target compensation levels for our executives relative to market practices and evaluating the overall design of our executive compensation program. At least once annually, at the Human Capital Committee’s request, Radford attends Human Capital Committee meetings. Radford reported directly to the Human Capital Committee and not to management. The Human Capital Committee assessed the independence of Radford pursuant to SEC rules and concluded that the work of Radford has not raised any conflict of interest.

Use of a Peer Group

Executive compensation data was drawn from the Radford Executive Benchmark Survey for companies in the semiconductor equipment, imaging, electronic equipment and instruments industries, focusing on companies that provide technology components of complex electronic or semiconductor device, that have 3-year average revenues generally between $50 million and $200 million and market capitalization between $50 million and $400 million and from publicly available proxy filings for the peer companies identified below (the “Peer Companies”). After the divestiture of our Photonics division at the end of fiscal 2021 the peer group was updated to adjust the revenue range (from companies with average 3-year revenues under $300 million) and the market capitalization range (from companies with market capitalization under $500 million) to the revenue and market capitalization ranges noted above. In the case of the data from the proxy filings of the Peer Companies, only data for the CEO and CFO positions was obtained, as these are the only two positions reported with sufficient frequency among the Peer Companies to draw meaningful conclusions on competitive pay. The market compensation levels for comparable

 

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positions were examined by Radford and the Human Capital Committee as part of the process to determine overall program design, base salary, target incentives and annual stock-based awards, including the total equity pool for allocation to all employees.

The Peer Companies we used to evaluate market compensation positioning for executives in making 2022 compensation decisions were selected in February 2022 based on the selection criteria discussed above, which the Human Capital Committee deemed relevant at that time, and resulted in the removal of eight companies (Clearfield, Inc., DSP Group Inc., Impinj, Inc., Iteris, Inc., Luna Innovations, NeoPhotonics Corporation, PCTEL, Inc., and PDF Solutions, Inc.) and five additions. As a result, the 2022 Peer Companies include the following companies:

 

AmtechSystems, Inc. *		•  AstroNova, Inc. *
AXTInc. *		•  CVD Equipment Corporation
CyberOpticsCorporation *		•  eMagin
EMCORECorporation *		•  GSI Technology, Inc.
ImmersionCorporation		•  In TEST Corporation *
KopinCorporation *		•  Park Aerospace Corp. *
PixelworksInc.*		•  Sono-Tek

 

*	Included in the 2021 peer group

At the time these peers were chosen, Intevac was at the 25^th percentile of market capitalization of the peer group, while at the 50^th percentile with regards to revenues and the lowest percentile with regards to year-over-year revenue growth.

In late 2021, the base salary, total target cash compensation (base salary plus performance-based annual cash bonus) and total target compensation (including stock-based awards) for each of Intevac’s five most senior executives, including Mr. Blonigan and Mr. Moniz, were compared to market pay levels for executives with similar levels of responsibility. In April 2022, the data review was updated for stock-based awards for our NEOs.

In setting compensation for our executive officers, including our NEOs, the Human Capital Committee uses competitive compensation data from an annual total compensation study of selected peer companies and other relevant survey sources to inform its decisions about overall compensation opportunities and specific compensation elements. Additionally, the Human Capital Committee uses multiple reference points when establishing targeted compensation levels. The Human Capital Committee applies judgment and discretion in establishing targeted pay levels, considering not only competitive market data, but also factors such as company, business unit and individual performance, scope of responsibility, critical needs and skill sets, experience, leadership potential and succession planning.

For 2022, the Human Capital Committee concluded that Intevac’s executive compensation:

 

•

Was appropriate considering the available competitive data, the Company’s strong financial performance, and the Company’s need to retain key employees; and

 

•

Continued to provide strong incentives to management to optimize Intevac’s financial performance in each year and over time.

The Human Capital Committee believes that the Company’s program to compensate NEOs and other employees is consistent with the intent and design of the Company’s variable pay programs, which link actual pay directly to improved operating results, and result in reduced compensation in years in which financial results do not meet expectations.

Elements of Executive Compensation

The primary components of executive compensation are:

 

•

Base salary;

 

•

Performance-based annual cash bonus; and

 

•

Annual grants of long-term, equity-based incentives, which in 2022, consisted of time-based RSUs and PRSUs.

 

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We allocate total potential and target compensation among these components based on the goals of our compensation program, including the need to offer competitive compensation and our focus on paying for performance. We also provide our executives the same benefits and perquisites that we offer our other U.S. employees. These standard employee benefits include participation in our 401(k) plan and employee stock purchase plan, and health and welfare and life insurance benefits, each with the same terms and conditions available to employees.

Base Salary

We provide our NEOs and other employees with base salary to compensate them for services rendered during the fiscal year. The purpose of base salary is to reward effective fulfillment of the assigned job responsibilities, and to reflect the position’s relative value to the Company and competitiveness of the executive job market.

The Human Capital Committee approves any changes to base salaries on an annual basis. To determine any annual changes to base salary; the committee utilizes the competitive market data provided by our independent compensation consultant in addition to an assessment of each executive’s responsibilities and performance against goals and objectives. These factors are evaluated at the Human Capital Committee’s discretion.

2022 Base Salaries

2022 base salaries for the NEOs were approved by the Human Capital Committee (with the exception of Mr. Hunton and Mr. Blonigan, whose base salaries were approved by the independent members of the Board, upon recommendation of the Human Capital Committee).

The annual base salaries for the NEOs in 2021 and 2022, were as follows:

 

Executive		2021				2022				Approximate Percentage Increase
Nigel Hunton (1)		$	—			$	550,000				N/A
James Moniz		$	360,000			$	360,000				—
John Dickinson (2)		$	—			$	330,000				N/A
Wendell Blonigan (3)		$	590,000			$	590,000				—

 

(1)	Mr. Hunton joined Intevac on January 19, 2022.

 

(2)	Mr. Dickinson joined Intevac on August 29, 2022.

 

(3)	Mr. Blonigan retired from Intevac on January 18, 2022.

Performance-based Annual Incentives

We provide the opportunity to earn performance-based annual bonuses to our NEOs and other management employees under our annual incentive plan (“AIP”). The objective of the AIP is to align our executive compensation with actual short-term business performance and with our strategic business objectives. Due to budgetary constraints and a forecasted loss for fiscal 2022, the Human Capital Committee suspended the AIP for 2022 other than for Mr. Hunton and Mr. Dickinson. For Mr. Hunton and Mr. Dickinson, a minimum 2022 AIP payout was guaranteed in their employment agreements, in order to attract them to Intevac. Mr. Hunton’s minimum bonus guarantee was made in order to make his first-year cash compensation competitive with his earnings history and his then-current alternative offers of employment. Mr. Dickinson’s minimum bonus guarantee represents the amount Mr. Dickinson forfeited upon leaving his former employer.

The AIP consists of two performance measures, each weighted equally:

 

•

Corporate Financial Performance, which is based on Intevac’s financial performance (profitability); and

 

•

Individual Performance, which is based on each NEO’s performance against goals and objectives set at the beginning of the year.

Having an incentive program which is based half on individual performance is important in order to provide our NEOs with incentives to achieve goals and objectives which are specific to their individual functional areas and to maximize the Company’s value, as well as for retention considerations, while having half based on Company profitability focuses the NEOs on the common goal of continuing to drive overall Company performance.

 

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Target Bonus Opportunities

Each participating NEO is assigned an annual incentive opportunity, computed by multiplying each executive’s base salary times his or her Target Bonus Percentage. The Human Capital Committee suspended the AIP for 2022. Mr. Hunton was guaranteed a minimum bonus of $275,000 for 2022 in his employment agreement. Mr. Hunton’s bonus guarantee was made in order to make his first-year cash compensation competitive with his earning’s history and his then-current alternative offers of employment. The total bonus opportunity for Mr. Hunton, in accordance with his employment agreement for 2022, was 200% of the executive’s target bonus for the year. Mr. Dickinson was guaranteed a minimum bonus of $100,000 for 2022 in his offer letter which represents the amount Mr. Dickinson forfeited upon leaving his former employer.

Target Bonus Percentages are determined based on competitive market data, internal equity considerations, and the degree of difficulty associated with achieving performance levels. Each factor is evaluated by the Human Capital Committee based on data and input provided by management as well as our independent compensation consultant. Typically, the pay philosophy is to target annual cash compensation with reference to the 50th percentile of the peer group, with the opportunity to earn annual incentives in excess of that level based on achieving performance superior to the objectives the Human Capital Committee has determined to reward.

For 2022, Mr. Hunton and Mr. Dickinson’s Target Bonus Percentages were established at their time of hire. Mr. Moniz’s Target Bonus Percentage was not increased from the prior year opportunity (as a percentage of base salary):

 

Executive		Target AIP (as % of base salary)				Target AIP ($)
Nigel Hunton			100	%		$	550,000
James Moniz			65	%		$	234,000
John Dickinson			60	%		$	195,000

Corporate Financial Performance Goals

As 2022 financial results were projected to be a loss at the beginning of the period, the 2022 Corporate Financial Performance Bonus was not funded and a bonus pool was not established for the 2022 Corporate Financial Performance Bonus.

Individual Performance Goals

Mr. Hunton received a comprehensive set of individual performance goals for 2022. These goals were established at the beginning of the fiscal year and approved by the Human Capital Committee. Mr. Moniz did not receive a set of individual performance goals for 2022 prior to the suspension of the AIP and his goals were not scored. No individual performance goals for 2022 were established for Mr. Blonigan prior to his departure from the Company. Mr. Hunton was guaranteed a minimum bonus of $275,000 for 2022 in his employment agreement. Mr. Dickinson following his hire received a comprehensive set of individual performance goals for 2022. Mr. Dickinson was guaranteed a minimum bonus of $100,000 for 2022 in his offer letter. The guaranteed bonus payments are considered one-time events in the year of hire and future AIP payouts will be subject to the mechanics of the performance plan. The individual performance goals are considered aggressive and deemed difficult to achieve.

 

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The following tables show 2022 individual performance goals and their relative weightings for Mr. Hunton and Mr. Dickinson:

Nigel Hunton, CEO

 

Fiscal 2022 Goals		Weighting				Achieved
•  Achieve objectives related to the Strategic Plan o   Exit non-core development projects o   Monetize non-core technology o   Achieve goals related to TRIO product o   Develop strategic partnerships in the glass sector o   Achieve objectives related to obtaining an evaluation unit order for a TRIO product			60	%			200	%
•  Achieve objectives related to Investor relations			10	%			200	%
•  Achieve objectives related to TRIO product design o   Provide samples to prospective customers/partners o   Obtain patent protection			10	%			200	%
•  Achieve objectives related to the HDD business o   Retain market share o   Achieve customer related objectives			10	%			200	%
•  Achieve objectives related to staffing o   Retain key talent o   Hire a Vice President of Business Development			10	%			200	%
			Final Score				200	%

John Dickinson, Vice President of Operations

 

Fiscal 2022 Goals		Weighting				Achieved
•  Evaluate the global operations organization and identify key gaps			25	%			100	%
•  Evaluate the new TRIO product for manufacturability			25	%			100	%
•  Develop a succession plan for USA Operations Manager			25	%			100	%
•  Coordinate the build strategy of the first TRIO production tool			25	%			100	%
			Final Score				100	%

2022 Performance Against Individual Goals

In order to determine the payout associated with the Individual Performance measures, the Human Capital Committee analyzed Mr. Hunton’s and Mr. Dickinson’s performance versus their individual goals. The specific performance versus objectives for each of the goals are not disclosed as the disclosure of these goals would potentially reveal confidential information regarding our business strategy and operations, which could result in substantial competitive harm.

Mr. Dickinson’s performance against each of the 2022 goals was evaluated at the end of the year by the CEO. The performance and evaluation were then reviewed and approved by the Human Capital Committee. The Human Capital Committee evaluated the CEO’s performance which was then reviewed and approved by the independent members of the Board.

2022 earned incentives were as follows:

 

		Opportunity								Actual
Executive		Target AIP (as % of base salary)				Target AIP ($)				2022 Earned Award				As a % of Target
Nigel Hunton (1)			100	%		$	550,000			$	687,500				125	%
John Dickinson (2)			60	%		$	195,000			$	100,000				51	%
James Moniz (3)			65	%		$	234,000			$	—				—

 

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(1)	Mr. Hunton was guaranteed a minimum bonus of $275,000 for 2022 in his employment agreement of which $137,500 was allocated to the Corporate Financial Performance bonus and $137,500 was allocated to his Individual Performance Bonus. Mr. Hunton scored 200% on his individual performance goals.

 

		Guaranteed Minimum Bonus				Target				Score				Bonus Paid
Corporate Financial Performance		$	137,500			$	275,000				0	%		$	137,500
Individual Performance		$	137,500			$	275,000				200	%		$	550,000
		$	275,000			$	550,000							$	687,500

 

(2)	Mr. Dickinson was guaranteed a minimum bonus of $100,000 for 2022 in his offer letter of which $50,000 was allocated to the Corporate Financial Performance bonus and $50,000 was allocated to his Individual Performance Bonus. Mr. Dickinson scored 100% on his individual performance goals.

 

		Guaranteed Minimum Bonus				Target				Score				Pro-Rated (4 of 12 months)				Bonus Paid
Corporate Financial Performance		$	50,000			$	97,500				0	%			0			$	50,000
Individual Performance		$	50,000			$	97,500				100	%		$	32,500			$	50,000
		$	100,000			$	195,000							$	32,500			$	100,000

 

(3)	As the AIP was suspended for 2022, Mr. Moniz did not receive a bonus payment.

Long-Term Incentives

We grant equity-based compensation to our NEOs to align their interests with the long-term interests of our stockholders and to provide our executives with incentives to manage Intevac from the perspective of an owner with an equity stake in the business.

In 2022, we utilized two incentive vehicles:

 

•

Time-based RSUs and

 

•

Performance-based RSUs (PRSUs)

For 2022 annual grants, the Company granted time-based RSUs to all equity plan participants. For 6 executives including our NEOs the Company granted a combination of RSUs and PRSUs. The Human Capital Committee believes that including PRSU awards in the total direct compensation opportunities of those executives whose individual performances and decisions have a direct impact on our Company’s performance helps to strengthen our overall pay-for-performance alignment by ensuring that a substantial portion of their compensation is aligned with the creation of value for our stockholders. For 2022 annual grants, the number of time-based RSUs and PRSUs were determined with reference to market data, including the median of our peer group and, with respect to Mr. Hunton and Mr. Dickinson, were also impacted by negotiations in connection with their hiring, in order to incentivize them to accept employment with Intevac.

The Human Capital Committee believes that the time-based RSU awards provide a valuable retention component to our annual compensation program. Further, RSUs are potentially less dilutive to the Company’s earnings per share than options. The 2022 annual RSU grants vest in three equal annual installments. Mr. Hunton and Mr. Moniz also received one-time special RSUs grants that vested after approximately one year.

Individual Grant Determinations

Annually, the Human Capital Committee approves the annual stock-based awards to be granted to all grant recipients taking into consideration the total dilutive impact of all shares to be granted, the burn rate (the total number of shares to be granted as a percentage of shares outstanding), and projected compensation expense related to employee stock-based awards. The Human Capital Committee determines the level of annual equity grants to be based on a target dollar value for the long-term incentive award, rather than as a fixed number of shares, which the Human Capital Committee believes better aligns with market expectations and peer practices. Each year, the Human Capital Committee sets guidelines for the size and mix of each

 

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grant to each NEO and other exempt employees. Actual stock-based award grants to the NEOs are generally made within the ranges set forth in these guidelines, based on the factors discussed below. For the NEOs, the guidelines reflect each NEO’s position within the Company and are set at a level that the Human Capital Committee considers appropriate to create a meaningful opportunity for reward predicated on increasing stockholder value, and appropriate to meet our retention goals. In determining the appropriate grant levels, the Human Capital Committee reviews competitive market practices, taking into consideration both the potential value to individual participants compared to executives at other companies with similar responsibilities. The Human Capital Committee also evaluated the mix of equity awards to be granted.

The number of time-based RSUs and PRSUs granted to the NEOs in 2022 is shown in the table below.

 

						Number of PRSUs
NEO		Number of RSUs (#)				Target (#)				Maximum Performance (200%) (#)
Nigel Hunton			266,500				333,500				667,000
James Moniz			68,800				93,000				186,000
John Dickinson			50,000				41,300				82,600
Wendell Blonigan			—				—				—

Mr. Hunton’s and Mr. Dickinson’s 2022 RSU and PRSU awards are new-hire awards and were negotiated and agreed to in connection with their employment agreements, and were subsequently granted, as a material inducement to them accepting employment with the Company. Mr. Hunton received a long term incentive award of 166,500 time-based RSUs and 333,500 PRSUs at target, The Human Capital Committee believes that a mix of time-vesting RSUs and PSUs (33% time-vested RSUs and 67% PRSUs) with challenging multi-year performance objectives represents a competitive approach that reinforces a strong pay-for-performance culture and aligns the interests of our newly appointed CEO with the interests of our stockholders. This structure reinforces a long-term pay-for-performance philosophy for our CEO, and supports alignment with the incentives of our other NEOs. Mr. Hunton also received a one-time special award of 100,000 time-based RSUs that vested on January 19, 2023, the first anniversary of Mr. Hunton’s hire date.

Mr. Moniz’s renewal grant of 43,800 RSUs and 93,000 PRSUs (186,000 shares at maximum performance) was proposed by Mr. Hunton and reviewed and approved at a Human Capital Committee meeting. The renewal grant is set at the 50th percentile times two to mimic a new hire award in light of Company’s reset to re-establish momentum and focus on the future growth trajectory and financial potential under its new leadership. The mix is aligned with the CEO’s grant per the new hire award (32% time-vested RSUs and 68% PRSUs.) The Board also granted a one-time special retention award of 25,000 time-based RSUs to Mr. Moniz in light of the change in leadership, which vested on February 15, 2023. In determining the number of time-based RSUs and PRSUs to grant to Mr. Moniz, the Human Capital Committee and the Board took into account factors such as his recent performance, level of responsibility, job assignment, the competitive climate, internal equity considerations, market data, and retention considerations. Each of these factors was considered by the Human Capital Committee, in its judgment, and no formal weighting of these factors was used.

The grant date fair value of time-based RSUs and PRSUs granted to the NEOs in 2022 is shown in the table below.

 

NEO		RSU ($)				PRSU ($)				Total ($)
Nigel Hunton			1,348,390				2,448,557				3,797,047
James Moniz			364,446				682,806				1,047,252
John Dickinson			241,000				261,925				502,925
Wendell Blonigan			—				—				—

2022 PRSUs

In 2022, a portion of the annual renewal grants to our NEOs were performance-based restricted stock units (PRSUs). The PRSU Awards are eligible to be earned based on achievement of certain stock prices based on the average closing price of the Company’s stock over a 30-day period (the “Company Stock Price Hurdle”) during a performance period commencing on the grant date (May 18, 2022 for Messrs. Hunton and Moniz and September 15, 2022 for Mr. Dickinson) and ending on May 31, 2025 (ending earlier upon a change in control, as defined under the equity plan under which the award was granted) (the

 

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“Performance Period”). The PRSU Awards will vest, if at all, in five possible tranches. Each of the five tranches will vest only if the applicable Company Stock Price Hurdle is achieved within the Performance Period, and each tranche may only be achieved once during the Performance Period. If a Company Stock Price Hurdle is not achieved within the Performance Period, the corresponding PRSUs will not vest, and all unvested PRSUs at the end of the Performance Period will immediately be forfeited. The actual number of shares that may vest under each PRSU grant can range from zero to 200% of the number of shares eligible to vest at target performance levels.

 

Name		PRSU Awards (at target performance)				PRSU Awards (at maximum performance)
Nigel Hunton			333,500				667,000
James Moniz			93,000				186,000
John Dickinson			41,300				82,600

Mr. Hunton’s and Mr. Dickinson’s PRSU Awards were negotiated and agreed to in connection with their employment agreements, and were subsequently granted, as a material inducement to them accepting employment with the Company. Their PRSU Awards are subject to the terms and conditions of the Inducement Plan and form of PRSU Award agreement thereunder. Mr. Moniz’s PRSU Award is subject to the terms and conditions of the Company’s 2020 Equity Incentive Plan (the “2020 Plan”) and form of PRSU Award agreement thereunder.

 

Tranche		Company Stock Price Hurdle		Required Share Price Improvement (as Measured from the May 18, 2022 Closing Price of $5.17 for Messrs. Hunton and Moniz / the September 15, 2022 Closing Price of $4.82 for Mr. Dickinson)				Number of PRSU Awards Eligible to Vest – N. Hunton				Number of PRSU Awards Eligible to Vest – J. Moniz				Number of PRSU Awards Eligible to Vest – J. Dickinson				Percentage of Target PRSU Awards Eligible to Vest
0		Below $6.00							0				0				0				0	%
1		$6.00 (goal achieved on December 28, 2022)			16.0% / 24.5%				66,700				18,600				8,260				20	%
2		$7.00 (goal achieved on February 23, 2023)			35.4% / 45.2%				100,050				27,900				12,390				30	%
3		$8.00			54.7% / 66.0%				166,750				46,500				20,650				50	%
4		$9.00			74.1% / 86.7%				166,750				46,500				20,650				50	%
5		$10.00 or greater			93.4% / 107.5%				166,750				46,500				20,650				50	%

The amount of PRSUs eligible to vest will not be determined through linear interpolation between tranches, except in connection with a change in control (as defined in the Inducement Plan or 2020 Plan, as applicable) where the consideration received for a share by the Company’s stockholders is greater than $8.00 but below $10.00. In the event of a change in control, the achievement of the Company Stock Price Hurdle will no longer be measured against the 30-day average described above and instead will be based on the consideration received for a share by the Company’s stockholders in connection with the change in control, and the number of PRSUs that will be eligible to vest will be based on such achievement, using linear interpolation between levels or, if greater, 50% of the PRSU Awards (at maximum performance). The first tranche of the awards vested on December 28, 2022, which was the first date in the performance period on which the average closing share price of Intevac stock for thirty consecutive trading days equaled or exceeded $6.00. The second tranche of the awards vested on February 23, 2023, which was the first date in the performance period on which the average closing share price of Intevac stock for thirty consecutive trading days equaled or exceeded $7.00.

2021 PRSUs

In 2021, the NEOs were granted PRSUs, with a two-year performance period beginning in May 2021. The number of PRSUs that will vest is determined by our common stock achieving a certain Total Shareholder Return (“TSR”) for the Company, relative to the TSR of the specified peer group over a measurement period of two years from the time of grant. The peer group is comprised of the “Peer Companies” listed in the Company’s “Compensation Discussion and Analysis” section in

 

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our 2020 proxy statement. At the end of the performance measurement period, the Human Capital Committee will determine the achievement against the performance objectives. Depending on the Company’s TSR relative to the peer group TSR, the actual number of shares that may vest under each PRSU grant can range from zero to 200% of the target number of shares subject to the grant. These awards are intended to align executive pay with long-term shareholder value creation and relative TSR performance. Relative TSR PRSUs generally vest at the end of the performance period, contingent on the NEO still being in service to Intevac through the end of the performance period, and, subject to accelerated vesting in certain circumstances as described below in “Potential Payments Upon Termination of Employment or Change in Control”.

The actual number of PRSUs that will be Achieved PRSUs will be determined as follows:

 

Company’s Position in the TSR Ranking Group (the “Company’s Relative TSR Performance”)		Percentage of Target Number of RSUs that Become Achieved RSUs
75th percentile or above		200%
50th percentile		100%
25th percentile		50%
Below 25th percentile		0%

2020 PRSUs

In 2020, the NEOs were granted PRSUs, issued collectively in four separate tranches with individual one-year performance periods beginning in May 2020, 2021, 2022 and 2023, respectively. Vesting of the PRSUs is based on the performance of our common stock relative to the performance of a peer group. The peer group is comprised of the “Peer Companies” listed in the Company’s “Compensation Discussion and Analysis” section in the 2020 proxy statement. At the end of each performance period, the Human Capital Committee will determine the achievement against the performance objectives.

On each performance assessment date, Intevac’s stock price growth for the applicable performance period will be compared against the peer group stock price growth for the applicable performance period (each expressed as a growth rate percentage) to result in a growth rate (the “Growth Rate Delta”) for the performance period equal to Intevac’s stock price growth minus the peer group stock price growth, both for the applicable performance period. A new Growth Rate Delta will be calculated for each performance period on the related performance assessment date. Any earned PRSU awards will vest 100% after the end of the applicable performance period. On each performance assessment date, 25% of the total number of PRSUs originally subject to the award (and no more) will vest upon achievement of a Growth Rate Delta greater than or equal to zero. If, on a performance assessment date, the Growth Rate Delta is less than 0%, no portion of the PRSUs will vest on such performance assessment date and 25% of the total number of PRSUs originally subject to the award will immediately terminate. In addition, in order to vest, the participant must remain in service to Intevac through the end of the applicable performance period.

When the second performance measurement period ended in May 2022 the Growth Rate Delta was greater than 0% and the metric was achieved and 100% of the PRSUs in the second tranche of the award vested. Mr. Moniz the remaining NEO participant in the 2020 PRSUs received 2,958 shares upon the vesting of the second tranche of the award.

 

Intevac’s TSR			-18%
Average Peer TSR (Excluding highest and lowest TSR)			-23%
Growth Rate Delta			5%
Payout			100%

When the first performance measurement period ended in May 2021 the Growth Rate Delta is less than 0% and the metric was not achieved and no portion of the PRSUs in the first tranche of the award vested.

Although these awards were not granted in 2022, until their expiration, the unvested portion of each PRSU continued to provide performance incentives due to the remaining challenging price hurdle, and retention benefits due to the continued service requirement.

Additional Policies and Practices

Ownership Guidelines

We do not currently have a stock ownership policy for our executive officers. However, all of our NEOs own shares of the Company’s common stock or vested, but unexercised, equity awards. Mr. Hunton as a member of the Company’s Board is

 

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subject to the director stock ownership guidelines of the Company. Mr. Blonigan who was formerly a member of the Company’s Board was subject to the director stock ownership guidelines of the Company.

Anti-Hedging Policies

The Company has an insider trading policy which, among other things, prohibits insiders from short sales of Intevac common stock.

Compensation Recovery Policy

Under the AIP, if it is determined after a bonus is paid under the plan that the individual and corporate performance upon which the bonus award was based was fraudulently represented, the Company has the right to require the return of the bonus. The Company’s current equity incentive plans also provide that awards granted under those plans will be subject to any Intevac clawback policy that is established to comply with applicable laws, and that the administrator of the plans may require a participant to forfeit, return or reimburse all or a portion of an award granted under the plan (and related amounts paid) under any such policy or as appropriate to comply with applicable laws. Outside of these provisions, at this time, we have not implemented fraudulent misrepresentation policies or a policy regarding retroactive adjustments to any cash or equity-based incentive compensation paid to our executive officers and other employees where the payments were predicated upon the achievement of financial results that were subsequently the subject of a financial restatement. However, the Company will be implementing a clawback policy in accordance with SEC and Nasdaq requirements no later than by the date required by such rules.

Severance and Change in Control Arrangements

On January 19, 2022, Nigel Hunton joined the Company as its new President and Chief Executive Officer. In connection with the negotiation of his employment, and in order to incentivize him to join the Company, the Company and Mr. Hunton entered into an employment agreement. Among other provisions, this employment agreements provides Mr. Hunton with certain severance benefits in connection with certain qualifying terminations of his employment, contingent upon Mr. Hunton signing and not revoking a release of claims in favor of the Company, and his continued compliance with the terms of his confidentiality agreement entered into with the Company. These severance benefits are described under “Potential Payments Upon Termination of Employment or Change in Control” beginning on page 51.

The Company has a change in control employment agreement with Mr. Moniz. Benefits under the change in control employment agreements are described under “Potential Payments Upon Termination of Employment or Change in Control” beginning on page 59. This agreement was entered into with Mr. Moniz in connection with the negotiation of his employment agreement in order to attract the executive to the Company.

The Company had a severance agreement with Mr. Blonigan, as well as an offer letter with Mr. Blonigan that provided for certain acceleration of vesting of his equity awards in connection with a change in control of the Company. In connection with his retirement from Intevac, Mr. Blonigan entered into a separation agreement and release with the Company. Benefits under these agreements are described under “Potential Payments Upon Termination of Employment or Change in Control” beginning on page 59.

Impact of Accounting and Tax Treatment

The Human Capital Committee considers the deductibility of executive compensation under Section 162(m) of the Code in designing, establishing and implementing our executive compensation policies and practices. Section 162(m) generally prohibits us from deducting any compensation over $1 million per taxable year paid to certain of our named executive officers. Under tax laws in effect prior to January 1, 2018, compensation treated as “performance-based compensation” within the meaning of Section 162(m) of the Code was not counted towards the $1 million limit. The Tax Cuts and Jobs Act (the “Tax Act”) among other changes, repealed the exception from the deduction limit under Section 162(m) for performance-based compensation effective for taxable years beginning after December 31, 2017, such that compensation paid to our covered executive officers in excess of $1 million will not be deductible unless it qualifies for transition relief applicable to certain arrangements in place as of November 2, 2017 that are not materially modified after that date. However, because of ambiguities and uncertainties as to the application and interpretation of Section 162(m) as revised by the Tax Act, including the uncertain scope of the transition relief adopted in connection with repealing Section 162(m)’s performance-based compensation exception, no assurance can be

 

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given that previously granted compensation intended to satisfy the requirements for performance-based compensation will in fact qualify for such exception. The Human Capital Committee may administer any awards granted prior to November 2, 2017 which qualify as performance-based compensation under Section 162(m), as amended by the Tax Act, in accordance with the transition rules applicable to binding contracts in effect on November 2, 2017 and will have the sole discretion to revise compensation arrangements to conform with the Tax Act and our Human Capital Committee’s administrative practices.

The Human Capital Committee balanced the desirability of having compensation qualify for deductibility with our need to maintain flexibility in compensating executive officers in a manner designed to promote our goals. As a result, the Human Capital Committee has not adopted a policy that all compensation must be deductible.

In addition to considering the tax consequences, the Human Capital Committee considers the accounting consequences of its decisions, including the impact of expenses being recognized in connection with equity-based awards, in determining the size and form of different equity-based awards.

2022 Summary Compensation Table

The following table presents information concerning the total compensation of Intevac’s named executive officers (the “NEOs”), which consist of (i) Intevac’s President and CEO, who was the Company’s principal executive officer (“PEO”) from his start date (January 19, 2022) to the fiscal year ended December 31, 2022, (ii) Messrs. Moniz and Dickinson, the two most highly compensated executive officers other than the PEO, who were serving as executive officers at the end of the last fiscal year, and (iii) Mr. Blonigan, Intevac’s former President and CEO, who was no longer serving as an executive officer at the end of the fiscal year.

 

Name and Principal Position		Year				Salary ($)				Stock Awards ($) (1)				Non-Equity Incentive Plan Compensation ($) (2)				All Other Compensation ($) (3)				Total ($)
Nigel Hunton, (4)			2022				514,033				3,797,047				687,500				22,000				5,020,580
President and CEO			2021				—				—				—				—				—
James Moniz,			2022				360,006				1,047,252				—				2,000				1,409,258
EVP and CFO			2021				357,697				259,818				87,750				2,000				707,265
John Dickinson, (5)			2022				106,250				502,925				100,000				1,562				710,737
VP of Operations			2021				—				—				—				—				—
Wendell Blonigan, (6)			2022				38,578				—				—				678,045				716,623
Former President and CEO			2021				585,394				941,346				125,375				2,000				1,654,115

 

(1)

Amounts shown do not reflect compensation actually received by the NEO. Instead, the amounts shown are the grant date fair value of time-based RSUs and PRSUs granted in fiscal 2022 and fiscal 2021 for all NEOs as determined pursuant to ASC 718. The material assumptions used to calculate the value of stock awards in fiscal 2022 and fiscal 2021 are set forth under Note 4 of the notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for fiscal 2022 filed with the SEC on February 16, 2023. With respect to the 2022 PRSUs and the 2021 TSR PRSUs, the fair value of the awards are determined based on a Monte Carlo simulation, using the material valuation assumptions set forth under Note 4 of the notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for fiscal 2022 filed with the SEC on February 16 2023.

 

(2)	The amounts shown in this column represent the value of cash bonuses earned during the year indicated and paid in the first quarter of the subsequent year.

 

(3)	Amounts in 2022 and 2021 include matching contributions we made under our tax-qualified 401(k) plan, which provides for broad-based employee participation.

 

(4)	Mr. Hunton joined the Company on January 19, 2022. Mr. Hunton received $20,000 in relocation benefits.

 

(5)	Mr. Dickinson joined the Company on August 29, 2022.

 

(6)

Mr. Blonigan retired from Intevac on January 18, 2022 and was paid out his accrued vacation of $64,045. Mr. Blonigan has been paid (i) a severance benefit equal to $590,000 or 12 months base salary, paid in equal installments on the Company’s normal payroll schedule over a 12-month period, and (ii) payments to defray health care costs of $2,000 per month for 12 months.

 

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Outstanding Equity Awards at 2022 Fiscal Year-End

The following table shows all outstanding option and stock awards held by each of the NEOs at the end of fiscal 2022.

 

		Option Awards (1), (2)																Stock Awards (1), (3)
Name		Number of Securities Underlying Unexercised Options (#) Exercisable				Number of Securities Underlying Unexercised Options (#) Unexercisable				Option Exercise Price ($)				Option Expiration Date				Number of Shares or Units of Stock That Have Not Vested (#)				Market Value of Shares or Units of Stock That Have Not Vested ($)(4)				Equity Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights That Have Not Vested (#)				Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units, or Other Rights That Have Not Vested ($)(4)
Nigel Hunton			—				—				—				—				100,000	(5)			647,000				—				—
			—				—				—				—				166,500	(6)			1,077,255				600,300	(7)			3,883,941
James Moniz			28,000				—				12.75				05/18/2024				5,000	(9)			32,350				—				—
			30,000				—				4.70				05/17/2025				17,750	(10)			114,843				—				—
			30,000				10,000	(8)			5.68				05/16/2026				23,478	(11)			151,903				5,916	(12)			38,277
			—				—				—				—				25,000	(13)			161,750				10,434	(14)			67,508
			—				—				—				—				43,800	(15)			283,386				167,400	(16)			1,083,078
John Dickinson			—				—				—				—				50,000	(17)			323,500				74,340	(18)			480,980

 

(1)	Reflects options, RSUs and PRSUs granted under the 2012 Plan, the 2020 Plan and the Inducement Plan.

 

(2)	Unless otherwise specified, stock options become vested and exercisable over a four-year period, 25% per year on each anniversary of the grant date, subject to the NEO’s continued service through each applicable vesting date.

 

(3)

Unless otherwise specified, time-based RSUs vest over a three-year period, 33% per year on each anniversary of the applicable vesting commencement date, subject to the NEO’s continued service through each applicable vesting date. The vesting commencement date is the first February 15, May 15, August 15 or November 15 on or after the grant date.

 

(4)	Reflects the fair value of outstanding stock awards as of December 31, 2022 at the market closing price of IVAC’s common stock of $6.47 per share.

 

(5)	100,000 shares vested on January 19, 2023.

 

(6)	55,500 shares vested on January 19, 2023. Assuming continued employment with Intevac, 55,500 shares will vest on January 19 of each of 2024 and 2025.

 

(7)

100,050 shares vested on February 23, 2023, when the average market closing price of IVAC’s common stock was $7.00 for thirty consecutive trading days. Assuming continued employment with Intevac, 166,750 shares vest when the average market closing price of IVAC’s common stock is $8.00 or higher for thirty consecutive trading days, 166,750 shares vest when the average market closing price of IVAC’s common stock is $9.00 or higher for thirty consecutive trading days, and 166,750 shares vest when the average market closing price of IVAC’s common stock is $10.00 or higher for thirty consecutive trading days.

 

(8)	Assuming continued employment with Intevac, 10,000 shares will become exercisable on May 16, 2023.

 

(9)	Assuming continued employment with Intevac, 5,000 shares will vest on May 15, 2023.

 

(10)	Assuming continued employment with Intevac, 8,875 shares will vest on May 15 of each of 2023 and 2024.

 

(11)	Assuming continued employment with Intevac, 7,826 shares will vest on May 15 of each of 2023, 2024 and 2025.

 

(12)	Assuming continued employment with Intevac, 2,958 shares will vest in May 2023 if the 2022 performance goal is achieved, and 2,958 shares will vest in May 2024 if the 2023 performance goal is achieved.

 

(13)	25,000 shares vested on February 15, 2023.

 

(14)

Assuming continued employment with Intevac, 10,434 shares are scheduled to vest in May 2023 if the 2-year TSR performance goal is achieved. The number of shares reported in the table is the target amount, and the actual number of shares that may vest ranges from 0% to 200% of the target amount, depending on achievement of specified TSR performance goals.

 

(15)	Assuming continued employment with Intevac, 14,600 shares will vest on May 15 of each of 2023, 2024 and 2025.

 

(16)

27,900 shares vested on February 23, 2023, when the average market closing price of IVAC’s common stock was $7.00 for thirty consecutive trading days. Assuming continued employment with Intevac, 46,500 shares vest when the average market closing price of IVAC’s common stock is $8.00 or higher for thirty consecutive trading days, 46,500 shares vest when the average market closing price of IVAC’s common stock is $9.00 or higher for thirty consecutive trading days, and 46,500 shares vest when the average market closing price of IVAC’s common stock is $10.00 or higher for thirty consecutive trading days.

 

(17)	Assuming continued employment with Intevac, 16,667 shares will vest on August 15 of each of 2023, 2024 and 2025.

 

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(18)

12,390 shares vested on February 23, 2023, when the average market closing price of IVAC’s common stock was $7.00 for thirty consecutive trading days. Assuming continued employment with Intevac, 20,650 shares vest when the average market closing price of IVAC’s common stock is $8.00 or higher for thirty consecutive trading days, 20,650 shares vest when the average IVAC stock market closing price is $9.00 or higher for thirty consecutive trading days, and 20,650 shares vest when the average market closing price of IVAC’s common stock is $10.00 or higher for thirty consecutive trading days.

Executive Employment Agreements and Arrangements

Nigel Hunton

We entered into an at-will employment agreement with Mr. Hunton on January 19, 2022 (the “Hunton Employment Agreement”), and he started employment as Intevac’s CEO on that same date. The Hunton Employment Agreement set his 2022 base salary at $550,000. It also provides for eligibility for an annual bonus targeted at 100% of his then-current base salary, and, for 2022 only, a maximum bonus opportunity of 200% of his then-current base salary and a minimum bonus of $275,000. Pursuant to the Hunton Employment Agreement, the Company assisted Mr. Hunton with certain reasonable and customary relocation expenses, not to exceed $20,000. In addition, the Hunton Employment Agreement provided, as a material inducement to Mr. Hunton accepting employment with Intevac, it would be recommended that Mr. Hunton be granted certain RSUs subject to time-based vesting and performance-based RSUs, which grants were made to Mr. Hunton and are described in the footnotes to the table entitled “Outstanding Equity Awards at 2022 Fiscal Year-End” and in the section of this proxy entitled “Compensation Discussion and Analysis.” The Hunton Employment Agreement also provides that Mr. Hunton is eligible to receive equity awards pursuant to any plans or arrangements we may have in effect from time to time and to participate in our employee benefit plans and programs on the same terms and conditions as other similarly-situated employees.

Pursuant to the terms of the Hunton Employment Agreement, Mr. Hunton was appointed to the Board and, at each annual meeting during his employment at which his term as a member of the Board has otherwise expired, he will be nominated by Intevac to serve on its Board, with his service as a Board member subject to any required stockholder approval. The Hunton Employment Agreement also provides for severance payments and benefits to Mr. Hunton if his employment with us ceases under certain circumstances. Please see “Potential Payments upon Termination of Employment or Change in Control” below for additional detail regarding these provisions.

John Dickinson

Mr. Dickinson’s 2022 offer letter provides for his at-will employment. He started employment as Intevac’s Vice President of Operations on August 29, 2022. Mr. Dickinson has a base salary of $325,000. Mr. Dickinson’s offer letter provides for eligibility for an annual bonus targeted at 60% of his then-current base salary, and, for 2022 only a minimum bonus of $100,000. In addition, the offer letter provided, as a material inducement to Mr. Dickinson accepting employment with Intevac, it would be recommended that Mr. Dickinson be granted certain RSUs subject to time-based vesting and performance-based RSUs, which grants were made to Mr. Dickinson and are described in the footnotes to the table entitled “Outstanding Equity Awards at 2022 Fiscal Year-End” and in the section of this proxy entitled “Compensation Discussion and Analysis.” The offer letter also provides that Mr. Dickinson is eligible to receive equity awards pursuant to any plans or arrangements we may have in effect from time to time and to participate in our employee benefit plans and programs on the same terms and conditions as other similarly-situated employees.

James Moniz

Mr. Moniz’ 2014 offer letter provides for his at-will employment. For 2022, Mr. Moniz has a base salary of $360,000 and a target annual bonus of 65% of his base salary. However, our annual incentive plan for 2022 was suspended with respect to Mr. Moniz and therefore he did not receive an annual bonus for 2022.

Potential Payments upon Termination of Employment or Change in Control

Severance Agreements

The Company entered into the Hunton Employment Agreement with Mr. Hunton when he was hired in January 2022, which provides for severance payments and benefits to Mr. Hunton if his employment with us ceases under certain circumstances. If the Company terminates Mr. Hunton’s employment with the Company for any reason other than cause (as such term is defined in the Hunton Employment Agreement) (and not by reason of Mr. Hunton’s death or disability (as such term is defined in the Hunton Employment Agreement)) or if Mr. Hunton resigns from employment with the Company for good reason (as such term is defined in the Hunton Employment Agreement), Mr. Hunton will receive as severance from the

 

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Company: (i) continuing payments of Mr. Hunton’s base salary in effect on the date of Mr. Hunton’s termination, payable in accordance with the Company’s standard payroll procedures for a period of twelve months; (ii) the immediate vesting of each of Mr. Hunton’s then-outstanding equity awards as to 50% of the unvested number of shares subject to each equity award (or, if such termination occurs within the twelve month period following a change in control (as defined in the 2020 Plan) (the “Change in Control Period”), the immediate vesting as of 100% of Mr. Hunton’s then-outstanding equity awards); provided, however, that any equity award that, at any time it was outstanding, was subject to performance-based vesting, will instead be treated as provided in the award agreement related to such equity award; (iii) payment or reimbursement for premiums for medical, vision and dental coverage under COBRA for Mr. Hunton and his eligible dependents for up to twelve months; (iv) a lump sum payment equal to a prorated portion of the average bonus paid to Mr. Hunton over the three most recently completed bonus periods or such lesser period of time that Mr. Hunton has been employed (or at target bonus if no bonus period has been completed), or, if the termination occurs within the Change in Control Period, payment of 100% of Mr. Hunton’s target bonus; and (v) if bonuses have not been paid for the calendar year preceding the year in which the termination occurs, a lump sum payment equal to the bonus that Mr. Hunton would have received had he remained employed through the bonus payment date based on actual performance (the payments in (iv) and (v), the “Bonus Payments”). Further, if Mr. Hunton’s termination is due to death or Disability, then Mr. Hunton will receive the Bonus Payments. The receipt of severance under the Hunton Employment Agreement is contingent upon Mr. Hunton signing and not revoking a release of claims in favor of the Company, and his continued compliance with the terms of his confidentiality agreement entered into with the Company.

The Company had entered into a severance agreement with Mr. Blonigan when he was hired in June 2013, which provided for severance payments and benefits to Mr. Blonigan if his employment with us had ceased under certain circumstances. Mr. Blonigan did not receive severance under this agreement, and instead received severance payments and benefits pursuant to the separation agreement described below. Mr. Blonigan’s 2013 employment agreement had provided for severance payments and benefits on the following terms: If the Company terminated Mr. Blonigan’s employment for a reason other than cause (as such term is defined in the severance agreement) that also was not due to his death or disability, or if Mr. Blonigan resigned for good reason (as such term is defined in the severance agreement), Mr. Blonigan would receive as severance from the Company: (i) continuing payments of his base salary in effect on the date of the his termination for twelve months from the date of such termination, plus (ii) continuing payments of $2,000 per month for twelve months from the date of such termination. Additionally, if Mr. Blonigan resigned from the Company for good reason, as a result of the change of control of the Company, he would receive his bonus amount for the fiscal year in which the change of control occurs, prorated based on time and performance. The receipt of severance under the agreement was contingent upon: (i) Mr. Blonigan signing and not revoking a release of claims in favor of the Company, and (ii) Mr. Blonigan’s continued compliance with the terms of his confidentiality agreement entered into with the Company.

On January 27, 2022, the Company entered into a Separation Agreement and Release (the “Separation Agreement”) with Mr. Blonigan. Under the terms of the Separation Agreement, Mr. Blonigan is entitled to receive: (i) a payment equal to $590,000, payable in equal installments in accordance with the Company’s standard payroll procedures for the twelve month period following the separation date; (ii) continuing payments intended to defray Mr. Blonigan’s health care costs of $2,000 per month for twelve months following the separation date; (iii) the payout of Mr. Blonigan’s 2021 bonus, in a lump sum payment equal to $125,375, which is equivalent to the amount Mr. Blonigan would have received had he remained an employee of the Company through the date such bonus payments were made; and (iv) accelerated vesting with respect to (a) 18,750 shares subject to a stock option granted to Mr. Blonigan in May 2018, and (b) 9,375 shares subject to a stock option granted to Mr. Blonigan in May 2019, which represents the number of shares that would have vested under each such option had Mr. Blonigan remain employed with the Company through May 31, 2022. As part of the Separation Agreement, and as a condition to receiving the foregoing benefits, the parties agreed to provisions relating to a release and waiver of claims, confidentiality, non-disparagement, tax consequences and post-separation support of certain Company efforts.

Change in Control Agreement

Pursuant to his hiring, the Company entered into a change in control agreement with Mr. Moniz in October 2014. As per the terms of the agreement, if within twelve months following a change of control (as such term is defined in the change in control agreement), the Company terminates Mr. Moniz’s employment for a reason other than cause (as such term is defined in the change in control agreement) or if Mr. Moniz resigns for good reason (as such term is defined in the change in control agreement) (each, a “qualifying termination”), Mr. Moniz will receive severance from the Company in the amount of twelve months of the executive’s base salary in effect on the date of the executive’s termination, payable at the Company’s discretion either in a lump sum or at equal intervals over a period of time not longer than twelve months. In addition, all stock options and restricted stock units held by Mr. Moniz shall have their vesting fully accelerated. The receipt of severance under the change in control agreement is contingent upon Mr. Moniz signing and not revoking a release of claims in favor of the Company.

 

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Excise Tax

Under each of the Company’s employment, severance and change in control agreements in the event the severance payments and other benefits payable to an NEO constitute “parachute payments” under Section 280G of the U.S. Internal Revenue Code and would be subject to the applicable excise tax, then the executive’s severance benefits will be either (i) delivered in full or (ii) delivered to such lesser extent which would result in no portion of such benefits being subject to the excise tax, whichever results in the receipt by executive on an after-tax basis of the greatest amount of benefits.

Change in Control Acceleration

As described above, pursuant to the Hunton Employment Agreement, in the event of a qualifying termination within the Change in Control Period, then, subject to the execution and non-revocation of a release of claims in favor of the Company, Mr. Hunton’s then-outstanding Company equity awards will vest in full; provided, however, that any equity award that, at any time it was outstanding, was subject to performance-based vesting, will instead be treated as provided in the award agreement related to such equity award. The determination of the number of shares eligible to vest upon a change of control under the 2022 PRSUs is described under “2022 PRSUs” beginning on page 45.

As described above, pursuant to his change in control agreement, in the event of a qualifying termination within twelve months after a change of control (as defined Mr. Moniz’s change of control agreement), then, subject to the execution and non-revocation of a release of claims in favor of the Company, Mr. Moniz’s then-outstanding Company equity awards will vest in full, both with respect to time-based Company equity awards and Company equity awards with performance-based vesting. However, the 2022 PRSUs are not subject to this provision. Instead, the determination for the number of shares eligible to vest upon a change of control under the 2022 PRSUs is as described under “2022 PRSUs” beginning on page 45.

Estimated Payments Pursuant to Severance and Change in Control Agreements

The following table estimates potential payments upon termination as if Mr. Hunton and Mr. Moniz had terminated on December 31, 2022, in connection with a change in control or other termination covered by the severance and change in control agreements and potential payments relating to the changed vesting schedule of outstanding equity awards under our 2020 Equity Incentive Plan, 2022 Inducement Equity Incentive Plan and our 2012 Equity Incentive Plan in connection with a change in control. The table reflects termination scenarios covered by the various agreements and the benefits receivable thereunder, as well as under our equity plans. The closing market price per share of our common stock on December 31, 2022 was $6.47.

 

Name of Executive Officer		Termination Without Cause or Resignation for Good Reason ($)				Change in Control With Qualifying Termination ($)				Change in Control Without Termination ($)
Base Salary
Nigel Hunton			550,000				550,000				—
James Moniz			—				360,000				—
Annual Cash Incentive
Nigel Hunton			550,000	(1)			550,000	(1)			—
James Moniz			—				—				—
Health Coverage
Nigel Hunton			24,000				24,000				—
James Moniz			—				—				—
Acceleration Of Equity Awards
Nigel Hunton			—				1,724,255				1,724,255
James Moniz			—				850,017				—
Total
Nigel Hunton			1,124,000				2,848,255				1,724,255
James Moniz			—				1,210,017				—

 

(1)

The amount shown includes a bonus of $550,000, which is the amount Mr. Hunton would be eligible to receive if his employment with Intevac had been terminated without cause, he resigned from the Company for good reason or terminated due to his death or disability, and meets the other terms and conditions of his severance agreement. This bonus would be pro-rated based on the average bonus paid to Mr. Hunton over the three most recently completed bonus periods or such lesser period of time that Mr. Hunton has been employed (or at target bonus if no bonus period has been completed). For purposes of this table, we have calculated this amount based on his target bonus for the 2022 performance period.

 

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Equity Incentive Plans

Under the 2020 Plan, the 2012 Plan and the Inducement Plan (which was adopted in January 2022) (together, the “Plans”), unless otherwise specified in an award agreement for a particular award, all unvested options, RSUs and other equity awards vest in full and, if applicable, become exercisable and performance-based awards would be deemed achieved at 100% of target upon a change in control (as defined in the applicable plan) of Intevac or a merger of Intevac with or into another corporation or entity, unless the option or award is assumed or substituted for by the acquiring entity, and to the extent exercisable, would terminate if not exercised within the applicable period.

The Board or its Human Capital Committee, as administrator of the Plans, has the authority to provide for the accelerated vesting of any or all outstanding equity awards under the Plans, including options held by our directors and executive officers, under such circumstances and at such times as the Human Capital Committee deems appropriate, including in the event of termination of the executive or a change in control of Intevac.

2022 Pay Versus Performance Table

Under rules adopted by the SEC pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as a smaller reporting company, we are required to calculate and disclose the correlation between executive pay and company performance for the years ended December 31, 2022 and 2021. The following table sets forth additional compensation information for our Principal Executive Officer (“PEO”), Mr. Hunton, our former Principal Executive Officer (“Former PEO”), Mr. Blonigan, and our other NEOs (“Non-PEO NEOs”), calculated in accordance with SEC regulations, for fiscal years 2022 and 2021.

 

Year		SCT Total for PEO ($) (1)				Compensation Actually Paid to PEO ($) (2)				SCT Total for Former PEO ($) (3)				Compensation Actually Paid to Former PEO ($) (4)				Average SCT Total for Non-PEO NEOs (5)				Average Compensation Actually Paid to Non-PEO NEOs ($) (6)				Value of Initial $100 Investment based on TSR ($)				Net Income (Loss) ($)				Non-GAAP Net (Loss) ($) (7)
2022			5,020,580				6,338,773				716,623				(544,383	)			1,055,998				1,530,760				90				(17,075,000	)			(14,057,000	)
2021			—				—				1,654,115				769,293				790,784				575,901				65				26,620,000				(21,738,000	)

 

(1)	The dollar amounts reported are the amounts of total compensation reported for our CEO, Mr. Hunton, for fiscal year 2022 in the “Total” column of the Summary Compensation Table (“SCT”). Mr. Hunton joined Intevac in January 2022.

 

(2)

The dollar amounts reported represent the amount of “compensation actually paid” for our PEO for fiscal year 2022, as computed in accordance with SEC rules. The dollar amounts do not reflect the actual amounts of compensation paid to the PEO during fiscal year 2022, but are dollar amounts derived from the starting point of the SCT total compensation under the methodology prescribed under SEC rules as shown in the adjustment table below.

 

(3)	The dollar amounts reported are the amounts of total compensation reported for our former CEO, Mr. Blonigan, for fiscal years 2022 and 2021 in the “Total” column of the SCT. Mr. Blonigan retired from Intevac on January 18, 2022.

 

(4)

The dollar amounts reported represent the amount of “compensation actually paid” for our Former PEO for the applicable year, as computed in accordance with SEC rules. The dollar amounts do not reflect the actual amounts of compensation paid to the Former PEO during the applicable year, but are dollar amounts derived from the starting point of the SCT total compensation under the methodology prescribed under SEC rules as shown in the adjustment table below.

 

(5)

The dollar amounts reported represent the average of the amounts reported for the Company’s Non-PEO NEOs as a group (this group excludes both Mr. Hunton and Mr. Blonigan) in the “Total” column of the SCT in each applicable year. The names of each of the Non-PEO NEOs included for purposes of calculating the average amounts in each applicable year are as follows: (i) for 2022, Messrs. Moniz and Dickinson; and (ii) for 2021, Mr. Moniz, Mr. Cho, the former EVP and General Manager of our TFE Division and Mr. Justyn, the former EVP and General Manager of our Photonics Division.

 

(6)

The dollar amounts reported represent the average amount of “compensation actually paid” for our Non-PEO NEOs as a group (this group excludes both Mr. Hunton and Mr. Blonigan), as computed in accordance with SEC rules. The dollar amounts do not reflect the actual amounts of compensation paid to the non-PEO NEOs during the applicable year, but are dollar amounts derived from the starting point of the SCT total compensation under the methodology prescribed under SEC rules as shown in the adjustment table below. The names of each of the Non-PEO NEOs included for purposes of calculating the average amounts in each applicable year are as follows: (i) for 2022, Messrs. Moniz and Dickinson; and (ii) for 2021, Messrs. Moniz, Cho, and Justyn.

 

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(7)	See the “Reconciliation of GAAP to Non-GAAP Results” below. We have voluntarily included information on our Non-GAAP net income to provide fuller context in light of the divestiture of the Photonics business.

To calculate the amounts in the “Compensation Actually Paid to PEO” column in the table above, the following amounts were deducted from and added to (as applicable) the PEO’s “Total” compensation as reported in the SCT:

 

Year		SCT Total for PEO ($)				Less: Reported Value of Equity Awards for PEO in SCT ($) (1)				Add: Equity Award Adjustments for PEO ($) (2)				Compensation Actually Paid to PEO ($)
2022			5,020,580				3,797,047				5,115,240				6,338,773
2021			—				—				—				—

 

(1)	Represents the grant date fair value of the equity awards to the PEO, as reported in the “Stock Awards” column in the SCT for each applicable year.

 

(2)	Represents the year-over-year change in the fair value of equity awards to the PEO, as itemized in the table below.

 

(3)	The Company has not paid dividends historically and does not sponsor any pension arrangements; thus no adjustments are made for these items.

Reconciliation of the SCT total compensation and “Compensation Actually Paid to PEO” is summarized in the following table:

 

Adjustments to Fair Value of Equity Awards for PEO		2022 ($)
Add fair value as of year-end for awards granted during the year that are unvested and outstanding as of year-end			4,691,028
Add fair value of awards that granted and vested during the year			424,212
Total Equity Award Adjustments			5,115,240

To calculate the amounts in the “Compensation Actually Paid to Former PEO” column in the table above, the following amounts were deducted from and added to (as applicable) the Former PEO’s “Total” compensation as reported in the SCT:

 

Year		SCT Total for Former PEO ($)				Less: Reported Value of Equity Awards for Former PEO in SCT ($) (1)				Add: Equity Award Adjustments for Former PEO ($) (2)				Compensation Actually Paid to Former PEO ($)
2022			716,623				—				(1,261,006	)			(544,383	)
2021			1,654,115				941,346				56,524				769,293

 

(1)	Represents the grant date fair value of the equity awards to the Former PEO, as reported in the “Stock Awards” column in the SCT for each applicable year.

 

(2)	Represents the year-over-year change in the fair value of equity awards to Former PEO, as itemized in the table below.

 

(3)	The Company has not paid dividends historically and does not sponsor any pension arrangements; thus no adjustments are made for these items.

 

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Reconciliation of the SCT total compensation and “Compensation Actually Paid to Former PEO” is summarized in the following table:

 

Adjustments to Fair Value of Equity Awards for Former PEO		2022 ($)				2021 ($)
Add fair value as of year-end for awards granted during the year that are unvested and outstanding as of year-end			—				647,303
Add fair value of awards that granted and vested during the year			—				—
Add year-over-year increase (decrease) in fair value of unvested and outstanding awards granted in prior years			—				(450,091	)
Add increase (decrease) in fair value from prior fiscal year-end for awards granted in a prior fiscal year that vested during the year			(16,285	)			(104,742	)
Subtract fair value at end of prior fiscal year of equity awards granted in a prior fiscal year that failed to meet vesting conditions			(1,244,721	)			(35,946	)
Total Equity Award Adjustments			(1,261,006	)			56,524

To calculate the amounts in the “Average Compensation Actually Paid to Non-PEO NEOs” column in the table above, the following amounts were deducted from and added to (as applicable) the average of the “Total” compensation of our non-PEO NEOs for each applicable year, as reported in the SCT for that year:

 

Year		Average SCT Total for Non-PEO NEOs ($)				Less: Average Reported Value of Equity Awards for Non-PEO NEOs in SCT ($) (1)				Add: Average Equity Award Adjustments for Non-PEO NEOs ($) (2)				Average Compensation Actually Paid to Non-PEO NEOs ($)
2022			1,059,998				775,089				1,245,851				1,530,760
2021			790,784				238,168				23,285				575,901

 

(1)	Represents the average of the grant date fair value of the equity awards to the Non-PEO NEOs, as reported in the “Stock Awards” column in the SCT for each applicable year.

 

(2)	Represents average of the year-over-year change in the fair value of equity awards to the Non-PEO NEOs, as itemized in the table below.

 

(3)	The Company has not paid dividends historically and does not sponsor any pension arrangements; thus no adjustments are made for these items.

 

Adjustments to Fair Value of Equity Awards for Non-PEO NEOs		2022 ($)				2021 ($)
Add fair value as of year-end for awards granted during the year that are unvested and outstanding as of year-end			981,676				184,753
Add fair value of awards that granted and vested during the year			85,415				87,650
Add year-over-year increase (decrease) in fair value of unvested and outstanding awards granted in prior years			153,358				(154,457	)
Add increase (decrease) in fair value from prior fiscal year-end for awards granted in a prior fiscal year that vested during the year			25,402				(88,371	)
Subtract fair value at end of prior fiscal year of equity awards granted in a prior fiscal year that failed to meet vesting conditions			—				(6,290	)
Total Equity Award Adjustments			1,245,851				23,285

Description of Relationship Between the Information Presented in the Pay versus Performance Table

In accordance with Item 402(v) of Regulation S-K, the Company is providing the following description of the relationships between information presented in the Pay versus Performance table.

 

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