SUPER VISION INTERNATIONAL, INC.
8210 PRESIDENTS DRIVE
ORLANDO, FLORIDA 32809
PROXY STATEMENT
RELATING TO THE ANNUAL MEETING
OF STOCKHOLDERS TO BE HELD MAY 4, 2001
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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SUPER VISION INTERNATIONAL, INC.
(Name of Registrant as Specified in Its Charter)
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SUPER VISION INTERNATIONAL, INC. Brett Kingstone
8210 Presidents Drive Chairman of the Board,
Orlando, Florida 32809 President and
Chief Executive Officer
April 3, 2001
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
of Super Vision International, Inc. The Annual Meeting will be held at the
principal executive offices of Super Vision International, Inc. at 8210
Presidents Drive, Orlando, Florida 32809, on Friday, the 4th day of May, 2001,
at 10:30 a.m. Eastern Time, and thereafter as it may from time to time be
adjourned.
Details of the business to be conducted at the Annual Meeting are given
in the attached Notice of Annual Meeting and Proxy Statement.
Your vote is important. Whether or not you attend the Annual Meeting,
please complete, sign, date and promptly return the enclosed proxy card in the
enclosed postage-paid envelope. If you decide to attend the Annual Meeting and
vote in person, you may do so.
On behalf of the Board of Directors, I would like to express our
appreciation for your continued interest in the affairs of the Company.
We look forward to seeing you at the Annual Meeting.
Sincerely,
/s/ Brett Kingstone
SUPER VISION INTERNATIONAL, INC.
- --------------------------------------------------------------------------------
NOTICE OF
2001 ANNUAL MEETING OF STOCKHOLDERS
AND
PROXY STATEMENT
----------------------------------------------------------
Date: May 4, 2001
Time: 10:30 a.m.
Place: Super Vision International Inc.
8210 Presidents Drive
Orlando, Florida 32809
----------------------------------------------------------
Dear Stockholders:
At our Annual Meeting, we will ask you to:
o Elect six directors to the Board of Directors;
o Ratify the selection of Ernst & Young LLP as independent
auditors for 2001; and
o Transact any other business that may properly be presented at
the Annual Meeting.
RECORD DATE
If you were a stockholder of record at the close of business on March
12, 2001, you are entitled to notice of and to vote at the Annual Meeting. A
list of stockholders entitled to vote at the meeting will be available during
business hours for ten days prior to the Annual Meeting at our offices, 8210
Presidents Drive, Orlando, Florida 32809, for examination by any stockholder for
any purpose germane to the meeting.
PROOF OF OWNERSHIP
Attendance at the Annual Meeting will be limited to stockholders of
record or their authorized representative by proxy. If your shares are held
through an intermediary, such as a bank or broker, you must present proof of
your ownership of Super Vision shares at the Annual Meeting. Proof of ownership
could include a proxy from the intermediary or a copy of your account statement,
which confirms your beneficial ownership of Super Vision shares.
By order of the Board of Directors,
/s/ Brett Kingstone
------------------------------------
Brett Kingstone
Chairman of the Board, President and
Chief Executive Officer
April 3, 2001
TABLE OF CONTENTS
PAGE
----
INFORMATION ABOUT THE ANNUAL MEETING AND VOTING...................................................................1
Why Did You Send Me this Proxy Statement?......................................................................1
How Many Votes Do I Have?......................................................................................1
How Do I Vote by Proxy?........................................................................................1
May I Revoke My Proxy?.........................................................................................1
How Do I Vote in Person?.......................................................................................2
What Vote Is Required to Approve Each Proposal?................................................................2
Is Voting Confidential?........................................................................................2
What Are the Costs of Soliciting the Proxies?..................................................................2
How Can I Obtain an Annual Report on Form 10-KSB?..............................................................3
INFORMATION ABOUT SUPER VISION INTERNATIONAL, INC. COMMON STOCK OWNERSHIP.........................................3
How Much Stock is Owned By Directors, Executive Officers and At Least 5% Stockholders?.........................3
INFORMATION ABOUT DIRECTORS AND EXECUTIVE OFFICERS................................................................4
The Board of Directors.........................................................................................4
The Committees of the Board....................................................................................5
How Do We Compensate Our Directors.............................................................................5
The Executive Officers.........................................................................................6
Did Directors, Executive Officers and Greater-Than-10% Stockholders Comply with Section 16(a) Beneficial
Ownership Reporting in 2000?...................................................................................6
How Do We Compensate Our Executive Officers....................................................................6
SUMMARY COMPENSATION TABLE........................................................................................6
AGGREGATE OPTION EXERCISES DURING FISCAL YEAR 2000 AND YEAR-END OPTION VALUES.....................................7
1994 STOCK OPTION PLAN............................................................................................7
ARRANGEMENTS WITH OFFICERS AND DIRECTORS..........................................................................8
Proposal 1: Elect Six Directors...............................................................................9
Proposal 2: Ratify Selection of Independent Auditors for 2001................................................11
AUDIT COMMITTEE REPORT...........................................................................................12
OTHER MATTERS....................................................................................................12
INFORMATION ABOUT STOCKHOLDER PROPOSALS..........................................................................12
EXHIBIT A AUDIT COMMITTEE CHARTER...............................................................................14
Proxy for 2001 Annual Meeting of Stockholders.................................................................16
PROXY STATEMENT FOR THE
SUPER VISION INTERNATIONAL, INC.
2001 ANNUAL MEETING OF STOCKHOLDERS
INFORMATION ABOUT THE ANNUAL MEETING AND VOTING
Why Did You Send Me this Proxy Statement?
The Board of Directors of Super Vision International, Inc. sent you
this Proxy Statement and the enclosed proxy card because the Board is soliciting
your proxy to vote at the 2001 Annual Meeting of Stockholders. This Proxy
Statement summarizes the information you need to know to vote intelligently at
the Annual Meeting. However, you do not need to attend the Annual Meeting to
vote your shares. Instead, you may simply complete, sign and return the enclosed
proxy card.
We will begin sending this Proxy Statement, the attached Notice of
Annual Meeting and the enclosed proxy card on or about April 3, 2001 to all
stockholders entitled to vote. Stockholders who owned Super Vision International
common stock at the close of business on March 12, 2001 are entitled to vote.
Effective March 12, 2001, there were 2,065,543 shares of Super Vision Class A
common stock and 483,264 shares of Super Vision Class B common stock
outstanding. Common stock (including both Class A and Class B) is our only class
of voting stock.
How Many Votes Do I Have?
Each share of Class A common stock that you own entitles you to one
vote for each matter to be acted upon at the Annual Meeting. Each share of Class
B common stock that you own entitles you to five votes for each matter to be
acted upon at the Annual Meeting. The proxy card enclosed herewith indicates the
number of Super Vision shares of each class of common stock that you own.
How Do I Vote by Proxy?
Whether you plan to attend the Annual Meeting or not, we urge you to
complete, sign and date the enclosed proxy card and to return it promptly in the
envelope provided. Returning the proxy card will not affect your right to attend
the Annual Meeting and vote.
If you properly fill in your proxy card and send it to us in time to
vote, your "proxy" (one of the individuals named on your proxy card) will vote
your shares as you have directed. If you sign the proxy card but do not make
specific choices, your proxy will vote your shares as recommended by the Board
of Directors, as follows:
o "FOR" the election of all six nominees for director; and
o "FOR" the ratification of Ernst & Young LLP as independent
auditors for 2001.
If any other matter is presented, your proxy will vote in accordance
with his or her best judgment. At the time this Proxy Statement went to press,
we knew of no matters which needed to be acted on at the Annual Meeting, other
than those discussed in this Proxy Statement.
May I Revoke My Proxy?
If you give a proxy, you may revoke it at any time before it is
exercised. You may revoke your proxy in any one of three ways:
o You may send in another proxy with a later date;
1
o You may notify Super Vision's Secretary in writing before the
Annual Meeting that you have revoked your proxy; or
o You may vote in person at the Annual Meeting.
How Do I Vote in Person?
If you plan to attend the Annual Meeting and vote in person, we will
give you a ballot when you arrive. However, if your shares are held in the name
of your broker, bank or other nominee, you must bring an account statement or
letter from the nominee indicating that you were the beneficial owner of the
shares on March 12, 2001, the record date for voting.
What Vote Is Required to Approve Each Proposal?
Proposal 1: Elect Six Directors The six nominees for director who
receive the most votes (a "plurality" as
required by Delaware law) will be
elected. So, if you do not vote for a
particular nominee, or you indicate
"withhold authority to vote" for a
particular nominee on your proxy card,
your vote will not count either "for" or
"against" the nominee. A "broker
non-vote" (i.e., when a broker does not
have authority to vote on a specific
issue) will also have no effect on the
outcome since only a plurality of votes
actually cast is required to elect a
director.
Proposal 2: The affirmative vote of a majority of
Ratify Selection of Auditors the shares present in person or by proxy
at the Annual Meeting is required to
ratify the selection of independent
auditors. Shares represented by proxy
which are marked "abstain" will have the
effect of a vote against Proposal 2. A
broker non-vote will not have the effect
of a vote against Proposal 2, since
broker non-votes are considered "not
entitled to vote" on that matter.
Quorum; The Effect of A majority of the outstanding shares of
Broker Non-Votes and Abstentions Class A and Class B common stock
represented in person or by proxy will
constitute a quorum. Your broker is not
entitled to vote on a proposal unless it
receives instructions from you. Even if
your broker does not vote your shares on
a proposal, such broker non-votes will
count as shares present for purposes of
determining the presence or absence of a
quorum for the transaction of business.
Similarly, abstentions are also counted
for determining if a quorum is present.
Is Voting Confidential?
As a matter of policy, proxies, ballots and voting tabulations that
identify individual stockholders are held confidential by Super Vision. That
information is available for examination only by the inspectors of election who
are employees appointed to tabulate the votes. The identity of the vote of any
stockholder is not disclosed except as may be necessary to meet legal
requirements.
What Are the Costs of Soliciting the Proxies?
Super Vision pays the cost of preparing, assembling and mailing this
proxy-soliciting material. In addition to the use of the mail, proxies may be
solicited personally, by telephone or telegraph, or by Super Vision officers and
employees without additional compensation. Super Vision pays all costs of
solicitation, including certain expenses of brokers and nominees who mail proxy
material to their customers or principals.
2
How Can I Obtain an Annual Report on Form 10-KSB?
The 2000 Form 10-KSB will be filed with the Securities and Exchange
Commission on or about March 21, 2001. If you would like a copy of the Annual
Report (including financial statements, but without exhibits), without charge,
please write to:
Corporate Secretary
Super Vision International, Inc.
8210 Presidents Drive
Orlando, Florida 32809
INFORMATION ABOUT SUPER VISION INTERNATIONAL, INC. COMMON STOCK OWNERSHIP
How Much Stock is Owned By Directors, Executive Officers and At Least 5%
Stockholders?
The following table shows, as of March 1, 2001, (a) all persons we know
to be "beneficial owners" of more than five percent of the outstanding common
stock of Super Vision, and (b) the common stock owned beneficially by Super
Vision directors and named executive officers and all executive officers and
directors as a group. Each person has sole voting and sole investment power with
respect to the shares shown, except as noted.
Shares Beneficially Owned (2)
--------------------------------------------------------
Number Percent Ownership
------------------ ------------------- Total
Beneficial Owners (1) Class A Class B Class A Class B Voting Power
------- ------- ------- ------- --------
Brett M. Kingstone(3) ................................. 345,387 483,264 16.72% 100% 61.62%
Kingstone Family Ltd Partnership II (4) ............... 291,387 483,264 14.11% 100% 60.41%
Edgar Protiva(5) ...................................... 13,498 * * * *
Eric Protiva(5) ....................................... 13,498 * * * *
Brian McCann(6) ....................................... 11,000 * * * *
Anthony Castor III(6) ................................. 10,000 * * * *
Fritz Zeck (6) ........................................ 7,000 * * * *
Hayward Industries, Inc.(7) ........................... 449,064 * 21.74% * 10.02%
Cooper Lighting, Inc. (8) ............................. 250,369 * 12.12% * 5.59%
All executive officers and
directors as a group (seven persons) (9) ............ 400,383 483,264 19.38% 100% 62.85%
- ---------------------
* Represents a percentage of beneficial ownership that is less than 1%.
(1) Unless otherwise stated, the address for all persons listed above is
Super Vision International, Inc., 8210 Presidents Drive, Orlando,
Florida 32809.
(2) "Beneficial ownership" is a technical term broadly defined by the
Securities and Exchange Commission to mean more than ownership in the
usual sense. For example, you "beneficially" own Super Vision common
stock not only if you hold it directly, but also if you indirectly
(through a relationship, a position as a director or trustee, or a
contract or understanding) have or share the power to vote the stock,
or to sell it, or if you have the right to acquire it within 60 days.
The percent of shares beneficially owned as of March 1, 2001 was
calculated based upon 2,548,807 outstanding shares, consisting of
2,065,543 shares of Class A and 483,264 shares of Class B common stock
outstanding.
3
(3) This amount includes the following shares owned by the Kingstone Family
Limited Partnership II (KFLPII), of which Mr. Kingstone controls and is
the general partner: (i) 483,264 shares of Class B common stock; (ii)
289,187 shares of Class A common stock that may be acquired upon the
exercise of warrants that were exercisable as of (or will become
exercisable within 60 days after) March 1, 2001; and (iii) 2,200 shares
Class A Common stock. In addition, this amount includes 54,000 shares
of Class A common stock which may be acquired upon the exercise of
options granted pursuant to the Company's stock option plan.
(4) Kingstone Family Limited Partnership II (KFLPII) was formed in 1998 by
Mr. Kingstone, and he is the general partner. KFLPII has granted
Hayward Industries, Inc. an option to purchase up to 28,918 shares of
Class A common stock that may be acquired upon exercise of the KFLPII
warrants to purchase 289,187 shares of Class A common stock. These
warrants granted to Hayward will vest only if the KFLPII fully or
partially exercises the option to purchase 289,187 shares of Class A
common stock. Similarly, KFLPII has granted Cooper Lighting, Inc. an
option to purchase up to 28,918 shares of Class A common stock that may
be exercised upon exercise of the KFLPII warrants to purchase 289,187
shares of Class A common stock. These warrants granted to Cooper will
vest only if the KFLPII fully or partially exercises the option to
purchase the 289,187 shares of Class A common stock.
(5) This amount includes 1,498 shares of Class A common stock. The balance
of 12,000 shares of Class A common stock may be acquired upon the
exercise of options granted for serving as a director of the Company
that were exercisable as of March 1, 2001, or that will become
exercisable within 60 days after March 1, 2001.
(6) All of these shares consist of Class A common stock, and all may be
acquired upon the exercise of options granted for serving as a director
of the Company that were exercisable as of March 1, 2001, or that will
become exercisable within 60 days after March 1, 2001.
(7) The address of Hayward Industries, Inc. is 900 Fairmont Avenue,
Elizabeth, New Jersey 07207. This amount represents shares of Class A
common stock, and also includes 199,584 warrants to purchase Class A
common stock that were exercisable as of March 1, 2001, or that will
become exercisable within 60 days after March 1, 2001. However, this
amount does not include (a) warrants to purchase up to 49,896 shares of
Class A common stock at $8.02 per share, subject to the satisfaction of
certain contingencies set forth in a distributorship agreement with
Super Vision, and (b) up to 28,918 shares that maybe acquired upon
exercise of the options owned by Hayward Industries described in
footnote (4) above.
(8) The address of Cooper Industries, Inc. is 400 Busse Road, Elk Grove
Village, Illinois 60007-2195. This amount represents shares of Class A
common stock, but does not include 28,918 shares that may be acquired
upon exercise of the options owned by Cooper Lighting Inc., in footnote
(4) above.
(9) This amount includes shares that may be acquired upon exercise of
options and warrants held by directors and executive officers of Super
Vision that were exercisable as of March 1, 2001, or that will become
exercisable within 60 days after March 1, 2001. This amount does not
include an aggregate of 40,000 shares that may be acquired upon
exercise of options held by executive officers of Super Vision which
are not exercisable during the next 60 days.
INFORMATION ABOUT DIRECTORS AND EXECUTIVE OFFICERS
The Board of Directors
The Board of Directors oversees the business and affairs of Super
Vision and monitors the performance of management. In accordance with corporate
governance principles, the Board of Directors does not involve itself in
day-to-day operations. The directors keep themselves informed through
discussions with the Chairman of the Board, other key executives and our
principal external advisors (legal counsel, outside auditors and other
consultants), by reading reports and other materials that we send to them and by
participating in Board and committee meetings.
The Board met one time during fiscal year 2000 and acted by unanimous
consent three times. Attendance at the Board and committee meetings was at least
75% for each director.
4
The Committees of the Board
The Board had two permanent committees in fiscal year 2000: the Audit
Committee and the Stock Option Committee. There is no compensation or nominating
committee.
The Audit Committee The Audit Committee reviews and approves
the audit reports rendered by the
Company's independent auditors and
reviews the effectiveness of Super
Vision's internal accounting methods and
procedures. The Audit Committee reports
to the Board of Directors about such
matters and recommends the selection of
independent auditors. For fiscal year
2000, Messrs. Edgar Protiva and Anthony
Castor served as members of the Audit
Committee. The Audit Committee met two
times during fiscal year 2000. The Audit
Committee acts under a written charter
adopted by the Board of Directors, a
copy of which is attached to this proxy
statement as Exhibit A. All of the
members of the Audit Committee are
"independent" (as defined by Rule 4200
(a)(15) of the National Association of
Securities Dealers' listing standards.
The Stock Option Committee The Stock Option Committee administers
Super Vision's 1994 Stock Option Plan.
For fiscal year 2000, Messrs. Edgar
Protiva and Eric Protiva served as
members of the Stock Option Committee.
The Stock Option Committee met one time
and took action by written consent eight
times during fiscal year 2000.
How Do We Compensate Our Directors?
Meeting Fees and Expenses We compensate directors who are not
employees of Super Vision with an annual
fee of $1,000 and an annual grant of
1,000 stock options for serving on our
Board of Directors. For each Board or
Committee meeting attended in person,
directors receive $500. For meetings
attended via telephone, directors
receive $250. We reimburse all directors
for travel and other related expenses
incurred in attending stockholder, Board
and committee meetings. We do not
compensate our employees for service as
a director. We do, however, reimburse
them for travel and other related
expenses.
Stock Awards During fiscal year 2000, pursuant to the
1994 Stock Option Plan, we granted
options to purchase 1,000 shares of
Class A common stock to Messrs. Eric
Protiva, Edgar Protiva, Brian McCann,
Anthony Castor, and Fritz Zeck, all
directors of Super Vision. The options
were granted on June 20, 2000 at an
exercise price of $7.63 and vested on
December 20, 2000.
5
The Executive Officers
Except for Mr. Larry Calise, whose biography is provided below, the
biographies of Super Vision's directors, are included under "Proposal 1: Elect
Six Directors," below at pages 13 through 14.
Larry Calise Mr. Calise was hired in February 2000 as
Chief Financial Officer the Company's Chief Financial Officer.
Age 42 Prior to this he served as Vice
President of Finance for nStor
Corporation, a manufacturer of
information storage and Raid solutions.
From 1986 through 1996, he held
positions of Controller, VP and
Corporate Controller, and VP Finance and
Administration for Philip Crosby
Associates, which was later acquired by
Alexander Proudfoot PLC, a multinational
management consulting firm specializing
in productivity and quality management.
From 1982 to 1986, Mr. Calise was an
Audit Supervisor for the CPA firm
PricewaterhouseCoopers LLP.
Did Directors, Executive Officers and Greater-Than-10% Stockholders Comply with
Section 16(a) Beneficial Ownership Reporting in 2000?
Section 16(a) of the Securities Exchange Act of 1934 requires our
directors, executive officers and greater-than-10% stockholders to file reports
with the Securities and Exchange Commission on changes in their beneficial
ownership of Super Vision common stock and to provide Super Vision with copies
of the reports. Based solely on our review of these reports and of
certifications furnished to us, we believe that all of these reporting persons
complied with their filing requirements for fiscal year 2000.
How Do We Compensate Our Executive Officers?
The tables below show salaries and bonuses paid during the last three
years, options granted in fiscal year 2000 and aggregate options exercised in
fiscal year 2000 for our Chief Executive Officer. Super Vision did not have any
other executive officers or other employees serving at the end of fiscal 2000
whose total annual salary and bonus exceeded $100,000.
SUMMARY COMPENSATION TABLE
Long-term
Annual compensation Compensation awards
------------------------------ ---------------------------------
Options LTIP All other
Year Salary Bonus # of Shares Payouts Compensation(1)
------ -------- -------- -------- -------- --------
Brett M. Kingstone(2) 2000 $131,192 $ 8,010 -- -- $ 16,176
1999 $127,154 $ 258 -- -- $ 15,822
1998 $129,846 -- -- -- $ 15,473
- ---------------
(1) Represents a monthly allowance of $1,000 to include automobile and
other related expenses as well as vested portion of Super Vision's
401(k) plan employer match.
(2) Mr. Kingstone is the President and Chief Executive Office of Super
Vision International, Inc., and the Chairman of its Board of Directors.
6
Employment Agreements
In January 1994, the Company entered into a three-year employment
agreement with Brett Kingstone, Chairman of the Board, Chief Executive Officer
and President of the Company. The agreement with Mr. Kingstone is renewable
automatically for successive one year terms and provides for a base annual
salary (subject to annual increases and bonuses at the discretion of the Board
of Directors) and a monthly automobile allowance of $1,000.
In the event of termination of Mr. Kingstone's agreement by the Company
other than for cause, the Company has agreed to pay him severance in an amount
equal to the annual base salary in effect for the balance of the term of the
agreement plus six months. The agreement contains confidentiality and
non-competition provisions.
The Company has no other employment agreements with its employees,
although all employees sign confidentiality and non-competition agreements.
AGGREGATE OPTION EXERCISES DURING FISCAL YEAR 2000 AND YEAR-END OPTION VALUES
None of the options held by the executive officers listed in the
"Summary Compensation Table" above were exercised in fiscal year 2000. The
following table shows information about the value of unexercised stock options
at December 31, 2000 for the executive officer listed below.
Number of Securities Under- Value of Unexercised In-
lying Unexercised Options the-Money Options at
at December 31, 2000 December 31, 2000(1)
---------------------------- ---------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
Brett M. Kingstone.... 54,000 10,000 -- --
- -------------
(1) The dollar values of any In -the-Money Options would be calculated by
determining the difference between $6.25 per share, the closing bid
price of common stock on December 29, 2000, and the exercise price of
the stock options. "In-the-Money" stock options are options for which
the exercise price is less than the market price of the underlying
stock on a particular date.
1994 STOCK OPTION PLAN
Super Vision's employees, officers, directors and consultants or
advisers are eligible to receive incentive stock options within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended, or non-qualified
stock options. The plan, which expires in January 2004, is administered by the
Stock Option Committee of the Board of Directors. The purposes of the plan are
to ensure the retention of existing executive personnel, key employees,
directors, consultants and advisors who are expected to contribute to the future
growth and success of Super Vision and to provide additional incentive by
permitting such individuals to participate in the ownership of Super Vision. The
criteria utilized by the committee in granting options pursuant to the plan are
consistent with these purposes.
Options granted under the Plan may be either incentive options or
non-qualified options. Incentive options granted under the Plan are exercisable
for a period of up to 10 years from the date of grant. No options may be granted
under the plan after January 2004. Options may be granted only to such
employees, officers, directors,
7
consultants and advisors as the committee shall select from time to time in its
sole discretion, but only employees of Super Vision shall be eligible to receive
incentive options.
An optionee may be granted more than one option under the plan. The
committee will, in its discretion, determine (subject to the terms of the plan)
who will be granted options, the time or times at which options shall be
granted, the number of shares subject to each option, whether the options are
incentive options or non-qualified options, and the manner in which options may
be exercised. In making such determination, consideration may be given to the
value of the services rendered by the respective individuals, their present and
potential contribution to the success of Super Vision and such other factors
deemed relevant in accomplishing the purpose of the plan.
The Plan may be amended or terminated by the Board of Directors at any
time. Any amendment which would increase the aggregate number of shares of Class
A common stock as to which options may be granted under the plan, materially
increase the benefits under the plan, or modify the class of persons eligible to
receive options under the plan shall be subject to the approval of the
stockholders of Super Vision. No amendment or termination may adversely affect
any outstanding option without the written consent of the optionee.
ARRANGEMENTS WITH OFFICERS AND DIRECTORS
Prior to September 1996, Super Vision's executive offices and
production facilities were located in Orlando, Florida in approximately 17,000
square feet of leased space. Max King Realty, an entity controlled by Mr.
Kingstone, owned the building, which housed Super Vision's executive offices. On
September 27, 1996, Super Vision entered into a lease agreement with Max King
Realty for new warehouse and office space. The new space consists of
approximately 70,000 square feet that Super Vision began occupying on August 15,
1997. The lease term expires in June 2012. Rental payments in 2000 amounted to
approximately $581,520.
On September 25, 1996, the Company entered into a Stock Purchase
Agreement and a Distributorship Agreement with Hayward Industries, Inc
("Hayward"). Under the terms of the Distributorship Agreement as amended on
January 10, 2000, Hayward acts as the exclusive, worldwide distributor for Super
Vision in the pool, spa and hot tub market. Under the terms of the Stock
Purchase Agreement, Hayward purchased 249,480 shares of Super Vision's Class A
common stock from Super Vision, at a price of $8.02 per share. In addition,
Super Vision granted warrants for the purchase of up to 249,480 additional
shares, at an exercise price of $8.02 per share. Vesting of the warrants is tied
to achievement of minimum purchase commitments contained in the Distributorship
Agreement. The warrants have a 10-year life and expire September 25, 2006. As of
December 31, 2000, total vested warrants related to Hayward's achievement of
minimum purchase commitments were 199,584.
Super Vision has granted Hayward rights of first refusal to acquire any
securities proposed to be sold by Super Vision to competitors of Hayward. Super
Vision has granted Hayward certain registration rights with respect to the
shares of common stock acquired under the Stock Purchase Agreement and shares
issuable upon exercise of the warrants described above under the Securities Act
of 1933, as amended. Hayward also has the right to designate one director to
Super Vision's Board of Directors, but has not designated a director as of this
time.
The Company derived approximately 28% of its total revenues from
Hayward in 2000 compared to approximately 19% in 1999. The Company was recently
notified by Hayward of an alleged intentional violation by the Company of the
distributorship agreement to which the Company and Hayward are parties as a
result of the Company's sale of its products into the exclusive swimming pool,
spa and hot tub market granted to Hayward thereunder. Hayward has informed the
Company that it believes that the alleged violation is a material and
non-curable breach of the distributorship agreement. As a result, the Company
and Hayward have commenced negotiations with respect to the alleged breach and
the terms of their relationship. The Company expects that these negotiations
will lead to the termination of this relationship and the distributorship
agreement; however, there can be no assurance that the parties will be able to
negotiate an acceptable agreement regarding the foregoing.
On November 23, 1998, Super Vision entered into a Stock Purchase
Agreement with Cooper Lighting, Inc., a subsidiary of Cooper Industries, Inc
("Cooper"). (a New York Stock Exchange company trading under the
8
symbol "CBE"), pursuant to which Super Vision sold to Cooper 250,369 shares of
its Class A common stock for a purchase price of $2,000,000. In addition, Super
Vision entered into a Distributorship Agreement with Cooper Lighting Inc. and
Cooper Industries (Canada), Inc., another subsidiary of Cooper Industries, Inc.,
collectively, pursuant to which Cooper Lighting, Inc. and Cooper Canada were
granted the exclusive distribution rights in the United States and Canada to
Super Vision's fiber optic products in the commercial, residential, industrial,
institutional and public transportation markets. Super Vision and Cooper
mutually agreed to terminate the Distributorship Agreement effective as of
December 31, 2000.
Effective July 10, 2000, Cooper notified the Company that Cooper did
not meet its minimum purchase commitment for the year ended December 31, 1999
and would not meet its purchase commitment for the year ending December 31,
2000, and further advised the Company that Cooper will not make up the
deficiencies pursuant to its option in the Distributorship Agreement to maintain
its exclusive sales rights in the Territory's Exclusive Market for the Company's
products. Upon this notification, the Company exercised its option to not excuse
the deficiency and terminate Cooper's exclusive rights to distribute, market and
sell the Company's products within the Territory's Exclusive Market. Effective
midnight on October 31, 2000, Cooper's exclusive rights for sale of the
Company's products in the Territory's Exclusive Market terminated. Cooper's ten
year warrant to purchase an additional 250,369 shares of Class A common stock of
Super Vision at $8.02 per share based on achievement of minimum purchase
commitments was also terminated midnight October 31, 2000. Cooper Lighting,
Inc., also has the right to designate one director to Super Vision's Board of
Directors, and in January 1999, Cooper Lighting, Inc., appointed Fritz Zeck to
the Board of Directors of Super Vision. For more information about Mr. Zeck, see
"Proposal 1: Elect Six Directors", below at pages 13 to 14.
Separate from the Distributorship Agreement, the Company received an
order to supply outdoor lighting products from Regent Lighting Corporation an
affiliate of Cooper Lighting. The Company derived approximately $1,525,000 and
13% of its total revenues from Regent Lighting Corporation in 2000.
Proposal 1: Elect Six Directors
The Board has nominated six directors for election at the Annual
Meeting to serve until the 2002 Annual Meeting of Stockholders, or until their
successors are elected and qualified. All nominees are currently directors of
Super Vision.
If any of the nominees should become unavailable, your shares will be
voted for a Board-approved substitute, or the Board may reduce the number of
directors to be elected. If any director resigns, dies or is otherwise unable to
serve out his term, or the Board increases the number of directors, the Board
may fill the vacancy until the next annual meeting.
Nominees
Brett M. Kingstone Mr. Kingstone has been Chairman of the
Chief Executive Officer, President Board, Chief Executive Officer and
and Chairman of Board of Directors President of Super Vision since July
Age 41 1999. From November 1997 to July 1999
Mr. Kingstone served as Chairman and
Chief Executive Officer. From the
Company's inception to November 1997 he
was Chairman, Chief Executive Officer
and President. From October 1985 until
January 1991, Mr. Kingstone served as an
independent consultant in the area of
fiber optic technology. Prior to that,
from December 1988 until October 1989,
he served as President of Fibermedia
Corporation in Boulder, Colorado. From
January 1984 to August 1985, he was a
partner in Kingstone Prato, Inc., a
venture capital partnership in Boulder,
Colorado. From August 1981 through
December 1983, he served as Vice
President of Sales of Gekee
9
Fiber Optics, Inc. in Palo Alto,
California. Mr. Kingstone is a graduate
of Stanford University and the author of
two books - The Student Entrepreneur's
Guide (McGraw-Hill) and The Dynamos
(John Wiley & Sons; Koksaido Press).
Edgar Protiva Mr. Protiva became a director of Super
Director Vision in March 1994. From 1980 to
Age 61 present, Mr. Protiva has been engaged in
merchant banking with K.C.L. Associates.
Mr. Protiva is the brother of Eric
Protiva, another director of the
Company.
Eric V. Protiva Mr. Protiva became a director of Super
Director Vision in March 1994. From 1982 to
Age 65 present Mr. Protiva has been the Chief
Executive Officer of AMS Electronic
GmbH, an entity headquartered in Munich,
Germany which he founded in 1982. AMS
Electronic GmbH changed its name in 1999
and is now known as EGORA Holding GmbH.
EGORA Holding GmbH, together with its
majority-owned subsidiaries, is engaged
in the electronic and fiber optics
components and systems business in
Europe. Mr. Protiva also serves as
director of ADVA Optical Networking AG.
Mr. Protiva is the brother of Edgar
Protiva, another director of the
Company.
Brian McCann Mr. McCann became a director of Super
Director Vision in October 1995. From February
Age 35 1998 until present, Mr. McCann has
served as the President of ADVA Optical
Networking, Inc., which provides optical
networking solutions for computer
operating systems. From 1996 to 1998,
Mr. McCann was the Vice President of
North American Business Development for
ADVA GmbH Optical Solutions of Munich,
Germany. From 1987 to 1996, Mr. McCann
has held successive positions as
Director of Sales and Marketing and
Product Manager for 3M Specialty Optical
Fibers.
Anthony T. Castor III Mr. Castor became a director of Super
Director Vision in September 1996. Currently, Mr.
Age 49 Castor is serving as Vice Chairman and
Director of Lynch Corporation, a
producer of adhesive and coating systems
as well as capital equipment for the
electronic display and consumer
tableware industries. He is also serving
as President and Chief Executive Officer
of Spinnaker Corporation which is a
subsidiary of Lynch Corporation. Mr.
Castor continues to serve as President
and Chief Executive Officer of the
Morgan Group, a specialty transportation
company. Mr. Castor also serves as a
director for the Morgan Group, Inc. From
January 1998 until January 2000, Mr.
Castor has served as President and Chief
Executive Officer of Precision
Industrial Corporation, a worldwide
supplier of capital equipment for
processing sheet metal. From 1994 until
December 1997, Mr. Castor was the
President and Chief Executive Officer of
Hayward Industries, Inc., a supplier of
pumps, filters, heaters and other
accessories for the pool and spa
industries and industrial equipment.
From 1987 to 1993, Mr. Castor was
Corporate Vice President of Crompton &
Knowles Corporation, a supplier of
specialty chemicals and process
equipment and President of its
wholly-owned subsidiary, Ingredient
Technology Corporation.
10
Fritz Zeck Mr. Zeck became a director of Super
Director Vision in January 1999. Since 1994, Mr.
Age 60 Zeck has served as President of Cooper
Lighting. Prior to this he served as
Vice President of Sales for Cooper
Lighting since he started in 1985. Mr.
Zeck joined Metalux in 1976 where he was
Regional Sales Manager for the Central
portion of the United States. He founded
Lumark Lighting in 1978, which was a
division of Metalux.
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The Board recommends that you vote "FOR" the election of all six
nominees for director.
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Proposal 2: Ratify Selection of Independent Auditors for 2001
We are asking you to ratify the Board's selection of Ernst & Young LLP,
certified public accountants, as independent auditors for fiscal year 2001. The
Audit Committee recommended the selection of Ernst & Young to the Board. Ernst &
Young has served as the independent auditors of Super Vision International since
September 1997.
Audit Fees. Ernst & Young LLP billed the Company $64,700, in the
aggregate, for professional services rendered by them for the audit of the
Company's annual financial statements for the fiscal year ended December 31,
2000, and the reviews of the interim financial statements included in the
Company's Forms 10-QSB filed during the fiscal year ended December 30, 2000.
Financial Information Systems Design and Implementation Fees. Ernst &
Young LLP provided no professional services to the Company of the nature
described in Paragraph (c)(4)(ii) of Rule 2-01 of Regulation S-X during the
fiscal year ended December 31, 2000.
All Other Fees. Ernst & Young LLP billed the Company $ 850, in the
aggregate, for all other services rendered by them (other than those covered
above under "Audit Fees" and "Financial Information Systems Design and
Implementation Fees") during the fiscal year ended December 31, 2000. This
amount generally included fees for accounting consultations.
A representative of Ernst & Young will attend the Annual Meeting to
answer your questions.
We are submitting this proposal to you because the Board believes that
such action follows general corporate practice. If you do not ratify the
selection of independent auditors, the Board will consider it a direction from
you to consider selecting other auditors for next year. However, even if you
ratify the selection, the Board may still appoint new independent auditors at
any time during the year if it believes that such a change would be in the best
interests of Super Vision and our stockholders.
- --------------------------------------------------------------------------------
The Board recommends that you vote "FOR"
ratification of the selection of Ernst & Young LLP as
independent auditors for 2001.
- --------------------------------------------------------------------------------
11
A COPY OF SUPER VISION'S ANNUAL REPORT ON FORM 10-KSB FOR THE YEAR
ENDED DECEMBER 31, 2000, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION,
WITH FINANCIAL STATEMENTS AND THE SCHEDULES THERETO BUT WITHOUT ANY OTHER
EXHIBITS, WILL BE MAILED TO THE STOCKHOLDERS OF SUPER VISION UPON REQUEST AND
WITHOUT CHARGE.
For Further information on obtaining the 2000 Annual Report, see "How
Can I Obtain an Annual Report on Form 10-KSB", above at page 7.
AUDIT COMMITTEE REPORT
In connection with the preparation and filing of the Company's Annual
Report on Form 10-KSB for the year ended December 31, 2000:
o The Audit Committee reviewed and discussed the audited
financial statements with management;
o The Audit Committee discussed with the independent auditors
the material required to be discussed by SAS 61; and
o The Audit Committee reviewed the written disclosures and the
letter from the independent auditors required by the
Independence Standards Board Standard No. 1 and discussed with
the auditors any relationships that may impact their
objectivity and independence and satisfied itself as to the
auditors' independence.
Based on the review and discussions referred to above, the Audit
Committee recommended to the Board of Directors of the Company that the audited
financial statements be included in the Annual Report on Form 10-KSB for the
year ended December 31, 2000.
Edgar Protiva
Anthony T. Castor III
OTHER MATTERS
Management does not know of any matters to be presented for action at
the meeting other than the election of directors and the ratification of the
independent auditors, as further described in the Notice of Annual Meeting of
Stockholders. However, if any other matters come before the Annual Meeting, it
is intended that the holders of the proxies will vote thereon in their
discretion.
INFORMATION ABOUT STOCKHOLDER PROPOSALS
Any stockholder who desires to present a proposal qualified for
inclusion in our proxy materials relating to our 2002 Annual Meeting must
forward the proposal to the Secretary at the address set forth below in time to
arrive at our offices no later than December 4, 2001. This deadline will change
in accordance with the rules and regulations promulgated by the Securities and
Exchange Commission if the date of the 2002 Annual Meeting is 30 calendar days
earlier or later than May 4, 2002. The notice provided by the stockholders must
contain:
o a complete and accurate description of the proposal;
12
o a statement that the stockholder (or the stockholder's legal
representative) intends to attend the meeting and present the
proposal and that the stockholder intends to hold of record
securities entitled to vote at the meeting through the meeting
date;
o the stockholder's name and address and the number of shares of
our voting securities that the stockholder holds of record and
beneficially as of the notice date; and
o a complete and accurate description of any material interest
of such stockholder in such proposal.
All stockholder proposals are subject to the requirements of the proxy
rules adopted under the Securities Exchange Act of 1934, as amended (regardless
of whether included in the proxy materials), and applicable Delaware law.
Under the proxy rules, in the event Super Vision receives notice of a
stockholder proposal to take action at the next annual meeting that is not
submitted for inclusion in the proxy materials, or is submitted for inclusion
but is properly excluded from such proxy materials, the persons named in the
form of proxy sent by Super Vision to its stockholders will have the discretion
to vote on such proposal in accordance with their best judgment if notice of the
proposal is not received at our offices by February 15, 2002.
If you wish to submit a stockholder proposal for the 2002 Annual
Meeting of Stockholders or if you would like a copy of our Bylaws (without
charge), please write to the Corporate Secretary, Super Vision, 8210 Presidents
Drive, Orlando, Florida 32809.
By order of the Board of Directors,
/s/Brett M. Kingstone
Chairman of the Board, President and
Chief Executive Officer
April 3, 2001
13
EXHIBIT A
AUDIT COMMITTEE FOR THE BOARD OF DIRECTORS
SUPER VISION INTERNATIONAL
CHARTER
Organization
There shall be an independent committee of the board of directors to be known as
the audit committee. This charter governs the operations of the audit committee.
The audit committee shall be composed of directors who are independent of
management and of the corporation and are free of any relationship that, in the
opinion of the board of directors, would interfere with their exercise of
independent judgment as a committee member.
Statement of Policy
The audit committee shall provide assistance to the corporate directors in
fulfilling their responsibility to the shareholders, potential shareholders, and
investment community relating to corporate accounting, reporting practices of
the corporation, and the quality and integrity of the financial reports of the
corporation. In so doing, it is the responsibility of the audit committee to
maintain free and open means of communication between the directors, the
independent auditors, the internal auditors, management of the corporation.
Responsibilities
The primary responsibility of the audit committee is to oversee the Company's
financial reporting process on behalf of the board and report the results of
their activities to the board. Management is responsible for preparing the
Company's financial statements, and the independent auditors are responsible for
auditing those financial statements. In carrying out its responsibilities, the
audit committee believes its policies and procedures should remain flexible, in
order to best react to changing conditions and to ensure to the directors and
shareholders that the corporate accounting and reporting practices of the
corporation are in accordance with all requirements and are of the highest
quality. The committee should take the appropriate actions to set the overall
corporate "tone" for quality financial reporting, sound business risk practices,
and ethical behavior.
In carrying out these responsibilities, the audit committee will:
o The committee shall have a clear understanding with management and the
independent auditors that the independent auditors are ultimately
accountable to the board and the audit committee, as representatives of
the Company's shareholders. The committee shall have the ultimate
authority and responsibility to evaluate and, where appropriate,
recommend the replacement of the independent auditors. The committee
shall discuss with the auditors their independence from management and
the Company and the matters included in the written disclosures
required by the Independence Standards Board. Annual, the committee
shall review and recommend to the board the selection of the Company's
independent auditors, subject to shareholders' approval.
o Meet with the independent auditors to discuss the overall scope and
plans of the proposed audit for the current year and the audit
procedures to be utilized, and at the conclusion thereof review such
audit, including any comments or recommendations of the independent
auditors.
o Review with the independent auditors, the company's internal auditor,
and financial and accounting personnel, the adequacy and effectiveness
of the accounting and financial controls of the corporation, and elicit
any recommendations for the improvement of such internal control
procedures or particular areas where new or more detailed controls or
procedures are desirable. Particular emphasis should be given to the
adequacy of such internal controls to expose any payments,
transactions, or procedures that might be deemed illegal or otherwise
improper. Further, the committee periodically should review company
policy statements to determine their adherence to the code of conduct.
o Receive prior to each meeting, a summary of findings from completed
internal audits and a progress report on the proposed internal audit
plan, with explanations for any deviations from the original plan.
o The committee shall review the interim financial statements with
management and the independent auditors prior to the filing of the
Company's Quarterly Report on Form 10-QSB. Also, the committee shall
discuss the results of the quarterly review and any other matters
required to be communicated to the committee by the independent
auditors under generally accepted auditing standards. The chair of the
committee may represent the entire committee for the purposes of this
review.
o Review the financial statements to be included in the annual report on
Form 10-KSB with management and the independent auditors to determine
that the independent auditors are satisfied with the disclosure and
content of the financial statements to be presented to the
shareholders, including their judgment about quality, not just
acceptability, of accounting principles, the reasonableness of
significant judgments, and the clarity of the disclosures in the
financial statements. Any changes in accounting principles should be
reviewed. Also, the committee shall discuss the results of the annual
audit and any other matters required to be communicated to the
committee by the independent auditors under generally accepted auditing
standards.
o Provide sufficient opportunity for the internal and independent
auditors to meet with the members of the audit committee without
members of management present. Among the items to be discussed in these
meetings are the independent auditors' evaluation of the corporation's
financial, accounting, and auditing personnel, and the cooperation that
the independent auditors received during the course of the audit.
o Review accounting and financial human resources and succession planning
within the company.
o Submit the minutes of all meetings of the audit committee to, or
discuss the matters discussed at each committee meeting with, the board
of directors. Annually prepare a report to shareholders as required by
SEC regulations. The report should be included in the Company's annual
proxy statement.
o Investigate any matter brought to its attention within the scope of its
duties, with the power to retain outside counsel for this purpose if,
in its judgment, that is appropriate.
o As the independent auditors are ultimately accountable to the Committee
and the Board, review the independence and performance of the auditors
o On an annual basis, review and discuss with the independent auditors
all significant relationships they have with or services they provide
to the Company that could impair their objectivity and independence.
o Discuss certain matters required to be communicated to audit committees
in accordance with AICPA SAS 61.
o Review and reassess the adequacy of this Charter at least annually.
Submit the charter to the Board for approval and have the document
published at least every three years in accordance with Securities and
Exchange Commission ("SEC") regulations.
SUPER VISION INTERNATIONAL, INC.
Proxy for 2001 Annual Meeting of Stockholders to be held on May 4, 2001
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of Super Vision International, Inc. hereby
constitutes and appoints Brett M. Kingstone, as attorney and proxy, with the
power to appoint a substitute, and hereby authorizes him to represent and vote,
as designated below, all of the shares of common stock of Super Vision which the
undersigned is entitled to vote at the Annual Meeting of Stockholders of Super
Vision to be held Friday, May 4, 2001, or at any and all adjournments or
postponements thereof, with respect to the matters set forth below and described
in the Notice of Annual Meeting of Stockholders and the Proxy Statement dated
April 3, 2001.
Proposal 1: To consider and act upon a proposal to elect Messrs. Brett
M. Kingstone, Edgar Protiva, Eric Protiva, Brian McCann,
Anthony Castor III and Fritz Zeck as directors to hold office
for one-year terms or until their successors are elected and
qualified.
[ ] FOR ELECTION OF ALL NOMINEES (except as shown below)
[ ] WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES
Instruction: To withhold authority to vote for any individual
nominee, strike through the nominee's name below:
Brett M. Kingstone Edgar Protiva Eric Protiva
Brian McCann Anthony Castor III Fritz Zeck
Proposal 2: To appoint Ernst & Young LLP as independent auditors for 2001.
[ ] FOR APPOINTMENT [ ] AGAINST APPOINTMENT [ ] ABSTAIN
Proposal 3. In their discretion, the proxies are authorized to vote
upon such other business as may properly come before the
meeting or any and all adjournments thereof.
[ ] AUTHORIZED TO VOTE [ ] ABSTAIN
This proxy, when properly executed, will be voted in the manner
directed herein by the undersigned stockholder(s). IF NO INDICATION IS MADE,
THIS PROXY WILL BE VOTED "FOR" THE NOMINEES LISTED, FOR THE INDEPENDENT
AUDITORS, AND THE PROXY HOLDERS WILL VOTE ON ANY MATTER UNDER PROPOSAL NO. 3 IN
THEIR DISCRETION AND IN THEIR BEST JUDGMENT.
Please mark, date and sign exactly as your name appears on your stock
certificate. When shares are held by joint tenants, both should sign. When
signing as corporate officer, partner, attorney, executor, administrator,
trustee or guardian, please specify your full title as such.
Dated:
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Signature
Dated:
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Signature if held jointly