<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
FILED BY THE REGISTRANT [X] FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
- --------------------------------------------------------------------------------
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to [section]240.14a-11(c) or
[section]240.14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
VICOR CORPORATION
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
[VICOR LOGO]
April 25, 1997
Dear Stockholder:
You are cordially invited to attend the 1997 Annual Meeting of Stockholders
(the "Annual Meeting"). The Annual Meeting will be held:
DATE: June 26, 1997
TIME: 5:00 P.M.
PLACE: Andover Country Club
60 Canterbury Street
Andover, Massachusetts
The attached Notice of Annual Meeting and Proxy Statement cover the formal
business of the Annual Meeting. The accompanying Proxy Statement contains
discussion of the matters to be voted upon at the Annual Meeting. At the Annual
Meeting your management will report on the operations of the Corporation, and
directors and officers of the Corporation will respond to questions that
stockholders may have.
The Board of Directors encourages you to promptly complete, date, sign, and
return your Proxy Card. Return of the Proxy Card indicates your interest in the
Corporation's affairs. If you attend the Annual Meeting and wish to vote your
shares in person you may revoke your proxy at that time.
Sincerely Yours,
/s/ PATRIZIO VINCIARELLI
-----------------------------------
PATRIZIO VINCIARELLI
President and Chairman of the Board
<PAGE> 3
VICOR CORPORATION
-----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON THURSDAY, JUNE 26, 1997
-----------------
NOTICE IS HEREBY GIVEN that the 1997 Annual Meeting of Stockholders (the
"Annual Meeting") of Vicor Corporation (the "Corporation") will be held on
Thursday, June 26, 1997 at 5:00 p.m., at the Andover Country Club, 60 Canterbury
Street, Andover, Massachusetts, for the following purposes:
1. To fix the number of Directors at six and to elect six Directors to
hold office until the 1998 Annual Meeting of Stockholders and until their
respective successors are duly elected and qualified; and
2. To consider and act upon any other matters which may properly be
brought before the Annual Meeting, or any adjournments or postponements
thereof.
Any action may be taken on the foregoing proposals at the Annual Meeting on
the date specified above, or on any date or dates to which, by original or later
adjournment, the Annual Meeting may be adjourned, or to which the Annual Meeting
may be postponed.
The Board of Directors has fixed the close of business on April 30, 1997 as
the record date for determining the stockholders entitled to notice of and to
vote at the Annual Meeting and any adjournments or postponements thereof. Only
stockholders of record at the close of business on that date will be entitled to
notice of and to vote at the Annual Meeting and any adjournments or
postponements thereof.
You are requested to fill in and sign the enclosed form of proxy which is
solicited by the Board of Directors and to mail it promptly in the enclosed
envelope. Any proxy may be revoked by a writing delivered to the Corporation
stating that the proxy is revoked or by delivery of a later dated proxy.
Stockholders of record who attend the Annual Meeting may vote in person by
notifying the Secretary, even if they have previously delivered a signed proxy.
By Order of the Board of Directors
MARK A. GLAZER
Secretary
Andover, Massachusetts
April 25, 1997
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN, DATE
AND PROMPTLY RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED. IF YOU WISH TO
VOTE YOUR SHARES IN PERSON AT THE MEETING, YOUR PROXY MAY BE REVOKED.
<PAGE> 4
VICOR CORPORATION
23 FRONTAGE ROAD
ANDOVER, MASSACHUSETTS 01810
TELEPHONE (508) 470-2900
PROXY STATEMENT
FOR THE 1997 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON THURSDAY, JUNE 26, 1997
April 25, 1997
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Vicor Corporation (the "Corporation") from
holders of the outstanding shares of capital stock of the Corporation for use at
the 1997 Annual Meeting of Stockholders of the Corporation to be held on
Thursday, June 26, 1997, and at any adjournments or postponements thereof (the
"Annual Meeting"). At the Annual Meeting, stockholders will consider the matters
set forth in the accompanying Notice of Annual Meeting.
This Proxy Statement and the accompanying Notice of Annual Meeting and
proxy card are first being sent to stockholders on or about May 9, 1997. The
Board of Directors has fixed the close of business on April 30, 1997 as the
record date for the determination of stockholders entitled to notice of and to
vote at the Annual Meeting (the "Record Date"). Only stockholders of record at
the close of business on the Record Date will be entitled to notice of and to
vote at the Annual Meeting. As of March 31, 1997, there were outstanding and
entitled to vote 30,296,240 shares of Common Stock and 12,247,309 shares of
Class B Common Stock of the Corporation. Each share of Common Stock entitles the
holder thereof to one vote per share and each share of Class B Common Stock
entitles the holder thereof to ten votes per share. Shares of Common Stock and
Class B Common Stock will vote together as a single class on the proposals set
forth in this Proxy Statement.
Stockholders of the Corporation are requested to complete, date, sign and
return the accompanying proxy card in the enclosed envelope. Shares represented
by a properly executed proxy received prior to the vote at the Annual Meeting
and not revoked will be voted at the Annual Meeting as directed in the proxy. If
a properly executed proxy is submitted and no instructions are given, the proxy
will be voted FOR the fixing of the Board of Directors at six and the election
of the six nominees for Directors of the Corporation named in this Proxy
Statement. It is not anticipated that any matters other than those set forth in
this Proxy Statement will be presented at the Annual Meeting. If other matters
are presented, proxies will be voted in accordance with the discretion of the
proxy holders.
A stockholder of record may revoke a proxy at any time before it has been
exercised by (i) filing a written revocation with the Secretary of the
Corporation at the address of the Corporation set forth above; (ii) filing a
duly executed proxy bearing a later date; or (iii) appearing in person,
notifying the Secretary and voting by
<PAGE> 5
ballot at the Annual Meeting. Any stockholder of record as of the Record Date
attending the Annual Meeting may vote in person whether or not a proxy has been
previously given, but the presence (without further action) of a stockholder at
the Annual Meeting will not constitute revocation of a previously given proxy.
Shares with respect to which votes have been withheld from any Director are
counted for purposes of determining the presence or absence of a quorum for the
transaction of business, but such withheld votes have no legal effect under
Delaware law. Shares that reflect abstentions or "broker non-votes" (i.e.,
shares held by brokers that are represented at the Annual Meeting but as to
which such brokers have not received instructions from the beneficial owners
and, with respect to one or more but not all issues, such brokers do not have
discretionary voting power to vote such shares) will be counted for purposes of
determining whether a quorum is present for the transaction of business at the
Annual Meeting. For purposes of determining whether a particular proposal has
passed, abstentions will be treated as votes cast against the proposal and
broker non-votes will have no effect on the outcome of the vote.
The cost of solicitation of proxies in the form enclosed herewith will be
borne by the Corporation. In addition to the solicitation of proxies by mail,
the Directors, officers and employees of the Corporation may also solicit
proxies personally or by telephone without special compensation for such
activities. The Corporation will also request persons, firms and corporations
holding shares in their names or in the names of their nominees, which are
beneficially owned by others, to send proxy materials to and obtain proxies from
such beneficial owners. The Corporation will reimburse such holders for their
reasonable expenses in connection therewith.
The Corporation's 1996 Annual Report including financial statements for the
fiscal year ended December 31, 1996, is being mailed to stockholders
concurrently with this Proxy Statement.
PROPOSAL I
ELECTION OF DIRECTORS
The Board of Directors of the Corporation has nominated the individuals
named below for election as Directors. If elected, the nominees will serve until
the 1998 Annual Meeting of Stockholders and until their respective successors
shall have been duly elected and qualified. Proxies will be voted for the
nominees named below unless otherwise specified in the proxy. Each of the
nominees has consented to serve as a Director. However, if any person nominated
by the Board of Directors fails to stand for election or is unable to accept
election, proxies solicited hereby will be voted either for the election of
another person or persons designated by the Board of Directors or to fix the
number of Directors at a lesser number and elect the nominees able and willing
to serve. Directors will be elected by a plurality of the votes cast by the
holders of Common Stock and Class B Common Stock voting on the election of
Directors. Holders of voting rights sufficient to elect each of the nominees
named below have indicated an intention to vote in favor of such nominees.
2
<PAGE> 6
INFORMATION REGARDING NOMINEES
The following table sets forth certain information as of March 31, 1997
with respect to the nominees for election to the Board of Directors. Information
regarding the beneficial ownership of shares of the capital stock of the
Corporation by such persons is set forth under the section of this Proxy
Statement entitled "Principal and Management Stockholders."
<TABLE>
<CAPTION>
NAME AGE DIRECTOR SINCE PRINCIPAL OCCUPATION FOR PAST FIVE YEARS
- --------------------- ---- -------------- ---------------------------------------------------
<S> <C> <C> <C>
Patrizio Vinciarelli. 50 1981 President and Chairman of the Board of the
Corporation.
Richard E. Beede..... 48 1993 Senior Vice President, Marketing of the
Corporation.
Estia J. Eichten..... 50 1981 Senior Scientist with the Fermi National
Accelerator Laboratory in Batavia, Illinois;
President of VLT Corporation, a wholly-owned
subsidiary of the Corporation, since 1987.
Jay M. Prager........ 50 1993 Senior Vice President, Technology of the
Corporation.
David T. Riddiford... 61 1984 General Partner of P.R. Venture Partners, L.P., a
venture capital affiliate of Pell, Rudman & Co.,
Inc., an investment advisory firm, since 1987;
general partner of the general partner of Venture
Founders Capital, a venture capital partnership,
since 1984.
M. Michael Ansour.... 42 1993 Managing partner of Langdon Street Capital, L.P.,
an investment limited partnership in New York City,
since 1992; Vice President of Kellner DiLeo & Co.,
an investment firm in New York City, from 1989 to
1991.
</TABLE>
The Corporation's Board of Directors held four meetings during the fiscal
year ended December 31, 1996. Each of the Directors attended more than 75% of
the total number of meetings of the Board of Directors and meetings of the
committees of the Board of Directors on which he served. The Board of Directors
has established an Audit Committee and an Executive Compensation Committee. The
Audit Committee held four meetings in 1996. The Audit Committee is composed of
Messrs. Ansour, Eichten and Riddiford. The functions of the Audit Committee
generally include recommending the appointment of independent auditors,
reviewing with the independent auditors the scope and results of the audit
engagement, and monitoring the Corporation's internal financial and accounting
controls. The Executive Compensation Committee met once in 1996. The Executive
Compensation Committee is composed of Messrs. Eichten and Riddiford. The
Executive Compensation Committee is responsible for establishing salaries,
bonuses and other compensation for the officers of the Corporation and
administering the Corporation's stock option and bonus plans pursuant to
authority delegated to it by the Board of Directors. The Board of Directors does
not have a standing nominating committee. The full Board of Directors performs
the function of such a committee.
DIRECTORS' COMPENSATION
Directors of the Corporation do not currently receive cash compensation for
service on the Board of Directors. Under the Corporation's 1993 Stock Option
Plan, each employee Director (other than Mr. Vinciarelli or any other Director
who holds in excess of 10% of the total number of shares of the capital stock of
the Corporation) and each non-employee Director automatically receives
non-qualified stock options upon election or re-election as a Director. Such
employee Directors and non-employee Directors automatically receive
non-qualified stock options to purchase up to 2,000 shares of the Corporation's
Common Stock, which vest in equal annual installments of 400 shares on each
anniversary of the date of grant and expire 10 years from the date of grant.
Non-employee Directors receive additional non-qualified stock options to
purchase up to 2,000 shares of the Corporation's Common Stock that vest in their
entirety one year from the date of grant
3
<PAGE> 7
and expire 15 months from the date of grant. All such options are exercisable at
a price equal to the fair market value of the Common Stock at the date of grant.
EXECUTIVE OFFICERS
Executive officers are elected annually and serve at the discretion of the
Board of Directors. The following persons are the executive officers of the
Corporation.
Patrizio Vinciarelli, 50, President and Chief Executive Officer. Dr.
Vinciarelli founded Vicor in 1981 and has served as President since that time.
Richard E. Beede, 48, Senior Vice President, Marketing. Mr. Beede joined
the Corporation in 1984.
Jay M. Prager, 50, Senior Vice President, Technology. Prior to joining the
Corporation in 1987, Mr. Prager was Director, New Product Development, at the
Modicon Division of Gould, Inc., a manufacturer of industrial control equipment,
where he spent a total of nine years in various engineering and engineering
management roles.
Barry Kelleher, 48, Senior Vice President, International Operations. Prior
to joining the Corporation in 1993, Mr. Kelleher was employed at Computer
Products Inc., a manufacturer of power conversion products, since 1981, where he
held the position of Corporate Vice President and President of the Power
Conversion Group.
David W. Nesbitt, 51, Senior Vice President, North and South American
Sales. Mr. Nesbitt held the position of Vice President, Sales from 1989 to 1992
and Vice President, North American Sales from 1992 to 1995. Prior to joining the
Corporation in 1989, Mr. Nesbitt was employed at Siliconix, Inc., a manufacturer
of integrated circuits, from 1981 to 1989. He held the position of Central Area
Manager from 1981 to 1986, at which time he was promoted to Director, North
American Sales.
William Rose, 47, Vice President, Operations. Prior to joining the
Corporation in 1990, Mr. Rose was Director, Manufacturing at Stellar Computer, a
manufacturer of computer systems. From 1985 to 1986, Mr. Rose was Director of
Manufacturing at MIPS Computer, a manufacturer of computer systems.
Mark A. Glazer, 44, Vice President, Finance and Administration. Mr. Glazer
held the position of Controller of the Corporation from 1988 to 1993. Prior to
joining the Corporation in 1988, Mr. Glazer was employed by Analog and Digital
Systems, Inc., a manufacturer of home and automotive stereo equipment, from 1983
to 1988, where he held the position of Controller from 1983 to 1986 and the
position of Treasurer from 1986 to 1987, at which time he was promoted to Vice
President, Finance.
N. Douglas Powers, 50, Vice President, Chief Information Officer. Mr.
Powers held the position of Director, Management Information Systems of the
Corporation from 1989 to 1991 and Senior Director, Management Information
Systems from 1991 to 1993. Prior to joining the Corporation in 1989, Mr. Powers
was Director, Research and Technical Support at Stratus Computer, Inc., a
manufacturer of fault tolerant computer systems, from 1981 to 1989.
Herbert H. Coughlan, Jr., 57, Vice President, Human Resources. Mr. Coughlan
held the position of Director, Human Resources of the Corporation from 1993 to
1994. Prior to joining the Corporation in 1993, Mr. Coughlan was Senior Vice
President, Administration at Hill Holiday, Inc., an international advertising
agency, from 1984 to 1993.
4
<PAGE> 8
PRINCIPAL AND MANAGEMENT STOCKHOLDERS
The following table sets forth the beneficial ownership of the
Corporation's Common Stock and Class B Common Stock held by (i) each person or
entity that is known to the Corporation to be the beneficial owner of more than
five percent of the outstanding shares of either class of the Corporation's
common stock, (ii) each Director of the Corporation, (iii) each of the executive
officers of the Corporation named in the Summary Compensation Table, and (iv)
all Directors and executive officers as a group, based on representations of the
Directors and executive officers of the Corporation as of March 31, 1997 and a
review of filings on Schedules 13D, 13F and 13G under the Securities Exchange
Act of 1934, as amended, with respect to December 31, 1996. Except as otherwise
specified, the named beneficial owner has sole voting and investment power over
the shares. The information in the table reflects shares outstanding of each
class of common stock on March 31, 1997, and does not, except as otherwise
indicated below, take into account conversions after such date of shares of
Class B Common Stock into Common Stock. Subsequent conversions of Class B Common
Stock into Common Stock will increase the voting control of persons who retain
shares of Class B Common Stock.
<TABLE>
<CAPTION>
PERCENT PERCENT CLASS B
TOTAL COMMON STOCK COMMON STOCK PERCENT OF
NAME OF NUMBER BENEFICIALLY BENEFICIALLY VOTING
BENEFICIAL OWNER(1) OF SHARES(2)(3) OWNED OWNED POWER(4)
------------------- --------------- ------------ --------------- ----------
<S> <C> <C> <C> <C>
Patrizio Vinciarelli..................... 20,980,761 32.9% 90.0% 78.7%
Estia J. Eichten......................... 1,244,364(5) 1.8% 5.6% 4.9%
M. Michael Ansour........................ 27,900 * * *
David T. Riddiford....................... 223,734(6) * * *
Richard E. Beede......................... 134,203(7) * * *
Jay M. Prager............................ 132,694 * * *
David W. Nesbitt......................... 82,417 * * *
Barry Kelleher........................... 37,226(8) * * *
All Directors and executive officers
as a group (12 persons)................. 22,966,332 36.8% 96.5% 84.0%
Nevis Capital Management, Inc............ 2,045,195 6.8% * 1.3%
119 St. Paul Street, Baltimore, MD 21202
The Edgemont Asset Management Corp....... 1,600,000 5.3% * 1.0%
140 East 45th Street, New York, NY 10017
- ---------------
* Less than 1%
(1) The address of Mr. Eichten is: c/o Fermi National Accelerator Laboratory,
Kirk Road and Pine Street, Batavia, IL 60510. The address of each other
person named in the table is: c/o Vicor Corporation, 23 Frontage Road,
Andover, MA 01810.
(2) Includes shares issuable upon the exercise of stock options that have vested
or will vest within 60 days in the following amounts: Mr. Vinciarelli, 125
shares of Common Stock; Mr. Eichten, 2,400 shares of Common Stock; Mr.
Ansour, 2,400 shares of Common Stock; Mr. Riddiford, 2,400 shares of Common
Stock; Mr. Beede, 20,101 shares of Common Stock; Mr. Prager, 77,898 shares
of Common Stock and 54,500 shares of Class B Common Stock; Mr. Nesbitt,
79,917 shares of Common Stock and 2,500 shares of Class B Common Stock; Mr.
Kelleher, 32,323 shares of Common Stock; and all Directors and executive
officers as a group, 287,369 shares of Common Stock and 88,600 shares of
Class B Common Stock.
(3) The calculation of the number of shares includes the following: for Mr.
Vinciarelli, 9,957,113 shares of Common Stock representing 32.9% of such
class and 11,023,648 shares of Class B Common Stock representing 90.0% of
such class; and for Mr. Eichten, 553,664 shares of Common Stock representing
1.8% of such class and 690,700 shares of Class B Common Stock representing
5.6% of such class.
</TABLE>
5
<PAGE> 9
(4) The percentages have been determined in accordance with Rule 13d-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). As of
March 31, 1997, a total of 42,543,549 shares of common stock were
outstanding, of which 30,296,240 were shares of Common Stock entitled to one
vote per share and 12,247,309 were shares of Class B Common Stock entitled
to ten votes per share. Each share of Class B Common Stock is convertible
into one share of Common Stock.
(5) Includes 8,500 shares of Common Stock beneficially owned by Mr. Eichten's
spouse as to which Mr. Eichten disclaims beneficial ownership.
(6) Includes 101,236 shares of Common Stock held by Venture Founders Partners
Limited Partnership. Mr. Riddiford, a Director of the Corporation, is a
general partner of the general partner of Venture Founders Partners Limited
Partnership.
(7) Includes 600 shares of Common Stock beneficially owned by Mr. Beede's spouse
and 1,200 shares of Common Stock beneficially owned by two relatives as to
which Mr. Beede disclaims beneficial ownership.
(8) Includes 3,000 shares of Common Stock beneficially owned by two relatives of
Mr. Kelleher as to which Mr. Kelleher disclaims beneficial ownership.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table shows for the fiscal years ended December 31, 1994,
1995 and 1996 the compensation paid by the Corporation to the Chief Executive
Officer and the other four most highly compensated executive officers who earned
more than $100,000 during 1996.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM
---------------------------------------------------- COMPENSATION AWARDS
OTHER ANNUAL -------------------
NAME AND COMPENSATION SHARES UNDERLYING
PRINCIPAL POSITION YEAR SALARY($) BONUS($) ($)(1) OPTIONS(#)
- ------------------ ---- --------- -------- ------------ -------------------
<S> <C> <C> <C> <C> <C>
P. Vinciarelli..................... 1996 170,615 -- 6,680 5,369
President and Chief 1995 158,609 -- 9,071 3,764
Executive Officer 1994 147,692 -- 10,835 2,400
R. Beede........................... 1996 151,846 14,207 7,965 6,126
Sr. Vice President, 1995 141,356 24,256 13,432 5,682
Marketing 1994 133,901 17,510 14,723 3,080
J. Prager.......................... 1996 151,846 -- 10,558 8,236
Sr. Vice President, 1995 141,356 -- 9,638 7,364
Technology 1994 133,440 -- 11,115 4,160
B. Kelleher........................ 1996 137,077 13,500 9,989 3,516
Sr. Vice President, 1995 127,795 20,322 8,553 3,530
International Operations 1994 125,000 13,426 6,882 2,000
D. Nesbitt......................... 1996 137,077 16,301 9,752 3,516
Sr. Vice President, 1995 128,314 24,302 9,209 8,530
North and South American Sales 1994 118,718 16,092 12,006 1,960
</TABLE>
6
<PAGE> 10
- ---------------
(1) This column sets forth the cost of providing certain perquisites and
benefits to the named executive officers. The amounts shown relate primarily
to automobile allowances, which were as follows: for Mr. Vinciarelli, $6,005
in 1996, $8,861 in 1995, and $10,625 in 1994; Mr. Beede, $6,813 in 1996,
$12,850 in 1995, and $12,933 in 1994; Mr. Prager, $9,206 in 1996, $9,428 in
1995, and $8,796 in 1994; Mr. Kelleher, $7,889 in 1996, $7,709 in 1995, and
$6,672 in 1994; and Mr. Nesbitt, $8,165 in 1996, $8,178 in 1995, and $8,394
in 1994.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table sets forth each grant of stock options during the
fiscal year ended December 31, 1996 to the Chief Executive Officer and each
other executive officer named in the Summary Compensation Table. All stock
options granted in 1996 relate to shares of the Corporation's Common Stock. No
stock appreciation rights ("SARs") have been granted by the Corporation.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
------------------------------------------------------------ VALUE AT ASSUMED ANNUAL
SHARES RATES OF STOCK PRICE
UNDERLYING APPRECIATION FOR OPTION
OPTIONS % OF TOTAL OPTIONS EXERCISE OR TERM
GRANTED GRANTED TO EMPLOYEES BASE PRICE EXPIRATION -------------------------
NAME (#) IN FISCAL YEAR ($/SH) DATE 5%($) 10%($)
- ---- ---------- -------------------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
P. Vinciarelli..... 2,372(1) 0.26% $14.50 3/14/1997 $ 1,782.51 $ 3,568.05
2,372(1) 0.26% $14.50 3/14/1997 $ 1,782.51 $ 3,568.05
625(4) 0.07% $16.00 4/17/2006 $ 6,288.95 $15,937.42
R. Beede........... 2,110(1) 0.23% $14.50 3/14/1997 $ 1,585.62 $ 3,173.94
2,016(2) 0.22% $14.88 3/04/2006 $18,865.63 $47,809.21
2,000(3) 0.22% $18.00 6/27/2006 $22,640.21 $57,374.73
J. Prager.......... 2,110(1) 0.23% $14.50 3/14/1997 $ 1,585.62 $ 3,173.94
2,110(1) 0.23% $14.50 3/14/1997 $ 1,585.62 $ 3,173.94
2,016(2) 0.22% $14.88 3/04/2006 $18,865.63 $47,809.21
2,000(3) 0.22% $18.00 6/27/2006 $22,640.21 $57,374.73
B. Kelleher........ 1,903(1) 0.21% $14.50 3/14/1997 $ 1,430.07 $ 2,862.56
1,613(2) 0.17% $14.88 3/04/2006 $15,094.38 $38,252.11
D. Nesbitt......... 1,903(1) 0.21% $14.50 3/14/1997 $ 1,430.07 $ 2,862.56
1,613(2) 0.17% $14.88 3/04/2006 $15,094.38 $38,252.11
- ---------------
(1) Options which expired March 14, 1997 were granted on March 1, 1996 and vest
and become exercisable over a one year period.
(2) Options expiring March 4, 2006 were granted on the corresponding date in
1996 and vest and become exercisable at a rate of 20% per year over five
years from the date of grant.
(3) Options expiring June 27, 2006 were granted on the corresponding date in
1996 and vest and become exercisable at a rate of 20% per year over five
years from the date of grant.
(4) Options expiring April 17, 2006 were granted on the corresponding date in
1996 and vest and become exercisable at a rate of 20% per year over five
years from the date of grant.
</TABLE>
The table also shows the value of the options granted at the end of the
option terms if the price of the Corporation's Common Stock were to appreciate
annually by 5% and 10%, respectively. There is no assurance that the stock price
will appreciate at the rates shown in the table. If the stock price appreciates,
the value of stock held by all stockholders will increase.
7
<PAGE> 11
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END VALUES
The following table sets forth the shares acquired and the value realized
upon exercise of stock options during the fiscal year ended December 31, 1996 by
the Chief Executive Officer and each other executive officer named in the
Summary Compensation Table and certain information concerning the number and
value of unexercised options.
<TABLE>
<CAPTION>
NUMBER OF SHARES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
FISCAL YEAR-END(#) FISCAL YEAR-END($)(2)
SHARES ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE(#) REALIZED($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------------- ------------------ -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
P. Vinciarelli............... -- -- 4,744 625 $ 10,389 $ 431
R. Beede..................... 195,804 $4,138,166 17,242 9,958 $ 112,319 $ 57,122
J. Prager.................... -- -- 133,372 8,378 $1,913,897 $ 45,281
B. Kelleher.................. -- -- 32,703 42,813 $ 172,768 $ 228,020
D. Nesbitt................... 3,000 $ 47,760 80,644 5,872 $ 996,857 $ 29,809
</TABLE>
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(1) Equal to the market value of the Corporation's Common Stock on the date of
exercise, less the option exercise price. Assumes conversion of any shares
of Class B Common Stock to Common Stock.
(2) Equal to the market value of shares covered by in-the-money options on
December 31, 1996, less the aggregate option exercise price. Options are
in-the-money if the market value of the shares covered thereby is greater
than the option exercise price. Assumes conversion of any shares of Class B
Common Stock to Common Stock.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON EXECUTIVE
COMPENSATION
The Executive Compensation Committee of the Board of Directors of the
Corporation (the "Committee") consists of David T. Riddiford and Estia J.
Eichten, both of whom are non-employee directors. The Committee establishes the
terms of and grants awards under the Corporation's 1993 Stock Option Plan (the
"Option Plan") and other benefit plans. The Committee also approves compensation
policies for executive officers.
Compensation Policies for Executive Officers
The Corporation's compensation program for executive officers currently
consists primarily of a base salary and awards of stock options. In addition to
base salary, the Corporation provides certain benefits to executive officers,
such as the use of an automobile and enhanced health insurance coverage, that
are not available to employees generally.
Salary levels for executive officers are proposed by management and
approved by the Committee. In connection with salary adjustments made in the
beginning of 1996, the Committee reviewed compensation information from a
national survey of the high tech industry. This survey contained data from over
four hundred companies, including the Corporation. The survey included
information from certain of the companies contained in the peer group used in
formulating the Stock Performance Graph appearing on page 11, but was not
limited to those companies. The Committee believes that salary levels for
executive officers of the Corporation are slightly below the median salary
levels of the companies surveyed.
The primary element of the Corporation's incentive compensation program has
been the granting of options to purchase shares of the Corporation's Common
Stock under the Corporation's Option Plan. Substantially all of the
Corporation's employees, including its executive officers, participate in the
8
<PAGE> 12
Corporation's Option Plan. The Option Plan is designed to give each
participating employee an ownership interest in the Corporation and to align the
interests of the executive officers with those of the Corporation's
stockholders.
Stock options are granted to employees and executive officers based upon
guidelines established by the Board of Directors and the Committee. Annual
continuation awards ("Continuation Awards") were granted to executive officers
in 1996 based on a formula which calculates the product of two times the
executive officer's merit increase (based on the executive officer's performance
review) divided by the market value per share of the Corporation's Common Stock
on the date of grant. The number of shares to be granted was approved by the
Committee, and was not based on any corporate or business unit performance
measures. All Continuation Awards were made with a 5-year vesting schedule.
In addition to Continuation Awards under the Option Plan, the Corporation
has in the past granted short-term "bonus" stock options to all eligible
employees and officers (except those who participate in the Corporation's sales
incentive plan), that were exercisable for approximately one year. However,
beginning in March 1997, these bonus options will be exercisable for
approximately two years. These grants have been designed to provide a short-term
incentive under the Option Plan. In 1996, the Corporation granted "bonus"
options at a rate of twenty percent of base salary to all participating
executive officers and employees of the Corporation. Management recommends the
grant of these options and the Committee does not use specific or weighted
criteria relating to performance of the Corporation in determining whether to
grant these awards. Although options of this type have typically been granted
over the past few years at the rate of twenty percent
of base salary to all eligible employees, this program is discretionary and may
be changed in the future.
During 1996, the Corporation had in effect a program of granting stock
options that were designed to promote long-term savings by participating
employees by investment of net proceeds realized upon the exercise of short-term
stock options in the Corporation's 401(k) program. Options of this type were
granted to all eligible employees and executive officers at the rate of twenty
percent of base salary.
Finally, to the extent applicable to the Corporation, the Committee intends
to review and to take any necessary and appropriate steps to ensure that the
Corporation complies with certain income tax regulations, which if not satisfied
would limit the deductibility of executive compensation above specified amounts.
Compensation of Chief Executive Officer
The Committee approves the annual salary for Mr. Vinciarelli, the
Corporation's Chief Executive Officer. The Committee does not have specific
criteria, either in terms of individual or corporate performance, in evaluating
the base salary of the Chief Executive Officer. In light of the relatively low
cash compensation paid to the Chief Executive Officer, the Committee has not
attempted to relate compensation of the Chief Executive Officer to the
performance of the Corporation. Based on salary data from the survey discussed
above, and other sources, the Committee believes that the Chief Executive
Officer's salary is at the lower end of the range of salaries for CEOs of
comparable companies.
In 1996, the Committee determined to include Mr. Vinciarelli in the
granting of stock options described above as "bonus" and savings incentive stock
options. However, as in prior years, the Corporation continued to exclude Mr.
Vinciarelli from the granting of Continuation Awards because of Mr.
Vinciarelli's significant stock holdings in the Corporation and the practice of
basing such awards on performance reviews that were typically prepared by Mr.
Vinciarelli.
Submitted by the Executive Compensation Committee:
Estia J. Eichten
David T. Riddiford
9
<PAGE> 13
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Eichten and Mr. Riddiford serve on the Committee. Mr. Eichten serves as
President of VLT Corporation, the Corporation's licensing subsidiary, but
receives no compensation for such service. Mr. Riddiford does not serve as an
officer of the Corporation. The Corporation is not aware of any compensation
committee interlocks.
INDEBTEDNESS OF MANAGEMENT
During 1996, the Corporation made six personal loans to Mr. Vinciarelli,
the President and Chief Executive Officer of the Corporation in the aggregate
amount of $1,078,882. The loans are for a term of five years, are unsecured and
bear interest at the higher of the prime rate less one percent or the applicable
federal rate under the Internal Revenue Code of 1986, as amended. The largest
aggregate amount of all indebtedness outstanding at any time during 1996 was
$1,245,100, including accrued interest. Since the beginning of fiscal year 1997,
the Corporation has loaned additional amounts to Mr. Vinciarelli on the same
terms. The aggregate amount of all such loans outstanding as of April 15, 1997
was approximately $1,419,107, including accrued interest.
In November 1995, the Corporation made a personal loan to Mr. Nesbitt, the
Senior Vice President of North and South American Sales of the Corporation in
the amount of $66,000. The loan is for a term of five years, is unsecured and
bears interest at the prime rate less one percent. The largest aggregate amount
of this indebtedness outstanding at anytime during 1996 was $65,563. The
aggregate amount outstanding as of April 15, 1997 was approximately $49,975,
including accrued interest.
10
<PAGE> 14
STOCKHOLDER RETURN PERFORMANCE GRAPH
The graph set forth below presents the cumulative, five-year stockholder
return for each of the Corporation's Common Stock, the Standard & Poor's 500
Index and an index of peer group companies selected by the Corporation (the
"Peer Group"). The Peer Group consists of ten publicly-traded companies in the
specialty electronic component industry: AMP Incorporated; Analog Devices
Incorporated; Burr-Brown Corporation; Cypress Semiconductor Corporation; Dallas
Semiconductor Corporation; Integrated Device Technology Incorporated; Intel
Corporation; Linear Technology Corporation; LSI Logic Corporation and Xilinx
Incorporated. The Corporation's Common Stock began trading publicly on April 3,
1990. The graph assumes an investment of $100 on December 31, 1991 in each of
the Corporation's Common Stock, the Standard & Poor's 500 Index, and the Peer
Group, and assumes reinvestment of dividends. The graph is market
capitalization-weighted.
One entity historically selected by the Corporation for inclusion in the
Peer Group is no longer listed on NASDAQ as of 1996. Consequently, the
Corporation has selected Xilinx Incorporated as its replacement. The Corporation
believes that Xilinx Incorporated is an appropriate substitute because, like the
Corporation, it is also an engineering intensive design company with a "high
mix" business and broad customer base.
COMPARISON OF FIVE YEAR CUMULATIVE RETURN
AMONG VICOR CORPORATION, S&P 500 INDEX
AND AN INDEX OF PEER GROUP COMPANIES
<TABLE>
<CAPTION>
MEASUREMENT PERIOD PEER GROUP
(FISCAL YEAR COVERED) VICOR CORPORATION S&P 500 INDEX COMPANIES
<S> <C> <C> <C>
12/31/91 100.00 100.00 100.00
12/31/92 42.44 107.62 144.23
12/31/93 53.49 118.46 199.35
12/31/94 59.88 120.03 226.88
12/31/95 93.02 165.13 359.60
12/31/96 77.61 203.05 682.97
</TABLE>
11
<PAGE> 15
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Corporation's executive
officers and Directors, and persons who own more than 10% of a registered class
of the Corporation's equity securities (collectively, "Insiders"), to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission (the "SEC") and NASDAQ. Insiders are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms they file. To the
Corporation's knowledge, based solely on a review of copies of such reports and
written representations that no other reports were required during the fiscal
year ended December 31, 1996, all transactions in the Corporation's securities
that were engaged in by Insiders, and therefore required to be disclosed
pursuant to Section 16(a) of the Exchange Act, were timely reported.
INDEPENDENT AUDITORS
The Corporation has selected Ernst & Young LLP as the independent auditors
for the Corporation for the fiscal year ending December 31, 1997. A
representative of Ernst & Young LLP is expected to be present at the Annual
Meeting and will be given the opportunity to make a statement. The
representative is expected to be available to respond to appropriate questions.
STOCKHOLDER PROPOSALS
Any stockholder wishing to present a proposal for inclusion in the
Corporation's Proxy Statement for the 1998 Annual Meeting of Stockholders must
submit the proposal to the Corporation so that it is received at the principal
executive offices of the Corporation, 23 Frontage Road, Andover, Massachusetts
01810, Attn: Secretary, not later than January 9, 1998. It is suggested that any
stockholder proposal be transmitted by certified mail, return receipt requested.
12
<PAGE> 16
Appendix A
/X/ MARK AS IN THIS EXAMPLE
VICOR
CORPORATION
With- For All
For hold Except
1.) Proposal to elect the following / / / / / /
Directors:
PATRIZIO VINCIARELLI, ESTIA J. EICHTEN,
DAVID T. RIDDIFORD, RICHARD E. BEEDE, JAY M. PRAGER
AND M. MICHAEL ANSOUR
If you do not wish your shares voted "FOR" a particular nominee, mark the "For
All Except" box and strike a line through the nominee(s) name. Your shares will
be voted for the remaining nominee(s).
RECORD DATE SHARES:
_____________________________
Please be sure to sign and date this Proxy. Date
_______________________________________________________________________________
_______Shareholder sign here_____________________Co-owner sign here____________
Mark box at right if comments or address change have
been noted on reverse side of this card. / /
DETACH CARD DETACH CARD
VICOR CORPORATION
Dear Stockholder:
Please take note of the important information enclosed with this Proxy Ballot,
which includes issues related to the management and operation of your
Corporation that require your immediate attention and approval. These are
discussed in detail in the enclosed proxy materials.
Your vote counts, and you are strongly encouraged to exercise your right to
vote your shares.
Please mark the box on the proxy card to indicate how your shares shall be
voted. Then sign the card, detach it and return your proxy vote in the enclosed
postage paid envelope.
Your vote must be received prior to the Annual Meeting of Stockholders,
June 26, 1997.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Vicor Corporation
<PAGE> 17
VICOR CORPORATION
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS - JUNE 26, 1997
The undersigned hereby constitutes and appoints Patrizio Vinciarelli and Mark
A. Glazer, and each of them, as Proxies of the undersigned, with full power to
appoint his substitute, and authorizes each of them to represent and to vote
all shares of Common Stock of Vicor Corporation (the "Corporation") held by the
undersigned at the close of business on April 30, 1997, at the Annual Meeting
of Stockholders to be held at the Andover Country Club, 60 Canterbury Street,
Andover, Massachusetts, on Thursday, June 26, 1997 at 5:00 p.m., local time,
and at any adjournments or postponements thereof.
When properly executed this proxy will be voted in the manner directed herein
by the undersigned stockholder(s). If no direction is given, this proxy will be
voted for the election of all the nominees for Director, and, in their
discretion, upon such other business as may properly come before the meeting. A
stockholder wishing to vote in accordance with the Board of Directors'
recommendation need only sign and date this proxy and return it in the envelope
provided.
The undersigned hereby acknowledge(s) receipt of a copy of the accompanying
Notice of Annual Meeting of Stockholders, the Proxy Statement with respect
thereto and the Company's 1996 Annual Report to Stockholders and hereby
revoke(s) any proxy or proxies heretofore given. This proxy may be revoked
at any time before it is exercised.
- -------------------------------------------------------------------------------
PLEASE VOTE, DATE, AND SIGN ON OTHER SIDE AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE.
- -------------------------------------------------------------------------------
Please sign this proxy exactly as your name appears on the books of the
Company. Joint owners should each sign personally. Trustees and other
fiduciaries should indicate the capacity in which they sign. If a corporation,
this signature should be that of an authorized officer who should state his or
her title.
- -------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
______________________________________ ______________________________________
______________________________________ ______________________________________
______________________________________ ______________________________________
DETACH CARD
