ITEM 10.
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DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
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The
Board of Directors
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.
The
identities and biographies of each member of the three classes of the Board of Directors serving staggered, three-year terms are
as follows:
Class I Directors Continuing in Office with a Term 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.
Class
II Director Continuing in Office with a 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 Directors Continuing in Office with a Term Expiring at the 2017 Annual Meeting:
Mats
Dahlin
, age 62, has served as a director of Neonode since November 2011. He served as President of Ericsson Enterprises AB
from January 2004 to May 2005, and was responsible for its global operations, including development and implementation of worldwide
enterprise strategy. From October 1998 to December 2003, Mr. Dahlin held various positions in Ericsson, including serving as Group
Executive Vice President, President of Ericsson Radio Systems AB, Head of Segment Network Operators, Head of Ericsson’s
Mobile Systems Division, and Head of Market Area EMEA. Since June 2005, Mr. Dahlin has pursued independent investments and has
served as a board member and advisor to the companies in which he invests.
The
Board of Directors has concluded that Mr. Dahlin should serve as director because of his investment background, his understanding
of the communications and technology industry, and his thirty years of experience in management and marketing.
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.
Stockholder
Nominations
The
Nominating and Governance Committee of the Board of Directors will consider director candidates recommended by stockholders. Refer
to our 2016 proxy statement for information regarding director nominations. Since the beginning of 2016, there have been no material
changes to the procedures by which stockholders may recommend director candidates.
Audit
Committee
The Board of Directors has established
an Audit Committee in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”). The members of the Audit Committee are Messrs. Löfgren, Dahlin, and 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 and also is “independent” as defined in applicable NASDAQ Stock Market rules.
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 2016 Form 10-K.
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).
Executive
Officers
The identities and biographies of our
executive officers are as follows:
Name
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Title
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Executive
Officer Since
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Thomas Eriksson
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President
and Chief Executive Officer of Neonode Inc.;
Chief
Executive Officer of Neonode Technologies AB
|
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April 2009
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Lars Lindqvist
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|
Vice President, Finance, Chief Financial Officer, Treasurer and Secretary of
Neonode Inc.
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August 2014
|
Biographical
information regarding Mr. Eriksson is under “The Board of Directors” 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.
ITEM 11
.
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EXECUTIVE
COMPENSATION
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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:
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Our
employees, including executives, are prohibited from pledging or hedging, or selling short, their shares of our common stock.
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Incentive
compensation paid to executive officers is subject to a Clawback Policy adopted by the Board of Directors.
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Outstanding
stock options are not subject to automatic vesting upon a change in control of our company.
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Our
company annually holds an advisory vote on named executive officer compensation.
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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 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:
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base
salary;
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cash
bonus;
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awards
under our equity incentive plans;
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benefits
under our defined contribution plans; and
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benefits
under our health and welfare benefits plans.
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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.
For
2016, the base salary 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, 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 financials 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.
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
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|
Year
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Salary
(1)
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Bonus
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Option
Awards
(2)
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All
Other Compensation
(3)
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Total
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Thomas Eriksson
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2016
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$
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219,983
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|
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—
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—
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$
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29,172
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$
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249,155
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Chief Executive Officer
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2015
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$
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215,231
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—
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$
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30,040
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$
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28,639
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$
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273,910
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2014
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$
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264,540
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—
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—
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$
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24,463
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$
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289,003
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Lars Lindqvist
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2016
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$
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176,655
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—
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—
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$
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25,804
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$
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202,459
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Chief Financial Officer
(4)
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2015
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$
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177,936
|
|
|
|
—
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$
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15,020
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$
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26,087
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$
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219,043
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2014
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$
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86,459
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$
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43,752
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—
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$
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83,186
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$
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213,397
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(1)
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For 2016, includes cash payments of approximately $10,000 to Mr. Eriksson and $1,000 to Mr. Lindqvist in lieu of vacation time.
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(2)
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Amounts presented are calculated as of the grant date of the option award in accordance with the provisions of US generally accepted accounting standards. Refer to “Stock-Based Compensation” in Note 9 to the consolidated financial statements in the 2016 Form 10-K for the valuation assumptions made in the Black-Scholes option pricing model used to calculate the fair value of the option awards.
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(3)
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For 2016, represents matching contributions to Swedish defined contribution plan.
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(4)
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Mr. Lindqvist became an executive officer of our company effective August 15, 2014. Prior to that date, he received compensation as a non-employee director of our company as described in our 2015 Proxy Statement. The amounts presented in this table do not reflect 2014 compensation paid to Mr. Lindqvist before he became an executive officer.
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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 $15,000 monthly in 2016). Mr. Lindqvist’s employment
agreement also provides that he is eligible to receive a discretionary annual bonus of up to 50% of his total yearly salary and
may participate in other bonus and stock option programs. In addition, Mr. Lindqvist is eligible to receive health care, pension,
and other benefits available to Neonode’s Swedish employees. His employment agreement contains other customary Swedish employment
and post-termination provisions.
The summaries of the employment agreements above
are qualified in their entirety by reference to the actual agreements, copies of which are incorporated by reference into this
2016 Form 10-K.
Grant
of Plan Based Awards
No
equity awards were granted to the named executive officers during the fiscal year ended December 31, 2016.
Outstanding
Equity Awards at Fiscal Year-End
The
following table presents information regarding the outstanding equity awards held by the named executive officers as of December
31, 2016.
Name
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Number of Securities Underlying Unexercised Options Exercisable
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Number of Securities Underlying Unexercised Options Unexercisable
|
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Option
Exercise Price
|
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Option
Expiration Date
|
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Thomas Eriksson
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40,000
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(1)
|
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—
|
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$
|
4.15
|
|
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3/03/2018
|
|
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239,000
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(2)
|
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—
|
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|
$
|
4.25
|
|
|
4/26/2019
|
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Lars Lindqvist
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20,000
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(1)
|
|
|
—
|
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|
$
|
4.15
|
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|
3/03/2018
|
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|
90,000
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(2)(3)
|
|
|
—
|
|
|
$
|
4.25
|
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4/26/2019
|
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10,000
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(3)(4)
|
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$
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6.21
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1/08/2021
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(1)
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Fully
vested on the March 3, 2015 grant date.
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(2)
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One-third
vested on the April 26, 2012 grant date and the remaining two-thirds vested monthly over the subsequent twenty-four months.
|
(3)
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Represents
award granted on April 26, 2012 as a member of the Board of Directors.
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(4)
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One-third
vested one year after the January 8, 2014 grant date and the remaining two-thirds vested monthly over the subsequent twenty-four
months.
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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.
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 Mr. Eriksson is presented as part of the “Summary Compensation Table” above. 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.
Name
|
|
Fees Earned or Paid in Cash
|
|
|
Option
Awards
|
|
|
All Other Compensation
|
|
|
Total
|
|
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
|
|
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 this Amendment
No. 1 to the Annual Report on Form 10-K 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 the 2016 Form 10-K of Neonode.
|
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.