June 29, 1999
U.S. Securities & Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: SWISSRAY International, Inc. ("SRMI")
SEC File No. 0-26972
Annual Meeting
Dear Sirs:
Enclosed herewith in accordance with applicable rules and regulations
is definitive filing of SRMI's Notice of Annual Meeting, Proxy, Proxy
Statement and Annual Report.
Very truly yours,
\S\Gary B. Wolff
Gary B. Wolff
GBW:th
Enc.
<PAGE>
SWISSRAY INTERNATIONAL, INC.
Proxy for 1998 Annual Meeting
This Proxy is Solicited by the Board of Directors
KNOW ALL MEN BY THESE PRESENTS that I (we), the undersigned
Stockholder(s) of SWISSRAY International, Inc. (the "Company"), do hereby
nominate, constitute and appoint 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 said Company, standing in my name on the books on the record
date, June 10, 1999, at the Annual Meeting of its Stockholders to be held at
Swissotel New York, The Drake, 440 Park Avenue, New York, New York, on July 23,
1999, at 3:00 p.m., local time, or at any postponement or adjournments thereof,
with all the powers the undersigned would possess if personally present.
This Proxy, when properly executed, will be voted as directed below. In
the absence of any direction, the shares represented hereby will be voted for
the (a) election of the nominees listed, (b) ratification of the appointment of
the auditors, (c) approval of the proposal to authorize the creation of a class
of preferred stock, (d) approval of the proposal to reincorporate the Company in
Delaware and (e) approval of the proposal to adopt the Company's 1999 Stock
Option Plan.
[ ] Please mark your votes in this example.
1. Election of Directors, Election of the five nominees, Ruedi G. Laupper
Josef Laupper, Dr. Erwin Zimmerli, Ueli Laupper and Dr. Sc. Dov Maor.
[ ] For All Nominees [ ] Withhold From All Nominees
The Board of Directors recommends a vote FOR the Nominees. If you do not wish
your shares voted FOR a particular nominee, draw a line through that person's
name above.
2. Approval of the appointment of Feldman Sherb Ehrlich & Co., P.C., as
independent auditors of the Company for the fiscal year ending June 30,
1999.
[ ] For [ ] Against [ ] Abstain
The Board of Directors recommends a vote FOR approval.
3. Approval of the proposal to authorize a creation of a class of
Preferred Stock.
[ ] For [ ] Against [ ] Abstain
The Board of Directors recommends a vote FOR approval.
4. Approval of the proposal to reincorporate the Company in Delaware.
[ ] For [ ] Against [ ] Abstain
The Board of Directors recommends a vote FOR approval.
5. Approval of the proposal to adopt the Company's 1999 Stock Option Plan.
[ ] For [ ] Against [ ] Abstain
The Board of Directors recommends a vote FOR approval.
6. 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.
SIGNATURE(S) ________________________
------------------------
DATE ________________________________
NOTE: Please sign exactly as the name(s) appear hereon. Joint owners should
sign. When signing as attorney, executor, administrator, trustee, or
guardian, please give full title as such.
<PAGE>
SWISSRAY INTERNATIONAL, INC.
320 West 77th Street, Suite 1A
New York, New York 10024
June 21, 1999
Dear Stockholder:
You are cordially invited to attend the 1998 Annual Meeting (the
"Annual Meeting") of Stockholders of SWISSRAY International, Inc. (the
"Company"), which will be held at the Swissotel New York, The Drake, 440 Park
Avenue, New York, New York on Friday, July 23, 1999, commencing at 3:00 p.m.
(local time). By attending the meeting, you will have an opportunity to hear a
report on the operations of your Company and to meet your directors and
executives. 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 five directors of
the Company to serve until the next Annual Meeting and until their successors
are duly elected and qualified; (2) ratify the Board of Directors' action of its
appointment of Feldman Sherb Ehrlich & Co., P,C. as the Company's independent
public accountants for the fiscal year ending June 30, 1999; (3) consider and
act upon a proposal to approve and adopt an amendment to the Company's
Certificate of Incorporation to authorize the creation of a class of Preferred
Stock; (4) consider and act upon the proposal to reincorporate the Company in
Delaware; (5) consider and act upon a proposal to adopt the SWISSRAY
International, Inc. 1999 Stock Option Plan; and (6) 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 read the Proxy Statement, then
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, 1998 (the "Annual Report") is being mailed to you together with the
enclosed proxy materials.
Yours sincerely,
Ruedi G. Laupper
Chairman of the Board,
Chief Executive Officer and President
<PAGE>
SWISSRAY INTERNATIONAL, INC.
320 West 77th Street, Suite 1A
New York, New York 10024
----------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held On July 23, 1999
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 at the Swissotel New York, The Drake, 440 Park Avenue,
New York, New York on Friday, July 23, 1999, at 3:00 p.m. (local time) for the
purpose of considering and voting upon the following matters:
(1) To elect five directors of the Company to serve until the next
Annual Meeting and until their successors are duly elected and
qualified;
(2) To ratify the Board of Directors' action of its appointment of
Feldman Sherb Ehrlich & Co., P.C. as the Company's independent
public accountants for the fiscal year ending June 30, 1999;
(3) To consider and act upon a proposal to approve and adopt an
amendment to the Company's Certificate of Incorporation to
authorize the creation of a class of Preferred Stock;
(4) To consider and approve a proposal to reincorporate the
Company in Delaware;
(5) To consider and act upon a proposal to adopt the SWISSRAY
International, Inc. 1999 Stock Option Plan; and
(6) 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, 1998, Proxy Statement and form of proxy are enclosed.
Only stockholders of record as of the close of business on June 10,
1999 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 the Company that your shares be voted at the Annual
Meeting.
By Order of the Board of Directors
Ruedi G. Laupper
Chairman of the Board,
Chief Executive Officer and President
June 21, 1999
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>
SWISSRAY INTERNATIONAL, INC.
------------------------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 23, 1999
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 at the Swissotel New York, The
Drake, 440 Park Avenue, New York, New York on Friday, July 23, 1999,at 3:00 p.m.
(local time) and at any adjournment thereof. Only stockholders of record as of
the close of business on June 10, 1999 (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, 1998 (the "Annual Report"), are being sent or given to the stockholders on
or about June 21, 1999.
At the Annual Meeting, the Stockholders of the Company will be asked
to: (1) elect five directors of the Company to serve until the next Annual
Meeting and until their successors are duly elected and qualified; (2) ratify
the Board of Directors' action of its appointment of Feldman Sherb Ehrlich &
Co., P.C. as the Company's independent public accountants for the fiscal year
ending June 30, 1999; (3) consider and act upon a proposal to approve and adopt
an amendment to the Company's Certificate of Incorporation to authorize the
creation of a class of Preferred Stock; (4) consider and act upon the proposal
to reincorporate the Company in Delaware; (5) consider and act upon a proposal
to adopt the SWISSRAY International, Inc. 1999 Stock Option Plan (the "Stock
Option Plan"); and (6) transact such other business as may properly come before
the meeting and any adjournments thereof.
Principal executive offices of the Company are located at Turbistrasse
25-27, CH-6280 Hochdorf, Switzerland and at 320 West 77th Street, Suite 1A, New
York, New York 10024. The Company's telephone number in Switzerland is
011-41-41-914-1200 and in the United States is 917-441-7841.
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 five directors to the Company to serve until the next
Annual Meeting and until their successors are duly elected and qualified; (2)
ratify the appointment of Feldman Sherb Ehrlich & Co., P.C. as the Company's
independent public accountants for the fiscal year ending June 30, 1999; (3)
1
<PAGE>
approve and adopt an amendment to the Company Certificate of Incorporation which
would authorize the creation of a class of Preferred Stock; (4) approve the
proposal to reincorporate the Company in Delaware; (5) adopt the SWISSRAY
International, Inc. 1999 Stock Option Plan; and (6) transact such other business
as may properly come before the Annual Meeting and any adjournment thereof. The
Board of Directors does not currently 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.
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 at a subsequent
date. A written notice revoking a previously executed Proxy should be sent to
the Company at 320 West 77th Street, Suite 1A, New York, New York 10024,
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 June 10, 1999, there were 12,006,216 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. Each outstanding share is entitled to one vote at the meeting for all
items set forth in the Notice and Proxy. Cumulative voting for the nominees for
directors is not permitted. 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.
If sufficient stockholders approve Proposal #4 (the reincorporation
proposal), the Board of Directors will merge the Company into a wholly-owned
Delaware subsidiary of the Company which would be the surviving corporation and
adopt the Certificate of Incorporation of the Delaware subsidiary attached as
Exhibit A hereto as the Certificate of Incorporation of the surviving
corporation, thereby reincorporating the Company in Delaware and (assuming
stockholder approval of Proposal #3 (the "Preferred Share" proposal)) creating a
class of Preferred Stock.
If Proposal #4 is not approved and Proposal #3 is approved, the
creation of a class of Preferred Stock will be effectuated through amendment to
the Company's current Certificate of Incorporation in accordance with the
Business Corporation Law of the State of New York.
2
<PAGE>
Pursuant to New York law, approval of the Reincorporation Proposal
requires the affirmative vote of no less than two-thirds of all outstanding
shares entitled to vote thereon, while approval of the other Proposals require
the affirmative vote of a majority of all outstanding shares entitled to be
voted thereon, in person or by proxy, at the meeting.
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 similarly be counted for purposes of determining the presence or
absence of a quorum.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of the Common Stock as of June 10,1999(except where otherwise noted)
with respect to (a) each person or firm 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.
<TABLE>
<CAPTION>
No. Of Shares Percentage of
Beneficially Shs. Benficially
Name and Address of Beneficial Owner (1) Owned (2) Owned (2)
- ---------------------------------------- -------------- ----------------
<S> <C> <C>
Ruedi G. Laupper (3)(9) 410,259 3.42%
Josef Laupper (4) 50,000 .42%
Erwin Zimmerli (5) 5,000 .04%
Ueli Laupper --- *
Dov Maor --- *
Michael Laupper --- *
Dominion Capital Fund, Ltd. 491,308(6) 4.09%
Sovereign Partners LP 703,018(7) 5.86%
Canadian Advantage Limited Partnership 562,620(8) 4.69%
Liviakis Financial Communications, Inc. 3,000,000(9) 24.99%
Rolcan Finance Ltd. 800,000 6.66%
All directors and officers as
a group (six persons) 465,259 3.88%
- ---------------
</TABLE>
o Represents less than 1% of the 12,006,216 shares outstanding as of
June 10, 1999 (the "Record Date").
(1) Unless otherwise indicated, the address for each named individual is in
care of SWISSRAY International, Inc., 320 West 77th Street, Suite 1A,
New York, New York 10024.
(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 benefically 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, warrants or convertible securities 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.
3
<PAGE>
(3) Includes (i) 30,000 shares owned indirectly by Ruedi G. Laupper through
SR Medical Equipment Ltd., a corporation which is wholly owned by him;
(ii) 368,259 shares owned indirectly by Ruedi G. Laupper through
Tomlinson Holding Inc., a corporation which is wholly owned by him and
(iii) 12,000 shares which may be acquired upon exercise of immediately
exercisable options, which options are owned indirectly by Ruedi G.
Laupper through SR Medical Equipment Ltd., a corporation which is
wholly owned by him.
(4) Includes 50,000 shares owned indirectly by Josef Laupper through Lairy
Investment Inc., a corporation in which he is a majority shareholder.
(5) Includes 5,000 shares which may be acquired upon exercise of
immediately exercisable options.
As of the Record Date, i.e., June 10, 1999, an aggregate principal
outstanding balance (exclusive of interest) for those Convertible Debentures
referred to below amounts to $13,223,371. None of these convertible debentures
are owned by officers and/or directors of the Company.
(6) Does not include up to 2,728,444 shares which normally could be issued,
at any time, upon conversion of previously issued convertible
debentures (the "Convertible Debentures").
(7) Does not include 3,237,571 shares which normally could be issued, at
any time, upon conversion of previously issued convertible debentures
(the "Convertible Debentures").
(8) Does not include up to 185,536 shares which normally could be issued,
at any time, upon conversion of previously issued convertible
debentures (the "Convertible Debentures").
(9) Pursuant to March 1999 Consulting Agreement, Ruedi G. Laupper,
President of SRMI, currently has sole voting power with respect to
these shares.
The foregoing information contained in footnotes 6 through 8 above
assumes conversion based on 80% of the last reported sales price on June 10,
1999. The number of shares indicated, if issued, could require disclosure of
beneficial ownership of in excess of 5%. Pursuant to terms of Convertible
Debentures, the holders thereof may not beneficially own more than 4.9% of
outstanding Company shares (other than as a result of mandatory conversion
provisions).
In addition, the only record holder known by the Company to hold more
than five percent of the Company's Common Stock is Cede & Co., P.O. Box 20,
Bowling Green Station New York, New York 10004. As of the record date Cede & Co.
held a total of 4,977,977 shares of the Company's Common Stock, which
represented approximately 41.46% of the total number of shares outstanding.
Cede & Co. is a nominee of the Depository Trust Company, which holds such
shares of record on behalf of various of its customers. The names of all of the
beneficial owners of the shares held by those stockholders are unknown to
Management.
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
five 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.
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The persons named below are being proposed as nominees for election as
directors for the term expiring at the next annual meeting currently intended to
be held in late 1999, and until their successors are elected and qualify. Each
nominee 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:
<TABLE>
<CAPTION>
Principal Occuption
During Past Five Number of Common Percentage
Years Or More and Director Shares Benefically of Shares
Name Birth Other Directships Since Owned on 6/10/99 Outstanding
- ---- ------- ---------------------
<S> <C> <C> <C> <C> <C>
Ruedi G. Laupper 4-22-50 See below 1995 (a) 3.42%
Josef Laupper 7-22-45 See below 1995 (a) .42%
Dr. Erwin Zimmerli 7-22-47 See below 1995 (a) .04%
Ueli Laupper 4-4-7 See below 1997 (a) --%
Dr. Sc. Dov Maor 12-6-46 See below 1998 (a) --%
</TABLE>
(a) The information under this caption regarding ownership of securities is
based upon statements by the individual nominees, directors, and officers as
reported and reflected hereinabove under the section entitled "Security
Ownership of Certain Beneficial Owners and Management".
INFORMATION CONCERNING NOMINEES FOR DIRECTOR
Nominees
The following information is submitted concerning the nominees for
election as directors:
Ruedi G. Laupper has been President, Chief Executive Officer 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 and
President 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 23 years of experience in
the field of radiology.
Josef Laupper has been Secretary, Treasurer (until January 1998) and a
director of the Company since May, 1995 (with the exception of not having served
as Secretary from December 23, 1997 to February 23, 1998). He has held
comparable positions with SR-Medical Holding AG, SR Medical AG and their
respective predecessors since 1990. He is principally in charge of the Company's
administration. Josef Laupper has approximately 19 years of experience within
the medical device business. Josef Laupper is the brother of Ruedi G. Laupper.
Dr. Erwin Zimmerli has been a director of the Company since May, 1995
and since March 1998, a member of the Company's Independent Audit Committee.
Since receiving his Ph.D. degree in law and economics from the University of St.
Gall, Switzerland in 1979, Dr. Zimmerli has served as head of the White Collar
Crime Department of the Zurich State Police (1980-86), as 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 (1987-1990) and
5
<PAGE>
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 has overall Company responsibilities in the area of
international marketing and sales with approximately eight years of experience
within the international X-ray market. He 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. Since the beginning of July 1998, he has been in charge of the
Company's US Operations and currently serves as CEO of both Swissray Medical
Systems, Inc. and Swissary Healthcare, Inc. as well as President of Swissray
America Inc. since the latter's formation in September 1998. Ueli Laupper is the
son of Ruedi G. Laupper
Dr. Sc. Dov Maor was appointed as a member of the Company's Board of
Directors and a member of its Independent Audit Committee effective March 26,
1998. Dr. Sc. Maor currently holds the position of Vice President for Technology
with Elbit Medical Imaging, Haifa. Dr. Sc. Dov Maor is well experienced in the
field of Nuclear Medicine and medical imaging and has been employed for over 10
year in a leading position in Research & Development. Additionally, he was
working in conjunction with the Max Planck Institute for Nuclear Physics in
Heidelberg within his field of experience. In addition to his technical
knowledge, Dr. Sc. Dov Maor is experienced in the commercial sector of the
industry.
Vote Required for Approval
The five 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 EACH OF 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 G. Laupper,
the Chairman of the Board of Directors, who receives $15,000.
Board and Committee Meetings
During the fiscal year which ended June 30, 1998, there were ten
meetings of the Board of Directors. Four of the five incumbent directors
attended all ten meetings of the Board while one incumbent director attended the
two meetings occurring after the date on which he was elected to the Board of
Directors. Two former directors who no longer have any association with the
Company attended three meetings during fiscal year ended June 30, 1998. The
Board of Directors does not currently have a standing nominating or compensation
committee or any committee or committees performing similar functions. It
established an independent audit committee effective as of March 26, 1998. The
Board of Directors has performed all of the functions that might otherwise be
performed by such committees (excepting for the aforesaid independent audit
committee).
The aforesaid independent audit committee was established so as to
comply with maintenance standards for the Nasdaq SmallCap Market, on which the
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Company's Common Stock was quoted until delisting on October 26, 1998. For
certain information with respect to such delisting (principally as a result of
failure to timely file its Form 10-K for fiscal year ended June 30, 1998),
reference is herewith made to the Company Form 8-K and 8-K/A (inclusive of
exhibits thereto) with date of report of November 3, 1998.
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 can be found herein under the
section entitled "Election of Directors" excepting for information with respect
to Herbert Laubscher and Erich A. Kalbermatter who resigned from all positions
held effective December 31, 1998 and February 1999 respectively and excepting
for informaiton with respect to Michael Laupper (who serves as a Company
officer) which summarized information is as follows:
Michael Laupper assumed the position of Interim Chief Financial Officer
of the Company effective January 1, 1999, having previously served as Controller
working in conjunction with the Company's former CFO. Michael Laupper completed
his commercial education in the chemical industry in 1991 in Switzerland and has
additionally completed studies in finance and accounting (in the United States
during 1996-97). He has served the Company in various management postitons at SR
Management AG., a Company subsidiary, prior to assuming his current position.
Michael Laupper is the son of Ruedi G. Laupper.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following Summary Compensation Table sets forth certain information
for the fiscal years ended June 30, 1996, 1997 and 1998 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, 1998 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
- --------------------------- ------ -------- ------ ------------ --------- ------------
<C> <C> <C> <C> <C> <C> <C>
Ruedi G. Laupper 1998 $189,644 --- $15,000 (1) --- ---
President and Chief Executive 1998 --- --- $1,122,973 (7) --- ---
Officer, Chairman of the 1997 $146,983 --- $15,000 (1) 120,000(5) ---
Board of Directors 1996 $161,085 --- $15,000 (1) --- ---
Josef Laupper 1998 $ 94,669 --- $12,000 (1) --- ---
Secretary, Treasurer 1997 $ 96,861 --- $12,000 (1) --- ---
1996 $106,229 --- $12,000 (1) --- ---
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Annual Compensation Long-Term Compensation
------------------------------------ -------------------------
Fiscal Other Annual Stock All Other
Name and Principal Position Year Salary Bonus Compensation Options Compensation
- --------------------------- ------ -------- ------ ------------ --------- ------------
<C> <C> <C> <C> <C> <C> <C>
Ueli Laupper 1998 $ 95,685 --- $10,000 (1) --- ---
Vice President International 1997 $ --- --- $ --- --- ---
Sales (2) 1996 $ --- --- $ --- --- ---
Herbert Laubscher 1998 $ 79,244 --- $ --- ---
Chief Financial Officer (2)(3) 1997 $ --- --- $ --- --- ---
1996 $ --- --- $ --- --- ---
Ulrich R. Ernst (4) 1997 $ 96,979 --- $10,000 (1) --- ---
1996 $ 98,197 --- $15,000 (1) --- ---
Erich A. Kalbermatter 1998 $ 33,652 --- $ --- --- ---
Chief Operating Officer (2)(6)
- --------------------
</TABLE>
(1) Fees for service on the Board of Directors of the Company.
(2) Compensation did not exceed $100,000 in any fiscal year.
(3) Herbert Laubscher joined the Company in August of 1996 and served as
Treasurer until his resignation effective December 31, 1998.
(4) Ulrich R. Ernst was Chairman of the Board of Directors from May 1995
until March 18, 1997.
(5) The options, which were fully vested on date of grant (6/13/97), were
issued in exchange for services to the Company as Chairman of the Board
of Directors.
(6) Erich A. Kalbermatter joined the Company on April 14, 1998 and resigned
February 1999.
(7) Compensation paid in equivalent of 48,259 post reverse split shares of
Common Stock for cancellation of Common Stock held by officer.
STOCK OPTION GRANTS IN LAST FISCAL YEAR
With respect to the Named Executive Officers there was no granting of
stock options under either the Company's 1996 or 1997 Stock Option Plans (the
"Plans") during the fiscal year ended June 30, 1998.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND YEAR-END OPTION VALUES (1)
<TABLE>
<CAPTION>
Number of Securities Underlying Value of Unexercised
Unexercised Options In-the-Money Options
at Fiscal Year-Ended at Fiscal Year -Ended ($)
Name Exercisable/Unexercised Exercisable/Unexercisable (2)
- ---- ------------------------------- -----------------------------
<S> <C> <C>
Ruedi G. Laupper 12,000/0 (3) $ 0/0
Josef Laupper (4) 0/0 0/0
Ueli Laupper (4) 0/0 0/0
Herbert Laubscher (4) 0/0 0/0
- ---------------
(1) No options were exercised by a Named Executive Officer during the
fiscal year ended June 30, 1998.
(2) Options are in-the-money if the fair market value of the underlying
securities exceeds the exercise price of the option.
(3) Includes 12,000 options which are owned indirectly by Ruedi G. Laupper
through SR Medical Equipment Ltd., a corporation which is wholly owned
by him.
(4) These individuals own no stock options of the Company.
8
</TABLE>
<PAGE>
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 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 G. Laupper,
Josef Laupper, Ueli Laupper, Erwin Zimmerli and Dov Maor, 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
executives 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 G. Laupper's compensation in fiscal 1998 was not specifically
tied to any measures of return on equity or earnings targets.
The foregoing report has been furnished by:
Ruedi G. Laupper
Joseph Laupper
Ueli Laupper
Erwin Zimmerli
Dov Maor
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.
Laupepr (Chairman of the Board of Directors, President and Chief Executive
Officer); Josef Laupper (Secretary and Treasurer) and Ueli Laupper (Vice
President International Sales). 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.
While the Company did not issue any shares of its Common Stock to any
of its officers during fiscal year ended June 30, 1998 it did issue 48,259
shares of Common Stock to a company controlled by Ruedi G. Laupper pursuant to
an agreement between Ruedi G. Laupper and the Company, dated as of June 30,
1997, in consideration of Mr. Laupper's agreement to the temporary cancellation
9
<PAGE>
of 160,863 shares of Common Stock held by Ruedi G. 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 percent (5%) of eligible, as
defined, employees' salaries into a government pension plan. The subsidiaries
also contribute approximately five percent (5%) of eligible employees salaries
into a private pension plan. Total contributions charged to operations for the
years ended June 30, 1998 and 1997 were $347,854 and $274,009, respectively.
CERTAIN TRANSACTIONS
See paragraph 2 above under the heading "COMPENSATION COMMITTEE
INTERLOCKS AND INSIDER PARTICIPATION".
PROPOSAL NO. 2 - PROPOSAL TO RATIFY THE BOARD OF DIRECTORS'
SELECTION OF FELDMAN SHERB EHRLICH & CO., P.C. AS
INDEPENDENT AUDITORS FOR THE COMPANY
On November 6, 1998 the Board of Directors selected Feldman Sherb
Ehrlich & Co., P.C. as the Company's auditors for the fiscal years ending June
30, 1998 and 1999 and is submitting the selection to stockholders for
ratification. Feldman Sherb Ehrlich & Co., PC. has audited the books, records
and accounts of the Company for the fiscal year ended June 30, 1998.
Representatives of Feldman Sherb Ehrlich & Co., P.C. are expected to attend the
Annual Meeting, will have the opportunity to make a statement if they so choose
and will be available to respond to appropriate questions.
Feldman Sherb Ehrlich & Co., P.C. ("FSE") audited the books, records
and accounts of the Company for the fiscal year ended June 30, 1998 subsequent
to the Company's termination of its relationship with its prior auditors STG-
Coopers & Lybrand AG, which firm did not audit the Company's financial
statements prior to termination or otherwise. The decision to retain FSE was
approved by the Board of Directors. For specific information as to why the
Company changed auditors, reference is made to Form 8-K and 8-K/A with date of
report of November 3, 1998 copies of which will be made available at the Annual
Meeting.
During the two most recent fiscal years, and subsequent interim period,
if any, there were no disagreements with the former accountants (Bederson & Co.
LLP, who audited the Company's books and records for fiscal years ended June 30,
1996 and 1997) 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.
10
<PAGE>
During the two most recent fiscal years, and any 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.
Vote Required for Approval
Ratification of the selection of Feldman Sherb Ehrlich & Co., P.C. 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.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS
VOTE FOR THE RATIFICATION OF THE APPOINTMENT OF FELDMAN SHERB
EHRLICH & CO., P.C. AS INDEPENDENT ACCOUNTANTS TO EXAMINE THE
COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS FOR THE FISCAL YEAR
ENDED JUNE 30, 1999.
PROPOSAL NO. 3 - 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, conversions 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 Directors' 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 discourage, make more difficult, delay or
prevent a change in control of the Company or make removal of management more
difficult. As a result, the Board of Directors' ability to issue Preferred Stock
may discourage the potential hostility of an acquiror, possibly resulting in
beneficial negotiations. Negotiating with an unfriendly acquiror may result in,
amongst 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 issued Preferred Stock.
11
<PAGE>
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 Proposal 3.
If approved by the stockholders, the amendment to the Certificate of
Incorporation (authorizing the creation of the Preferred Stock) will become
effective upon filing with the Secretary of State of New York of a Certificate
of Amendment to the Company's Certificate of Incorporation which filing is
expected to take place shortly after 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 without cumulative
voting rights and without any preemptive rights.
Alternatively, if both Proposals 3 and 4 (reincorporation of Company in
State of Delaware) are approved, then the current Certificate of Incorporation
shall not be amended (in New York) but rather the following action shall be
taken:
If the Preferred Stock Proposal is adopted by the Company's
stockholders, such proposal will become effective on the date the Merger is
effectuated if the Reincorporation Proposal is approved by the Company's
stockholders (and, as aforesaid, on the date a certificate of amendment is filed
in New York, the Company's state of incorporation, if the Reincorporation
Proposal is not so approved).
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THIS PROPOSAL
AND UNANIMOUSLY RECOMMENDS THAT THE STOCEHOLDERS VOTE "FOR" THE
CREATION OF A CLASS OF PREFERRED STOCK.
PROPOSAL NO. 4 - CHANGE THE STATE OF INCORPORATION FROM
NEW YORK TO DELAWARE
The proposed reincorporation will be effected by the merger of the
Company into a wholly-owned Delaware subsidiary of the Company organized for
such purpose (interchangeably, the "Delaware Company" or the "Surviving
Corporation"). The Delaware Company will be the surviving corporation in the
Merger. There will be no change in the business or properties of the Company and
the Delaware Company as a result of the Merger, and the Surviving Corporation
will assume all of the obligations of the Company. The directors and officers of
the Surviving Corporation will be the same as those of the Company.
The Plan of Merger (the "Merger Agreement"), in the form attached
hereto as Exhibit B, providing for the Merger has been unanimously approved by
the Board of Directors.
The Merger Agreement provides, however, that the Board of Directors may
terminate the Merger Agreement and abandon the Merger if for any reason,
including, but not limited, to the number of shares for which appraisal rights
have been exercised and the cost to the Company thereof, the Board of Directors
determines that it is inadvisable to proceed with the Merger. See "Rights of
Dissenting Stockholders" below.
The Certificate of Incorporation for the Delaware Company (the
"Delaware Certificate") provides for the authorization of 50,000,000 shares of
Common Stock of the Company, $.0001 par value per share and 1,000,000 shares of
Preferred Stock, $.0001 par value per share. Pursuant to the Merger Agreement,
each outstanding share of the Company's Common Stock will be converted into a
fully paid and non-assessable share of Common Stock of the Surviving Corporation
with identical rights attached thereto, i.e. the holders of Common Stock (i)
have equal ratable rights to dividends from funds legally available therefore,
when, as and if declared by the Board of Directors of the Company; (ii) are
entitled to share ratably in all of the assets of the Company available for
distribution to holders of Common Stock upon liquidation, dissolution or winding
up of the affairs of the Company; (iii) do not have preemptive, subscription or
conversion rights and there are no redemption or sinking funds provisions
applicable thereto; and (iv) are entitled to one non-cumulative vote per share
on all matters which stockholders may vote on at all meetings of stockholders.
For information concerning creation of a class of Preferred Stock, reference is
herewith made to Proposal #3 hereof. Outstanding options and warrants to
purchase any number of shares of the Company's Common Stock will be converted
into options or warrants to purchase the same number of shares of the Surviving
Corporation's Common Stock at the same exercise price. IT WILL NOT BE NECESSARY
FOR STOCKHOLDERS TO EXCHANGE THEIR EXISTING STOCK CERTIFICATES FOR STOCK
CERTIFICATES OF THE SURVIVING CORPORATION. OUTSTANDING CERTIFICATES FOR SHARES
OF COMMON STOCK OF THE COMPANY SHOULD NOT BE DESTROYED OR SENT TO THE COMPANY.
Delivery of certificates for the Company's Common Stock issued prior to the
effectiveness of the Merger will constitute "good delivery" of shares in
transactions subsequent to the Merger. Certificates representing shares of the
Surviving Corporation's Common Stock will be issued with respect to transfers
consummated after the Reincorporation. New certificates will also be issued upon
the request of any stockholder, subject to normal requirements as to proper
endorsement, signature guarantee, if required, and payment of applicable taxes.
The Company's Common Stock will continue to trade, post merger, on the
same market that it was trading pre-merger.
AT THE EFFECTIVE TIME OF THE MERGER, THE COMPANY WILL BE GOVERNED BY
DELAWARE LAW, BY A NEW CERTIFICATE OF INCORPORATION AND NEW BY-LAWS, EACH OF
WHICH WILL RESULT IN CHANGES IN THE RIGHTS OF THE STOCKHOLDERS.
Certain Anti-Takeover Provisions in Proposed Delaware Certificate of
Incorporation (Proposal No. 4) and Possible Future Issuances of Preferred Stock
(Proposal No. 3).
The Company's proposed Delaware Certificate of Incorporation and
Delaware General Corporation Law contain certain provisions that may have the
effect of inhibiting a non-negotiated merger or other business combination
involving the Company. Such provisions are intended to encourage any person
interested in acquiring the Company to negotiate with and obtain the approval of
the Board of Directors in connection with any such transaction. These provisions
include undesignated preferred stock and the application of the Delaware General
Corporation Law. Certain of these provisions may discourage a future acquisition
of the Company that is not approved by the Board of Directors in which
12
<PAGE>
stockholders might receive a premium over the market value for their shares.
As a result, stockholders who might desire to participate in such transaction
may not have the opportunity to do so. See also Proposal No.3, fourth paragraph
regarding Preferred Stock.
For additional information and details relating to these and other
changes, reference is made to the Delaware Certificate, attached to this Proxy
Statement as Exhibit A, and the discussions in this Proxy Statement under
"Principal Reasons for Changing the State of Incorporation," "Principal
Differences Between New York and Delaware Corporation Laws" and "Changes in
Certificate of Incorporation and By-laws." The discussion herein of the
provisions of the Delaware Certificate is subject to, and qualified in its
entirely by, reference to all the provisions of the Delaware Certificate. Copies
of the Certificate of Incorporation and By-laws of the Company and the
Certificate of Incorporation and By-laws of the Delaware Company are available
for inspection at the principal office of the Company.
Principal Reasons for Changing the State of Incorporation
For many years, Delaware has followed a policy of encouraging
incorporation in that state and, in furtherance of that policy, has adopted
comprehensive, modern and flexible corporate laws which are periodically updated
and revised to meet changing business needs. As a result, many corporations
initially choose Delaware as their domicile and many others have reincorporated
in Delaware in a manner similar to that proposed by the Company. Because of
Delaware's long-standing policy of encouraging incorporation in that state, and
its consequent preeminence as the state of incorporation for many major
corporations, the Delaware courts have developed a considerable expertise in
dealing with corporate issues and a substantial body of case law has developed
construing Delaware law and establishing public policies with respect to
Delaware corporations.
It is anticipated that Delaware corporate law will continue to be
interpreted and explained in a number of significant court decisions which may
provide greater predictability with respect to the Company's corporate legal
affairs. Certain aspects of Delaware corporate law have, however, been publicly
criticized on the ground that they do not afford minority stockholders the same
substantive rights and protection as are available in a number of other states.
For a discussion of certain differences in stockholders' rights and the powers
of management under the Delaware General Corporation Law (the "Delaware GCL")
and the New York Business Corporation Law (the "New York BCL") see "Principal
Differences Between New York and Delaware Corporation Laws" and "Changes in
Certificate of Incorporation and By-Laws" below.
In the event the Reincorporation Proposal is not approved, the Company
will remain a New York corporation.
Principal Differences Between New York and Delaware Corporation Laws
The Merger will effect several changes in the rights of stockholders as
a result of differences between the New York BCL and the Delaware GCL. The
provisions of the New York BCL and Delaware GCL differ in many respects.
Summarized below are certain of the principal differences affecting the rights
of stockholders. This summary does not purport to be a complete statement of
differences affecting stockholders' rights under the New York BCL and the
Delaware GCL and is subject to, and qualified in its entirely by reference to,
all the provisions thereof.
14
<PAGE>
Dividends.
The Delaware GCL provides that a corporation may, unless otherwise
restricted by its certificate of incorporation, declare and pay dividends out of
surplus, or if no surplus exists, out of net profits for the current or
preceding fiscal year (provided that the amount of capital of the corporation is
not less than the aggregate amount of the capital represented by the issued and
outstanding stock of all classes having a preference upon the distribution of
assets). Under the New York BCL, dividends may be paid only out of surplus. The
Company does not now, and has not recently, paid any dividends on its Common
Stock. The payment by the Company of dividends, if any, in the future rests
within the discretion of its Board of Directors and will depend, among other
things, upon the Company's earnings, its capital requirements and its financial
condition, as well as other relevant factors. By reason of its present financial
status and its contemplated financial requirements, the Company does not
contemplate or anticipate paying any dividends upon its Common Stock in the
foreseeable future.
Dissenters' Rights of Appraisal.
Under the New York BCL, dissenting stockholders who follow prescribed
statutory procedures are entitled to appraisal rights in connection with certain
mergers, consolidations and sales of all or substantially all the assets of a
corporation. The Delaware GCL provides similar rights and procedures for mergers
and consolidations only. Furthermore, under the Delaware GCL, even in those
cases, such rights are not provided in certain circumstances, including
transactions in which shares of the corporation being voted in a merger or
consolidation are listed on a national securities exchange or are held of record
by more than 2,000 stockholders and in which the shares to be received in such
merger or consolidation are shares of the surviving corporation or are listed on
a national securities exchange or are held of record by more than 2,000
stockholders.
The Company's Common Stock was listed on the NASDAQ SmallCap Market
until delisting in October 1998. Such delisting decision is currently under
appeal and in the event that the Company prevails (of which no assurance
whatsoever can be given) the Delaware Company's Common Stock will be listed on
the NASDAQ SmallCap Market.
The availability of appraisal rights to stockholders of the Company who
dissent from the Merger is discussed under "Rights of Dissenting Stockholders"
below.
Issuance to Officers, Directors and Employees of Rights or Options to Purchase
Shares.
The New York BCL, requires the affirmative vote of a majority of the
shares entitled to vote in order to issue to officers, directors or employees
options or rights to purchase stock. The Delaware GCL does not require
stockholders approval of such transactions. However, if the Company once again
becomes subject to the rules of NASDAQ it may require stockholder approval of
the Company's option plans and grants thereunder in certain instances.
Vote Required.
The New York BCL requires that certain mergers and consolidations and
sales of all or substantially all of the assets not in the ordinary course
15
<PAGE>
of business be approved by the holders of not less than two-thirds of the
outstanding stock entitled to vote thereon. Under the Delaware GCL, such
transactions require approval by the holders of a majority of the outstanding
stock entitled to vote thereon, and a vote of the stockholders of the surviving
corporation is not necessary where, in the case of a merger, (i) no amendment of
its certificate of incorporation or change in its outstanding stock is involved
and (ii) the merger results in no more than a 20% increase in its outstanding
common stock.
Loans to Directors.
Under the Delaware GCL, loans may be made to employees or officers,
even those who are also directors if the Board of Directors finds that the loan
may benefit the corporation. The New York BCL requires that loans to directors
be authorized by an affirmative vote of stockholders.
Redeemable Shares.
The Delaware GCL permits redeemable shares to be redeemed at the option
of the corporation or the stockholder, while the New York BCL generally permits
redemption only at the option of the corporation.
Corporate Action without a Stockholders' Meeting.
The New York BCL permits corporate action without a stockholders'
meeting only upon the written consent of all stockholders entitled to vote on
such action. The Delaware GCL permits corporate action without a meeting of
stockholders upon the written consent of the holders of that number of shares
necessary to authorize the proposed corporate action being taken, unless the
certificate of incorporation expressly provides otherwise, and then requires the
corporation to provide notice of the actions taken through such procedure to the
stockholders who did not vote with respect to such action.
Consideration for Shares.
Under the New York BCL, neither obligations of the subscriber for
future payments nor obligations of the subscriber for future services
constitutes payment or part payment for shares of a corporation. Furthermore,
certificates for shares may not be issued until the full amount of the
consideration therefor has been paid (except in the case of shares purchased
pursuant to stock options under a plan permitting installment payments). Under
the Delaware GCL, shares of stock may be issued, and deemed to be fully paid and
nonassessable, if the corporation receives consideration (in the form of cash,
services rendered, personal property, real property, leases of real property, or
a combination thereof) having a value not less than the par value of such shares
and the corporation receives a binding obligation of the subscriber to pay the
balance of the subscription price.
Classification of the Board of Directors.
The New York BCL permits a classified board with as many as four
classes but forbids fewer than three directors in any class. The Delaware GCL
permits a classified board of directors with as many as three classes, provided
that separate classes of directors must have staggered terms of office with
16
<PAGE>
only one class of directors coming up for election each year. Neither the
Delaware Certificate nor the Certificate of Incorporation of the Company provide
for a classified board of directors.
Business Combination Statutes.
The New York BCL prohibits any "business combination" (as therein
defined) between a "domestic corporation" and an "interested stockholder" for
five years after the date that the interested stockholder became an interested
stockholder unless prior to that date the board of directors of the domestic
corporation approved the business combination or the transaction that resulted
in the interested stockholder becoming an interested stockholder. After five
years, such a business combination is permitted only if (i) it is approved by a
majority of the shares not owned by, or by an affiliate of, the interested
stockholder or (ii) certain statutory fair price requirements are met. A
"resident domestic corporation" is defined as any corporation that (i) is
incorporated in New York, (ii) has its principal executive offices and
significant business operations in New York or has at least 250 or 25% of its
employees in New York (including employees of its 80% owned subsidiaries , if
any), and (iii) has at least 10% of its stock beneficially owned by New York
residents. An "interested stockholder" is any person who beneficially owns,
directly or indirectly, 20% or more of the outstanding voting stock of the
corporation.
The Delaware GCL prohibits any "business combination" between a
Delaware corporation and an "interested stockholder" for three years following
the date that the interested stockholder became an interested stockholder unless
(i) prior to that date the board of directors approved the business combination
or the transaction that resulted in the interested stockholder becoming an
interested stockholder, (ii) upon consummation of the transaction that resulted
in the interested stockholder becoming an interested stockholder the interested
stockholder held at least 85% of the outstanding voting stock of the corporation
(not counting shares owned by officers and directors and certain shares in
employee stock plans), or (iii) on or subsequent to such date the business
combination is approved by the board of directors and at least two thirds of the
outstanding shares of voting stock not owned by the interested stockholder. The
Delaware GCL defines "interested stockholder" as any person who beneficially
owns, directly or indirectly, 15% or more of the outstanding voting stock of the
corporation. Unlike New York, Delaware does not require that the corporation's
principal executive offices or significant operations be located in Delaware in
order to be covered by this law.
Number of Directors.
Under the Delaware GCL, a corporation may have as few as one director
and there are no maximum limits. The specific number may be fixed in the
certificate of incorporation but if so, it may be changed only with both board
of directors and stockholder approval. If the certificate of incorporation is
silent as to the number of directors, the board of directors may fix or change
the authorized number of directors pursuant to a provision of the by-laws.
Under the New York BCL, the number of directors may not be less than
three, and any higher number may be fixed by the by-laws or by action of the
stockholders or of the board of directors under specific provisions of the
by-laws adopted by the stockholders. The number of directors may be increased or
decreased by amendment of the by-laws or by action of the stockholders or of the
board of directors under the specific limitation of a by-law adopted by the
17
<PAGE>
stockholders, subject to certain limitations.
Inspection of Stockholders List.
With respect to the inspection of stockholders lists, the New York BCL
provides a right of inspection on at least 5 days written demand to (i) any
person who shall have been a stockholder for at least 6 months immediately
preceding his demand or (ii) any person holding, or thereunto authorized in
writing by, at least 5% of any class of outstanding shares. The corporation has
certain rights calculated to assure itself that the demand for inspection is not
for a purpose or interest other than that of the corporation.
The Delaware GCL permits any stockholder to inspect the stockholder's
list for a purpose reasonably related to such person's interest as a stockholder
and, during the 10 days preceding the stockholder's meeting, for any purpose
germane to that meeting.
Changes in Certificate of Incorporation and By-Laws
The Delaware Certificate differs from the Certificate of Incorporation
of the Company primarily as a result of differences between the Delaware GCL and
the New York BCL. The By-laws of the two corporations likewise differ primarily
as a result of differences between the Delaware GCL and the New York BCL and the
Delaware Certificate and the Certificate of Incorporation of the Company. Set
forth below is a discussion of certain significant changes set forth in the
Delaware Certificate.
Change of Company Purposes.
The purpose for which the Company was formed as set forth in its
Certificate of Incorporation initially adopted in 1968 and subsequently amended
included certain activities in which the Company, in its present form is no
longer engaged. Moreover, the Company may elect to pursue other activities in
the future. The Delaware Certificate states broadly that the Company's purpose
is to engage in any lawful activity, which is the customary purpose clause for
modern corporations.
Change in Par Value of Authorized Capital Stock.
The Delaware Certificate authorizes the Company to issue up to
50,000,000 shares of Common Stock and 1,000,000 shares of Preferred Stock and
sets the par value of $ .0001 per share for both classes of stock instead of the
current $.01 par value per share of Common Stock. The purpose and effect of this
change in par value is to minimize the annual franchise tax payable by the
Company.
Indemnification and Elimination of Liability.
The Delaware Certificate and the By-laws of the Delaware Company
contain indemnification provisions eliminating the personal liability of
directors to the fullest extent permitted by the Delaware GCL. The provision is
parallel to the provision of the Company's Certificate of Incorporation
eliminating the liability of directors of the Company to the extent permitted by
the New York BCL.
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Transactions with Affiliates.
The Delaware Certificate does not contain provisions requiring special
authorization in respect of certain transactions with affiliated stockholders,
since the purpose of the provisions to this effect in the Company's Certificate
of Incorporation is addressed by Section 203 of the Delaware GCL.
Rights of Dissenting Stockholders.
Because the Company will not be technically the "surviving
corporation," stockholders of the Company who do not vote in favor of the
Reincorporation Proposal may have the right to seek to obtain payment in cash of
the fair value of their shares by complying with the requirements of Section 623
of the New York BCL. The dissenting stockholders must file with the Company
before a taking of the vote on the Reincorporation Proposal a written objection
including a statement of intention to demand payment for shares and stating such
stockholder's name and residence address, the number of shares of stock as to
which dissent is made and a demand for payment of the fair value of such shares
if the Merger is consummated. Such stockholder may not dissent as to less than
all shares owned. Within ten days after the vote of stockholders authorizing the
Reincorporation Proposal, the Company must give written notice of such
authorization to each such dissenting stockholder. Within twenty days after the
filing of such notice, any stockholder to whom the Company failed to give notice
of the Annual Meeting who elects to dissent from the Merger must file with the
Company a written notice of such election, stating such stockholder's name and
residence address, the number of shares of stock as to which dissent is made and
a demand for payment of the fair value of the shares. Such stockholder may not
dissent as to less than all shares owned. At the time of filing the notice of
election to dissent or within one month thereafter, dissenting stockholders must
submit certain certificates representing shares to the Company or its transfer
agent for notation thereon of the election to dissent, after which such
certificates will be returned to the stockholder.
Failure to submit the certificates may result in the loss of
dissenter's rights. Within 15 days after the expiration of the period within
which stockholders may file their notices of election to dissent, or within 15
days after consummation of the Merger, whichever is later (but not later than
ninety days after the stockholders' vote authorizing the Merger), the Company
must make a written offer (which, if the Merger has not been consummated, may be
conditioned upon such consummation) to each stockholder who has filed such
notice of election to pay for the shares at a specified price which the Company
considers to be their fair value. If the Company and the dissenting stockholder
are unable to agree as to such value, Section 623 provides for judicial
determination of value. A negative vote on the Reincorporation Proposal does not
constitute a written objection required to be filed by an objecting stockholder.
Failure by a stockholder to vote against the Reincorporation Proposal, however,
will not constitute a waiver of rights under Section 623 provided that a written
objection has a been properly filed and such stockholder has not voted in favor
of the Reincorporation Proposal.
The foregoing does not purport to be a complete statement of the
provisions of Section 623 and is qualified in its entirety by reference to said
Section.
Because the Reincorporation Proposal does not involve any change in the
nature of the Company's business but is a technical matter only, management
hopes that no stockholder will exercise dissenter's right. Under the Merger
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Agreement, the Board of Directors may abandon the Merger, even after stockholder
approval, if for any reason the Board of Directors determines that it is
inadvisable to proceed with the Merger, including considering the number
of shares for which appraisal rights have been exercised and the cost to the
Company thereof.
Federal Income Tax Consequences
Holders of the Company's Common Stock who do not exercise their
dissenter's rights will not recognize gain or loss for federal income tax
purposes as a result of the Merger and the conversion of their shares into
shares of the Delaware Company. The basis of the shares of the Delaware Company
in the hands of each stockholder will be the same as the basis of the holder's
shares of the Company, and the holding period for shares of the Delaware Company
will include the holding period for shares of the Company, provided that the
shares of the Company were held as capital assets at the date of the Merger.
Stockholders who exercise their dissenter's rights to obtain payment for their
shares will recognize such gain or loss.
Vote Required for Approval of the Reincorporation Proposal
Approval of the Reincorporation Proposal will require the affirmative
vote of two-thirds of the outstanding shares of Common Stock of the Company
entitled to vote thereon at the Annual Meeting. Proxies solicited by the Board
of Directors will be voted for the Reincorporation Proposal, unless stockholders
specify otherwise.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS
VOTE FOR THE REINCORPORATION PROPOSAL.
PROPOSAL NO. 5 - APPROVAL OF THE SWISSRAY INTERNATIONAL, INC.
1999 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. Thereafter, the Board of Directors approved the SWISSRAY
International, Inc. 1997 Stock Option Plan. The purpose of the Stock Option
Plans are (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, consultants, attorneys and advisors for their services
to the Company and (ii) to give the Company additional flexibility in
compensating employees and other individuals with stock options. No options were
granted under the 1997 Stock Option Plan.
The Board of Directors in March 1999 adopted the Company's 1999
Non-Statutory Stock Option Plan so as to provide a critical long-term incentive
for employees, non-employee directors, consultants, attorneys and advisors of
the Company and its subsidiaries. The Board of Directors believes that the
Company's policy of granting stock options to such persons will continue to
provide it with a critical advantage in attracting and retaining qualified
candidates. In addition, the Stock Option Plan is intended to provide the
Company 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, consultants, attorneys and advisors
to 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 1999 Non-Statutory Stock Option Plan which includes
incentives for motivating employees of the Company, while at the same time
promoting a closer identity of interest between employees, non-employee
directors, consultants, attorneys and advisors 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 D.
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. 1999 Non-Statutory Stock
Option Plan
The purpose of the Non-Statutory Stock Option Plan ("Plan"), attached
hereto as Exhibit D, is to provide directors, officers and employees of,
consultants, attorneys and advisors to the Company and its subsidiaries with
additional incentives by increasing their ownership interest in the Company.
Directors, officers and other employees of the Company and its subsidiaries are
eligible to participate in the Plan. Options in the form of Non-Statutory Stock
Options ("NSO") may also be granted to directors who are not employed by the
Company and consultants, attorneys and advisors to the Company providing
valuable services to the Company and its subsidiaries. In addition, individuals
who have agreed to become an employee of, director of or an attorney, consultant
or advisor to the Company and/or its subsidiaries are eligible for option
grants, conditional in each case on actual employment, directorship or attorney,
advisor and/or consultant status. The Plan provides for the issuance of NSO's
only, which are not intended to qualify as "incentive stock options" within the
meaning of Section 422 of the Internal Revenue Code, as amended.
The maximum number of options that may be granted under this Plan shall
be options to purchase 3,000,000 shares of Common Stock.
The Board of Directors of the Company or a Compensation Committee (once
established) will administer the Stock Option Plan with the discretion generally
to determine the terms of any option grant, including the number of option
shares, exercise price, term, vesting schedule and the post-termination exercise
period. Notwithstanding this discretion (i) the term of any option may not
exceed 10 years and (ii) an option will terminate as follows: (a) if such
termination is on account of termination of employment for any reason other than
death, without cause, such options shall terminate one year thereafter; (b) if
such termination is on account of death, such options shall terminate 15 months
thereafter; and (c) if such termination is for cause (as determined by the Board
of Directors and/or Compensation Committee), such options shall terminate
immediately. Unless otherwise determined by the Board of Directors or
Compensation Committee, the exercise price per share of Common Stock subject to
an option shall be equal to no less than 110% of the fair market value of the
Common Stock on the date such option is granted. No NSO shall be assignable or
otherwise transferable except by will or the laws of descent and distribution.
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 wil not necessarily be required for
amendments which might increase the cost of the Stock Option Plan or broaden
eligibility except that no amendment or alteration to the Plan shall be made
without the approval of stockholders which would (a) increase the total number
of shares reserved for the purposes of the Plan or decrease the NSO price
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(except as provided in paragraph 9 of the Plan) or change the classes of persons
eligible to participate in the Plan or (b) extend the NSO period or (c)
materially increase the benefits accruing to Plan participants or (d) materially
modify Plan participation eligibility requirements or (e) extend the expiration
date of the Plan. Unless otherwise indicated the Stock Option Plan will remain
in effect until terminated by the Board of Directors.
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. Upon exercising a NSO, 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.
The 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.
Additionally, the following tax effects on Stock Option Plan
participation may be considered:
Tax Treatment to the Participants. The Stock Option Plan provides for
the grant of nonqualified stock options. A description of these options and
certain federal income tax aspects associated therewith is set forth below.
Because tax results may vary due to individual circumstances, each participant
in the Stock Option Plan is urged to consult his personal tax adviser with
respect to the tax consequences of the exercise of an option or the sale of
stock received upon the exercise thereof, especially with respect to the effect
of state tax laws.
Federal Income Tax Treatment of Nonqualified Stock Options. No income
is recognized by an optionee when a non-qualified stock option is granted.
Except as described below, upon exercise of a nonqualified stock option, an
optionee is treated as having received ordinary income at the time of exercise
in an amount equal to the difference between the option price paid and the then
fair market value of the Common Stock acquired. The Company is entitled to a
deduction at the same time and in a corresponding amount. The optionee's basis
in the Common Stock acquired upon exercise of a nonqualified stock option is
equal to the option price plus the amount of ordinary income recognized, and any
gain or loss thereafter recognized upon disposition of the Common Stock is
treated as capital gain or loss.
Stock acquired by "insiders' (i.e., officers, directors or persons holding 10%
or more of the stock of the Company who are subject to the restrictions on
short-swing trading imposed by Section 16(b) of the Securities Exchange Act of
1934) upon exercise of nonqualified stock options constitutes "restricted
property" and, unless the optionee elects otherwise, the recognition of income
upon exercise is deferred to the date upon which the stock acquired upon
exercise may first be sold without incurring Section 16(b) liability (generally
six months after exercise). If such an optionee does not elect to recognize
income upon exercise, the insider will realize ordinary income in an amount
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equal to the difference between the option price and the fair market value on
the date the stock may first be sold without incurring Section 16(b) liability.
Vote Required for Approval
The affirmative vote of a majority of the outstanding shares of the
Common Stock present in persons 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 THE STOCKHOLDERS VOTE FOR
THE ADOPTION OF THE COMPANY'S 1999 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 a
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 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.
STOCKHOLDERS PROPOSALS AND NOMINATIONS FOR THE 1999
ANNUAL MEETING OF STOCKHOLDERS
The Company anticipates that the 1999 Annual Meeting will be held on or
about December 15, 1999 and that the proxy materials for the 1999 Annual Meeting
will be mailed on or before November 15, 1999. If any stockholder wishes a
proposal to be considered for inclusion in the 1999 Proxy Statement, this
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material must be received by the Chief Executive Officer no later than September
13, 1999.
ANNUAL REPORT
The Company's Annual Report for the fiscal year ended June 30, 1998 is
being mailed on or about June 21, 1999, together with this Notice of Annual
Meeting of Stockholders, Proxy Statement and Proxy to each stockholder of record
on June 10, 1999.
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
June 21, 1999
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EXHIBIT INDEX
Number Description
Exhibit A Delaware Certificate of Incorporation (1)
Exhibit B Agreement and Plan of Merger of SWISSRAY International, Inc. (New
York) and SWISSRAY International, Inc. (Delaware) (1)
Exhibit C Amended New York Certificate of Incorporation (2)
Exhibit D 1999 Non-Statutory Stock Option Plan
_____________
(1) To be utilized if both Proposals 3 and 4 are approved and to be
utilized (without creation of class of Preferred Stock) if Proposal 4
is approved but Proposal 3 is not.
(2) To be used if Proposal 3 is approved but Proposal 4 is not approved.
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CERTIFICATE OF INCORPORATION
OF
SWISSRAY INTERNATIONAL, INC.
The undersigned, a natural person, for the purpose of organizing a
corporation for conducting the business and promoting the purposes hereinafter
stated, under the proviso and subject to the requirements of the Laws of the
State of Delaware (particularly Chapter 1 Title 8 of the Delaware Code and the
acts amendatory thereof and supplemental thereto, and known, identified and
referred to as the "General Corporation Law of the State of Delaware"), hereby
certifies that:
FIRST: The name of the corporation (hereinafter called the
"Corporation") is SWISSRAY International, Inc.
SECOND: The address, including street number, city and county, of the
registered office of the Corporation in the State of Delaware is Corporation
Trust Center, 1209 Orange Street, City of Wilmington, County of New Castle, and
the name of the registered agent of the Corporation in the State of Delaware at
such address is The Corporation Trust Company.
THIRD: The purpose of the corporation is to engage in any lawful act
or activity for which corporations may be organized under the General
Corporation Law of Delaware.
The foregoing provisions of this Article THIRD shall be construed both
as purposes and powers and each as an independent purpose and power. The
foregoing enumeration of specific purposes and powers shall not be held to limit
or restrict in any manner the purposes and powers of the Corporation, and the
purposes and powers herein specified shall, except when otherwise provided in
this Article THIRD, be in no way limited or restricted by reference to, or
inference from, the terms of any provision of this or any other Article of this
Certificate of Incorporation; provided, that the Corporation shall not conduct
any business, promote any purpose, or exercise any power or privilege within or
without the State of Delaware which, under the laws thereof, the Corporation may
not lawfully conduct, promote, or exercise.
FOURTH: The total number of shares of Common Stock which the
Corporation shall have authority to issue is Fifty-One Million (51,000,000)
shares, of which Fifty Million (50,000,000) shall be Common Stock, par value
$.0001 per share without cumulative voting rights and without any preemptive
rights and One Million (1,000,000) shall be Preferred Stock, par value $.0001
per share.
The Board of Directors of the Corporation is expressly authorized at
any time, and from time to time, to provide for the issuance of shares of
Preferred Stock in one or more series, with such designations, preferences and
relative, participating, optional or other special rights, and qualifications,
limitations, or restrictions thereof, as shall be stated and expressed in the
resolution or resolutions providing for the issue thereof adopted by the Board
of Directors.
FIFTH: The name and mailing address of the incorporator is as follows:
Name Mailing Address
Ruedi G. Laupper SWISSRAY International, Inc.
320 West 77nd Street
New York, New York 10024
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SIXTH: The Corporation is to have perpetual existence.
SEVENTH:Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this Corporation under
the provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this Corporation under the provisions of Section 279 of Title 8 of the
Delaware Code order a meeting of creditors or class of creditors, and/or of the
stockholders or class of stockholders of this Corporation, as the case may be,
to be summoned in such manner as the said court directs. If a majority in number
representing three-fourths in value of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of this Corporation, as the
case may be, agree to any compromise or arrangement and to reorganization of
this Corporation as consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which the said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders, of this Corporation, as the case may be, and also on this
Corporation.
EIGHTH: For the management of the business and for the conduct of the
affairs of the Corporation, and in further definition, limitation and regulation
of the powers of the Corporation and of its directors and of its stockholders or
any class thereof, as the case may be, it is further provided:
1. The management of the business and the conduct of the affairs of the
Corporation shall be vested in its Board of Directors. The number of
Directors which shall constitute the whole Board of Directors shall be
fixed by, or in the manner provided in, the By-Laws. The phrase "whole
Board" and the phrase "total number of Directors" shall be deemed to
have the same meaning, to wit, the total number of Directors which the
Corporation would have if there were no vacancies. No election of
Directors need be by written ballot.
2. After the original or other By-Laws of the Corporation have been
adopted, amended or repealed as the case may be, in accordance with the
provisions of Section 109 of the General Corporation Law of the State
of Delaware, and, after the Corporation has received any payment for
any of its stock, the power to adopt, amend, or repeal the By-Laws of
the Corporation may be exercised by the Board of Directors of the
Corporation; provided, however, that any provision for the
classification of Directors of the Corporation for staggered terms
pursuant to the provisions of subsection (d) of Section 141 of the
General Corporation Law of the State of Delaware shall be set forth in
an initial By-Law or in a By-Law adopted by the stockholders entitled
to vote of the Corporation unless provisions for such classification
shall be set forth in this Certificate of Incorporation.
3. Whenever the Corporation shall be authorized to issue only one class
of stock, each outstanding share shall entitle the holder thereof to
notice of, and the right to vote at, any meeting of stockholders.
Whenever the Corporation shall be authorized to issue more than one
class of stock no outstanding share of any class of stock which is
denied voting power under the provisions of the Certificate of
Incorporation shall entitle the holder thereof to the right to vote
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at any meeting of stockholders except as the provisions of paragraph
(c)(2) of Section 242 of the General Corporation Law of the State of
Delaware shall otherwise require; provided, that no share of any such
class which is otherwise denied voting power shall entitle the holder
thereof to vote upon the increase or decrease in the number of
authorized shares of aid class.
NINTH: The personal liability of the directors of the Corporation is
hereby eliminated to the fullest extent permitted by the provisions of paragraph
(7) of subsection (b) of Section 102 of the General Corporate Law of the State
of Delaware, as the same may be amended and supplemented. No amendment or repeal
of this Article NINTH shall apply to or have any effect on the liability or
alleged liability of any director of this Corporation for or with respect to any
acts or omissions of such director occurring prior to such amendment or repeal.
TENTH: The Corporation shall, to the fullest extent permitted by
Section 145 of the General Corporation Law of the State of Delaware, as the same
may be amended and supplemented, indemnify any and all persons whom it shall
have power to indemnify under said section from and against any and all of the
expenses, liabilities or other matters referred to in or covered by said
section, and the indemnification provided for herein shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any By-Law, agreement, vote of stockholders or disinterested Directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be director, officer, employee or agent and shall inure to the
benefit of the heirs, executors and administrators of such a person.
ELEVENTH:From time to time any of the provisions of this Certificate
of Incorporation may be amended, altered or repealed, and other provisions
authorized by the laws of the State of Delaware at the time in force may be
added or inserted in the manner and at the time prescribed by said laws, and all
rights at any time conferred upon the stockholders of the Corporation by this
Certificate of Incorporation are granted subject to the provisions of this
Article TENTH.
TWELFTH:No Director of the Corporation shall be liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a Director, except for liability (i) for any breach of the Director's
duty of loyalty to the Corporation or its stockholders; (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law; (iii) for the payment of unlawful dividends or unlawful stock
repurchases or redemptions under Section 174 of the Delaware General Corporation
Law; or (iv) for any transaction from which the Director derived an improper
personal benefit.
THIRTEENTH:The Board of Directors of the Corporation, when evaluating
any offer of another party (a) to make a tender or exchange offer for any equity
security of the Corporation or (b) to effect a business combination, shall, in
connection with the exercise of its judgment in determining what is in the best
interests of the Corporation as a whole, be authorized to give due consideration
to any such factors as the Board of Directors determines to be relevant,
including without limitation:
a. the interests of the Corporation's stockholders;
b. whether the proposed transaction might violate federal or state laws;
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c. not only the consideration being offered in the proposed transaction, in
relation to the then current market price for the outstanding capital
stock of this Corporation, but also to the market price for the capital
stock of the Corporation over a period of years, the estimated price that
might be achieved in a negotiated sale of the Corporation as a whole or
in part or through orderly liquidation, the premiums over market price for
the securities of other corporations in similar transactions, current
political, economic and other factors bearing on securities prices and the
Corporation's financial condition and future prospects; and
d. the social, legal and economic effects upon employees, suppliers,
customers and others having similar relationships with the Corporation,
and the communities in which the Corporation conducts its business.
In connection with any such evaluation, the Board of Directors is authorized to
conduct such investigations and engage in such legal proceedings as the Board of
Directors may determine.
FOURTEENTH: Notwithstanding any other provisions of this Certificate of
Incorporation or the By-laws (and notwithstanding the fact that a lesser
percentage may be specified by law, this Certificate of Incorporation or the
By-laws of this Corporation), the affirmative vote of 75% of the total number of
votes of the then outstanding shares of capital stock of the Corporation
entitled to vote generally in the election of directors voting together as a
single class, shall be required to amend or repeal, or to adopt any provision
inconsistent with the purpose or intent of ARTICLE THIRTEEN hereof.
FIFTEENTH:The effective date of the Certificate of Incorporation of the
Corporation, and the date upon which the existence of the Corporation shall
commence, shall be its date of filing.
Signed: New York, New York
July , 1999
Ruedi G. Laupper, Incorporator
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AGREEMENT AND PLAN OF MERGER
OF
SWISSRAY International, Inc. (A New York Corporation)
and
SWISSRAY International, Inc. (A Delaware Corporation)
AGREEMENT AND PLAN OF MERGER, dated as of July , 1999, by and between SWISSRAY
International, Inc. a New York corporation ("SRMI"), and SWISSRAY International,
Inc., a Delaware corporation ("Surviving Corporation").
WITNESSETH:
SRMI is a corporation duly organized and existing under the laws of the State of
New York.
Surviving Corporation is a corporation duly organized and existing under the
laws of the State of Delaware.
The authorized number of shares of SRMI is 50,000,000 shares of Common Stock,
$.01 par value.
The authorized number of shares of Surviving Corporation is 51,000,000 shares of
which 50,000,000 shares shall be Common Stock, $ .0001 par value per share and
1,000,000 shares shall be Preferred Shares, $.0001 par value per share.
The Boards of Directors of SRMI and Surviving Corporation deem it advisable for
the mutual benefit of SRMI and Surviving Corporation, and their respective
stockholders, that SRMI be merged with and into Surviving Corporation and have
approved this Agreement and Plan of Merger (the "Agreement").
NOW, THEREFORE, in consideration of the premises and of the mutual covenants,
agreements and provisions hereinafter contained, the parties hereto agree that,
in accordance with the applicable laws of the States of New York and Delaware,
SRMI shall be, at the Effective Date of the Merger (as hereinafter defined),
merged with and into Surviving Corporation, which shall be the surviving
corporation, and that the terms and conditions of such merger and the mode of
carrying it into effect shall be as follows:
ARTICLE I
Merger
1.1 On the Effective Date of the Merger, SRMI shall be merged with and into
Surviving Corporation. The separate existence of SRMI shall cease and Surviving
Corporation shall continue in existence and, without other transfer, succeed to
and posses all the properties, rights, privileges, immunities, powers, purposes
and franchises, of a public, as well as of a private nature, and shall be
subject to all of the obligations, liabilities, restrictions, disabilities and
duties of SRMI and Surviving Corporation, all without further act or deed, as
provided in Section 259 of the Delaware General Corporation Law.
1.2 All rights of creditors and all liens upon the property of either SRMI or
Surviving Corporation shall be preserved unimpaired by the Merger, and all
debts, liabilities, obligations and duties, including, but not limited to, the
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obligations of SRMI pursuant to any existing guarantees, leases, stock options
or other contracts or agreements, of either SRMI or Surviving Corporation shall,
on the Effective Date of the Merger, become the responsibility and liability of
Surviving Corporation, and may be enforced against it to the same extent as if
said debts, liabilities, obligations and duties had been incurred or contracted
by it. All corporate acts, plans (including but not limited to stock option
plans), policies, arrangements, approvals and authorizations of SRMI, its
shareholders, board of directors, officers and agents, which were valid and
effective immediately prior to the Effective Date of the Merger, shall be taken
for all purposes as t he acts, plans, policies, arrangements, approvals and
authorizations of Surviving Corporation and shall be as effective and binding
thereon as the same were with respect to SRMI.
1.3 Prior to the Effective Date of the Merger, SRMI and Surviving Corporation
shall take all such action as shall be necessary or appropriate in order to
effectuate the Merger. In case at any time after the Effective Date of the
Merger Surviving Corporation shall determine that any further conveyance,
assignment or other documents or any further actions necessary or desirable to
vest in or confirm to Surviving Corporation full title to all the properties,
assets, rights, privileges and franchises of SRMI, the officers and directors of
SRMI, at the expense of Surviving Corporation, shall execute and deliver all
such instruments and take all such action as Surviving Corporation may determine
to be necessary or desirable in order to vest in and confirm to Surviving
Corporation title to and possession of all such properties, assets, rights,
privileges and franchises, and otherwise to carry out the purposes of this
Agreement.
ARTICLE II
Terms and Conditions of the Merger
The terms and conditions of the Merger, including the manner and basis of
converting the shares of capital stock of SRMI into shares of capital stock of
Surviving Corporation shall be as follows:
2.1 Certificate of Incorporation. From and after the Effective Date of the
Merger and until thereafter amended as provided by law, the Certificate of
Incorporation of Surviving Corporation in effect on the date hereof, as set
forth in Exhibit A shall be the Certificate of Incorporation of Surviving
Corporation.
2.2 By-laws. The By-laws of SRMI and/or Surviving Corporation, as the case may
be, in effect on the Effective Date of the Merger shall continue in force and be
the By-laws of Surviving Corporation until altered, amended or repealed.
2.3 Directors and Officers. The directors and officers of SRMI in office on the
Effective Date of the Merger shall continue in office as, and be and constitute,
the directors and officers of Surviving Corporation, each to hold office as
provided by the By-laws until his successor shall have been elected and shall
have qualified or until his earlier death, resignation or removal.
2.4 Conversion of Outstanding Shares, Rights and Options. The manner and basis
of converting the shares, rights and options to purchase shares of SRMI into
shares, rights and options to purchase shares of Surviving Corporation, and the
cancellation and retirement of shares of Surviving Corporation, shall be as
follows:
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2.4.1 Each share of Common Stock, par value $ .01 per share, of SRMI issued and
outstanding, or held in the treasury of SRMI, on the Effective Date of the
Merger shall forthwith and without the surrender of stock certificates or any
other action, be converted into the fully-paid and non-assessable share of
Common Stock, par value $ .0001 per share, of Surviving Corporation, issued and
outstanding or held in the treasury of Surviving Corporation, as the case may
be.
2.4.2 Each option or right to purchase shares of Common Stock, par value $ .01
per share, of SRMI which has been granted pursuant to any stock option plan or
financing of any nature of SRMI or otherwise, on the Effective Date of the
Merger shall forthwith and without any action by the holder of such option or
right, be converted into an option to purchase the same number of shares of
Common Stock, par value $ .0001 per share, of Surviving Corporation on the same
terms and with the same exercise price as such options contained immediately
prior to the Effective Date of the Merger.
2.5 Dividends. The holders of shares of Common Stock of SRMI shall be entitled
to receive from Surviving Corporation (i) those dividends, if any, which were
declared by the Board of Directors of SRMI prior to, but not yet paid, as of the
Effective Date of the Merger and (ii) those dividends which may be declared by
the Board of Directors of Surviving Corporation subsequent to the Effective Date
of the Merger pursuant to the Certificate of Incorporation of Surviving
Corporation, and no holder of shares of Common Stock of SRMI shall be entitled
to any other dividends which might otherwise accrue on or prior to the Effective
Date of the Merger.
ARTICLE III
Procedures Regarding Stock Certificates
From and after the Effective Date, each outstanding stock certificate
theretofore representing shares of Common Stock of SRMI shall represent the same
number of shares of Common Stock of Surviving Corporation. Each holder of a
certificate or certificates theretofore representing shares of Common Stock of
SRMI may, but shall not be required to, surrender the same to Surviving
Corporation for cancellation and exchange or transfer, and such holder or his
transferee shall be entitled to receive certificates representing one share of
the Common Stock of Surviving Corporation for each of Common Stock of SRMI
represented by the certificates surrendered. Until so surrendered for
cancellation and exchange or transfer each outstanding certificate which, prior
to the Effective Time, represented shares of Common Stock of SRMI, shall be
deemed and treated for all purposes to represent the ownership of the same
number of shares of the Common Stock of Surviving Corporation as though such
surrender had taken place.
ARTICLE IV
Effective Date
This Agreement shall be submitted to the stockholder of Surviving Corporation
and the shareholders of SRMI at meetings which shall be convened on or prior to
March 24, 1999, or such other dates as may be agreed on by the parties, as
provided by the applicable laws of the States of New York and Delaware. If this
Agreement is duly authorized and adopted by the requisite votes of the holder of
Common Stock of Surviving Corporation and holders of Common Stock of SRMI and
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this Agreement is not terminated pursuant to the provisions of Article V hereof,
then a certificate of merger shall be filed in accordance with the laws of the
State of Delaware and a certificate of merger shall be filed in accordance with
the laws of the State of New York. The Merger shall become effective upon the
filing of the certificates of merger with the Secretaries of State of the States
of New York and Delaware (the "Effective Date of the Merger").
ARTICLE V
Approval of Shareholders --- Termination
5.1 This Agreement shall be submitted to the shareholders of SRMI and the
stockholders of Surviving Corporation as provided by law, and it shall take
effect and be deemed and be taken to be the Agreement and Plan of Merger of SRMI
and Surviving Corporation upon the approval or adoption thereof by the
shareholders of SRMI and the stockholder of Surviving Corporation, in accordance
with the requirements of the laws of the State of New York and the State of
Delaware, and upon the execution, filing and recording of such documents and the
doing of such other acts and things as shall be required for accomplishing the
merger under the provisions of the applicable statutes of the State of New York
and of the State of Delaware.
5.2 At any time prior to the filing of the certificates of merger with the
Secretary of State of the States of Delaware and New York, this Agreement may be
terminated by the board of directors of either SRMI or Surviving Corporation,
notwithstanding the approval of this Agreement by either or both of the
shareholders of SRMI and the stockholders of Surviving Corporation, if for any
reason the board of directors of SRMI or Surviving Corporation determines that
it is inadvisable to proceed with the Merger, including, without limitation,
giving consideration to the number of shares for which appraisal rights have
been exercised and the cost to SRMI thereof.
5.3 In the event of the termination and abandonment of this Agreement pursuant
to the provisions of Section 5.2, this Agreement shall become null and void and
have no effect, without any liability on the part of either SRMI or Surviving
Corporation or any of their respective shareholders, stockholders, directors or
officers.
ARTICLE VI
Certain Agreements of Surviving Corporation
6.1 Surviving Corporation, as the surviving corporation, hereby agrees that it
may be served with process in the State of New York in any proceeding for the
enforcement of any liability or obligation of SRMI or of the rights of
dissenting shareholder of SRMI.
6.2 Surviving Corporation, as the surviving corporation, hereby irrevocably
appoints the Secretary of the State of New York as its agent to accept service
of process in any action or proceeding described in Section 6.1.
6.3 Surviving Corporation, as the surviving corporation, hereby agrees that it
will promptly pay to dissenting shareholders, if any, of SRMI the amount, if
any, to which such dissenting shareholders shall be entitled pursuant to the
laws of the State of New York.
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ARTICLE VII
Miscellaneous
7.1 This Agreement may be executed in any number of counterparts, each of which
shall be an original, but such counterparts shall together constitute but one
and the same instrument.
7.2 The headings of the several articles herein have been inserted for
convenience of reference only and are not intended to be a part or to affect the
meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, each of SRMI and Surviving Corporation, pursuant to
authority duly given by resolutions adopted by its Board of Directors has caused
these presents to be executed in its name by its President or a Vice-President
and its corporate seal to be affixed and attested by its Secretary or an
Assistant Secretary.
(Corporate Seal) SWISSRAY INTERNATIONAL, INC.
(New York)
Attest:
By:
_________________________
Josef Laupper, Secretary
(Corporate Seal) SWISSRAY INTERNATIONAL, INC.
(Delaware)
Attest:
By:
_________________________
Josef Laupper, Secretary
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CERTIFICATE OF AMENDMENT OF
CERTIFICATE OF INCORPORATION OF
SWISSRAY International, Inc.
------------------------------------
UNDER SECTION 805 OF THE BUSINESS CORPORATION LAW
WE, THE UNDERSIGNED, Ruedi G. Laupper and Josef Laupper, being
respectively the president and the secretary of SWISSRAY International, Inc.
hereby certify:
1. The name of the corporation is SWISSRAY International, Inc.
2. The certificate of incorporation of said corporation was filed
with the Department of State on the 2nd day of January. 1968 under the name CGS
Units Incorporated.
3. That the amendment to the Certificate of Incorporation
effected by this Certificate is as follows:
Article 4 of the Certificate of Incorporation is amended to
add 1,000,000 shares of Preferred Stock, $.01 par value, and shall read
as follows:
"4. The total number of shares authorized which the
corporation shall have authority to issue is 51,000,000
shares, of which 50,000,000 shares shall be Common Stock, par
value $.01 per share without cumulative voting rights and
without any preemptive rights and 1,000,000 shares shall be
Preferred Stock, par value $.01 per share."
The Board of Directors of the Corporation is expressly authorized at
any time, and from time to time, to provide for the issuance of shares of
Preferred Stock in one or more series, with such designations, preferences and
relative, participating, optional or other special rights, and qualifications,
limitations, or restrictions thereof, as shall be stated and expressed in the
resolution or resolutions providing for the issue thereof adopted by the Board
of Directors.
4. The amendment to the Certificate of Incorporation was
authorized by an affirmative vote of the holders of at least a majority of all
outstanding shares entitled to vote on an amendment to the Certificate of
Incorporation at the Annual Meeting of Shareholders. Said authorization being
subsequent to the affirmative vote of the Board of Directors
IN WITNESS WHEREOF, we hereunto sign our names and affirm that the
statements made herein are true under the penalties of perjury, this ____ day of
July, 1999.
---------------------------
Ruedi G. Laupper, President
---------------------------
Josef Laupper, Secretary
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SWISSRAY International, Inc.
1999 NON-STATUTORY STOCK OPTION PLAN
1. Purpose of this Plan.
This Non-Statutory Stock Option Plan (the "Plan") is intended as an
employment incentive, to aid in attracting and retaining in the employ or
service of SWISSRAY International, Inc. (the "Company"), a New York corporation,
and any Affiliated Corporation, persons of experience and ability and whose
services are considered valuable, to encourage the sense of proprietorship in
such persons, and to stimulate the active interest of such persons in the
development and success of the Company. This Plan provides for the issuance of
non-statutory stock options ("NSOs" or "Options") which are not intended to
qualify as "incentive stock options" within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code").
2. Administration of this Plan.
The Company's Board of Directors ("Board") may appoint and maintain as
administrator of this Plan the Compensation Committee (the "Committee") of the
Board which shall consist of at least three members of the Board. Until such
time as the Committee is duly constituted, the Board itself shall have and
fulfill the duties herein allocated to the Committee. The Committee shall have
full power and authority to designate Plan participants, to determine the
provisions and terms of respective NSOs (which need not be identical as to
number of shares covered by any NSO, the method of exercise as related to
exercise in whole or in installments, or otherwise), including the NSO price,
and to interpret the provisions and supervise the administration of this Plan.
The Committee may, in its discretion, provide that certain NSOs not vest (that
is, become exercisable) until expiration of a certain period after issuance or
until other conditions are satisfied, so long as not contrary to this Plan.
A majority of the members of the Committee shall constitute a quorum.
All decisions and selections made by the Committee pursuant to this Plan's
provisions shall be made by a majority of its members. Any decision reduced to
writing and signed by all of the members shall be fully effective as if it had
been made by a majority at a meeting duly held. The Committee shall select one
of its members as its chairman and shall hold its meetings at such times and
places as it deems advisable. If at any time the Board shall consist of seven or
more members, then the Board may amend this Plan to provide that the Committee
shall consist only of Board members who shall not have been eligible to
participate in this Plan (or similar stock or stock option plan) of the Company
or its affiliates at any time within one year prior to appointment to the
Committee.
All NSOs granted under this Plan are subject to, and may not be
exercised before, the approval of this Plan by the holders of a majority of the
Company's outstanding shares, and if such approval is not obtained, all NSOs
previously granted shall be void. Each NSO shall be evidenced by a written
agreement containing terms and conditions established by the Committee
consistent with the provisions of this Plan.
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3. Designation of Participants.
The persons eligible for participation in this Plan as recipients of
NSOs shall include full-time and part-time employees (as determined by the
Committee) and officers of the Company or of an Affiliated Corporation. In
addition, directors of the Company or any Affiliated Corporation who are not
employees of the Company or an Affiliated Corporation and any attorney,
consultant or other adviser to the Company or any Affiliated Corporation shall
be eligible to participate in this Plan. For all purposes of this Plan, any
director who is not also a common law employee and is granted an option under
this Plan shall be considered an "employee" until the effective date of the
director's resignation or removal from the Board of Directors, including removal
due to death or disability. The Committee shall have full power to designate,
from among eligible individuals, the persons to whom NSOs may be granted. A
person who has been granted an NSO hereunder may be granted an additional NSO or
NSOs, if the Committee shall so determine. The granting of an NSO shall not be
construed as a contract of employment or as entitling the recipient thereof to
any rights of continued employment.
4. Stock Reserved for this Plan.
Subject to adjustment as provided in Paragraph 9 below, a total of
3,000,000 shares of Common Stock ("Stock"), of the Company shall be subject to
this Plan. The Stock subject to this Plan shall consist of unissued shares or
previously issued shares reacquired and held by the Company or any Affiliated
Corporation, and such amount of shares shall be and is hereby reserved for
sale for such purpose. Any of such shares which may remain unsold and which are
not subject to outstanding NSOs at the termination of this Plan shall cease to
be reserved for the purpose of this Plan, but until termination of this Plan,
the Company shall at all times reserve a sufficient number of shares to meet
the requirements of this Plan. Should any NSO expire or be canceled prior to its
exercise in full, the unexercised shares theretofore subject to such NSO may
again be subjected to an NSO under this Plan.
5. Option Price.
The purchase price of each share of Stock placed under NSO shall not be
less than fifty percent (50%) of the fair market value of such share on the date
the NSO is granted. The fair market value of a share on a particular date shall
be deemed to be the average of either (i) the highest and lowest prices at which
shares were sold on the date of grant, if traded on a national securities
exchange, (ii) the high and low prices reported in the consolidated reporting
system, if traded on a "last sale reported" system, such as NASDAQ, or (iii) the
high bid and high asked price for over-the-counter securities.If no transactions
in the Stock occur on the date of grant, the fair market value shall be
determined as of the next earliest day for which reports or quotations are
available. If the common shares are not then quoted on any exchange or in any
quotation medium at the time the option is granted, then the Board of
Directors or Committee will use its discretion in selecting a good faith value
believed to represent fair market value based on factors then known to them. The
cash proceeds from the sale of Stock are to be added to the general funds of the
Company.
6. Exercise Period.
(a) The NSO exercise period shall be a term of not more than ten (10)
years from the date of granting of each NSO and shall automatically terminate:
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(i) Upon termination of the optionee's employment with the
Company for cause;
(ii) At the expiration of twelve (12) months from the date of
termination of the optionee's employment with the Company for any reason other
than death, without cause; provided, that if the optionee dies within such
twelve-month period, subclause (iii) below shall apply; or
(iii)At the expiration of fifteen (15) months after the date
of death of the optionee.
(b) "Employment with the Company" as used in this Plan shall include
employment with any Affiliated Corporation, and NSOs granted under this Plan
shall not be affected by an employee's transfer of employment among the Company
and any Parent or Subsidiary thereof. An optionee's employment with the Company
shall not be deemed interrupted or terminated by a bona fide leave of absence
(such as sabbatical leave or employment by the Government) duly approved,
military leave, maternity leave or sick leave.
7. Exercise of Options.
(a) The Committee, in granting NSOs, shall have discretion to determine
the terms upon which NSOs shall be exercisable, subject to applicable provisions
of this Plan. Once available for purchase, unpurchased shares of Stock shall
remain subject to purchase until the NSO expires or terminates in accordance
with Paragraph 6 above. Unless otherwise provided in the NSO, an NSO may be
exercised in whole or in part, one or more times, but no NSO may be exercised
for a fractional share of Stock.
(b) NSOs may be exercised solely by the optionee during his lifetime,
or after his death (with respect to the number of shares which the optionee
could have purchased at the time of death) by the person or persons entitled
thereto under the decedent's will or the laws of descent and distribution.
(c) The purchase price of the shares of Stock as to which an NSO is
exercised shall be paid in full at the time of exercise and no shares of Stock
shall be issued until full payment is made therefor. Payment shall be made
either (i) in cash, represented by bank or cashier's check, certified check or
money order (ii) in lieu of payment for bona fide services rendered, and such
services were not in connection with the offer or sale of securities in a
capital raising transaction, (iii) by delivering shares of the Company's Common
Stock which have been beneficially owned by the optionee, the optionee's spouse,
or both of them for a period of at least six (6) months prior to the time of
exercise (the "Delivered Stock") in a number equal to the number of shares of
Stock being purchased upon exercise of the NSO or (iv) by delivery of shares of
corporate stock which are freely tradeable without restriction and which are
part of a class of securities which has been listed for trading on the NASDAQ
system or a national securities exchange, with an aggregate fair market value
equal to or greater than the exercise price of the shares of Stock being
purchased under the NSO, or (v) a combination of cash, services, Delivered Stock
or other corporate shares. An NSO shall be deemed exercised when written notice
thereof, accompanied by the appropriate payment in full, is received by the
Company. No holder of an NSO shall be, or have any of the rights and privileges
of, a shareholder of the Company in respect of any shares of Stock purchasable
upon exercise of any part of an NSO unless and until certificates representing
such shares shall have been issued by the Company to him or her.
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8. Assignability.
No NSO shall be assignable or otherwise transferable (by the optionee
or otherwise) except by will or the laws of descent and distribution. No NSO
shall be pledged or hypothecated in any manner, whether by operation of law or
otherwise, nor be subject to execution, attachment or similar process.
9. Reorganizations and Recapitalizations of the Company.
(a) The existence of this Plan and NSOs granted hereunder shall not
affect in any way the right or power of the Company or its shareholders to make
or authorize any and all adjustments, recapitalizations, reorganizations or
other changes in the Company's capital structure or its business, or any merger
or consolidation of the Company, or any issue of bonds, debentures, preferred or
prior preference stocks ahead of or affecting the Company's Common Stock or the
rights thereof, or the dissolution or liquidation of the Company, or any sale,
exchange or transfer of all or any part of its assets or business, or the other
corporation act or proceeding, whether of a similar character or otherwise.
(b) The shares of Stock with respect to which NSOs may be granted
hereunder are shares of the Common Stock of the Company as currently
constituted. If, and whenever, prior to delivery by the Company of all of the
shares of Stock which are subject to NSOs granted hereunder, the Company shall
effect a subdivision or consolidation of shares or other capital readjustment,
the payment of a Stock dividend, a stock split, combination of shares (reverse
stock split) or recapitalization or other increase or reduction of the number of
shares of the Common Stock outstanding without receiving compensation therefor
in money, services or property, then the number of shares of Stock available
under this Plan and the number of shares of Stock with respect to which NSOs
granted hereunder may thereafter be exercised shall (i) in the event of an
increase in the number of outstanding shares, be proportionately increased, and
the cash consideration payable per share shall be proportionately reduced; and
(ii) in the event of a reduction in the number of outstanding shares, be
proportionately reduced, and the cash consideration payable per share shall be
proportionately increased.
(c) If the Company is reorganized, merged, consolidated or party to a
plan of exchange with another corporation pursuant to which shareholders of the
Company receive any shares of stock or other securities, there shall be
substituted for the shares of Stock subject to the unexercised portions of
outstanding NSOs an appropriate number of shares of each class of stock or other
securities which were distributed to the shareholders of the Company in respect
of such shares of Stock in the case of a reorganization, merger, consolidation
or plan of exchange; provided, however, that all such NSOs may be canceled by
the Company as of the effective date of a reorganization, merger, consolidation,
plan of exchange, or any dissolution or liquidation of the Company, by giving
notice to each optionee or his personal representative of its intention to do so
and by permitting the purchase of all the shares subject to such outstanding
NSOs for a period of not less than thirty (30) days during the sixty (60) days
next preceding such effective date.
(d) Except as expressly provided above, the Company's issuance of
shares of Stock of any class, or securities convertible into shares of Stock of
any class, for cash or property, or for labor or services, either upon direct
sale or upon the exercise of rights or warrants to subscribe therefor, or upon
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conversion of shares or obligations of the Company convertible into shares of
Stock or other securities, shall not affect, and no adjustment by reason thereof
shall be made with respect to, the number of shares of Stock subject to NSOs
granted hereunder or the purchase price of such shares.
10. Purchase for Investment.
Unless the shares of Stock covered by this Plan have been registered
under the Securities Act of 1933, as amended, each person exercising an NSO
under this Plan may be required by the Company to give a representation in
writing that he is acquiring such shares for his own account for investment and
not with a view to, or for sale in connection with, the distribution of any part
thereof.
11. Effective Date and Expiration of this Plan.
This Plan shall be effective as of February 1, 1999 the date of its
adoption by the Board, subject to the approval of the Company's shareholders,
and no NSO shall be granted pursuant to this Plan after its expiration. This
Plan shall expire on February 1, 2009 except as to NSOs then outstanding, which
shall remain in effect until they have expired or been exercised.
12. Amendments or Termination.
The Board may amend, alter or discontinue this Plan at any time in such
respects as it shall deem advisable in order to conform to any change in any
other applicable law, or in order to comply with the provisions of any rule or
regulation of the Securities and Exchange Commission required to exempt this
Plan or any NSOs granted thereunder from the operation of Section 16(b) of the
Securities Exchange Act of 1934, as amended ("Exchange Act"), or in any other
respect not inconsistent with Section 16(b) of the Exchange Act; provided, that
no amendment or alteration shall be made which would impair the rights of any
participant under any NSO theretofore granted, without his consent (unless made
solely to conform such NSO to, and necessary because of, changes in the
foregoing laws, rules or regulations), and except that no amendment or
alteration shall be made without the approval of shareholders which would:
(a) Increase the total number of shares reserved for the purposes of
this Plan or decrease the NSO price provided for in Paragraph 5 (except as
provided in Paragraph 9), or change the classes of persons eligible to
participate in this Plan as provided in Paragraph 3; or
(b) Extend the NSO period provided for in Paragraph 6; or
(c) Materially increase the benefits accruing to participants under
this Plan; or
(d) Materially modify the requirements as to eligibility for
participation in this Plan; or
(e) Extend the expiration date of this Plan as set forth in Paragraph
11.
13. Government Regulations.
This Plan, and the granting and exercise of NSOs hereunder, and the
obligation of the Company to sell and deliver shares of Stock under such NSOs,
shall be subject to all applicable laws, rules and regulations, and to such
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approvals by any governmental agencies or national securities exchanges as may
be required.
14. Liability.
No member of the Board of Directors, the Committee or officers or
employees of the Company or any Affiliated Corporation shall be personally
liable for any action, omission or determination made in good faith in
connection with this Plan.
15. Miscellaneous.
(a) The term "Affiliated Corporation" used herein shall mean any Parent
or Subsidiary.
(b) The term "Parent" used herein shall mean any corporation owning 50
percent or more of the total combined voting stock of all classes of the Company
or of another corporation qualifying as a Parent within this definition.
(c) The term "Subsidiary" used herein shall mean any corporation more
than 50 percent of whose total combined voting stock of all classes is held by
the Company or by another corporation qualifying as a Subsidiary within this
definition.
16. Options in Substitution for Other Options.
The Committee may, in its sole discretion, at any time during the term
of this Plan, grant new options to an employee under this Plan or any other
stock option plan of the Company on the condition that such employee shall
surrender for cancellation one or more outstanding options which represent the
right to purchase (after giving effect to any previous partial exercise thereof)
a number of shares, in relation to the number of shares to be covered by the new
conditional grant hereunder, determined by the Committee. If the Committee shall
have so determined to grant such new options on such a conditional basis ("New
Conditional Options"), no such New Conditional Option shall become exercisable
in the absence of such employee's consent to the condition and surrender and
cancellation as appropriate. New Conditional Options shall be treated in all
respects under this Plan as newly granted options. Option may be granted under
this Plan from time to time in substitution for similar rights held by employees
of other corporations who are about to become employees of the Company or an
Affiliated Corporation, or the merger or consolidation of the employing
corporation with the Company or an Affiliated Corporation, or the acquisition by
the Company or an Affiliated Corporation of the assets of the employing
corporation, or the acquisition by the Company or an Affiliated Corporation of
stock of the employing corporation as the result of which it becomes an
Affiliated Corporation.
17. Withholding Taxes.
Pursuant to applicable federal and state laws, the Company may be
required to collect withholding taxes upon the exercise of a NSO. The Company
may require, as a condition to the exercise of a NSO, that the optionee
concurrently pay to the Company the entire amount or a portion of any taxes
which the Company is required to withhold by reason of such exercise, in such
amount as the Committee or the Company in its discretion may determine. In lieu
of part or all of any such payment, the optionee may elect to have the Company
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withhold from the shares to be issued upon exercise of the option that number of
shares having a Fair Market Value equal to the amount which the Company is
required to withhold.
SWISSRAY International, Inc.
ATTEST:
By: Ruedi G. Laupper, President
By: Josef Laupper, Secretary
(SEAL)
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CERTIFICATION OF PLAN ADOPTION
I, the undersigned Secretary of this Corporation, hereby certify that
the foregoing 1999 Non-Statutory Stock Option Plan was duly approved by the
requisite number of holders of the issued and outstanding common stock of this
corporation as of July , 1999.
Josef Laupper, Secretary
(SEAL)
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OPTION AGREEMENT
The undersigned hereby grants _____________________ (pursuant to the SWISSRAY
International, Inc. 1999 Non-Statutory Stock Option Plan dated February 1, 1999
attached hereto) an option to purchase _____________________ shares of SWISSRAY
International, Inc. (the "Corporation").
Option Period. This option shall be for a period of _______ years from the date
of this Option Agreement ("Option Period").
Option Price. The option price shall be $ per share for an aggregate of $ if the
entire shares are purchased. The option price of the shares of Common Stock
shall be paid in full at the time of exercise and no shares of Common Stock
shall be issued until full payment is made therefor. Payment shall be made
either (i) in cash, represented by bank or cashier's check, certified check or
money order (ii) in lieu of payment for bona fide services rendered, and such
services were not in connection with the offer or sale of securities in a
capital-raising transaction, (iii) by delivering shares of the undersigned's
Common Stock which have been beneficially owned by the optionee, the optionee's
spouse, or both of them for a period of at least six (6) months prior to the
time of exercise (the "Delivered Stock") in a number equal to the number of
shares of Stock being purchased upon exercise of the Option or (iv) by delivery
of shares of corporate stock which are freely tradeable without restriction and
which are part of a class of securities which has been listed for trading on the
NASDAQ system or a national securities exchange, with an aggregate fair market
value equal to or greater than the exercise price of the shares of Stock being
purchased under the Option, or (v) a combination of cash, services, Delivered
Stock or other corporate shares.
Shareholder Rights. No holder of an Option shall be, or have any of the rights
and privileges of, a shareholder of the Corporation in respect of any shares of
Common Stock purchasable upon exercise of any part of an Option unless and until
certificates representing such shares shall have been issued by the Corporation
to him or her.
Determination of Exercise Date. This Option or a portion of this Option shall be
deemed exercised when written notice thereof, accompanied by the appropriate
payment in full, is received by the Corporation.
Date: ___________, 1999
SWISSRAY International, Inc.
_________________________________
By: Ruedi G. Laupper, President
_________________________________
By: Josef Laupper, Secretary
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