SUPER VISION INTERNATIONAL, INC.
8210 PRESIDENTS DRIVE
ORLANDO, FLORIDA 32809
PROXY STATEMENT
RELATING TO THE ANNUAL MEETING
OF STOCKHOLDERS TO BE HELD MAY 14, 2002
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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Rule 14a-6(e)(2)).
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
SUPER VISION INTERNATIONAL, INC.
(Name of Registrant as Specified in Its Charter)
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SUPER VISION INTERNATIONAL, INC.
8210 Presidents Drive
Orlando, Florida 32809
April 8, 2002
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 Tuesday, the 14th day of May, 2002,
at 10:00 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,
Brett Kingstone,
Chairman of the Board
President and
Chief Executive Officer
TABLE OF CONTENTS
PAGE
----
Information About The Annual Meeting and Voting................................... 4
Why Did You Send Me this Proxy Statement?........................................ 4
How Many Votes Do I Have?........................................................ 4
How Do I Vote by Proxy?.......................................................... 4
May I Revoke My Proxy?........................................................... 4
How Do I Vote in Person?......................................................... 5
What Vote Is Required to Approve The Proposal?................................... 5
Is Voting Confidential?.......................................................... 5
What Are the Costs of Soliciting the Proxies?.................................... 5
Information About Super Vision International, Inc. Common Stock Ownership......... 5
How Much Stock is Owned By Directors, Executive Officers and At Least 5%
Stockholders?.................................................................... 5
Information About Directors and Executive Officers................................ 7
The Board of Directors........................................................... 7
The Committees of the Board...................................................... 7
How Do We Compensate Our Directors............................................... 8
The Executive Officers........................................................... 8
Did Directors, Executive Officers and Greater-Than-10% Stockholders Comply
with Section 16(a) Beneficial Ownership Reporting in 2001?....................... 8
How Do We Compensate Our Executive Officers...................................... 9
Summary Compensation Table........................................................ 9
Aggregate Option Exercises During Fiscal Year 2001 and Year-End Option Values..... 10
1994 Stock Option Plan............................................................ 10
Arrangements with Officers and Directors.......................................... 11
PROPOSAL 1: ELECT SIX DIRECTORS................................................. 12
Independent Public Accountants.................................................... 14
Audit Committee Report............................................................ 15
Other Matters..................................................................... 15
Information About Stockholder Proposals........................................... 15
PROXY FOR 2002 ANNUAL MEETING OF STOCKHOLDERS..................................... 17
PROXY STATEMENT FOR THE
SUPER VISION INTERNATIONAL, INC.
2002 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 2002 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 8, 2002 to all
stockholders entitled to vote. Stockholders who owned Super Vision common stock
at the close of business on March 15, 2002 are entitled to vote. Effective
March 15, 2002, there were 2,083,110 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.
In this Proxy Statement, unless the context otherwise requires, "Super Vision,"
"we," "our," "us," the "company" and similar expressions refer to Super Vision
International, Inc., a Delaware corporation.
We are also sending along with this Proxy Statement, the Company's Annual
Report on Form 10-KSB which includes our Financial Statements. The Annual
Report is not to be regarded as proxy solicitation material.
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" (the individual 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:
. "FOR" the election of all six nominees for director.
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:
. You may send in another proxy with a later date;
. You may notify Super Vision's Secretary in writing before the
Annual Meeting that you have revoked your proxy; or
. 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 15, 2002, the record date for voting.
What Vote Is Required to Approve The 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.
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.
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 15, 2002, (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)
----------------------------------------------------
Beneficial Owners (1) Number Percent Ownership Total
----------------- -------------------
Class A Class B Class A Class B Voting Power
-------- ------- --------- -------- ------------
Brett M. Kingstone(3) 351,387 483,264 14.45% 100% 57.08%
Kingstone Family Ltd Partnership II (4) 291,387 483,264 12.28% 100% 56.54%
Edgar Protiva(5) 14,498 * * * *
Brian McCann(6) 12,000 * * * *
Larry Calise (7) 11,000 * * * *
Anthony Castor III(6) 11,000 * * * *
Fritz Zeck(6) 8,000 * * * *
Robert Wexler (6) 5,000 * * * *
Hayward Industries, Inc.(8) 399,168 * 17.88% * 8.59%
Cooper Lighting, Inc. (9) 250,369 * 12.02% * 5.56%
All executive officers and directors as a
group (10) 412,885 483,264 16.57% 100% 57.64%
* 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 15, 2002 was calculated based upon 2,566,374
outstanding shares, consisting of 2,083,110 shares of Class A and 483,264
shares of Class B common stock outstanding.
(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 15, 2002; and (iii) 2,200 shares Class A Common stock.
In addition, this amount includes 60,000 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
13,000 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 15, 2002, or that will become exercisable within 60
days after March 15, 2002.
(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 15, 2002, or that will become
exercisable within 60 days after March 15, 2002.
(7) All of these shares consist of Class A common stock, and all may be
acquired upon the exercise of options granted for serving as an executive
officer of the Company that were exercisable as of March 15, 2002, or that
will become exercisable within 60 days after March 15, 2002.
(8) 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 149,688 warrants to purchase Class A common stock that
were exercisable as of March 15, 2002, or that will become exercisable
within 60 days after March 15, 2002. However, this amount does not include
up to 28,918 shares that maybe acquired upon exercise of the options owned
by Hayward Industries described in footnote (4) above.
(9) The address of Cooper Industries, Inc. is 1121 Highway 74 South, Peachtree
City, Georgia 30269. 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.
(10) 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 15, 2002, or that will become exercisable
within 60 days after March 15, 2002. This amount does not include an
aggregate of 29,000 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 two times during fiscal year 2001 and acted by unanimous
written consent five times. Attendance at the Board and committee meetings was
at least 75% for each director.
The Committees of the Board
The Board had three permanent committees in fiscal year 2001: the Audit
Committee, the Compensation Committee and the Stock Option Committee. There is
not a permanent 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 2001, Messrs. Edgar Protiva and
Anthony Castor served as members of the Audit
Committee. The Audit Committee met four times
during fiscal year 2001. 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 Board
of Directors has adopted a written charter for the
audit committee.
The Compensation Committee The Compensation Committee reviews and recommends
compensation plans for the top 5 highest paid
employees. The Compensation Committee reports to
the Board of Directors about such matters and
recommends the incentive plans for these
employees. For fiscal year 2001, Messrs. Anthony
Castor, Brian McCann and Fritz Zeck served as
members of the Compensation Committee. The
Compensation Committee met one time during fiscal
year 2001, and held several informal discussions
among members of the committee.
The Stock Option Committee The Stock Option Committee administers Super
Vision's 1994 Stock
Option Plan. For fiscal year 2001, Messrs. Edgar
Protiva, Eric Protiva and Brian McCann served as
members of the Stock Option Committee. The Stock
Option Committee met one time and took action by
written consent nine times during fiscal year
2001.
How Do We Compensate Our Directors?
Meeting Fees We compensate directors who are not employees of
and Expenses 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 2001, 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 at the time the options were granted. The
options were granted on May 4, 2001 at an exercise
price of $7.50 and vested on November 4, 2001.
With the appointment of Robert Wexler to the
Board, he was granted 5,000 options effective
September 26, 2001 at an exercise price of $6.00
that vest on March 26, 2002.
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 12 through 14.
Larry Calise Mr. Calise was hired in February 2000 as the
Chief Financial Officer Company's Chief Financial Officer. Prior to this
Age 43 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 2001?
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 the filing requirements for fiscal year 2001.
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 2001 and aggregate options exercised in
fiscal year 2001 for our Chief Executive Officer and our Chief Financial
Officer. Super Vision does not have any other executive officers or other
employees serving at the end of fiscal 2001 whose total annual salary and bonus
exceeded $100,000.
Summary Compensation Table
Annual compensation
---------------------------
All other
---------- --------- ---------------
Year Salary Bonus Compensation(1)
------ ---------- --------- ---------------
Brett M. Kingstone(2) 2001 $135,462 $12,368 $15,122
2000 $131,192 $ 8,010 $16,176
1999 $127,154 $ 258 $15,822
Larry Calise(3) 2001 $109,692 $ 50 $ 423
2000 $ 86,346 $ 502 --
- ----------
(1) Includes a monthly allowance of $1,000 for automobile and other related
expenses as well as the vested portion of Super Vision's 401(k) plan
employer match.
(2) Mr. Kingstone is the President and Chief Executive Officer of Super Vision
International, Inc., and the Chairman of its Board of Directors.
(3) Mr. Calise is the Chief Financial Officer of Super Vision International,
Inc.
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.
We have entered into indemnification agreements with certain of our directors
and executive officers which provide that we will indemnify our directors and
executive officers against expenses, judgments, penalties, fines and amounts
paid in settlement actually and reasonably incurred by a director or executive
officer in connection with any civil or criminal action or administrative
proceeding arising out of the performance of his duties as an officer, director,
employee or agent of our company.
Aggregate Option Exercises During Fiscal Year 2001 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 2001. The following
table shows information about the value of unexercised stock options at December
31, 2001 for the executive officers listed below.
Number of Securities Under- Value of Unexercised In-
lying Unexercised Options the-Money Options at
at December 31, 2001 December 31, 2001(1)
-------------------------- --------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
Brett M. Kingstone.... 64,000 -- -- --
Larry Calise.......... 11,000 29,000 -- --
- ----------
(1) The dollar values of any In-the-Money Options would be calculated by
determining the difference between $5.64 per share, the closing bid price
of common stock on December 31, 2001, 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. Neither Mr. Kingstone nor Mr. Calise currently have any In-the-Money
options.
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 under our 1994 stock option plan (the "Plan"). The Plan, which expires
in January 2004, is administered by the Stock Option Committee of the Board of
Directors. There are 450,000 shares of our Class A common stock reserved for
issuance under the Plan. 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, 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
On September 27, 1996, Super Vision entered into a lease agreement with Max
King Realty, an entity controlled by Mr. Kingstone, our President, Chief
Executive Officer and Chairman of the Board, for approximately 70,000 square
feet of warehouse and office space. We began occupying this facility in August
1997. The lease term expires in June 2012. Rental payments for the year ended
December 31, 2001 amounted to approximately $598,481. The lease agreement was
approved by all of the disinterested directors of Super Vision, with Mr.
Kingstone abstaining from the vote. At the time we entered in the lease
agreement, based on then current economic conditions, the real estate market,
and our prospects, we believed that the transaction was on terms, when taken as
a whole, no less favorable to Super Vision than could generally be obtained from
unaffiliated third parties.
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.
On August 15, 2001, the Company reached an agreement with Hayward
terminating Hayward's exclusive distribution rights as of September 30, 2001.
The agreement with Hayward allowed the Company to commence direct selling of its
fiber optic lighting products in the swimming pool and spa market worldwide,
except in the United States and Canada, as of August 15, 2001, and within the
United States and Canada as of October 1, 2001. The Company has agreed to pay
Hayward royalties on gross sales of fiber optic pool lighting products sold in
the U.S. and Canada over a term of five years at the rate of 5% of gross sales
in the first year, 3% in the second and third years and 2% in the fourth and
fifth years with a $100,000 minimum payment due during each of the Company's
fiscal years ending December 31, 2002 and 2003. Pursuant to the agreement,
Hayward also agreed to return certain fiber optic lighting products previously
sold by the Company to Hayward and to return vested warrants covering 49,896
shares of the Company's Class A common stock previously issued to Hayward all in
exchange for $300,000 paid in December 2001. The settlement payment of $300,000
was allocated to the returned inventory at its fair market value of
approximately $155,000, to the returned vested warrants at their fair market
value on August 15, 2001, the measurement date, of approximately $43,000 and the
balance of settlement payment of approximately $102,000 was recorded as one-time
charge to operations in December 2001. The inventory repurchased from Hayward
represents the Company's manufactured fiber optic lighting products, which had
been directly purchased by Hayward from the Company on or after January 1, 2000
through September 30, 2001. The shares underlying Hayward's remaining warrants
and other shares of the Company stock owned by Hayward are subject to certain
registration rights. The termination of Hayward's exclusive distribution rights
also released Hayward from any annual minimum inventory purchase commitments for
2001 and beyond.
As of December 31, 2001, total vested warrants in relation to Hayward's
achievement of annual minimum purchase commitments under the original
Distributorship Agreement was 149,688.
Hayward Industries, Inc., also has the right to designate one director to
Super Vision's Board of Directors, and in September 2001, Hayward Industries,
Inc., appointed Robert Wexler to the Board of Directors of Super Vision. For
more information about Mr. Wexler, see "Proposal 1: Elect Six Directors", below
at pages 12 to 13.
On November 23, 1998, we entered into a Stock Purchase Agreement with
Cooper Lighting, Inc., a subsidiary of Cooper Industries, Inc. (a New York Stock
Exchange company trading under the symbol "CBE") pursuant to which we sold
Cooper 250,369 shares of our Class A common stock for a purchase price of
$2,000,000. In addition, we entered into a distributorship agreement with two
of Cooper's subsidiaries pursuant to which they were granted certain exclusive
distribution rights in the United States and Canada to market and sell our fiber
optic lighting products in certain markets including the architectural market.
Cooper was also granted a ten-year warrant to purchase an additional 250,369
shares of our Class A Common Stock at $8.02 per share. Vesting of
this warrant was tied to Cooper's achievement of certain annual minimum purchase
commitments. Cooper did not meet its minimum purchase commitments. The Kingstone
Family Limited Partnership II, which is controlled by Brett Kingstone, our
president, chairman of the board and chief executive officer, also granted
Cooper an option to purchase up to 28,918 shares our Class A common stock that
may be acquired upon exercise of warrants to purchase 289,187 shares of Class A
common stock held by the partnership. These warrants will vest only if the
partnership fully or partially exercises its warrant to purchase 289,187 shares
of our Class A common stock. The warrants to purchase up to 28,918 shares have
an exercise price equal to the "market value" of the underlying shares at the
time of exercise.
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, to
market and to 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 12 to 13.
Proposal 1: Elect Six Directors
The Board has nominated six directors for election at the Annual Meeting to
serve until the 2003 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 is our founder. He has
Chief Executive Officer, President and been employed by us in a senior
Chairman of Board of Directors executive capacity and has been
Age 42 chairman of the company's board of
directors since our formation in1991.
Since July 1999,Mr. Kingstone has been
our Chairman of the Board, Chief
Executive Officer and President. From
November 1997 to July 1999, Mr.
Kingstone served as our Chairman and
Chief Executive Officer. From our
inception to November 1997 he was
Chairman, Chief Executive Officer and
President. Since 1994 Mr. Kingstone has
been the owner of Max King Realty Inc.,
a commercial real estate company. 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 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
Director Super Vision in March 1994. From 1980
Age 60 to present, Mr. Protiva has been
engaged in merchant banking with K.C.L.
Associates.
Brian McCann Mr. McCann became a director of Super
Director Vision in October 1995. Currently, Mr.
Age 36 McCann is serving as Chief Marketing
and Strategy Officer of ADVA Optical
Networking, Inc., a manufacturer of
optical networking systems used for
high-speed telecommunication and
enterprise networks. Previously, Mr.
McCann held the positions of Chief
Sales and Marketing Officer and
founding President from 1998. ADVA
Optical Networking, Inc., is the U.S.
subsidiary of ADVA AG. From 1996 to
1998, Mr. McCann was the Vice President
of North American Business Development
for ADVA AG of Munich, Germany.
Anthony T. Castor III Mr. Castor became a director of Super
Director Vision in September 1996. Currently,
Age 50 Mr. Castor is serving as President,
Chief Executive Officer and a Director
of the Morgan Group, Inc., a specialty
transportation company. Previously, Mr.
Castor served as Vice Chairman and a
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 also served as
President and Chief Executive Officer
of Spinnaker Corporation, which is a
subsidiary of Lynch Corporation. From
January 1998 until January 2000, Mr.
Castor was 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.
Fritz Zeck Mr. Zeck became a director of Super
Director Vision in January 1999. Since 1994, Mr.
Age 61 Zeck has served as President of Cooper
Lighting, Inc., a manufacturer of
lighting products. From 1985 until
1994, he served as Vice President of
Sales for Cooper Lighting. 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. Mr. Zeck
serves as Cooper Lighting's designee to
our Board of Directors.
Robert Wexler Mr. Wexler became a director of Super
Director Vision in September 2001. From 1993 to
Age 41 present, Mr. Wexler has been a partner
in the corporate department of the law
firm of Krugman & Kailes
LLP in Saddle Brook, New Jersey.
Krugman and Kailes serves as the
general counsel for Hayward Industries,
Inc. Mr. Wexler serves as Hayward
Industries' designee to our Board of
Directors.
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The Board recommends that you vote "FOR" the election of all six
nominees for director.
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INDEPENDENT PUBLIC ACCOUNTANTS
Changes in Accountants. On October 8, 2001, we engaged the accounting firm
of Gallogly, Fernandez & Riley, LLP as our new independent public accountants
and dismissed Ernst & Young LLP. The decision to change our accounting firm was
approved by the audit committee of our Board of Directors and by our Board of
Directors. During the two most recent fiscal years ended December 31, 2000 and
1999 and the subsequent interim reporting periods from the last audit date of
December 31, 2000, through and including the termination date of October 8,
2001, there were no disagreements between us and Ernst & Young LLP on any matter
of accounting principles or practices, financial statement disclosure, auditing
scope or procedure, or any reportable events. The report of Ernst & Young LLP
on the financial statements of the company for the past two fiscal years ended
December 31, 2000 and 1999, contained no adverse opinion or disclaimer of
opinion and was not qualified or modified as to uncertainty, audit scope, or
accounting principles.
We have not consulted with Gallogly, Fernandez &, Riley, LLP during the
last two fiscal years ended December 31, 2000 and 1999 or during the subsequent
interim reporting periods from the last audit date of December 31, 2000, through
and including the termination date of October 8, 2001, on either the application
of accounting principles or type of opinion Gallogly, Fernandez & Riley, LLP
might issue on our financial statements.
We requested Ernst & Young LLP to furnish a letter addressed to the
Securities and Exchange Commission stating whether Ernst & Young LLP agrees with
the above statements made by us. A copy of this letter addressed to the
Securities and Exchange Commission, dated October 10, 2001, is filed as Exhibit
16 to our Current Report on Form 8-K dated October 8, 2001.
Audit Fees. Ernst & Young LLP billed the Company $55,800, in the aggregate,
for professional services rendered by them for the audit of the Company's annual
financial statements and review of the tax returns for the year ended December
31, 2000, and review of the interim financial statements included in the
Company's Forms 10-QSB filed for the 1st and 2nd quarters for fiscal year ended
December 31, 2001. Gallogly, Fernandez & Riley LLP billed the Company $16,750,
($5,000 of which is a prepayment for services) in the aggregate, for
professional services rendered by them for the audit of the Company's annual
financial statement for the fiscal year ended December 31, 2001 including
reviewing the interim financial statements included in the Company's Form 10-QSB
for the 3rd quarter of 2001. The engagement letter between the Company and
Gallogly, Fernandez and Riley LLP indicates we will be billed a total of $53,900
for the review of the 3rd quarter 10-QSB, the 10-KSB for the year ended December
31, 2001, tax preparation and the audit of the Company's financial statements
for the year ended December 31, 2001.
Financial Information Systems Design and Implementation Fees. Gallogly,
Fernandez & Riley LLP and Ernst and Young LLP provided no professional services
to the Company relating to financial information systems design and
implementation during the fiscal year ended December 31, 2001.
All Other Fees. Ernst & Young LLP billed the Company $15,000, 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, 2001. This
amount generally included fees for accounting consultations and in this case
specifically related to the filing of the SB-2. Gallogly, Fernandez &
Riley LLP has not yet provided any other services (other than those covered
above under "Audit Fees") during the fiscal year ended December 31, 2001. This
amount generally included fees for accounting consultations.
Representatives of Gallogly, Fernandez & Riley LLP will attend the Annual
Meeting and will have an opportunity to make a statement if they desire to do
so. Such representatives are expected to be available to respond to appropriate
questions from the stockholders.
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, 2001:
. The Audit Committee reviewed and discussed the audited financial
statements with management;
. The Audit Committee discussed with the independent auditors the
material required to be discussed by SAS 61; and
. 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.
. The audit committee reviewed the non-audit services that were provided
by Ernst & Young LLP, including any services described under
"Financial Information Systems Design and Implementation Fees," and
"All Other Fees," above and considered whether the provision of such
services was compatible with maintaining the principal accountants
independence. Gallogly, Fernandez and Riley LLP has not provided any
non-audit services as of December 31, 2001.
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, 2001.
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, 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 2003 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 January 14, 2003. This deadline will change in
accordance with the rules and
regulations promulgated by the Securities and Exchange Commission if the date of
the 2003 Annual Meeting is 30 calendar days earlier or later than May 14, 2003.
The notice provided by the stockholders must contain:
. a complete and accurate description of the proposal;
. 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;
. 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
. 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, 2003.
If you wish to submit a stockholder proposal for the 2003 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,
Brett M. Kingstone
Chairman of the Board, President and
Chief Executive Officer
April 8, 2002
SUPER VISION INTERNATIONAL, INC.
Proxy for 2002 Annual Meeting of Stockholders to be held on May 14, 2002
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 Tuesday, May 14, 2002, 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 8, 2002.
Proposal 1: To consider and act upon a proposal to elect Messrs. Brett M.
Kingstone, Edgar Protiva, Brian McCann, Anthony Castor III, Fritz
Zeck and Robert Wexler as directors each 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 Brian McCann
Anthony Castor III Fritz Zeck Robert Wexler
Proposal 2: 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 AND THE PROXY HOLDERS WILL VOTE ON ANY
MATTER UNDER PROPOSAL NO. 2 IN THEIR DISCRETION AND IN THEIR BEST JUDGMENT.
Please mark, date and sign below exactly as your name appears on your stock
certificate. When shares are held jointly, both should sign. When signing as
corporate officer, partner, attorney, executor, administrator, trustee or
guardian, please specify your full title as such.
Dated: __________________ ____________________________
Signature
Dated: __________________ ____________________________
Signature if held jointly