D3DXCompileShader failed error

Vertex Shader Compiler Error

HRESULT 0x8007007E (file not found) implies that some files are missing from the DirectX HLSL compiler installation.

To resolve this error, install the full version of DirectX 9c, even if you have a newer version of DirectX already installed on your PC:
http://www.microsoft.com/en-us/download/details.aspx?id=8109

After downloading this package, extract the files into a folder on your PC and then run DXSetup.exe to complete the installation process.