<PAGE>
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)(4) and 0-11
1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
-----------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
5) Total fee paid:
-----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
* Set forth the amount on which the filing fee is calculated and state how it
was determined.
/ / 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:
-----------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
3) Filing Party:
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4) Date Filed:
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<PAGE>
MICROVISION, INC.
----------------
NOTICE OF 1999 ANNUAL MEETING
JUNE 10, 1999
------------------------
Dear Microvision Shareholder:
The Annual Meeting of Shareholders of Microvision, Inc. (the "Company") will
be held on the second floor of our offices, located at 19910 North Creek
Parkway, Bothell, Washington on June 10, 1999, at 9:00 a.m. for the following
purposes:
1. To elect ten directors to serve one-year terms;
2. To ratify the appointment of PricewaterhouseCoopers LLP as our
independent auditors for the fiscal year ending December 31, 1999; and
3. To conduct any other business that may properly come before the meeting.
If you were a shareholder of record on April 14, 1999, you will be entitled
to vote on these matters. A list of shareholders as of the record date will be
available for shareholder inspection at the headquarters of the Company, 19910
North Creek Parkway, Bothell, Washington.
At the meeting, you will have an opportunity to ask questions about
Microvision and its operations. Details of the business to be conducted at the
meeting are more fully described in the accompanying Proxy Statement.
Regardless of the number of shares you own, your vote is important. Please
sign, date and return the proxy card in the enclosed envelope at your earliest
convenience.
We look forward to seeing you. Thank you for your ongoing support of and
interest in Microvision.
Sincerely,
RICHARD F. RUTKOWSKI
PRESIDENT AND CHIEF EXECUTIVE OFFICER
May 7, 1999
Bothell, Washington
<PAGE>
PROXY STATEMENT
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
INFORMATION ABOUT THE ANNUAL MEETING AND VOTING........................... 3
INFORMATION ABOUT MICROVISION COMMON STOCK OWNERSHIP...................... 5
INFORMATION ABOUT DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT
EMPLOYEES............................................................... 7
The Board of Directors.................................................... 7
The Committees of the Board............................................... 7
How We Compensate Directors............................................... 7
The Executive Officers.................................................... 8
How We Compensate Executive Officers...................................... 8
Report on Executive Compensation for 1998................................. 10
Stock Performance Graph................................................... 12
Significant Employees..................................................... 12
Certain Relationships and Related Transactions............................ 14
DISCUSSION OF PROPOSALS RECOMMENDED BY THE BOARD.......................... 14
Proposal 1: Election of Directors......................................... 14
Proposal 2: Ratification of Independent Auditors.......................... 17
Other Business.......................................................... 18
INFORMATION ABOUT SHAREHOLDER PROPOSALS AND NOMINATING DIRECTOR
CANDIDATES.............................................................. 18
Shareholder Proposals..................................................... 18
Director Candidates....................................................... 18
</TABLE>
IMPORTANT
Whether or not you expect to attend the Annual Meeting in person, we urge
you to sign, date, and return the enclosed Proxy at your earliest convenience.
This will ensure the presence of a quorum at the meeting. Promptly signing,
dating, and returning the Proxy will save the Company the expenses and extra
work of additional solicitation. An addressed envelope for which no postage is
required if mailed in the United States is enclosed for that purpose. Sending in
your Proxy will not prevent you from voting your shares at the meeting if you
desire to do so, as your Proxy is revocable at your option.
2
<PAGE>
MICROVISION, INC.
19910 NORTH CREEK PARKWAY
BOTHELL, WASHINGTON 98011
------------------------
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
JUNE 10, 1999
------------------------
INFORMATION ABOUT THE ANNUAL MEETING AND VOTING
Q: Why did you send me this Proxy Statement?
A: We sent you this Proxy Statement and the enclosed proxy card because
Microvision's Board of Directors is soliciting your proxy to vote at the
1999 Annual Meeting of Shareholders.
This Proxy Statement summarizes the information regarding the matters to be
voted upon at the Annual Meeting. You do not need to attend the Annual
Meeting, however, to vote your shares. You may simply complete, sign and
return the enclosed proxy card.
We mailed this Proxy Statement to all shareholders entitled to vote on or
about May 7, 1999. If you owned shares of our common stock at the close of
business on April 14, 1999, our record date, you are entitled to vote those
shares. On the record date, there were 6,622,967 shares of Microvision
common stock outstanding, our only class of voting stock.
Q: How many votes do I have?
A: You have one vote for each share of Microvision common stock that you owned
on the record date. The proxy card will indicate the number.
Q: How do I vote by proxy?
A: If you properly fill in your proxy card and deliver it to us by June 10,
1999, your "proxy" (one of the individuals named on your proxy card) will
vote your shares as you have directed. If you sign the proxy card but do not
make specific choices, your proxy will vote your shares as recommended by
the Board as follows:
- "FOR" electing all ten nominees for Director, and
- "FOR" ratifying PricewaterhouseCoopers LLP as our auditors for the 1999
fiscal year.
If any other matter is presented, your proxy will vote in accordance with
his best judgment. At the time we printed this Proxy Statement, we knew of
no matters that needed to be acted on at the Annual Meeting other than those
discussed in this Proxy Statement.
Q: May my broker vote for me?
A: Under the rules of the National Association of Securities Dealers, if your
broker holds your shares in its "street" name, the broker may vote your
shares on Proposal 1 or 2 even if it does not receive instructions from you.
Q: May I revoke my proxy?
A: Yes. You may change your mind after you send in your proxy card by following
these procedures. To revoke your proxy:
1. Send in another signed proxy with a later date;
3
<PAGE>
2. Send a letter revoking your proxy to Microvision's Secretary at the
Company's offices in Bothell, Washington; or
3. Attend the Annual Meeting and vote in person.
Q: What is the quorum requirement for the meeting?
A: The quorum requirement for holding the meeting and transacting business is a
majority of the outstanding shares entitled to be voted. The shares may be
present in person or represented by proxy at the meeting. Both abstentions
and broker non-votes are counted as present for the purpose of determining
the presence of a quorum. Generally, broker non-votes occur when shares held
by a broker for a beneficial owner are not voted with respect to a
particular proposal because (1) the broker has not received voting
instructions from the beneficial owner, or (2) the broker lacks
discretionary voting power to vote such shares.
Q: What is the effect of abstentions and broker non-votes?
A: Abstentions and broker non-votes will have no effect on the election of
directors or the ratification of the appointment of PricewaterhouseCoopers
LLP as the Company's auditors for 1999.
Q: How do I vote in person?
A: If you plan to attend the Annual Meeting and vote in person, we will give you
a ballot when you arrive. If your shares are held in the name of your
broker, bank or other nominee, you must bring an account statement or letter
from the nominee. The account statement or letter must show that you were
the direct or indirect (beneficial) owner of the shares on April 14, 1999,
the record date for voting.
Q: What vote is required to approve each proposal?
A: The ten nominees for Director who receive the most votes will be elected. So,
if you do not vote for a nominee, or you indicate "withhold authority to
vote" for a nominee on your proxy card, your vote will not count either
"for" or "against" the nominee.
A majority of the shares of Microvision common stock voting at the Annual
Meeting is required to ratify PricewaterhouseCoopers LLP as our accountants
for fiscal year 1999. So, if you do not vote, or if you abstain from voting,
it has no effect on this vote.
Q: Is voting confidential?
A: We keep all the proxies, ballots and voting tabulations private as a matter
of practice. We only let our Inspector of Election examine these documents.
We will not disclose your vote to management unless it is necessary to meet
legal requirements. We will forward to management, however, any written
comments that you make on the proxy card or elsewhere.
Q: What are the costs of soliciting these proxies?
A: Microvision will pay all the costs of soliciting these proxies. Although we
are mailing these proxy materials, our officers and employees may also
solicit proxies by telephone, by fax or other electronic means of
communication, or in person. We will reimburse banks, brokers, nominees and
other fiduciaries for the expenses they incur in forwarding the proxy
materials to you.
Q: Who should I call if I have any questions?
A: If you have any questions about the Annual Meeting or voting, or your
ownership of Microvision common stock, please call Richard A. Raisig, our
Secretary, at (425) 415-6847. Mr. Raisig's e-mail address is
"[email protected]."
4
<PAGE>
INFORMATION ABOUT MICROVISION COMMON STOCK OWNERSHIP
Q: How much stock is owned by 5% shareholders, directors and executive officers?
R: The following table shows as of April 8, 1999, to the best of the Company's
knowledge, the number of shares of Microvision common stock beneficially
owned by all persons we know to be beneficial owners of at least 5% of
Microvision's common stock, Microvision's directors, the executive officers
named in the Summary Compensation Table on page 8 of this Proxy Statement
and all directors and executive officers as a group.
<TABLE>
<CAPTION>
PERCENTAGE OF
NAME AND ADDRESS OF BENEFICIAL OWNER NUMBER OF SHARES(1) COMMON STOCK(2)
- -------------------------------------------------------------------------- ------------------- -------------------
<S> <C> <C>
Margaret Elardi(3)........................................................ 600,600 9.1%
3411 Las Vegas Blvd. South
Las Vegas, NV 89109
Capital Ventures International(4)......................................... 586,388 8.7%
One Capitol Place
Grand Cayman, Cayman Islands BWI
Richard F. Rutkowski(5)................................................... 442,992 6.3%
c/o Microvision, Inc.
19910 North Creek Parkway
Bothell, WA 98011
George M. Galpin(6)....................................................... 385,350 5.6%
20 West Dayton, Suite D-5
Edmonds, WA 98020
Stephen R. Willey(7)...................................................... 342,960 4.9%
c/o Microvision, Inc.
19910 North Creek Parkway
Bothell, WA 98011
Walter J. Lack............................................................ 217,537 3.3%
10100 Santa Monica Blvd., 16th Floor
Los Angeles, CA 90067
Richard A. Raisig(8)...................................................... 136,015 2.0%
c/o Microvision, Inc.
19910 North Creek Parkway
Bothell, WA 98011
Robert A. Ratliffe........................................................ 16,650 *
2300 Carillon Point
Kirkland, WA 98033
Jacob Brouwer............................................................. 10,400 *
1200 West Pender Street, Suite 1200
Vancouver, B.C. VGE 259
Canada
Richard A. Cowell......................................................... 10,400 *
c/o Booz, Allen & Hamilton
4301 N. Fairfax Drive, Suite 200
Arlington, VA 22203
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
PERCENTAGE OF
NAME AND ADDRESS OF BENEFICIAL OWNER NUMBER OF SHARES(1) COMMON STOCK(2)
- -------------------------------------------------------------------------- ------------------- -------------------
<S> <C> <C>
William A. Owens.......................................................... 4,000 *
c/o Teledesic
2300 Carillon Point
Kirkland, WA 98033
Douglas Trumbull.......................................................... 4,000 *
c/o Entertainment Design Workshop
1375 Boardman Street
Sheffield, MA 01257
All executive officers and directors as a group (10 persons).............. 1,785,554 22.1%
</TABLE>
- ------------------------
* 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, except as noted, each person has
sole voting and sole investment power with respect to the shares shown,
subject to community property laws, where applicable.
(2) Rounded to the nearest 1/10th of one percent, based on 6,622,967 shares of
Common Stock outstanding at April 8, 1999, assuming no exercise of the
Public Warrants, the Representatives' Warrants, or any other outstanding
options or warrants and no conversions of preferred stock.
(3) Includes 600,000 shares issuable upon the conversion of preferred stock and
the exercise of warrants and conversion of underlying convertible preferred
stock.
(4) Capital Ventures International filed a Schedule 13G reporting beneficial
ownership of more than 5% of the Company's Common Stock on or about April 8,
1999. According to the filing, Capital Ventures International has shared
voting and dispositive power over 586,388 shares. Heights Capital
Management, Inc. is the investment advisor to Capital Ventures International
and, as such, may exercise voting and dispositive power over these shares.
(5) Includes 409,517 shares issuable upon exercise of Public Warrants and
options.
(6) Mr. Galpin filed an amended Schedule 13G reporting his beneficial ownership
of more than 5% of the Company's Common Stock on or about January 11, 1999.
According to the filing, Mr. Galpin had sole voting and dispositive power
over 314,700 shares (including 240,500 shares underlying Public Warrants);
shared voting power over 43,750 shares; and shared dispositive power over
26,900 shares (including 14,000 shares underlying Public Warrants).
(7) Includes 310,575 shares issuable upon exercise of Public Warrants and
options.
(8) Includes 126,015 shares issuable upon exercise of options.
Q: Did directors, executive officers and greater-than-10% shareholders comply
with the beneficial ownership reporting requirements under Section 16(a) of
the Securities Exchange Act of 1934 in 1998?
A: Section 16(a) of the Securities Exchange Act of 1934 requires that our
directors, executive officers and greater-than-10% shareholders file reports
with the SEC relating to their initial beneficial ownership of Microvision's
securities and any subsequent changes. They must also provide us with copies
of the reports.
Based on copies of reports furnished to us, we believe that all of these
reporting persons complied with their filing requirements for 1998, except
that Stephen R. Willey, William Owens, Douglas Trumbull, Jacob Brouwer,
Richard Cowell and Robert Ratliffe each filed one late report.
6
<PAGE>
INFORMATION ABOUT DIRECTORS, EXECUTIVE OFFICERS
AND SIGNIFICANT EMPLOYEES
THE BOARD OF DIRECTORS
The Board of Directors oversees the business and affairs of Microvision and
monitors the performance of management. In accordance with corporate governance
principles, the Board does not involve itself in day-to-day operations. The
directors keep themselves informed through discussions with the President, other
key executives and our principal external advisers by reading the reports and
other materials that we send them regularly and by participating in Board and
committee meetings. Directors of the Company hold office until the next annual
meeting of shareholders or until their successors have been elected and duly
qualified.
The Board met six times during 1998. Each director attended at least 75% of
the meetings of the Board and committees on which they serve. The Board also
approved certain actions by unanimous written consent.
THE COMMITTEES OF THE BOARD
The Board has an Audit Committee, a Compensation Committee and a Finance
Committee. There is no standing nominating or other committee that recommends
qualified candidates to the Board for election as Directors. The entire Board
performs these duties. In addition, our Bylaws provide a procedure for you to
recommend candidates for election as directors at an Annual Meeting. For more
information, see below at page 18 under "Information about Shareholder Proposals
and Nominating Director Candidates."
THE AUDIT COMMITTEE. 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. Cowell and Lack currently serve on the Audit Committee, with Mr.
Cowell serving as Chairman. The Audit Committee met one time during 1998.
THE COMPENSATION 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 our stock option plans, except for the
granting of options to executive officers, which grants are made by the Board.
The Compensation Committee's Report on Executive Compensation for 1998 is set
forth below beginning on page 10.
Messrs. Lack, Ratliffe, Rutkowski and Raisig currently serve as members of
the Compensation Committee, with Mr. Lack serving as Chairman. The Compensation
Committee met two times during 1998.
THE FINANCE COMMITTEE. The Finance Committee makes recommendations to the
Board on matters related to financing and our capitalization. Messrs. Rutkowski,
Lack, Brouwer and Raisig are the current members of the Finance Committee, with
Mr. Rutkowski serving as Chairman. The Finance Committee met three times during
fiscal 1998.
HOW WE COMPENSATE DIRECTORS
Pursuant to the 1996 Independent Director Stock Plan (the "Director Plan"),
each non-employee director ("Independent Director") receives an annual award of
Common Stock ("Annual Award") 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 number of shares
awarded
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<PAGE>
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). Shares issued pursuant to an Annual Award vest in full on the
earlier of one year from the date of grant or on the day prior to the next
annual meeting of shareholders subsequent to the date on which the Annual Award
was granted. If any shares awarded under the Director Plan are forfeited, such
shares will again be available for purposes of the Director Plan. Unless earlier
suspended or terminated by the Board, the Director Plan will continue in effect
until the earlier of: (i) ten years from the date on which it is adopted by the
Board and (ii) the date on which all shares available for issuance under the
Director Plan have been issued.
Non-employee directors receive a fee of $1,000 per committee meeting
attended, excluding committee meetings held in conjunction with a meeting of the
Board of Directors. All directors are reimbursed for reasonable travel and other
out-of-pocket expenses incurred in attending meetings of the Board of Directors.
THE EXECUTIVE OFFICERS
Executive officers are elected by the Board of Directors of the Company and
hold office until their successors are elected and duly qualified.
HOW WE COMPENSATE EXECUTIVE OFFICERS
The following table shows salaries, bonuses and other compensation paid
during the last three years to our Chief Executive Officer and our next two most
highly compensated executive officers. No other executive officer received
annual salary and bonuses exceeding $100,000 in the fiscal year ended December
31, 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION -------------
------------------------------------------------------ SECURITIES
NAME AND FISCAL SALARY BONUS OTHER ANNUAL UNDERLYING
PRINCIPAL POSITION YEAR ($) ($)(1)(2)(3) COMPENSATION ($) OPTIONS
- ------------------------------------------------ ----------- --------- ----------- ----------------- -------------
<S> <C> <C> <C> <C> <C>
Richard F. Rutkowski ........................... 1998 175,000 105,000 -- --
Chief Executive Officer 1997 145,000 100,000 -- 340,000
and President 1996 126,250 107,500 -- --
Stephen R. Willey .............................. 1998 150,000 88,000 -- 238,000
Executive Vice President 1997 130,000 85,000 -- --
1996 78,333 92,320 36,667(4) --
Richard A. Raisig .............................. 1998 130,000 64,000 -- --
Chief Financial Officer, 1997 120,000 75,000 -- 136,000
Vice President, Operations, 1996 40,729 15,000 -- 100,000
and Secretary
</TABLE>
- ------------------------
(1) Bonus amounts for 1998 include amounts paid in 1999 for services performed
in 1998.
(2) Bonus amounts for 1997 include amounts paid in 1998 for services performed
in 1997. Mr. Raisig's bonus included a portion related to the four month
period ended December 31, 1996.
(3) Bonus amounts for 1996 include amounts paid in 1997 for services performed
in 1996.
8
<PAGE>
(4) Represents payments in consideration of consulting services rendered to the
Company by Mr. Willey prior to and concurrent with Mr. Willey's employment
with the Company.
OPTION GRANTS IN 1998
The following table provides information on option grants in fiscal 1998 to
Mr. Stephen R. Willey, Executive Vice President. None of the other officers
named in the Summary Compensation Table were granted options in fiscal 1998.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE
AT ASSUMED ANNUAL
RATES
NUMBER OF PERCENT OF OF STOCK PRICE
SECURITIES TOTAL APPRECIATION
UNDERLYING OPTIONS GRANTED EXERCISE FOR OPTION TERM(1)
OPTIONS TO EMPLOYEES PRICE EXPIRATION --------------------
NAME GRANTED IN 1998 ($/SH) DATE 5% 10%
- ---------------------------- ----------- --------------- ----------- ----------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Stephen R. Willey........... 56,000 9.73 14.00 10/1/08 $ 159,100 $ 704,200
56,000 9.73 17.50 10/1/08 $ 0 $ 508,200
56,000 9.73 21.88 10/1/08 $ 0 $ 262,900
56,000 9.73 27.34 10/1/08 $ 0 $ 0
14,000 2.43 34.18 10/1/08 $ 0 $ 0
</TABLE>
- ------------------------
(1) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. The assumed
5% and 10% rates of stock price appreciation are provided pursuant to the
rules of the Securities and Exchange Commission and do not represent the
Company's estimate or projection of the future Common Stock price.
AGGREGATED OPTION VALUES AS OF YEAR-END 1998. The following table provides
information concerning the exercise of stock options by the officers named in
the Summary Compensation Table and the value of unexercised stock options held
by those officers at December 31, 1998.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT DECEMBER 31, 1998 AT DECEMBER 31, 1998,
NUMBER OF ----------------------------------- (1)
SHARES ACQUIRED VALUE ----------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------- --------------- --------- ----------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Richard F.
Rutkowski........... 30,000 $ 264,900 381,517 240,000 $2,651,697 $ 0
Stephen R. Willey..... 3,000 $ 20,100 307,875 224,000 $2,560,275 $ 0
Richard A. Raisig..... 10,000 $ 17,500 98,047 127,953 $ 392,736 $ 113,203
</TABLE>
- ------------------------
(1) Calculated based on a closing price of $13.00 per share on December 31,
1998.
EMPLOYMENT AGREEMENTS
Pursuant to his employment agreement with the Company effective October 1,
1997, Mr. Rutkowski receives an annual base salary of $145,000, 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 1998, Mr. Rutkowski's base salary was adjusted to $175,000 and he was
awarded a bonus of $100,000 for services performed during 1997. In 1997, Mr.
Rutkowski received options to purchase up to an aggregate of 340,000 shares of
Common Stock for service to the Company during the period October 1, 1997
through December 31, 2001. These options have ten-year terms, vest quarterly,
and will immediately vest and become exercisable upon the occurrence of certain
events following a change in control. 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, Mr. Rutkowski's stock options will
continue to vest and Mr. Rutkowski will be entitled to a
9
<PAGE>
severance payment. The Employment Agreement expires, unless previously
terminated, on December 31, 2001. In January 1999, Mr. Rutkowski's base salary
was adjusted to $200,000 and he was awarded a bonus of $105,000 for services
performed during 1998.
Pursuant to his employment agreement with the Company effective October 1,
1998, Mr. Willey receives an annual base salary of $150,000, 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
addition, Mr. Willey received options to purchase up to an aggregate of 238,000
shares of Common Stock for service to the Company during the period October 1,
1998 through December 31, 2002. These options have ten-year terms, vest
quarterly, and will immediately vest and become exercisable upon the occurrence
of certain events following a change in control. Mr. Willey is entitled to all
benefits offered generally to the Company's employees. Upon termination without
cause of Mr. Willey's employment by the Company, Mr. Willey's stock options will
continue to vest and Mr. Willey will be entitled to a severance payment. The
Employment Agreement expires, unless previously terminated, on December 31,
2002. In January 1999, Mr. Willey's base salary was adjusted to $170,000 and he
was awarded a bonus of $88,000 for services performed during 1998.
Pursuant to his employment agreement with the Company, effective October 1,
1997, Mr. Raisig receives an annual base salary of $130,000, 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 1998, Mr. Raisig was awarded a bonus of $75,000 for services performed
during 1997 and four months in 1996. In 1997, Mr. Raisig received options to
purchase up to an aggregate of 136,000 shares of Common Stock for service to the
Company during the period October 1, 1997 through December 31, 2000. These
options have ten-year terms, vest quarterly, and will immediately vest and
become exercisable upon the occurrence of certain events following a change in
control. Mr. Raisig is entitled to all benefits offered generally to the
Company's employees. Upon termination without cause of Mr. Raisig's employment
by the Company, Mr. Raisig's stock options will continue to vest and Mr. Raisig
will be entitled to a severance payment. The employment agreement expires,
unless previously terminated, on December 31, 2000. In January 1999, Mr.
Raisig's base salary was adjusted to $150,000 and he was awarded a bonus of
$64,000 for services performed during 1998.
CERTAIN TAX CONSIDERATIONS RELATED TO EXECUTIVE COMPENSATION
As a result of Section 162(m) of the Internal Revenue Code of 1986, as
amended, in the event that compensation paid by the Company to a "covered
employee" (the chief executive officer and the next four highest paid employees)
in a year were to exceed an aggregate of $1,000,000, the Company's deduction for
such compensation could be limited to $1,000,000.
REPORT ON EXECUTIVE COMPENSATION FOR 1998
BY THE COMPENSATION COMMITTEE
EXECUTIVE COMPENSATION PHILOSOPHY
The Compensation Committee of the Board of Directors is comprised of two
outside directors and two representatives from management. The Compensation
Committee is responsible for evaluating compensation levels and compensation
programs for executives and for making recommendations to the Board regarding
appropriate compensation awards for executive management.
The executive compensation program of the Company is designed to attract,
retain and motivate executive officers capable of leading the Company to meet
its business objectives, to incentivize executive management, to enhance long
term shareholder value and to reward executive management based on contributions
to both the short and long term success of the Company. The Compensation
Committee's philosophy is for the Company to use compensation policies and
programs
10
<PAGE>
that align the interests of executive management with those of the shareholders
and to provide compensation programs that incentivize and reward both the short
and long term performance of the executive officers based on the success of the
Company in meeting its business objectives.
EXECUTIVE COMPENSATION COMPONENTS
BASE SALARY. Recommendations for base salaries for executive officers are
made at levels believed by the Compensation Committee to be sufficient to
attract and retain qualified executive officers based on the stage of
development of the Company and the market practices of other companies. A change
in base salary of an executive officer is based on an evaluation of the
performance of the executive and of the performance of the Company as a whole.
In determining recommended base salaries, the Compensation Committee not only
considers the short term performance of the Company, but also the success of the
executive officers in developing and executing the Company's strategic plans,
developing management employees and exercising leadership in the development of
the Company.
INCENTIVE BONUS. The Compensation Committee believes that a significant
portion of the total cash compensation for executive officers should be based on
the Company's success in meeting its short term performance objectives and
contributions by the executive officers that enable the Company to meet its long
term objectives, and has structured the executive compensation program to
reflect this philosophy. This approach creates a direct incentive for executive
officers to achieve desired short term corporate goals that also further the
long term objectives of the Company, and places a significant portion of each
executive officer's annual compensation at risk.
STOCK OPTIONS. The Compensation Committee believes that equity
participation is a key component of the Company's executive compensation
program. Stock options are awarded by the Board of Directors to executive
officers primarily based on potential contributions to the Company's growth and
development and marketplace practices. These awards are designed to retain
executive officers and to motivate them to enhance shareholder value by aligning
the financial interests of executive officers with those of shareholders. Stock
options provide an effective incentive for management to create shareholder
value over the long term because the full benefits of the option grants cannot
be realized unless an appreciation in the price of the Company's common stock
occurs over a number of years.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
Based on the executive compensation policy and components described above,
the Compensation Committee recommended the salary and incentive bonus received
by Richard F. Rutkowski, the President and Chief Executive Officer of the
Company for services rendered in fiscal 1998. Mr. Rutkowski received a base
salary of $175,000 for 1998 and also earned a bonus of $105,000 for the year.
The Company did not grant Mr. Rutkowski any stock options in 1998. Mr. Rutkowski
earned the bonus based upon leading the Company to achieving a record year in
revenue, the progress made in the staff and organizational development of the
Company, and advances in the market acceptance and commercialization of the
Company's technology.
COMPENSATION COMMITTEE
Walter J. Lack, Chairman
Robert Ratliffe
Richard F. Rutkowski
Richard A. Raisig
11
<PAGE>
STOCK PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder return on an
initial $100 investment in the Company's Common Stock (assuming the reinvestment
of dividends) since August 27, 1996 (the date the Company's Common Stock began
trading on the Nasdaq National Market) to two indices: the Nasdaq Stock Market
Index and an index of peer companies selected by the Company ("Peer Index"). The
companies in the Peer Index are as follows: Kopin Corporation, Planar
Corporation, and Three Five Systems, Inc. The past performance of the Company's
Common Stock is not an indication of future performance. There can be no
assurance that the price of the Company's Common Stock will appreciate at any
particular rate or at all in future years.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
MICROVISION NASDAQ STOCK MARKET INDEX COMPANY DETERMINED PEER INDEX
<S> <C> <C> <C>
08/27/96 $100.00 $100.00 $100.00
12/31/96 $76.19 $113.33 $111.53
12/31/97 $266.67 $137.84 $134.61
12/31/98 $247.62 $192.47 $145.50
</TABLE>
SIGNIFICANT EMPLOYEES
TODD R. MCINTYRE has served as Vice President, Business Development since
January 1996. Mr. McIntyre is responsible for establishing relationships with
third parties for the development of products incorporating the VRD technology.
Prior to 1996, Mr. McIntyre held business development and marketing positions
with several development stage companies, including Southern Limited
Partnership, a magazine and book publisher; Sasquatch Publishing Company, Inc.,
a magazine and book publisher; SPRY Inc., an Internet software products
publisher; and Notable Technologies, Inc., a wireless telecommunications
products manufacturer.
ANDREW LEE has served as Vice President, Sales since September 1997. From
January 1997 to September 1997, Mr. Lee served as Vice President, Sales and
Marketing of the Company. Mr. Lee is responsible for developing and implementing
the Company's sales strategy. From January 1992 to January 1997, Mr. Lee was
Senior Director, National Systems Sales, for AEI Music Network, Inc., the
largest audio-visual systems integrator in the United States. From January 1989
to December 1991, Mr. Lee was Director, Sales and Marketing, for ADB Industries
Inc., a manufacturer of precision assemblies for the defense and aerospace
industries, where he was responsible for designing and implementing marketing
strategies for both commercial and military markets.
12
<PAGE>
WILLIAM MCALLISTER has served as Vice President of Marketing since January
1999. From 1995 to 1998, Mr. McAllister was Vice President of Marketing for the
Western Region for AT&T Wireless Services. From 1993 to 1995, Mr. McAllister was
Vice President, General Manager, Oregon District for AT&T Wireless Services.
From 1987 to 1993, Mr. McAllister was the Director, Sales and Marketing for the
Oregon District of McCaw Cellular Communications, the predecessor of AT&T
Wireless. From 1985 to 1987, Mr. McAllister was a Sales Manager with Nynex/IBM
Corporation, where he held the positions of systems engineer, account executive
and sales school instructor with IBM from 1974 to 1985.
ARTHUR P. MINICH has served as Vice President Research and Product
Development since March 1999. From 1997 to 1998, Mr. Minich was President and
General Manager for the display division of Laser Power Corporation, as well as
Acting Vice President of Operations for Laser Power's microlaser division. From
1992 to 1997, Mr. Minich was the Chief Technical Officer and Vice President of
Research and Development for Proxima Corporation. He also was the Founder,
President and Chairman of Pivotal Corp. from 1990 to 1992; Business Unit/Group
General Manager for Eastman Kodak from 1988 to 1990; President and Chief
Executive Officer for Daystar Systems Technology from 1985 to 1986; Division
General Manager for Tektronix from 1982 to 1985; and Vice President of Research
and Development and Software Sciences for Auto-trol Technology Corp. from 1977
to 1982. Mr. Minich began his career at Hewlett-Packard, where he spent twelve
years in various research and development and manufacturing positions.
DOUGLAS A. STOLL has served as Director of Engineering since October 1996.
Mr. Stoll has responsibility for managing the Company's core technology and
internal product development programs. Prior to joining the Company Mr. Stoll
spent 16 years with the Space and Defense Sector of TRW, Inc. in various project
management roles, where he managed several simulation and avionics design teams.
Mr. Stoll was the program manager for all TRW activities on the B-2 program from
1990 through 1992. Prior to joining TRW, Mr. Stoll spent 10 years in the U.S.
Air Force as a B-52 pilot and as a scientific analyst at the Edwards Flight Test
Center. Mr. Stoll currently holds the rank of Lieutenant Colonel in the Air
Force Reserves. Mr. Stoll earned an M.S. in Physics from Ohio State University,
an M.S. in Systems Management from the University of Southern California and an
executive MBA from UCLA.
JOHN LEWIS has served as Director of Research since November 1996. Mr. Lewis
has primary responsibility for directing and managing the ongoing research on
the Company's core technology and for developing the Company's intellectual
property assets. From 1978 to 1996, Mr. Lewis held various technical and
management positions at Polaroid Corporation. During his tenure at Polaroid, Mr.
Lewis headed several projects that involved using micro-optics in the coupling
of semiconductor light sources and using scanning mechanisms for high quality
imaging. From 1986 to 1994, Mr. Lewis managed the Department of Physical Systems
within Polaroid's Research Division. Mr. Lewis holds a B.S. degree in physics
from Massachusetts Institute of Technology and is named as inventor on five
patents and two patents pending.
THOMAS M. LIPPERT, PH.D. has served as Principal Scientist since August
1997. From 1992 to 1997, Dr. Lippert was Head of Display Technology at the David
Sarnoff Research Center, where he was responsible for new business development
and product management on both commercial and government contracts. From 1987 to
1992, Dr. Lippert was a Senior Principal Development Engineer with the Military
Avionics Division of Honeywell, where he had technical responsibility for
research related to advanced electronic and optic technologies applicable to
helmet-mounted sight and display systems.
13
<PAGE>
ABRAHAM GROSS, PH.D. has served as Principal Engineer since July 1998. From
1992 to 1998, Dr. Gross was Chief Scientist of Orbotech, the world's largest
developer of machine vision systems. From 1985 to 1987, Dr. Gross was a Senior
Physicist at Optrotech. He started his career in 1983 as a research fellow in
the atmospheric optics group of the Soreq Nuclear Research Center in Yavne,
Israel. Dr. Gross holds various patents in the areas of optical systems, optical
scanners and optical inspection systems.
CASEY T. TEGREENE, ESQ. has served as Intellectual Property Counsel since
July 1997. From 1992 to 1997, Mr. Tegreene was affiliated with the law firm of
Seed and Berry where he specialized in electrical and mechanical patent matters
including litigation. From 1989 to 1992, Mr. Tegreene was affiliated with
Cravath, Swaine & Moore, where he specialized in corporate transactions and
securities work. Prior to pursing his legal career, Mr. Tegreene worked with
Motorola's Government Electronics Group as a research and design engineer
focusing on optical and microwave systems and components. He graduated cum laude
from the University of South Florida with a B.S.E. (Electrical--1981). He later
received his M.S.E.E. from Georgia Institute of Technology (1983) and J.D. from
New York University (1989). Mr. Tegreene was admitted to the Washington State
Bar (1992) and the New York State Bar (1990), and is registered to practice
before the U.S. Patent and Trademark Office. Mr. Tegreene is also a member of
the Washington State Bar Association and the Washington State Patent Law
Association.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In January 1999, Margaret Elardi, a director of the Company, purchased 5,000
shares of the Company's Series B Convertible Preferred Stock, Class 1 (the
"Series B-1 Stock") for $5,000,000 in cash. The Series B-1 Stock will be
convertible from time to time into shares of common stock at an initial
conversion price of $12.50 per share, subject to adjustment under certain
conditions. The Company also granted Mrs. Elardi an option to purchase 1,600
shares of Series B Convertible Preferred Stock, Class 2 (the "Series B-2 Stock")
at $1,000 per share at any time prior to July 14, 1999, and an option to
purchase 1,920 shares of Series B Convertible Preferred Stock, Class 3 (the
"Series B-3 Stock") at $1,000 per share at any time prior to October 14, 1999.
The initial conversion price for the Series B-2 Stock is $16.00 per share and
for the Series B-3 Stock is $19.20 per share. Terms of the transaction include
certain rights for Mrs. Elardi to have the common stock underlying the preferred
stock registered by the Company.
In January 1999, Capital Ventures International purchased 440,893 shares of
Common Stock for $6,000,000 in cash. In addition, Capital Ventures International
acquired two warrants, one to purchase up to 145,495 shares at $19.05 per share
at any time until April 1, 2004 and another warrant to purchase up to 418,848
shares at a price of $17.91 per share on April 1, 2000. Under the terms of the
Agreement, the Company will register the shares of common stock issued in the
initial sale and underlying the two warrants. Terms of the transaction include a
provision that could result in a one-time issuance of additional shares up to a
fixed maximum of 225,774 if the market price (as defined in the Agreement) of
the Company's common stock is less than $14.33 on the date of effectiveness of
the registration statement.
DISCUSSION OF PROPOSALS RECOMMENDED BY THE BOARD
PROPOSAL ONE: ELECTION OF DIRECTORS
The Board of Directors of the Company will consist of ten 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, Richard A. Cowell, Robert A. Ratliffe, Walter J. Lack, William A.
Owens, Margaret Elardi and Douglas Trumbull.
14
<PAGE>
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
beneficially owned by each nominee as of April 8, 1999, is set forth beginning
on page 5.
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)(2)....... 43 Chief Executive Officer, President and Director
Stephen R. Willey................ 45 Executive Vice President and Director
Richard A. Raisig(1)(2).......... 51 Chief Financial Officer, Vice President, Operations, Secretary
and Director
Jacob Brouwer(2)................. 72 Director
Richard A. Cowell(3)............. 51 Director
Margaret Elardi.................. 74 Director
Walter J. Lack(1)(2)(3).......... 51 Director
William A. Owens................. 58 Director
Robert A. Ratliffe(1)............ 38 Director
Douglas Trumbull................. 57 Director
</TABLE>
- ------------------------
(1) Member of the Compensation Committee
(2) Member of the Finance Committee
(3) Member of the Audit Committee
RICHARD F. RUTKOWSKI has served as Chief Executive Officer of the Company
since September 1995, as President since July 1996, and as a director since
August 1995. From November 1992 to 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. From February 1990 to April 1995, Mr. Rutkowski was a
principal of Rutkowski, Erickson, Scott, a consulting firm. Mr. Rutkowski also
serves as a director of CMT Crimble Microtest.
STEPHEN R. WILLEY has served as Executive Vice President of the Company
since October 1995 and as a director since June 1995. Mr. Willey served as the
Company's technical liaison to the University of Washington's HIT Lab. From
January 1994 to 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 founded by Mr. Willey in 1985. As a principal of DGI,
Mr. Willey provided senior management consulting services to CREO Products,
Inc., an electro-optics equipment manufacturer, from June 1989 to December 1992.
Mr. Willey also co-founded an Internet services company, PRO.NET Communications,
Inc. Mr. Willey serves as a director of CMT Crimble Microtest and of In Step
Mobile Communications, Inc.
15
<PAGE>
RICHARD A. RAISIG has served as Chief Financial Officer and Vice President,
Operations of the Company since August 1996, as Secretary since April 1998, and
as a director of the Company since March 1996. From June 1995 to August 1996,
Mr. Raisig was Chief Financial Officer of Videx Equipment Corporation, a
manufacturer and rebuilder of wire processing equipment for the cabling
industry. 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 1990, Mr. Raisig was a Senior Vice President of Dean Witter Reynolds, Inc.
Mr. Raisig is a Certified Public Accountant.
JACOB BROUWER has served as a director of the Company since 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, Grand Trunk Railway (USA), First Interstate Bank of Washington
and First Interstate Bank of Canada, The Insurance Corporation of British
Columbia, Air BC, Golden Tulip Hotels Ltd., Prime Resources Group Inc.
(Homestake), and Pioneer Life Assurance Company and former Chairman of the
International Financial Centre of British Columbia and Northwestel Inc. Mr.
Brouwer currently serves as a director of Doman Industries, a forest products
company and was recently appointed as a board member of the West Vancouver
Police Commission for the Province of British Columbia. He also serves on the
Board of Governors of numerous Charitable Organizations such as the YMCA,
Vancouver Aquarium, the Vancouver Bach Choir and the PC Canada Fund.
RICHARD A. COWELL has served as a director of the Company since August 1996.
Mr. Cowell is a Senior Associate at Booz Allen & Hamilton where, among other
duties, he is involved in the incorporation of simulation and models into
education and training programs for Department of Defense contractors. Prior to
joining Booz Allen 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 writing and producing a film
entitled "America's Army" in 1994. Mr. Cowell retired from the Army holding the
rank of Colonel.
MARGARET ELARDI has served as a director of the Company since January 1999.
A long-time entrepreneur and philanthropist, Mrs. Elardi is a prominent real
estate developer with a distinguished career spanning more than 30 years in the
Nevada real estate and destination entertainment industry. Mrs. Elardi has
served as a director of Nevada State Bank and Community Bank of Nevada. Mrs.
Elardi instituted a first-of-its-kind scholarship program at the University of
Nevada Las Vegas, which guarantees a four-year tuition waiver for virtually
every high school valedictorian in the state.
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. He is a member of the International Academy
of Trial Lawyers and an Advocate of the American Board of Trial Advocates. 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.
WILLIAM A. OWENS has served as a director of the Company since October 1998.
Mr. Owens is the Vice Chairman and Co-Chief Executive Officer of Teledesic LLC,
a satellite communications network company. Prior to joining Teledesic, Mr.
Owens was President, Chief Operating Officer and Vice Chairman of the Board of
Science Applications International Corporation (SAIC), a diversified high-
16
<PAGE>
technology research and engineering company. Prior to joining SAIC, Mr. Owens
was Vice Chairman of the Joint Chiefs of Staff, the nation's second-ranking
military officer. From 1991 to 1993, Mr. Owens was deputy chief of Naval
Operations for Resources, Warfare Requirements and Assessments, and from 1990 to
1991 served as commander of the U.S. Sixth Fleet. From 1988 to 1991, Mr. Owens
served as senior military assistant to the Secretary of Defense. In 1988 Mr.
Owens was the director of the Office of Program Appraisal for the Secretary of
the Navy and in 1987 he served as commander of Submarine Group Six, the Navy's
largest submarine group.
ROBERT A. RATLIFFE has served as a director of the Company since in July
1996. Since 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. From 1986 to 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.
DOUGLAS TRUMBULL has served as a director since October 1998. Mr. Trumbull
is the President and Chief Executive Officer of Entertainment Design Workshop,
LLC, a privately owned company he founded in 1997. Mr. Trumbull's career in the
entertainment business spans 30 years, and his feature film projects include
2001: A SPACE ODYSSEY, CLOSE ENCOUNTERS OF THE THIRD KIND, BLADE RUNNER and STAR
TREK: THE MOTION PICTURE. Prior to forming EDW in 1997, Mr. Trumbull served as
Vice Chairman of Imax Corporation, the leader in giant-screen film exhibition,
and also served as President and Chief Executive Officer of Ridefilm
Corporation, a wholly-owned subsidiary of Imax created to commercialize motion
simulation technology. In addition to his artistic achievements, Mr. Trumbull
holds 15 patents, including one for the first entertainment simulator ride and
another for the Showscan-Registered Trademark- process for high-speed 70mm
cinematography, which received a Scientific and Engineering Award from the
Academy of Motion Picture Arts and Sciences. In 1995, Mr. Trumbull was awarded
the International Monitor Awards Lifetime Achievement Award, as well as the
American Society of Cinematographers President's Award for outstanding
contributions to the field of film making.
PROPOSAL TWO: RATIFICATION OF INDEPENDENT AUDITORS
The Board of Directors has appointed PricewaterhouseCoopers LLP as
independent auditors of the Company for the fiscal year ending December 31,
1999, 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 PricewaterhouseCoopers 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.
PricewaterhouseCoopers 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 PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT AUDITORS FOR THE FISCAL
YEAR ENDING DECEMBER 31, 1999.
In the event that the votes cast in favor of ratification of the appointment
of PricewaterhouseCoopers LLP as 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, 1998 was
first mailed to the shareholders of the Company with this Proxy Statement on or
about May 7, 1999. The Annual Report
17
<PAGE>
is not to be treated as part of the proxy solicitation material or as having
been incorporated by reference herein.
OTHER BUSINESS
We know of no other matters to be voted on at the Annual Meeting. If,
however, other matters are presented for a vote at the meeting, the proxy
holders (the individuals designated on the proxy card) will vote your shares
according to their judgment on those matters.
INFORMATION ABOUT SHAREHOLDER PROPOSALS
AND NOMINATING DIRECTOR CANDIDATES
SHAREHOLDER PROPOSALS
In order for a shareholder proposal to be considered for inclusion in our
proxy statement for the year 2000 Annual Meeting, the written proposal must be
received by the Company no later than January 8, 2000. Such proposals also must
comply with Securities and Exchange Commission regulations regarding the
inclusion of shareholder proposals in company sponsored proxy materials.
If a shareholder proposal is not included in our proxy statement for the
year 2000 Annual Meeting, it may be raised from the floor during the meeting if
written notice of the proposal is received by the Company not less than 60 nor
more than 90 days prior to the meeting or, if later, by the 10th business day
following the first public announcement of the meeting.
The proposal must also contain the information required in our Bylaws for
shareholder proposals, including:
1. a brief description of the business you wish to bring before the
meeting, the reasons for conducting such business, the language of the
proposal and any material interest you have in such business,
2. your name and address,
3. the number of shares of our stock that you own and when you acquired
them,
4. a representation that you intend to appear at the meeting, in person or
by proxy, and
5. a representation that you are entitled to vote at the meeting.
The Chairman, if the facts so warrant, may direct that any business was not
properly brought before the meeting in accordance with our Bylaws.
DIRECTOR CANDIDATES
You may propose director candidates for consideration by our Board simply by
writing us.
In addition, our Bylaws permit shareholders to nominate directors at a
shareholder meeting. In order to nominate a director at a shareholder meeting,
you must notify us not fewer than 60 nor more than 90 days in advance of the
meeting or, if later, by the 10th business day following the first public
announcement of the meeting. In addition, the proposal must contain the
information required in our Bylaws for director nominations, including:
- your name and address,
- the number of shares of our stock that you own and when you acquired them,
- a representation that you are entitled to vote at the meeting,
18
<PAGE>
- a representation that you intend to appear at the meeting, in person or by
proxy, to nominate the person or persons specified in the notice,
- each nominee's name, age, address, and principal occupation or employment,
- all information concerning the nominee that must be disclosed about
nominees in proxy solicitations under the SEC proxy rules, and
- each nominee's executed consent to serve as a director if so elected.
The Chairman, in his discretion, may determine that a proposed nomination
was not made in accordance with the required procedures and, if so, disregard
the nomination.
If you wish to obtain a free copy of our Bylaws or make proposals or
nominate candidates for the Board, please contact Richard A. Raisig, Secretary,
Microvision, Inc., 19910 North Creek Parkway, Bothell, Washington 98011.
By Order of the Board of Directors,
RICHARD F. RUTKOWSKI
PRESIDENT AND CHIEF EXECUTIVE OFFICER
May 7, 1999
Bothell, Washington
19
<PAGE>
PROXY
MICROVISION, INC.
ANNUAL MEETING JUNE 10, 1999
PROXY SOLICITED BY BOARD OF DIRECTORS
THE ANNUAL MEETING OF SHAREHOLDERS OF MICROVISION, INC. WILL BE HELD
ON JUNE 10, 1999 AT 9:00 A.M., PACIFIC DAYLIGHT TIME, AT THE COMPANY'S
HEADQUARTERS, LOCATED AT 19910 NORTH CREEK PARKWAY, BOTHELL, 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 June 10, 1999, 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.)
- --------------------------------------------------------------------------------
- Please Detach and Mail in the Envelope Provided -
<PAGE>
Please mark
your votes / X /
as in this
example
FOR the WITHHOLD AUTHORITY
nominees to vote for the nominees
1. Election of / / / /
Directors:
Nominees: Richard F. Rutkowski
Stephen R. Willey
Richard A. Raisig
Jacob Brouwer
Richard A. Cowell
Margaret Elardi
Walter J. Lack
William A. Owens
Robert A. Ratliffe
Douglas Trumbull
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 FOR AGAINST ABSTAIN
PricewaterhouseCoopers LLP as independent / / / / / /
auditors of the Company for the fiscal
year ending December 31, 1999.
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 THE 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 PRICEWATERHOUSECOOPERS
LLP AS INDEPENDENT AUDITORS OF THE COMPANY. THE PROXIES MAY VOTE IN THEIR
DISCRETION AS TO OTHER MATTERS THAT MAY COME BEFORE THE MEETING.
Signature or Signatures: Date , 1999
------------------ ----------------- --------
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.
- --------------------------------------------------------------------------------
- Please Detach and Mail in the Envelope Provided -
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF SHAREHOLDERS
MICROVISION, INC.
JUNE 10, 1999
