UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
SCHEDULE
14A
(RULE
14a-101)
INFORMATION
REQUIRED IN PROXY STATEMENT
SCHEDULE
14A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934
Filed
by the Registrant [X]
Filed
by a Party other than the Registrant [ ]
Check
the appropriate box:
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[X]
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Preliminary
Proxy Statement
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[ ]
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Confidential,
For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive
Proxy Statement
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Definitive
Additional Materials
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Soliciting
Material Pursuant to §240.14a-12
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Uni-Pixel,
Inc
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(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):
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[X]
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No
fee required.
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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paid previously with preliminary materials:
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Check
box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date
of its filing.
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Amount
previously paid:
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Form,
Schedule or Registration Statement No.:
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Party:
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PRELIMINARY
PROXY MATERIAL – SUBJECT TO COMPLETION
Uni-Pixel,
Inc.
4699
Old Ironsides Drive, Suite 300,
Santa Clara, California 95054
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
To
be Held May 18, 2017
Dear
Stockholder:
You
are invited to attend the Annual Meeting of Stockholders of Uni-Pixel, Inc. on May 18, 2017, which will be held at Uni-Pixel’s
headquarters, 4699 Old Ironsides Drive, Suite 300, Santa Clara, California 95054 at 9:00 a.m., local time (the “Annual Meeting”).
Enclosed with this letter is your Notice of the Annual Meeting, Proxy Statement and Proxy voting card. The Proxy Statement included
with this notice discusses each of our proposals to be considered at the Annual Meeting. Please review our annual report on Form
10-K for the year ended December 31, 2016 on our website at
http://www.unipixel.com
(under “Investors”).
At
this year’s meeting, you will be asked to: (1) elect six directors to serve terms of one year each; (2) approve, on an advisory
basis, the compensation of our named executive officers; (3) ratify the appointment of PMB Helin Donovan as our independent registered
public accounting firm for the fiscal year ending December 31, 2017; (4) increase the number of authorized common shares; (5)
approve an amendment to the Uni-Pixel, Inc. 2011 Stock Incentive Plan; and (6) transact such other business as may properly come
before the Annual Meeting or any adjournments thereof.
The
Board of Directors has fixed the close of business on March 23, 2017 as the record date for determining the stockholders entitled
to notice of and to vote at the Annual Meeting and any adjournment and postponements thereof (the “Record Date”).
Please
complete, sign, date, and return your voting card promptly in the enclosed envelope.
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Sincerely,
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/s/
Jeff A. Hawthorne
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Jeff
A. Hawthorne
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President
and Chief Executive Officer
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Santa
Clara, California
April
[●], 2017
PRELIMINARY
PROXY MATERIAL – SUBJECT TO COMPLETION
Uni-Pixel,
Inc.
4699
Old Ironsides Drive, Suite 300,
Santa
Clara, California 95054
Notice
of Annual Meeting of Stockholders
to
be held May 18, 2017
To
the Stockholders of Uni-Pixel, Inc.:
The
2016 Annual Meeting of stockholders will be held at UniPixel’s headquarters, 4699 Old Ironsides Drive, Suite 300, Santa
Clara, California 95054 at 9:00 a.m., local time, on May 18, 2017 (the “Annual Meeting”). During the Annual Meeting,
stockholders will be asked to:
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(1)
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Elect
six directors to serve until our next Annual Meeting or until the election and qualification of their successors;
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(2)
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Approve,
on an advisory basis, the 2016 compensation of our named executive officers;
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(3)
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Ratify
the appointment of PMB Helin Donovan as our independent registered public accounting firm for the fiscal year ending December
31, 2017;
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(4)
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Approve
an amendment to the Company’s Amended and Restated Certificate of Incorporation, as amended, to increase the authorized
number of shares of the Company’s common stock from 100,000,000 authorized shares of common stock to 150,000,000 shares;
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(5)
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Approve
an amendment to the Uni-Pixel, Inc. 2011 Stock Incentive Plan; and
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(6)
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Transact
any other business properly brought before the Annual Meeting or any adjournments thereof.
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The
foregoing items of business are more fully explained in the Proxy Statement accompanying this Notice.
If
you are a stockholder as of March 23, 2017, you may vote at the meeting. The date of mailing this Notice of Meeting and Proxy
Statement is on or about [●], 2017.
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By
order of our Board of Directors
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/s/
Christine A. Russell
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Christine
A. Russell
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Chief
Financial Officer and Corporate Secretary
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April
[●], 2017
PRELIMINARY
PROXY MATERIAL – SUBJECT TO COMPLETION
PROXY
STATEMENT
This
Proxy Statement and the accompanying proxy card are first being mailed, beginning on or about [●], 2017, to owners of shares
of common stock of Uni-Pixel, Inc. (which may be referred to in this Proxy Statement as “we,” “our,” “us,”
“UniPixel,” or the “Company”) in connection with the solicitation of proxies by our board of directors
(“Board”) for our annual meeting of stockholders to be held on May 18, 2017 at 9:00 a.m., local time, at 4699 Old
Ironsides Drive, Suite 300, Santa Clara, California 95054 (referred to as the “Annual Meeting”). This proxy procedure
permits all stockholders, many of whom are unable to attend the Annual Meeting, to vote their shares at the Annual Meeting. Our
Board encourages you to read this document thoroughly and to take this opportunity to vote on the matters to be decided at the
Annual Meeting.
CONTENTS
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About
The Meeting: Questions and Answers – page [2]
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Governance
of the Company – page [6]
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Proposal
1 – Election of Directors – page [10]
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Executive
Compensation and Other Information – page [14]
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Security
Ownership of Management and Certain Beneficial Owners – page [18]
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Proposal
2 – Approval, on advisory basis, of the 2016 compensation of our named executive officers – page [20]
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Report
of the Audit Committee – page [20]
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Proposal
3 – Ratification of Appointment of Independent Registered Public Accounting Firm – page [21]
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Proposal
4 – Approval of an amendment to the Company’s Amended and Restated Certificate of Incorporation, as amended, to
increase the authorized number of shares of the Company’s common stock – page [22]
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Proposal
5 – Approval of an amendment to the Uni-Pixel, Inc. 2011 Stock Incentive Plan – page [24]
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Certain
Relationships and Related Transactions – page [29]
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Requirements
for Advance Notification of Nominations and Stockholder Proposals – page [29]
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Other
Matters – page [29]
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IMPORTANT
NOTICE
WHETHER
OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE REQUESTED TO MARK, DATE AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT AS
PROMPTLY AS POSSIBLE IN THE ENCLOSED ENVELOPE. SIGNING AND RETURNING A PROXY WILL NOT PREVENT YOU FROM VOTING IN PERSON AT THE
MEETING.
THANK
YOU FOR ACTING PROMPTLY
IMPORTANT
NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 18, 2017: The Notice
of Annual Meeting, Proxy Statement and Annual Report on Form 10-K for the year ended December 31, 2016 as filed with the SEC on
[●] are also available at
http://www.unipixel.com
, which does not have “cookies” that identify visitors
to the site.
PRELIMINARY
PROXY MATERIAL – SUBJECT TO COMPLETION
About
The Meeting: Questions And Answers
What
am I voting on?
At
this year’s meeting, you will be asked to:
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(1)
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Elect
six directors to serve until our next annual meeting of stockholders or until the election and qualification of their successors;
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(2)
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Approve,
on an advisory basis, the 2016 compensation of our named executive officers (commonly
known as, and sometimes referred to in this Proxy Statement as, a “Say-on-Pay”
proposal);
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(3)
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Ratify
the appointment of PMB Helin Donovan as our independent registered public accounting firm for the fiscal year ending December
31, 2017;
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(4)
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Approve
an amendment to the Company’s Amended and Restated Certificate of Incorporation, as amended, to increase the authorized
number of shares of the Company’s common stock from 100,000,000 authorized shares of common stock to 150,000,000 shares;
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(5)
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Approve
an amendment to the Uni-Pixel, Inc. 2011 Stock Incentive Plan; and
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(6)
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Transact
any other business properly brought before the Annual Meeting or any adjournments thereof.
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Who
is entitled to vote at the Annual Meeting, and how many votes do they have?
Common
stockholders of record at the close of business on March 23, 2017 (the “Record Date”) are entitled to one vote for
each share of our common stock held on all matters to be voted on at the Annual Meeting. Our common stock is the only type of
security entitled to vote at the Annual Meeting. Our Series A-1 Convertible Preferred Stock does not enjoy a right to vote at
the Annual Meeting. There were 55,724,162 shares of common stock outstanding on March 23, 2017. From April 7, 2017 through May
18, 2017, you may inspect a list of stockholders eligible to vote. If you would like to inspect the list, please call Christine
A. Russell, our Chief Financial Officer and Corporate Secretary, at (408) 675-5079 to arrange a visit to our offices. In addition,
the list of stockholders will be available for viewing by stockholders at the Annual Meeting.
How
do I vote?
You
may vote over the Internet, by telephone, by mail or in person at the Annual Meeting. Please be aware that if you vote by telephone
or over the Internet, you may incur costs such as telephone and Internet access charges for which you will be responsible.
Vote
by Internet.
You can vote via the Internet at www.proxyvote.com. You will need to use the control number appearing on your
proxy card to vote via the Internet. You can use the Internet to transmit your voting instructions up until 11:59 p.m. Eastern
Time on Wednesday, May 17, 2017. Internet voting is available 24 hours a day. If you vote via the Internet, you do not need to
vote by telephone or return a proxy card.
Vote
by Telephone.
You can vote by telephone by calling the toll-free telephone number 1-800-690-6903. You will need to use the
control number appearing on your proxy card to vote by telephone. You may transmit your voting instructions from any touch-tone
telephone up until 11:59 p.m. Eastern Time on Tuesday, June 7, 2016. Telephone voting is available 24 hours a day. If you vote
by telephone, you do not need to vote over the Internet or return a proxy card.
Vote
by Mail.
If you received a printed proxy card, you can vote by marking, dating and signing it, and returning it in the postage-paid
envelope provided to Uni-Pixel, Inc., c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. Please promptly mail your proxy card
to ensure that it is received prior to the closing of the polls at the Annual Meeting.
Vote
in Person at the Meeting.
If you attend the Annual Meeting and plan to vote in person, we will provide you with a ballot at
the Annual Meeting. If your shares of common stock are registered directly in your name, you are considered the stockholder of
record and you have the right to vote in person at the Annual Meeting. If your shares of common stock are held in the name of
your broker or other nominee, you are considered the beneficial owner of shares of common stock held in street name. As a beneficial
owner, if you wish to vote at the Annual Meeting, you will need to bring to the Annual Meeting a legal proxy from your broker
or other nominee authorizing you to vote those shares.
If
you vote by any of the methods discussed above, you will be designating Jeff A. Hawthorne, our President and Chief Executive Officer,
and Christine A. Russell, our Chief Financial Officer and Corporate Secretary, as your proxies. They may act together or individually
on your behalf, and will have the authority to appoint a substitute to act as proxy.
Submitting
a proxy will not affect your right to attend the Annual Meeting and vote in person.
If
your shares of common stock are held in the name of a bank, broker or other nominee, you will receive separate voting instructions
from your bank, broker or other nominee describing how to vote your shares. The availability of Internet voting will depend on
the voting process of your bank, broker or other nominee. Please check with your bank, broker or other nominee and follow the
voting instructions it provides.
You
should instruct your bank, broker or other nominee how to vote your shares of common stock. If you do not give voting instructions
to the bank, broker or other nominee, the bank, broker or other nominee will determine if it has the discretionary authority to
vote on the particular matter. Under applicable rules, brokers have the discretion to vote on routine matters, such as the ratification
of the selection of accounting firms or the amendment to the Company’s Amended and Restated Certificate of Incorporation,
as amended, to increase the authorized number of shares of the Company’s common stock, but do not have discretion to vote
on non-routine matters. Under the regulations applicable to New York Stock Exchange member brokerage firms (many of whom are the
record holders of shares of our common stock), the uncontested election of directors is no longer considered a routine matter.
Matters related to executive compensation are also not considered routine. As a result, if you are a beneficial owner and hold
your shares in street name, but do not give your broker or other nominee instructions on how to vote your shares with respect
to these matters, votes may not be cast on your behalf only on routine matters. If your bank, broker or other nominee indicates
on its proxy card that it does not have discretionary authority to vote on a particular proposal, your shares will be considered
to be “broker non-votes” with regard to that matter. Broker non-votes will be counted as present for purposes of determining
whether enough votes are present to hold our Annual Meeting, but a broker non-vote will not otherwise affect the outcome of a
vote on a proposal that requires a majority of the votes cast. With respect to a proposal that requires a majority of the outstanding
shares, a broker non-vote has the same effect as a vote against the proposal.
What
is a proxy?
A
proxy is a person you appoint to vote on your behalf. By using the methods discussed above, you will be appointing Jeff A. Hawthorne,
our President and Chief Executive Officer, and Christine A. Russell, our Chief Financial Officer and Corporate Secretary, as your
proxies. They may act together or individually to vote on your behalf, and will have the authority to appoint a substitute to
act as proxy. If you are unable to attend the Annual Meeting, please vote by proxy so that your shares of common stock may be
voted.
How
will my proxy vote my shares?
If
you are a stockholder of record, your proxy will vote according to your instructions. If you choose to vote by mail and complete
and return the enclosed proxy card but do not indicate your vote, your proxy will vote “
FOR
” the election of
the nominated slate of directors (see Proposal 1); “
FOR
” the approval, on an advisory basis, of the compensation
paid to our named executive officers (see Proposal 2); “
FOR
” the ratification of PMB Helin Donovan as our independent
registered public accounting firm for the fiscal year ending December 31, 2017 (see Proposal 3); “
FOR
” an amendment
to the Company’s Amended and Restated Certificate of Incorporation, as amended, to increase the number of authorized shares
of common stock from 100,000,000 to 150,000,000 (see Proposal 4); and
“FOR
” the approval of the amendment to
the Uni-Pixel 2011 Stock Incentive Plan (see Proposal 5). We do not intend to bring any other matter for a vote at the Annual
Meeting, and we do not know of anyone else who intends to do so. Your proxies are authorized to vote on your behalf, however,
using their best judgment, on any other business that properly comes before the Annual Meeting.
How
do I change my vote?
If
you are a stockholder of record, you may revoke your proxy at any time before your shares of common stock are voted at the Annual
Meeting by:
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Notifying
our Corporate Secretary, Christine A. Russell, in writing at 4699 Old Ironsides Drive, Suite 300, Santa Clara, California
95054, that you are revoking your proxy;
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Submitting
a proxy at a later date via the Internet, or by signing and delivering a proxy card relating to the same shares and bearing
a later date than the date of the previous proxy prior to the vote at the Annual Meeting, in which case your later-submitted
proxy will be recorded and your earlier proxy revoked; or
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Attending
and voting by ballot at the Annual Meeting.
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If
your shares of common stock are held in the name of a bank, broker or other nominee, you should check with your bank, broker or
other nominee and follow the voting instructions your bank, broker or other nominee provides.
Who
will count the votes?
A
representative from PMB Helin Donovan, our auditors, will act as the inspector of election and count the votes.
What
constitutes a quorum?
The
holders of a majority of the 55,724,162 shares of common stock eligible to vote as of the record date, either present or represented
by proxy, constitute a quorum. A quorum is necessary in order to conduct the Annual Meeting. If you choose to have your shares
represented by proxy at the Annual Meeting, you will be considered part of the quorum. Both abstentions and broker non-votes are
counted as present for the purpose of determining the presence of a quorum. If a quorum is not present at the Annual Meeting,
the stockholders present in person or by proxy may adjourn the meeting to a later date. If an adjournment is for more than 30
days or a new record date is fixed for the adjourned meeting, we will provide notice of the adjourned meeting to each stockholder
of record entitled to vote at the meeting.
What
vote is required to approve each proposal?
Election
of Directors
. For Proposal 1, the election of directors, the nominees will be elected by a plurality of the votes of the
shares of common stock present in person or represented by proxy and entitled to vote at the Annual Meeting. This means that the
six nominees with the most votes for election will be elected. You may choose to vote, or withhold your vote, separately for each
nominee. A properly executed proxy or voting instructions marked “
WITHHOLD
” with respect to the election of
one or more directors will not be voted with respect to the director or directors indicated, although it will be counted for the
purposes of determining whether there is a quorum.
Say-on-Pay
Proposal
. Proposal 2 is an advisory vote and is non-binding on the Company and the Board. The proposal solicits advice
only and therefore, there is no minimum number of votes required with respect to the Say-on-Pay Proposal.
Ratification
of the Appointment of Independent Registered Public Accounting Firm
. For Proposal 3, the affirmative vote of the holders
of shares of common stock having a majority of the votes cast by the holders of all of the shares of common stock present or represented
and voting on such matter will be required for approval.
To
approve an amendment to the Company’s Amended and Restated Certificate of Incorporation, as amended, to increase the number
of authorized shares of common stock from 100,000,000 to 150,000,0000.
For Proposal 4, the affirmative vote of a majority
of the issued and outstanding shares of common stock of the Company will be required for approval.
Approval
of the amendment to Uni-Pixel, Inc. 2011 Stock Incentive Plan
. For Proposal 5, the affirmative vote of the holders of
shares of common stock having a majority of the votes cast by the holders of all of the shares of common stock present or represented
and voting on such matter will be required for approval.
Other
Proposals
. Any other proposal that might properly come before the meeting will require the affirmative vote of the holders
of shares of common stock having a majority of the votes cast by the holders of all of the shares of common stock present or represented
and voting on such matter at the meeting in order to be approved, except when a different vote is required by law, our certificate
of incorporation or our Bylaws.
If
your proxy indicates an abstention from voting on all matters, the shares of common stock represented will be counted as present
for the purpose of determining a quorum, but they will not be voted on any matter at the Annual Meeting. Because directors are
elected based on a plurality vote, if you abstain from voting on the proposal to re-elect the directors (Proposal 1), your abstention
will have no effect on the outcome of the vote with respect to this proposal. If you abstain from voting on the advisory vote
for executive compensation (Proposal 2) it will have no effect on the outcome of the vote with respect to the proposal as abstentions
votes will not be counted as votes cast. If you abstain from voting on the proposal to ratify the appointment of PMB Helin Donovan
as our independent registered public accounting firm (Proposal 3), your abstention will have the same effect as a vote against
the proposal. Similarly, if you abstain from voting on an amendment to the Company’s Amended and Restated Certificate of
Incorporation to increase the number of authorized shares of common stock from 100,000,000 to 150,000,000 (Proposal 4), your abstention
will have the same effect on the outcome of the vote with respect to this proposal as a vote against the proposal, as the approval
requires a majority of the issued and outstanding shares of common stock of the Company. Finally, if you abstain from voting to
amend the Uni-Pixel, Inc. 2011 Stock Incentive Plan (Proposal 5), your abstention will have the same effect as a vote against
the proposal.
What
percentage of our common stock do our directors and officers own?
As
of March 23, 2017 our director-nominees and executive officers beneficially owned approximately 1.2% of our outstanding common
stock. See the discussion under the heading “Security Ownership of Management and Certain Beneficial Owners” on page
[18] for more details.
Who
is soliciting proxies, how are they being solicited, and who pays the cost?
We,
on behalf of our Board, through our directors, officers, and employees, are soliciting proxies primarily by mail and the Internet.
Further, proxies may also be solicited in person, by telephone, or facsimile. We will pay the cost of soliciting proxies. We will
also reimburse stockbrokers and other custodians, nominees, and fiduciaries for their reasonable out-of-pocket expenses for forwarding
proxy and solicitation materials to the owners of our common stock.
Who
is our Independent Registered Public Accounting Firm, and will they be represented at the Annual Meeting?
PMB
Helin Donovan served as the independent registered public accounting firm auditing and reporting on our financial statements for
the fiscal year ended December 31, 2016 and has been appointed to serve as our independent registered public accounting firm for
2017. We expect that representatives of PMB Helin Donovan will be present at the Annual Meeting. They will have an opportunity
to make a statement, if they desire, and will be available to answer appropriate questions at the Annual Meeting.
What
are the recommendations of our Board?
The
recommendations of our Board are set forth together with the description of each proposal in this Proxy Statement. In summary,
the Board recommends a vote:
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FOR
the election of the nominated directors (see Proposal 1);
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FOR
the approval, in an advisory capacity, of the compensation paid to our named executive officers (see Proposal 2);
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FOR
the ratification of PMB Helin Donovan as our independent registered public accounting firm for the fiscal year ending
December 31, 2017 (see Proposal 3).
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FOR
approving the certificate of amendment to the Company’s Amended and Restated
Certificate of Incorporation, as amended, to increase the number of authorized shares
of common stock from 100,000,000 to 150,000,000 (see Proposal 4); and
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FOR
the approval of an amendment to the Uni-Pixel, Inc. 2011 Stock Incentive Plan (see Proposal 5).
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With
respect to any other matter that properly comes before the meeting, the proxy holders will vote as recommended by the Board or,
if no recommendation is given, in their own discretion.
If
you sign and return your proxy card but do not specify how you want to vote your shares, the persons named as proxy holders on
the proxy card will vote in accordance with the recommendations of the Board.
Governance
of the Company
Our
business, property and affairs are managed by, or under the direction of, our Board, in accordance with the General Corporation
Law of the State of Delaware and our Bylaws. Members of the Board are kept informed of our business through discussions with the
Chief Executive Officer and other key members of management, by reviewing materials provided to them by management, and by participating
in meetings of the Board and its Committees. There are no family relationships between any director, executive officer or person
nominated to become a director.
We
continue to review our corporate governance policies and practices by comparing our policies and practices with those suggested
by various groups or authorities active in evaluating or setting best practices for corporate governance of public companies.
Based on this review, we have adopted, and will continue to adopt, changes that the Board believes are the appropriate corporate
governance policies and practices for our Company.
Stockholder
Communications
Stockholders
may communicate with the members of the Board, either individually or collectively, by writing to the Board at 4699 Old Ironsides
Drive, Suite 300, Santa Clara, California 95054. These communications will be reviewed by the office of the Corporate Secretary
as agent for the non-employee directors in facilitating direct communication to the Board. The Corporate Secretary’s office
will treat communications containing complaints relating to accounting, internal accounting controls, or auditing matters as reports
under our Whistleblower Policy. Further, the Corporate Secretary’s office will disregard communications that are bulk mail,
solicitations to purchase products or services not directly related either to us or the non-employee directors’ roles as
members of the Board, sent other than by stockholders in their capacities as such or from particular authors or regarding particular
subjects that the non-employee directors may specify from time to time, and all other communications which do not meet the applicable
requirements or criteria described below, consistent with the instructions of the non-employee directors.
General
Communications
. The Corporate Secretary’s office will summarize all stockholder communications directly relating to
our business operations, the Board, our officers, our activities or other matters and opportunities closely related to us. This
summary and copies of the actual stockholder communications will then be circulated to the Board.
Stockholder
Proposals and Director Nominations and Recommendations
. Stockholder proposals are reviewed by the Corporate Secretary’s
office for compliance with the requirements for such proposals set forth in our Bylaws and in Regulation 14a-8 promulgated under
the Securities Exchange Act of 1934 (“Exchange Act”). Stockholder proposals that meet these requirements will be summarized
by the Corporate Secretary’s office. Summaries and copies of the stockholder proposals are circulated to the Board.
Stockholder
nominations for directors are reviewed by the Corporate Secretary’s office for compliance with the requirements for director
nominations that are set forth in our Bylaws. Stockholder nominations for directors that meet these requirements are summarized
by the Corporate Secretary’s office. Summaries and copies of the nominations or recommendations are then circulated to the
Board.
The
Board will consider director candidates recommended by stockholders. If a director candidate is recommended by a stockholder,
the Board expects to evaluate such candidate in the same manner it evaluates director candidates it identifies. Stockholders desiring
to make a recommendation to the Board should follow the procedures set forth above regarding stockholder nominations for directors.
Retention
of Stockholder Communications
. Any stockholder communications which are not circulated to the Board because they do not meet
the applicable requirements or criteria described above will be retained by the Corporate Secretary’s office for at least
ninety calendar days from the date on which they are received, so that these communications may be reviewed by the directors generally
if such information relates to the Board as a whole, or by any individual to whom the communication was addressed, should any
director elect to do so.
Distribution
of Stockholder Communications
. Except as otherwise required by law or upon the request of a non-employee director, the Chairman
of the Board will determine when and whether a stockholder communication should be circulated among one or more members of the
Board and/or Company management.
Attendance
at Annual Meetings
. We encourage our Board members to attend the annual meeting each year. All Board members attended last
year’s annual meeting.
Corporate
Governance and Board Matters - Director Independence
The
Board held 4 meetings during the year ended December 31, 2016. Each of our directors attended at least 75% of the aggregate Board
meetings and meetings of the Board committee(s) of which he or she is a member.
In
determining the independence of our existing directors, we apply the definition of “independent director” provided
under the listing rules of The NASDAQ Stock Market LLC (“NASDAQ”). Pursuant to these rules, the Board concluded its
annual review of existing director independence on February 23, 2017. After considering all relevant facts and circumstances,
the Board affirmatively determined that all of the directors then serving on the Board, including those existing directors nominated
for reelection at the Annual Meeting with the exception of Jeff A. Hawthorne, who is employed by us, and Sam Young, are independent
of us under NASDAQ’s rules.
Committees
of our Board
The
Board has two standing committees: the Audit Committee (all Audit Committee members satisfy the independence standards of the
Exchange Act and NASDAQ’s rules) and the Compensation Committee (all Compensation Committee members satisfy the independence
standards of the Exchange Act and NASDAQ’s rules). Charters have been adopted for all committees. Anthony J. LeVecchio (Chairman),
Ross A. Young and Malcolm Thompson are the current members of the Audit Committee. Ross A. Young (Chairman), James E. Doran, and
Malcom Thompson are the current members of the Compensation Committee.
Audit
Committee
The
Audit Committee consists of three non-employee directors, all of whom are “independent” as defined under section 5605(a)(2)
of the NASDAQ Listing Rules. In addition, the Board has determined that Anthony J. LeVecchio, the Chairman of our Audit Committee,
qualifies as an “audit committee financial expert” as defined in the rules of the SEC. The Audit Committee operates
pursuant to a charter, which can be viewed on our website at www.unipixel.com (under “Investors”). The Audit Committee
met 4 times during 2016 with all members in attendance at each meeting. The role of the Audit Committee is to:
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oversee
management’s preparation of our financial statements and management’s conduct of the accounting and financial
reporting processes;
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oversee
management’s maintenance of internal controls and procedures for financial reporting;
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oversee
our compliance with applicable legal and regulatory requirements, including without limitation, those requirements relating
to financial controls and reporting;
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oversee
the independent auditor’s qualifications and independence;
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oversee
the performance of the independent auditors, including the annual independent audit of our financial statements;
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prepare
the report required by the rules of the SEC to be included in our Proxy Statement; and
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discharge
such duties and responsibilities as may be required of the Audit Committee by the provisions of applicable law, rule or regulation.
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Compensation
Committee
The
Compensation Committee consists of three non-employee directors, all of whom are “independent” as defined in section
5605(a)(2) of the NASDAQ Listing Rules. The Compensation Committee met 1 time during 2016 with all members in attendance at each
meeting. The role of the Compensation Committee is to:
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develop
and recommend to the independent directors of the Board, for approval by the independent directors on the Board, the annual
compensation (base salary, bonus, stock options and other benefits) for our President/Chief Executive Officer;
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review,
approve and recommend to the independent directors of the Board the annual compensation (base salary, bonus and other benefits)
for all of our executives (Vice Presidents and above);
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review,
approve and recommend to the Board the aggregate number of stock options to be granted to employees below the level of Vice
President;
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ensure
that a significant portion of executive compensation is reasonably related to the long-term interest of our stockholders;
and
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prepare
certain portions of our annual Proxy Statement, including an annual report on executive compensation.
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A
copy of the charter of the Compensation Committee is available on our website at www.unipixel.com (under “Investors”).
The
Compensation Committee may form and delegate a subcommittee consisting of one or more members to perform the functions of the
Compensation Committee. The Compensation Committee may engage outside advisers, including outside auditors, attorneys and consultants,
as it deems necessary to discharge its responsibilities. The Compensation Committee has sole authority to retain and terminate
any compensation expert or consultant to be used to provide advice on compensation levels or assist in the evaluation of director,
President/Chief Executive Officer or senior executive compensation, including sole authority to approve the fees of any expert
or consultant and other retention terms. In addition, the Compensation Committee considers, but is not bound by, the recommendations
of our Chief Executive Officer with respect to the compensation packages of our other executive officers.
Director
Qualifications and Diversity
The
Board seeks independent directors who represent a diversity of backgrounds and experiences that will enhance the quality of the
Board’s deliberations and decisions. Candidates should have substantial experience with one or more publicly traded companies
or should have achieved a high level of distinction in their chosen fields. The Board is particularly interested in maintaining
a mix that includes individuals who are active or retired executive officers and senior executives, particularly those with experience
in technology; research and development; finance, accounting and banking; or marketing and sales.
There
is no difference in the manner in which the Board evaluates nominees for director based on whether the nominee is recommended
by a stockholder. In evaluating nominations to the Board, the Board also looks for certain personal attributes, such as integrity,
ability and willingness to apply sound and independent business judgment, comprehensive understanding of a director’s role
in corporate governance, availability for meetings and consultation on Company matters, and the willingness to assume and carry
out fiduciary responsibilities. Each of the candidates nominated for election to our Board was recommended by the Board.
Compensation
Committee Interlocks
During
2016, Malcolm J. Thompson, James E. Doran and Ross A. Young served on the Compensation Committee. None of these individuals has
ever been an officer or employee of ours. None of our executive officers currently serve or in the past year has served as a member
of the board of directors or compensation committee of any entity that has one or more executive officers serving as a member
of our Board or the Compensation Committee.
Code
of Ethics for Senior Financial Officers
We
adopted a Code of Business Conduct and Ethics (“Code of Ethics”) applicable to our principal executive officer and
principal financial and accounting officer and any persons performing similar functions. In addition, the Code of Ethics applies
to our employees, officers, directors, agents and representatives. The Code of Ethics requires, among other things, that our employees
avoid conflicts of interest, comply with all laws and other legal requirements, conduct business in an honest and ethical manner
and otherwise act with integrity and in our best interest.
The
Code of Ethics includes procedures for reporting violations of the Code of Ethics. In addition, the Sarbanes-Oxley Act of 2002
requires companies to have procedures to receive, retain and treat complaints received regarding accounting, internal accounting
controls or auditing matters and to allow for the confidential and anonymous submission by employees of concerns regarding questionable
accounting or auditing matters. The Code of Ethics is intended to comply with the rules of the SEC and includes these required
procedures. The Code of Ethics is available on our website at www.unipixel.com (under “Investors”).
Risk
Oversight
Enterprise
risks are identified and prioritized by management and each prioritized risk is assigned to a Board committee or the full Board
for oversight as follows:
Full
Board
- Risks and exposures associated with strategic, financial, cyber security and execution risks and other current matters
that may present material risk to our operations, plans, prospects or reputation. Risks and exposures relating to corporate governance
and management and director succession planning.
Audit
Committee
- Risks and exposures associated with financial matters, particularly financial reporting, tax, accounting, disclosure,
internal control over financial reporting, financial policies, investment guidelines and credit and liquidity matters.
Compensation
Committee
- Risks and exposures associated with leadership assessment, and compensation programs and arrangements, including
incentive plans.
Board
Leadership Structure
The
Chairman of the Board presides at all meetings of the Board. The Chairman is appointed on an annual basis by at least a majority
vote of the remaining directors, and two directors may be appointed to serve as Co-Chairman. Currently, the offices of Chairman
of the Board and Chief Executive Officer are separated. The Company has no fixed policy with respect to the separation of the
offices of the Chairman of the Board and Chief Executive Officer. The Board believes that the separation of the offices of the
Chairman of the Board and Chief Executive Officer is in the best interests of the Company and will review this determination from
time to time.
Review,
Approval or Ratification of Transactions with Related Persons
The
Board reviews issues involving potential conflicts of interest, and reviews and approves all related party transactions, including
those required to be disclosed as a “related party” transaction under applicable federal securities laws. The Board
has not adopted any specific procedures for conducting reviews of potential conflicts of interest and considers each transaction
in light of the specific facts and circumstances presented. However, to the extent a potential related party transaction is presented
to the Board, the Company expects that the Board would become fully informed regarding the potential transaction and the interests
of the related party, and would have the opportunity to deliberate outside of the presence of the related party. The Company expects
that the Board would only approve a related party transaction that was in the best interests of the Company, and further would
seek to ensure that any completed related party transaction was on terms no less favorable to the Company than could be obtained
in a transaction with an unaffiliated third party. No transaction requiring disclosure under applicable federal securities laws
occurred during fiscal year 2016 that was submitted to the Board for approval as a “related party” transaction.
Section
16(a) Beneficial Ownership Reporting Compliance
Based
solely upon a review of Forms 3, 4 and 5 furnished to the Company, the Company believes that all of its directors, officers and
applicable stockholders timely filed these reports.
Proposal
1 — Election Of Directors
Nominees
for Election
The
Board currently has six members. Our Board has nominated six individuals to serve as directors, including each of our six incumbent
directors. Each nominee has agreed, if elected, to serve until the next annual meeting of stockholders or until the election and
qualification of his or her successor. If any nominee is unable to stand for election, which circumstance we do not anticipate,
the Board may provide for a lesser number of directors or designate a substitute. In the latter event, shares represented by proxies
may be voted for a substitute nominee.
If
a quorum is present at the Annual Meeting, then nominees will be elected by a plurality of the votes of the shares of common stock
present in person or represented by proxy and entitled to vote at the meeting. There is no cumulative voting in the election of
directors.
The
following biographical information is furnished as to each nominee for election as a director:
Jeff
A. Hawthorne
. Biographical information for Mr. Hawthorne is set forth below under “Executive Compensation and Other
Information”. We believe that Mr. Hawthorne’s business experience, in particular his experience as an executive in
several other display and optical technology companies, qualifies him to serve as a Director of Uni-Pixel, Inc.
Ross
A. Young, 51
. Mr. Young has served as a director since May 20, 2008. Mr. Young founded DisplaySearch, the leading provider
of market intelligence on displays and related technology, in 1996, sold it to The NPD Group in 2005 and is credited with building
the firm to what it is today. After leaving DisplaySearch in 2008, he served as VP at Samsung LCD before joining IMS Research
in late 2009 as SVP of displays, LEDs and lighting. He left this position in January 2012 and currently provides his services
as an independent consultant. Mr. Young has made multiple appearances on television, including NBC’s The Today Show, as
a display industry expert, and has been an invited speaker at over 30 different conferences worldwide. Mr. Young was appointed
to the board of directors of semiconductor start-up Akhan Technologies in 2010 and the Advisory Board of Illumitex, an LED start-up,
in 2009. Mr. Young received The NPD Group’s prestigious John Byington Award for outstanding creativity and innovation in
November 2006, was appointed to the board of directors at Westar Display Technologies in February 2005 and was named to the VLSI
Research Executive All-Star Team in 1994. Prior to founding DisplaySearch in 1996, he served in senior marketing positions at
OWL Displays, Brooks Automation, Fusion Semiconductor and GCA in the driver IC, flat panel automation, etch and strip and lithography
markets. He is also a published author, having written a book on U.S. - Japanese competition titled Silicon Sumo: U.S.-Japan Competition
and Industrial Policy in the Semiconductor Equipment Industry. Mr. Young holds a Bachelor’s degree in economics from the
University of California at San Diego.
Mr.
Young’s technology industry experience, particularly as it relates to our industry, makes him highly qualified to serve
as a member of our Board and other Board committees. With his business experience and educational background, Mr. Young is well-versed
in new technologies to help lead our company and is well-versed in the review and evaluation of financial statements of publicly
traded companies. He provides valuable insight to our Board and other Board committees.
Anthony
J. LeVecchio, 70
. Mr. LeVecchio has served as a director since May 9, 2011. Mr. LeVecchio has been the president and owner
of The James Group, a general business consulting firm that has advised clients across a range of industries, since 1988. Prior
to forming The James Group, Mr. LeVecchio was the senior vice president and chief financial officer for VHA Southwest, Inc., a
regional healthcare system. Mr. LeVecchio currently serves as director, advisor and executive of private and public companies
in a variety of industries. Mr. LeVecchio also currently serves on the board of directors of ViewPoint Financial Group, a community
bank based in Plano, Texas that is listed on The NASDAQ Global Select Market and as chairman of its Audit Committee. Mr. LeVecchio
holds a Bachelor of Economics and an M.B.A. in Finance from Rollins College.
Mr.
LeVecchio’s leadership roles in numerous companies make him a valuable member of our Board and Audit Committee. The extensive
management experience he has acquired in these roles provides him with the knowledge to assist with financial, accounting, regulatory
and administrative matters. Mr. LeVecchio is well-versed in accounting principles and financial reporting rules and regulations,
and is equipped to evaluate financial results and participate in our Audit Committee.
Malcolm
J. Thompson, 71
. Dr. Thompson has served as a director since August 19, 2014. In March 2013, Dr. Thompson was appointed CEO
of the Nano-Bio Manufacturing Consortium, which is funded by the Air Force to develop real time next generation human performance
monitoring using flexible electronics to monitor stress, fatigue and cognitive ability. Since January 2002, Dr. Thompson has been
President of MJT Associates, which provides high-tech business and technology consulting. Dr. Thompson has over 25 years of experience
in the display industry and is a recognized worldwide authority. Dr. Thompson was Chairman and CEO of RPO from December 2006 to
March 2011. RPO was a multinational company that developed a revolutionary new touch technology for LCD displays. Dr. Thompson
was board member and eventually succeeded Floyd Kvamme as Chairman of the board of Photon Dynamics from 1993 to 2008. Dr. Thompson
was also a board member of Cambridge Display Technology from 2005 to 2007. Dr. Thompson was interim and part time CEO of Vitex
from April 2003 to December 2005 and President and CEO of Novalux from March 2009 to December 2010. Dr. Thompson held various
positions, rising to be Chief Technologist at the Xerox Palo Alto Research Center (PARC) from 1982-1995, where he was responsible
for the advanced development and commercialization of revolutionary new imaging systems. His group produced the first desktop
high resolution TFT LCD. That technology was used to develop one of the first digital X-ray systems. He spun this activity out
of PARC and was the founder, President and CEO of dpiX from January 1995 to March 1999. Dr. Thompson was the founder and Chairman
of the board of USDC, now FlexTech Alliance and has been a board member from 1993 to the present. Dr. Thompson has served on Audit,
Nominating and Compensation Committees for various public and private companies. Dr. Thompson has been given many prestigious
awards and was appointed a Technology Pioneer at the World Economic Forum in 2000 and 2001. Dr. Thompson led a US/Japan Trade
and Partners delegation on flat panel displays in his capacity as Chairman of the board of USDC. Dr. Thompson has a BSc and PhD
from Brighton University in the UK.
Dr.
Thompson’s technology industry experience, particularly as it relates to our industry, makes him highly qualified to serve
as a member of our Board and other Board committees. With his business experience and educational background, Dr. Thompson is
well-versed in new technologies to help lead our company and is well-versed in the review and evaluation of financial statements
of publicly traded companies. He provides valuable insight to our Board and other Board committees.
James
E. Doran, 68.
Mr. Doran is currently an executive-level consultant for companies ranging from small start-ups to multi-billion
dollar international corporations. His recent consulting experience includes engagements with Brewer Science, Digimarc, Ramtron,
Sun Power and Transphorm. Mr. Doran’s expertise is in assessing the strengths and weaknesses of technology companies and
developing and leading strategies and initiatives to improve their competitiveness. He also helps companies form partnerships
and joint ventures, where his extensive international and joint-venture experience is a major benefit. Mr. Doran also serves as
a consulting partner with L.B. Day & Company, Inc., a West Coast-based strategic planning and organization-development consulting
firm. Mr. Doran has had a successful 40-year career in the semiconductor business. He started as a process engineer at Signetics,
advanced to engineering and operations management at Intersil, ran development facilities for Intel, then ran semiconductor fabs
for AMD in California, Texas, and Germany. Mr. Doran has been COO for Spansion, where he ran all aspects of operations worldwide.
Most recently, he served as the first Senior VP of Worldwide Operations for GlobalFoundries, running the factories in Germany,
Singapore, and New York. Mr. Doran has had extensive international experience in Germany, Japan, China, Malaysia, and Thailand,
and he helped establish one of the most successful US/Japan joint ventures (Fujitsu AMD Semiconductor Limited) and one of the
most successful solar joint ventures (Sunpower and AUO). Mr. Doran holds a Bachelor’s degree in Physics from Northwestern
University and a Master’s degree in Physics from the University of Wisconsin. He has served on the board of directors of
publicly traded companies Spansion and Ramtron, and on various Advisory Boards. Mr. Doran has been a frequent speaker at technology
conferences in the US, Germany and Japan. He also served as the executive leader of ISSM (International Semiconductor Symposium
on Manufacturing), and has been a frequent guest speaker at Stanford as part of SIMA (the Stanford Industry Manufacturing Association).
Mr.
Doran’s technology industry experience, particularly as it relates to our industry, makes him highly qualified to serve
as a member of our Board and other Board committees. With his business experience and educational background, Mr. Doran is well-versed
in new technologies to help lead our company and is well-versed in the review and evaluation of financial statements of publicly
traded companies.
Sam
I. Young, 69.
Mr. Young is co-founder of four technology companies including Flash pioneer Exel Microelectronics, Corsair
Microsystems , the Hyundai Electronics Flash memory division currently doing in excess of $2 billion in revenue and healthcare
start-up NuEnerchi Inc. Mr. Young has over 35 years of experience in RF and embedded products, touch screen controllers, memory,
logic, solar energy, LED lighting, cloud computing and software, during which time he was responsible for managing companies,
defining product lines, sales and P&L. Mr. Young served as an executive at several public companies with sales of hundreds
of millions of dollars as well as nine start-ups as a direct employee and over a dozen more as an advisor or part time executive.
Mr. Young serves or has served on the advisory board or board of directors of multiple technology firms and has participated in
raising well over $100 million in venture capital and formed many strategic relationships with fortune 500 companies. He has extensive
experience in doing business in Asia and built and managed six sales forces from ground up. Mr. Young defined and introduced over
30 products to the market. Mr. Young chaired the EIA/JEDEC standards committee for all memory for four years and was formerly
the Director for Dataquest’s memory service before they were acquired by the Gartner Group. Mr. Young is a published author
of numerous articles for technical journals and magazines including two cover stories for the top Electronics publications. He
also chaired and organized numerous sessions at technical conferences. Mr. Young is currently the president of Young and Associates,
a firm with worldwide resources formed to help companies in the areas of strategic and five-year business planning, general management,
product and market positioning/strategy, public relations and branding, marketing, strategic partnership creation, operations
and, sales channel and business development and has consulting services focused on sales to the Company in 2016. Prior to Young
and Associates he served as CEO of Lynguent Inc. an EDA company with a revolutionary software product enabling the fast creation
of analog circuit models to dramatically reduce the simulation time for mixed signal circuits. Mr. Young holds a Bachelor degree
in electrical engineering from Pratt University in New York City.
Mr.
Young’s technology industry and leadership experience, makes him highly qualified to serve as a member of our Board and
other Board committees. With his business experience and educational background, Mr. Young is well-versed in new technologies
to help lead our company and is well-versed in the areas of Sales and Marketing as well as general management and building first
class organizations.
Corporate
Governance and Board Matters – Director Compensation
The
table below summarizes the total compensation paid to or earned by our directors during the fiscal year ended December 31, 2016.
As set forth below, UniPixel’s director compensation program consists only of equity-based compensation. The amounts represented
in the “Stock Awards” column reflects the stock compensation expense recorded by the Company and does not necessarily
equate to the income that will ultimately be realized by the director for such awards. The table does not include Mr. Hawthorne,
whose compensation is described in the Summary Compensation Table below.
2016
Director Compensation Table
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Name
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|
Fees
Earned or Paid in Cash
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|
|
Stock
Awards
(1)(2)
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|
|
Total
|
|
|
Sam I.
Young
|
|
|
—
|
|
|
$
|
150,010
|
|
|
$
|
150,010
|
|
|
Ross A. Young
|
|
|
—
|
|
|
$
|
112,508
|
|
|
$
|
112,508
|
|
|
James E. Doran
|
|
|
—
|
|
|
$
|
112,508
|
|
|
$
|
112,508
|
|
|
Anthony J. LeVecchio
|
|
|
—
|
|
|
$
|
112,508
|
|
|
$
|
112,508
|
|
|
Malcolm J. Thompson
|
|
|
—
|
|
|
$
|
112,508
|
|
|
$
|
112,508
|
|
|
(1)
|
The
amounts represent the aggregate grant date fair value of the awards granted in 2016 to each named director computed in accordance
with stock-based accounting rules (FASB ASC Topic 718).
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|
|
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(2)
|
On
June 8, 2016, Messrs. Ross Young, LeVecchio and Doran and Dr. Thompson were each awarded
75,000 restricted stock units and Mr. Sam Young was awarded 100,000 restricted stock
units, pursuant to our 2011 Stock Incentive Plan, as previously disclosed on our Current
Report on Form 8-K filed with the SEC on June 10, 2016. These units vest 1/12th on August
1, 2016, 1/
12th
on November 1, 2016, 1/12th
on February 1, 2017, 1/12th on May 1, 2017, 1/12th on August 1, 2017, 1/
12th
on November 1, 2017, 1/12th on February 1, 2018, 1/12th on May 1, 2018, 1/12th
on August 1, 2018, 1/
12th
on November 1,
2018, 1/12th on February 1, 2019 and 1/12th on May 1, 2016.
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|
(3)
|
All
of our directors use their personal credit cards for approved business expenses. The directors’ personal credit cards
may accrue airline miles, hotel points, and/or various other types of rewards (collectively, “Credit Card Bonuses”).
The Credit Card Bonuses belong to the individual directors. No director accrued Credit Card Bonuses having a value of more
than $10,000.
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|
|
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(4)
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At
December 31, 2016, the directors had the following restricted stock award, option award
and restricted stock unit awards outstanding:
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|
Name
|
|
Aggregate
Number of Unvested Restricted Stock (#)
|
|
|
Aggregate
Number of Shares Underlying Stock Options (#)
|
|
|
Aggregate
Number of Shares Underlying Restricted Stock Units (#)
|
|
|
Sam I.
Young
|
|
|
—
|
|
|
|
—
|
|
|
|
83,333
|
|
|
Ross A. Young
|
|
|
6,666
|
|
|
|
—
|
|
|
|
62,500
|
|
|
James E. Doran
|
|
|
—
|
|
|
|
—
|
|
|
|
62,500
|
|
|
Anthony J. LeVecchio
|
|
|
6,666
|
|
|
|
—
|
|
|
|
62,500
|
|
|
Malcolm J. Thompson
|
|
|
6,666
|
|
|
|
555
|
|
|
|
62,500
|
|
Overview
UniPixel’s
director compensation program consists only of equity-based compensation. The equity compensation is designed to build an ownership
stake in the Company while conveying an incentive to directors relative to the returns recognized by our stockholders. In 2016,
with the approval of the Board to begin issuing restricted stock units (“RSUs”) under the Uni-Pixel, Inc. 2011 Stock
Incentive Plan (the “Plan”), directors received only RSUs as equity compensation. All directors are reimbursed for
ordinary and reasonable expenses incurred in exercising their responsibilities in accordance the Company’s Travel and Entertainment
Expense Reimbursement policy applicable to all employees of the Company.
No
Cash-Based Compensation
Company
non-employee directors currently do not receive an annual stipend. All directors are reimbursed for ordinary and reasonable expenses
incurred in exercising their responsibilities in accordance the Company’s Travel and Entertainment Expense Reimbursement
policy applicable to all employees of the Company.
Pension
and Benefits
The
non-employee directors are not eligible to participate in the Company’s benefits plans, including the 401(k) plan.
Indemnification
Agreements
The
Company’s certificate of incorporation requires the Company to indemnify both the directors and officers of the Company
to the fullest extent permitted by Delaware state law.
Continuing
Education of Directors
We
are committed to supporting the continuing education of our directors on relevant matters.
Vote
and Recommendation
The
affirmative vote of the holders of a plurality of the shares of common stock present in person or represented by proxy and entitled
to vote on the nominees will be required to approve each nominee. This means that the six nominees with the most votes for election
will be elected.
Our
Board recommends a vote “FOR” each of the nominees.
Executive
Compensation and Other Information
Executive
Officers
Jeff
A. Hawthorne, 59, Chief Executive Officer, President, Principal Executive Officer and Director—
On
April 14, 2014, Jeff Hawthorne was appointed as our Chief Executive Officer, President and a director of the Board. During January
2009 to March 2012 and February 2013 to April 2014, Mr. Hawthorne was a business advisor to various companies. From March 2012
to February 2013, Mr. Hawthorne served as senior vice president and general manager of the MOCVD business unit at Veeco, where
he was responsible for revenue of $300 million and 350 employees. From November 1991 to October 2008, Mr. Hawthorne was employed
by Photon Dynamics, beginning as an inspection system applications engineer, promoted to VP of development and president of its
image processing division, and eventually promoted to the positions of president and CEO of the company before it was acquired
by Orbotech for $290 million. The company was the leading supplier of test, repair and inspection equipment for the flat panel
display industry, with 350 employees and operations in Japan, Korea, Taiwan and China. As president and CEO, he oversaw multiple
new product introductions, which drove the company’s market share to 80%, and grew annual revenues from $70 million to $180
million. Earlier in his career, Mr. Hawthorne held various technical and management roles at companies in flat panel display engineering
consulting and the development of custom thin film deposition equipment used for semiconductor, solar and wear coating applications.
Since October 2012, Mr. Hawthorne has served as a director on the board of directors at Iteru Systems, a developer of a unique
enterprise data management platform. Since October 2008, Mr. Hawthorne is also a member of the visiting committee for the Dean
of the Engineering School at the University of Rochester. Mr. Hawthorne holds a Master of Science degree in Optical Engineering
from the University of Rochester, Institute of Optics and a Bachelor of Science, Cum Laude, in Engineering Physics from the University
of Colorado, Boulder. Mr. Hawthorne also attended the Stanford Executive Program at Stanford University’s Graduate School
of Business. Mr. Hawthorne is also an inventor on seven patents in automated machine vision technology for inspection and testing
of flat panel displays. Mr. Hawthorne’s extensive business experience as an executive officer and his educational background
gives him the qualifications and skills to serve as a director of Uni-Pixel, Inc.
Christine
A. Russell, 67, Chief Financial Officer
— Ms. Russell joined UniPixel in May of 2015. From May 2014 to March 2015,
she served as CFO of Vendavo, Inc., a pricing optimization enterprise software company, which was sold in late 2014 to a private
equity firm. From May 2009 to October 2013, Ms. Russell was Chief Financial Officer of Evans Analytical Group, (EAG), a leading
global provider of materials characterization and microelectronic failure analysis and “release to production” services.
From June 2006 to April 2009, Ms. Russell was with Virage Logic Corporation, a provider of advanced intellectual property for
the design of integrated circuits, where she served as Executive Vice President of Business Development from September 2008 and
as Chief Financial Officer from June 2006 to September 2008. Ms. Russell served as Senior Vice President and Chief Financial Officer
of OuterBay Technologies, Inc., a database archiving and data lifecycle management company, from May 2005 to February 2006, when
OuterBay was acquired by Hewlett-Packard Company. From October 2003 to May 2005, Ms. Russell served as the Chief Financial Officer
of Ceva, Inc. a company specializing in semiconductor intellectual property offering digital signal processing cores and software.
From October 1997 to October 2003, Ms. Russell served as Chief Financial Officer of Persistence Software, Inc., a company offering
application server technology for major financial institutions and enterprises. Prior to 1997, Ms. Russell served in various senior
financial management positions with a variety of technology companies. Ms. Russell holds a B.A. degree and M.B.A. degree from
the University of Santa Clara.
Executive
Officer Compensation
The
table below summarizes the total compensation paid to or earned by our principal executive officer and the most highly compensated
executive officer other than the principal executive officer who was serving as an executive officer at the end of the last completed
fiscal year. Collectively, we refer to these officers as the “named executive officers”. The amounts represented in
the “Option Awards” column reflect the stock compensation expense recorded by the Company pursuant to Financial Accounting
Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718 and does not necessarily equate to the income that will
ultimately be realized by the named executive officers for such awards.
Summary
Compensation Table
Name
and
Principal Position
|
|
Year
|
|
|
Salary
|
|
|
Stock
Awards
(1)(2)
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeff
A. Hawthorne
|
|
|
2016
|
|
|
$
|
305,000
|
|
|
$
|
119,727
|
(1)
|
|
$
|
424,727
|
|
|
Chief Executive Officer, President (Principal
Executive Officer) & Director
|
|
|
2015
|
|
|
$
|
241,667
|
|
|
$
|
460,831
|
(2)
|
|
$
|
702,498
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Christine A. Russell
|
|
|
2016
|
|
|
$
|
280,000
|
|
|
$
|
152,126
|
(1)
|
|
$
|
432,126
|
|
|
Chief Financial Officer & Secretary
|
|
|
2015
|
|
|
$
|
145,731
|
|
|
$
|
44,133
|
(2)
|
|
$
|
189,864
|
|
|
(1)
|
Amounts
reflect RSUs granted for the fiscal year ended December 31, 2016. The amounts represent the aggregate grant date fair value
of the awards granted to each named executive officer computed in accordance with stock-based accounting rules (FASB ASC Topic
718).
Assumptions used in the calculation of these amounts are included in Note 6-Stockholders’
Equity, to our audited financial statements for the fiscal year ended December 31, 2016 included in the Annual Report on Form
10-K as filed with the SEC on [●].
|
|
|
|
|
(2)
|
Amounts
reflect restricted stock awards granted for the fiscal year ended December 31, 2015.
The amounts represent the aggregate grant date fair value of the awards granted to each
named executive officer computed in accordance with stock-based accounting rules (FASB
ASC Topic 718).
Assumptions used in the calculation
of these amounts are included in Note 6-Stockholders’ Equity, to our audited financial
statements for the fiscal year ended December 31, 2015 included in the Annual Report
on Form 10-K as filed with the SEC on March 30, 2016.
|
Narrative
Disclosures
401(k)
Plan
Effective
February 2007, the Company created an employee benefit plan available to all full-time employees under Section 401(k) of the Internal
Revenue Code (“401(k) plan”). Employees may make contributions up to a specified percentage of their compensation,
as defined. The Company is not obligated to make contributions under the 401(k) plan. In addition, the Company did not make any
matching employer contribution to the 401(k) Plan in 2016 or 2015.
Employment
Agreements
As
of December 31, 2016, the Company does not have any employment agreements outstanding.
Payments
Upon Termination and Change of Control
The
Company has agreed that, if the employment of Jeff Hawthorne, the Company’s Chief Executive Officer and President, is terminated
for reasons other than cause or as a result of death or disability or Mr. Hawthorne’s termination of employment for Good
Reason, either of which occurs during the period that begins when negotiations for a Change in Control (as defined below) begins
and ends on the six month anniversary of the closing of the Change in Control transaction, Mr. Hawthorne will receive (i) a severance
payment consisting of 2 times his annual base salary, (ii) all unvested equity awards he may have received during his employment
will, to the extent that such awards are unvested, immediately vest, and (iii) should he elect to continue to receive group health
benefits under COBRA, for a period of 12 months following his termination, the Company will pay the premiums for his continuation
coverage, up to a maximum of $1,500 per month. Mr. Hawthorne may resign for “Good Reason” in the event of a reduction
in his base salary of at least 10% (provided that it is not part of a general salary reduction), a material demotion in position
and job duties or a relocation by more than thirty-five driving miles from the Company’s current location.
The
Company has also agreed that, if the employment of Christine Russell, the Company’s Chief Financial Officer, is terminated
is terminated for reasons other than cause or as a result of death or disability or Ms. Russell’s termination of employment
for Good Reason, either of which occurs during the period that begins when negotiations for a Change in Control begins and ends
on the six month anniversary of the closing of the Change in Control transaction and such termination is not a termination for
any other reason, Ms. Russell will receive (i) a severance payment equal to one year of her annual salary, (ii) all unvested equity
awards she may have received during her employment will, to the extent that such awards are unvested, immediately vest and (iii)
should she elect to continue to receive group health benefits under COBRA, for a period of 12 months following her termination
the Company will pay the premiums for her continuation coverage, up to a maximum of $1,500 per month. Ms. Russel may resign for
“Good Reason” in the event of a reduction in her base salary of at least 10% (provided that it is not part of a general
salary reduction), a material demotion in position and job duties or a relocation by more than thirty-five driving miles from
the Company’s current location.
Change
in Control” is defined as (i) the sale or disposition by the Company to an unrelated third party of substantially all of
its business or assets, (ii) the sale of the capital stock of the Company in connection with the sale or transfer of the Company’s
securities representing greater than 50% of the voting power in the Company to an unrelated third party, or (iii) the merger or
consolidation of Company with another corporation as part of a sale or transfer of the Company’s securities representing
greater than 50% of the voting power in Company to an unrelated third party.
Executive
Officer Equity Awards Outstanding
|
Outstanding
Equity Awards at December 31, 2016
|
|
Stock
Awards
|
|
Name
|
|
Number
of Shares or Units of Stock That Have Not Vested
|
|
|
Market
Value of Shares or Units of Stock That Have Not Vested
|
|
|
Jeff
A. Hawthorne
|
|
|
50,000
|
(a)
|
|
$
|
49,000
|
(d)
|
|
|
|
|
166,666
|
(b)
|
|
$
|
163,335
|
(d)
|
|
|
|
|
66,666
|
(c)
|
|
$
|
65,335
|
(d)
|
|
|
|
|
|
|
|
|
|
|
|
Christine Russell
|
|
|
175,000
|
(b)
|
|
$
|
171,500
|
(d)
|
|
|
|
|
120,000
|
(c)
|
|
$
|
117,600
|
(d)
|
|
(a)
|
Represents
restricted stock granted on April 14, 2014 which vests on April 14, 2017.
|
|
(b)
|
Represents
RSUs granted on June 8, 2016, which vests on February 1, 2017, 1/10th on May 1, 2017, 1/10th on August 1, 2017, 1/
10th
on November 1, 2017, 1/10th on February 1, 2018, 1/10th on May 1, 2018, 1/10th on August 1, 2018, 1/
10th
on November 1, 2018, 1/10th on February 1, 2019 and 1/10th on May 1, 2016.
|
|
(c)
|
Represents
restricted stock grants on July 31, which vests 1/3rd on 7/31/2016, 1/3rd on 7/31/2017 and 1/3rd on 7/31/2018.
|
|
(d)
|
Valued
at $0.98 per share which was the closing price of our common stock on December 30, 2016.
|
Compensation
of Executive Officers
Overview
The
Compensation Committee of the Board administers our executive compensation and benefit programs. Our Compensation Committee is
appointed by our Board, and, as discussed above, consists entirely of independent directors. Each member of the Compensation Committee
is also an “outside directors” for purposes of Section 162(m) of the Internal Revenue Code and “non-employee
directors” for purposes of Rule 16b-3 under the Exchange Act. The Compensation Committee, along with our independent directors
on the full Board, oversee all compensation and benefit programs and actions that affect our executive officers.
Compensation
Philosophy
The
Company is committed to developing and commercializing innovative products. The Company is engaged in a competitive industry,
and to accomplish this objective, we design our compensation programs to attract, motivate and retain qualified executives dedicated
to working towards our short and long-term corporate goals. People are one of our key assets, and we seek to hire employees and
executives who share our corporate vision and values and have the skills and motivation to execute on our corporate strategy.
In our dynamic work environment, we foster the following corporate values:
|
|
●
|
Leadership;
|
|
|
|
|
|
|
●
|
Innovation
and creativity;
|
|
|
|
|
|
|
●
|
Diversity;
|
|
|
|
|
|
|
●
|
Teamwork;
|
|
|
|
|
|
|
●
|
Accountability;
and
|
|
|
|
|
|
|
●
|
High
ethical standards.
|
Objectives
of Our Compensation Program
The
primary objective of our compensation programs for our executive officers is to attract and retain qualified executives and employees
of outstanding ability and potential. In addition, other objectives of our compensation program include the following:
|
|
●
|
Motivate
executives and employees to work towards completing our overall corporate goals and milestones and their individual employee
objectives over the short and long-term;
|
|
|
|
|
|
|
●
|
Align
our executives’ and employees’ performance with our stockholders’ interests; and
|
|
|
|
|
|
|
●
|
Compete
effectively with the compensation programs of comparable companies to allow us to compete with our peers for valuable human
resources.
|
What
Our Compensation Program is Designed to Reward
Our
compensation program is designed to reward performance measured over a short and long-term basis. Accordingly, the Compensation
Committee aims to balance a fixed cash base salary with variable cash and equity incentives to motivate each executive to reach
his or her individual objectives as well as our overall corporate objectives. Base salaries, any annual cash incentives and the
vesting of our restricted stock units, restricted stock awards, options and retirement plans encourage executive retention and
provide a balance between short and long-term elements of compensation.
We
generally set corporate objectives at the beginning of the fiscal year, against which the performance of our executives is evaluated
for determining adjustments in compensation for the subsequent fiscal year. Our corporate objectives typically include the progress
of sales growth, advancement of research and development programs, management of costs and expenses and attainment of necessary
capital resources.
Compensation
Process; Role of Management
The
Compensation Committee is responsible for determining and approving all compensation for our executive officers. Pursuant to its
charter, the Compensation Committee recommends for approval by the independent members of the full Board the salary, bonus, equity
grants and other aspects of the compensation of our President and Chief Executive Officer, approves the salary and bonus levels,
if any, for other executive officers, approves equity grants to other executive officers and approves all employment, severance
and change-in-control agreements applicable to other executive officers. Our Chief Executive Officer assists the Compensation
Committee in its deliberations with respect to the compensation payable to our other executive officers, and typically recommends
specific compensation packages for our executive officers based upon his assessment and evaluation of their performance for the
prior year. In determining the amount of compensation to be paid to our executive officers, the Compensation Committee reviews
the compensation paid to comparable officers by companies similar in size in the industry.
Following
the end of each fiscal year, our Chief Executive Officer evaluates executive officer performance for the prior fiscal year, other
than his own performance, and discusses the results of such evaluations with the Compensation Committee. The Chief Executive Officer
assesses each executive officer’s performance for the prior fiscal year based upon subjective factors concerning such officer’s
individual business goals and objectives, and the contributions made by the executive officer to our overall results. The Chief
Executive Officer then makes specific recommendations to the Compensation Committee for adjustments of base salary, any target
bonus and equity awards, if appropriate, as part of the compensation packages for each executive officer, other than himself,
for the next fiscal year.
The
Compensation Committee reviews the performance of the Chief Executive Officer and determines all compensation for the Chief Executive
Officer, subject to the final approval of the independent members of the full Board.
During
the 2016 fiscal year, the Compensation Committee did not use a compensation consultant in determining the compensation of the
Company’s executive officers.
At
the annual meeting that was held on June 8, 2016, our shareholders voted to approve on an advisory basis, by a margin of 92%,
the compensation paid to our named executive officers. The Compensation Committee viewed the results of the 2016 advisory vote
as an affirmation of our current pay practices, and so it did not implement significant changes to our executive compensation
program for the year 2016.
COMPENSATION
COMMITTEE REPORT
The
Compensation Committee of the Board has reviewed and discussed the section entitled “Compensation of Executive Officers”
included in this Proxy Statement with management. Based on such review and discussions, the Compensation Committee recommended
to the Board that the section entitled “Compensation of Executive Officers” be included in this Proxy Statement. The
material in this report shall not be deemed to be “soliciting material” or “filed” with the SEC, and will
not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange
Act of 1934, as amended, as a result of furnishing the disclosure in this manner.
Compensation
Committee of the Board
Ross
A. Young
James
E. Doran
Malcolm
J. Thompson
Security
Ownership Of Management AND Certain Beneficial Owners
The
following table shows information known to us about beneficial ownership of our common stock by:
|
|
●
|
each
of our directors;
|
|
|
|
|
|
|
●
|
each
of our current named executive officers as well as any additional individuals identified as named executive officers in the
section of this report titled “Executive Officer Compensation”;
|
|
|
|
|
|
|
●
|
all
of our current directors and named executive officers as a group; and
|
|
|
|
|
|
|
●
|
each
person known by us to beneficially own more than 5% of our common stock.
|
Beneficial
ownership and percentage ownership are determined in accordance with the rules of the SEC. Under these rules, beneficial ownership
generally includes any shares as to which the individual or entity has sole or shared voting power or investment power and includes
any shares that an individual or entity has the right to acquire beneficial ownership of within 60 days of March 23, 2017 through
the exercise of any option, warrant, conversion privilege or similar right. In computing the number of shares beneficially owned
by a person and the percentage ownership of that person, shares of our common stock that could be issued upon the exercise of
outstanding options and warrants that are exercisable within 60 days of March 23, 2017 are considered to be outstanding. These
shares, however, are not considered outstanding as of March 23, 2017 when computing the percentage ownership of each other person.
To
our knowledge, except as indicated in the footnotes to the following table, all beneficial owners named in this table have sole
voting and investment power with respect to all shares shown as beneficially owned by them. Percentage of ownership is based on
55,724,162 shares of common stock outstanding as of March 23, 2017.
|
Name
and
Address
of Beneficial Owner
|
|
Amount
of Beneficial Ownership(1)
|
|
|
|
Percent
of Class
|
|
|
Directors and Officers:
|
|
|
|
|
|
|
|
|
|
|
Jeff A. Hawthorne
|
|
|
299,063
|
|
(2
|
)
|
|
0.54
|
%
|
|
Christine A. Russell
|
|
|
239,456
|
|
(3
|
)
|
|
0.43
|
%
|
|
Sam Young
|
|
|
46,332
|
|
(4
|
)
|
|
0.08
|
%
|
|
James E. Doran
|
|
|
25,000
|
|
(5
|
)
|
|
0.04
|
%
|
|
Ross A. Young
|
|
|
89,134
|
|
(6
|
)
|
|
0.16
|
%
|
|
Anthony J. LeVecchio
|
|
|
118,888
|
|
(7
|
)
|
|
0.21
|
%
|
|
Malcolm J. Thompson
|
|
|
41,112
|
|
(8
|
)
|
|
0.07
|
%
|
|
All Current Directors and Executive
Officers as a Group (7 persons)
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Beneficial
ownership is determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended, and is generally
determined by voting power and/or investment power with respect to securities. Unless otherwise noted, all of such shares
of common stock listed above are owned of record by each individual named as beneficial owner and such individual has sole
voting and dispositive power with respect to the shares of common stock owned by each of them.
|
|
|
|
|
(2)
|
Includes
50,000 shares of restricted stock that vests 50% on April 14, 2017. Includes 66,666 shares
of restricted stock that vests 50% on July 31, 2017 and 50% on July 31, 2018. Includes
16,666 RSUs that vest on May 1, 2017. The restricted stock may not be sold or transferred
until vested.
|
|
|
|
|
(3)
|
Includes
120,000 shares of restricted stock that vests 50% on July 31, 2017 and 50% on July 31,
2018. The restricted stock may not be sold or transferred until vested. Includes 17,500
RSUs that vest on May 1, 2017. The restricted stock may not be sold or transferred until
vested.
|
|
|
|
|
(4)
|
Includes
8,333 RSUs that vest on May 1, 2017.
|
|
|
|
|
(5)
|
Includes
6,250 RSUs that vest on May 1, 2017.
|
|
(6)
|
Includes
1,800 shares of restricted stock that vest on April 14, 2017. Includes 6,666 shares of
restricted stock that vests 50% on July 31, 2017 and 50% on July 31, 2018. Includes 6,250
RSUs that vest on May 1, 2017 and options to purchase 37,334 shares of common stock that
are currently exercisable or will be vested as of May 22, 2017.
|
|
|
|
|
(7)
|
Includes
1,800 shares of restricted stock that vest on April 14, 2017. Includes 6,666 shares of
restricted stock that vests 50% on July 31, 2017 and 50% on July 31, 2018. Includes (i)
6,250 RSUs that vest on May 1, 2017; (ii) options to purchase 18,667 shares of common
stock that are currently exercisable or will be vested as of May 22, 2017; and (iii)
46,421 warrants currently exercisable or will be exercisable as of May 22, 2017.
|
|
|
|
|
(8)
|
Includes
6,666 shares of restricted stock that vests 50% on July 31, 2017 and 50% on July 31,
2018. Includes 6,250 RSUs that vest on May 1, 2017 and options to purchase 6,112 shares
of common stock that are currently exercisable or will be vested as of May 22, 2017.
|
PROPOSAL
2 – APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION OF OUR NAMED
EXECUTIVE
OFFICERS
In
recent years, good corporate governance commentators and advisors have advocated and, increasingly, governmental regulatory authorities,
including the SEC, are mandating that public companies, such as UniPixel, initiate procedures to ensure that our stockholders
have input on our compensation programs for our named executive officers (referred to as “Say-on-Pay”). In summary,
our policies and programs for compensating our named executive officers are designed to attract, retain, motivate, and reward
top quality personnel capable of driving our success. Pay that reflects performance and alignment of that pay with the interests
of long-term stockholders are key principles that underlie the design of our compensation programs for our named executive officers.
Our
Board values and encourages constructive dialogue on executive compensation and other important governance topics with our stockholders,
to whom it is ultimately accountable. We urge you to read this Proxy Statement for additional details on the Company’s executive
compensation.
Our
Say-on-Pay proposal is designed to provide our stockholders with the opportunity to consider and vote upon the compensation paid
to our named executive officers, as disclosed in this Proxy Statement pursuant to Item 402 of SEC Regulation S-K, including the
compensation tables and narrative discussion and the section entitled “Compensation of Executive Officers”. Although
the vote is advisory and non-binding on the Company or the Board, our Board and the Compensation Committee will review the voting
results. To the extent there is any significant lack of support for the compensation of our named executive officers, we would
expect to initiate procedures designed to help us better understand stockholder concerns. Our Board and Compensation Committee
would consider constructive stockholder feedback in making future decisions about the compensation programs for our named executive
officers.
At
the annual meeting that was held on June 8, 2016, our shareholders voted to approve on an advisory basis, by a margin of 92%,
the compensation paid to our named executive officers. The Compensation Committee viewed the results of the 2016 advisory vote
as an affirmation of our current pay practices, and so it did not implement significant changes to our executive compensation
program for the year 2016.
Marking
the Proxy Card “For” indicates support for the compensation of our named executive officers; marking the Proxy Card
“Against” indicates lack of support for the compensation of our named executive officers. You may abstain by marking
the “Abstain” box on the Proxy Card.
Vote
and Recommendation
This
is an advisory vote and does not require a minimum number of votes.
However, our Board recommends that stockholders vote “FOR”
the approval of the compensation paid to our named executive officers in Proposal 2
.
Report
of the Audit Committee
The
Audit Committee of the Board has:
|
|
●
|
reviewed
and discussed the Company’s audited consolidated financial statements for the year ended December 31, 2016 with management;
|
|
|
|
|
|
|
●
|
discussed
with the Company’s independent auditors the matters required to be discussed by Statement on Auditing Standards No.
61, as amended (AICPA, Professional Standards, Vol. 1 AU section 380), as adopted by the Public Company Accounting Oversight
Board in Rule 3200T; and
|
|
|
|
|
|
|
●
|
received
the written disclosures and letter from the independent auditors required by the applicable requirements of the Public Accounting
Oversight Board regarding the independent auditors communications with the Audit Committee concerning independence, and has
discussed with PMB Helin Donovan matters relating to its independence.
|
In
reliance on the review and discussions referred to above, the Audit Committee recommended to the Board that the consolidated financial
statements audited by PMB Helin Donovan for the fiscal year ended December 31, 2016 be included in its Annual Report on Form 10-K
for such fiscal year to be filed with the SEC on [●].
Audit
Committee of the Board
Anthony
J. LeVecchio, Chairman
Ross
Young
Malcolm
Thompson
PROPOSAL
3 – Ratification of Appointment
of
Independent Registered Public Accounting Firm
The
Audit Committee of the Board has appointed PMB Helin Donovan as our independent registered public accounting firm to audit our
financial statements for the fiscal year ending December 31, 2017. PMB Helin Donovan has served as our independent registered
public accounting firm since 2005.
Stockholder
ratification of the selection of PMB Helin Donovan as our independent registered public accounting firm is not required by our
Bylaws or the Delaware General Corporation Law. The Board seeks such ratification as a matter of good corporate practice. Should
the stockholders fail to ratify the selection of PMB Helin Donovan as our independent registered public accounting firm, the Board
will reconsider whether to retain that firm for fiscal year 2017. In making its recommendation to the Board that stockholders
ratify the appointment of PMB Helin Donovan as our independent registered public accounting firm for the fiscal year ending December
31, 2017, the Audit Committee considered whether PMB Helin Donovan’s provision of non-audit services is compatible with
maintaining the independence of our independent registered public accounting firm.
Audit
Information – Fees Paid to Independent Registered Public Accounting Firm
The
Audit Committee pre-approved the audit fees, audit-related fees, tax fees and all other fees described below in accordance with
our pre-approval policy and believes such fees are compatible with the independence of PMB Helin Donovan.
|
|
|
2016
|
|
|
2015
|
|
|
Audit Fees
|
|
$
|
123,151
|
|
|
$
|
133,676
|
|
|
Audit Related Fees
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Tax Fees
|
|
$
|
11,950
|
|
|
$
|
6,190
|
|
|
All Other Fees
|
|
$
|
18,100
|
|
|
$
|
9,120
|
|
Audit
Fees
. The “Audit Fees” are the aggregate fees of PMB Helin Donovan attributable to professional services rendered
in 2016 and 2015 for the audit of our annual financial statements and for review of financial statements included in our quarterly
reports on Form 10-Q or for services that are normally provided by PMB Helin Donovan in connection with statutory and regulatory
filings or engagements for those fiscal years. These fees include fees billed for professional services rendered by PMB Helin
Donovan for the review of registration statements or services that are normally provided in connection with statutory and regulatory
filings or engagements for those fiscal years.
Audit-Related
Fees
. PMB Helin Donovan did not bill us for any professional services that were reasonably related to the performance of the
audit or review of financial statements for either the fiscal year ended December 31, 2016, or the fiscal year ended December
31, 2015, that are not included under Audit Fees above.
Tax
Fees
. PMB Helin Donovan billed $11,950 and $6,190 for the fiscal years ended December 31, 2016 and 2015, respectively, for
professional services rendered for tax compliance, tax advice, and tax planning.
All
Other Fees
. PMB Helin Donovan billed $18,100 and $9,120 for the fiscal year ended December 31, 2016 and 2015, respectively.
Pre-approval
Policies and Procedures
The
Audit Committee is required to review and approve in advance the retention of the independent auditors for the performance of
all audit and lawfully permitted non-audit services and the fees for such services. The Audit Committee may delegate to one or
more of its members the authority to grant pre-approvals for the performance of non-audit services, and any such Audit Committee
member who pre-approves a non-audit service must report the pre-approval to the full Audit Committee at its next scheduled meeting.
The Audit Committee is required to periodically notify the Board of their approvals. The required pre-approval policies and procedures
were complied with during 2016 and 2015.
PMB
Helin Donovan Representatives at Annual Meeting
We
expect that representatives of PMB Helin Donovan will be present at the Annual Meeting. They will be given the opportunity to
make a statement if they desire to do so, and they will be available to respond to appropriate questions after the meeting.
Vote
Required and Recommendation
The
affirmative vote of the holders of shares of common stock having a majority of the votes cast by the holders of all of the shares
of common stock present or represented and voting on such matter will be required for approval of this proposal.
The
Board recommends that stockholders vote “FOR” ratification of the appointment of PMB Helin Donovan as our independent
registered public accounting firm for the fiscal year ending December 31, 2017 as described in this Proposal 3.
Proposal
4
—APPROVING THE CERTIFICATE OF
AMENDMENT TO THE COMPANY’S AMENDED AND RESTATED CERTIFICATE OF INCORPORATION, AS AMENDED, TO INCREASE THE NUMBER OF AUTHORIZED
SHARES OF COMMON STOCK FROM 100,000,000 TO 150,000,000
Introduction
The
Company’s Amended and Restated Certificate of Incorporation, as amended, currently authorizes 100,000,000 shares of common
stock, par value $0.001 per share, and 10,000,000 shares of preferred stock, par value $0.001 per share. Our certificate of designations,
filed on January 18, 2017 (the “Certificate of Designations”), designated 3,000 shares of Series A-1 Convertible Preferred
Stock and sets forth the powers, preferences and rights of such shares, including that such shares do not have voting rights.
All 3,000 shares of Series A-1 Convertible Preferred Stock are currently outstanding and as such preferred shares remain outstanding,
we are required to reserve at least 200% of the number of shares of common stock as shall from time to time be necessary to effect
the conversion, which currently equals 17,142,858 shares of common stock. The remainder of the preferred stock are undesignated,
for which the Board is authorized to fix the designation, powers, preferences and rights.
As
of March 23, 2017, there are 55,886,115 shares of common stock issued and outstanding or held by the Company as treasury shares.
In addition, as of that date, the Company has issued warrants for the purchase of an additional 22,051,965 shares of common stock.
Out of the 100,000,000 shares of common stock authorized, we have 1,510,818 shares left for issuance. The Plan, as amended, reserves
4,500,000 shares of the Company’s common stock for issuance to directors, employees, consultants and advisors to the Company
or its affiliates. Currently, 375,664 shares of common stock under the Plan remain available for issuance.
On
February 23, 2017, the Board unanimously adopted a resolution approving and recommending that the Company’s stockholders
approve, an amendment (the “Charter Amendment”) to the Company’s Amended and Restated Certificate of Incorporation,
as amended, to increase the number of shares of common stock that the Company is authorized to issue from 100,000,000 shares to
150,000,000 shares, and also to increase the total number of shares of capital stock that the Company is authorized to issue to
reflect such increase in the Company’s authorized common stock. The Board believes that the proposed Charter Amendment to
increase the number of authorized shares of common stock is necessary to give us flexibility to issue shares of common stock for
future corporate needs. Accordingly, the Board has declared the proposed Charter Amendment to be advisable and in the best interests
of the Company and our stockholders, and is submitting the proposed amendment to a vote of our stockholders.
Purpose
of the Proposed Charter Amendment
As
a general matter, the Company would be able to issue the additional authorized shares of common stock in its discretion from time
to time, subject to and as limited by, rules or listing requirements of the NASDAQ or any other then applicable securities exchange,
and without further action or approval of our stockholders. The discretion of the Board, however, would be subject to any other
applicable rules and regulations in the case of any particular issuance or reservation for issuance that might require our stockholders
to approve such transaction, as discussed below. The Board provides stability and a level of predictability to the Company’s
strategic direction, as it evaluates capital raising activities, transactions and other corporate actions on an on-going basis
that are beneficial to the Company and its stockholders.
As
the number of outstanding shares of common stock and shares reserved for issuance has essentially reached the 100,000,000 current
share limits for common stock in our Amended and Restated Certificate of Incorporation, as amended, the Board believes that failure
to approve this proposal would seriously restrict our ability to manage our capital needs, to the detriment of stockholders’
interest. The Board believes that additional authorized shares of common stock would give us the necessary flexibility to issue
shares for various corporate purposes when and as appropriate to issue additional shares in the future without the delays necessitated
by having to obtain stockholder approval (except as otherwise required by law or by the rules of the NASDAQ or any other then
applicable securities exchange) and enable us to take timely advantage of market conditions and opportunities. Approval by the
stockholders of this proposal will avoid the possible need to call and hold a special meeting on an expedited basis for that purpose
at a later date thereby enabling the Company to act quickly where a potential capital raising or financing transaction, or an
acquisition opportunity arises, or if the Board otherwise determines that it is advisable to issue additional shares of common
stock.
Other
corporate purposes for which the additional authorized shares could be used include stock splits and stock dividends; and other
general corporate purpose transactions.
Possible
Anti-Takeover Effects of the Proposal
If
the proposed Charter Amendment is approved by the Company’s stockholders, the additional authorized shares of common stock
would have rights identical to the Company’s currently outstanding common stock. Future issuances of shares of common stock
or securities convertible into shares of common stock could have a dilutive effect on the Company’s earnings per share,
book value per share and the voting interest and power of current stockholders since holders of common stock are not entitled
to preemptive rights.
Securities
and Exchange Commission rules require disclosure of the possible anti-takeover effects of an increase in authorized capital stock
and other charter and bylaw provisions that could have an anti-takeover effect. Although the Company has not proposed the increase
in the number of authorized shares of common stock with the intent of using the additional shares to prevent or discourage any
actual or threatened takeover of the Company, under certain circumstances, such shares could have an anti-takeover effect. The
additional shares could be issued to dilute the stock ownership or voting rights of persons seeking to obtain control of the Company
or could be issued to persons allied with the Board or management and thereby have the effect of making it more difficult to remove
directors or members of management by diluting the stock ownership or voting rights of persons seeking to effect such a removal.
Accordingly, if the proposed Charter Amendment is approved, the additional shares of authorized common stock may render more difficult
or discourage a merger, tender offer or proxy contest, the assumption of control by a holder of a large block of common stock,
or the replacement or removal of the Board or management.
The
following provisions of the Company’s Amended and Restated Certificate of Incorporation, as amended, and the following provisions
of the Company’s Amended and Restated Bylaws may have an anti-takeover effect of preventing, discouraging or delaying any
change in control of the Company: (i) the ability of the Board to issue preferred stock without stockholder approval; (ii) limitations
on who may call a special meeting of stockholders; and (iii) advance notice requirements for nominations for election to the Board
or for proposing matters that can be acted upon at stockholder meetings.
Required
Vote
The
approval of the Charter Amendment to increase the number of authorized shares of common stock requires the affirmative vote of
a majority of the issued and outstanding shares of common stock of the Company that are entitled to vote. Abstentions are not
affirmative votes and, therefore, will have the same effect as a vote against the proposal.
Recommendation
of the Board
A
copy of the proposed Charter Amendment to the Amended and Restated Certificate of Incorporation, as amended, which includes the
increase of the authorized shares of common stock is attached to this proxy statement as Appendix A.
The
Board recommends a vote “FOR” approval of the increase in authorized shares of the Company’s common stock in
Proposal 4, because it believes that it will give us the necessary flexibility to issue shares for various corporate purposes,
including, in particular, capital-raising or strategic transactions and enable us to take timely advantage of market conditions
and opportunities.
Proposal
5 – APPROVAL OF THE AMENDMENT TO THE UNI-PIXEL, INC. 2011 Stock INCENTIVE PLAN
We
are asking our stockholders to approve an amendment (the “Plan Amendment”) to the Plan, pursuant to which an additional
3,000,000 shares of the Company’s common stock will be added to the existing 4,500,000 shares of the Company’s common
stock reserved for issuance as
options, SARs, dividend equivalent rights, restricted stock,
RSUs, performance units or performance shares
(“Awards”). Approval of the Plan Amendment is dependent upon
approval of the Charter Amendment also occurring, as without that, there are insufficient shares of common stock available for
the Plan Amendment to occur.
On
January 21, 2011, our Board adopted the Plan to promote the long-term success of the Company by offering additional incentives
to employees, consultants and directors to attract and retain the services of those persons essential to the Company’s growth
and financial success. The Plan became effective on the date it was approved by the Board. Our stockholders approved the Plan
at the Annual Meeting which took place on August 16, 2011.
The Plan will continue in effect
for a term of 10 years unless sooner terminated.
The Plan was last amended by the Board on April 18, 2016 and approved
by the stockholders on June 8, 2016, pursuant to which an additional 1,600,000 shares of the Company’s common stock were
added to Company’s common stock reserved for Awards. The Plan Amendment was adopted by our Board on February 23, 2017. Copies
of the full text of the Plan are available for review at our principal offices and we will furnish copies to our stockholders
without charge upon written request directed to Uni-Pixel, Inc., 4699 Old Ironsides Drive, Suite 300, Santa Clara, California
95054, Attention: Corporate Secretary. A copy of the Plan Amendment is attached to this Proxy Statement as Appendix B.
In
addition to the Plan, the Company also has outstanding awards made pursuant to three other plans – the Uni-Pixel, Inc. 2005
Stock Incentive Plan, the Uni-Pixel, Inc. 2007 Stock Incentive Plan and the Uni-Pixel, Inc. 2010 Stock Incentive Plan (collectively
with the Plan, the “Company Award Plans”). The Company can no longer make awards under the Uni-Pixel, Inc. 2005 Stock
Incentive Plan, but does have the ability to make awards under the Uni-Pixel, Inc. 2007 Stock Incentive Plan and the Uni-Pixel,
Inc. 2010 Stock Incentive Plan in addition to the Plan. As of March 23, 2017, 375,664 shares of common stock remained available
for future issuance under the Plan, 134,245 shares of common stock remain available for future issuance under the Uni-Pixel, Inc.
2010 Stock Incentive Plan and 25,726 shares of common stock remained available for future issuance under the Uni-Pixel, Inc. 2007
Stock Incentive Plan. As a result the total amount of awards that remain available for future issuance under these three plans
is 535,635.
Our
Board believes that the approval of the Plan Amendment to increase the shares reserved under the Plan by 3,000,000 shares of common
stock, is essential to our future success. In 2017, we want to remain focused on balancing the longer-term needs of our business
while remaining prudent with our spending in the short-term. Part of this strategy is limiting our current salary costs for employees
while still attracting top talent. We believe that our current employees are our most valuable assets and that the future awards
that will be permitted under the Plan through the Plan Amendment are vital to our ability to attract and retain outstanding and
highly skilled individuals in the competitive labor markets in which we compete. These future awards that will be approved by
the Plan Amendment will enable us to align our long-term growth interests with that of our employees and in turn with the interests
of our stockholders. It will also allow us to incentivize our new executive management team to maximize stockholder returns and
increase the value of the Company’s common stock.
The
following summary describes the material features of the Plan. The summary, however, does not purport to be a complete description
of all the provisions of the Plan.
Equity
Compensation Plan Information
Description
of the Plan
The
Plan, as amended by the Plan Amendment, authorizes the sale or award to employees, consultants and directors of the Company and
its subsidiaries (collectively referred to as the “Recipients”) of up to 7,500,000 shares of the Company’s common
stock (the “Plan Shares”). The Plan Shares may be authorized but unissued shares or reacquired common stock. If Plan
Shares are forfeited or canceled, expire or are settled in cash, they will be deemed not to have been issued for purposes of determining
the maximum aggregate number of Plan Shares which may be issued. If unvested Plan Shares are forfeited or repurchased by the Company
at their original purchase price, such Plan Shares shall become available for future grant under the Plan. On March 23, 2017,
the last sale price of our common stock was $0.80 per share.
Each
sale or award of Plan Shares under the Plan will be made pursuant to the terms and conditions provided for in an award agreement
(an “Award Agreement”) entered into by the Company and the individual Recipient. Awards may include
the
grant of options, SARs, dividend equivalent rights, restricted stock, RSUs, performance units or performance shares although,
to date, the only Awards that have been granted from the Plan are RSUs, restricted stock grants and stock options.
Plan
Shares may be sold or awarded under the Plan for such consideration as the Board may determine, including cash, check, promissory
notes, surrender of shares of common stock and payment through a broker-dealer sale and remittance procedure; provided, however,
that the portion of the consideration equal to the par value of the Plan Shares must be paid in cash or other legal consideration
permitted under Delaware law.
Plan
Administration
The
Plan is administered by the Board, either in its entirety or by a committee of the Board (the “Administrator”). Subject
to the limitations set forth in the Plan, the Administrator has discretion to take any actions it deems necessary or advisable
for the administration of the Plan.
Terms
and Conditions
Only
employees, consultants and directors of the Company and its subsidiaries will be eligible to receive Awards under the Plan. Currently,
we have two executive officers, five non-employee directors and 38 employees who are eligible to receive Awards under the Plan.
Awards may be subject to such special forfeiture conditions, rights of repurchase and other transfer restrictions as the Administrator
may determine appropriate with respect to a particular Award, as set forth in the Award Agreement.
Restrictions
on Transfer
The
Plan provides that
incentive stock options may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during
the lifetime of the grantee, only by the grantee. Other Awards may be transferred by will and by the laws of descent and distribution,
and during the lifetime of the grantee, by gift and/or pursuant to a domestic relations order to members of the grantee’s
immediate family to the extent and in the manner determined by the Administrator.
Adjustment
of Shares
The
number of Plan Shares covered by each outstanding Award Agreement will be proportionately adjusted for (a) any increase or decrease
in the number of issued shares of common stock resulting from a stock split, reverse stock split, stock dividend, combination
or reclassification of the common stock, or similar transaction affecting the common stock, (b) any other increase or decrease
in the number of issued shares of common stock effected without receipt of consideration by the Company, or (c) as the Administrator
may determine in its discretion, any other transaction with respect to common stock to which Section 424(a) of the Internal Revenue
Code applies or a similar transaction.
Amendments
to the Plan
The
Plan may be amended, suspended or terminated by the Board at any time and for any reason. To the extent necessary to comply with
applicable laws, the Company must obtain stockholder approval of any amendment in such a manner and to such a degree as required.
Tax
Consequences Relating to the Plan Generally
The
following is a brief summary of certain federal income tax consequences arising with respect to the sale or award of Plan Shares
under the Plan. This summary is not intended to be exhaustive and the exact federal income tax consequences to the Recipients
of Plan Shares under the Plan will depend on various factors and on the particular circumstances of the Recipients. This summary
is based on present laws, regulations and interpretations. Therefore, the federal income tax consequences described in this summary
may change.
Tax
Consequences Relating to the Sale or Award of Restricted Stock or RSUs Under the Plan
Restricted
Stock
Generally,
a Recipient of Plan Shares constituting restricted stock will not recognize taxable income until such time as the right of repurchase
imposed on the Plan Shares lapses. The taxable income will then be equal to the excess of the fair market value of the Plan Shares
at the time the right of repurchase imposed on the Plan Shares lapses less the amount (if any) the Recipient paid for the Plan
Shares.
However,
the Recipient may elect under Internal Revenue Code Section 83(b) to include as ordinary income in the year of the award or purchase
an amount equal to the excess of the fair market value of the Plan Shares on the date of the sale or award less the amount (if
any) the Recipient paid for the Plan Shares. If the Recipient makes the Section 83(b) election, the Recipient will not recognize
any additional income when the Plan Shares vest. Any appreciation in the value of Plan Shares after the award or purchase is not
taxed as compensation but instead is taxed as capital gain when the Plan Shares are sold or transferred. If the Recipient makes
a Section 83(b) election and the Plan Shares are later forfeited, the Recipient is not entitled to a tax deduction or a refund
of the tax already paid. The Section 83(b) election must be filed with the Internal Revenue Service within 30 days following the
date the Plan Shares are awarded or sold to the Recipient. Any ordinary income resulting from the election will be subject to
applicable tax withholding requirements if the Recipient is an employee or former employee of the Company. The election generally
is not revocable and cannot be made after the 30-day period has expired.
The
Company will be entitled to an income tax deduction equal to the amount of ordinary income the Recipient recognizes in connection
with a restricted stock award. The deduction will generally be allowed for the taxable year of the Company in which the Recipient
recognizes such ordinary income.
RSUs
A
distribution of common stock in payment of a RSU award will be taxable as ordinary income when actually or constructively received
by the Recipient. The amount taxable as ordinary income is the aggregate fair market value of the common stock determined as of
the date it is received. The Company is entitled to deduct the amount of such payments when such payments are taxable as compensation
to the recipient, subject to Section 162(m) of the Code.
Tax
Consequences Relating to the Sale or Award of Stock Options Under the Plan
Non-Statutory
Stock Options
Under
the current provisions of the Internal Revenue Code, if shares of common stock are issued to the original holder of a non-qualified
option granted and exercised under the Plan (assuming there is not an active trading market for options of the Company), the Recipient
will not recognize income at the time of the grant of the option. However, on exercise of the option and purchase of the common
stock, the Recipient will recognize ordinary income in an amount equal to the excess of the fair market value of the shares of
common stock acquired at the time of exercise over the exercise price. Furthermore, upon the sale of the shares of common stock
the Recipient will recognize a short-term or long-term capital gain, or loss, as the case may be, in an amount equal to the difference
between the amount the Recipient received from the sale of those shares and the Recipient’s tax basis in the shares (as
described below). Finally, we will be entitled to expense as compensation the amount of ordinary income that the holder recognized.
If
the Recipient pays the exercise price entirely in cash, the tax basis of the shares of common stock will be equal to the amount
of the exercise price paid plus the ordinary income recognized by the Recipient from exercising the options. This basis should
equal the fair market value of the shares of common stock acquired on the date of exercise. The holding period will begin on the
day after the tax basis of the shares is determined.
The
ordinary income received by the Recipient on exercise of the option is considered to be compensation from the Company. As with
other forms of compensation, withholding tax and other trust fund payments will be due with respect to the exercise of the options.
Incentive
Stock Options
The
rule stated above is different when there has been an acquisition of our common stock pursuant to the exercise of an incentive
stock option. The rules governing incentive stock options prevent the taxation of the options as income to the Recipient at the
time the option is granted or at the time the Recipient exercises the option and buys the stock. The Recipient incurs tax (which
is at capital gains rates) only at the time of the sale of the stock the Recipient purchased by exercising the option. However,
in order to take advantage of the special tax treatment, there are certain restrictions relating to incentive stock options that
must be met. The Recipient must be an employee and must have an option to receive shares of the corporation employing him, its
parent or its subsidiary. The options must be granted within 10 years from the date that the plan is adopted by the Board or approved
by the stockholders, whichever is earlier. Further, the option granted must be exercisable within 10 years from the date it is
granted, unless the Recipient owns stock with more than 10% of the total combined voting power of all classes, in which case the
option granted must be exercisable within 5 years from the date it is granted. The exercise price may not be less than the fair
market value of the stock at the time the option is granted, unless the Recipient owns stock with more than 10% of the total combined
voting power of all classes, in which case the exercise price may not be less than 110% of the fair market value of the stock
at the time the option is granted. The option may not be transferred other than by will or the laws of descent and distribution.
The option may be exercised only by the Recipient (unless the Recipient dies, in which case his executor, administrator or representative
would be entitled to exercise). The Recipient must remain an employee of the corporation from the time the option is granted until
three months before the option is exercised. Once the stock has been purchased by exercise of the incentive option, it cannot
be sold within two years from the date the option was granted or within one year from the date the option was exercised and the
stock was purchased, whichever is later.
Awards
Made During the 2016 Year
For
information relating to RSUs granted to our directors during the 2016 year, please see the discussion titled “Director Compensation”
included in this Proxy Statement. For information relating to the RSUs granted to our named executive officers during the 2016
year, please see the discussion titled “Executive Compensation” included in this Proxy Statement. The table below
illustrates the number of shares of common stock underlying RSUs granted to all current executive officers as a group, all current
directors who are not executive officers as a group, each associate of any director or executive officer and each other person
who received 5% or more of the RSUs granted during 2016 and the number of shares of common stock underlying RSUs or options granted
to all employees who are not executive officers, as a group:
|
Classification
|
|
Number
of Shares
Underlying RSUs
|
|
|
Number
of Shares Underlying Stock Options
|
|
|
Executive officers, as a
group
|
|
|
440,899
|
|
|
|
—
|
|
|
Non-employee directors, as a group
|
|
|
400,000
|
|
|
|
—
|
|
|
Associates of directors or executive
officers
|
|
|
—
|
|
|
|
—
|
|
|
Persons who received 5% or more of RSUs
during 2016
|
|
|
—
|
|
|
|
—
|
|
|
Employees who are not executive officers,
as a group
|
|
|
552,304
|
|
|
|
418,000
|
|
The
Plan currently have reserved for issuance of 4,500,000 shares of common stock. Of that amount, as of March 23, 2017, we have granted
awards for shares of restricted stock, RSUs and options for the purchase of common stock covering 4,124,336 shares of common stock.
In addition, as of March 23, 2017, there are currently outstanding under all of the Company Award Plans, awards for shares of
restricted stock and options for the purchase of common stock totaling 3,034,562 shares.
Potential
Dilutive Impact of Plan Amendment
We
are committed to effectively managing our employee equity compensation programs while minimizing stockholder dilution. For this
reason, in administering our equity compensation program, we consider both our “burn rate” and our “overhang”
in evaluating the impact of the program on our stockholders. We define “burn rate” as the number of equity awards
granted during the year, divided by the weighted average number of shares of common stock outstanding during the period. The burn
rate measures the potential dilutive effect of our equity grants. We define “overhang” as the number of full value
awards granted (but not yet vested or issued) and stock options granted (but not yet exercised) divided by the number of shares
of common stock outstanding at the end of the period.
In
April 2016, when our Board adopted the prior amendment increasing the number of shares available for issuance under the Plan,
the Company had 38,251,836 shares of common stock outstanding and 10,095,360 warrants.
In
May 2016 and February 2017, we sold shares of our common stock in public offerings. In addition, in January 2017, we sold shares
of Series A-1 Convertible Preferred Stock which is currently convertible into 2,000,000 shares of common stock. Furthermore, as
of these offerings, our number of warrants outstanding was increased to 22,051,965. In part as a result of these transactions
in our securities, we had 77,776,127 shares of common stock and warrants outstanding on March 23, 2017, or more than one and a
half times the amount as April 2016 when the prior amendment to the Plan was adopted by the Board plus the 3,000 shares of preferred
stock.
Burn
Rate Analysis
. In setting the amount of shares of common stock subject to the Plan at 7,500,000, the Board considered
the historical amounts of equity awards the Company has granted in the past three years. In fiscal years 2014, 2015 and 2016,
the Company granted equity awards under the Company Award Plans representing approximately 3.5%, 7.6% and 4.4% of 12,331,322,
16,574,743 and 41,575,784 weighted average common shares outstanding in each respective year. Using grants under all the Company
Award Plans, the Company calculated its three-year average equity share usage at 6.1% of weighted average common shares outstanding.
However, in light of the increase in the number of shares outstanding in 2016 and 2017, as of March 23, 2017, the weighted average
common shares outstanding is approximately 49,066,866, or 36% more than that of 2016. In determining the number of shares proposed
to be added to the Plan, which is approximately 6.1% of that amount, we have considered the burn rate percentage for issuances
in 2016 using the current weighted average common shares outstanding amount, and as was the case in 2015, it is approximately
3.7% with the higher number of shares now outstanding which would result over the prior three years in burn rates of 3.5%, 3.5%
and 3.7%, respectively. The Compensation Committee intends to manage the Company’s burn rate by continuing to review institutional
investor guidelines and market practices, and, in connection with that, we believe the 3,000,000 shares of common stock for which
stockholder approval is being sought represents an appropriate increase at this time.
Overhang
Analysis
. In setting the amount of additional shares to be subject to the Plan, the Board also considered the total amount
of awards outstanding under existing grants. As of March 23, 2017, awards covering an aggregate of 3,034,562 shares of common
stock were outstanding and 535,635 shares remain available for future issuance under all of the Company Award Plans. Accordingly,
our outstanding awards and shares available for issuance under all the Company Award Plans, consisting of approximately 3.6 million
shares of common stock (commonly referred to as the “overhang”), represented approximately 6.4% of our outstanding
shares of common stock as of March 23, 2017, on a fully diluted basis. If stockholders approve the Plan Amendment, an additional
3,000,000 shares of common stock will be available for future grants, which will bring the total overhang to approximately 11.8%,
which we believe is within industry norms.
Vote
Required and Recommendation
The
affirmative vote of the holders of shares of common stock having a majority of the votes cast by the holders of all of the shares
of common stock present or represented and voting on such matter will be required for approval of this proposal. In addition,
regardless of the vote on Proposal 5, the plan amendment cannot occur without stockholder approval of Proposal 4 relating to the
increase in the number of authorized common shares as set forth in Proposal 4 as there are otherwise insufficient authorized common
shares available for the Plan Amendment.
The
Board recommends that stockholders vote “FOR” the approval of the Plan Amendment to the Uni-Pixel, Inc. 2011 Stock
Incentive Plan as described in this Proposal 5.
Certain
Relationships And Related Transactions
Other
than compensation agreements and other arrangements with our executive officers and directors, during our last two fiscal years
there has not been, and there is not currently proposed, any transaction or series of transactions to which we were or will be
a party in which the amount involved exceeded or will exceed $120,000 and in which any of our directors, nominees for director,
executive officers, holders of more than five percent of any class of our voting securities or any member of the immediate family
of the foregoing persons had or will have a direct or indirect material interest.
Requirements
For Advance Notification of Nominations
and
Stockholder Proposals
Stockholder
proposals submitted to us pursuant to Rule 14a-8 promulgated under the Exchange Act for inclusion in our Proxy Statement and form
of proxy for our 2018 Annual Meeting of stockholders must be received by us no later than November 23, 2016, which is 120 calendar
days before the one-year anniversary of the date on which the Company first mailed this Proxy Statement, and must comply with
the requirements of the proxy rules promulgated by the SEC. Stockholder proposals should be addressed to our Corporate Secretary
at 4699 Old Ironsides Drive, Suite 300, Santa Clara, California 95054.
Recommendations
from stockholders which are received after the deadline likely will not be considered timely for consideration by the Committee
for next year’s Annual Meeting.
Other
Matters
The
Board does not intend to bring any other matters before the Annual Meeting and has no reason to believe any other matters will
be presented. If other matters properly do come before the Annual Meeting, however, it is the intention of the persons named as
proxy agents in the enclosed proxy card to vote on such matters as recommended by the Board, of if no recommendation is given,
in their own discretion.
The
Company’s Annual Report to Stockholders for fiscal year 2016 is being mailed with this Proxy Statement to stockholders entitled
to notice of the Annual Meeting. The Annual Report includes the consolidated financial statements, unaudited selected consolidated
financial data and management’s discussion and analysis of financial condition and results of operations. The costs of preparing,
assembling, mailing and soliciting the proxies will be borne by us. Proxies may be solicited, without extra compensation, by our
officers and employees by mail, telephone, facsimile, personal interviews and other methods of communication.
If
you and other residents at your mailing address own shares in street name, your broker or bank may have sent you a notice that
your household will receive only one copy of proxy materials for each company in which you hold shares through that broker or
bank. This practice of sending only one copy of proxy materials is known as householding. If you did not respond that you did
not want to participate in householding, you were deemed to have consented to the process. If the foregoing procedures apply to
you, your broker has sent one copy of our Proxy Statement to your address. If you want to receive separate copies of the proxy
materials in the future, or you are receiving multiple copies and would like to receive only one copy per household, you should
contact your stockbroker, bank or other nominee record holder, or you may contact us at the address or telephone number below.
In any event, if you did not receive an individual copy of this Proxy Statement, we will send a copy to you if you address your
written request to, or call, Christine A. Russell, Chief Financial Officer and Corporate Secretary of Uni-Pixel, Inc., 4699 Old
Ironsides Drive, Suite 300, Santa Clara, California 95054, telephone number (408) 675-5079.
Copies
of the documents referred to above that appear on our website are also available, without charge, upon request by any stockholder
addressed to our Corporate Secretary, Uni-Pixel, Inc., 4699 Old Ironsides Drive, Suite 300, Santa Clara, California 95054.
Appendix
A
SECOND
CERTIFICATE OF AMENDMENT
OF
THE
AMENDED AND RESTATED
CERTIFICATE
OF INCORPORATION
OF
UNI-PIXEL,
INC.
Uni-Pixel,
Inc.
(the “Corporation”), organized and existing under and by virtue of the General
Corporation Law of the State of Delaware (“DGCL”) and acting pursuant to Section 242 thereof, does hereby certify
that:
FIRST:
The original Certificate of Incorporation of the Corporation was filed with the Secretary of State of Delaware on October
13, 2000, under the name NEV Acquisition Corp. and that a Certificate of Merger was filed with the Secretary of State of Delaware
on June 18, 2001, which changed the name to Real-Estateforlease.com, Inc., and that an Amended and Restated Certificate of Incorporation
was filed with the Secretary of State of Delaware on January 27, 2005, which changed the name to Uni-Pixel, Inc., and that a Certificate
of Amendment was filed with the Secretary of State of Delaware on February 1, 2007, and that an Amended and Restated Certificate
of Incorporation was filed with the Secretary of State of Delaware on November 22, 2010, and that a Certificate of Amendment was
filed with the Secretary of State of Delaware on December 9, 2010 and that a Certificate of Designations, Preferences and Rights
of the Series A-1 Convertible Preferred Stock was filed on January 18, 2017 pursuant to the DGCL.
SECOND:
That section (a) of Article IV of the Amended and Restated Certificate of Incorporation is hereby deleted in its entirety
and replaced by the following:
“The
Corporation shall be authorized to issue an aggregate of 160,000,000 shares of capital stock, or which 150,000,000 shares shall
be Common Stock, $0.001 par value per share (the “Common Stock”), and 10,000,000 shares shall be Preferred Stock,
$0.01 par value per share (the “Preferred Stock”).”
THIRD:
That the foregoing amendment was approved by the holders of the requisite number of shares of the Corporation in accordance
with Section 228 of the General Corporation Law.
FOURTH:
That the foregoing amendment was duly adopted in accordance with Section 242 of the General Corporation Law.
IN
WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment of the Amended and Restated Certificate of Incorporation
to be executed by its duly authorized officer this [●] day of
[●]
, 2017.
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UNI-PIXEL,
INC.
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By:
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/s/
Christine Russell
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Name:
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Ms.
Christine Russell
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Title:
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Chief
Financial Officer
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Appendix
B
AMENDMENT
NO. 5 TO THE
UNI-PIXEL,
INC. 2011 STOCK INCENTIVE PLAN
The
undersigned hereby certifies that (1) she is the duly elected, qualified and acting Secretary of Uni-Pixel, Inc. (the “Company”)
and (2) on February 23, 2017, in accordance with Section 13 of that certain Uni-Pixel, Inc. 2011 Stock Incentive Plan (the “Plan”),
the Board of Directors of the Company amended the Plan, which amendment was approved by the stockholders of the Company and became
effective on May 18, 2017. Said amendment deleted the first sentence of sub-section 3.01 of Section 3, which states:
3.01.
Fixed Share Limit
. Subject to the provisions of
Section 10
, below, the maximum aggregate number of Shares which
may be issued pursuant to all Awards (including Incentive Stock Options) is Four Million Five Hundred Thousand (4,500,000) Shares.
and
replaces it with the following:
3.01.
Fixed Share Limit
. Subject to the provisions of
Section 10
, below, the maximum aggregate number of Shares which
may be issued pursuant to all Awards (including Incentive Stock Options) is Seven Million Five Hundred Thousand (7,500,000) Shares.
In
all other respects, the terms and conditions of the Plan shall remain the same.
IN
WITNESS WHEREOF, the undersigned has signed her name as of this 18th day of May, 2017.
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/s/
CHRISTINE RUSSELL
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Christine
Russell
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Chief
Financial Officer and Secretary
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Grafico Azioni Uni-Pixel, Inc. (NASDAQ:UNXL)
Storico
Da Gen 2025 a Feb 2025
Grafico Azioni Uni-Pixel, Inc. (NASDAQ:UNXL)
Storico
Da Feb 2024 a Feb 2025
