def14c_neonode.htm
SCHEDULE
14-C INFORMATION STATEMENT
Information
Statement Pursuant to Section 14C of the
Securities
Exchange Act of 1934
Check the
appropriate box:
¨ Preliminary
Information Statement
x Definitive
Information Statement
¨ Confidential,
for Use of the Commission Only (as permitted by Rule 14c-5(d) (2))
NEONODE,
INC.
(Name of
Registrant As Specified In Its Charter)
PAYMENT
OF FILING FEE (CHECK THE APPROPRIATE BOX):
x No fee
required.
¨ Fee computed on table
below per Exchange Act Rules 14c-5(g)(4) and 0-11.
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Aggregate
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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
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¨ 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.
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Previously Paid;
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No.:
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NEONODE,
INC.
SCHEDULE
14C INFORMATION STATEMENT
AND
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
TO
BE HELD ON DECEMBER 11, 2009
To Our
Stockholders:
Notice is
hereby given that the 2009 Annual Meeting of Shareholders of Neonode, Inc., a
Delaware corporation (the “Company”), will be held on December 11, 2009 at 4:00
p.m. local time, at the Company’s headquarters located at Linnegatan 89, 11523
Stockholm, Sweden.
Only
stockholders of record as of November 10, 2009 will be entitled to receive this
Information Statement and Notice of Annual Meeting.
The
following actions will be taken at the meeting:
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1.
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The
election of the following as directors of the Company, each for a term of
three years or until his successor is
elected:
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Mr. Per
Bystedt
Mr.
Thomas Eriksson
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2.
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The
ratification of the appointment of KMJ Corbin and Company as our
independent auditors for the fiscal year
2009.
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Please be
advised that Per Bystedt, Magnus Goertz, Thomas Eriksson, and Ramin Remo
Behdasht (the “Majority Stockholders”), holding approximately 62.78% of our
issued and outstanding shares of stock, beneficially own a majority of the
issued and outstanding shares of stock of the Company. The Majority
Stockholders have advised the Board of Directors that they will vote their
shares in favor of the foregoing proposals. No other votes are
required or necessary to elect the directors or to ratify the appointment of our
independent auditors for fiscal year 2009, and none are being solicited
hereunder.
WE
ARE NOT ASKING YOU FOR A PROXY AND
YOU
ARE REQUESTED NOT TO SEND US A PROXY
THIS
NOTICE IS FOR INFORMATION PURPOSES ONLY. NO ACTION IS REQUIRED BY
YOU.
By Order
of the Board of Directors
/s/ Per
Bystedt
Mr. Per
Bystedt, Chairman
November
18, 2009
Important
Notice Regarding the Availability of Materials for the Shareholder Meeting to be
Held on December 11, 2009. This Information Statement and the Annual
Report to Security Holders are available at www.neonode.com.
NEONODE, INC.
INFORMATION
STATEMENT
Table of
Contents
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Page
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Notice
of Annual Meeting of Stockholders
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Introduction
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1 |
Admission
to the Annual Meeting
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2 |
Outstanding
Voting Securities and Vote Required
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2 |
PROPOSAL
1: Election of Directors
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3 |
PROPOSAL
2: Ratification of Appointment of Independent
Auditors
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9 |
Fees
Paid to the Independent Auditors
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9 |
Other
Information Regarding the Company
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10 |
Executive
Compensation
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13 |
No
Dissenters’ Rights
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15 |
Certain
Relationships and Related Transactions
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15 |
Other
Matters
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16 |
Annual
Report/Form 10-K
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16 |
Stockholder
Proposals for the 2010 Annual Meeting
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16 |
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INTRODUCTION
This
Information Statement is furnished by and on behalf of the Board of Directors
(the “Board”) of Neonode, Inc., a Delaware corporation (“we”, “us”, “our”, or
the “Company”), in connection with our Annual Meeting of Stockholders to be held
on December 11, 2009 at 4:00 p.m. local time, at the Company’s headquarters
located at Linnegatan 89, 11523 Stockholm, Sweden.
WE
ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A
PROXY. THIS NOTICE IS FOR INFORMATION PURPOSES ONLY.
You are
welcome to attend the meeting in person to vote your shares. However,
Per Bystedt, Magnus Goertz, Thomas Eriksson, and Ramin Remo Behdasht (the
“Majority Stockholders”), the holders of a majority of our outstanding stock,
have informed us that they will vote all of their shares of stock for the
election of the directors named in Proposal One and for the ratification of the
appointment of the independent auditors named in Proposal
Two. Accordingly, these matters will be approved.
This
Information Statement is being furnished to you solely for the purpose of
informing you and the other stockholders of the matters described herein in
compliance with Regulation 14C of the Securities Exchange Act of 1934, as
amended, and the Delaware General Corporation Law.
Since the
proposals will be approved by the holders of the required majority of the issued
and outstanding shares of the Company, in order to eliminate the costs and
management time involved in obtaining proxies and in order to effect the above
actions as early as possible to accomplish the purposes hereafter described, we
will not be soliciting proxies. You are urged to read this
Information Statement in its entirety for a description of the actions to be
taken at the Annual Meeting.
This
Information Statement will be mailed on or about November 18, 2009 to
shareholders of record as of November 10, 2009.
The
complete mailing address of the Company’s principal executive office is:
Linnegatan 89, 11523 Stockholm, Sweden.
As of
November 10, 2009 the following voting shares were outstanding:
CLASS
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SHARES
OUTSTANDING
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VOTING
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Common
Stock
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411,472,042 |
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411,472,042 |
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Series
A Preferred Stock
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96,545.30 |
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96,545.30 |
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Series
B Preferred Stock
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17,266.65 |
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17,266.65 |
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Total:
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411,585,853.95 |
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411,585,853.95 |
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Each
issued share is entitled to one vote.
The
Majority Stockholders, holders of 258,380,010 shares of our stock (approximately
62.78% of the total outstanding shares), will vote to approve each of the
proposals. Appraisal rights are not available to stockholders with
respect to any matter approved.
The
annual report on Form 10-K of the Company for the year ended December 31, 2008
(the “Annual Report”), including the Company’s audited consolidated financial
statements for the year ended December 31, 2008, is being mailed to the
Company’s stockholders with this Information Statement and is hereby
incorporated by reference. The Annual Report is not to be regarded as
proxy soliciting material or as a communication by means of which a solicitation
of proxies is to be made.
THE COMPANY IS NOT SOLICITING PROXIES
IN CONNECTION WITH THE MATTERS DESCRIBED IN THIS INFORMATION
STATEMENT. WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED
NOT TO SEND US A PROXY.
ADMISSION TO ANNUAL
MEETING
Only stockholders of record will
be admitted to the 2009 Annual Meeting. You must present proof of
your ownership of your Neonode stock to be admitted to the 2009 Annual
Meeting. If your shares are held in the name of a bank, broker or
other holder of record and you plan to attend the 2009 Annual Meeting, you must
present proof of your ownership such as a bank or brokerage account statement,
to be admitted. Stockholders must also present a form of personal
identification to be admitted to the 2009 Annual Meeting. No cameras,
recording equipment or electronic devices will be permitted in the
meeting.
Each
share of Common Stock, Series A Preferred Stock, and Series B Preferred Stock
entitles the holder thereof to one vote on each matter properly brought before
the 2009 Annual Meeting. As of the Record Date, 411,472,042 shares of
Common Stock were issued and outstanding, 96,545.30 shares of Series A Preferred
Stock were issued and outstanding, and 17,266.65 shares of Series B Preferred
Stock were issued and outstanding. Thus, stockholders representing no
fewer than 205,792,927 shares of the Company’s stock are required to vote
for the aforementioned proposals to effect the matters set forth
therein. It is anticipated that at the 2009 Annual Meeting, the
Majority Stockholders, who beneficially own 258,380,010 shares of stock,
representing approximately 62.78% of the total number of outstanding shares of
the Company’s stock on the Record Date, will vote in favor of the aforementioned
proposals, thereby ensuring the election of the nominees for directors of the
Company and the ratification of the appointment of KMJ Corbin and Company as
independent auditors. Since the proposals will be approved by the
holders of the required majority of the issued and outstanding stock of the
Company, no proxies are being solicited in connection with this Information
Statement and the accompanying Notice of Annual Meeting of Stockholders of the
Company.
In accordance with
Rule 14c-2 under the Exchange Act, the proposals will not be adopted until
a date at least twenty (20) days after the date on which this Information
Statement has been mailed to the stockholders of the Company. As this
Information Statement is being sent to the beneficial owners of Common Stock on
November 18, 2009, which is more than twenty (20) days before the date of
the 2009 Annual Meeting, the Company anticipates that the actions contemplated
by this Information Statement will be effected on or about the close of business
on the date of the 2009 Annual Meeting.
The Company has asked brokers and
other custodians, nominees and fiduciaries to forward this Information Statement
to the beneficial owners of the Company’s stock held of record by such persons
as of the Record Date and will reimburse such persons for out-of-pocket expenses
incurred in forwarding such material.
PROPOSAL
1: ELECTION OF DIRECTORS
According
to our Certificate of Incorporation, the Board of Directors is divided into
three classes. Each class consists, as nearly as possible, of
one-third of the total number of directors, and each class has a three-year
term. Vacancies on the Board may be filled only by persons elected by
a majority of the remaining directors. A director elected by the
Board to fill a vacancy in a class shall serve for the remainder of the full
term of that class, and until the director’s successor is elected and qualified.
This includes vacancies created by an increase in the number of
directors.
The Board
currently has three members, Mr. Per Bystedt, Mr. John Reardon, and Mr. Thomas
Eriksson. Mr. Bystedt was appointed on August 10, 2007 and Mr. Eriksson was
appointed to fill a vacancy created by the resignation of a director appointed
on August 10, 2007. Each of Mr. Bystedt’s and Mr. Eriksson’s term as
a director continues until the 2009 Annual Meeting of Stockholders of the
Company. Directors are elected by a plurality of the votes of the
holders of shares present in person or represented by proxy and entitled to vote
on the election of directors. The nominees receiving the highest number of
affirmative votes will be elected.
As of the
date of this Information Statement, there are no material proceedings to which
any Director or executive officer of the Company, or any associate thereof, is a
party which are adverse to the Company or any of its subsidiaries.
The
following table sets forth the age and position currently held with the Company
of persons nominated by the Board of Directors of the Company for the election
as directors of the Company:
Name
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Age
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Position
Currently Held with the Company
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Per
Bystedt
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45
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Chairman
of the Board and CEO
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Thomas
Eriksson
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37
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Director
and CEO of Neonode Technologies AB
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The
proposed nominees for election as directors, Messrs Bystedt and Eriksson, are
willing to be reelected as directors of the Company. If elected, both
nominees are expected to serve until the 2012 Annual Meeting of Stockholders of
the Company or until their successors are duly elected and qualified or until
his earlier death, resignation, or removal. The Majority Stockholders
will vote in favor of all of the proposed nominees for election as directors,
which will be sufficient to elect such directors.
The
following is a brief biography of each nominee for election and for each
continuing director:
Nominees
for Election as Directors for a Three-Year Term Expiring at the 2012 Annual
Meeting
Per Bystedt,
age 45, has served as the Chairman of the Board of Directors and the Chief
Executive Officer of the Company since May 2008 and served as the interim Chief
Executive Officer of Old Neonode from October 2005 through July 2006.
Since 1997, Mr. Bystedt has been the Chief Executive Officer of Spray AB,
an internet investment company. From 1991 through 1997, Mr. Bystedt was a
Senior Vice President of various television production and network companies
including Trash Television, ZTV AB, TV3 Broadcasting Group Ltd and MTG
AB. From 2000 through the present, Mr. Bystedt has served as a
member of the board of directors of Axel Johnson AB. From 2000 to
2008, he was a member of the board of directors of Eniro AB, and, from 2005 to
2008, was a member of the board of directors of Servera AB. From 2005
to the present, Mr. Bystedt has been the chairman of the board of directors
of AIK Fotboll AB. From 1997 through 2005, he served as a member of
the board of directors of Ahlens AB, and from 1998 through 2000 he was the
chairman of the board of directors of Razorfish, Inc. Mr. Bystedt
holds an MBA degree from the Stockholm School of Economics.
Thomas
Eriksson, age 37, has served as the Chief Executive Officer of Neonode
Technologies AB, a wholly owned subsidiary of the Company, since January 1,
2009. From February 2006 through December 31, 2008, Mr. Eriksson
served as the Chief Technical Officer of the Company. Mr. Eriksson was one of
the founders of Neonode, Inc. in 2001.
Director
Continuing in Office Whose Term Expires at the 2010 Annual Meeting
John
Reardon, age 48, has served as a director of SBE, Inc. since
February 2004 and of Old Neonode since February 2007. Mr. Reardon
is the chairman of the Audit Committee and member of the Compensation and
Nominating and Governance Committees of the Company. Mr. Reardon
has served as President and member of the board of directors of The RTC Group, a
technical publishing company since 1990. In 1994, Mr. Reardon founded a
Dutch corporation, AEE, to expand the activities of The RTC Group into Europe.
Mr. Reardon also serves on the board of directors of One Stop Systems,
Inc., a computing systems and manufacturing company.
STRUCTURE
AND PRACTICES OF THE BOARD OF DIRECTORS
Corporate
Structure
Neonode,
Inc. is in the business of providing optical touchscreen solutions for handheld
devices. Our touchscreen solutions are based on our optical infrared
touchscreen technology which we refer to as zForce™. Our mission is to
make the easiest (to use and integrate), best (functionality and design) and
cheapest touch screen solution for handheld devices. We believe that keyboards
and keypads with moving parts will become obsolete for handheld devices and that
our touchscreen solutions will be at the forefront of a new wave of finger-based
input technologies that will enable the user to interact and operate everything
from small mobile devices to large industrial applications using a combination
of touches, swipes, and hand gestures. Our Common Stock trades on the
Over-the-Counter Bulletin Board under the symbol “NEON.OB.”
We have
one subsidiary, Neonode Technologies AB, in Sweden. The Swedish
subsidiary was established to accelerate the research and development of our
proprietary technology and solutions.
Corporate
Governance Guidelines
The
Company adopted the Neonode, Inc. Code of Business Conduct that applies to all
officers, directors and employees. All of the Company’s employees must carry out
their duties in accordance with the policies set forth in the Code of Business
Conduct and with applicable laws and regulations. The Code of Business Conduct
contains a separate Code of Ethics that applies specifically to the Company’s
Chief Executive Officer and senior financial officers. The Code of Business
Conduct and Code of Ethics is available on our website at http://www.neonode.com/Documents/investor/business_code_of_conduct.pdf.
The Board
has adopted a written Audit Committee Charter that is available on the Company’s
website at http://www.neonode.com/Documents/investor/audit_committee_charter.pdf.
The Board
has adopted a written Compensation Committee Charter that is available on the
Company’s website at http://www.neonode.com/Documents/investor/compensation_committee_charter.pdf.
The Board
has adopted a written Nominating and Governance Committee Charter that is
available on the Company’s website at http://www.neonode.com/Documents/investor/nominating_and_governance_committee_charter.pdf.
Board
Committees
The Board
has three committees: an Audit Committee, a Compensation Committee, and a
Nominating and Governance Committee. John Reardon constitutes the
member of each committee. Below is a description of each committee of
the Board.
Audit
Committee. John Reardon is Chairman of the Audit Committee.
The Audit Committee of the Board, which was established in accordance with
Section 3(a)(58)(A) of the Exchange Act, oversees the Company’s corporate
accounting and financial reporting process. For this purpose, the Audit
Committee performs several functions, including the following:
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determines
whether to retain or terminate the existing independent registered public
accounting firm or to appoint and engage a new independent registered
public accounting firm;
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reviews
and approves the retention of the independent registered public accounting
firm to perform any proposed permissible non-audit
services;
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monitors
the rotation of partners of the independent registered public accounting
firm on the Company’s audit engagement team as required by
law;
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confers
with management and the independent registered public accounting firm
regarding the effectiveness of internal controls over financial
reporting;
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establishes
procedures, as required under applicable law, for the receipt, retention
and treatment of complaints received by the Company regarding accounting,
internal accounting controls or auditing matters and the confidential and
anonymous submission by employees of concerns regarding questionable
accounting or auditing matters;
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reviews
the financial statements to be included in the Company’s Annual Report on
Form 10-K; and
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discusses
with management and the independent registered public accounting firm the
results of the annual audit and the results of the Company’s quarterly
financial statements.
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The Board
annually reviews the SEC standards and definition of independence for Audit
Committee members and has determined that all members of the Company’s Audit
Committee are independent. The Company does not have an “audit committee
financial expert” as defined in the rules of the Securities and Exchange
Commission serving on the Audit Committee because the Board believes that the
background and financial sophistication of its members are sufficient to fulfill
the duties of the Audit Committee.
Compensation
Committee. The Compensation Committee of the Board reviews and
approves the overall compensation strategy and policies for the Company. The
Compensation Committee duties include the following:
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reviewing
and approving corporate performance goals and objectives relevant to the
compensation of the Company’s executive officers and other senior
management;
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reviewing
and approving the compensation and other terms of employment of the
Company’s Chief Executive Officer;
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reviewing
and approving the compensation and other terms of employment of the other
executive officers; and
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administering
and reviewing the Company’s stock option and purchase plans, pension and
profit sharing plans, stock bonus plans, deferred compensation plans and
other similar programs.
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The
Committee has the authority to obtain advice or assistance from consultants,
legal counsel, accounting or other advisors as appropriate to perform its
duties, and to determine the terms, costs and fees for such engagements. All
members of the Company’s Compensation Committee are
independent.
The
Compensation Committee conducts an annual performance and compensation review
for each of our executive officers and determines salary adjustments and bonus
and equity awards at one or more meetings generally held during the last quarter
of the year. In addition, the Compensation Committee considers matters related
to individual compensation, such as compensation for new executive hires, as
well as various compensation policy issues throughout the year. For executives
other than the Chief Executive Officer, the Compensation Committee receives and
considers performance evaluations and compensation recommendations submitted to
the Committee by the Chief Executive Officer. In the case of the Chief Executive
Officer, the evaluation of his performance is conducted by the Compensation
Committee, which determines any adjustments to his compensation as well as
awards to be granted. The agenda for meetings of the Compensation Committee is
usually determined by its Chairman with the assistance of the Company’s Chief
Executive Officer and Chief Financial Officer. Compensation Committee meetings
are regularly attended by the Chief Executive and Chief Financial
Officer.
The
Committee approves routine on-hire option grants to employees of the Company,
subject to specific limitations. For these grants, the exercise price must be
equal to the closing price on the OTC BB of the Company’s Common Stock on the
trading on the date of grant.
Nominating and Governance
Committee. The Nominating and Governance Committee
of the Board is responsible for identifying, reviewing and evaluating candidates
to serve as directors of the Company, consistent with criteria approved by the
Board. The Nominating and Governance duties include the following:
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reviewing
and evaluating incumbent directors;
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recommending
candidates to the Board for election to the Board;
and
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making
recommendations to the Board regarding the membership of the committees of
the Board.
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The
member of the Nominating and Governance Committee is independent.
The
Nominating and Governance Committee believes that candidates for director should
have certain minimum qualifications, including being able to read and understand
basic financial statements, being over 21 years of age and having the highest
personal integrity and ethics. The Nominating and Governance Committee also
intends to consider such factors as possessing relevant expertise upon which to
be able to offer advice and guidance to management, having sufficient time to
devote to the affairs of the Company, demonstrated excellence in his or her
field, having the ability to exercise sound business judgment and having the
commitment to rigorously represent the long-term interests of the Company’s
stockholders. However, the Nominating and Governance Committee retains the right
to modify these qualifications from time to time. Candidates for director
nominees are reviewed in the context of the current composition of the Board,
the operating requirements of the Company and the long-term interests of
stockholders. In conducting this assessment, the committee considers diversity,
age, skills, and such other factors as it deems appropriate, given the current
needs of the Board and the Company, to maintain a balance of knowledge,
experience and capability.
In the
case of incumbent directors whose terms of office are set to expire, the
Nominating and Governance Committee reviews such directors’ overall service to
the Company during their term, including the number of meetings attended, level
of participation, quality of performance, and any other relationships and
transactions that might impair such directors’ independence.
In the
case of new director candidates, the Nominating and Governance Committee also
determines whether the nominee must be independent pursuant to applicable SEC
rules and regulations and the advice of counsel, if necessary. The Nominating
and Governance Committee then uses its network of contacts to compile a list of
potential candidates, but may also engage, if it deems appropriate, a
professional search firm. The Nominating and Governance Committee conducts any
appropriate and necessary inquiries into the backgrounds and qualifications of
possible candidates after considering the function and needs of the Board. The
Nominating and Governance Committee meets to discuss and consider such
candidates’ qualifications and then selects a nominee for recommendation to the
Board by majority vote. To date, the Nominating and Governance Committee has not
paid a fee to any third party to assist in the process of identifying or
evaluating director candidates. To date, the Nominating and Governance Committee
has not received any director nominations from stockholders of the
Company.
The
Nominating and Governance Committee will consider director candidates
recommended by stockholders. The Nominating and Governance Committee does not
intend to alter the manner in which it evaluates candidates, including the
minimum criteria set forth above, based on whether the candidate was recommended
by a stockholder or not. Stockholders who wish to recommend individuals for
consideration by the Nominating and Governance Committee to become nominees for
election to the Board may do so by delivering a written recommendation to the
Nominating and Governance Committee at the following address: Neonode, Inc.,
Linnegatan 89, 11523 Stockholm, Sweden, at least six months prior to any meeting
at which directors are to be elected. Submissions must include the full name of
the proposed nominee, a description of the proposed nominee’s business
experience for at least the previous five years, complete biographical
information, a description of the proposed nominee’s qualifications as a
director and a representation that the nominating stockholder is a beneficial or
record owner of the Company’s stock. Any such submission must be accompanied by
the written consent of the proposed nominee to be named as a nominee and to
serve as a director if elected.
Meetings
of the Board
The Board
met four times during the Company’s 2008 fiscal year. Each then-serving director
attended 75% or more of the aggregate of the meetings of the Board and of the
committees on which he served, held during the period for which he was a
director or committee member, respectively. In addition, the Company’s
independent directors met in regularly scheduled executive sessions at which
only independent directors are present.
Each
then-serving director attended last year’s annual meeting, either in person or
telephonically.
Communication
with the Board
Shareholders,
or anyone else wishing to contact the Board directly, may send a written
communication to David W. Brunton, Chief Financial Officer, 651 Byrdee Way,
Lafayette, CA 94549, USA. Mr. Brunton will forward such
correspondence only to the intended recipients, whether the entire Board or only
an individual Board member. However, prior to forwarding any
correspondence, Mr. Brunton will review such correspondence and, in his
discretion, may not forward certain items if they are deemed to be of a
commercial nature or sent in bad faith.
Director
Independence
A
majority of the members of the board of a company listed on a national exchange
must qualify as “independent,” as affirmatively determined by the board of
directors. Since the Company is not listed on a national exchange, it
is not required to comply with these “independent” requirements. John
Reardon is the Company’s sole independent director.
Directors’
Fees
Effective
January 1, 2008, each non-employee director of the Company was to receive an
annual retainer of $24,000, payable monthly in arrears. On August 25, 2009, the
non-employee director compensation plan was revised, reducing the annual
retainer from $24,000 to $12,000. The Chairman of the Board is
entitled to receive an annual retainer of $30,000, payable monthly in
arrears. Mr. Bystedt was appointed CEO of the Company in May 2008 and
subsequent to his appointment ceased to earn fees as the Chairman of the Board
of Directors. No director is entitled to receive a per-meeting fee.
The members of the Board are also eligible for reimbursement for their expenses
incurred in attending Board meetings in accordance with Company policy. The
Directors have not been paid their fees for the months of August 2008 through
July 2009.
Effective
January 2, 2008, on January 2 of each year (or the next business day if
that date is a legal holiday), each non-employee director is automatically
granted an additional option to purchase 40,000 shares of common stock of the
Company. However, the Company did not grant the non-employee directors any stock
options on January 2, 2009. The exercise price of options granted is
100% of the fair market value of the common stock subject to the option on the
date of the option grant. Options granted to Directors may not be exercised
until the date upon which the optionee (or the affiliate of the optionee) has
provided one year of continuous service as a non-employee director following the
date of grant of such option, at which point 100% of the option becomes
exercisable. The options will fully vest upon a change of control, unless the
acquiring company assumes the options or substitutes similar options. The
term of options granted is 10 years.
Prior to
January 2, 2008, the directors were compensated primarily with grants of stock
options. During the year ended December 31, 2007, the Company granted options
covering 493,903 shares to non-employee directors of the Company, at an exercise
price per share ranging from $1.84 to $4.50. The fair market value of such
common stock on the date of each grant was equal to the closing sales price
reported on the Nasdaq Small Cap Market for the date of grant. As of the date of
this Information Statement, no options granted to directors have been
exercised. On August 25, 2009, Mr. Reardon was granted a warrant to
purchase 5 million shares of our common stock and Ms. Susan Major, a director
who resigned from our Board on September 15, 2009, was granted a warrant to
purchase 2 million shares of our common stock, at an exercise price of $0.02.
These warrants expire on August 25, 2016, seven years from the date of
grant.
The table
below summaries the compensation paid by the Company to our directors for the
fiscal year ended December 31, 2008:
Director
Compensation
Name
|
|
Fees
Earned
or
Paid
in
Cash
($)
|
|
|
Stock
Awards
($)
|
|
|
Option
Awards
($)
|
|
|
Non-Equity
Incentive
Plan
Compensation
($)
|
|
|
Nonqualified
Deferred
Compensation
Earnings
|
|
|
All
Other
Compensation
($)
|
|
|
Total
($)
|
|
|
|
|
|
|
|
|
|
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per
Bystedt (b)
|
|
$
|
12,500
|
|
|
|
-
|
|
|
$
|
97,932
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
110,432
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Susan
Major (c)(d)
|
|
$
|
24,000
|
|
|
|
-
|
|
|
$
|
274,880
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
298,880
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John
Reardon (c)
|
|
$
|
24,000
|
|
|
|
-
|
|
|
$
|
299,704
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
323,704
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kenneth
Olson (c) (e)
|
|
$
|
14,000
|
|
|
|
-
|
|
|
$
|
11,366
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
25,366
|
|
(a)
|
Amounts
are calculated as of the grant date of the options award in accordance
with the provisions of Statement of Financial Accounting Standards
(“SFAS”) No. 123R “Share-based Payment.” Please see Note 14. “Stock Based
Compensation” in the Notes to the Consolidated Financial Statements as
filed on Neonode Inc.’s annual report Form 10K for the valuation
assumptions made in the Black-Scholes option pricing used to calculate
fair value of the option awards.
|
(b)
|
Mr.
Bystedt was appointed CEO in May 2008 and subsequent to his appointment
ceased to earn fees as the Chairman of the Board of
Directors.
|
(c)
|
Ms.
Major and Messrs, Reardon and Olson were paid a fee equal to $2,000 per
month as a member of the Board of Directors. $10,000 of the amounts earned
by each during 2008 was accrued but not paid until such time that the
Company earns sufficient cash flow from operations to make such
payment. As of October 26, 2009, the Company owes Ms. Major and
Messrs. Reardon and Olson $26,000, $22,000, and $20,000, respectively, for
accrued and unpaid fees for past services as members of the
Board.
|
(d)
|
Ms.
Major was appointed to the Board of Directors in August 2007 and resigned
in September 2009.
|
|
|
(e)
|
Mr.
Olson was appointed to the Board of Directors in June 2008 and resigned in
March 2009.
|
|
|
THE
MAJORITY STOCKHOLDERS WILL VOTE IN FAVOR OF THIS PROPOSAL. NO PROXY
IS REQUIRED OR REQUESTED FROM YOU. VERY SPECIFICALLY, YOU ARE
REQUESTED NOT TO SEND US YOUR PROXY. THIS NOTICE IS FOR INFORMATION
PURPOSES ONLY.
PROPOSAL
TWO
TO
RATIFY THE APPOINTMENT OF KMJ CORBIN AND COMPANY
AS
OUR INDEPENDENT ACCOUNTANTS FOR FISCAL YEAR 2009
The Board
of Directors has selected KMJ Corbin and Company as the Company’s independent
auditor for the current fiscal year, and the Board is asking stockholders to
ratify that selection. The Board considers the selection of the
independent auditor to be an important matter of shareholder concern and is
submitting the selection of KMJ Corbin and Company for ratification by
stockholders as a matter of good corporate practice.
FEES
PAID TO THE INDEPENDENT AUDITORS
Audit
Fees
Fees
billed by BDO Feinstein International AB and fees incurred, for
professional services are $867,000 for the year ended December 31, 2008, and
$535,000 for the year ended December 31, 2007, including fees associated with
the annual audit and review of the quarterly reports on Form
10-Q. Fees for these services are expensed as incurred.
Tax
Fees
$24,000
in fees have been billed by BDO Seidman LLC for tax services for the years 2008,
and $18,000 for the year ended December 31, 2007.
All
other Fees
No fees were
billed by BDO Feinstein International AB or KMJ Corbin and Company or
for professional services rendered during the fiscal years ended December 31,
2008 and December 31, 2007, other than those specified above.
All
services described above were approved by the Board of Directors acting as the
audit committee pursuant to SEC Regulation S-X, Rule 2-01(c)(7)(i).
The affirmative
vote of holders of a majority of the shares of Common Stock represented at the
meeting is required to approve the ratification of the selection of KMJ Corbin
and Company as the Company’s independent auditors for the current fiscal
year.
THE
MAJORITY STOCKHOLDERS WILL VOTE IN FAVOR OF THIS PROPOSAL. NO PROXY
IS REQUIRED OR REQUESTED FROM YOU. VERY SPECIFICALLY, YOU ARE
REQUESTED NOT TO SEND US YOUR PROXY. THIS NOTICE IS FOR INFORMATION
PURPOSES ONLY.
OTHER
INFORMATION REGARDING THE COMPANY
Our
executive officers and the executive officers of our subsidiary who perform
policy-making functions are as follows:
Name
|
|
Age
|
|
Position
with the Company
|
|
Officer
Since
|
Mr.
Per Bystedt
|
|
45
|
|
Chairman
of the Board and CEO
|
|
May
22, 2008
|
Mr.
Thomas Eriksson
|
|
37
|
|
Director
and CEO of Neonode Technologies AB
|
|
April
26, 2009
|
Mr.
David W. Brunton
|
|
59
|
|
Vice
President, Finance, Chief Financial Officer, Treasurer and
Secretary
|
|
November
1, 2001
|
Section 16(a)
of the Securities Exchange Act of 1934 requires our officers and directors, and
persons who own more than 10% of our stock, to file reports of ownership and
changes in ownership with the SEC. Officers, directors, and greater than 10%
stockholders are required by SEC regulation to furnish us with copies of all
Section 16(a) forms they file. Based solely upon a review of the
copies of such forms furnished to us, we believe that during our preceding
fiscal year all Section 16(a) filing requirements applicable to our
officers, directors, and greater than 10% beneficial owners were complied
with.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth, as of October 26, 2009, certain information
regarding the estimated ownership of our common stock assuming conversion of all
issued and outstanding Series A and Series B Preferred Stock by: (i) each
director; (ii) each of our “named executive officers,” as defined in Item 402
under Regulation S-K promulgated by the Securities and Exchange Commission;
(iii) all executive officers and directors of Neonode as a group; and (iv) all
those known by us to be beneficial owners of more than five percent of our
common stock. Unless otherwise indicated, the address for each of the persons
and entities set forth below is c/o Neonode Inc. - Stockholder
address.
Percentage
ownership is based on 501,913,996 shares, the estimated number of shares of
common stock outstanding after the conversion of all of the Series A and B
Preferred Stock at the increased conversion rates plus the assumed exercise of
the 41,759,979 outstanding common stock purchase warrants.
|
|
Beneficial
Ownership (1)
|
|
Beneficial
Owner
|
|
Number
of
Shares
|
|
Percent
of
Total
|
|
|
|
|
|
|
|
|
Ramin
Remo Behdasht
58
Carters Road
Dural
NSW 2158 Australia
|
|
27,929,877
|
|
|
5.56
|
%
|
|
|
|
|
|
|
|
Per
Bystedt (2)
CEO
and Director
|
|
84,631,928
|
|
|
16.86
|
%
|
|
|
|
|
|
|
|
Magnus
Goertz
Founder
|
|
74,756,652
|
|
|
14.89
|
%
|
|
|
|
|
|
|
|
Thomas
Eriksson
CEO
Neonode Technologies AB & Director
|
|
73,993,853
|
|
|
14.748
|
%
|
|
|
|
|
|
|
|
David
Brunton (2)
CFO
|
|
11,404,451
|
|
|
2.27
|
%
|
|
|
|
|
|
|
|
John
Reardon (2)
Director
|
|
5,309,817
|
|
|
1.06
|
%
|
|
|
|
|
|
|
|
All
executive officers and directors of Neonode as a group
|
|
278,026,578
|
|
|
55.39
|
%
|
|
|
|
|
|
|
|
(1)
|
This
table is based upon information supplied by officers, directors and
principal stockholders. Unless otherwise indicated in the footnotes to
this table and subject to community property laws where applicable, we
believe that each of the stockholders named in this table has sole voting
and investment power with respect to the shares indicated as beneficially
owned.
|
|
|
(2)
|
Includes,
40,000, 70,000, and 232,095 shares of common stock that Messrs. Bystedt,
Brunton, and Reardon, respectively, have the right to acquire within 60
days after the date of this table under outstanding stock options and
includes 2,892,300, 4,000,000 and 5,000,000 shares of common stock that
can be purchased pursuant to outstanding common stock purchase warrants
held by Messrs. Bystedt, Brunton, and Reardon,
respectively.
|
|
|
The
following table includes information regarding our equity incentive plans as of
the end of fiscal 2008
Equity
Compensation Plan Information
Plan
category
|
|
Number of securities to be
issued upon exercise of
outstanding options,
warrants and rights
|
|
|
Weighted-average exercise
price of outstanding options,
warrants
and rights
|
|
|
Number of securities
remaining available for future
issuance under equity
compensation plans (excluding
securities
reflected in column (a)
|
|
|
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|
Equity
compensation plans approved by security holders
|
|
|
1,262,387
|
|
|
$
|
2.83
|
|
|
|
94,801
|
|
Equity
compensation plans not approved by security holders
|
|
|
2,184,996
|
|
|
$
|
1.32
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
3,447,383
|
|
|
$
|
1.88
|
|
|
|
94,801
|
|
The
following table details the outstanding options to purchase shares of our common
stock pursuant to each plan at December 31, 2008:
Plan
|
|
Options
Outstanding
|
|
|
Available
for
Issue
|
|
|
Outstanding
Options
Vested
|
|
1996
Plan
|
|
|
46,000
|
|
|
|
—
|
|
|
|
46,000
|
|
1998
Plan
|
|
|
66,395
|
|
|
|
—
|
|
|
|
29,900
|
|
Neonode
Plan
|
|
|
880,330
|
|
|
|
—
|
|
|
|
880,330
|
|
2006
Plan
|
|
|
287,753
|
|
|
|
94,801
|
|
|
|
71,247
|
|
Director
Plan
|
|
|
42,500
|
|
|
|
—
|
|
|
|
15,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
1,322,978
|
|
|
|
94,801
|
|
|
|
1,042,977
|
|
(1) The
1998 Plan has not been approved by our shareholders.
(2) The
2007 Neonode Plan was assumed by Neonode upon the consummation of the August
2007 SBE Merger with Neonode.
Summary
of 1998 Non-Officer Stock Option Plan
The
purpose of the 1998 Non-officer Stock Option Plan is to provide a means by which
eligible recipients of options may be given an opportunity to benefit from
increases in value of our common stock through the granting of nonstatutory
stock options. The plan permits the grant of nonstatutory stock options.
Nonstatutory stock options may be granted under the 1998 Plan to our employees
or consultants who are not, at the time of such grants, directors or officers.
The administrator, in its discretion, selects the persons to whom options are
granted, the time or times at which such options are granted, and the exercise
price and number of shares subject to each such grant. We do not expect to issue
any further options under the 1998 Plan.
August
2009 Stock Purchase Warrants
On
August 25, 2009, we granted 15,660,000 stock purchase warrants to employees,
consultants, and members of our Board. The stock purchase warrants
have an exercise price equal to $0.02 per shares, which was the market price on
the date of grant. These stock purchase warrants have a seven-year
term and are vested on the date of grant. The stock underlying the stock
purchase warrants granted has not been registered for resale.
Warrant
Holder
|
|
Position
|
|
Warrants
Granted
|
|
John
Reardon
|
|
|
Board
Member
|
|
|
5,000,000
|
|
David
Brunton
|
|
|
Officer
|
|
|
4,000,000
|
|
Susan
Major
|
|
|
Ex
Board Member
|
|
|
2,000,000
|
|
Mats
Dahlin
|
|
|
Advisor
|
|
|
4,660,000
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
15,660,000
|
|
We are
unaware of any contract or other arrangement the operation of which may at a
subsequent date result in a change of control of our Company.
EXECUTIVE
COMPENSATION
The table
below summarizes the total compensation paid to or earned by each of the named
executive officers for the fiscal year ended December 31, 2008:
Summary
Compensation Table
Name
and
Principal
Position
|
|
Year
|
|
|
Salary
($)
|
|
|
Bonus
($)
|
|
|
Stock
Awards
($)
|
|
|
Option
Awards
($)
|
|
|
All
Other
Compensation
($)
|
|
|
Total
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
(b)
|
|
|
(a)
|
|
|
(c)
|
|
|
|
|
Per
Bystedt Chief Executive Officer (f)
|
|
2008
|
|
|
$
|
91,174
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
91,174
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mikael
Hagman, (d) (e) (g) President and Chief Executive Officer
|
|
|
2008
2007
|
|
|
$
$
|
96,147
190,167
|
|
|
$
|
-
73,680
|
|
|
|
-
-
|
|
|
$
|
-
53,782
|
|
|
$
|
-
23,464
|
|
|
$
$
|
96,147
341,093
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David
W. Brunton, Chief Financial Officer
|
|
|
2008
2007
|
|
|
$
$
|
165,000
185,000
|
|
|
$
|
-
30,625
|
|
|
$
$
|
17,897
22,750
|
|
|
$
|
144,120
86,968
|
|
|
$
$
|
1,040
1,632
|
|
|
$
$
|
328,057
326,975
|
|
|
(a)
|
Amounts
are calculated as of the grant date of the option award in accordance with
the provisions of Statement of Financial Accounting Standards (SFAS) No.
123R “Share-based Payment.” Please see Note 14. “Stock Based Compensation”
in the Notes to the Consolidated Financial Statements as filed on Neonode
Inc.’s annual report Form 10K for the valuation assumptions made in the
Black-Scholes option pricing used to calculate fair value of the option
awards.
|
|
(b)
|
Amounts
are the market value of common stock issued to Mr. Brunton under the
pre-merger SBE, Inc. stock in-lieu of cash payroll plan that was
implemented in 2007 as a cash preservation measure and the market value of
common stock issued to Mr. Brunton in 2008 for payment of accrued vacation
liability.
|
|
(c)
(d)
|
Includes
$23,464 attributable in fiscal 2007 to Mr. Hagman for payments to the
Swedish defined contribution retirement plan and $1,040 and $1,632
attributable in fiscal 2008 and 2007, respectively, to Mr. Brunton for
premiums paid by the Company for group term life insurance.
Mr.
Hagman became President and Chief Executive Officer effective March 2007
and left the Company in March 2008.
|
|
(e)
|
Mr.
Hagman is a citizen of Sweden and is employed in Sweden and all payments
to him are in Swedish Krona (SEK). The amounts in this table are displayed
in U.S. Dollars (USD) and are converted from the SEK to USD using the
average exchange rate for fiscal 2008 year 6.58 SEK to the USD and of 2007
year of 6.79SEK to the USD.
|
|
(f)
|
Mr.
Bystedt was appointed Chief Executive Officer in May 2008. He is a citizen
of Sweden and is employed in Sweden and all payments to him are in Swedish
Krona (SEK). The amounts in this table are displayed in U.S. Dollars (USD)
and are converted from the SEK to USD using the average exchange rate for
fiscal 2008 year 6.58 SEK to the USD. The Company accrued but did not pay
300,000 Krona ($45,587 USD) in salary for the first three months that Mr.
Bystedt was employed as the CEO. Mr. Bystedt was paid 300,000 Krona
($45,587) of the amount owed to him for the next three months by the
Swedish government pursuant to Swedish reconstruction laws. The accrued
but unpaid balance of $45,587 has not been paid and has been forgiven in
the Neonode bankruptcy. Mr. Bystedt will not receive any salary for 2009
until such time that the Board of Directors determines that the Company
has sufficient cash flow from operations to pay his
salary.
|
|
(g)
|
Mr.
Hagman was awarded 250,000 stock options in January 2008 and the
compensation expense for 2008 related to option grants reflects the fair
value of these options calculated on the date of the option award in
accordance with the provisions of SFAS No. 123R. All 250,000 stock options
were unvested and forfeited as in March 2008 when he left the
company.
|
Outstanding
Equity Awards at Fiscal Year-end
|
|
|
|
OPTION
AWARDS
|
Name
& Principal
Position
|
|
Grant
Date
|
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
|
|
Number
of
Securities
Underlying
Unexercised
Options(#)
Unexercisable
|
|
|
Equity
Incentive
Plan
Awards:
Number
of
Securities
Underlying
Unexercised
Unearned Options
(#)
|
|
|
Option
Exercise
price
($)
|
|
Option
Expiration
Date
|
Mikael
Hagman,
|
|
1/18/2007
|
|
|
88,298
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
2.12
|
|
1/17/2009
|
President
& Chief Executive Office (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David
W. Brunton,
|
|
10/22/2002
|
|
|
20,000
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
4.50
|
|
10/22/2009
|
Chief
Financial Officer
|
|
4/12/2004
|
|
|
5,000
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
22.25
|
|
4/12/2011
|
|
|
3/31/2005
|
|
|
20,000
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
14.75
|
|
8/8/2012
|
|
|
3/21/2006
|
|
|
5,000
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
5.00
|
|
3/21/2013
|
|
|
5/30/2007
|
|
|
15,000
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
2.33
|
|
5/30/2014
|
|
|
8/10/2007
|
|
|
59,999
|
|
|
|
120,001
|
(1)
|
|
|
-
|
|
|
$
|
4.90
|
|
8/10/2014
|
|
(1)
|
Stock
Option Grants vest 25% on first anniversary date of grant and monthly
thereafter for the next 36 months.
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(2)
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Mr.
Hagman left the Company in March 2008 and was replaced by Mr. Bystedt our
Chairman of the Board of Directors. Mr. Bystedt has waived all fees for
his services as Chief Executive Officer and as Chairman of the Board of
Directors until such time that we can afford to pay the fees and
compensation. For stock option information for Mr. Bystedt see the table
below titled Director Compensation.
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Employment
Contracts and Change of Control Arrangements
If Mr.
Brunton’s employment terminates due to a change in control (a “Change in Control
Termination’), Mr. Brunton will be entitled to receive the following
benefits:
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1.
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Salary Continuation.
Mr. Brunton shall continue to receive an amount equal to six (6) months of
Base Salary. Such amount shall be paid in equal monthly installments over
the six (6) months following the Change in Control Termination and shall
be subject to all required tax
withholding.
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2.
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Bonus Payment. Within
fifteen (15) days following the last day of the fiscal quarter during
which the Change in Control Termination occurs, Mr. Brunton shall receive
the pro-rata share of any bonus to which he would have been entitled had
his employment with the Company continued. The bonus amount paid will
be the product of the bonus percentage of Base Salary derived per his
bonus plan multiplied by
his Base
Salary from the beginning of the Fiscal Year through the date of his
Involuntary Termination Without Cause. Such payment shall be subject to
all required tax withholding.
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3.
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Acceleration of Option
Vesting. Effective as of the date of the Change in Control
Termination, Mr. Brunton shall be credited with full vesting under all
options to purchase the Company’s Common Stock that he holds on such
date.
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NO DISSENTERS’
RIGHTS
The corporate action described in
this Information Statement will not afford stockholders the opportunity to
dissent from the actions described herein or to receive an agreed or judicially
appraised value for their shares.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Refinancing
and Capital Raising Transactions
Per
Bystedt, our Chairman of the Board and Chief Executive Officer, is personally
involved in our refinancing and capital raising activities. He is the
beneficial owner of Iwo Jima SARL. Iwo Jima SARL entered into a
Subscription Agreement on December 30, 2008 and invested $100,000 in the Company
in exchange for the issuance of 10,000 shares of Series A Preferred Stock, and
is one of the three Cypressen Stockholders who participated in the share
exchange transaction with the Company pursuant to the Share Exchange Agreement
on December 29, 2008. Iwo Jima SARL also surrendered warrants in
exchange for the issuance of Series B Preferred Stock.
As of
October 26, 2009, we completed a private placement of convertible notes totaling
$959,000 that can be converted, at the holder’s option, into 47,949,151 shares
of our common stock at a conversion price of $0.02 per share. The convertible
note holders have the right to have the conversion price adjusted to equal the
lower stock price if we issue common stock or convertible notes at a lower
conversion price than $0.02 during the period that the notes are outstanding.
These convertible notes are due on December 31, 2010 and bear an annual interest
rate of 7%, payable on June 30 and December 31 of each year that the convertible
notes are outstanding. In addition, we issued 23,974,576 three-year
warrants to the convertible note holders with an exercise price of $0.04 per
share. The warrants may be exercised and converted to common stock, at the
warrant holder’s option, beginning on the six-month anniversary date of issuance
until the warrant expiration date. Mr. Bystedt and Iwo Jima SARL
invested a total of $116,000 of the $959,000 raised in the private placement
financing transaction. Mr. Bystedt and Iwo Jima SARL received a total
of 2,892,300 warrants to purchase our common stock, and the convertible notes
can be converted into a total of 5,784,600 shares of our common stock. We are
not obligated to register the common stock related to the convertible debt or
the warrants.
As of
October 26, 2009, Iwo Jima SARL holds 81,699,628 shares of Common
Stock.
Mr.
Magnus Goertz, one of the founders of Neonode Technologies AB, is the beneficial
owner of Athemis Ltd., which company is one of the three Cypressen Stockholders
who participated in the share exchange transaction with the Company pursuant to
the Share Exchange Agreement. As of October 26, 2009, Athemis Ltd.
holds 74,756,652 shares of Common Stock.
Mr.
Thomas Eriksson, our director and the CEO of Neonode Technologies AB, is the
beneficial owner of Wirelesstoys AB, which company is one of the three Cypressen
Stockholders who participated in the share exchange transaction with the Company
pursuant to the Share Exchange Agreement. As of October 26, 2009,
Wirelesstoys AB holds 73,993,853 shares of Common Stock.
Mr. David
W. Brunton, our Chief Financial Officer, purchased 4,854.74 shares of Series A
Preferred Stock from each of the Cypressen Stockholders (Iwo Jima SARL,
Wirelesstoys AB, and Athemis Ltd.) in December, 2009, for a total purchase of
14,564.22 shares of Series A Preferred Stock. As of October 26, 2009, the shares
of Series A Preferred stock have been converted to 7,000,000 shares of Common
Stock
The
independent board members review and approve all transactions that may be deemed
to be with related parties of the Company. The board members have the
authority to obtain advice or assistance from consultants, legal counsel,
accounting or other advisors as appropriate to perform its duties in
relationship to the review and approval of related party transactions, and to
determine the terms, costs and fees for such engagements.
OTHER
MATTERS
The Board
of Directors of the Company knows of no other matters to be presented for
stockholder action at the Annual Meeting. However, other matters may properly
come before the Annual Meeting or any adjournment or postponement
thereof.
On April
15, 2009, we filed with the SEC our Annual Report on Form 10-K for the year
ended December 31, 2008. A copy of the 10-K has been mailed to
all stockholders along with this Information Statement. The Company’s
filings with the SEC are all accessible by following the links on the Company’s
website at http://investor.neonode.com. Shareholders
may obtain additional copies of the Company’s Annual Report on Form 10-K and the
exhibits thereto, without charge, by writing to us at our principal executive
offices at Linnegatan 89, 11523 Stockholm, Sweden.
STOCKHOLDER
PROPOSALS
From time
to time stockholders present proposals that may be proper subjects for inclusion
in a proxy statement and for consideration at an annual meeting of
stockholders. Under the rules of the SEC, to be included in the proxy
statement for our 2010 annual meeting of stockholders, proposals must be
received by us no later than July 21, 2010.
By Order
of the Board of Directors
/s/ Per Bystedt
Mr. Per
Bystedt
Chairman
of the Board
Stockholm,
Sweden
November
18, 2009
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