<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
SWISSRAY INTERNATIONAL, INC.
- - --------------------------------------------------------------------------------
(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):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(l) 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.
[ ] 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:
------------------------------------------------------------------------
<PAGE> 2
SWISSRAY INTERNATIONAL, INC.
200 EAST 32ND STREET, SUITE 34B
NEW YORK, NEW YORK 10016
November 24, 1997
Dear Stockholder:
You are cordially invited to attend the 1997 Annual Meeting (the "Annual
Meeting") of Stockholders of Swissray International, Inc. (the "Company"), which
will be held in Conference Room 45B, 101 Park Avenue, 45th floor, New York, New
York on Tuesday, December 23, 1997, commencing at 2:00 p.m. (local time). We
look forward to greeting as many of our stockholders as are able to be with us.
At the Annual Meeting, you will be asked to: (1) elect six directors of the
Company to serve until the next Annual Meeting and until their successors are
duly elected and qualified; (2) approve the appointment of Coopers & Lybrand
L.L.P. as the Company's independent public accountants for the fiscal year
ending June 30, 1998; (3) consider and act upon proposals to approve and adopt
amendments to the Company's Certificate of Incorporation to (a) increase the
number of authorized shares of the Company's common stock $.01 par value (the
"Common Stock") from 30,000,000 to 50,000,000; and (b) authorize the creation of
a class of preferred stock; (4) consider and act upon a proposal to adopt the
Swissray International, Inc. 1997 Stock Option Plan; and (5) transact such other
business as may properly come before the meeting and any adjournment thereof.
We hope you will find it convenient to attend the meeting in person.
Whether or not you expect to attend, to assure your representation at the
meeting and the presence of a quorum, please complete, date, sign and mail
promptly the enclosed proxy card (the "Proxy"), for which a return envelope is
provided. No postage need be affixed to the Proxy if it is mailed in the United
States. After returning your Proxy, you may, of course, vote in person on all
matters brought before the meeting.
The Company's Annual Report to Stockholders for the fiscal year ended June
30, 1997 (the "Annual Report") is being mailed to you together with the enclosed
proxy materials.
Yours sincerely,
/s/ Ruedi G. Laupper
RUEDI G. LAUPPER
Chairman of the Board,
Chief Executive Officer and President
<PAGE> 3
SWISSRAY INTERNATIONAL, INC.
200 EAST 32ND STREET, SUITE 34B
NEW YORK, NEW YORK 10016
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 23, 1997
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "Annual
Meeting") of Swissray International, Inc., a New York corporation (the
"Company"), will be held in Conference Room 45B, 101 Park Avenue, 45th floor,
New York, New York on Tuesday, December 23, 1997, at 2:00 p.m. (local time), for
the following purposes:
(1) To elect six directors of the Company to serve until the next
Annual Meeting and until their successors are duly elected and qualified;
(2) To approve the appointment of Coopers & Lybrand L.L.P. as the
Company's independent public accountants for the fiscal year ending June
30, 1998;
(3) To consider and act upon proposals to approve and adopt amendments
to the Company's Certificate of Incorporation to:
(a) increase the number of authorized shares of the Company's
common stock $.01 par value (the "Common Stock") from 30,000,000 to
50,000,000; and
(b) authorize the creation of a class of preferred stock;
(4) To consider and act upon a proposal to adopt the Swissray
International, Inc. 1997 Stock Option Plan; and
(5) To transact such other business as may properly come before the
meeting and any adjournment thereof.
The accompanying proxy is solicited by the Board of Directors of the
Company. A copy of the Company's Annual Report to Stockholders for the fiscal
year ended June 30, 1997, Proxy Statement and form of proxy are enclosed.
Only stockholders of record as of the close of business on November 14,
1997 are entitled to notice of, and to vote at, the Annual Meeting and any
adjournment thereof. Such stockholders may vote in person or by proxy.
You are cordially invited to be present at the Annual Meeting. It is
important to you and to the Company that your shares be voted at the Annual
Meeting.
By Order of the Board of Directors
/s/ Ruedi G. Laupper
RUEDI G. LAUPPER
Chairman of the Board,
Chief Executive Officer and President
November 24, 1997
IMPORTANT NOTICE:
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, YOU ARE
URGED TO READ THE ATTACHED PROXY STATEMENT CAREFULLY AND THEN TO SIGN, DATE AND
RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED STAMPED AND ADDRESSED ENVELOPE. AS
SET FORTH IN THE PROXY STATEMENT, THE GIVING OF THE PROXY WILL NOT AFFECT YOUR
RIGHT TO ATTEND AND TO VOTE AT THE ANNUAL MEETING.
<PAGE> 4
SWISSRAY INTERNATIONAL, INC.
------------------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 23, 1997
This Proxy Statement and the accompanying form of proxy ("Proxy") are being
furnished to the stockholders of Swissray International, Inc., a New York
corporation (the "Company"), in connection with the solicitation of Proxies by
the Board of Directors of the Company for use at the Annual Meeting of
Stockholders (the "Annual Meeting") to be held in Conference Room 45B, 101 Park
Avenue, 45th floor, New York, New York, on December 23, 1997, at 2:00 p.m.
(local time), and at any adjournment thereof. Only stockholders of record as of
the close of business on November 14, 1997 (the "Record Date") will be entitled
to notice of, and to vote at, the Annual Meeting.
This Proxy Statement and the accompanying Proxy, together with a copy of
the Company's Annual Report to Stockholders for the fiscal year ended June 30,
1997 (the "Annual Report"), are being sent or given to the stockholders on or
about November 24, 1997.
At the Annual Meeting, the stockholders of the Company will be asked to:
(1) elect six directors of the Company to serve until the next Annual Meeting
and until their successors are duly elected and qualified; (2) approve the
appointment of Coopers & Lybrand L.L.P. as the Company's independent public
accountants for the fiscal year ending June 30, 1998; (3) consider and act upon
proposals to approve and adopt amendments to the Company's Certificate of
Incorporation to (a) increase the number of authorized shares of the Company's
common stock $.01 par value (the "Common Stock") from 30,000,000 to 50,000,000;
and (b) authorize the creation of a class of preferred stock; (4) consider and
act upon a proposal to adopt the Swissray International, Inc. 1997 Stock Option
Plan (the "Stock Option Plan"); and (5) transact such other business as may
properly come before the meeting and any adjournment thereof.
The principal executive office of the Company is located at
Industriestrasse 6, CH-6285, Hitzkirch, Switzerland and the Company also has an
office at 200 East 32nd Street, Suite 34-B, New York, New York 10016. The
Company's telephone number in Switzerland is 011-4141-919-9050 and in the United
States is (212) 545-0095.
STOCKHOLDERS ARE REQUESTED TO COMPLETE, DATE AND SIGN THE ACCOMPANYING FORM
OF PROXY AND RETURN IT PROMPTLY TO THE COMPANY IN THE ENCLOSED POSTAGE PAID
ENVELOPE.
GENERAL
SOLICITATION OF PROXIES
If the accompanying Proxy is properly executed and returned, the shares
represented thereby will be voted in accordance with the instructions specified
in the Proxy. In the absence of instructions to the contrary, such shares will
be voted to (1) elect six directors of the Company to serve until the next
Annual Meeting and until their successors are duly elected and qualified; (2)
approve the appointment of Coopers & Lybrand L.L.P. as the Company's independent
public accountants for the fiscal year ending June 30, 1998; (3) consider and
act upon a proposal to approve and adopt amendments to the Company's Certificate
of Incorporation which would (a) increase the number of authorized shares of the
Company's Common Stock from 30,000,000 to 50,000,000; and (b) authorize the
creation of a class of preferred stock; (4) consider and act upon a proposal to
adopt the Swissray International, Inc. 1997 Stock Option Plan; and (5) transact
such other business as may properly come before the Annual Meeting and any
adjournment thereof. The Board of Directors does not intend to bring any other
matters before the Annual Meeting and is not aware of any matters that will come
before the Annual Meeting other than as described herein. In the absence of
instructions to the contrary, however, it is the intention of each of the
persons named in the accompanying Proxy to vote all properly executed Proxies on
behalf of the stockholders they represent in accordance with their discretion
with respect to any such other matters properly coming before the Annual
Meeting. The expenses with respect to this solicitation of Proxies will be paid
by the Company.
<PAGE> 5
REVOCATION OF PROXIES
Any stockholder may revoke such stockholder's Proxy at any time prior to
the voting thereof on any matter (without, however, affecting any vote taken
prior to such revocation). A Proxy may be revoked by written notice of
revocation received prior to the Annual Meeting, by attending the Annual Meeting
and voting in person or by submitting a signed Proxy bearing a subsequent date.
A written notice revoking a previously executed Proxy should be sent to the
Company at 200 East 32nd Street, Suite 34-B, New York, New York 10016,
Attention: Secretary. Attendance at the Annual Meeting will not in and of itself
constitute a revocation of a Proxy.
VOTING SECURITIES AND BENEFICIAL OWNERSHIP
Only holders of record of the Common Stock of the Company as of the close
of business on the Record Date will be entitled to vote at the Annual Meeting.
Each share of Common Stock entitles the registered holder thereof to one vote on
each matter to come before the Annual Meeting. As of the close of business on
November 7, 1997, there were 23,616,131 shares of the Common Stock outstanding.
The presence, in person or by Proxy, of stockholders entitled to cast a majority
of all votes entitled to be cast at the Annual Meeting will constitute a quorum.
Assuming a quorum, the nominees receiving a majority of the votes cast at the
Annual Meeting for the election of directors will be elected as directors. Votes
that are withheld will be counted for purposes of determining the presence or
absence of a quorum but will have no other effect. Broker non-votes, if any,
will be counted for purposes of determining the presence or absence of a quorum
but will have no effect on the outcome of the election of directors.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of the Common Stock as of November 7, 1997 (except where otherwise
noted) with respect to (a) each person known by the Company to be the beneficial
owner of more than five percent of the outstanding shares of Common Stock, (b)
each director of the Company, (c) the Company's executive officers and (d) all
officers and directors of the Company as a group (except as indicated in the
footnotes to the table, all of such shares of Common Stock are owned with sole
voting and investment power):
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENTAGE OF
BENEFICIALLY SHARES BENEFICIALLY
NAME AND ADDRESS OF BENEFICIAL OWNER(1) OWNED(2) OWNED(2)
- - ------------------------------------------------------------ ---------------- -------------------
<S> <C> <C>
Ruedi G. Laupper(3)......................................... 4,102,590 17.4%
Josef Laupper(4)............................................ 500,000 2.1%
Ulrich R. Ernst(5)(6)....................................... 500,000 2.1%
Erwin Zimmerli(7)........................................... 50,000 *
Ueli Laupper................................................ 0 --
Herbert Laubscher........................................... 0 --
Thomson Kernaghan & Co. Ltd.(8)............................. 1,704,347 7.2%
--------- ----
All directors and officers as a group (six persons)......... 5,152,590 21.8%
</TABLE>
- - ---------------
* Represents less than 1%.
(1) Unless otherwise indicated, the address for each named individual is in care
of Swissray International, Inc., 200 East 32nd Street, Suite 34-B, New York,
NY 10016.
(2) Unless otherwise indicated, the Company believes that all persons named in
the table have sole voting and investment power with respect to all shares
of the Common Stock beneficially owned by them. A person is deemed to be the
beneficial owner of securities which may be acquired by such person within
60 days from the date of this Proxy Statement upon the exercise of options,
warrants or convertible securities. Each \beneficial owner's percentage
ownership is determined by assuming that options that are held by such
person (but not those held by any other person) and which are exercisable
within 60 days of the date of this Proxy Statement, have been exercised.
2
<PAGE> 6
(3) Includes (i) 300,000 shares owned indirectly by Mr. Laupper through SR
Medical Equipment Ltd., a corporation which is wholly owned by Mr. Laupper;
(ii) 3,682,590 shares owned indirectly by Mr. Laupper through Tomlinson
Holding Inc., a corporation which is wholly owned by Mr. Laupper and (iii)
120,0000 shares which may be acquired upon exercise of immediately
exercisable options, which options are owned indirectly by Mr. Laupper
through SR Medical Equipment Ltd., a corporation which is wholly owned by
Mr. Laupper.
(4) Includes 500,000 shares owned indirectly by Mr. Laupper through Lairy
Investment Inc., a corporation of which Mr. Laupper is a majority
shareholder.
(5) Includes 500,000 shares owned indirectly by Mr. Ernst through a corporation
of which Mr. Ernst is a majority shareholder.
(6) Mr. Ernst was Chairman of the Board of Directors from May 1995 until March
18, 1997.
(7) Includes 50,000 shares which may be acquired upon exercise of immediately
exercisable options.
(8) Includes 509,091 shares which may be issued upon conversion of
previously-issued convertible debentures (the "Convertible Debentures")
assuming conversion based on the last reported sales price on November 21,
1997. The Convertible Debentures are convertible into shares of common stock
of the Company at any time after December 3, 1997.
PROPOSAL NO. 1 -- ELECTION OF DIRECTORS
The directors are elected annually by the stockholders of the Company. The
By-laws of the Company provide that the number of directors shall be no less
than three or more than seven unless and until otherwise determined by vote of a
majority of the entire Board of Directors. In accordance therewith, a total of
six persons have been designated by the Board of Directors as nominees for
election at the Annual Meeting and are being presented to the stockholders for
election. The directors to be elected at the Annual Meeting shall be determined
by a majority vote of the shares present in person or by proxy, entitled to vote
at the Annual Meeting.
The By-Laws of the Company permit the Board of Directors by a majority
vote, between annual meetings of the stockholders, to increase the number of
directors and to appoint qualified persons to fill the vacancies created
thereby.
The persons named below are being proposed as nominees for election as
directors for the term expiring at the next annual meeting to be held in 1998,
and until their successors are elected and qualify. Each person, with the
exception of Akbar Seddigh and Daniel A. Wuersch, is currently a director of the
Company. The persons named in the enclosed proxy intend to vote for such
nominees for election as directors, but if the nominees should be unable to
serve, proxies will be voted for such substitute nominees as shall be designated
by the Board of Directors to replace such nominees. It is believed that each
nominee will be available for election. The names of the nominees for election
and certain information as to each of them are as follows:
INFORMATION CONCERNING NOMINEES FOR DIRECTOR
AND EXECUTIVE OFFICERS
NOMINEES
The following information is submitted concerning the nominees for election
as directors.
Ruedi G. Laupper, 47, has been President and a director of the Company
since May 1995 and Chairman of the Board of Directors since March 1997. In
addition, he is Chairman of the Board of Directors of the Company's principal
operating subsidiaries. Ruedi G. Laupper is the founder of the predecessors of
the Company and was Chief Executive Officer of SR-Medical AG until May 1995. He
has approximately 22 years of experience in the field of radiology. He is the
brother of Josef Laupper and the father of Ueli Laupper.
Josef Laupper, 52, has been Secretary, Treasurer and a director of the
Company since May 1995. He has held comparable positions with SR-Medical AG,
Teleray AG and their respective predecessors since 1990. He is principally in
charge of the Company's administration. Josef Laupper has approximately 18 years
of experience within the medical device business. Josef Laupper is the brother
of Ruedi G. Laupper and the uncle of Ueli Laupper.
3
<PAGE> 7
Erwin Zimmerli, 50, has been a director of the Company since May 1995.
Since receiving his Ph.D. degree in law and economics from the University of St.
Gall, Switzerland in 1979, Zimmerli has served as head of the White Collar Crime
Department of the Zurich State Police (1980-86), an expert of a Swiss
Parliamentary Commission for penal law and Lecturer at the Universities of St.
Gall and Zurich (1980-87), Vice President of an accounting firm (1987-90) and
Executive Vice President of a multinational aviation company (1990-92). Since
1992 he has been actively engaged in various independent consulting capacities
primarily within the Swiss legal community.
Ueli Laupper, 27, has been Vice President of International Sales since
March 1997 and a director of the Company since March 1997. He was Chief
Executive Officer of SR Medical AG from July 1995 until June 30, 1997. Ueli
Laupper has overall Company responsibilities in the area of international
marketing and sales with approximately seven years of experience within the
international X-ray market. Ueli Laupper is the son of the Company's President
and the nephew of Josef Laupper.
Akbar Seddigh, 54, served as Chief Executive Officer of a subsidiary of The
Swedish Atomic Energy (1976-1981) and Chief Executive Officer of Scanning AB, a
subsidiary of Volvo AB (1981-1985). Mr. Seddigh founded Ortivus AB (formerly
Medical Invest Svenska AB) in 1985 and was its Chief Executive Officer until
August, 1997 at which time he was elected Vice Chairman. Ortivus AB, which has
been listed on the Stockholm Stock Exchange since January, 1997, brought the new
medical concepts of MIDA (Myocardial Ischemia Dynamic Analysis) and telemedicine
(Mobimed) to the market. Mr. Seddigh serves as a member on the following boards:
Chairman of Analytica AB, Director of Nordbanken Taby, Goseberg Bruk AB,
Artimplant AB, Cellavision AB and Chemel AB. He obtained a masters degree in
analytical chemistry in 1968 from the Institute of Technology in Stockholm and a
BA in market economics in 1973 from the Stockholm Business School.
Daniel A. Wuersch, 37, obtained a graduate degree in law from the
University of Zurich, Switzerland in 1986. In addition, he holds a Ph.D. degree
in law from the University of Zurich and an L.L.M. degree from the Georgetown
University Law Center, Washington, D.C. He has been associated with the law
firms of Morgan, Lewis & Bockius LLP in New York since September 1996, Fried,
Frank, Harris, Shriver & Jacobson in New York from April 1993 through August
1996 and prior thereto with the Homburger law firm in Zurich, Switzerland.
VOTE REQUIRED FOR APPROVAL
The six nominees receiving a majority of the votes cast at the Annual
Meeting for the election of directors will be elected as directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR ITS NOMINEES TO THE BOARD OF DIRECTORS.
COMPENSATION OF DIRECTORS
Directors of the Company receive $10,000 annually for serving as directors
except for Josef Laupper, who receives $12,000 and Ruedi Laupper, the Chairman
of the Board of Directors, who receives $15,000. Ruedi Laupper also received
options to acquire 120,000 shares of the Company's Common Stock on June 13, 1997
in exchange for services to the Company as Chairman of the Board of Directors.
The exercise price for such options is $.73 per share. The options were fully
vested on the date of grant.
BOARD AND COMMITTEE MEETINGS
During the fiscal year which ended June 30, 1997, there were nine meetings
of the Board of Directors. Two of the four incumbent directors attended all nine
meetings of the Board while one of the incumbent directors attended seven of the
meetings and one incumbent director attended all five meetings occurring after
the date on which he was elected to the Board of Directors. The Board of
Directors does not currently have a standing audit, nominating or compensation
committee or any committee or committees performing similar functions. The Board
of Directors has performed all of the functions that might otherwise be
performed by such committees.
Upon election of the new Board of Directors, the Board of Directors will
form (i) an audit committee to comply with recently amended maintenance
standards for the Nasdaq SmallCap Market, on which the Common Stock is quoted
and (ii) a compensation committee (the "Compensation Committee").
4
<PAGE> 8
EXECUTIVE OFFICERS
The executive officers of the Company are appointed by the Board of
Directors of the Company and serve at the discretion of the Board of Directors.
Information concerning each executive officer's age, position and certain other
information with respect to each executive officer, other than Herbert
Laubscher, can be found herein under the section entitled "Election of
Directors."
Herbert Laubscher, 31, joined the Company as a manager responsible for
finance and controlling on August 2, 1996. He was appointed Chief Financial
Officer of the Company on September 15, 1997. Herbert Laubscher obtained his
graduate degree in business administration from the University of St. Gall,
Switzerland in October 1992. From October 1992 until June 1995 he was an
accountant with Price Waterhouse in Zurich. Prior to joining the Company he
served as group financial officer of AZ Zibatra Holding GmbH in Leipzig,
Germany.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following Summary Compensation Table sets forth certain information for
the fiscal years ended June 30, 1995, 1996 and 1997 concerning the cash and
non-cash compensation earned by or awarded to the Chief Executive Officer of the
Company, the three other most highly compensated executive officers of the
Company as of June 30, 1997 and the former Chairman of the Board of Directors
(the "Named Executive Officers"):
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
----------------------------------- ------------------------
FISCAL OTHER ANNUAL STOCK ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION OPTIONS COMPENSATION
- - ---------------------------- ------ -------- ----- ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C>
Ruedi G. Laupper............ 1997 $146,983 -- $ 15,000(2) 120,000(6) --
President and Chief
Executive 1996 $161,085 -- $ 15,000(2) -- --
Officer, Chairman of the 1995 $ 50,555(1) -- -- -- --
Board of Directors
Josef Laupper............... 1997 $ 96,861 -- $ 12,000(2) -- --
Secretary, Treasurer 1996 $106,229 -- $ 12,000(2) -- --
1995 $ 50,555(1) -- -- -- --
Ueli Laupper................ 1997 -- -- -- -- --
Vice President
International 1996 -- -- -- -- --
Sales(3) 1995 -- -- -- -- --
Herbert Laubscher........... 1997 -- -- -- -- --
Chief Financial
Officer(3)(4) 1996 -- -- -- -- --
1995 -- -- -- -- --
Ulrich R. Ernst(5).......... 1997 $ 96,979 -- $ 10,000(2) -- --
1996 $ 98,197 -- $ 15,000(2) -- --
1995 -- -- -- -- --
</TABLE>
- - ---------------
(1) In 1995, the Company changed its fiscal year end from December 31 to June
30. As a result, the Company had a fiscal year beginning on January 1, 1995
and ending on June 30, 1995. Accordingly, the salaries listed for fiscal
year 1995 were for a six-month period. The salaries for each of Ruedi G.
Laupper and Josef Laupper for the twelve-month period ending June 30, 1995
were $101,110 and $101,110 respectively.
(2) Fees for service on the Board of Directors of the Company.
(3) Compensation did not exceed $100,000 in any fiscal year.
(4) Herbert Laubscher joined the Company on August 2, 1996.
(5) Ulrich R. Ernst was Chairman of the Board of Directors from May 1995 until
March 18, 1997.
(6) The options, which were fully vested on date of grant (6/13/97), were issued
in exchange for services to the Company as Chairman of the Board of
Directors.
5
<PAGE> 9
STOCK OPTION GRANTS IN LAST FISCAL YEAR(1)
The following table shows, with respect to the Named Executive Officers,
information concerning the grant of stock options pursuant to the 1996
Non-Statutory Stock Option Plan (the "Plan") during the fiscal year ended June
30, 1997.
<TABLE>
<CAPTION>
PERCENT OF POTENTIAL REALIZATION
TOTAL VALUE AT ASSUMED
NUMBER OF OPTIONS ANNUAL RATES OF
SECURITIES GRANTED TO MARKET STOCK APPRECIATION
UNDERLYING EMPLOYEES EXERCISE OR PRICE ON FOR OPTION TERM
OPTIONS IN FISCAL BASE PRICE DATE OF EXPIRATION ------------------------------
NAME GRANTED YEAR PER SHARE GRANT(4) DATE 0% 5% 10%
- - ----------------- ---------- ---------- ----------- -------- ---------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ruedi G.
Laupper........ 120,000(2) 30.4% $0.73(3) $ 2.94 6/13/02 $265,200 $282,840 $300,480
Josef
Laupper(5).....
Ueli
Laupper(5).....
Herbert
Laubscher(5)...
Ulrich R.
Ernst(5)(6)....
</TABLE>
- - ---------------
(1) The options to purchase the Company's Common Stock were granted under the
Swissray International, Inc. 1996 Non-Statutory Stock Option Plan.
(2) These options were owned indirectly through SR Medical Equipment Ltd., a
corporation wholly owned by Mr. Laupper. They were immediately exercisable
on the date of grant.
(3) The exercise price per share is contingent on purchase of the entire amount
of securities.
(4) The market price on date of grant was based on the average of the high and
low reported prices on the Nasdaq SmallCap Market on June 13, 1997.
(5) These individuals own no stock options of the Company.
(6) Mr. Ernst was Chairman of the Board of Directors from May 1995 until March
18, 1997.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND YEAR-END OPTION VALUES(1)
<TABLE>
<CAPTION>
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT FISCAL YEAR-END(#) AT FISCAL YEAR-END($)
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE(2)
- - ---------------------------------------- ------------------------------- ------------------------------
<S> <C> <C>
Ruedi G. Laupper........................ 120,000/0(3) $ 1.79/0
Josef Laupper(4)........................ 0/0 0/0
Ueli Laupper(4)......................... 0/0 0/0
Herbert Laubscher(4).................... 0/0 0/0
Ulrich R. Ernst(4)(5)................... 0/0 0/0
</TABLE>
- - ---------------
(1) No options were exercised by a Named Executive Officer during the fiscal
year ended June 30, 1997.
(2) Options are in-the-money if the fair market value of the underlying
securities exceeds the exercise price of the option.
(3) Includes 120,000 options which are owned indirectly by Mr. Laupper through
SR Medical Equipment Ltd., a corporation which is wholly owned by Mr.
Laupper.
(4) These individuals own no stock options of the Company.
(5) Mr. Ernst was Chairman of the Board of Directors from May 1995 until March
18, 1997.
6
<PAGE> 10
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF THE COMPANY'S
PREVIOUS FILINGS UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED, THAT MIGHT INCORPORATE FUTURE FILINGS,
INCLUDING THIS PROXY STATEMENT, IN WHOLE OR IN PART, THE FOLLOWING REPORT OF THE
BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION AND THE PERFORMANCE GRAPH INCLUDED
HEREIN SHALL NOT BE INCORPORATED BY REFERENCE INTO ANY SUCH FILINGS.
REPORT OF THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
The Board of Directors, the members of which are Ruedi Laupper, Josef
Laupper, Ueli Laupper and Erwin Zimmerli has furnished the following report on
executive compensation:
To: The Stockholders of Swissray International, Inc.
The Corporation's executive compensation is supervised by the Board of
Directors. Compensation paid to the Company's executive officers, including the
Company's President, Chief Executive Officer and Chairman of the Board of
Directors, is intended to reflect the responsibility associated with each
executive's position, the past performance of the specific executive and the
goals of management.
The Board of Directors has no existing policy with respect to the specific
relationship of corporate performance to executive compensation. Accordingly,
Ruedi Laupper's compensation in fiscal 1997 was not specifically tied to any
measures of return on equity or earnings targets.
The foregoing report has been furnished by:
Ruedi G. Laupper
Josef Laupper
Ueli Laupper
Erwin Zimmerli
7
<PAGE> 11
PERFORMANCE GRAPH
Set forth below is a line graph comparing the cumulative total stockholder
return on the Company's Common Stock with the cumulative total return (including
reinvested dividends) of the Nasdaq Composite Index and the Standard & Poors
Smallcap 600 Index, for the period commencing June 1, 1995, when the Company was
registered under Section 12 of the Securities Exchange Act of 1934, as amended
and the Company's Common Stock began publicly trading and ending June 30, 1997.
The graph is based on an initial investment of $100.
Stock Performance Graph and Table
Comparison of Two-Year
Cumulative Total Returns Among
Swissray International, Inc., Nasdaq Composite Index
and S&P Smallcap 600 Index
<TABLE>
<CAPTION>
Swissray Standard & Poors
Measurement Period International, Nasdaq Composite Smallcap 600
(Fiscal Year Covered) Inc. Index Index
<S> <C> <C> <C>
6/1/95 100.00 100.00 100.00
6/30/95 150.12 243.19 249.21
6/30/96 126.59 773.61 994.78
6/30/97 56.94 1315.48 1777.75
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company had no Compensation Committee during the last completed fiscal
year. The Corporation's executive compensation was supervised by all members of
the Company's Board of Directors and the following directors were concurrently
officers of the Company in the following capacities: Ruedi G. Laupper (Chairman
of the Board of Directors, President and Chief Executive Officer); Josef Laupper
(Secretary and Treasurer), Ueli Laupper (Vice President International Sales) and
Ulrich R. Ernst (Chairman of the Board of Directors from May 1995 until March
18, 1997). No executive officer of the Company served as a member of the board
of directors or compensation committee of any entity which has one or more
executive officers who serve on the Company's Board of Directors.
The Company issued 482,590 shares of Common Stock to a company controlled
by Ruedi G. Laupper pursuant to an agreement between Mr. Laupper and the
Company, dated as of June 30, 1997, in consideration of Mr. Laupper's agreement
to the temporary cancellation of 1,608,633 shares of Common Stock held by
8
<PAGE> 12
Mr. Laupper or companies controlled by him to enable the Company to maintain a
sufficient number of shares of Common Stock to meet certain obligations of the
Company to issue Common Stock and to permit certain financings prior to the
increase of the number of authorized shares of Common Stock from 15,000,000 to
30,000,000.
BENEFIT PLANS
The Swiss and German subsidiaries, mandated by government regulations, are
required to contribute approximately five (5%) percent of eligible, as defined,
employees' salaries into a government pension plan. The subsidiaries also
contribute approximately five (5%) percent of eligible employee salaries into a
private pension plan. Total contributions charged to operations for the years
ended June 30, 1997 and 1996, were $274,009 and $198,722, respectively.
Effective March 1, 1992, Empower, Inc. ("Empower"), a subsidiary of the
Company, adopted a qualified 401(k) retirement plan for the benefit of
substantially all its employees. Under the plan, employees can contribute and
defer taxes on compensation contributed. Empower matches, within prescribed
limits, the contributions of the employees. Empower also has the option to make
an additional contribution to the plan. Empower's contribution to the plan for
the period April 1, 1997 (date of the Company's acquisition of Empower) to June
30, 1997 was $4,185.
Effective April 3, 1992, Empower adopted a "Section 125" employee benefits
plan, which is also referred to as a "Cafeteria" plan. Empower pays for
approximately 85% of the employees' health coverage and the employee pays
approximately 15% of the cost of the coverage. With the implementation of the
Cafeteria plan, the employees' payments for coverage are on a pre-tax basis. A
new employee has only a ninety (90) day waiting period before he or she becomes
eligible to participate in the group insurance plan and the Cafeteria plan.
CERTAIN TRANSACTIONS
The Registrant issued 482,590 shares of Common Stock to a company
controlled by Ruedi G. Laupper pursuant to an agreement between Mr. Laupper and
the Company, dated as of June 30, 1997, in consideration of Mr. Laupper's
agreement to the temporary cancellation of 1,608,633 shares of Common Stock held
by Mr. Laupper or companies controlled by him to enable the Company to maintain
a sufficient number of shares of Common Stock to meet certain obligations of the
Company to issue Common Stock and to permit certain financings prior to the
increase of the number of authorized shares of Common Stock from 15,000,000 to
30,000,000.
The Company made unsecured advances to its former Chairman of the Board of
Directors during the fiscal year ended June 30, 1997 requiring interest at 6%
per annum. The balance at June 30, 1997 was $69,587. Interest charged to the
stockholder for the fiscal year ended June 30, 1997 was $3,460.
PROPOSAL NO. 2 -- APPOINTMENT OF INDEPENDENT AUDITORS
On November 7, 1997 the Board of Directors selected Coopers & Lybrand
L.L.P. as the Company's auditors for the fiscal year ending June 30, 1998 and is
submitting the selection to stockholders for ratification. Coopers & Lybrand
L.L.P. has audited the books, records and accounts of the Company's Swiss
subsidiaries for the fiscal year ended June 30, 1997. Representatives of Coopers
& Lybrand L.L.P. are not expected to attend the Annual Meeting.
VOTE REQUIRED FOR APPROVAL
Ratification of the selection of Coopers & Lybrand L.L.P. as independent
public accountants will require the affirmative vote of a majority of the shares
of Common Stock present in person or represented by Proxy at the Annual Meeting
and entitled to vote.
9
<PAGE> 13
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE
RATIFICATION OF THE APPOINTMENT OF COOPERS & LYBRAND L.L.P. AS INDEPENDENT
ACCOUNTANTS TO EXAMINE THE COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS FOR THE
FISCAL YEAR ENDED JUNE 30, 1998.
Bederson & Company LLP ("Bederson") audited the books, records and accounts
of the Company for the fiscal year ended June 30, 1997. Bederson was dismissed
on November 7, 1997. The decision to change auditors was approved by the Board
of Directors. Bederson is expected to attend the Annual Meeting, will have the
opportunity to make a statement and will be available to answer questions that
may be asked by stockholders.
During the two most recent fiscal years, and subsequent interim period,
there were no disagreements with the former accountants on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure, which disagreements (if not resolved to the satisfaction of
the former accountants) would have caused them to make reference in connection
with their report to the subject matter of the disagreements. The accountants'
report on the financial statements of the Company for each of the past two years
did not contain any adverse opinion or disclaimer of opinion and was not
qualified or modified as to uncertainty or audit scope or accounting principles.
During the two most recent fiscal years, and the subsequent interim period
neither the Company nor anyone on the Company's behalf consulted the newly
engaged accountants regarding either the application of accounting principles to
a specified transaction, either completed or proposed, or the type of audit
opinion that might be rendered on the Company's financial statements.
PROPOSAL NO. 3(a) -- APPROVAL OF THE INCREASE OF NUMBER
OF AUTHORIZED SHARES OF COMMON STOCK
The Board of Directors of the Company has adopted a resolution unanimously
approving and recommending to the Company's stockholders for their approval an
amendment to the Company's Certificate of Incorporation to provide for an
increase of the number of shares of Common Stock which the Company shall be
authorized to issue from 30,000,000 to 50,000,000. As of the close of business
on November 7, 1997, there were 23,616,131 shares of Common Stock outstanding.
In addition, as of November 7, 1997 the Company had reserved (i) up to 5,000,000
shares of Common Stock for issuance upon the conversion of certain convertible
debentures issued by the Company on August 19, 1997 (as required by the terms of
such debentures); (ii) up to 856,287 shares of Common Stock for issuance upon
the conversion of certain convertible debentures issued by the Company on July
31, 1997 (as required by the terms of such debentures); (iii) 1,644,000 shares
of Common Stock for issuance upon the exercise of outstanding options under the
Plan; (iv) 35,000 shares of Common Stock for issuance upon the exercise of
options available for future grant under the Plan; and (v) up to 800,000 shares
of Common Stock for issuance upon the conversion of certain convertible
debentures issued by the Company on April 28, 1997 (as required by the terms of
such debentures). As of November 7, 1997, the Company had issued and reserved
for issuance approximately 31,951,418 shares of Common Stock. Accordingly, as of
such date (i), the number of shares of Common Stock issued plus the number of
shares of Common Stock reserved for issuance exceeded the number of shares of
Common Stock available, (ii) the Company was not in compliance with all of its
obligations to reserve a sufficient number of shares of Common Stock for
issuance upon conversion of convertible debentures or exercise of outstanding
options and (iii) there were no additional shares of Common Stock available for
issuance in connection with future financings, any refinancing of outstanding
debentures or any stock option plan for employees, non-employee directors and
consultants. Without increasing the number of shares of Common Stock which the
Company is authorized to issue, this situation could only be remedied if the
Company was able and had the means available to (i) purchase shares of Common
Stock in the open market or (ii) contract with shareholders to cancel shares of
Common Stock. No assurance can be given that either of these options will be
available to the Company or that the Company will have the necessary financial
resources therefor.
The Board of Directors recommends the proposed increase in the authorized
number of shares of Common Stock to insure that a sufficient number of
authorized and unissued shares is available (i) to meet the Company's
obligations under the convertible debentures and options previously issued or
contracted for by the Company or to permit a refinancing of any or all of the
Company's outstanding convertible debentures, (ii) to raise additional capital
for the operations of the Company, (iii) for the financing of the acquisition of
other businesses and (iv) to
10
<PAGE> 14
make options and shares available to employees, non-employee directors and
consultants of the Company as an incentive for services provided to the Company.
Such shares would be available for issuance by the Board of Directors of the
Company without further action by the stockholders, unless required by the
Company's Certificate of Incorporation or by Nasdaq rules. Neither the presently
authorized shares of Common Stock nor the additional shares of Common Stock that
may be authorized pursuant to the amendment to the Company's Certificate of
Incorporation carry preemptive rights.
Except as described above, there are currently no plans or arrangements
relating to the issuance of any additional shares of Common Stock proposed to be
authorized. However, if this proposal is approved by the stockholders, no
assurance can be given that the Company will not consider effecting an equity
offering of Common Stock or otherwise issuing such stock in the future for the
purpose of raising additional working capital, acquiring related business or
assets or otherwise.
The additional shares of Common Stock, if issued, would have a dilutive
effect upon the percentage of equity of the Company owned by present
stockholders. The issuance of such additional shares of Common Stock might be
disadvantageous to current stockholders in that any additional issuances would
potentially reduce per share dividends, if any. Stockholders should consider,
however, that the possible impact upon dividends is likely to be minimal in view
of the fact that the Company has never paid dividends, has never adopted any
policy with respect to the payment of dividends and does not intend to pay any
cash dividends in the foreseeable future. In addition, the issuance of such
additional shares of Common Stock, by reducing the percentage of equity of the
Company owned by present shareholders, would reduce such present shareholders'
ability to influence the election of directors or any other action taken by the
holders of Common Stock.
The authorization to issue the additional shares of Common Stock would
provide management with the capacity to negate the efforts of unfriendly tender
offerors through the issuance of securities to others who are friendly or
desirable to management. This proposal is not the result of management's
knowledge of any specific effort to accumulate shares of the Company's Common
Stock or to obtain control of the Company in opposition to management or
otherwise. The Company is not submitting this proposal to enable it to frustrate
any efforts by another party to acquire a controlling interest or to seek
representation on the Board of Directors. The submission of this proposal is not
a part of any plan by the Company's management to adopt a series of amendments
to the Certificate of Incorporation or By-laws so as to render the takeover of
the Company more difficult.
PROPOSAL NO. 3(b) -- APPROVAL OF THE CREATION OF
A CLASS OF PREFERRED STOCK
The Board of Directors recommends that a class of preferred stock be
created to provide the Company with additional flexibility in raising capital
which it currently does not have.
The Board of Directors of the Company has adopted a resolution unanimously
approving and recommending to the Company's stockholders for their approval an
amendment to the Company's Certificate of Incorporation to provide for the
issuance of up to 1,000,000 shares of preferred stock, par value $.01 (the
"Preferred Stock") in one or more series.
The designations, preferences, conversion rights, cumulative, relative,
participating, optional or other rights, including voting rights,
qualifications, limitations or restrictions thereof (collectively, the
"Limitations and Restrictions") of the Preferred Stock will be determined by the
Board of Directors. Thus, the Board of Directors will, in the event of the
approval of this proposal by the Company's stockholders, be entitled to
authorize the creation and issuance of 1,000,000 shares of Preferred Stock in
one or more series with such Limitations and Restrictions as may be determined
in the Board of Director's sole discretion, with no further authorization by
security holders required for the creation and issuance thereof. Therefore, the
terms of any Preferred Stock subject to this proposal cannot be stated or
estimated at this time.
The issuance of Preferred Stock could adversely affect the voting power and
other rights of the holders of Common Stock. Preferred Stock may be issued
quickly with terms calculated to delay or prevent a change in control of the
Company or make removal of management more difficult. As a result, the Board of
Director's ability to issue Preferred Stock may discourage the potential
hostility of an acquiror, possibly resulting in
11
<PAGE> 15
beneficial negotiations. Negotiating with an unfriendly acquiror may result in,
among other things, terms more favorable to the Company and its stockholders.
Conversely, the issuance of Preferred Stock may adversely affect the market
price of, and the voting and other rights of the holders of, the Common Stock.
The Company presently has no plans to issue Preferred Stock.
VOTE REQUIRED FOR APPROVAL
The affirmative vote of a majority of the outstanding shares of Common
Stock present in person or represented by proxies at the Annual Meeting and
entitled to vote is required to approve the amendment set forth in Proposals
3(a) and 3(b). If approved by the stockholders, the amendment to the Certificate
of Incorporation will become effective upon filing with the Secretary of the
State of New York a Certificate of Amendment to the Company's Certificate of
Incorporation which filing is expected to take place shortly after the Annual
Meeting.
If Proposal No. 3(a) and Proposal No. 3(b) are both approved by the
Company's stockholders, the Board of Directors expects to file a Certificate of
Amendment to the Company's Certificate of Incorporation increasing the number of
authorized shares of Common Stock and authorizing the creation of the Preferred
Stock as soon as practicable after the date of the Annual Meeting. The
Certificate of Amendment would amend and restate Article Fourth of the Company's
Certificate of Incorporation to read as follows:
The aggregate number of shares of all classes of stock which the
corporation shall have authority to issue is Fifty-one Million
(51,000,000), of which 50,000,000 shall be Common Stock, par value $.01
per share, and 1,000,000 shall be Preferred Stock, par value $.01 per
share.
If Proposal No. 3(a) is approved by the Company's stockholders and Proposal
No. 3(b) is not so approved, the Board of Directors expects to file a
Certificate of Amendment to the Company's Certificate of Incorporation
increasing the number of authorized shares of Common Stock as soon as
practicable after the date of the Annual Meeting. The Certificate of Amendment
would amend and restate Article Fourth of the Company's Certificate of
Incorporation to read as follows:
The aggregate number of shares of all classes of stock which the
corporation shall have authority to issue is Fifty Million (50,000,000),
all of which 50,000,000 shall be Common Stock, par value $.01 per share.
If Proposal No. 3(b) is approved by the Company's shareholders and Proposal
No. 3(a) is not so approved, the Company's Certificate of Incorporation will not
be amended.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR BOTH
PROPOSALS TO THE AMENDMENT TO THE CERTIFICATE OF INCORPORATION.
PROPOSAL NO. 4 -- APPROVAL OF THE SWISSRAY INTERNATIONAL, INC.
1997 STOCK OPTION PLAN
On January 30, 1996 the Board of Directors adopted the Company's 1996
Non-Statutory Stock Option Plan. Substantially all of the options under such
plan have been granted. Consequently, the Board of Directors approved the
Swissray International, Inc. 1997 Stock Option Plan (the "Stock Option Plan").
The purpose of the Stock Option Plan is (i) to ensure that a sufficient number
of shares of Common Stock will be available for grants of options to provide an
incentive to employees, non-employee directors and consultants for their
services to the Company and (ii) to give the Compensation Committee added
flexibility in compensating employees and other individuals with stock options.
In the Board of Directors' judgment, the Stock Option Plan provides a
critical long-term incentive for employees, non-employee directors and
consultants of the Company and its subsidiaries. The Board of Directors believes
that the Company's policy of granting stock options to employees, non-employee
directors and consultants will continue to provide it with a critical advantage
in attracting and retaining qualified candidates, in particular in the United
States. In addition, the Stock Option Plan is intended to provide the
Compensation Committee with maximum flexibility to compensate plan participants.
It is expected that such flexibility will be an integral part of the Company's
policy to encourage employees, non-employee directors and consultants to
12
<PAGE> 16
focus on the long-term growth of stockholder value. The Board of Directors
believes that important advantages to the Company are gained by an option
program such as the Stock Option Plan which includes incentives for motivating
employees of the Company, while at the same time promoting a closer identity of
interests between employees, non-employee directors and consultants on the one
hand, and the stockholders on the other.
The principal terms of the Stock Option Plan are summarized below and a
copy of the Stock Option Plan is annexed to this Proxy Statement as Exhibit A.
The summary of the Stock Option Plan set forth below is not intended to be a
complete description thereof and such summary is qualified in its entirety by
the actual text of the Stock Option Plan to which reference is made.
SUMMARY DESCRIPTION OF THE SWISSRAY INTERNATIONAL, INC. 1997 STOCK OPTION PLAN
The purpose of the Stock Option Plan, attached hereto as Exhibit A, is to
provide directors, officers and employees of, and consultants to the Company and
its subsidiaries with additional incentives by increasing their ownership
interests in the Company. Directors, officers and other employees of the Company
and its subsidiaries are eligible to participate in the Stock Option Plan.
Options may also be granted to directors who are not employed by the Company and
consultants providing valuable services to the Company and its subsidiaries. In
addition, individuals who have agreed to become an employee of, director of or a
consultant to the Company and its subsidiaries are eligible for option grants,
conditional in each case on actual employment, directorship or consultant
status. Awards of options to purchase Common Stock may include incentive stock
options under Section 422 of the Internal Revenue Code ("ISOs") and/or
non-qualified stock options ("NQSOs"). Grantees who are not employees of the
Company or a subsidiary shall only receive NQSOs.
The maximum number of options that may be granted under this plan shall be
options to purchase 2,000,000 shares of Common Stock.
The Compensation Committee will administer the Stock Option Plan. The
Compensation Committee generally will have discretion to determine the terms of
any option grant, including the number of option shares, exercise price, term,
vesting schedule, the post-termination exercise period, and whether the grant
will be an ISO or NQSO. Notwithstanding this discretion: (i) the number of
shares subject to options granted to any individual in any calendar year may not
exceed 200,000; (ii) the term of any option may not exceed 10 years (unless
granted as an ISO to an individual or entity who possesses more than 10% of the
voting power of the Company, which term may not exceed five years); (iii) an
option will terminate as follows: (a) if such termination is on account of
permanent and total disability (as determined by the Compensation Committee),
such options shall terminate one year thereafter; (b) if such termination is on
account of death, such options shall terminate six months thereafter; (c) if
such termination is for cause (as determined by the Compensation Committee),
such options shall terminate immediately; (d) if such termination is for any
other reason, such options shall terminate three months thereafter; and (iv) the
exercise price of each share subject to an ISO shall be not less than 100%, or,
in the case of an ISO granted to an individual described in Section 422(b)(6) of
the Code, 110%, of the fair market value (determined in accordance with Section
422 of the Code) of a share of the Stock on the date such option is granted.
Unless otherwise determined by the Compensation Committee, (i) the exercise
price per share of Common Stock subject to an option shall be equal to the fair
market value of the Common Stock on the date such option is granted; (ii) all
outstanding options become exercisable immediately prior to a "change in
control" of the Company (as defined in the Stock Option Plan) and (iii) each
option shall become exercisable in three equal installments on each of the
first, second and third anniversary of the date such option is granted.
The Stock Option Plan may be amended, altered, suspended, discontinued or
terminated by the Board of Directors without further stockholder approval,
unless such approval is required by law or regulation or under the rules of the
stock exchange or automated quotation system on which the Common Stock is then
listed or quoted. Thus, stockholder approval will not necessarily be required
for amendments which might increase the cost of the Stock Option Plan or broaden
eligibility. The Stock Option Plan will remain in effect until terminated by the
Board of Directors. No ISO may be granted more than ten years after such date.
13
<PAGE> 17
FEDERAL TAX CONSEQUENCES
The following is a brief description of the federal income tax consequences
generally arising with respect to options that may be granted under the Stock
Option Plan. This discussion is only intended for the information of
stockholders considering how to vote at the Annual Meeting, and not as tax
guidance to individuals who participate in the Stock Option Plan.
The grant of an option will create no tax consequences for the grantee or
the Company. A grantee will not have taxable income upon exercising an ISO
(except that the alternative minimum tax may apply) and the Company will receive
no deduction at that time. Upon exercising a NQSO, the participant must
generally recognize ordinary income equal to the difference between the exercise
price and fair market value of the freely transferable and nonforfeitable stock
received. In such case, the Company will be entitled to a deduction equal to the
amount recognized as ordinary income by the participant.
A participant's disposition of shares acquired upon the exercise of an
option generally will result in capital gain or loss measured by the difference
between the sale price and the participant's tax basis in such shares (or the
exercise price of the option in the case of shares acquired by exercise of an
ISO and held for the applicable ISO holding periods). Generally, there will be
no tax consequences to the Company in connection with a disposition of shares
acquired under an option except that the Company will be entitled to a deduction
(and the participant will recognize ordinary taxable income) if shares acquired
upon exercise of an ISO are disposed of before the applicable ISO holding
periods have been satisfied.
Section 162(m) of the Internal Revenue Code generally disallows a public
company's tax deduction for compensation to its chief executive officer and the
four other most highly compensated executive officers in excess of $1 million.
Compensation that qualifies as "performance-based compensation" is excluded from
the $1 million deductibility cap, and therefore remains fully deductible by the
company that pays it. The Company intends that options granted to the relevant
officers with an exercise price at least equal to 100% of fair market value of
the underlying stock at the date of grant will qualify as such
"performance-based compensation," although option grants under the Stock Option
Plan may not so qualify.
VOTE REQUIRED FOR APPROVAL
The affirmative vote of a majority of the outstanding shares of the Common
Stock present in person or represented by Proxy at the Annual Meeting and
entitled to vote is required to approve the adoption of the Stock Option Plan.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE
ADOPTION OF THE COMPANY'S 1997 STOCK OPTION PLAN.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors,
officers and persons who own more than 10% of a registered class of the
Company's equity securities, to file initial reports of ownership and reports of
changes in ownership with the Securities and Exchange Commission (the
"Commission"). Such persons are required by the Commission to furnish the
Company with copies of all Section 16(a) forms they file. Based solely on its
review of the copies of Forms 3, 4 and 5 received by it, the Company believes
that, with the exception of those persons indicated below, all directors,
officers and 10% stockholders complied with such filing requirements.
According to the Company's records, the following filings appear not to
have been timely made: one initial statement of beneficial ownership on Form 3
and one statement of changes in beneficial ownership on Form 5 covering two
transactions (such Form 5 representing a delinquent Form 4) were not filed
timely by Ruedi G. Laupper; one initial statement of beneficial ownership on
Form 3 was not filed timely by Ueli Laupper; one initial statement of beneficial
ownership on Form 3 and one statement of changes in beneficial ownership on Form
5 covering one transaction (such Form 5 representing a delinquent Form 4) were
not filed timely by Tomlinson Holding, Inc.; one initial statement of beneficial
ownership on Form 3 was not filed timely by Josef Laupper; one initial statement
of beneficial ownership on Form 3 was not filed timely by Ulrich R. Ernst; one
initial statement of beneficial ownership was not filed timely by Berkshire
Capital Management and one initial statement of
14
<PAGE> 18
beneficial ownership on Form 3 and one statement of changes in beneficial
ownership on Form 5 covering one transaction (such Form 5 representing a
delinquent Form 4) were not filed timely by Erwin Zimmerli.
OTHER BUSINESS
The Board of Directors does not know of any matters to be presented for
consideration at the Annual Meeting other than the matters described in the
Notice of Annual Meeting, but if other matters are presented, it is the
intention of the persons named in the accompanying Proxy to vote on such matters
in accordance with their judgment.
STOCKHOLDER PROPOSALS AND NOMINATIONS FOR THE 1998
ANNUAL MEETING OF STOCKHOLDERS
The Company anticipates that the 1998 Annual Meeting will be held on or
about November 15, 1998 and that the proxy materials for the 1998 Annual Meeting
will be mailed on or about October 15, 1998. If any stockholder wishes a
proposal to be considered for inclusion in the 1998 Proxy Statement, this
material must be received by the Chief Executive Officer no later than July 27,
1998.
ANNUAL REPORT
The Company's Annual Report for the fiscal year ended June 30, 1997, is
being mailed on or about November 24, 1997, together with this Notice of Annual
Meeting of Shareholders, Proxy Statement and Proxy to each stockholder of record
on November 14, 1997.
SOLICITATION OF PROXIES
The accompanying Proxy is solicited by the Board of Directors, and the cost
of such solicitation will be borne by the Company. Proxies may be solicited by
directors, officers and employees of the Company, none of whom will receive any
additional compensation for his or her services. Solicitation of Proxies may be
made personally or by mail, telephone, telegraph, facsimile or messenger. The
Company will pay persons holding shares of the Common Stock in their names or in
the names of nominees, but not owning such shares beneficially, such as
brokerage houses, banks and other fiduciaries, for the reasonable expense of
forwarding soliciting materials to their principals.
By Order of the Board of Directors
/s/ Ruedi G. Laupper
RUEDI G. LAUPPER
Chairman of the Board of Directors,
President and Chief Executive Officer
New York, New York
November 24, 1997
15
<PAGE> 19
EXHIBIT A
SWISSRAY INTERNATIONAL, INC.
1997 STOCK OPTION PLAN
SECTION 1. PURPOSE
The Plan authorizes the Committee to provide to Employees, Non-Employee
Directors and Consultants of the Corporation and its Subsidiaries, who are in a
position to contribute materially to the long-term success of the Corporation,
with options to acquire Stock of the Corporation. The Corporation believes that
this incentive program will cause those persons to increase their interest in
the Corporation's welfare, and aid in attracting and retaining Employees,
Non-Employee Directors and Consultants of outstanding ability.
SECTION 2. DEFINITIONS
Unless the context clearly indicates otherwise, the following terms, when
used in the Plan, shall have the meanings set forth in this Section:
"Board" shall mean the Board of Directors of the Corporation.
A "Change in Control" shall be deemed to have occurred:
(i) if any person (as defined in Sections 3(a)(9) and 13(d)(3) of the
Exchange Act), other than the Corporation or an employee benefit plan of
the Corporation, acquires directly or indirectly the beneficial ownership
of any voting security of the Corporation and immediately after such
acquisition such person is, directly or indirectly, the beneficial owner of
voting securities representing 30% or more of the total voting power of any
class of voting securities of the Corporation then outstanding;
(ii) upon consummation of any transaction described in Section 8,
other than any such transaction which results in at least 30% of the total
voting power represented by each class of the voting securities of the
Corporation (or, if the Corporation does not survive, the surviving entity)
outstanding immediately after such transaction being beneficially owned by
at least 30% of the holders of each class of outstanding voting securities
of the Corporation immediately prior to the transaction, with the voting
power of each such continuing holder relative to other such continuing
holders not substantially altered in the transaction;
(iii) upon a complete liquidation of the Corporation or the sale or
disposition by the Corporation of all or a substantial portion of the
Corporation's assets (i.e., 30% or more of the total assets of the
Corporation); or
(iv) if the individuals (A) who constitute the Board as of the date
the Plan is adopted by the Board (the "Original Directors") or (B) who
thereafter are elected to the Board and whose election, or nomination for
election, to the Board was approved by a vote of at least two-thirds (2/3)
of the Original Directors then still in office (such directors becoming
"Additional Original Directors" immediately following their election) or
(C) who are elected to the Board and whose election, or nomination for
election, to the Board was approved by a vote of at least two-thirds (2/3)
of the Original Directors and Additional Original Directors then still in
office (such directors also becoming "Additional Original Directors"
immediately following their election), cease for any reason to constitute a
majority of the members of the Board.
For purposes of the foregoing, the terms "beneficial ownership",
"beneficial owner", and "beneficially owned" shall be determined in accordance
with Rule 13d-3 promulgated pursuant to the Exchange Act.
"Code" shall mean the Internal Revenue Code of 1986 as it may be amended
from time to time.
"Committee" means the Compensation Committee of the Board, or such other
Board committee as may be designated by the Board to administer the Plan;
provided, however, that the Committee shall consist solely of two or more
Directors; and provided further that until such time as a Compensation Committee
is appointed, the functions thereof under this Plan shall be exercised by the
Board.
<PAGE> 20
"Consultant" shall mean (i) any person who is engaged to perform services
for the Corporation or its Subsidiaries, other than as an Employee or Director,
or (ii) any person who has agreed to become a consultant within the meaning of
clause (i).
"Corporation" shall mean Swissray International, Inc., a New York
corporation.
"Director" shall mean any member of the Board.
"Employee" shall mean (i) any full-time employee of the Corporation or its
Subsidiaries (including Directors who are otherwise employed on a full-time
basis by the Corporation or its Subsidiaries), or (ii) any person who has agreed
to become an employee within the meaning of clause (i).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as it may be
amended from time to time.
"Fair Market Value" means, with respect to Stock, the fair market value
thereof determined by such methods or procedures as shall be established from
time to time by the Committee, provided, however, that (i) if the Stock is
listed on a national securities exchange or quoted in an interdealer quotation
system, the Fair Market Value of such Stock on a given date shall be based upon
the last sales price or, if unavailable, the average of the closing bid and ask
prices per share of the Stock on such date (or, if there was no trading or
quotation in the Stock on such date, on the next preceding date on which there
was trading or quotation) as reported in the Wall Street Journal (or other
reporting service approved by the Committee).
"Grantee" shall mean a person granted an Option under the Plan.
"ISO" shall mean an Option granted pursuant to the Plan to purchase shares
of the Stock and intended to qualify as an incentive stock option under Section
422 of the Code, as now or hereafter constituted.
"Non-Employee Director" shall mean (i) a Director of the Corporation who is
not an Employee or (ii) any person who has agreed to become a director within
the meaning of clause (i).
"NQSO" shall mean an Option granted pursuant to the Plan to purchase shares
of the Stock that is not an ISO.
"Options" shall refer collectively to NQSOs and ISOs issued under and
subject to the Plan.
"Plan" shall mean this 1997 Stock Option Plan as set forth herein and as
amended from time to time.
"Stock" shall mean shares of Common Stock of the Corporation, $.01 par
value.
"Stock Option Agreement" shall mean a written agreement between the
Corporation and the Grantee, or a certificate accepted by the Grantee,
evidencing the grant of an Option hereunder and containing such terms and
conditions, not inconsistent with the Plan, as the Committee shall approve.
"Subsidiary" shall mean (i) any corporation with respect to which the
Corporation owns, directly or indirectly, 50% or more of the total combined
voting power of all classes of stock of such corporation, or (ii) any entity
which the Committee reasonably expects to become a subsidiary within the meaning
of clause (i).
SECTION 3. SHARES OF STOCK SUBJECT TO THE PLAN; TYPES OF OPTIONS
(a) The maximum number of options that may be granted under this plan shall
be options to purchase 2,000,000 shares of Common Stock. Any shares of Stock
delivered pursuant to an Option may consist, in whole or in part, of authorized
and unissued shares or treasury shares.
(b) Options granted under the Plan may be of two types: ISOs and NQSOs. The
Board shall have the authority and discretion to grant to an eligible Employee
either ISOs, NQSOs or both, but shall clearly designate the nature of each
Option at the time of grant. Non-Employee Directors and Consultants shall only
receive NQSOs.
SECTION 4. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Committee. Subject to the express
provisions of the Plan, the Committee shall have the authority to interpret the
Plan, to prescribe, amend and rescind rules and regulations
2
<PAGE> 21
relating to the Plan, to determine the terms and provisions of Stock Option
Agreements thereunder and to make all other determinations necessary or
advisable for the administration of the Plan. Any controversy or claim arising
out of or related to the Plan or the Options granted thereunder shall be
determined unilaterally by, and at the sole discretion of, the Committee. Any
action of the Committee with respect to the Plan shall be final, conclusive, and
binding on all persons, including the Corporation, subsidiaries of the
Corporation, Grantees, any person claiming any rights under the Plan from or
through any Grantee, and stockholders of the Corporation or any Subsidiary. The
express grant of any specific power to the Committee, and the taking of any
action by the Committee, shall not be construed as limiting any power or
authority of the Committee. The Committee may delegate to officers or managers
of the Corporation or any Subsidiary the authority, subject to such terms as the
Committee shall determine, to perform such functions as the Committee may
determine, to the extent permitted under applicable law. Other provisions of the
Plan notwithstanding, the Board may perform any function of the Committee under
the Plan, including without limitation for the purpose of ensuring that
transactions under the Plan by Grantees who are then subject to Section 16 of
the Exchange Act in respect of the Corporation are exempt under Rule 16b-3. In
any case in which the Board is performing a function of the Committee under the
Plan, each reference to the Committee herein shall be deemed to refer to the
Board.
SECTION 5. GRANT OF OPTIONS TO EMPLOYEES AND CONSULTANTS
(a) Employees and Consultants of the Corporation and its Subsidiaries shall
be eligible to receive Options under the Plan. The Committee shall determine and
designate from time to time the Employees or Consultants who are to be granted
Options, and shall specify in each Stock Option Agreement the nature of the
Option granted and the number of shares of Stock subject to each such Option,
provided, however, that in any calendar year, no Employee or Consultant may be
granted an Option to purchase more than 200,000 shares of Stock (determined
without regard to when such Option is exercisable).
(b) The Committee shall determine whether any Option granted shall be an
ISO or NQSO. Notwithstanding the foregoing, Grantees who are not Employees
(determined with reference to the definition of Employee in Section 2) of the
Corporation or a Subsidiary (determined with reference to the definition of
Corporation and the definition of Subsidiary in Section 2) on the date an Option
is granted shall only receive NQSOs.
(c) The exercise price per share of the Stock subject to an Option granted
to an Employee or Consultant shall be determined by the Committee and specified
in the Stock Option Agreement, provided, however, that the exercise price of
each share subject to an ISO shall be not less than 100%, or, in the case of an
ISO granted to an individual described in Section 422(b)(6) of the Code, 110%,
of the fair market value (determined in accordance with Section 422 of the Code)
of a share of the Stock on the date such Option is granted. Unless otherwise
determined by the Committee, the exercise price per share of Stock subject to an
Option shall be equal to the Fair Market Value of the Stock on the date such
Option is granted.
(d) The term of each Option granted to an Employee or Consultant shall be
determined by the Committee and specified in a Stock Option Agreement, provided
that no Option shall be exercisable more than ten years from the date such
Option is granted, and provided further that no ISO granted to a Control Person
shall be exercisable more than five years from the date such Option is granted.
(e) The aggregate fair market value (determined in accordance with Section
422 of the Code at the time the ISO is granted) of the Stock with respect to
which ISOs are exercisable for the first time by any Employee during any
calendar year under all plans of the Corporation and its Subsidiaries shall not
exceed $100,000. To the extent the limitation set forth in the preceding
sentence is exceeded, the Options with respect to such excess shall be treated
as NQSOs.
(f) The Committee shall determine whether any Option granted to an Employee
or Consultant shall become exercisable in one or more installments and specify
the installment dates in the Stock Option Agreement. The Committee may also
specify in the Stock Option Agreement such other provisions, not inconsistent
with the terms of the Plan, as it may deem desirable, including such provisions
as it may deem necessary to qualify any ISO under the provisions of Section 422
of the Code. Unless otherwise determined by the Committee, (i) each Option shall
become exercisable in three equal installments on each of the first, second and
third anniversary of
3
<PAGE> 22
the date such Option is granted, and (ii) notwithstanding (i), each Option shall
become exercisable immediately prior to a Change in Control.
(g) The Committee may, at any time, grant new or additional options to any
eligible Employee or Consultant who has previously received Options under the
Plan, or options under other plans, whether such prior Options or other options
are still outstanding, have been exercised previously in whole or in part, or
have been canceled. The exercise price of such new or additional Options may be
established by the Committee, subject to Section 5(c) hereof, without regard to
such previously granted Options or other options.
SECTION 6. GRANTS OF OPTIONS TO NON-EMPLOYEE DIRECTORS
(a) Non-Employee Directors of the Corporation shall be eligible to receive
NQSO's under the Plan only pursuant to the provisions of this Section 6. The
Board of Directors shall determine and designate from time to time the
Non-Employee Directors who are to be granted Options, and shall specify in each
Stock Option Agreement the nature of the Option granted and number of shares of
Stock subject to each such Option, provided, however, that in any calendar year,
no Non-Employee Directors may be granted an Option to purchase more than 200,000
shares of Stock (determined without regard to when such Option is exercisable).
(b) The exercise price per share of the Stock subject to an Option granted
to a Non-Employee Director shall be determined by the Board of Directors and
specified in the Stock Option Agreement. Unless otherwise determined by the
Board of Directors, the exercise price per share of Stock subject to an Option
shall be equal to the Fair Market Value of the Stock on the date such Option is
granted.
(c) The term of each Option granted to a Non-Employee Director shall be
determined by the Board of Directors and specified in a Stock Option Agreement,
provided that no Option shall be exercisable more than ten years from the date
such Option is granted. Notwithstanding the exercise period of any Option
granted to a Non-Employee Director, all such Options shall immediately become
exercisable upon a Change in Control of the Corporation.
(d) The Board of Directors shall determine whether any Option granted to a
Non-Employee Director shall become exercisable in one or more installments and
specify the installment dates in the Stock Option Agreement. Unless otherwise
determined by the Board of Directors, each Option shall become exercisable in
three equal installments on each of the first, second and third anniversaries of
the date such Option is granted.
(e) The Board of Directors, may, at any time, grant new or additional
Options to any eligible Non-Employee Director who has previously received
Options under the Plan, or options under other plans, whether such prior Options
or other options are still outstanding, have been exercised previously in whole
or in part, or have been cancelled. The exercise price of such new or additional
Options may be established by the Board of Directors, subject to Section 6 (b)
hereof, without regard to such previously granted Options or other options.
SECTION 7. EXERCISE OF OPTIONS
(a) A Grantee shall exercise an Option by delivery of written notice to the
Corporation setting forth the number of shares with respect to which the Option
is to be exercised, together with cash, certified check, bank draft, wire
transfer, or postal or express money order payable to the order of the
Corporation for an amount equal to the Option price of such shares and any
income tax required to be withheld. The Committee may, in its sole discretion,
permit a Grantee to pay all or a portion of the exercise price by delivery of
Stock or other property (including notes or other contractual obligations of the
Grantee to make payment on a deferred basis, such as through "cashless exercise"
arrangements, to the extent permitted by applicable law), and the methods by
which Stock will be delivered or deemed to be delivered to the Grantee.
(b) Except as provided pursuant to Section 8(a) or (b), no Option granted
to an Employee or Consultant shall be exercised unless at the time of such
exercise the Grantee is then an Employee (determined with reference to the
definition of Employee in Section 2), Non-Employee Director (determined with
reference to the definition of Non-Employee Director in Section 2) or Consultant
(determined with reference to the definition of Consultant in Section 2) of the
Corporation or a Subsidiary (determined with reference to the definition of
Corporation and the definition of Subsidiary in Section 2).
4
<PAGE> 23
SECTION 8. TERMINATION OF EMPLOYMENT OR RELATIONSHIP.
(a) Unless otherwise determined by the Committee, upon termination of a
Grantee's employment or consultancy with the Corporation and its Subsidiaries, a
Grantee's Options shall terminate as follows: (i) if such termination is on
account of permanent and total disability (as determined by the Committee), such
Options shall terminate one year thereafter; (ii) if such termination is on
account of death, such Options shall terminate six months thereafter; (iii) if
such termination is for cause (as determined by the Committee), such Options
shall terminate immediately; and (iv) if such termination is for any other
reason, such Options shall terminate three months thereafter. In addition, all
Options granted on the basis of clause (ii) of the respective definitions of
Employee, Consultant, Non-Employee Director and Subsidiary shall immediately
terminate if the Committee determines, in its sole discretion, that the
Consultant, Employee Non-Employee Director or Subsidiary, as the case may be,
will not become a Consultant, Employee Non-Employee Director or Subsidiary
within the meaning of clause (i) of such Sections.
(b) Upon a Non-Employee Director ceasing to be a Non-Employee Director of
the Corporation for any reason (except as a result of the Grantee becoming an
Employee of the Corporation or a Subsidiary or as a result of the Grantee's
retirement, disability or death), such Grantee's Options shall terminate thirty
(30) days thereafter. Upon the Grantee ceasing to be a Non-Employee Director as
a result of retirement, disability or death, or such Grantee's employment by the
Corporation or a Subsidiary, the period during which such Grantee may exercise
any outstanding and then exercisable installments of his or her Options shall
not exceed: (i) one year from the date of death, disability or becoming an
Employee and (ii) three months from the date of retirement, provided, however,
that in no event shall the period extend beyond the expiration of the Option
term.
(c) The sale of any Subsidiary shall be treated as a termination of
employment or consultancy, as the case may be, under Section 8(a)(iv) with
respect to any Grantee employed or retained by such Subsidiary.
(d) Subject to the foregoing, in the event of death, Options may be
exercised by a Grantee's legal representative.
(e) During any period described in Section 8(a) following the Grantee's
termination of employment or consultancy but prior to termination of the Option,
unless otherwise determined by the Committee, the Option shall be exercisable
only to the extent that it was exercisable upon such termination of employment
or consultancy.
SECTION 9. ADJUSTMENT UPON CHANGES IN CAPITALIZATION
In the event that any recapitalization, forward or reverse split,
reorganization, merger, consolidation, spin-off, combination, repurchase, or
exchange of Stock or other securities, Stock dividend or other special, large
and nonrecurring dividend or distribution (whether in the form of cash,
securities or other property), liquidation, dissolution, or other similar
corporate transaction or event, affects the Stock such that an adjustment is
appropriate in order to prevent dilution or enlargement of the rights of
Grantees under the Plan, then the Committee shall, in such manner as it may deem
equitable, adjust any or all of (i) the number and kind of shares of Stock
deemed to be available thereafter for grants of Options under Section 3, (ii)
the number and kind of shares of Stock that may be delivered or deliverable in
respect of outstanding Options, (iii) the number of shares with respect to which
Options may be granted to a given Grantee in the specified period as set forth
in Section 5(a), and (iv) the exercise price (or, if deemed appropriate, the
Committee may make provision for a cash payment with respect to any outstanding
Option). In addition, the Committee is authorized to make adjustments in the
terms and conditions of, and the criteria included in, Options (including,
without limitation, cancellation of Options in exchange for the in-the-money
value, if any, of the vested portion thereof, or substitution of Options using
stock of a successor or other entity) in recognition of unusual or nonrecurring
events (including, without limitation, events described in the preceding
sentence and events constituting a Change in Control) affecting the Corporation
or any Subsidiary or the financial statements of the Corporation or any
Subsidiary, or in response to changes in applicable laws, regulations, or
accounting principles.
5
<PAGE> 24
SECTION 10. RESTRICTIONS ON ISSUING SHARES
The Corporation shall not be obligated to deliver Stock upon the exercise
or settlement of any Option or take any other action under the Plan until the
Corporation shall have determined that applicable federal and state laws, rules,
and regulations have been complied with and such approvals of any regulatory or
governmental agency have been obtained and contractual obligations to which the
Option may be subject have been satisfied. The Corporation, in its discretion,
may postpone the issuance or delivery of Stock under any Option until completion
of such stock exchange listing or registration or qualification of such Stock or
other required action under any federal or state law, rule, or regulation as the
Corporation may consider appropriate, and may require any Grantee to make such
representations and furnish such information as it may consider appropriate in
connection with the issuance or delivery of Stock under the Plan.
SECTION 11. TAX WITHHOLDING
The Corporation shall have the right to require that the Grantee make such
provision, or furnish the Corporation such authorization, necessary or desirable
so that the Corporation may satisfy its obligation, under applicable laws, to
withhold or otherwise pay for income or other taxes of the Grantee attributable
to the grant or exercise of Options granted under the Plan or the sale of Stock
issued with respect to Options. This authority shall include authority to
withhold or receive Stock or other property and to make cash payments in respect
thereof in satisfaction of a Grantee's tax obligations.
SECTION 12. TRANSFERABILITY
Options will not be transferable by a Grantee except by will or the laws of
descent and distribution or to a beneficiary in the event of the Grantee's
death, shall not be pledged, mortgaged, hypothecated or otherwise encumbered, or
otherwise subject to the claims of creditors, and, in the case of ISOs, shall be
exercisable during the lifetime of a Grantee only by such Grantee or his
guardian or legal representative; provided, however, that NQSOs may be
transferred to one or more transferees during the lifetime of the Grantee to the
extent and on such terms as then may be permitted by the Committee.
SECTION 13. GENERAL PROVISIONS
(a) Each Option shall be evidenced by a Stock Option Agreement. The terms
and provisions of such Stock Option Agreements may vary among Grantees and among
different Options granted to the same Grantee.
(b) The grant of an Option in any year shall not give the Grantee any right
to similar grants in future years, any right to continue such Grantee's
employment relationship with the Corporation or its Subsidiaries, or, until such
Option is exercised and share certificates are issued, any rights as a
Stockholder of the Corporation. All Grantees shall remain subject to discharge
to the same extent as if the Plan were not in effect.
(c) No Grantee, and no beneficiary or other persons claiming under or
through the Grantee shall have any right, title or interest by reason of any
Option to any particular assets of the Corporation or its Subsidiaries, or any
shares of Stock allocated or reserved for the purposes of the Plan or subject to
any Option except as set forth herein. The Corporation shall not be required to
establish any fund or make any other segregation of assets to assure the payment
of any Option.
(d) The issuance of shares of Stock to Grantees or to their legal
representatives shall be subject to any applicable taxes and other laws or
regulations of the United States or of any state having jurisdiction thereof.
SECTION 14. CHANGES TO THE PLAN AND STOCK OPTION AGREEMENTS.
The Board may amend, alter, suspend, discontinue or terminate the Plan or
the Committee's authority to grant Options under the Plan without the consent of
stockholders or Grantees, except that any such action shall be subject to the
approval of the Corporation's stockholders at or before the next annual meeting
of stockholders for which the record date is after such Board action if such
stockholder approval is required by any federal or state law or regulation or
the rules of any stock exchange or automated quotation system on which the Stock
may then be listed or quoted, and the Board may otherwise, in its discretion,
determine to submit other such changes to the
6
<PAGE> 25
Plan to stockholders for approval; provided, however, that, without the consent
of an affected Grantee, no such action may materially impair the rights of such
Grantee under any Option theretofore granted to him. The Committee may waive any
conditions or rights under, or amend, alter, suspend, discontinue, or terminate,
any Option theretofore granted and any Stock Option Agreement relating thereto;
provided, however, that, without the consent of an affected Grantee, no such
action may materially impair the rights of such Grantee under such Stock Option
Agreement.
SECTION 15. EFFECTIVE DATE OF PLAN
The Plan is effective upon its approval by the stockholders of the
Corporation and shall continue in effect until terminated by the Board. No ISO
may be granted more than ten years after such date.
7
<PAGE> 26
[BEDERSON & COMPANY LLP LETTERHEAD]
EXHIBIT B
November 18, 1997
Division of Corporation Finance
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Swissray International, Inc.
Proxy Statement Disclosure
Item 304(a)(3) of Regulation S-K
Sirs:
As former auditors of Swissray International, Inc. ("Swissray"), we submit
this letter in accordance with requirements of Item 304(a)(3) of Regulation S-K.
Bederson & Company LLP agrees with the statements made by Swissray in its Proxy
Statement Disclosure reporting the change in auditors. Coopers & Lybrand LLP was
engaged by Bederson & Company LLP to perform audit procedures in connection with
the audited consolidated financial statement of Swissray International Inc. for
year ended June 30, 1997.
Very truly yours,
[Signature]
BEDERSON & COMPANY LLP
8
<PAGE> 27
SWISSRAY INTERNATIONAL, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PROXY FOR 1997 ANNUAL MEETING
TO BE HELD DECEMBER 23, 1997
Revoking any such prior appointment the undersigned hereby
nominates, constitutes and appoints Ruedi G. Laupper and Josef Laupper
or either of them (with full power to act alone), my true and lawful
attorney(s) with full power of substitution, for me and in my name,
place and stead to vote all the Common Stock of Swissray
International, Inc. (the "Company"), standing in my name on the books
on the record date, November 14, 1997, or which the undersigned would
otherwise be entitled to vote at the Annual Meeting of the Company's
stockholders to be held in Conference Room 45B, 45th floor, 101 Park
Avenue, New York, New York, on December 23, 1997, at 2:00 P.M., local
time, or at any postponement or adjournment thereof, with all the
powers the undersigned would possess if personally present. All shares
votable by the undersigned will be voted by the proxies named above in
the manner specified on the reverse side of this card, and such
proxies are authorized to vote in their discretion on such other
matters as may properly come before the meeting.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED AS DIRECTED, BUT
IF NO INSTRUCTIONS ARE SPECIFIED, THIS PROXY WILL BE VOTED FOR THE
ELECTION OF THE NOMINEES LISTED AND FOR EACH OF THE PROPOSALS TO BE
ACTED UPON AT THE ANNUAL MEETING.
[X] Please mark your boxes as in this example.
1. Election of Directors. Election of the six nominees: Ruedi G.
Laupper, Josef Laupper, Erwin Zimmerli, Ueli Laupper, Akbar Seddigh
and Daniel A. Wuersch.
[ ] FOR ALL NOMINEES [ ] WITHHOLD FROM ALL NOMINEES
If you do not wish your shares voted FOR a particular nominee, mark
the FOR box and draw a line through that person's name above.
2. Approval of the appointment of Coopers & Lybrand L.L.P. as
independent auditors of the Company for the fiscal year ending June
30, 1998.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(continued and to be signed and dated on reverse side)
<PAGE> 28
3. Approval of the proposed Amendment to the Certificate of
Incorporation to:
(a) Increase the number of authorized shares of Common Stock from
30,000,000 to 50,000,000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(b) Create a class of preferred stock.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. Approval of the Company's 1997 Stock Option Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. In their discretion, the Proxies are authorized to vote upon such
other business as may properly come before such meeting or
adjournment or postponement thereof.
Please sign, date and return the proxy card promptly using the
enclosed envelope.
Please check here if you plan to attend the Annual Meeting. [ ]
Dated:
----------------------------------
----------------------------------
Signature
----------------------------------
Signature
NOTE: PLEASE SIGN EXACTLY AS THE
NAME(S) APPEAR(S) ABOVE. JOINT
OWNERS SHOULD EACH SIGN
PERSONALLY. TRUSTEES AND OTHER
FIDUCIARIES SHOULD INDICATE THE
CAPACITY IN WHICH THEY SIGN, AND
WHERE MORE THAN ONE NAME APPEARS,
A MAJORITY MUST SIGN. IF A
CORPORATION, THE SIGNATURE SHOULD
BE THAT OF AN AUTHORIZED OFFICER
WHO SHOULD STATE HIS OR HER TITLE.
