Company: VUZI
Filing Date: 2025-04-28
Form Type: DEF 14A
Source: 0001104659-25-040266
Chunk: 47

Company: Vuzix Corp
Filing Date: 2025-04-28
Form: DEF 14A
Chunk 47
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-year performance award for its Co-Founders (Paul Travers and Grant Russell) and select other senior management team members were added to the program. This LTIP consisted exclusively of stock options with performance tranches that vest only if one of the various market capitalization milestones and/or certain operational milestones are achieved. The original LTIP consists of a 10-year grant of stock options and was designed to help ensure that Vuzix would be executing well on both a top-line and bottom-line basis with EBITBA margin milestones. This award was fully aligned with Vuzix’ long-term ambitions and the interests of its stockholders. The operational and market-based milestones behind the LTIP were not achieved, as they required market capitalization of >$10B, revenues over $1.5B, and EBITDA margins of 16% for full vesting of the plan. If successful, those outcomes would have created significant value for the Company’s stockholders. The Company and the Board of Directors no longer believes that the original LTIP has successfully accomplished its original objectives, as the ability of the Company and management to achieve the performance and equity market capitalization targets is low, and thus the original LTIP does not provide appropriate incentives to the Co-Founders and Senior Management. Additionally, the cancellation of this program will save further large amounts of stock based compensation that would be needed upon the vesting of the all the options. That amount as of December 31, 2024 could be as high as $36.9 million and result in the issuance of 5,359,500 shares to those option holders. Under the proposed new LTIP, total stock compensation expense will be $2.3 million and result in the issuance of a maximum of 594,056 shares of common stock. This would result in a savings of approximately $34.6 million in future stock compensation expense and the issuance of 4,495,444 shares of common stock upon vesting. RECOMMENDATION OF THE BOARD FOR PROPOSAL NO. 6: OUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” APPROVAL OF THE GRANT OF RSUS TO OUR EXECUTIVE OFFICERS AND OTHER EMPLOYEES AND CONCURRENT CANCELLATION OF PREVIOSLY GRANTED OPTIONS TO SUCH OFFICERS AND OTHERS OTHER MATTERS The Board of Directors knows of no other matters that will be presented for consideration at the Annual Meeting, but if other matters properly come before the meeting, the persons