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1.
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To
elect six directors to serve until the 2011 annual meeting of stockholders
and until their successors are duly elected and
qualified.
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2.
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To
ratify the selection of EFP Rotenberg, LLP as our independent registered
public accounting firm for the year ending December 31,
2010.
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3.
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To
transact such other business as may properly come before the meeting or
any adjournment thereof.
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By
Order of the Board of Directors
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|
Steven
D. Ward,
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|
Secretary
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Dated:
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April
30, 2010
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You
are cordially invited to attend the meeting in person. Whether
or not you expect to attend the meeting, please complete, date, sign and
return the enclosed proxy as promptly as possible in order to ensure your
representation at the meeting. Your vote is important, no
matter how many shares you owned on the record date. A return envelope is
enclosed for your convenience and needs no postage if mailed in the United
States. Even if you have voted by proxy, you may still vote in
person if you attend the meeting. Please note, however, that if
your shares are held of record by a broker, bank or other nominee and you
wish to vote at the meeting, you must obtain a proxy issued in your name
from that record
holder.
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Notice
of Annual Meeting of Stockholders
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1
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Proxy
Statement for 2010 Annual Meeting of Stockholders
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3
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Questions
and Answers about this Proxy Material and Voting
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3
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Security
Ownership of Certain Beneficial Owners and Management
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7
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Section
16(a) Beneficial Ownership Reporting Compliance
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8
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Proposal
1 - Election of Directors
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8
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Nominees
for Election as Directors
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8
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Information
Regarding the Board and its Committees
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10
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Corporate
Governance and Related Matters
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12
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Proposal
2 – Ratification of the Selection of the Company’s Independent Registered
Public
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||
Accounting
Firm for 2010
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14
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Audit
Committee Report
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15
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Compensation
of Named Executive Officers and Directors
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16
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Named
Executive Officers
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16
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Executive
Officer Compensation Tables
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16
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Employment
Agreements
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17
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Potential
Payments upon Termination or a Change in Control
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18
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Director
Compensation
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20
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Transactions
with Related Persons
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21
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Other
Matters
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23
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·
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You
are present and vote in person at the meeting;
or
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|
·
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You
have properly submitted a proxy
card.
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·
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To
vote in person, come to the annual meeting and we will give you a ballot
when you arrive.
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·
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To
vote using the proxy card, simply complete, date and sign the enclosed
proxy card and return it promptly in the envelope provided. If
you return your signed proxy card to us before the annual meeting, we will
vote your shares as you direct.
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·
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Proposal 1 - Election of
directors
|
|
·
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Proposal 2 – Ratification of the selection
of EFP Rotenberg, LLP as our independent registered public accounting firm
for the year ending December 31,
2010.
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|
·
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for election of the
nominated slate of directors (see Proposal 1);
and
|
|
·
|
for ratification of EFP
Rotenberg, LLP as our independent registered public accounting firm for
the year ending December 31, 2010 (see Proposal
2).
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·
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You
may submit another properly completed proxy card with a later
date.
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·
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You
may send a written notice that you are revoking your proxy to our
Corporate Secretary at Vuzix Corporation, 75 Town Centre Drive,
Rochester, New York 14623.
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·
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You
may attend the annual meeting and vote in person. Simply attending the
meeting will not, by itself, revoke your
proxy.
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Name and Addresses of
Beneficial Owner (1)
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Shares
Beneficially Owned (2)
|
Percent of Outstanding Shares
Beneficially Owned (3)
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|||||||
Paul
J. Travers
|
72,765,203 | (4) | 27.28 | % | |||||
Grant
Russell
|
12,296,366 | (5) | 4.61 | % | |||||
William
Lee
|
450,000 | (6) | * | ||||||
Frank
Zammataro
|
225,000 | (7) | * | ||||||
Kathryn
Sayko
|
225,000 | (7) | * | ||||||
Bernard
Perrine
|
225,000 | (7) | * | ||||||
Paul
Churnetski
|
20,452,709 | (8) | 7.67 | % | |||||
Directors
and executive officers as a group (6 people)
|
106,639,278 | (9) | 39.98 | % |
(1)
|
The
address for each person is c/o Vuzix Corporation, 75 Town Centre
Drive, Rochester, NY 14623.
|
(2)
|
We
have determined beneficial ownership in accordance with the rules of the
SEC. These rules generally attribute beneficial ownership of securities to
persons who possess sole or shared voting power or investment power with
respect to those securities. In addition, the rules include shares of
common stock issuable pursuant to the exercise of stock options or
warrants, or the conversion of convertible promissory notes, that are
either immediately exercisable or convertible, or that will become
exercisable within 60 days after the date of this proxy statement.
These shares are deemed to be outstanding and beneficially owned by the
person holding those options, warrants or convertible promissory notes for
the purpose of computing the percentage ownership of that person, but they
are not treated as outstanding for the purpose of computing the percentage
ownership of any other person.
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(3)
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The
percentage of shares beneficially owned is based on
263,600,274 shares of our common stock issued and outstanding as of
April 29, 2010.
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(4)
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Includes
1,691,308 shares issuable upon exercise of options granted under our
2007 option plan.
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(5)
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Includes
(i) 232,589 shares issuable upon exercise of options granted under
our 2007 option plan and (ii) 50,000 shares issuable upon exercise of
warrants to purchase common stock.
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(6)
|
Includes
(i) 225,000 shares issuable upon exercise of options granted under our
2009 option plan and (ii) 75,000 shares issuable upon exercise of warrants
to purchase common stock.
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(7)
|
Represents
shares issuable upon exercise of options granted under our 2009 option
plan.
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(8)
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Includes
174,256 shares issuable upon exercise of options granted under our 2007
option plan.
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(9)
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Includes
(i) 2,998,153 shares issuable upon exercise of options granted under
our 2007 option plan and (ii) 125,000 shares issuable upon exercise of
warrants to purchase common stock.
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·
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selecting
and hiring our independent auditors, and approving the audit and non-audit
services to be performed by our independent
auditors;
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·
|
evaluating
the qualifications, performance and independence of our independent
auditors;
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·
|
monitoring
the integrity of our financial statements and our compliance with legal
and regulatory requirements as they relate to financial statements or
accounting matters;
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·
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reviewing
the adequacy and effectiveness of our internal control policies and
procedures;
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·
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discussing
the scope and results of the audit with the independent auditors and
reviewing with management and the independent auditors our interim and
year-end operating
results; and
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·
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preparing
the audit committee report that the SEC requires in our annual proxy
statement.
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·
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reviewing
and approving compensation of our executive officers including annual base
salary, annual incentive bonuses, specific goals, equity compensation,
employment agreements, severance and change in control arrangements, and
any other benefits, compensations or
arrangements
|
·
|
reviewing
and recommending compensation goals, bonus and stock compensation criteria
for our employees;
|
·
|
preparing
any compensation committee report required by the rules of the SEC to be
included in our annual proxy
statement; and
|
·
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administering,
reviewing and making recommendations with respect to our equity
compensation plans.
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[Name
of director(s) or Board of Directors]
|
|
Vuzix
Corporation
|
|
c/o
Corporate Secretary
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|
75
Town Centre Drive
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|
Rochester,
New York 14623
|
2009
|
2008
|
|||||||
Audit
Fees (1)
|
$ | 64,000 | 0 | |||||
Audit-Related
Fees (2)
|
0 | 0 | ||||||
Tax
Fees (3)
|
$ | 59,000 | 0 | |||||
All
Other Fees (4)
|
$ | 26,000 | 0 | |||||
Total
EFP Rotenberg, LLP Fees
|
$ | 149,000 | 0 |
(1)
|
Audit
fees primarily represent amounts billed for the audit of our annual
consolidated financial statements for such fiscal
year.
|
(2)
|
Audit-related
fees represent services rendered in connection with the comfort letter
delivered to our underwriters in connection with our initial public
offering.
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(3)
|
Tax
fees consist of professional services rendered by EFP Rotenberg, LLP
primarily in connection with our tax compliance activities and the
preparation of federal and state income tax
returns.
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(4)
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All
other fees in 2009 are for services rendered in connection with the
preparation of a prospectus and responses to SEC comments thereon in
connection with our initial public
offering.
|
Audit
Committee:
|
|
William
Lee, Chairman
|
|
Kathryn
Sayko
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|
Bernard
Perrine
|
|
·
|
Paul
J. Travers - chief executive officer and
president
|
|
·
|
Grant
Russell – chief financial officer and executive vice
president
|
Option
|
All Other
|
||||||||||||||||||||||
Salary
|
Bonus
|
Awards
|
Compensation
|
Total
|
|||||||||||||||||||
Name and Principal Position
|
Year
|
($)
|
($)
|
($)
|
($)
|
($)
|
|||||||||||||||||
Paul
J. Travers, President and
|
2009
|
$ | 200,000 | — | — | — | $ | 200,000 | |||||||||||||||
Chief
Executive Officer
|
2008
|
$ | 200,000 | — | — | — | $ | 200,000 | |||||||||||||||
Grant
Russell, Chief Financial
|
2009
|
$ | 175,000 | — | $ | 3,067 | (1) | $ | 24,913 | (2) | $ | 202,980 | |||||||||||
Officer &
Executive Vice President
|
2008
|
$ | 175,000 | — | — | $ | 24,571 | (2) | $ | 199,571 |
(1)
|
Represents
the dollar amounts recognized for share-based compensation expense for
financial statement reporting purposes for stock options granted in 2009
and unvested stock options granted in prior years in accordance with FASB
ASC Topic 718 - Stock Compensation, but
without giving effect to estimated forfeitures related to service-based
vesting conditions. The assumptions used to compute the fair value are
disclosed in note 18 (Stock-based Compensation Expense) to our
audited financial statements for the year ended December 31, 2009
included in our annual report to stockholders for the year ended December
31, 2009.
|
(2)
|
Consists
of amounts paid to Mr. Russell in reimbursement for the rental of an
automobile and direct travel to and from his primary residence in
Vancouver, Canada to Rochester, New
York.
|
Option Awards
|
||||||||||||||||||
Equity
|
||||||||||||||||||
Incentive Plan
|
||||||||||||||||||
Awards:
|
||||||||||||||||||
Number
of
|
Number
of
|
Number
of
|
||||||||||||||||
Securities
|
Securities
|
Securities
|
||||||||||||||||
Underlying
|
Underlying
|
Underlying
|
||||||||||||||||
Unexercised
|
Unexercised
|
Unexercised
|
Option
|
|||||||||||||||
Options
|
Options
|
Unearned
|
Exercise
|
Option
|
||||||||||||||
(#)
|
(#)
|
Options
|
Price
|
Expiration
|
||||||||||||||
Name
|
Exercisable
|
Unexercisable
|
(#)
|
($)
|
Date
|
|||||||||||||
Paul
Travers
|
188,576 | — | — | 0.00875 |
9/03/12
|
|||||||||||||
1,485,232 | — | — | 0.02599 |
1/03/13
|
||||||||||||||
Grant
Russell
|
174,256 | — | — | 0.00875 |
9/03/12
|
|||||||||||||
33,333 | 166,667 |
(1)
|
— | 0.15000 |
5/02/19
|
|
·
|
We
have assumed that the termination event occurred effective as of December
31, 2009, the last day of 2009;
|
|
·
|
We
have assumed that the value of our common stock was $0.16 per share, the
US dollar equivalent of the Canadian dollar closing market price (Cdn
$0.17 per share) of our common stock on January 5, 2010, the first trading
day of our common stock, and that all unvested options were exercised on
December 31, 2009; and
|
|
·
|
Health
benefits are included at the estimated value of continuation of this
benefit.
|
·
|
two times
his annual base salary, payable in 24 equal monthly
installments
|
$ | 600,000 | ||
·
|
his
annual incentive bonus, payable within 60 days of
termination
|
$ | - | ||
Total
cash compensation upon termination
|
$ | 600,000 |
·
|
four times
his annual base salary, payable in 48 equal monthly
installments
|
$ | 1,200,000 | ||
·
|
his
annual incentive bonus, then in effect, payable within 60 days of
termination
|
$ | - | ||
Total
cash compensation upon change of control
|
$ | 1,200,000 |
·
|
continuation
of medical benefits throughout the period during which severance payments
are made or
until he becomes eligible to receive medical benefits from subsequent employer |
$ | 5,225 | ||
·
|
value
of all unvested options, which would vest immediately
|
$ | 0 | ||
·
|
any
accrued amounts owing to him
|
·
|
two
times his annual base salary, payable in 24 equal monthly
installments
|
$ | 550,000 | ||
·
|
his
annual incentive bonus, payable within 60 days of
termination
|
$ | - | ||
Total
cash compensation upon termination
|
$ | 550,000 |
·
|
four
times his annual base salary, payable in 48 equal monthly
installments
|
$ | 1,100,000 | ||
·
|
his
annual incentive bonus, then in effect, payable within 60 days of
termination
|
$ | - | ||
Total
cash compensation upon change of control
|
$ | 1,100,000 |
·
|
continuation
of medical benefits throughout the period during which severance payments
are made or
until he becomes eligible to receive medical benefits from subsequent employer |
$ | 5,225 | ||
·
|
value
of all unvested options, which would vest immediately
|
$ | 917 | ||
·
|
any
accrued amounts owing to him
|
Fees
|
||||||||||||||||||||||||||||
Earned
|
Nonqualified
|
|||||||||||||||||||||||||||
or
|
Non-Equity
|
Deferred
|
||||||||||||||||||||||||||
Paid
in
|
Stock
|
Option
|
Incentive
Plan
|
Compensation
|
All
Other
|
|||||||||||||||||||||||
Cash
|
Awards
|
Awards
|
Compensation
|
Earnings
|
Compensation
|
Total
|
||||||||||||||||||||||
Name
|
($)
|
($)
|
($) (1)
|
($)
|
($)
|
($)
|
($)
|
|||||||||||||||||||||
Robert
F. Mechur (2)
|
— | — | $ | 4,412 | — | — | — | $ | 4,412 | |||||||||||||||||||
William
Lee (3)
|
— | — | 18,904 | — | — | — | 18,904 | |||||||||||||||||||||
Frank
Zammataro (4)
|
— | — | 18,904 | — | — | — | 18,904 | |||||||||||||||||||||
Kathryn
Sayko (4)
|
— | — | 18,904 | — | — | — | 18,904 | |||||||||||||||||||||
Bernard
Perrine (4)
|
— | — | 18,904 | — | — | — | 18,904 |
(1)
|
The
amounts shown in this column represent the dollar amounts recognized for
share-based compensation expense for financial statement reporting
purposes for stock options granted in 2009 and unvested stock options
granted in prior years in accordance with FASB ASC Topic 718 - Stock
Compensation, but
without giving effect to estimated forfeitures related to service-based
vesting conditions. The assumptions used to compute the fair value are
disclosed in note 18 (Stock-based Compensation Expense) to our
audited financial statements for the year ended December 31, 2009
included in our annual report to stockholders for the year ended December
31, 2009.
|
(2)
|
Resigned
from our board of directors in June 25,
2009.
|
(3)
|
Elected
to our board of directors on June 26,
2009.
|
(4)
|
Elected
to our board of directors effective as of December 8,
2009.
|
By
Order of the Board of Directors
|
||
Steven
D. Ward,
|
||
Secretary
|
||
Dated:
|
April
30, 2010
|
|
Rochester,
New York
|
We
will make available at no cost, upon your written request, a copy of our
annual report on Form 10-K for the year ended December 31, 2009 (without
exhibits) as filed with the Securities and Exchange
Commission. Copies of exhibits to our Form 10-K will be made
available, upon your written request and payment to us of the reasonable
costs of reproduction and mailing. Written requests should be
made to: Corporate Secretary, Vuzix Corporation, 75 Town Centre Drive,
Rochester, New York 14623.
|
PROPOSAL NO. 1
:
|
To
elect six directors to serve until the 2011
|
For
|
Withhold
|
For All
|
||||||
annual
meeting of stockholders and until
|
Except
|
|||||||||
their
successors have been duly elected and
|
o
|
o
|
o
|
|||||||
qualified.
|
||||||||||
01 Paul J. Travers
|
02 Grant Russell
|
|||||||||
03 William Lee
|
04 Frank Zammataro
|
|||||||||
05 Kathryn Sayko
|
06 Bernard Perrine
|
|||||||||
INSTRUCTION:
To withhold authority to vote for any individual nominee, mark "For All
Except" and write that nominee's name in the space provided
below.
|
||||||||||
|
||||||||||
PROPOSAL
NO. 2:
|
To
ratify the appointment of EFP Rotenberg,
|
For
|
Against
|
Abstain
|
||||||
LLP
as the Company’s independent registered
|
||||||||||
public
accounting firm for the year ending
|
o
|
o
|
o
|
|||||||
December
31, 2010.
|