SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. __)
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
MICROVISION, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X ] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: Set forth the amount on which
the filing fee is calculated and state how it was determined.
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
MICROVISION, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
August 7, 1997
The Annual Meeting of Shareholders of Microvision, Inc., a Washington
corporation, will be held at the Company's headquarters, located at 2203 Airport
Way South, Suite 100, Seattle, Washington on August 7, 1997, at 8:30 a.m.,
Pacific Daylight Time, for the following purposes:
1. to elect seven directors of the Company to serve a term of one year
each;
2. to ratify the appointment of the independent auditors of the Company
for the fiscal year ending December 31, 1997; and
3. to transact any other business that properly comes before the Annual
Meeting.
The Board of Directors is not aware of any other business to come before
the Annual Meeting.
Only shareholders of record at the close of business on June 25, 1997, are
entitled to notice of and to vote at the Annual Meeting or any adjournments
thereof. A list of shareholders as of the record date will be available for
shareholder inspection at the corporate headquarters of the Company, 2203
Airport Way South, Suite 100, Seattle, Washington.
Please complete, sign, and date the enclosed proxy and return it promptly
in the enclosed postage pre-paid reply envelope. If you are able to attend the
meeting, you may revoke the proxy and vote personally on all matters brought
before the meeting.
By Order of the Board of Directors,
Richard A. Raisig
Vice President and Chief Financial Officer
July 1, 1997
Seattle, Washington
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING
IN PERSON, PLEASE EXECUTE AND RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING
ENVELOPE SO THAT YOUR SHARES WILL BE VOTED. THE ENVELOPE REQUIRES NO POSTAGE IF
MAILED IN THE UNITED STATES.
<PAGE>
MICROVISION, INC.
2203 Airport Way South, Suite 100
Seattle, Washington 98134
July 1, 1997
------------
PROXY STATEMENT
------------
Purpose
- -------
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Microvision, Inc., a Washington corporation
(the "Company"), to be voted at the Annual Meeting of Shareholders of the
Company to be held at the Company's headquarters, located at 2203 Airport Way
South, Suite 100, Seattle, Washington on August 7, 1997, at 8:30 a.m., Pacific
Daylight Time (the "Annual Meeting"). The accompanying Notice of Annual Meeting
of Shareholders and this Proxy Statement are being first mailed to shareholders
on or about July 1, 1997.
Record Date and Outstanding Shares
- ----------------------------------
The Board of Directors has fixed June 25, 1997, as the record date for the
determination of holders of common stock, no par value, of the Company (the
"Common Stock") entitled to notice of and to vote at the Annual Meeting. At the
close of business on that date, there were outstanding and entitled to vote
5,782,213 shares of Common Stock. Holders of Common Stock will be entitled to
one vote per share of Common Stock held and are not entitled to cumulative
voting rights in the election of directors.
Proxies and Revocation of Proxies
- ---------------------------------
The enclosed proxy is being solicited by the Board of Directors for use at
the Annual Meeting and any adjournments thereof and will not be voted at any
other meeting. All proxies that are properly executed, received by the Company
prior to or at the Annual Meeting, and not revoked will be voted at the Annual
Meeting or any adjournments thereof in accordance with the instructions given
therein.
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before it is voted. Proxies may be revoked by (i) filing
with the Secretary of the Company, at or before the taking of the vote at the
Annual Meeting, a written notice of revocation bearing a later date than the
date of the proxy, (ii) duly executing a subsequent proxy relating to the same
shares and delivering it to the Secretary of the Company before
1
<PAGE>
the Annual Meeting, or (iii) attending the Annual Meeting and voting in person
(although attendance at the Annual Meeting will not in and of itself constitute
a revocation of a proxy). Any written notice revoking a proxy should be sent to
Microvision, Inc., 2203 Airport Way South, Suite 100, Seattle, Washington 98134,
Attention: Secretary, or hand delivered to the Secretary at or before the taking
of the vote at the Annual Meeting.
Quorum and Voting
- -----------------
The presence in person or by proxy of at least a majority of the total
number of outstanding shares of Common Stock entitled to vote is required to
constitute a quorum for the transaction of business at the Annual Meeting.
Abstentions and broker non-votes will be considered represented at the meeting
for the purpose of determining a quorum.
The shares represented by each proxy will be voted in accordance with the
instructions given therein. Where no instructions are indicated, the proxy will
be voted for the nominees to the Board of Directors named in this Proxy
Statement, for the ratification of Price Waterhouse LLP as independent auditors
of the Company for the fiscal year ending December 31, 1997, and at the
discretion of the persons named in the proxy on any other business that may
properly come before the Annual Meeting.
Under applicable law and the Company's Articles of Incorporation and
Bylaws, if a quorum is present at the Annual Meeting, the seven nominees for
election to the Board of Directors who receive the plurality of votes cast for
the election of Directors by the shares present in person or represented by
proxy shall be elected Directors. Each shareholder will be entitled to one vote
for each share of Common Stock held and will not be entitled to cumulate votes
in the election of Directors. The appointment of Price Waterhouse LLP as the
Company's independent auditors will be ratified if the number of votes cast in
favor of the proposal exceeds the number of votes cast against it. Abstentions
and broker non-votes will have no effect on the outcome of the voting because
they will not represent votes cast.
Solicitation of Proxies
- -----------------------
The cost of preparing, printing, and mailing this Proxy Statement and of
the solicitation of proxies by the Company will be borne by the Company.
Solicitation will be made by mail and may be made by directors, officers, and
employees of the Company personally, or by telephone or facsimile. The Company
will request brokers, custodians, nominees, and other like parties to forward
copies of the proxy materials to the beneficial owners of the Common Stock and
will reimburse such parties for their reasonable and customary charges or
expenses in this connection.
2
<PAGE>
PROPOSAL ONE: ELECTION OF DIRECTORS
The Board of Directors of the Company will consist of seven Directors who
will be elected at the Annual Meeting to serve until their successors are
elected at the next annual meeting of shareholders. Proxies received from
shareholders, unless directed otherwise, will be voted FOR the election of the
following nominees: Richard F. Rutkowski, Stephen R. Willey, Richard A. Raisig,
Jacob Brouwer, Robert A. Ratliffe, Richard A. Cowell, and Walter J. Lack.
If any nominee is unable to stand for election, the shares represented by
all valid proxies will be voted for the election of such substitute nominee as
the Board of Directors may recommend. All of the nominees are currently
Directors of the Company. The Company is not aware that any nominee is or will
be unable to stand for election.
Set forth below are the name, position held with the Company, and age of
each of the nominees for Director of the Company. The principal occupation and
recent employment history of each of the nominees are described below under
"Directors and Executive Officers," and the number of shares of Common Stock
held or controlled by each nominee as of May 31, 1997, is set forth below in
"Security Ownership of Principal Shareholders and Management."
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL OF THE NOMINEES NAMED
BELOW FOR DIRECTORS OF THE COMPANY.
<TABLE>
<CAPTION>
Name Age Position
- ------------------------ -------- -----------------------------------
<S> <C> <C>
Richard F. Rutkowski (1) 41 Chief Executive Officer, President
and Director
Stephen R. Willey 43 Executive Vice President and Director
Richard A. Raisig (1) 50 Chief Financial Officer and Vice
President, Operations and Director
Walter J. Lack (1)(2) 49 Director
Robert A. Ratliffe 36 Director
Jacob Brouwer (2) 70 Director
Richard A. Cowell 50 Director
(1) Member of the Compensation and Finance Committees
(2) Member of the Audit Committee
</TABLE>
Directors and Executive Officers
Richard F. Rutkowski served as Chief Operating Officer of the Company from
December 1994 until September 1995, Chief Executive Officer of the Company since
September 1995, as a director of the Company since August 1995, and was elected
President
3
<PAGE>
of the Company in July 1996. Between November 1992 and May 1994, Mr. Rutkowski
served as Executive Vice President of Medialink Technologies Corporation
(formerly Lone Wolf Corporation), a developer of high speed digital networking
technology for multimedia applications in audio-video computing, consumer
electronics and telecommunications. Between February 1990 and April 1995, Mr.
Rutkowski was a principal of Rutkowski, Erickson & Scott, a consulting firm. Mr.
Rutkowski also serves as a director of Digital Data Networks, Inc., a developer
of wireless communications systems and networked electronic display media for
the transit industry.
Stephen R. Willey has served as Executive Vice President of the Company
since October 1995 and as a director since June 1995. Mr. Willey also serves as
the Company's technical liaison to the University of Washington's HIT Lab.
Between January 1994 and April 1996, Mr. Willey served as an outside consultant
to the Company through DGI The Development Group, Inc. ("DGI"), a business and
technology consulting firm that Mr. Willey founded in 1982 and CSI Connection
Systems, Inc., also a business and technology consulting firm founded by Mr.
Willey. As principal of DGI, Mr. Willey provided technology consulting services
to CREO Products, Inc., an electro-optics equipment manufacturer, between June
1989 and December 1992. Mr. Willey also co-founded PRO.NET Communications, Inc.,
an Internet services company. Mr. Willey has served as a director of PRO.NET
since 1994.
Richard A. Raisig has served as Chief Financial Officer and Vice President,
Operations of the Company since August 1996 and as a director of the Company
since March 1996. Mr. Raisig was Chief Financial Officer of Videx Equipment
Corporation, a manufacturer and rebuilder of wire processing equipment for the
cabling industry from June 1995 until August 1996. From July 1992 to May 1995,
Mr. Raisig was Chief Financial Officer and Senior Vice President-Finance for
Killion Extruders, Inc., a manufacturer of plastic extrusion equipment. From
February 1990 to July 1992, Mr. Raisig was Managing Director of Crimson Capital
Company, an investment banking firm. Prior to February 1990, Mr. Raisig was a
Senior Vice President of Dean Witter Reynolds, Inc. Mr. Raisig is a Certified
Public Accountant.
Walter J. Lack has served as a director of the Company since August 1995.
Mr. Lack is a partner of Engstrom, Lipscomb & Lack, a Los Angeles, California
law firm that he founded in 1974. Mr. Lack has acted as a special arbitrator for
the Superior Court of the State of California since 1976 and for the American
Arbitration Association since 1979. Mr. Lack also serves as a director of HCCH
Insurance Holdings, Inc., a multinational insurance company listed on The New
York Stock Exchange. Mr. Lack has been involved in a number of start-up
companies, both as an investor and as a director.
Robert A. Ratliffe joined the Company as a director in July 1996. Mr.
Ratliffe has been Vice President and principal of Eagle River, Inc., an
investment company specializing in the telecommunications and technology
sectors, and Vice President of Communications for Nextel Communications, Inc., a
wireless telecommunications company, since early 1996.
4
<PAGE>
Between 1986 and 1996, Mr. Ratliffe served as Senior Vice President,
Communications, for AT&T Wireless Services, Inc., and its predecessor, McCaw
Cellular Communications, Inc., where he also served as Vice President of
External Affairs and as Vice President of Acquisitions and Development. Prior to
joining McCaw Cellular Communications, Inc., Mr.
Ratliffe was a Vice President with Seafirst Bank.
Jacob Brouwer joined the Company as a director in July 1996. Mr. Brouwer is
the Chairman and Chief Executive Officer of Brouwer Claims Canada & Co. Ltd., an
insurance adjusting company that he founded in 1956. Mr. Brouwer has served as a
director for numerous companies, including the Canadian National Railway
Company, The Insurance Corporation of British Columbia, Air B.C., Golden Tulip
Hotels Ltd., and Northwestel Inc. Mr. Brouwer is past President of the British
Columbia Adjusters Association, and former Chairman of the International
Financial Centre of British Columbia. Mr. Brouwer currently serves as a director
of Doman Industries, a forest products company.
Richard A. Cowell joined the Company as a director in August 1996. Mr.
Cowell is a Senior Associate at Booz Allen & Hamilton involved in, among other
things, the incorporation of simulation and models into education and training
programs for Department of Defense contractors. Prior to joining Booz Allen &
Hamilton in March of 1996, Mr. Cowell served in the United States Army for 25
years. Immediately prior to his retirement from the Army, Mr. Cowell served as
Director of the Louisiana Maneuvers Task Force reporting directly to the Chief
of Staff, Army. Mr. Cowell has authored a number of articles relating to the
future of the Army and received awards for his writing and producing of a film
entitled "America's Army" in 1994. Mr. Cowell retired from the Army holding the
rank of Colonel.
No employee of the Company receives any compensation for his services as a
Director. Currently, non-employee Directors receive no salary for their services
and receive no fee for their participation in meetings, although all Directors
are reimbursed for reasonable travel and other out-of-pocket expenses incurred
in attending meetings of the Board. The 1996 Independent Director Stock Plan,
which was approved by the shareholders in August 1996, provides for the grant of
shares of Common Stock to non-employee directors of the Company on an annual
basis each time he or she is elected to the Board (or, if directors are elected
to serve terms longer than one year, as of the date of each annual shareholders'
meeting during that term) (the "Annual Award"). The number of shares awarded in
the Annual Award is equivalent to the result of $20,000 divided by the fair
market value of a share on the date of the award, rounded to the nearest 100
shares (or a fraction thereof if the Independent Director is elected or
appointed to the Board at any time other than at the annual meeting of
shareholders).
Directors are elected at the annual meeting of shareholders. Vacancies
resulting from an increase in the size of the Board may be filled by the Board
of Directors or by the shareholders. Directors hold office until the next annual
shareholders meeting and until their successors are elected and qualified.
5
<PAGE>
Board Committees and Meetings
The Board of Directors met six times during the last fiscal year. Each
director attended at least 75% of the meetings of the full Board and of all
Board committees on which he served during fiscal 1996 in person or by
telephone. The Board of Directors also approved certain actions by unanimous
written consent.
The Company's Board of Directors maintains a Compensation Committee, a
Finance Committee, and an Audit Committee. The Board has not established a
Nominating Committee.
The Compensation Committee makes recommendations to the Board regarding
salaries, incentives, and other forms of compensation for directors, officers,
and other key employees of the Company, and administers policies relating to
compensation and benefits. The Compensation Committee also serves as the Plan
Administrator for the Company's stock option plans, except for the granting of
such options to officers, which grants are made by the Board. Messrs. Rutkowski,
Raisig, and Lack are the current members of the Compensation Committee. The
Compensation Committee met one time during fiscal 1996.
The Finance Committee makes recommendations to the Board on matters related
to financing and the Company's capitalization. Messrs. Rutkowski, Raisig and
Lack are the current members of the Finance Committee. The Finance Committee met
one time during fiscal 1996.
The Audit Committee reviews the Company's accounting practices and internal
accounting controls and financial results, and oversees the engagement of the
Company's independent auditors. Messrs. Lack and Brouwer are the current members
of the Audit Committee. The Audit Committee did not meet during fiscal 1996.
Security Ownership of Principal Shareholders and Management
The following table sets forth certain information regarding the beneficial
ownership of the Common Stock as of May 31, 1997, by (i) each person known by
the Company to own beneficially more than 5% of the Company's outstanding Common
Stock ("Principal Shareholder"); (ii) each of the Company's directors; and (iii)
all executive officers and directors of the Company as a group.
<TABLE>
<CAPTION>
Amount and Nature of Percentage of
Name and Address of Beneficial Owner Beneficial Ownership (1) Common Stock (2)
- ------------------------------------ ------------------------ ----------------
<S> <C> <C>
George M. Galpin (3) 305,750 5.1%
120 West Dayton, Suite D-5
Edmonds, WA 98020
6
<PAGE>
Amount and Nature of Percentage of
Name and Address of Beneficial Owner Beneficial Ownership (1) Common Stock (2)
- ------------------------------------ ------------------------ ----------------
Richard F. Rutkowski (4) 264,466 4.4%
c/o Microvision, Inc.
2203 Airport Way South, Suite 100
Seattle, WA 98134
Stephen R. Willey (5) 230,728 3.8%
c/o Microvision, Inc.
2203 Airport Way South, Suite 100
Seattle, WA 98134
Walter J. Lack (6) 205,437 3.5%
10100 Santa Monica Blvd., 16th Floor
Los Angeles, CA 90067
Richard A. Raisig (7) 24,062 *
c/o Microvision, Inc.
2203 Airport Way South, Suite 100
Seattle, WA 98134
Robert A. Ratliffe 10,250 *
2300 Carillon Point
Kirkland, WA 98033
Jacob Brouwer 4,000 *
1200 West Pender Street, Suite 1200
Vancouver, B.C. VGE 259
Canada
Richard A. Cowell 4,000 *
c/o Booz, Allen & Hamilton
4301 N. Fairfax Drive, Suite 200
Arlington, VA 22203
------- ------
All executive officers and directors as a 742,943 11.8%
group (7 persons)
- -------------------
* Less than 1% of the outstanding shares of Common Stock.
(1) Shares not outstanding but deemed beneficially owned by virtue of the right
of an individual to acquire them within 60 days are treated as outstanding
for determining the amount and percentage of Common Stock owned by such
individual. To the Company's knowledge, each person has sole voting and
sole investment power with respect to the shares shown, subject to
community property laws, where applicable.
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<PAGE>
(2) Rounded to the nearest 1/10th of one percent, based on 5,782,213 shares of
Common Stock outstanding at May 31, 1997.
(3) Mr. Galpin filed a Schedule 13D reporting his beneficial ownership of more
than 5% of the Company's Common Stock on or about March 22, 1997.
(4) Includes options to purchase up to 262,591 shares of Common Stock.
(5) Includes options and Public Warrants to purchase up to 222,343 shares of
Common Stock.
(6) Includes Warrants to purchase up to 25,000 shares of Common Stock.
(7) Includes options to purchase 23,437 shares of Common Stock.
</TABLE>
Section 16(a) Beneficial Ownership Reporting Compliance
Based solely on a review of the copies of the forms provided to the Company
and written representations that no other filing of forms was required, the
Company believes that, during the fiscal year ended December 31, 1996, the
directors of the Company complied with all filing requirements applicable
thereto under Section 16(a) of the Securities Exchange Act, as amended, except
that Walter J. Lack filed one late report, failed to timely report eight
transactions, and failed to file one required report; Robert A. Ratliffe filed
one late report and failed to timely report three transactions; Richard A.
Raisig failed to timely report two transactions; and Jacob Brouwer and Richard
A. Cowell each failed to timely report one transaction.
8
<PAGE>
Executive Compensation
The following table sets forth the compensation received for services
in all capacities to the Company for the last three fiscal years by Richard F.
Rutkowski, the Company's Chief Executive Officer and President, and Stephen R.
Willey, Executive Vice President (the "Named Executives"). No other officer of
the Company received annual salary and bonuses exceeding $100,000 in the fiscal
year ended December 31, 1996.
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation (1) Awards
------------------------------------------- ------------------
Name and Fiscal Salary Bonus Other Annual Securities
Principal Position Year ($) ($)(2) Compensation ($)(3) Underlying Options
- ------------------ ------ ------- ------- ------------------- ------------------
<S> <C> <C> <C> <C> <C>
Richard F. Rutkowski (4)............... 1996 131,250 134,375 - -
Chief Executive Officer 1995 92,500 30,000 - -
and President 1994 18,750 - 3,790 311,517
Stephen R. Willey (5).................. 1996 78,333 115,400 36,667 -
Executive Vice President 1995 - - 67,500 296,875
1994 - - 35,000 -
- ---------------
(1) Based on his annual salary rate, Richard A. Raisig, Chief Financial Officer
and Vice President of Operations, would have received annual compensation
in excess of $100,000 had he been employed by the Company for the full
year.
(2) Bonus amounts for 1996 reflect amounts paid in 1997 for services performed
in 1996 and during the last three months of 1995.
(3) Represents (i) with respect to Mr. Rutkowski, payments in consideration of
consulting services rendered to the Company prior to Mr. Rutkowski's
employment with the Company and (ii) with respect to Mr. Willey, payments
in consideration of consulting services rendered to the Company prior to
and concurrent with Mr. Willey's employment with the Company. See "Certain
Relationships and Related Transactions."
(4) Mr. Rutkowski joined the Company as an employee on October 1, 1994.
Pursuant to his Amended and Restated Employment Agreement with the Company,
Mr. Rutkowski was granted options to purchase up to an aggregate of 311,517
shares of Common Stock as partial compensation for calendar years 1995,
1996, and 1997. See "Employment Agreements." On December 31, 1996, options
with respect to 213,666 shares of Common Stock had vested. Prior to his
employment with the Company, Mr. Rutkowski served as a consultant to the
Company.
(5) Mr. Willey joined the Company as an employee on October 1, 1995. Pursuant
to his Employment Agreement with the Company, Mr. Willey was granted
options to purchase up to an aggregate of 296,875 shares of Common Stock as
partial compensation for years ending September 30, 1995, 1996, 1997, and
1998. See "- Employment Agreements." On December 31, 1996, options with
respect to 175,781 shares of Common Stock had vested. Prior to his
employment with the Company, Mr. Willey served as a consultant to the
Company.
</TABLE>
Option Grants. No stock options or other similar rights were granted by the
Company during 1996 to the Named Executives.
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<PAGE>
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values. The following table sets forth information concerning exercise of stock
options during 1996 by the Named Executives and the fiscal year-end value of
unexercised options:
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at December 31, 1996 at December 31, 1996 (1)
------------------------------ ----------------------------
Number of
Shares Acquired on Value
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Richard F.
Rutkowski - - 213,666 97,851 448,886 -
Stephen R. - - 175,781 121,094 312,500 -
Willey
- ---------------
(1) Calculated based on a closing price of $4.00 per share on December 31,
1996.
</TABLE>
Employment Agreements. Pursuant to his Amended and Restated Employment
Agreement with the Company, Mr. Rutkowski receives an annual base salary of
$120,000, subject to increases as determined by the Board of Directors, and an
annual cash performance bonus in an amount to be determined by the Board of
Directors. In January 1997, Mr. Rutkowski's base salary was adjusted to $145,000
and he was awarded a bonus a $134,375 for services performed during 1996 and
during the last three months of 1995. In addition, Mr. Rutkowski has received
options to purchase up to an aggregate of 311,517 shares of Common Stock for his
service to the Company during the period 1995 through 1997. These options have
five-year terms, vest quarterly, and will immediately vest and become
exercisable upon the occurrence of certain significant business events,
including a sale of a majority of the Company's assets to a third party. Mr.
Rutkowski is entitled to all benefits offered generally to the Company's
employees. Upon termination without cause of Mr. Rutkowski's employment by the
Company, certain of Mr. Rutkowski's stock options will vest and Mr. Rutkowski
will be entitled to a severance payment. The Amended and Restated Employment
Agreement expires, unless previously terminated, on December 31, 1997.
The Company entered into an employment agreement with Stephen R. Willey,
the Company's Executive Vice President and a director of the Company, effective
May 1, 1996. Pursuant to this agreement, Mr. Willey receives an annual base
salary of $110,000, adjusted annually for the cost of living and subject to
increases as determined by the Board of Directors. In addition, Mr. Willey is
entitled to receive an annual cash performance bonus in an amount determined by
the Board of Directors, and has received options to purchase an aggregate of
296,875 shares of Common Stock for his services during the period 1995 through
1998. In January 1997, Mr. Willey's base salary was adjusted to $130,000 and he
was awarded a bonus of $115,400 for services performed in 1996 and during the
last three
10
<PAGE>
months of 1995. Upon termination without cause of Mr. Willey's employment by the
Company, certain of Mr. Willey's stock options will vest and Mr. Willey will be
entitled to a severance payment. Mr. Willey's employment agreement expires,
unless previously terminated, on September 30, 1998.
Certain Relationships and Related Transactions
Since inception of the Company, there has not been, nor is there currently
proposed, any transaction or series of similar transactions to which the Company
was or is to be a party in which the amount involved exceeds $60,000 and in
which any director or executive officer had or will have a direct or indirect
material interest other than the transactions described below.
Securities Issuances
From November 1995 through June 1996, the Company sold an aggregate of
859,776 shares of the Company's Series A Preferred Stock to 58 entities and
individuals for an aggregate purchase price of $4,127,000 in cash. In February
1996, Walter J. Lack, a director of the Company, purchased 15,625 shares of
Series A Preferred Stock for $75,000 in cash.
In June 1996, the Company issued 17,500 shares of common stock to Mr. Lack
upon the exercise of certain warrants issued thereto as compensation for
consulting services provided by Mr. Lack to the Company.
In early July 1996, the Company issued $750,000 in aggregate principal
amount of its 7% Notes to six investors raising net proceeds of $707,500 for the
Company's immediate operating requirements and for payment of certain expenses
incurred in connection with its initial public offering. The 7% Notes were
convertible or redeemable at the option of the holder at any time after 90 days
after the date of the final prospectus issued in connection with the Company's
initial public offering. The 7% Notes bore interest at the rate of 7% per annum,
payable semiannually in arrears on December 15 and June 15, and were to mature
on July 10, 1997. The 7% Notes were subordinate to all future senior
indebtedness of the Company. Walter J. Lack, a director of the Company,
purchased $250,000 in principal amount of the 7% Notes. In December 1996, Mr.
Lack redeemed the 7% Notes in full and, pursuant to the terms of the 7% Notes,
was issued 15,000 shares of Common Stock. The remaining 7% Notes were redeemed
in November and December 1996.
Consulting Arrangements; Salary Payments to Affiliates
Between December 1993 and October 1995, two entities with which Stephen R.
Willey, Executive Vice President and a director of the Company, is affiliated
provided strategic planning and technical consulting services to the Company. As
compensation for these services, the Company paid an aggregate of $137,092 to
these entities. The consulting
11
<PAGE>
relationship between the Company and the affiliates terminated in October 1995,
at which time Mr. Willey became an employee of the Company. Between October 1995
and April 1996, salary payable to Mr. Willey in the aggregate amount of $36,667
was paid directly to one of these affiliates
Loans to Officers
During 1996, the Company made loans to Richard F. Rutkowski, Chief
Executive Officer and President and a director of the Company, and Stephen R.
Willey, Executive Vice President and a director of the Company, in the amounts
of $82,400 and $69,000, respectively. The loans were evidenced by promissory
notes with maturities of one year and earned interest at 8% per annum payable
quarterly. The loans were made in consideration of Messrs. Rutkowski and Willey
agreeing to a modification of their respective employment agreements. The loan
grants were approved by the Board of Directors of the Company. The loans and all
accrued interest thereon were repaid in full during 1996.
PROPOSAL TWO: APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed Price Waterhouse LLP as independent
auditors of the Company for the fiscal year ending December 31, 1997, and has
further directed that the selection of such auditors be submitted for
ratification by the shareholders at the Annual Meeting. The Company has been
advised by Price Waterhouse LLP that neither that firm nor any of its associates
has any relationship with the Company other than the usual relationship that
exists between independent public accountants and clients. Price Waterhouse LLP
will have one or more representatives at the Annual Meeting who will have an
opportunity to make a statement and will be available to respond to appropriate
questions from shareholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
APPOINTMENT OF PRICE WATERHOUSE LLP AS INDEPENDENT AUDITORS FOR THE FISCAL YEAR
ENDING DECEMBER 31, 1997.
In the event that the votes cast in favor of ratification of the
appointment of independent auditors do not exceed the votes cast against such
action, the selection of other auditors will be considered by the Board of
Directors.
ANNUAL REPORT
The Company's Annual Report for the fiscal year ended December 31, 1996,
accompanies this Proxy Statement. The Annual Report is not to be treated as part
of the proxy solicitation material or as having been incorporated by reference
herein.
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OTHER BUSINESS
The Board of Directors does not intend to present any business for action
at the meeting other than the election of directors and the proposals set forth
herein, nor does it have knowledge of any matters that may be presented by
others. If any other matter properly comes before the meeting, the persons named
in the accompanying form of proxy intend to vote in accordance with the
recommendations of the Board of Directors.
SHAREHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
Any shareholder proposal intended for inclusion in the proxy materials for
the Company's 1998 Annual Meeting must be received at the principal executive
offices of the Company not later than March 1, 1998.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. SHAREHOLDERS WHO DO NOT
EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON ARE URGED TO EXECUTE AND RETURN
THE ENCLOSED PROXY IN THE REPLY ENVELOPE PROVIDED HEREIN.
By Order of the Board of Directors
Richard A. Raisig
Vice President and Chief Financial Officer
July 1, 1997
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PROXY
MICROVISION, INC.
Annual Meeting, August 7, 1997
PROXY SOLICITED BY BOARD OF DIRECTORS
The Annual Meeting of Shareholders of Microvision, Inc., will be held
on August 7, 1997 at 8:30 a.m., Pacific Daylight Time, at the Company's
headquarters, located at 2203 Airport Way
South, Seattle, Washington
The undersigned hereby appoints Richard F. Rutkowski and Richard A. Raisig,
and each of them, proxies with power of substitution to vote on behalf of the
undersigned all shares that the undersigned may be entitled to vote at the
annual meeting of shareholders of Microvision, Inc. (the "Company") on August 7,
1997 and any adjournments thereof, with all powers that the undersigned would
possess if personally present, with respect to the following matters proposed by
the Board of Directors:
(Continued and to be signed on the other side.)
<PAGE>
1. Election of Directors: Richard F. Rutkowski, Stephen R. Willey,
Richard A. Raisig, Walter J. Lack,
Robert A. Ratliffe, Richard A. Cowell,
Jacob Brouwer.
[ ] FOR the nominees [ ] WITHHOLD AUTHORITY to vote for the nominees
Shareholders may withhold authority to vote for any particular nominee by lining
through or otherwise striking out the name of any nominee.
2. Proposal to ratify the appointment of Price Waterhouse LLP as auditors of the
Company for the fiscal year ending December 31, 1997:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Transaction of any business that properly comes before the meeting or any
adjournments thereof and matters incident to the conduct of the meeting. A
majority of the proxies or substitutes at the meeting may exercise all the
powers granted hereby.
The shares represented by this proxy will be voted as specified above, but if no
specification is made, this proxy will be voted for the election of directors
and for the ratification of the selection of Price Waterhouse LLP as independent
auditors of the Company. The proxies may vote in their discretion as to other
matters that may come before this meeting.
Signature or Signature: ___________________________ Date _________________, 1997
Note: Please date and sign as name is imprinted hereon, including designation as
executor, trustee, etc., if applicable. A corporation must sign its name by the
president or other authorized officer.
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