UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 14A
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Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
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Preliminary Proxy Statement
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to
§240.14a-12
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NEONODE INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
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NEONODE INC.
NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS
TO BE HELD ON OCTOBER 3, 2017
Stockholders of Neonode Inc.:
Notice is hereby given that the 2017 Annual Meeting of Stockholders
of Neonode Inc., a Delaware corporation (“Neonode”),
will be held on October 3, 2017 at 3:00 p.m. local time at
Neonode’s principal executive office located at Storgatan
23C, 11455 Stockholm, Sweden, to conduct the following
business:
1.
To elect three Class III directors to serve on the Board of
Directors of Neonode for a term of three years and until the
election and qualification of their respective successors;
2.
To approve, on a nonbinding advisory basis, the compensation of
Neonode’s named executive officers;
3.
To approve an amendment to Neonode’s Amended and Restated
Certificate of Incorporation, as amended and corrected, to increase
the number of authorized shares of Neonode common stock from
70,000,000 shares to 100,000,000 shares;
4.
To ratify the appointment of KMJ Corbin and Company LLP as
Neonode’s independent registered public accounting firm for
the fiscal year ending December 31, 2017; and
5.
To transact any other business that may properly come before the
meeting.
The record date for the 2017 Annual Meeting is August 8, 2017. Only
stockholders of record, or their proxies, at the close of business
on that date may vote at the meeting or any adjournment
thereof.
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By Order of the Board of Directors
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/s/ Lars Lindqvist
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Lars
Lindqvist
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Vice President, Finance, Chief Financial
Officer,
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Treasurer and Secretary
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August 21, 2017
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Important Notice Regarding the Availability of Proxy
Materials for the Annual Meeting of
Stockholders to be Held on Tuesday, October 3, 2017:
This notice, the proxy statement, the proxy card, and
Neonode’s annual report
are available at
http://www.astproxyportal.com/ast/16987
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NEONODE INC.
PROXY STATEMENT FOR THE
2017 ANNUAL MEETING
This proxy statement is furnished by and on behalf of the Board of
Directors of Neonode Inc., a Delaware corporation
(“we”, “us”, “our”,
“company,” or “Neonode”), in connection
with the Annual Meeting of Stockholders of Neonode to be held on
October 3, 2017 at 3:00 p.m. local time at Neonode’s
principal executive office located at Storgatan 23C, 11455
Stockholm, Sweden.
This proxy statement and accompanying materials are first being
sent or given to stockholders on approximately August 23, 2017.
Questions and Answers
About the 2017 Annual Meeting
What is the purpose of the 2017 Annual
Meeting
?
At the 2017 Annual Meeting, stockholders
will be asked to:
•
elect three Class III directors to Neonode’s Board of
Directors for a term of three years;
•
hold an advisory vote on the compensation of Neonode’s named
executive officers (the “say-on-pay” vote);
•
approve an amendment to Neonode’s Amended and Restated
Certificate of Incorporation, as amended and corrected (the
“Certificate of Incorporation”), to increase the number
of authorized shares of Neonode common stock from 70,000,000 shares
to 100,000,000 shares; and
•
ratify the appointment of KMJ Corbin and Company LLP as
Neonode’s independent registered public accounting firm for
the fiscal year ending December 31, 2017.
Stockholders also may be asked to act on any other business that
may properly come before the meeting. Members of our
company’s management team will be present at the meeting to
respond to appropriate questions from stockholders.
Who is entitled
to vote
?
The
record date for the 2017 Annual Meeting is August 8, 2017. Only
stockholders of record at the close of business on that date are
entitled to vote at the meeting. Each share of common stock and
Series B Preferred Stock entitles the holder thereof to one vote on
each matter properly brought before the meeting. As of the record
date, 58,594,503 shares of our common stock were issued and
outstanding and 83 shares of Series B Preferred Stock were issued
and outstanding.
What is the
difference between being a “record holder” and holding
shares in “street name”
?
A
record holder is listed as a stockholder on the share register of
our company. Shares held in “street name” are held of
record in the name of a brokerage firm or bank for the benefit of
another person.
Am I entitled
to vote if my shares are held in “street
name”
?
If
your shares are held by a broker or bank, you are considered the
beneficial owner of shares held in “street name”. If
your shares are held in street name, proxy materials should be
forwarded to you by the record holder if it is a broker or bank
along with a voting instruction card. As the beneficial owner, you
may direct your broker or bank record holder how to vote your
shares, and your broker or bank is required to vote your shares in
accordance with your instructions.
What is the
quorum requirement
?
A
quorum is necessary to hold a valid meeting. A quorum will be
present if a majority of the outstanding shares eligible to vote
are represented in person or by proxy at the meeting. Your shares
will be counted towards the quorum only if you submit a valid proxy
(or one is submitted on your behalf by your broker or bank, or
other nominee record holder) or if you vote in person at the
meeting. Abstentions and broker non-votes will be counted towards
the quorum requirement.
Who can attend
the 2017 Annual Meeting
?
All
of our stockholders of record as of the close of business on August
8, 2017 may attend the 2017 Annual Meeting. “Street
name” holders also are invited to attend the meeting;
however, if you are not the stockholder of record, you may not vote
your shares in person at the meeting unless you request and obtain
a valid proxy from your broker or bank.
1
What if a
quorum is not present at the meeting
?
If
a quorum is not present at the scheduled time of the meeting,
either the chairman of the meeting or a majority of the outstanding
shares entitled to vote represented at the meeting may adjourn the
meeting.
How many votes
do I have
?
On
each matter to be voted upon, you have one vote for each share of
common stock and/or preferred stock you own as of the record
date.
Can I change my
vote after I submit my proxy
?
If
you are a record holder of shares, you may revoke your proxy and
change your vote at any time before your proxy is actually voted at
the meeting:
•
by signing and delivering another proxy with a later date;
•
by giving written notice of such revocation to the Corporate
Secretary of our company prior to or at the meeting; or
•
by voting in person at the meeting.
What if I do
not specify how my shares are to be voted
?
If
you submit a proxy but do not indicate any voting instructions, the
persons named as proxies will vote in accordance with the
recommendations of the Board of Directors.
How are votes
counted
?
Votes
will be counted by the inspector of election appointed for the 2017
Annual Meeting, who will separately count “for” and
“against” votes, abstentions, and broker non-votes.
What is an
abstention
?
An
“abstention” represents a stockholder’s
affirmative choice to decline to vote on a proposal, other than the
election of directors (the choices for election of directors are
limited to “For” or “Withhold”).
How will
abstentions be treated
?
Under
the Bylaws of our company, abstained shares are excluded from the
votes cast, so they will have no practical effect for or against a
proposal.
What is a
broker non-vote
?
If
you are a “street name” beneficial owner but do not
provide voting instructions to your broker record holder, then
under applicable rules your broker may only exercise discretionary
authority to vote on routine matters. Of the items described in
this proxy statement, it is our understanding that routine matters
consist of Proposals 3 and 4. A broker may not exercise
discretionary authority to vote on non-routine matters. This lack
of discretionary authority is called a “broker
non-vote.” Of the items described in this proxy statement, it
is our understanding that non-routine matters consist of Proposals
1 and 2.
How will broker
non-votes be treated
?
Broker
non-votes will be treated as shares present for quorum purposes,
but not considered entitled to vote on that matter. Therefore,
broker non-votes do not count as votes for or against any
proposal.
What are the
recommendations of the Board of Directors
?
The
Board recommends that you vote:
•
FOR the election to the Board of Directors of the Class III
nominees named in this proxy statement;
•
FOR the approval, on an advisory basis, of the compensation of the
named executive officers;
•
FOR the approval of the amendment to the Certificate of
Incorporation to increase the number of authorized shares of common
stock from 70,000,000 shares to 100,000,000 shares; and
•
FOR the ratification of KMJ Corbin and Company LLP as independent
registered public accounting firm for the fiscal year ending
December 31, 2017.
How many votes
are required to elect the director nominees
?
The
affirmative vote of a plurality of the shares cast at the 2017
Annual Meeting is required to elect the Class III directors. This
means that the three nominees who receive more affirmative votes
than any other person(s) will be elected directors.
How many votes
are required to approve the amendment to our Certificate of
Incorporation
?
The
affirmative vote of a majority of the shares entitled to vote at
the 2017 Annual Meeting is required to approve the amendment to
Neonode’s Certificate of Incorporation.
2
How many votes
are required to approve the remaining
proposals
?
The
affirmative vote by the shares constituting a majority of the votes
cast at the 2017 Annual Meeting is required to approve each
remaining proposal.
Will any other
business be conducted at the 2017 Annual
Meeting
?
We
know of no other matter that will be presented at the meeting.
However, if any other matter properly comes before the stockholders
for a vote at the meeting, the proxy holder(s) will vote your
shares in accordance with the recommendations of the Board of
Directors or otherwise at the discretion of the proxy
holder(s).
Where can I
find the voting results of the 2017 Annual
Meeting
?
We
intend to announce preliminary voting results at the 2017 Annual
Meeting and file final results in a Current Report on Form 8-K with
the Securities and Exchange Commission (the “SEC”)
within four days of the meeting.
Proxy
Solicitation
We will bear the entire cost of this proxy solicitation. Our
directors, officers and regularly engaged employees may solicit
proxies personally or by mail, telephone, facsimile, internet or
other electronic means, for which solicitation they will not
receive any additional compensation. We will reimburse brokerage
firms, banks, custodians, and other fiduciaries for their
out-of-pocket expenses in forwarding solicitation materials to
beneficial owners upon our request.
Notice and
Access
We are using the “Notice and Access” method of posting
the proxy materials online instead of mailing printed copies. We
believe that this process will provide you with a convenient and
quick way to access the proxy materials, including this proxy
statement and our annual report, and to authorize a proxy to vote
your shares, while allowing us to conserve natural resources and
reduce the costs of printing and distributing the proxy
materials.
Most stockholders will not receive paper copies of the proxy
materials unless they request them. Instead, a Notice and Access
card, which has been mailed to our stockholders of record, provides
instructions regarding how you may access or request all of the
proxy materials by telephone, e-mail, or online. The Notice and
Access card also instructs you how to submit your proxy via the
mail or online. If you prefer to receive a paper or e-mail copy of
the proxy materials, you should follow the instructions for
requesting such materials printed on the Notice and Access
card.
If your shares are held by a brokerage firm or bank on your behalf
in “street name”, you as beneficial owner should
receive a Notice and Access card that instructs you how to provide
your broker or bank with voting instructions for your shares. Most
brokers and banks enable beneficial owners to provide voting
instructions via the mail, online, or other means.
It is important that
your shares be represented at the 2017 Annual Meeting
and voted in accordance with your wishes. Whether or not you plan
to attend the meeting,
please complete a proxy as promptly as possible so that your shares
will be voted at the 2017 Annual Meeting.
This will not limit your right to vote in person or to attend the
meeting.
3
PROPOSAL 1 —
ELECTION OF CLASS III DIRECTORS
Three persons will be elected at the 2017 Annual Meeting of
Stockholders to serve as Class III directors of the Board of
Directors of our company. The elected Class III directors are
expected to serve until the 2020 Annual Meeting of Stockholders of
Neonode or until their respective successors are duly elected and
qualified, or until their earlier death, resignation, or
removal.
The Board of Directors has nominated Per Eriksson and Åsa
Hedin for election and Per Löfgren for reelection as Class III
directors of the Board of Directors.
The term of Mats Dahlin, who currently serves as a Class III
director, will expire directly after the 2017 Annual Meeting. The
Board of Directors thanks Mr. Dahlin for his many years of service
as a director for our company.
Mr. Eriksson, Ms. Hedin, and Mr. Löfgren have each expressed
their willingness to serve as a member of the Board. If Mr.
Eriksson, Ms. Hedin, or Mr. Löfgren becomes unavailable to
serve as a director for any reason (which event is not
anticipated), the shares represented by proxy may (unless such
proxy contains instructions to the contrary) be voted for such
other person as may be determined by the proxy holder(s).
Biographical information about Mr. Eriksson, Ms. Hedin, and Mr.
Löfgren is provided under “Composition of the Board of
Directors” in the Board Matters and Corporate Governance
section below.
Required Vote and
Recommendation
Directors are elected by a plurality of the votes of the holders of
common stock and Series B Preferred Stock present in person or by
proxy and entitled to vote at the meeting. Provided a quorum is
present, the nominees receiving the highest number of affirmative
votes will be elected as Class III directors. Abstentions and
broker non-votes will not be counted as votes cast and will have no
effect on the result of the vote, although they will count towards
the presence of a quorum. Properly executed and unrevoked proxies
will be voted “FOR” the nominee of the Board of
Directors unless contrary instructions are indicated in the
proxy.
The Board of
Directors recommends that you vote “FOR” the election
of
the Board of Directors’ nominees for Class III
directors.
4
BOARD MATTERS AND
CORPORATE GOVERNANCE
Composition of the Board
of Directors
In accordance with our Certificate of Incorporation, the Board of
Directors exclusively determines the number of directors that
compose the Board. By resolution in connection with preparation for
the 2017 Annual Meeting, the Board of Directors increased the size
of the Board from five members to six members. In addition, no
later than the date of the 2017 Annual Meeting, the Board of
Directors is expected to further increase the size of the Board to
add the designated directors as described under “Board
Representatives” below.
Also in accordance with 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.
Each class has a three-year term. Currently, two members of the
Board serve in Class I, one member serves in Class II, and two
members serve in Class III. Immediately subsequent to the 2017
Annual Meeting, with the expected addition of the designated
directors as described under “Board Representatives”
below, we expect the Board to consist of three members in Class I,
two members in Class II, and three members in Class III.
Our Certificate of Incorporation provides that any vacancies on the
Board of Directors 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 may serve for the remainder of
the full term of that class, and until the director’s
successor is elected and qualified.
Continuing Directors and
Nominees
The identities and biographies of each continuing member or nominee
to the three classes of the Board of Directors serving staggered,
three-year terms are as follows:
Class I Directors Continuing in Office with Terms Expiring at
the 2018 Annual Meeting:
Per Bystedt
, age 51, has served as Chairman of the Board of
Directors of Neonode since August 2007, including as Executive
Chairman between January 2011 and June 2015. From May 2008 to
January 2011, Mr. Bystedt served as Chief Executive Officer of
Neonode, and he served as the interim Chief Executive Officer of
Neonode from October 2005 to July 2006. From 1997 to 2008, Mr.
Bystedt served as Chief Executive Officer and President of Spray
AB, an internet investment company. From 2000 to 2010, Mr. Bystedt
served as a member of the Board of Directors of Axel Johnson AB.
From 2000 to 2008, Mr. Bystedt served as a member of the Board of
Directors of Eniro AB, and from 2005 to 2008 he served as a member
of the Board of Directors of Servera AB. From 2005 to 2010, Mr.
Bystedt was Chairman of the Board of Directors of AIK Fotboll AB.
From 1997 to 2005, Mr. Bystedt served as a member of the Board of
Directors of Ahlens AB, and from 1998 to 2000 he was Chairman of
the Board of Directors of Razorfish, Inc.
The Board of Directors has concluded that Mr. Bystedt should serve
as director because of his past experience as Chief Executive
Officer of our company, his understanding of finance and
technology, and his more than twenty years of management and
business oversight experience as a chief executive officer and
member of the boards of directors of various companies.
Thomas Eriksson
, age 47, has served as President of Neonode
since June 2015, as Chief Executive Officer of Neonode since
January 2011, and as director of Neonode since December 2009. Mr.
Eriksson also has served as Chief Executive Officer of Neonode
Technologies AB, a wholly-owned subsidiary of Neonode, since
January 1, 2009. Mr. Eriksson was one of the founders of our
company in 2001 and he served as Chief Technical Officer of Neonode
from February 2006 to December 31, 2008. Prior to joining Neonode,
Mr. Eriksson founded several companies with products ranging from
car electronics test systems and tools to GSM/GPRS/GPS-based fleet
management systems including M2M applications and wireless
modems.
The Board of Directors has concluded that Mr. Eriksson should serve
as director because of his current role as President and Chief
Executive Officer of our company, his experience as one of the
founders of our company, and his understanding of our
technology.
5
Class II Director Continuing in Office with Term Expiring at the
2019 Annual Meeting:
John Reardon
, age 57, has served as a director of Neonode
and its predecessors since February 2004. Mr. Reardon has served as
President and member of the Board of Directors of The RTC Group, a
technical publishing company, since 1990. Mr. Reardon also serves
on the Board of Directors of One Stop Systems, Inc., a computing
systems and manufacturing company, and Middle Canyon, Inc., a
private distribution and integration company representing major
industrial computing lines.
The Board of Directors has concluded that Mr. Reardon should serve
as director because of his institutional knowledge of our company
and his twenty-five years of experience in management, finance, and
business development.
Class III Nominees for Election with Terms Expiring at the 2020
Annual Meeting:
Åsa Hedin
, age 54, has served as a non-executive board
member and business advisor to Elekta AB since April 2015. She
previously served as Executive Vice President Marketing and
Corporate Development at Elekta between January 2013 and April 2015
and, prior to that, served as Executive Vice President for Elekta
Neuroscience and President of Elekta Instrument between August 2007
and January 2013. Ms. Hedin also has held executive positions at
Gambro and Siemens Healthcare. She currently serves on the Boards
of Directors of Tobii AB, Nolato AB, Immunova AB, Cellavision AB,
Fingerprint Cards AB, and E. Öhman J:or Fonder AB.
The Board of Directors has concluded that Ms. Hedin should serve as
director because of her ability to serve as an independent member
of the Board and her diverse executive background and experience on
various company boards.
Per Eriksson
, age 55, has served as President and Chief
Executive Officer of NetEnt, AB since 2012. NetEnt is a digital
entertainment company listed on the NASDAQ OMX Nordic stock
exchange. Prior to joining NetEnt, Mr. Eriksson served as President
and Chief Executive Officer of Dustin Group and, prior to that, as
head of Dell EMC EMEA for Dell Ltd. and Chief Executive Officer for
Dell Sweden and the Nordics.
The Board of Directors has concluded that Mr. Eriksson should serve
as director because of his eligibility to serve as an independent
member of the Board and more than 25 years of experience with B2B
sales in the information technology industry.
Per Eriksson is not related to Thomas Eriksson, the President and
Chief Executive Office of Neonode and also a member of the Board of
Directors.
Per Löfgren
, age 53, has served as Vice President
Global Sales and Chief Financial Officer for Segment Global
Services of Ericsson AB since January 2015. He also has served as
President of Ericsson AB since January 2015. From 2011 to 2014, he
served as Executive Vice President and Chief Financial Officer of
Ericsson North America. From 2008 until 2011, Mr. Löfgren
served as President of Ericsson Sweden AB. Prior to 2008, he served
in various Ericsson business units globally as a division chief
financial officer, controller, marketing and other management
positions.
The Board of Directors has concluded that Mr. Löfgren should
serve as director because of his qualification as an audit
committee financial expert, his general financial and business
knowledge, and his thirty years of experience in the communications
and technology industry.
Board
Representatives
On August 2, 2017, our company entered into a Securities Purchase
Agreement pursuant to which the purchasers of a majority of the
securities became entitled to designate up to two individuals to
join the Board of Directors, provided that each designee would be
eligible to serve as an independent director under applicable
NASDAQ Stock Market rules. The Securities Purchase Agreement does
not provide the majority purchasers with any ongoing
representation. Subsequent to the initial appointment to the Board
of Directors, the designees are not assured of being nominated for
election at a future annual meeting of stockholders. In the event
either designee ceases to serve as director for any reason, the
Board of Directors is not obligated to appoint any replacement
individual to fill the vacancy.
6
In accordance with the Securities Purchase Agreement, the majority
purchasers designated the following two individuals to serve as
directors:
Andreas Bunge
, age 56, since 2015 has been Chief Executive
Officer of Merkatura AB, a private holding company, and provides
business consulting for technology companies. Between 2012 and
2015, he served as Chief Executive Officer of Spago Nanomedical AB
(formerly Spago Imaging AB) until its public listing on the NASDAQ
OMX Nordic stock exchange. Between 2005 and 2012, Mr. Bunge founded
and served as Chief Executive Officer of Accelerator Nordic AB,
which spun-off Spago Imaging in 2012. Prior to Accelerator Nordic,
he founded and served as Chief Executive Officer of Applied Sensor
AB and held various managerial positions at Intentia AB. He also
has served as a member of the boards of directors of numerous
companies during the past 15 years. Mr. Bunge has an MSc in
Engineering and Management from Linköping University.
Ulf Rosberg
, age 51, currently serves as Chief Executive
Officer of UMR Invest AB, a private holding company, and as
Chairman of Payair Technologies AB. He previously served in various
leadership positions at Nordic Capital AB from 1994 until June
2017, including as investment manager, director, partner, and most
recently as senior advisor since 2012. Prior to joining Nordic
Capital, Mr. Rosberg held corporate finance positions with SEB
Investment Banking and Leimdörfer & Partners. He has an
M.Sc. in Economics from the Stockholm School of Economics and a
degree with a major in finance from New York University, Stern
School of Business in New York.
As provided in the Securities Purchase Agreement, the Board of
Directors is expected to appoint these two designees to serve as
directors no later than the date of the 2017 Annual Meeting of
Stockholders. Upon such appointment, one designee is expected to
serve as a Class I director and the other as a Class II
director.
Leadership of the Board
of Directors
The business of our company is managed under the direction of the
Board of Directors, which is elected by our stockholders. The basic
responsibility of the Board is to lead our company by exercising
business judgment to act in what each director reasonably believes
to be the best interests of our company and its stockholders.
Leadership is important to facilitate the ability of the Board to
act effectively as a working group so that our company and its
performance may benefit. The Board does not have a lead independent
director. The Board has chosen to separate the positions of chief
executive officer and chairman. The Board believes that it is
appropriate to have one individual responsible for our
company’s operational aspects and a second individual
responsible for our company’s strategic aspects. As prior
Chief Executive Officer of our company with knowledge of our
challenges and opportunities, Mr. Bystedt’s role as Chairman
includes providing feedback on the direction, performance, and
strategy of our company.
Committees of the Board
of Directors
The Board of Directors has established three committees: an Audit
Committee, a Compensation Committee, and a Nominating and
Governance Committee. John Reardon, Mats Dahlin and Per
Löfgren are the current members of each committee.
In 2016, the Audit Committee met four times, the Compensation
Committee met once, and the Nominating and Governance Committee met
once. All of the directors attended at least 75% of the meetings of
each committee on which he was then serving. In addition, the
independent directors of the Board of Directors regularly meet in
executive sessions.
The Board of Directors has adopted written charters for each of the
Audit Committee, Compensation Committee, and Nominating and
Governance Committee. Copies of the Audit Committee Charter,
Compensation Committee Charter, and Nominating and Governance
Committee Charter are available on our website at
http://www.neonode.com/investor-relations/corporate-governance/
.
The information contained on our website is not part of and is not
incorporated by reference into this proxy statement. Each of the
committees has the authority under its respective charter to engage
legal counsel or other experts or consultants, as it deems
appropriate to carry out its responsibilities.
The Board of Directors has determined that John Reardon, Mats
Dahlin, and Per Löfgren meet applicable SEC and NASDAQ Stock
Market rules and regulations regarding “independence”
and are able to exercise independent judgment with respect to our
company. John Reardon, Mats Dahlin, and Per Löfgren also meet
the independence
7
requirements of each charter of the Audit Committee, Compensation
Committee, and Nominating and Governance Committee.
If they are elected to the Board, Mr. Eriksson and Ms. Hedin are
expected to be appointed by the Board of Directors to one or more
of the committees in place of Mr. Dahlin subsequent to the
expiration of his term of office directly after the 2017 Annual
Meeting. The Board of Directors has determined that Mr. Eriksson
and Ms. Hedin meet applicable SEC and NASDAQ Stock Market rules and
regulations regarding “independence” and are able to
exercise independent judgment with respect to our company.
Audit
Committee
. The members of the Audit Committee
are Per Löfgren, Mats Dahlin, and John Reardon. Mr.
Löfgren is Chairman of the Audit Committee. The Board of
Directors has determined that Mr. Löfgren qualifies as an
“audit committee financial expert”, as defined in SEC
rules. The Audit Committee, which was established in accordance
with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), oversees our
company’s corporate accounting and financial reporting
process, the audits of our company’s financial statements,
and the integrity of financial reports and other financial
information provided by our company to the government and the
public. The Audit Committee’s authority and responsibilities
are specified in its charter and include the following:
•
determining whether to retain or terminate the existing independent
registered public accounting firm or to appoint and engage a new
independent registered public accounting firm;
•
reviewing and approving the retention of the independent registered
public accounting firm to perform any proposed permissible
non-audit services;
•
discussing with management and with the independent registered
public accounting firm the results of the annual audit and the
results of the quarterly financial statements;
•
reviewing the financial statements to be included in the Annual
Report on Form 10-K;
•
conferring with management and the independent registered public
accounting firm regarding the effectiveness of internal controls
over financial reporting; and
•
establishing procedures for the receipt, retention, and treatment
of complaints received regarding accounting, internal accounting
controls, or auditing matters, and the confidential, anonymous
submission by employees of concerns regarding questionable
accounting or auditing matters.
Compensation
Committee
. The members of the Compensation
Committee are Mats Dahlin, Per Löfgren, and John Reardon. Mr.
Dahlin is Chairman of the Compensation Committee. The Compensation
Committee reviews all components of executive officer and director
compensation. The Compensation Committee’s authority and
responsibilities are specified in its charter and include the
following:
•
reviewing and approving the compensation and other terms of
employment of the chief executive officer;
•
reviewing and approving corporate performance objectives and goals
relevant to the compensation of the chief executive officer;
•
reviewing and approving the compensation and other terms of
employment of the other executive officers; and
•
administering and reviewing incentive-based or equity compensation
plans of the executive officers and other employees.
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 Compensation 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 typically is determined by
its chairman, with the assistance of the chief executive officer
and chief financial officer. For equity grants, the Compensation
Committee
8
selects an exercise price that
is not less than the closing price of shares of our common stock on
the NASDAQ Stock Market on the grant date.
To
perform its duties, the Compensation Committee has the authority to retain or terminate any consulting firm used to evaluate director
or executive compensation, and to determine and approve the terms, costs and fees for such engagements. The Compensation Committee
did not retain such a consultant in 2016 and has not engaged such a consultant for 2017.
Nominating and
Governance Committee
. The members of the
Nominating and Governance Committee are John Reardon, Mats Dahlin,
and Per Löfgren. Mr. Reardon is Chairman of the Nominating and
Governance Committee. The Nominating and Governance
Committee’s authority and responsibilities are specified in
its charter and include the following:
•
developing and recommending to the Board of Directors criteria for
selecting qualified director candidates;
•
identifying individuals qualified to become members of the Board of
Directors;
•
evaluating and selecting, or recommending to the Board of
Directors, director nominees for each election of directors;
•
considering committee member qualifications, appointment, and
removal;
•
recommending codes of conduct and codes of ethics applicable to our
company; and
•
providing oversight in the evaluation of the Board of Directors and
each committee.
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 possessing personal integrity and ethics.
The Nominating and Governance Committee also considers factors such
as whether a candidate possesses relevant expertise upon which to
be able to offer advice and guidance to management, has sufficient
time to devote to the affairs of our company, has demonstrated
excellence in his or her field, has the ability to exercise sound
business judgment, and has the commitment to rigorously represent
the long-term interests of our stockholders. The Nominating and
Governance Committee retains the right to modify these
qualifications from time to time.
The Nominating and Governance Committee does not have a specific
policy with respect to the consideration of diversity in
identifying director nominees. Candidates are reviewed in the
context of the current composition of the Board of Directors and
whether it reflects the appropriate balance of independence, sound
judgment, business specialization, technical skills, diversity, and
other desired qualities. The Nominating and Governance Committee
seeks to have a Board with a diversity of background and
experience.
In the case of an incumbent director whose term of office is set to
expire, the Nominating and Governance Committee reviews the
director’s overall service to our company during his or her
term, including the number of meetings attended, level of
participation, quality of performance, and any other relationships
and transactions that might impair the director’s
independence or judgment. In the case of new director candidates,
the Nominating and Governance Committee determines whether the
candidate will be independent pursuant to applicable SEC and NASDAQ
Stock Market rules and regulations. The Nominating and Governance
Committee may conduct appropriate and necessary inquiries into the
backgrounds and qualifications of current or possible nominees. 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.
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 a candidate as described above for nominees based on
whether the candidate was recommended by a stockholder. Since the
beginning of 2016, there have been no material changes to the
procedures by which stockholders may recommend director
candidates.
9
Stockholders may directly nominate a person for director only by
complying with the procedure set forth in the Bylaws of our
company, which in summary requires that the stockholder submit the
name of the nominee in writing to the Corporate Secretary of our
company not less than 60 days nor more than 90 days prior to the
first anniversary of the date of the preceding year’s annual
meeting. Nominations may be mailed or delivered to Corporate
Secretary, Neonode Inc., Storgatan 23C, 11455 Stockholm, Sweden, at
least six months prior to any meeting at which directors are to be
elected. As described in more detail in the Bylaws of our company,
nominations must include the full name of the nominee, complete
biographical information of the nominee including a description of
business experience for at least the previous five years, a
description of the nominee’s qualifications for director, and
a representation that the nominating stockholder is a beneficial
owner or record holder of shares of our stock. Any such submission
must be accompanied by the written consent of the nominee to be
named as a nominee and to serve as a director if elected. To date,
the Nominating and Governance Committee has not received any
director nominations from our stockholders.
Meetings of the Board of
Directors
The Board of Directors met four times during 2016. Each director
attended 75% or more of the meetings of the Board.
Although our company does not have a policy requiring their
attendance, members of the Board of Directors are encouraged to
attend the annual meeting of stockholders. Five of the six members
of the Board attended, in person or telephonically, last
year’s 2016 Annual Meeting of Stockholders. Each member of
the Board intends to attend, either in person or telephonically,
this year’s 2017 Annual Meeting.
Director
Compensation
In 2016, Messrs. Bystedt, Reardon, Dahlin, and Löfgren
received fees for serving as members of the Board of Directors. The
annual retainer for Mr. Bystedt for serving as Chairman of the
Board is 624,000 Swedish Kronor (“SEK”) (approximately
$96,000 in 2011 when his annual chairmanship fee was established).
In addition, we contribute approximately 5% of Mr. Bystedt’s
compensation to a Swedish pension organization. The annual retainer
for the other non-employee directors is $48,000. Directors do not
receive per-meeting fees. The members of the Board also are
eligible for reimbursement for their expenses incurred in attending
Board meetings.
None of our directors received stock option awards in 2016.
The following table lists the compensation paid to non-employee
directors for their services as members of the Board for the fiscal
year ended December 31, 2016. Compensation paid to Thomas Eriksson
is presented as part of the “Summary Compensation
Table” below. Mr. Bystedt and Mr. Löfgren are paid in
our local currency; accordingly, for purposes of this table, their
compensation has been converted to US Dollars at an approximate
weighted average exchange rate of 8.55 SEK to one US Dollar.
|
|
Fees
Earned or
Paid in Cash
|
|
|
|
|
|
|
Per Bystedt
|
|
$
|
94,670
|
|
—
|
|
$
|
3,802
|
|
$
|
98,472
|
Mats Dahlin
|
|
$
|
48,000
|
|
—
|
|
|
—
|
|
$
|
48,000
|
Per Löfgren
|
|
$
|
48,041
|
|
—
|
|
|
—
|
|
$
|
48,041
|
John Reardon
|
|
$
|
48,000
|
|
—
|
|
|
—
|
|
$
|
48,000
|
Communication with the
Board of Directors
Stockholders, or anyone else wishing to contact the Board of
Directors directly, may send a written communication to Corporate
Secretary, Neonode Inc., Storgatan 23C, 11455 Stockholm, Sweden.
The Corporate Secretary will forward such correspondence only to
the intended recipients, whether the entire Board or only an
individual member of the Board. However, prior to forwarding any
correspondence, the Corporate Secretary of our company may review
such correspondence and, at his discretion, may not forward certain
items if deemed to be of a commercial nature or in bad faith.
10
Risk
Oversight
Management continually monitors the material risks facing our
company. The Board of Directors is responsible for exercising
oversight of management’s identification of, planning for,
and managing these risks, which include financial, technological,
competitive, and operational risks. The Board periodically reviews
and considers the relevant risks faced by our company. Further,
particularly as a prior Chief Executive Officer of our company, the
Chairman is well-positioned to lead Board discussions on risk due
to his knowledge of our company and industry.
Code of
Ethics
The Board of Directors has adopted the Code of Business Conduct
applicable to our officers, directors, and employees. The Code of
Business Conduct contains a separate Code of Ethics that applies
specifically to our company’s chief executive officer and
senior financial officers. The Code of Business Conduct, including
the Code of Ethics, is available on our website at
http://www.neonode.com/investor-relations/corporate-governance/
.
If we amend or waive the Code of Business Conduct or Code of Ethics
with respect to our directors, principal executive officer,
principal financial officer, principal accounting officer or
controller, or persons performing similar functions, we will post
the amendment or waiver on our website. The information contained
on our website is not part of and is not incorporated by reference
into this this proxy statement.
Section 16(a) Beneficial
Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our directors and
executive officers, and persons who own more than ten percent of a
registered class of our equity securities, to file reports of
ownership and changes in ownership with the SEC. Based solely upon
a review of the copies of such reports and written representations
that no other reports were required, we believe that for the fiscal
year ended December 31, 2016 all of our directors, executive
officers, and greater than ten percent beneficial owners have
complied with the reporting requirements of Section 16(a).
11
PROPOSAL 2 —
ADVISORY VOTE ON
NAMED EXECUTIVE OFFICERS
COMPENSATION
The Dodd-Frank Wall Street Reform and Consumer Protection Act of
2010 (the “Dodd-Frank Act”) requires that we provide
our stockholders with the opportunity to vote to approve, on a
nonbinding, advisory basis, the compensation of the named executive
officers as disclosed in this proxy statement. This proposal,
commonly known as a “say-on-pay” proposal, provides
stockholders the opportunity to express their views on the
compensation of the named executive officers, which for 2016
consisted of Thomas Eriksson and Lars Lindqvist. The Board of Directors
has determined that our company will hold a nonbinding, advisory
“say-on-pay” vote every year until the next required
advisory vote on the frequency of such vote, which will occur no
later than the 2018 Annual Meeting of Stockholders.
As described in the Compensation Discussion and Analysis section
below, our compensation programs are designed to attract and retain
key executives responsible for the success of our company and are
administered in the long-term interests of our company and our
stockholders. The Board of Directors believes that the compensation
paid to the named executive officers for 2016 was reasonable and
appropriate.
Accordingly, stockholders are being asked to vote on the following
resolution at the 2017 Annual Meeting:
“RESOLVED, that the stockholders of Neonode Inc. approve, on
an advisory basis, the compensation of the named executive
officers, as disclosed in Neonode Inc.’s Proxy Statement for
the 2017 Annual Meeting of Stockholders, pursuant to the
compensation disclosure rules of the Securities and Exchange
Commission, including the summary compensation table and the other
related tables and disclosure.”
Required Vote and
Recommendation
Approval of the compensation of the named executive officers
requires the affirmative vote of a majority of the votes cast by
the holders of shares of our common stock and Series B Preferred
Stock present in person or by proxy and entitled to vote at the
meeting. This vote is advisory and therefore is not binding.
However, the Board of Directors and the Compensation Committee will
review the voting results and take them into account in making
decisions regarding future compensation of the named executive
officers. Abstentions and broker non-votes will not be counted as
votes cast and will have no effect on the result of the vote,
although they will count towards the presence of a quorum. Properly
executed and unrevoked proxies will be voted “FOR”
Proposal 2 unless contrary instructions are indicated in the
proxy.
The Board of
Directors recommends that you vote “FOR” the approval,
on an advisory basis,
of the compensation of the named executive officers as disclosed in
this proxy statement.
12
EXECUTIVE
OFFICERS
Information about our current executive officers is as follows:
|
|
|
|
|
Thomas Eriksson
|
|
President and Chief Executive Officer of Neonode
Inc.;
Chief Executive Officer of Neonode Technologies AB
|
|
April 2009
|
Lars Lindqvist
|
|
Vice President, Finance, Chief Financial
Officer, Treasurer and
Secretary of Neonode Inc.
|
|
August 2014
|
Biographical information regarding Thomas Eriksson is under
“Composition of the Board of Directors” in the Board
Matters and Corporate Governance section above.
Lars Lindqvist
, age 59, has served as an executive officer
of Neonode since August 2014. Upon becoming an executive officer,
Mr. Lindqvist resigned as a member of the Board of Directors of
Neonode, a position he had held since November 2011. Prior to
becoming an executive officer of our company, Mr. Lindqvist served
as a management consultant to LQ Consulting GmbH since January
2013, interim Chief Executive Officer of 24 Mobile Advertising
Solutions AB from June 2012 to December 2012, interim Chief
Executive Officer of ONE Media Holding AB from April 2011 to May
2012, and Chief Financial Officer for Mankato Investments AG Group
from June 2005 to March 2011. In addition, Mr. Lindqvist was Chief
Financial Officer of Microcell OY, a Finnish ODM of mobile phones,
from August 2002 to May 2005, and he was Chief Financial Officer of
Ericsson Mobile Phones from May 1995 to July 2002.
13
COMPENSATION DISCUSSION
AND ANALYSIS
Overview
Our executive compensation programs seek to balance the interests
of stockholders and executives while supporting our need to attract
and retain competent executive management. Toward this end, the
Board of Directors and the Compensation Committee seek to emphasize
the enhancement of stockholder value and deliver a total executive
compensation package in a cost-effective manner.
2016
Summary
For 2016, the Compensation Committee acted conservatively with
respect to executive compensation by awarding neither bonuses nor
equity compensation to the named executive officers. In addition,
no perquisites were paid to the named executive officers in
2016.
Say-on-Pay
At our 2016 Annual Meeting of Stockholders, approximately 93% of
the votes cast in the advisory “say-on-pay” vote were
voted for approval of the compensation of the named executive
officers as disclosed in our 2016 proxy statement. The Board of
Directors and Compensation Committee have considered the results of
the 2016 “say-on-pay” vote and believe that the
substantial support by our stockholders indicates they generally
are supportive of our approach to executive compensation. The Board
of Directors and Compensation Committee will continue to consider
“say-on-pay” votes in formulating future executive
compensation policies and decisions.
Governance
These additional factors are important attributes of our
company’s overall program with respect to executive
compensation:
•
Our employees, including executives, are prohibited from pledging
or hedging, or selling short, their shares of our common stock.
•
Incentive compensation paid to executive officers is subject to a
Clawback Policy adopted by the Board of Directors.
•
Outstanding stock options are not subject to automatic vesting upon
a change in control of our company.
•
Our company annually holds an advisory vote on named executive
officer compensation.
Compensation
Committee
The Compensation Committee of the Board of Directors oversees our
executive compensation program. The Compensation Committee, which
is composed solely of independent directors, reviews executive
officer performance and reviews and approves executive officer
compensation.
In addition, the Compensation Committee administers the 2006 Equity
Incentive Plan and the 2015 Stock Incentive Plan of our company. In
that capacity, the Compensation Committee selects the employees,
including executives, and non-employee directors of our company who
will receive awards, determines the number of shares covered
thereby, and establishes the terms, conditions, and other
provisions of the grants.
Under its charter, the Compensation Committee has the authority to
retain or terminate any consulting firm used to evaluate director
or executive compensation and to determine and approve the terms,
costs and fees for such engagements. The Compensation Committee did
not retain a compensation consultant in 2016 and has not engaged a
compensation consultant for 2017.
Role of Chief Executive
Officer
The Compensation Committee establishes compensation policies and
practices for the chief executive officer. The chief executive
officer recommends compensation packages for the remaining
executive officers based on his review of our company’s
performance and the executive’s contribution to this
performance, and salary levels for our
14
employees in general. After reviewing these recommendations and
after discussion with the chief executive officer, the Compensation
Committee makes whatever modifications it believes are
appropriate.
Compensation
Philosophy
The Board of Directors believes that executive compensation should
vary with our performance in achieving our financial and
non-financial objectives, should be tied to individual performance,
and should be structured to align the interests of our executive
officers with the interests of our stockholders. The Compensation
Committee seeks to provide a total compensation package that is
adequate and competitive in relation to the compensation practices
of comparable companies of our size and type of business.
Accordingly, the Compensation Committee provides salaries based
upon individual performance together, where appropriate, with
periodic cash bonuses and stock options based on our overall
performance relative to our corporate objectives and the
executive’s individual contributions.
The Compensation Committee has not adopted formal guidelines for
allocating total compensation between long-term and current
compensation or equity compensation and cash compensation but
rather allocates on a case-by-case basis as appears appropriate in
achieving objectives of our compensation philosophy.
In reviewing the competitiveness of our executive compensation, the
Compensation Committee takes into account information from sources
such as independent members of the Board of Directors and publicly
available data relating to the compensation practices and policies
of other companies in our industry. However, the Compensation
Committee has not developed any specific list of peer group
companies to inform its compensation decisions. Consistent with
this view, the Compensation Committee has not targeted a
predetermined percentile of any peer group companies in determining
compensation. While benchmarking may not necessarily be appropriate
for a company of our size or as a sole tool for setting
compensation because some aspects of our business and objectives
are unique to us, the Compensation Committee may in the future
gather and review peer group information if the Compensation
Committee determines it be important to its decision-making
process.
Section 162(m) of the Internal Revenue Code of 1986, as amended,
generally disallows a federal income tax deduction to public
companies for certain compensation over $1,000,000 paid to a chief
executive officer and the three other most highly compensated
executive officers other than the chief financial officer.
Qualifying performance-based compensation will not be subject to
the deduction limit if certain requirements are met. The
Compensation Committee does not believe that Section 162(m) or
other accounting and tax treatment of particular forms of
compensation materially affect compensation decisions. However, the
Compensation Committee will evaluate the effect of such accounting
and tax treatment on an ongoing basis and will make appropriate
modifications to compensation policies where appropriate.
Components of
Compensation
The primary elements of total compensation we historically pay to
our executive officers, including the chief executive officer and
the other executive officers identified under the “Summary
Compensation Table” below, include the following:
•
base salary;
•
cash bonus;
•
awards under our equity incentive plans;
•
benefits under our defined contribution plans; and
•
benefits under our health and welfare benefits plans.
Base
Salaries
Base salaries for executives are reviewed annually and adjustments
are determined, where appropriate, to maintain salaries at
competitive levels, taking into account each executive’s
experience and individual performance, to maintain an equitable
relationship between executive salaries and overall salaries for
other employees, and to reflect the executive’s annual
performance evaluation.
15
For 2016, the base salaries of Mr. Eriksson and Mr. Lindqvist were
maintained at the same level as 2015. In 2014, the base salary of
Mr. Lindqvist upon his appointment as Chief Financial Officer was
established at a rate comparable to that of the prior Chief
Financial Officer.
Cash
Bonuses
The Compensation Committee determines whether executives should
receive cash bonuses based on our financial position, achievement
of major corporate objectives, and the contribution of the
executive, above normal expectations, to our overall success and
achievements in creating stockholder value. The Compensation
Committee may award bonuses at its discretion based upon subjective
factors it determines after the conclusion of the year.
To date, the Compensation Committee has established a
non-discretionary bonus structure solely for Mr. Eriksson as Chief
Executive Officer tied to the performance of the share price of our
common stock (NEON) relative to the price of the NASDAQ-100
Technology Sector Index (NDXT) based upon a maximum payout to Mr.
Eriksson of 1,000,000 Swedish Kronor (“SEK”)
(approximately $117,000 in 2016). If the price of shares of our
common stock increases during the year by more than 25% of the
increase in the price of the NASDAQ-100 Technology Sector Index,
then Mr. Eriksson would be entitled to the maximum payout. If the
price of shares of our common stock increases during the year at
approximately the same percentage as the NASDAQ-100 Technology
Sector Index, then Mr. Eriksson would be entitled to 50% of the
maximum. The price of shares of our common stock in 2016 did not
increase relative to the NASDAQ-100 Technology Sector Index. As a
result, the Compensation Committee did not award a
non-discretionary cash bonus to Mr. Eriksson for the fiscal year
ended 2016.
As described under “Employment Agreements” below, Mr.
Lindqvist’s employment agreements provides him with a bonus
opportunity of up to 50% of his total yearly salary at the
discretion of the chief executive officer. No bonus was awarded to
Mr. Lindqvist for the fiscal year ended 2016.
Equity
Incentive Plan Awards
We use the grant of options
and other equity awards under our equity incentive plans,
particularly the 2015 Stock Incentive Plan, as the primary vehicle
for providing long-term incentive compensation opportunities to our
employees, including executives. The options we have granted have a
per share exercise price which is not less than the closing price
of a share of our common stock on the NASDAQ Stock Market on the
grant date. Accordingly, options granted under our equity incentive
plans have no value unless the market price of our common stock
increases after the grant date. Our equity incentive awards are
designed to provide at-risk compensation that aligns
management’s financial interests with those of our
stockholders, encourages management ownership of our common stock,
supports the achievement of corporate financial objectives, and
provides competitive equity reward opportunities. When determining
whether to grant equity awards, the Compensation Committee
considers the executive’s responsibilities and anticipated
contributions to achieving our performance goals, and its judgment
about whether the complete compensation package provided to the
executive is sufficient to retain, motivate and adequately reward
him. For 2016, the Compensation Committee did not grant equity
incentive awards to the named executive officers.
Defined
Contribution Plans
In accordance with Swedish practice, we contribute an amount equal
to fifteen percent of the salary of our executives to Swedish
pension organizations through an arrangement akin to a 401(k)
plan.
Health and
Welfare Benefits Plans
We provide employee benefits programs to our executives in Sweden,
including healthcare, disability, and life insurance. Our employee
benefits plans are provided on a non-discriminatory basis to all
employees.
Severance and Change in
Control Arrangements
Certain of the named executive officers will receive compensation
if, under certain circumstances, their employment is terminated by
our company or in connection with a change in control of our
company. See “Payments Upon Termination or Change in
Control” below for a description of these provisions. We
believe that change in control arrangements should represent a fair
allocation of the risks of termination between us and the
executive,
16
preserving a measure of economic security for the executive while
making it possible for employment to be terminated without
additional liability to our company in the event of changes in our
condition and affairs.
Clawback
Policy
The Board of Directors has adopted a policy giving it authority to
retroactively recoup any cash bonus or incentive compensation paid
to any executive officer, including the named executive officers,
where it is subsequently determined following a significant or
material restatement of our financial statements that the award
would not have been paid if performance had been measured in
accordance with the restated financial statements for a period
covering any of the three fiscal years preceding the restatement.
We intend to amend this policy as needed to comply with any
additional requirements of the Dodd-Frank Act with respect to
clawbacks after the SEC adopts regulations implementing the
requirements.
Insider Trading
Policy
Pursuant to our company’s Policy Against Insider Trading and
Securities Fraud, we prohibit our executive officers and directors
from pledging their shares of our common stock or hedging the
economic risk of ownership of their shares. To our knowledge, all
of our executive officers and directors are in compliance with
these anti-pledging and anti-hedging provisions. In addition,
pursuant to the Policy Against Insider Trading and Securities Fraud
and in accordance with applicable law, our executive officers and
directors are prohibited from entering into short sale transactions
of shares of our common stock.
Stock Ownership
Guidelines
The Board of Directors believes that the interests of our executive
officers and our stockholders should be aligned and for this reason
supports our executive officers acquiring or maintaining a
significant equity ownership position in our company so as to have
a meaningful personal financial stake in our success. Mr. Eriksson
beneficially owns approximately five percent of our common stock.
However, we have not adopted formal stock ownership guidelines.
17
EXECUTIVE COMPENSATION
TABLES
Summary Compensation
Table
The following table presents information regarding compensation
earned by the named executive officers. Mr. Eriksson and Mr.
Lindqvist are compensated in Swedish Kronor (“SEK”);
accordingly, for purposes of this table, compensation paid in SEK
has been converted to US Dollars at an approximate weighted average
exchange rate of 8.55, 8.43, and 6.86 SEK to one US Dollar for the
years ended December 31, 2016, 2015, and 2014 respectively.
Name and Principal Position
|
|
|
|
|
|
|
|
|
|
All Other
Compensation
(3)
|
|
|
Thomas Eriksson
|
|
2016
|
|
$
|
219,983
|
|
|
—
|
|
|
—
|
|
$
|
29,172
|
|
$
|
249,155
|
Chief Executive Officer
|
|
2015
|
|
$
|
215,231
|
|
|
—
|
|
$
|
30,040
|
|
$
|
28,639
|
|
$
|
273,910
|
|
|
2014
|
|
$
|
264,540
|
|
|
—
|
|
|
—
|
|
$
|
24,463
|
|
$
|
289,003
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lars Lindqvist
|
|
2016
|
|
$
|
176,655
|
|
|
—
|
|
|
—
|
|
$
|
25,804
|
|
$
|
202,459
|
Chief Financial Officer
(4)
|
|
2015
|
|
$
|
177,936
|
|
|
—
|
|
$
|
15,020
|
|
$
|
26,087
|
|
$
|
219,043
|
|
|
2014
|
|
$
|
86,459
|
|
$
|
43,752
|
|
|
—
|
|
$
|
83,186
|
|
$
|
213,397
|
Employment
Agreements
On March 5, 2014, our company entered into an employment agreement
with Mr. Eriksson. Under his employment agreement, Mr. Eriksson is
entitled to receive a monthly salary of 150,000 SEK (approximately
$17,500 monthly in 2016). Mr. Eriksson’s employment agreement
also provides that he is eligible to receive a discretionary annual
bonus up to 1,000,000 SEK (approximately $117,000 in 2016) and may
participate in other bonus and stock option programs. In addition,
Mr. Eriksson is eligible to receive health care, pension, and other
benefits available to Neonode’s Swedish employees. His
employment agreement contains other customary Swedish employment
and post-termination provisions.
On August 5, 2014, our company entered into an employment agreement
with Mr. Lindqvist. Under his employment agreement, Mr. Lindqvist
is entitled to receive a monthly salary of 125,000 SEK
(approximately $15,000 monthly in 2016). Mr. Lindqvist’s
employment agreement also provides that he is eligible to receive a
discretionary annual bonus of up to 50% of his total yearly salary
and may participate in other bonus and stock option programs. In
addition, Mr. Lindqvist is eligible to receive health care,
pension, and other benefits available to Neonode’s Swedish
employees. His employment agreement contains other customary
Swedish employment and post-termination provisions.
The summaries of the employment agreements above are qualified in
their entirety by reference to the actual agreements, copies of
which are incorporated by reference in our Annual Report on Form
10-K for the fiscal year ended December 31, 2016.
Grant of Plan Based
Awards
No equity awards were granted
to the named executive officers during the fiscal year ended
December 31, 2016.
18
Outstanding Equity
Awards at Fiscal Year-End
The following table presents information regarding the outstanding
equity awards held by the named executive officers as of December
31, 2016.
|
|
Number of
Securities
Underlying
Unexercised
Options
Exercisable
|
|
Number of
Securities
Underlying
Unexercised
Options
Unexercisable
|
|
|
|
|
Thomas Eriksson
|
|
40,000
|
(1)
|
|
—
|
|
$
|
4.15
|
|
3/03/2018
|
|
|
239,000
|
(2)
|
|
—
|
|
$
|
4.25
|
|
4/26/2019
|
Lars Lindqvist
|
|
20,000
|
(1)
|
|
—
|
|
$
|
4.15
|
|
3/03/2018
|
|
|
90,000
|
(2)(3)
|
|
—
|
|
$
|
4.25
|
|
4/26/2019
|
|
|
10,000
|
(3)(4)
|
|
|
|
$
|
6.21
|
|
1/08/2021
|
Option
Exercises
No options were exercised by the named executive officers during
the fiscal year ended December 31, 2016.
Potential Payments Upon
Termination or Change of Control
Payments Upon
Termination
Mr. Eriksson and Mr. Lindqvist are not entitled to any severance or
other additional benefits upon termination of their employment with
our company.
In addition, the terms of the
outstanding option award agreements held by the named executive
officers do not contain a provision that would accelerate the
option if the employment of the executive officer is terminated for
any reason.
Severance and
Other Benefits Upon Change of Control
The Board of Directors has an
unwritten understanding with Mr. Eriksson that if his employment
terminates due to a Change in Control Termination, he would be
entitled to receive an amount equal to six months of base salary
paid in equal monthly installments over the six months following
the Change in Control Termination. The understanding of the Board
of Directors is that “Change in Control” and
“Change in Control Termination” as applied to Mr.
Eriksson shall be determined in the same manner as in executive
severance agreements entered into with executives who have since
separated from our company, including David Brunton who served as
Chief Financial Officer prior to Mr. Lindqvist. Consistent with
those past executive severance agreements, the understanding of the
Board of Directors is that a “Change in Control”
generally means the sale of more than 50% of our company’s
assets or stock to a purchaser or group of purchasers, or a merger
in which our stockholders receive less than 50% of the voting
shares of the surviving entity, and a “Change in Control
Termination” generally means an involuntary termination
without cause or a voluntary termination with good reason, either
of which occurs within six months of a Change in
Control.
Mr. Lindqvist is not contractually entitled to, nor is there any
unwritten understanding with the Board of Directors regarding, any
severance or other additional benefits upon termination of his
employment in connection with the change in control of our
company.
In addition, the terms of the outstanding option award agreements
held by the named executive officers do not contain provisions that
would accelerate their options if their employment is terminated in
connection with a change in control of our company.
19
REPORT OF THE
COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors of Neonode
Inc. has reviewed and discussed with management the Compensation
Discussion and Analysis included in the proxy statement for the
2017 Annual Meeting of Stockholders of Neonode. Based on the review
and discussion, the Compensation Committee recommended to the Board
of Directors that the Compensation Discussion and Analysis be
included in such proxy statement.
|
|
THE COMPENSATION COMMITTEE
|
|
|
Mats Dahlin, Chairman
|
|
|
Per Löfgren
|
|
|
John Reardon
|
The foregoing Report
of the Compensation Committee is not soliciting material, shall not
be deemed filed with the Securities and Exchange Commission and
shall not be incorporated by reference in any filing of Neonode
under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, whether made before or after the
date hereof and irrespective of any general incorporation language
in any such filing.
Compensation Committee
Interlocks and Insider Participation
In 2016, none of the members of the Compensation Committee were
current or former officers or employees of our company at the time
they were serving on the Compensation Committee. As a result, there
were no “interlocks” as defined by the rules of the SEC
with respect to any member of the Compensation Committee during
2016.
20
PROPOSAL 3 —
APPROVAL OF AMENDMENT TO CERTIFICATE OF INCORPORATION
Our company’s Amended and Restated Certificate of
Incorporation, as amended and corrected (the “Certificate of
Incorporation”) currently authorizes the issuance of
71,000,000 shares of stock consisting of 70,000,000 shares of
common stock, par value $0.001 per share, and 1,000,000 shares of
Preferred Stock, par value $0.001 per share. The Board of Directors
approved and adopted, subject to receiving the approval of our
stockholders, an amendment to the Certificate of Incorporation to
increase our authorized shares of common stock to 100,000,000
shares (the “Amendment”).
If approved by stockholders, the Amendment would replace Section A
of Article IV of the Certificate of Incorporation with the
following:
“This corporation is authorized to issue two classes of stock to be
designated, respectively, “Common Stock” and
“Preferred Stock.” The total number of shares which the
corporation is authorized to issue is One Hundred One Million
(101,000,000) shares, of which One Hundred Million (100,000,000)
shares will be Common Stock, par value $0.001 per share, and One
Million (1,000,000) shares will be Preferred Stock, par value
$0.001 per share, of which 444,541 shares shall be designated as
Series A Preferred Stock and 54,425 shares shall be designated as
Series B Preferred Stock.”
The Board has determined the Amendment to be advisable and in the
best interests of our company and our stockholders.
The additional 30,000,000 shares of common stock authorized for
issuance pursuant to the Amendment would be part of the existing
class of common stock and, if and when issued, would have the same
rights and privileges as the shares of common stock presently
issued and outstanding.
The Amendment will not affect the number of authorized shares of
preferred stock, par value $0.001 per share, of our company.
If approved by the required vote of stockholders, the Amendment
will become effective on the date it is filed with the Secretary of
State of the State of Delaware. The Board of Directors reserves the
right, notwithstanding stockholder approval of the Amendment and
without further action by our stockholders, not to proceed with the
Amendment at any time before the effective date of the
Amendment.
Purpose and Effects of
Increasing the Number of Authorized Shares of Common
Stock
As of August 8, 2017, of the 70,000,000 shares of common stock
currently authorized by the Certificate of Incorporation,
approximately 58,500,000 shares are issued and outstanding,
approximately 11,000 shares are reserved for issuance upon
conversion of Series B Preferred Stock, approximately 7,914,000
shares are reserved for issuance upon exercise of outstanding
warrants, approximately 1,756,000 shares are reserved for issuance
upon exercise of outstanding options, and approximately 1,655,000
shares are reserved for future issuance under existing equity
incentive plans. Accordingly, nearly all of the authorized common
shares of our company are outstanding or reserved for issuance.
The proposed increase of 30,000,000 shares of common stock
represents an increase of approximately 43% relative to the
70,000,000 shares of common stock currently authorized by the
Certificate of Incorporation.
The Board of Directors believes it is in the best interests of our
company and our stockholders to increase our authorized shares of
common stock in order to have additional shares available for use
as the Board deems appropriate or necessary. In making this
determination, the Board considered, among other things, our
historical share issuances, recent practices at other public
companies, and a recommendation from our management. As such, the
primary purpose of the Amendment is to provide our company with
greater flexibility with respect to managing its common stock in
connection with such corporate purposes as may, from time to time,
be considered advisable by the Board. These corporate purposes
could include, without limitation, financing activities, public or
private offerings, stock dividends or splits, conversions of
convertible securities, issuance of options and restricted stock
awards pursuant to our employee benefits plans, establishing a
strategic relationship with a corporate partner and acquisition
transactions. The Board has determined that having an increased
number of authorized but unissued shares of common stock would
allow us to take prompt action with respect to corporate
opportunities that develop, without the delay and expense of
convening a special meeting of stockholders for the purpose of
approving an
21
increase in our capitalization. The Board will determine whether,
when and on what terms the issuance of shares of common stock may
be advisable in connection with any of the foregoing purposes.
Pursuant to the Securities Purchase Agreement our company entered
into on August 2, 2017, we agreed, among other things, to sell
9,750,000 shares of common stock and issue warrants to purchase up
to 3,250,000 shares of common stock. The warrants are not
exercisable until August 8, 2018. Our company currently does not
have sufficient authorized but unissued and unreserved shares to
enable these warrants to be fully exercised when they become
exercisable. The terms of these warrants provide that they can only
be exercised if our company has sufficient authorized but unissued
and reserved shares of common stock. However, there is no penalty
or alternative outcome provided for in the Securities Purchase
Agreement or the warrant terms if these warrants cannot be
exercised due to a failure by our stockholders to increase our
company’s authorized shares of common stock. The issuance of
securities, including the shares upon exercise of these warrants,
pursuant to the Securities Purchase Agreement was not contingent
upon the adoption of the Amendment.
Other than shares reserved for issuance under outstanding warrants,
our existing equity compensation plans and upon conversion of
outstanding preferred stock and shares that may become issuable
pursuant to the August 2, 2017 Securities Purchase Agreement
warrants, we do not currently have any other arrangements,
agreements or understandings that would require the issuance of
additional shares of common stock.
The Amendment will not have any immediate effect on the rights of
existing stockholders. Although at present the Board has no other
plans to issue the additional shares of common stock, the Board
believes it would be prudent and advisable to have those shares
available to provide additional flexibility regarding the potential
use of shares of common stock for business and financial purposes
in the future. The Board will have the authority to issue
authorized common stock without requiring future stockholder
approval of such issuances, except as may be required by applicable
law or NASDAQ Stock Market rules. Future issuances of common stock
or securities convertible into or exchangeable for common stock
could have a dilutive effect on our earnings per share, book value
per share and the voting power and interest of current
stockholders.
The Board has not proposed the Amendment with the intention of
discouraging tender offers or takeover attempts of Neonode.
However, the availability of additional authorized shares for
issuance could, under certain circumstances, discourage or make
more difficult efforts to obtain control of our company. This
proposal is not being presented with the intent that it be used to
prevent or discourage any acquisition attempt, but nothing would
prevent the Board from taking any appropriate actions not
inconsistent with its fiduciary duties.
Under Delaware law, stockholders are not entitled to appraisal
rights with respect to the Amendment and we will not independently
provide our stockholders with any such right.
Required Vote
Approval of the Amendment requires the affirmative vote of a
majority of the outstanding shares of common stock and Series B
Preferred Stock entitled to vote on the proposal. Abstentions and
broker non-votes will have the same effect as votes against this
proposal. Properly executed and unrevoked proxies will be voted
“FOR” Proposal 3 unless contrary instructions are
indicated in the proxy.
The Board of
Directors recommends that you vote “FOR” the approval
of
the amendment to the Certificate of Incorporation
22
PROPOSAL 4 —
RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board of Directors has selected KMJ
Corbin and Company LLP as our company’s independent
registered public accounting firm for the fiscal year ending
December 31, 2017, and the Board is asking stockholders to ratify
that selection. A representative of KMJ Corbin and Company LLP is
not expected to be present at the 2017 Annual Meeting.
Although ratification is not required by the Bylaws of our company
or otherwise, the Board of Directors considers the selection of the
independent registered public accounting firm to be an important
matter of stockholder concern and is submitting the selection of
KMJ Corbin and Company LLP for ratification by stockholders as a
matter of good corporate practice. If the selection is not
ratified, the Audit Committee will consider whether it is
appropriate to select another independent registered public
accounting firm. Even if the selection is ratified, the Audit
Committee at its discretion may select a different independent
registered public accounting firm at any time during the year if it
determines that such a change would be in the best interest of our
company.
Required Vote and
Recommendation
Ratification of the
appointment of KMJ Corbin and Company LLP as our company’s
independent registered public accounting firm for the fiscal year
ending December 31, 2017 requires the affirmative vote of a
majority of the votes cast by the holders of shares of our common
stock and Series B Preferred Stock present in person or by proxy
and entitled to vote at the meeting. Abstentions and broker
non-votes, if any, will not be counted as votes cast and will have
no effect on the result of the vote, although they will count
towards the presence of a quorum. Properly executed and unrevoked
proxies will be voted FOR Proposal 4 unless contrary instructions
are indicated in the proxy.
The Board of
Directors recommends that you vote “FOR” the
ratification of the appointment
of KMJ Corbin and Company LLP as Neonode’s independent
registered public accounting firm
for the fiscal year ending December 31, 2017.
23
PRINCIPAL ACCOUNTANT
FEES AND SERVICES
The following table lists aggregate fees billed to us for the
fiscal years ended December 31, 2016 and 2015, by KMJ Corbin and
Company LLP, our company’s independent registered public
accounting firm.
|
|
|
|
|
Audit Fees
|
|
$
|
246,000
|
|
$
|
251,000
|
Audit-Related Fees
|
|
|
—
|
|
|
—
|
Tax Fees
|
|
|
—
|
|
|
—
|
All Other Fees
|
|
|
—
|
|
|
—
|
Total Fees
|
|
$
|
246,000
|
|
$
|
251,000
|
Audit Fees represent aggregate fees billed for professional
services rendered for the audit of our annual consolidated
financial statements and internal control over financial reporting,
the review of the condensed consolidated financial statements
included in our quarterly reports, and the review of registration
statements including consents provided therewith and related
matters.
Pre-Approval of Audit
and Non-Audit Services
Pursuant to applicable law, and as set forth in the terms of its
charter, the Audit Committee of the Board of Directors is
responsible for appointing, setting compensation for, and
overseeing the work of our company’s independent registered
public accounting firm. Any audit or non-audit services proposed to
be performed are considered by and, if deemed appropriate, approved
by the Audit Committee in advance of the performance of such
services. All of the fees earned by KMJ Corbin and Company LLP
described above were attributable to services pre-approved by the
Audit Committee.
24
REPORT OF THE AUDIT
COMMITTEE
The Audit Committee of the Board of Directors of Neonode assists
the Board of Directors in its oversight of Neonode’s
accounting and financial reporting process and interacts directly
with and evaluates the performance of Neonode’s independent
registered public accounting firm.
Management is responsible for Neonode’s internal controls and
the financial reporting process. The independent registered public
accounting firm is responsible for performing an independent audit
of Neonode’s consolidated financial statements and assessment
of Neonode’s internal control over financial reporting in
accordance with standards of the Public Company Accounting
Oversight Board and for issuing a report thereon. The Audit
Committee’s responsibility is to monitor and oversee these
processes.
The Audit Committee reviewed and discussed the audited consolidated
financial statements of Neonode for the fiscal year ended December
31, 2016 with management and KMJ Corbin and Company LLP. The Audit
Committee also discussed with KMJ Corbin and Company LLP the
matters required to be discussed by Auditing Standard No. 1301, as
adopted by the Public Company Accounting Oversight Board. In
addition, the Audit Committee received from KMJ Corbin and Company
LLP the written disclosures and the letter required by the
applicable requirements of the Public Company Accounting Oversight
Board with respect to KMJ Corbin and Company LLP’s
communications with the Audit Committee concerning independence,
and the Audit Committee discussed with KMJ Corbin and Company LLP
their independence from Neonode and its management.
Based on the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors, and the Board of
Directors approved, that the audited consolidated financial
statements of Neonode be included in Neonode’s Annual Report
on Form 10-K for the fiscal year ended December 31, 2016, which was
filed with the Securities and Exchange Commission on March 15,
2017.
|
|
THE AUDIT COMMITTEE
|
|
|
Per Löfgren, Chairman
|
|
|
Mats Dahlin
|
|
|
John Reardon
|
The foregoing Report
of the Audit Committee is not soliciting material, shall not be
deemed filed with the Securities and Exchange Commission and shall
not be incorporated by reference in any filing of Neonode under the
Securities Act of 1933, as amended, or the Securities Exchange Act
of 1934, as amended, whether made before or after the date hereof
and irrespective of any general incorporation language in any such
filing.
25
CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS,
AND DIRECTOR
INDEPENDENCE
Review, Approval or
Ratification of Transactions with Related Persons
The Board of Directors has adopted a written policy that addresses
related person transactions requiring disclosure under Item 404 of
Regulation S-K as promulgated by the SEC. A related person of our
company includes a director, a director nominee, an executive
officer, a stockholder beneficially owning a more than five percent
voting interest in our company, or an immediate family member of
any of the foregoing. Under the policy, any transaction in which a
related person has a direct or indirect material interest and where
the amount exceeds $120,000 must be approved by disinterested
members of the Board of Directors.
In determining whether to approve or ratify a related person
transaction, the Board of Directors will take into account, whether
(i) the terms are fair to our company and on the same basis
generally available to an unrelated person, (ii) there are business
reasons for our company to enter into the transaction, (iii) it
would impair independence of an outside director, and (iv) it would
present an improper conflict of interest, taking into account
factors that the Board of Directors deems relevant.
Since the beginning of 2016, there have been no related person
transactions, and there are no such transactions currently
proposed, in respect of our company within the scope of Item 404(a)
of Regulation S-K as promulgated by the SEC.
Director
Independence
The Board of Directors has determined that each of Messrs. Dahlin,
Löfgren, and Reardon is an independent director within the
meaning of the applicable NASDAQ Stock Market rules. The Board is
composed of a majority of independent directors and, as described
under “Committees of the Board of Directors” in the
Board Matters and Corporate Governance section above, each
established committee of the Board — the Audit Committee, the
Compensation Committee, and the Nominating and Governance Committee
— is comprised solely of independent directors.
26
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
Beneficial Ownership
Table
The following table presents certain information as of August 8,
2017 regarding the beneficial ownership of shares of our common
stock by: (i) principal stockholders known by us to be beneficial
owners of more than five percent of common stock; (ii) each
director and nominee for director; (iii) each of the named
executive officers, as identified under “Summary Compensation
Table” in the Executive Compensation section above; and (iv)
all of our current directors and executive officers as a group. To
our knowledge, none of the beneficial owners listed below owned
shares of our preferred stock as of June 29, 2017.
Percentage ownership is based on 58,594,586 shares, representing
the aggregate number of shares of our common stock and Series B
Preferred Stock outstanding as of August 8, 2017. In computing the
number of shares beneficially owned by a person and the percentage
ownership of that person, shares of our common stock that could be
issued upon the exercise of outstanding options and warrants held
by that person that are exercisable at the present time or within
60 days of August 8, 2017 are considered outstanding; however,
these shares are not considered outstanding when computing the
percentage ownership of any other person.
Except as otherwise noted below, the address for each person or
entity listed in the table is c/o Neonode Inc., Storgatan 23C,
11455, Stockholm Sweden.
|
|
|
|
|
|
|
|
AWM
Investment Company, Inc.
(1)
|
|
3,666,195
|
|
7.5
|
%
|
c/o Special Situations Funds
527 Madison Avenue
Suite 2600
New York, NY 10022
|
|
|
|
|
|
|
|
|
|
|
|
Per
Bystedt
(2)(3)
|
|
3,248,322
|
|
6.6
|
%
|
|
|
|
|
|
|
Thomas Eriksson
(2)(4)
|
|
2,506,900
|
|
5.1
|
%
|
|
|
|
|
|
|
Mats
Dahlin
(2)(5)
|
|
1,304,825
|
|
2.7
|
%
|
|
|
|
|
|
|
Per
Löfgren
(2)
|
|
45,000
|
|
*
|
|
|
|
|
|
|
|
John
Reardon
(2)(6)
|
|
120,034
|
|
*
|
|
|
|
|
|
|
|
Lars
Lindqvist
(2)
|
|
170,000
|
|
*
|
|
|
|
|
|
|
|
Per
Eriksson
|
|
8,600
|
|
*
|
|
|
|
|
|
|
|
Åsa Hedin
|
|
0
|
|
*
|
|
|
|
|
|
|
|
Peter
Lindell
(7)
|
|
3,500,000
|
|
5.8
|
%
|
|
|
|
|
|
|
Ulf
Rosberg
(8)
|
|
3,500,000
|
|
5.8
|
%
|
|
|
|
|
|
|
All Current Directors and Executive Officers as
a Group (6 persons)
|
|
7,395,081
|
|
14.9
|
%
|
27
Securities Authorized
for Issuance under Equity Compensation Plans
The following table presents information regarding securities
authorized for issuance under equity compensation plans as of
December 31, 2016:
|
|
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 the
first column)
|
Equity compensation plans approved by
securityholders
(2)
|
|
1,846,000
|
|
$
|
4.31
|
|
1,655,000
|
Equity compensation plans not approved by
securityholders
|
|
—
|
|
|
—
|
|
—
|
Total
|
|
1,846,000
|
|
$
|
4.31
|
|
1,655,000
|
28
ADDITIONAL
INFORMATION
Annual Report
On March 15, 2017, we filed with the SEC our Annual Report on Form
10-K for the fiscal year ended December 31, 2016. A copy of our
annual report is being made available to all stockholders along
with this proxy statement. The Notice and Access card provided to
stockholders contains instructions on how to access this proxy
statement and our annual report. The Notice and Access card also
contains instructions as to how to obtain a paper or e-mail copy of
the proxy materials.
Our filings with the SEC are accessible on our company website at
http://www.neonode.com/investor-relations/sec-filings/
.
The information contained on our website is not part of and is not
incorporated by reference into this proxy statement.
We will provide
without charge to any person solicited hereby, upon the written
request of any such person, a copy of our Annual Report on Form
10-K for the fiscal year ended December 31, 2016. Requests should
be directed to us at our principal executive office at Storgatan
23C, 11455 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. To be included
in the proxy statement for our 2018 Annual Meeting of Stockholders,
proposals must be received by us no later than April 24, 2018 and
otherwise must comply with SEC rules governing inclusion of such
proposals. Any proposal received after April 24, 2018 will be
untimely, in accordance with SEC rules and regulations.
Matters (other than nominations of candidates for election as
directors) may be brought before the meeting by stockholders only
by complying with the procedure set forth in the Bylaws of our
company, which in summary requires notice in writing to the
Corporate Secretary of our company be delivered or mailed to, and
received at, our principal executive office not less than 60 days
nor more than 90 days prior to the anniversary of the prior
year’s annual meeting. Each such stockholder notice shall set
forth as to each matter the stockholder proposes to bring before
the annual meeting: (1) a brief description of the matter desired
to be brought before the annual meeting and the reasons for
bringing such matter before the annual meeting; (2) the name and
address, as they appear on our company’s books, of the
stockholder proposing such business; (3) the class and number of
shares of our company which are beneficially owned by the
stockholder; (4) any material interest of the stockholder in such
business; and (5) any other information that is required to be
provided by the stockholder pursuant to applicable SEC rules. For
information regarding nominating candidates for election as
directors, refer to description under “Committees of the
Board of Directors” in the Board Matters and Corporate
Governance section above.
Householding
Under rules adopted by the SEC, we are permitted to deliver a
single set of proxy materials to any household at which two or more
stockholders reside if we believe the stockholders are members of
the same family. This process, called householding, allows us to
reduce the number of copies of these materials we must print and
mail. Even if householding is used, each stockholder will continue
to be entitled to submit a separate proxy or voting
instruction.
If you share the same last name and address with another of our
stockholders who also holds his or her shares directly, and you
each wish to start householding for our annual reports and proxy
statements, please contact us at our principal executive offices at
Storgatan 23C, 11455 Stockholm, Sweden, or by calling us at 46 (0)
8 667 17 17.
If you consent to householding, your election will remain in effect
until you revoke it. Should you later revoke your consent, you will
be sent separate copies of those documents that are mailed at least
30 days or more after receipt of your revocation.
In addition, some broker and bank record holders who hold shares of
our common stock for beneficial owner street name holders may be
participating in the practice of householding proxy statements and
annual reports. If your household receives a single set of proxy
materials for this year, but you prefer to receive your own copy,
contact us as stated above, and we will promptly send you a copy.
If a broker or bank holds shares of our common stock for your
benefit and you share the same last name and address with another
stockholder for whom a broker or bank
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holds shares of our common stock, and together both of you prefer
to receive only a single set of our disclosure documents, contact
your broker or bank as described in the voter instruction card or
other information you received from your broker or bank.
Directions to Annual
Meeting Location
All of our stockholders of record as of the close of business on
August 8, 2017 may attend the 2017 Annual Meeting. “Street
name” holders also are invited to attend the meeting;
however, if you are not the stockholder of record, you may not vote
your shares in person at the meeting unless you request and obtain
a valid proxy from your broker or bank.
If you do attend the 2017 Annual Meeting at our office in
Stockholm, most people will find it easiest to take the train or a
taxi from the Stockholm Arlanda Airport. The train (the Arlanda
express) takes approximately twenty minutes to the central station,
and from there take a taxi to our office. If you want to take the
subway, the nearest station is Östermalmstorg. The address of
our office where the 2017 Annual Meeting will be held is Storgatan
23C (Östermalmstorg).
Other Matters
The Board of Directors of our company knows of no matters to be
presented for stockholder action at the 2017 Annual Meeting other
than as set forth in this proxy statement. However, other matters
may properly come before the 2017 Annual Meeting or any adjournment
or postponement thereof. In the event that other matters properly
come before the 2017 Annual Meeting, the proxy holder(s) will vote
as recommended by the Board or, if no recommendation is given, at
the discretion of the proxy holder(s).
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