UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

 

Filed by the Registrant   ☒                               Filed by a Party other than the Registrant   ☐

Check the appropriate box:

 

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Preliminary Proxy Statement

 

 

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Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

 

 

☒

 

Definitive Proxy Statement

 

 

☐

 

Definitive Additional Materials

 

 

☐

 

Soliciting Material Pursuant to § 240.14a-12

 

LUNA INNOVATIONS INCORPORATED

(Name of Registrant as Specified in its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

 

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No fee required.

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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

 

 

(1)

 

Title of each class of securities to which transaction applies:

 

 

 

 

 

 

 

 

(2)

 

Aggregate number of securities to which transaction applies:

 

 

 

 

 

 

 

 

(3)

 

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

 

 

 

 

 

 

 

(4)

 

Proposed maximum aggregate value of transaction:

 

 

 

 

 

 

 

 

(5)

 

Total fee paid:

 

 

 

 

 

 

☐

 

Fee paid previously with preliminary materials.

 

 

 

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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing.

 

 

 

 

 

 

 

(1)

 

Amount Previously Paid:

 

 

 

 

 

 

 

 

(2)

 

Form, Schedule or Registration Statement No.:

 

 

 

 

 

 

 

 

(3)

 

Filing Party:

 

 

 

 

 

 

 

 

(4)

 

Date Filed:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOTICE OF 2021 ANNUAL MEETING OF STOCKHOLDERS AND

PROXY STATEMENT

 

 

 

 

 

 

To be held on May 11, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Notice of Annual Meeting of Stockholders

 

 

301 1st Street SW, Suite 200 • Roanoke, Virginia 24011

 

 

 

Items of Business

 

Date

Tuesday, May 11, 2021

 

Time

12:00 p.m. EDT

 

 

 

 

 

1.    To elect the board’s three nominees named herein to serve as Class III members of the Company’s board of directors to hold office until the 2024 annual meeting of stockholders.

2.    To approve, on an advisory basis, the compensation of the Company’s named executive officers, as disclosed in this proxy statement.

3.    To ratify the appointment, by the Audit Committee of the Company’s board of directors, of Grant Thornton LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2021.

4.    To transact any other business that is properly brought before the meeting or any adjournment or postponement thereof.

 

 

 

 

 

 

The Annual Meeting will be held in a virtual-only meeting format, via live video webcast that will provide stockholders with the ability to participate in the Annual Meeting, vote their shares and ask questions.  In order to attend the Annual Meeting, you must register at https://www.proxydocs.com/LUNA. Upon completing your registration, you will receive further instructions via email, including a unique link that will allow you access to the Annual Meeting and to vote and submit questions during the Annual Meeting. Please refer to the attached proxy statement, which forms a part of this Notice and is incorporated herein by reference, for further information with respect to the business to be transacted at the annual meeting.

Please refer to the attached proxy statement, which forms a part of this Notice and is incorporated herein by reference, for further information with respect to the business to be transacted at the annual meeting.

Stockholders of record at the close of business on March 26, 2021 (the “Record Date”) are entitled to notice of, and to vote at, the annual meeting or any adjournment or postponement thereof. The presence, online or by proxy, of shares of the Company’s common stock representing a majority of shares of the Company’s common stock issued and outstanding on the Record Date will be required to establish a quorum at the annual meeting.

Your vote is important. Please sign, date and return the enclosed proxy card as soon as possible, or vote by telephone or on the Internet as instructed in these materials, to make sure that your shares are represented at the annual meeting. If you are a stockholder of record of the Company’s common stock, you may cast your vote by proxy or online at the virtual annual meeting. If your shares are held of record by a brokerage firm, bank or other nominee, you must obtain a proxy issued in your name from that record holder and should instruct the record holder as to how to vote your shares.

By Order of the Board of Directors,

 

/s/ Scott A. Graeff

Scott A. Graeff

President, Chief Executive Officer, Treasurer and Secretary

Roanoke, Virginia

April 09, 2021

You are cordially invited to attend the annual meeting. Whether or not you plan to attend the virtual annual meeting, please complete, sign, date and return the accompanying proxy card in the enclosed envelope, or vote by telephone or on the Internet as instructed in these materials, as promptly as possible in order to ensure your representation at the meeting. Even if you have voted by proxy, you may still vote online if you attend the virtual annual meeting.

 

 

 

Important Notice Regarding the Availability of Proxy Materials for the Meeting of Stockholders to be held on May 11, 2021:

The Proxy Statement and Annual Report to Stockholders are available at https://www.proxydocs.com/LUNA.

 

 

 

 

 

 

 

Table of Contents

 

 

Information Concerning Solicitation and Voting

 

1

 

 

 

Proposal No. 1 — Election of Directors

 

5

 

 

 

Executive Officers

 

19

 

 

 

Proposal No. 2 — Advisory Vote on Executive Compensation

 

20

 

 

 

Proposal No. 3 — Ratification of Appointment of Independent Registered Public Accounting Firm

 

21

 

 

 

Audit Committee Report

 

22

 

 

 

Executive Compensation

 

23

 

 

 

Executive Summary

 

23

Overview of Compensation Philosophy

 

23

Role of Compensation Committee and Compensation Consultant

 

24

Peer Group

 

25

Compensation Recovery Policy

 

25

Future Compensation Strategy

 

25

Summary Compensation Table

 

26

Narrative Disclosure to Summary Compensation Table

 

27

Outstanding Equity Awards at December 31, 2020

 

30

 

 

 

Stock Ownership Guidelines

 

34

 

 

 

Security Ownership of Certain Beneficial Owners and Management

 

35

 

 

 

Certain Relationships and Related Person Transactions

 

37

 

 

 

Other Information

 

38

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LUNA INNOVATIONS, INC.

 

 

i

2021 PROXY STATEMENT

 

 

 

 

 

 

LUNA INNOVATIONS INCORPORATED

 

 

PROXY STATEMENT

FOR

ANNUAL MEETING OF STOCKHOLDERS

May 11, 2021

 

INFORMATION CONCERNING SOLICITATION AND VOTING

General

This proxy statement is furnished to the stockholders of Luna Innovations Incorporated (the “Company,” “we,” “us,” or “our”) in connection with the solicitation of proxies for use at our annual meeting of stockholders to be held on May 11, 2021 at 12:00 p.m. EDT for the purposes set forth in the accompanying “Notice of Annual Meeting of Stockholders.” The annual meeting will be a virtual stockholder meeting through which you can listen to the meeting, submit questions and vote online. To register, visit https://www.proxydocs.com/LUNA and enter your control number which is included in the proxy materials mailed to you. Upon completing your registration, you will receive further instructions via email, including a unique link that will allow you to access the Annual Meeting. On the day of the meeting, we recommend that you log in a few minutes before the annual meeting to ensure you are logged in when the meeting starts. Online check-in will begin at 11:45 a.m. EDT. Information on how to vote online during the annual meeting is discussed below.

We have decided to hold a virtual meeting due to developments related to COVID-19.  We also believe holding a virtual meeting improves stockholder access, encourages greater global participation, lowers costs compared to an in-person event, and aligns with our broader sustainability goals. Stockholders attending the virtual meeting will be afforded the same rights and opportunities to participate as they would at an in-person meeting.

A copy of our Annual Report to Stockholders, which includes our annual report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission, together with this proxy statement and accompanying proxy card, is expected to be mailed on or about April 13, 2021 to our stockholders of record as of the close of business on the Record Date. Those materials are also available at https://www.proxydocs.com/LUNA.

This solicitation is made on behalf of our board of directors, and we will pay the costs of solicitation. We will reimburse banks, brokerage firms and other custodians, nominees and fiduciaries for reasonable expenses incurred by them in sending our proxy material to our stockholders. Our principal executive offices are located at 301 1st Street SW, Suite 200, Roanoke, Virginia 24011, and our telephone number is (540) 769-8400.

Asking Questions and Technical Matters Related to our Virtual Annual Meeting

Only stockholders of record as of the record date for the annual meeting and their proxy holders may submit questions or comments.

If you would like to submit a question, you may do so by joining the virtual annual meeting and typing your question in the box in the annual meeting portal.

We ask that you limit your remarks to one brief question or comment that is relevant to the annual meeting or our business and that remarks are respectful of your fellow stockholders and meeting participants. Questions may be grouped by topic by our management with a representative question read aloud and answered. In addition, questions may be ruled as out of order if they are, among other things, irrelevant to our business, related to pending or threatened litigation, disorderly, repetitious of statements already made, or in furtherance of the

 

LUNA INNOVATIONS, INC.

 

 

1

2021 PROXY STATEMENT

 

 

speaker’s own personal, political or business interests. Questions will be addressed in the Q&A portion of the annual meeting.

If you encounter any difficulties accessing the virtual annual meeting during the check-in or meeting time, please call the technical support number that will be posted on the Virtual Stockholder Meeting log in page. Technical support will be available starting at 11:00 a.m. EDT on May 11, 2021.

 

Shares Entitled to Vote and Quorum Requirement

Our outstanding common stock constitutes the only class of securities entitled to vote at the annual meeting. Stockholders of record of our common stock at the close of business on the Record Date are entitled to notice of, and to vote at, our 2021 annual meeting of stockholders. As of the close of business on March 26, 2021, 31,397,642 shares of our common stock were outstanding; therefore, the presence at the meeting, online or by proxy, of at least 15,698,822 shares of common stock will constitute a quorum. Each share of common stock owned as of the Record Date is entitled to one vote. If there is no quorum, holders of a majority of shares present at the meeting online or represented by proxy may adjourn the meeting to another date.

Voting Procedures

The procedures for voting differ depending on whether you are a stockholder of record (that is, if your shares are registered directly in your own name with the Company’s transfer agent) or you hold your shares in “street name” (that is, your shares are held in an account at a brokerage, bank, dealer or other similar organization rather than in your own name, in which case you are considered to be the “beneficial owner” of those shares).

Stockholders of Record

Stockholders of record may vote by (i) completing and returning the enclosed proxy card prior to the meeting, (ii) voting over the telephone, (iii) voting on the Internet, or (iv) voting online during the meeting.

A proxy card is enclosed for your use. We ask that you carefully review, complete, sign, date and return the proxy card in the accompanying envelope, which is postage prepaid if mailed in the United States.

In addition to submitting your vote by mail, you may vote by telephone or over the Internet. In order to vote by telephone or over the Internet, please have the enclosed proxy card available for reference, and call the number or visit the website listed on the proxy card and follow the instructions. You will be asked to provide the control number from the enclosed proxy card. The telephone and internet voting procedures are designed to authenticate stockholders’ identities, to allow stockholders to give their voting instructions and to confirm that stockholders’ instructions have been recorded properly.

You may attend the annual meeting via the Internet and vote during the annual meeting. Registration is required by visiting www.proxydocs.com/LUNA and entering your control number which is included in the proxy materials mailed to you. Please have your notice in hand when you access the website and then follow the instructions. The annual meeting can be accessed by following the directions received in subsequent emails you receive.

If you are a stockholder of record and do not vote by completing your proxy card, by telephone, by mail, over the Internet or online during the annual meeting, your shares will not be voted.

Beneficial Owners

If your shares are held in street name, the organization holding your account is considered to be the stockholder of record for purposes of voting at the annual meeting. If you are a beneficial owner of shares registered in the name of your broker, bank, or other agent, you should have received a voting instruction form with these proxy materials from that organization rather than from the Company. As a beneficial owner, you still have the right to direct your broker or other agent regarding how to vote the shares in your account. Simply complete and mail the voting instruction form to ensure that your vote is counted. Alternatively, you may vote by telephone or over the Internet as instructed by your broker or bank.

 

LUNA INNOVATIONS, INC.

 

 

2

2021 PROXY STATEMENT

 

 

You are also invited to attend the virtual annual meeting and are required to register in advance at www.proxydocs.com/LUNA. However, since you are not the stockholder of record, you may not vote your shares online at the meeting unless you request and obtain a valid proxy from your broker or other agent. Follow the instructions from your broker or bank included with these proxy materials or contact your broker or bank to request a proxy form.

If you are a beneficial owner and do not instruct your broker, bank, or other agent how to vote your shares, the question of whether your broker or nominee will still be able to vote your shares depends on whether the New York Stock Exchange ("NYSE"), deems the particular proposal to be a “routine” matter. Even though our common stock is listed on the Nasdaq Capital Market, the NYSE rules apply to brokers who are NYSE members voting on matters being submitted to stockholders at our annual meeting. Brokers and nominees can use their discretion to vote “uninstructed” shares with respect to matters that are considered to be “routine,” but not with respect to “non-routine” matters. Under the rules and interpretations of the NYSE, “non-routine” matters are matters that may substantially affect the rights or privileges of stockholders, such as mergers, stockholder proposals, elections of directors (even if not contested), executive compensation and certain corporate governance proposals, even if supported by management. Accordingly, your broker or nominee may not vote your shares on Proposals No. 1 or No. 2 without your instructions but may vote your shares on Proposal No. 3.

 

 

 

We provide Internet proxy voting to allow you to vote your shares online, with procedures designed to ensure the authenticity and correctness of your proxy vote instructions. There is no cost associated with casting your vote online. However, please be aware that you must bear any costs associated with your Internet access, such as usage charges from Internet access providers and telephone companies.

 

The persons named as attorneys-in-fact to vote the proxies, Scott A. Graeff and Eugene Nestro, were selected by the board of directors and are executive officers of the Company. All properly executed proxies returned in time to be counted at the annual meeting will be voted.

If you return a signed and dated proxy card without marking voting selections, then unless there are different instructions on the proxy card, your shares will be voted at the meeting FOR the election of the three director nominees listed in Proposal No. 1, FOR the advisory approval of executive compensation in Proposal No. 2, and FOR the ratification of the appointment of our independent registered public accounting firm in Proposal No. 3. With respect to any other business that may properly come before the annual meeting and be submitted to a vote of stockholders, proxies will be voted in accordance with the best judgment of the designated proxy holders.

All votes cast at the annual meeting will be tabulated by the person or persons appointed by our board of directors to act as inspectors of election for the meeting. The inspectors of election will separately count, for Proposal No. 1, the election of directors, votes “For,” “Withhold” and “broker non-votes,” and with respect to other proposals, votes “For” and “Against,” abstentions and “broker non-votes.” Broker non-votes occur when a beneficial owner of shares held in “street name” does not give instructions to the broker or nominee holding the shares as to how to vote on matters deemed “non-routine,” in which case the broker or nominee cannot vote the shares, as described above.

Abstentions and broker non-votes will be counted as shares that are present and entitled to vote for purposes of determining the presence of a quorum. Abstentions will be counted towards the vote total for each of Proposals No. 2, and 3 and will have the same effect as “Against” votes. Broker non-votes have no effect and are not included in the tabulation of voting results on any proposals.

The director nominees listed in Proposal No. 1 will be elected by a plurality of the votes of the shares present or represented by proxy at the meeting and entitled to vote on the election of directors. The three nominees receiving the most “For” votes will be elected.

Proposal No. 2, advisory approval of the compensation of the Company’s named executive officers, will be considered to be approved if it receives “For” votes from the holders of a majority of shares either present or represented by proxy at the meeting and entitled to vote.

The appointment of our independent registered public accounting firm listed in Proposal No. 3 will be ratified if a majority of shares present or represented by proxy at the meeting and entitled to vote thereon vote “For” such proposal.

Your vote is important. Accordingly, please carefully review, complete, sign, date and return the enclosed proxy card, or vote over the telephone or Internet, whether or not you plan to attend the annual meeting.

 

LUNA INNOVATIONS, INC.

 

 

3

2021 PROXY STATEMENT

 

 

If you receive more than one set of proxy materials, your shares may be registered in more than one name or in different accounts. Please follow the voting instructions on the proxy cards in the proxy materials to ensure that all of your shares are voted.

Changing Your Vote

If you are a stockholder of record, you may revoke your proxy at any time before it is actually voted at the meeting either by signing and submitting a new proxy card with a later date or by attending the annual meeting and voting online. You may also grant a subsequent proxy by telephone or over the Internet. Your most recently submitted proxy card or telephone or Internet proxy is the one that will be counted. Merely attending the meeting, however, will not revoke your submitted proxy unless you vote at the meeting, which will have the effect of revoking your proxy. You may also send a timely written notice that you are revoking your proxy to our Corporate Secretary at 301 1st Street SW, Suite 200, Roanoke, Virginia 24011.

If you hold shares through a bank or brokerage firm, you should have received a proxy card and voting instructions with these proxy materials, and you must contact the bank or brokerage firm directly to revoke any prior voting instructions.

Results of Voting

Preliminary voting results will be announced at the annual meeting. In addition, final voting results will be published in a current report on Form 8-K that we expect to file within four business days after the annual meeting. If final voting results are not available to us in time to file a Form 8-K within four business days after the annual meeting, we intend to file a Form 8-K to publish preliminary results and, within four business days after the final results are known to us, file an additional Form 8-K to publish the final results.

 

 

 

LUNA INNOVATIONS, INC.

 

 

4

2021 PROXY STATEMENT

 

 

 

 

Proposal No. 1

Election of Directors

 

General Information

Our board of directors is divided into three classes (Class I, Class II and Class III) with staggered three-year terms. Each class consists, as nearly as possible, of one-third of the total number of directors. Vacancies on the board of directors may be filled only by persons elected by a majority of the remaining directors. A director elected by the board of directors to fill a vacancy in a class, including vacancies created by an increase in the number of directors, shall serve for the remainder of the full term of that class and until the director’s successor is duly elected and qualified.

The board of directors currently has seven members, including three Class III directors, Scott A. Graeff, Donald Pastor and N. Leigh Anderson whose terms expire at the 2021 annual meeting. However, Mr. Pastor is not standing for re-election this year and will retire from the Board at the conclusion of his term following the Annual Meeting of Stockholders. Mr. Graeff and Dr. Anderson were both previously elected by the stockholders. Our Nominating and Governance Committee recommended Ms. Pamela Coe to our board, following her identification by a non-management member of our board of directors, after considering a number of qualified candidates. The terms of the Class I and Class II directors will expire at the 2022 and 2023 annual meetings of the stockholders, respectively.

Our board of directors has nominated Mr. Graeff, Dr. Anderson and Ms. Coe to serve as Class III directors for a three-year term expiring at the 2024 annual meeting of stockholders and until their successors have been duly elected and qualified, or, if sooner, until the director’s death, resignation or removal. Dr. Anderson is currently a Class III director, a member of the Compensation Committee and a member of the Audit Committee. Mr. Graeff is currently a Class III director and our President and Chief Executive Officer. If elected, we expect that Ms. Coe will serve as a member of the Audit Committee and Nominating and Governance Committee.

Directors are elected by a plurality of the votes of shares present online at the meeting or represented by proxy and entitled to vote on the election of directors. Proxies cannot be voted for more than three nominees. The three nominees receiving the highest number of “For” votes will be elected. Only votes “For” and “Withheld” will affect the outcome. Broker non-votes will have no effect on this proposal. Shares represented by executed proxies will be voted “For” the election of the three nominees recommended by the board of directors unless the proxy is marked in such a manner so as to withhold authority to vote. If any of the nominees is unable or unexpectedly declines to serve as director, the board of directors may designate another nominee to fill the vacancy, and the proxy will be voted for that nominee. Each person nominated for election has agreed to serve if elected, and we have no reason to believe that either nominee will be unable to serve.

The names of the three nominees for director and of our other directors whose terms will continue after the annual meeting, their ages as of March 26, 2021, and certain other information about them are set forth below. There are no family relationships among our directors or executive officers.

 

 

 

 

 

 

 

 

 

 

  Names of Nominees

 

Age

 

Position(s)

 

Director

Since

  Scott A. Graeff

 

54

 

Director

 

2017

  N. Leigh Anderson

 

71

 

Director

 

2017

  Pamela Coe

 

61

 

Nominee

 

N/A

 

  Names of the Incumbent Directors with

  Terms Continuing After 2021 Annual Meeting

 

Age

 

Position(s)

 

Director

Since

  Richard W. Roedel

 

71

 

Chairman of the Board of Directors

 

2005

  Gary Spiegel

 

70

 

Director

 

2015

  Warren B. Phelps, III

 

74

 

Director

 

2017

  Mary Beth Vitale

 

67

 

Director

 

2019

 

 

LUNA INNOVATIONS, INC.

 

 

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2021 PROXY STATEMENT

 

 

Our Nominating and Governance Committee seeks to assemble a board of directors that, as a whole, possesses the appropriate balance of professional and industry knowledge, financial expertise and high-level management experience necessary to oversee and direct our business. To that end, the committee has identified and evaluated nominees in the broader context of the board’s overall composition, with the goal of recruiting members who complement and strengthen the skills of other members and who also exhibit integrity, collegiality, sound business judgment and other qualities that the committee views as critical to effective functioning of the board. The biographies below include information, as of the date of this proxy statement, relating to the specific and particular experience, qualifications, attributes or skills of each director or nominee that led the committee to believe that the nominee or director should serve or continue to serve, as applicable, on the board. However, each of the members of the committee may have a variety of reasons why he or she believes a particular person would be an appropriate nominee for the board, and these views may differ from the views of other members.

 

LUNA INNOVATIONS, INC.

 

 

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2021 PROXY STATEMENT

 

 

Class III Director Nominees for Election for a Three-Year Term Expiring at the 2024 Annual Meeting of Stockholders

  

 

 

 

Scott A. Graeff

Age: 54

Director Since: 2017

 

 

Biographical Information

 

Scott A. Graeff was appointed as our President, Chief Executive Officer and a member of the Board of Directors in October 2017. Mr. Graeff has served as our Treasurer since 2005, and our Secretary since May 2015. Mr. Graeff previously served as our Chief Strategy Officer from 2012 to October 2017 and as our Chief Commercialization Officer from 2010 to 2012. He also served as our interim Chief Financial Officer during the period from 2010 to 2011. He previously served as our Chief Operating Officer from 2009 to 2010, as our Chief Commercialization Officer from 2006 to 2009, and as our Chief Financial Officer and Executive Vice President, Corporate Development, from 2005 to 2006. Mr. Graeff was also a member of our board of directors from 2005 until 2006. From 1999 to 2001, Mr. Graeff served as Chief Financial Officer of Liquidity Link, a software development company. From 2001 to 2002, Mr. Graeff served as President and Chief Financial Officer of Autumn Investments. From 2002 until 2005, Mr. Graeff served as a Managing Director for Gryphon Capital Partners, a venture capital investment group. From 2003 until 2005, Mr. Graeff also served as the Acting Chief Financial Officer of Luna Technologies, Inc., which we acquired in 2005. Mr. Graeff holds a B.S. degree in commerce from the University of Virginia.

 

Qualifications

 

The Nominating and Governance Committee believes that Mr. Graeff's position as our President and Chief Executive Officer and his prior management experience will enable him to continue to make valuable contributions to our board of directors.

 

 

 

N. Leigh Anderson

Age: 71

Director Since: 2017

Board Committees:

Compensation

Audit

 

Biographical Information

 

N. Leigh Anderson has served as a member of our board of directors since May 2017. Dr. Anderson has served as Chief Executive Officer of SISCAPA Assay Technologies, a developer of diagnostic testing technology, of which he was a co-founder, since 2011, and has served as the Chief Executive Officer of the Plasma Proteome Institute, a non-profit biomedical scientific research institute in Washington, D.C., of which he is also a founder, since 2002. From 2001 to 2002, Dr. Anderson served as the Chief Scientific Officer and a member of the board of directors of Large Scale Biology Corporation, a public biotechnology company. Dr. Anderson also served as a member of the board of directors and a member of the audit committee of Dade Behring Holdings, Inc., a publicly held medical diagnostics equipment manufacturer, from 2002 until its acquisition by Siemens AG in 2007. Dr. Anderson earned a B.A. degree in physics from Yale University and a Ph.D. in molecular biology from Cambridge University.

 

Qualifications

 

The Nominating and Governance Committee believes that Dr. Anderson's scientific background in critical areas and pertinent executive and director experience in the biotechnology and biomedical industries enable him to bring significant value to the board of directors.

 

 

 

 

 

 

LUNA INNOVATIONS, INC.

 

 

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2021 PROXY STATEMENT

 

 

 

 

Pamela Coe

Age: 61

Director Nominee

 

Biographical Information

 

Pamela Coe is recommended by our Nominating and Governance Committee to serve on our board of directors. Ms. Coe served as Senior Vice President, Legal & Secretary for Liberty Media Corporation and its sister companies from 2007 until her retirement in January 2020. Previously she was Senior Counsel - Finance for Tele-Communications, Inc. (TCI), which merged with AT&T from 1993 to 2000. Prior to her tenure at TCI, Ms. Coe was a Partner in a major San Francisco based law firm Pettit and Martin from 1985 to 1992. During her tenure, Ms. Coe specialized in corporate, securities and banking law. From December 2012 to July 2019, Ms. Coe served as a member of the Board of Directors of Expedia Group, Inc. and served on Expedia’s Compensation Committee. She holds a Bachelor of Science degree in Finance from Arizona State University and a Juris Doctor from the University of California, Los Angeles – School of Law.

 

 

Qualifications

 

The Nominating and Governance Committee believes that Ms. Coe’s board experience in a range of industries and her capital markets experience as an attorney will bring significant value to the board of directors.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE “FOR” EACH NAMED NOMINEE.

 

 

 

 

 

LUNA INNOVATIONS, INC.

 

 

8

2021 PROXY STATEMENT

 

 

Class I Directors Continuing in Office Until the 2022 Annual Meeting of Stockholders

 

 

 

RICHARD W. ROEDEL

Age: 71

Director Since: 2005

Board Committees

Nominating & Governance

Compensation

 

Biographical Information

 

Richard W. Roedel has served as a member of our board of directors since 2005 and as Chairman of our board of directors since 2010. Mr. Roedel also serves as a director of publicly held companies, Brightview Holdings, Inc., Six Flags Entertainment Corporation, LSB Industries, Inc., and Clarivate Plc. Mr. Roedel serves as a Chairman of LSB and until February 2021, Six Flags. Mr. Roedel will not be seeking re-election to the board of directors of Six Flags when his current term expires at its annual meeting of stockholders in May 2021. Mr. Roedel has previously served on boards of IHS Markit Ltd, Lorillard, Inc., Sealy Corporation, BrightPoint, Inc., Broadview Holdings, Inc., Dade Behring Holdings, Inc., and TakeTwo Interactive Software, Inc. Mr. Roedel is a member of the National Association of Corporate Directors (NACD) Risk Oversight Advisory Council. Mr. Roedel served a three-year term, ending in 2017, on the Standing Advisory Group of the Public Company Accounting Oversight Board (PCAOB). From 1971 through 2000, he was employed by BDO Seidman LLP, becoming an audit partner in 1980, later being promoted in 1990 to managing partner in Chicago and then managing partner in New York in 1994, and finally, in 1999, to chairman and chief executive officer. Mr. Roedel holds a B.S. degree in accounting from The Ohio State University and is a Certified Public Accountant.

 

 

Qualifications

 

The Nominating and Governance Committee believes that Mr. Roedel’s public accounting experience and his status as an authority on issues facing audit committees, his extensive service on public company boards and committees and his deep familiarity with our company make him a valuable member of the board of directors.

 

 

 

GARY SPIEGEL

Age: 70

Director Since: 2015

Board Committees:

Compensation

Nominating & Governance

 

Biographical Information

 

Gary Spiegel has served as a member of our board of directors since May 2015. He has more than 40 years of experience in the photonics industry. He held various positions, including vice president, sales and marketing, senior vice president, sales and business development, and senior vice president, business development at Newport Corporation from 2002 to 2013. Mr. Spiegel retired from Newport Corporation in 2014 and is currently a business development consultant. He has a bachelor’s degree in Industrial Marketing from Baruch College of the City University of New York and executive education course on Mergers and Acquisitions at UCLA Anderson school. He currently sits on the board of directors of Telescent Inc., an early stage technology company focused on software defined network cross connect technology. From 2016-2019, he served on the board of Alio Industries, a small technology company serving a variety of high technology markets. He served as Secretary and Treasurer of the SPIE from 2015 through 2018, where he chaired the Financial Advisory Committee, as well as the Compensation Committee. He is the chairman of the SPIE Audit committee, an honored Fellow of the SPIE and the recipient of its 2020 Directors Award.

 

 

Qualifications

 

The Nominating and Governance Committee believes that Mr. Spiegel's extensive experience in the photonics industry enables him to continue to make valuable contributions to the board of directors.

 

 

 

 

 

 

 

 

 

LUNA INNOVATIONS, INC.

 

 

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2021 PROXY STATEMENT

 

 

 

 

Class II Director Continuing in Office Until the 2023 Annual Meeting of Stockholders

 

 

  

 

 

Warren B. Phelps, III

Age: 74

Director Since: 2017

Board Committees:

Audit

Compensation

 

Biographical Information

 

Warren B. Phelps, III has served as a member of our board of directors since May 2017. He has served as Executive Chairman of Empower RF Systems, a developer and manufacturer of high power RF amplifiers for the defense and commercial markets, since 2013. From 2009 until 2012, Mr. Phelps served as the Chairman and Chief Executive Officer of Empower. Since 2007, Mr. Phelps has served as a director of CarParts.com and its predecessor US AutoParts, a public company.  From 2007 – 2017 he was Chair of the Audit Committee and a member of the Nominating and Governance Committee. Currently Mr. Phelps serves as CarParts.com’s Board Chair, chair of the Compensation Committee and chair of the Nominating and Governance Committee. From 2000 until his retirement in 2006, Mr. Phelps served in several executive positions for Spirent plc, a leading communications technology company, most recently as President of the Performance Analysis Broadband division. From 1996 to 2000, Mr. Phelps was at Netcom Systems, a provider of network test and measurement equipment, most recently as President and Chief Executive Officer. Prior to that, Mr. Phelps held executive positions, including Chairman and Chief Executive Officer, at MICOM Communications and in various financial management roles at Burroughs/Unisys Corporation. Mr. Phelps holds a B.S. degree in mathematics from St. Lawrence University in Canton, New York and an M.B.A. from The University of Rochester in Rochester, New York.

 

Qualifications

 

The Nominating and Governance Committee believes that Mr. Phelps's prior experience as a Chief Executive Officer and with the defense and commercial industries enables him to make valuable contributions to the board of directors.

 

 

 

 

 

  

 

 

Mary Beth Vitale

Age: 67

Director Since: 2019

Board Committees:

Nominating & Governance

Audit

Biographical Information

 

Mary Beth Vitale has served as a member of our board of directors since September 2019. She currently serves as chair of Pareteum, Inc., a publicly traded company and GEHA, a VEBA health insurer where she chairs the Risk and Technology Committee. Ms. Vitale also served on the board of directors of CoBiz Financial, a publicly traded national commercial bank, from 2005 to 2018. Ms. Vitale co-founded Pellera, LLC., a consulting firm specializing in cybersecurity and board governance to boards of directors, in 2001. She joined the National Board of Women Corporate Directors in October 2020. Previously, she had served as President, CEO and Chairman of the Board of WestwindMedia.com, President and Chief Operating Officer of RMI.NET, and President-Western States and corporate officer for AT&T. Ms. Vitale is past Chairman of the Board of Directors of the National Association of Corporate Directors (NACD) local chapter and has also been recognized as an NACD Board Leadership Fellow and SEC qualified financial expert. She currently is a faculty member for the NACD in board governance and cyber security training. In 2020, she was selected as one of the top 100 directors by the NACD. Ms. Vitale also earned the CERT Certificate in Cybersecurity Oversight from the Software Engineering Institute, which demonstrates her commitment to advanced cybersecurity literacy to the Company, investors and regulators. She received her bachelor's degree from Hillsdale College; a master’s degree from the University of Colorado; and an Advanced Management certificate from the Wharton School.

Qualifications

 

The Nominating and Governance Committee believes that Ms. Vitale's financial and cybersecurity expertise enables her to make valuable contributions to the board of directors.

 

 

 

 

 

LUNA INNOVATIONS, INC.

 

 

10

2021 PROXY STATEMENT

 

 

 

 

 

 

 

 

 

LUNA INNOVATIONS, INC.

 

 

11

2021 PROXY STATEMENT

 

 

Independence of the Board of Directors

As required under the Nasdaq Stock Market (“Nasdaq”) listing standards, a majority of the members of a listed company’s board of directors must qualify as “independent,” as affirmatively determined by the board of directors. Our board of directors consults with legal counsel to ensure that the board’s determinations are consistent with relevant securities and other laws and regulations regarding the definition of “independent,” including those set forth in pertinent Nasdaq listing standards, as in effect from time to time.

Consistent with these considerations, after review of all relevant identified transactions or relationships between each director and director nominee, or any of his or her family members, and the Company, its senior management and its independent auditors, our board of directors has affirmatively determined that the following six current directors and one director nominee are independent within the meaning of the applicable Nasdaq listing standards: Mr. Spiegel, Mr. Roedel, Mr. Pastor, Mr. Phelps, Ms. Vitale, Dr. Anderson and Ms. Coe. In addition, after review of all relevant identified transactions and relationships between each person who served as director during 2020, or any of his family members, and the Company, its senior management and its independent auditors, our board of directors has affirmatively determined that John B. Williamson, III and Michael W. Wise, who served on our board of directors until May 2020, were also independent within the meaning of the applicable Nasdaq listing standards. In making these determinations, the board found that none of these current or former directors, or the director nominee, had a material or disqualifying relationship with the Company. Mr. Graeff is not independent, as he is currently employed as our President and Chief Executive Officer.

Board Leadership Structure

Our board of directors is led by an independent non-executive Chairman, Mr. Roedel, who has authority, among other things, to call and preside over board meetings, including meetings of the independent directors, to set meeting agendas and to determine materials to be distributed to the board. Accordingly, the non-executive Chairman has substantial ability to shape the work of the board. We believe that separation of the positions of Chairman and Chief Executive Officer reinforces the independence of the board in its oversight of our business and affairs. In addition, we believe that having an independent non-executive Chairman creates an environment that is more conducive to objective evaluation and oversight of management’s performance, increasing management accountability and improving the ability of the board to monitor whether management’s actions are in the best interests of the Company and our stockholders. As a result, we believe that having an independent non-executive Chairman can enhance the effectiveness of the board as a whole.

Role of the Board in Risk Oversight

One of the board’s key functions is informed oversight of our risk management process. In February 2021, the board established a standing Risk Committee, to address risks including, but not limited to, operational, financial, cybersecurity, legal and regulatory, strategic and reputational risks, including with respect to the COVID-19 outbreak. Additionally, our Audit Committee has the responsibility to consider and discuss our major financial risk exposures and the steps our management has taken to monitor and control these exposures, including guidelines and policies to govern the process by which risk assessment and management is undertaken. The Audit Committee also monitors compliance with legal and regulatory requirements. Our Nominating and Governance Committee monitors the effectiveness of our corporate governance policies, including whether they are successful in preventing illegal or improper liability-creating conduct. Our Compensation Committee assesses and monitors whether any of our compensation policies and programs have the potential to encourage excessive risk-taking.

Information Regarding Certain Committees of the Board of Directors

Our board of directors has established an Audit Committee, a Compensation Committee and a Nominating and Governance Committee. Beginning in 2021, our board of directors also established a Risk Committee. Our board of directors and its committees meet regularly throughout the year and also hold special meetings and act by written consent from time to time as appropriate. Our board of directors has delegated various responsibilities and authority to these committees as generally described below. The committees regularly report on their activities and actions to the full board of directors. Each of these committees of our board of directors has a written charter approved by our board of directors.

 

LUNA INNOVATIONS, INC.

 

 

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2021 PROXY STATEMENT

 

 

The following table provides the membership information for 2020 for each of the Audit, Compensation and Nominating and Governance committees:

 

Name

 

Audit

 

Compensation

 

Nominating and

Governance

 

 

 

 

 

 

 

 

 

 

 

 

 

Richard W. Roedel

 

 

 

 

 

 

X

 

 

 

X

*

Donald Pastor

 

 

 

 

 

 

X

*

 

 

X

 

John B. Williamson, III

 

 

X

(1)

 

 

 

 

 

 

X

(1)

Warren B. Phelps, III

 

 

X

*

 

 

X

 

 

 

 

 

Gary Spiegel

 

 

X

 

 

 

X

 

 

 

 

 

Michael W. Wise

 

 

X

(2)

 

 

 

 

 

 

X

(2)

N. Leigh Anderson

 

 

X

 

 

 

 

 

 

 

X

 

Mary Beth Vitale

 

 

X

 

 

 

 

 

 

 

X

 

 

 

 

 

*

Committee Chairman