<PAGE>
SWISSRAY INTERNATIONAL, INC.
Proxy for 2000 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 (our) true and lawful attorney(s) with
full power of substitution, for me (us) and in my (our) name, place and stead to
vote all the Common Stock of said Company, standing in my (our) name on the
books on the record date, October 19, 2000, at the Annual Meeting of its
Stockholders to be held at the Hyatt Regency McCormick Place Hotel located at
2233 South Martin Luther King Drive, Chicago, Illinois 60616, on November 30,
2000, at 10:00 a.m., local time, or at any postponement or adjournment 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 and (c) approval of the proposal to adopt the Company's 2001 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 & Co., P.C., as
independent auditors of the Company for the fiscal year ending June 30,
2001.
[ ] For [ ] Against [ ] Abstain
The Board of Directors recommends a vote FOR approval.
3. Approval of the proposal to adopt the Company's 2001 Stock Option Plan.
[ ] For [ ] Against [ ] Abstain
The Board of Directors recommends a vote FOR approval.
4. 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.
80 Grasslands Road
Elmsford, New York 10523
October 26, 2000
Dear Stockholder:
You are cordially invited to attend the 2000 Annual Meeting (the
"Annual Meeting") of Stockholders of SWISSRAY International, Inc. (the
"Company"), which will be held at the Hyatt Regency McCormick Place Hotel
located at 2233 South Martin Luther King Drive, Chicago, Illinois 60616, on
November 30, 2000, commencing at 10:00 a.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 & Co., P.C. as the Company's independent public
accountants for the fiscal year ending June 30, 2001; (3) consider and act upon
a proposal to adopt the SWISSRAY International, Inc. 2001 Stock Option Plan and
(4) transact such other business as may properly come before the meeting and any
adjournment thereof.
The Company has chosen to hold its Annual Meeting of Stockholders on
November 30, 2000 in Chicago, Illinois so as to coincide with the Annual
Radiological Society of North America ("RSNA") Convention being held from
November 26, 2000 to November 30, 2000. In this manner Company stockholders
attending the Meeting will have an opportunity to and are urged to visit the
Company's exhibition booth and attend Company presentations and lectures
regarding both current products and products under development. Attendees will
also be able to participate in demonstrations regarding product utilization and
operation. At the 1999 RSNA Convention the Company received two awards for its
outstanding market campaign and presence: the Pro-Comm 1999 and the 2000 BMA
Tower Award, both sponsored by the Business Marketing Association. We would like
to share our success with you and invite you to visit our booth during
exhibition hours and meet with numerous Company representatives.
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, 2000 (the "Annual Report") is being mailed to you together with the
enclosed proxy materials.
Yours sincerely,
/s/Ruedi G. Laupper
Ruedi G. Laupper
Chairman of the Board,
Chief Executive Officer and President
<PAGE>
SWISSRAY INTERNATIONAL, INC.
80 Grassland Road
Elmsford, New York 10523
----------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 30, 2000
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 Hyatt Regency McCormick Place Hotel located at
2233 South Martin Luther King Drive, Chicago, Illinois 60616, on November 30,
2000, at 10:00 a.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 & Co., P.C. as the Company's independent
public accountants for the fiscal year ending June 30, 2001;
(3) To consider and act upon a proposal to adopt the SWISSRAY
International, Inc. 2001 Stock Option Plan; and
(4) 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, 2000, Proxy Statement and form of proxy are enclosed.
Only stockholders of record as of the close of business on October 19,
2000 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
/s/Ruedi G. Laupper
Ruedi G. Laupper
Chairman of the Board,
Chief Executive Officer and President
October 26, 2000
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 NOVEMBER 30, 2000
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 Hyatt Regency McCormick
Place Hotel located at 2233 South Martin Luther King Drive, Chicago, Illinois
60616, on November 30, 2000, at 10:00 a.m. (local time) and at any adjournment
thereof. Only stockholders of record as of the close of business on October 19,
2000 (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, 2000 (the "Annual Report"), are being sent or given to the stockholders on
or about October 26, 2000.
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 & Co., P.C.
as the Company's independent public accountants for the fiscal year ending June
30, 2001; (3) consider and act upon a proposal to adopt the SWISSRAY
International, Inc. 2001 Stock Option Plan (the "Stock Option Plan") and (4)
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 80 Grasslands Road, Elmsford, New
York 10523. The Company's telephone number in Switzerland is 011-41-41-914-1200
and in the United States is 914-345-3700.
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 & Co., P.C. as the Company's independent
public accountants for the fiscal year ending June 30, 2001; (3) adopt the
SWISSRAY International, Inc. 2001 Stock Option Plan and (4) 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.
1
<PAGE>
Revocation of Proxies
Any stockholder may revoke such stockholder's Proxy at any time prior
to the voting thereof on any matter (without, however, affecting any vote taken
prior to such revocation). A Proxy may be revoked by written notice of
revocation received prior to the Annual Meeting, by attending the Annual Meeting
and voting in person or by submitting a signed proxy bearing a subsequent date.
A written notice revoking a previously executed Proxy should be sent to the
Company at 80 Grasslands Road, Elmsford, New York 10523, 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 October 19, 2000, there were 23,767,129 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.
Ratification of Proposal 2 as well as stockholder approval of Proposal
3 each 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.
Votes that are withheld will be counted for purposes of determining the
presence or absence of a quorum but will have no other effect. Abstention and
broker non-votes, if any, will similarly be counted for purposes of determining
the presence or absence of a quorum but will have no other effect on the vote.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of the Common Stock as of October 19, 2000 (except where otherwise
noted) with respect to (a) each person known by the Registrant to be the
beneficial owner of more than five percent of the outstanding shares of Common
Stock, (b) each director of the Registrant, (c) the Registrant's executive
officers and (d) all officers and directors of the Registrant as a group. Except
as indicated in the footnotes to the table, all of such shares of Common Stock
are owned with sole voting and investment power. As of the date indicated above
Ruedi G. Laupper, President of the Registrant, has sole voting rights over
approximately 27% of all outstanding shares. See footnotes 7 and 9 below. The
title of class of all securities indicated below is Common Stock with $.01 par
value per share.
No. Of Shares Percentage of
Beneficially Shs. Beneficially
Name and Address of Beneficial Owner Owned (1) Owned (1)
------------------------------------ -------------- ----------------
Ruedi G. Laupper (2)(9) 2,941,074 12.29%
c/o SWISSRAY International, Inc.
Turbistrasse 25-27
CH 6280 Hochdorf
Switzerland
Josef Laupper (3) 325,000 1.36%
c/o SWISSRAY International, Inc.
Turbistrasse 25-27
CH 6280 Hochdorf
Switzerland
2
<PAGE>
Erwin Zimmerli (4) 218,750 *%
c/o SWISSRAY International, Inc.
Turbistrasse 25-27
CH 6280 Hochdorf
Switzerland
Ueli Laupper (10) 443,750 1.85%
80 Grasslands Road
Elmsford, New York 10024
Dov Maor (12) 31,250 *%
c/o SWISSRAY International, Inc.
Turbistrasse 25-27
CH 6280 Hochdorf
Switzerland
Michael Laupper (11) 250,000 1.05%
c/o SWISSRAY International, Inc.
Turbistrasse 25-27
CH 6280 Hochdorf
Switzerland
Dominion Capital Fund, Ltd. 1,449,473 (5) 5.88%
c/o Thomson Kernaghan & Co. Ltd.
365 Bay Street
Toronto, Ontario M5H 2V2
Canada
Sovereign Partners LP 2,252,371 (6) 8.84%
90 Grove Street - Suite 01
Ridgefield, Connecticut 06877
Liviakis Financial Communications, Inc. (LFC) 3,526,000 (7) 14.84%
495 Miller Avenue - 3rd Floor
Mill Valley, California 94914
Parkdale LLC 2,615,434(13) 9.91%
c/o Thomson Kernaghan & Co. Ltd.
365 Bay Street
Toronto, Ontario M5H 2V2
Canada
All directors and officers as
a group (six persons) 4,209,824 (8) 17.18%
* Represents less than 1% of the 23,767,129 shares outstanding as of October 19,
2000.
(1) Unless otherwise indicated, the Company believes that all persons named
in the table have sole voting and investment power with respect to all
shares of the Common Stock beneficially owned by them. A person is
deemed to be the beneficial owner of securities which may be acquired
by such person within 60 days from the date indicated above 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 indicated above, have been
exercised.
3
<PAGE>
(2) Includes (i) 37,500 shares owned indirectly by Ruedi G. Laupper through
SR Medical Equipment Ltd., a corporation which is wholly owned by him;
(ii) 460,324 shares owned indirectly by Ruedi G. Laupper through
Tomlinson Holding Inc., a corporation which is wholly owned by him,
(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 and (iv) an additional 156,250 shares which may be
acquired upon exercise of balance of immediately exercisable options
issued in October 1999.
(3) Includes 175,000 shares which may be acquired upon exercise of balance
of immediately exercisable options issued in October 1999.
(4) Includes 68,750 shares which may be acquired upon exercise of balance
of immediately exercisable options.
As of the October 19, 2000, an aggregate principal outstanding balance
(exclusive of interest) for those Convertible Debentures referred to below
amounts to $6,894,400. None of these convertible debentures are owned by
officers and/or directors of the Company.
(5) Includes 560,151 shares currently owned as well as up to 889,322
shares which normally could be issued (exclusive of interest), at any
time, upon conversion of previously issued convertible debentures (the
"Convertible Debentures"). Dominion Capital Fund, Ltd. is managed and
directed by David Sims, its sole director. Voting control of Dominion
Capital Fund, Ltd.'s shares is exercised by Livingstone Asset
Management Limited, a Bahamas Company controlled by David Sims.
(6) Includes 535,890 shares currently owned as well as up to 1,716,481
shares which normally could be issued (exclusive of interest), at any
time, upon conversion of previously issued convertible debentures (the
"Convertible Debentures"). The person or persons having voting control
are Southridge Capital Management LLC, P.P., Steven Hicks (President) -
Connecticut.
The foregoing information contained in footnotes 5 and 6 above assumes
conversion based on 18% - 20% discount from market (dependent upon debenture)
based upon the last reported sales price on October 19, 2000. This number of
shares, if issued, would require disclosure of beneficial ownership of in excess
of 5%. However, pursuant to terms of Convertible Debentures, the holders thereof
may not beneficially own more than 4.99% of outstanding Company shares (other
than as a result of mandatory conversion provisions). The 4.99% limitation is
only contractual in nature. The 4.99% limitation does not apply and,
accordingly, would not limit beneficial ownership in any manner in the event
that (a) 50% or more of the Company is acquired, (b) the Company is merged into
another company or (c) a change of control occurs.
(7) Pursuant to written Agreements, the Registrant's President, Ruedi G.
Laupper, has sole voting rights with respect to these shares without
any limitation thereon so long as same are owned by LFC. LFC in turn
(and pursuant to agreement with the Company) may not sell any of such
shares until March 28, 2001 and then only in accordance with and
subject to such volume limitations as are imposed in accordance with
the applicable provisions of Rule 144 under the Securities Act of 1933.
(8) Includes 737,000 shares issuable upon option exercise.
(9) When taking into account the number of shares owned beneficially by
Ruedi G. Laupper (2,772,824) as well as those shares over which he
exercises voting control (as indicated in footnote 7 above) Ruedi G.
Laupper exercises voting control over approximately 27% of all voting
shares as of October 19, 2000.
(10) Includes 193,750 shares which may be acquired upon exercise of balance
of immediately exercisable options issued in October 1999.
(11) Includes 100,000 shares which may be acquired upon exercise of balance
of immediately exercisable options issued in October 1999.
(12) Includes 31,250 shares which may be acquired upon exercise of
immediately exercisable options issued in October 1999.
(13) Includes up to 2,615,434 shares currently which normally could be
4
<PAGE>
issued (exclusive of interest), at any time, upon conversion of
previously issued convertible debentures (the "Convertible
Debentures"). Parkdale LLC is managed and directed by Navigator
Management Ltd., its sole director. Voting control of Parkdale LLC's
shares is exercised by Livingstone Asset Management Limited, a Bahamas
Company controlled by David Sims.
As indicated in footnote 5, Livingstone Asset Management Limited, a
Bahamas Company controlled by David Sims has voting control over both Dominion
Capital Fund, Ltd. and Parkdale LLC. These persons or firms having voting
control (i.e., Livingstone Asset Management Limited, controlled by David Sims)
do not own any Company shares of record but rather have been given the right to
vote by Dominion Capital and Parkdale with respect to those shares owned by such
entities. Accordingly, such persons and/or firms (referred to in this paragraph)
exercise, in the aggregate, as of October 19, 2000 the right to vote over
560,151 shares owned in the aggregate by Dominion Capital and Parkdale.
Restrictive Shares Issued in Accordance With Consulting Agreements
Those shares of Company common stock indicated as being owned by
Liviakis Financial Communications, Inc. ("LFC") were issued to such firm in
accordance with various terms and conditions contained in certain Consulting
Agreement between the Company and such firm. With respect to certain summarized
information regarding such Consulting Agreement, reference is herewith made to
the Company's Form 10-K for fiscal year ended June 30, 2000 and in particular
the subsection therein entitled "Restrictive Shares Issued in Accordance with
Consulting Agreement". While such information summarizes certain pertinent terms
and conditions contained in the Agreement heretofore referred to it does not
purport to be a complete summary of such Agreement. A copy of such Agreement is
filed with the SEC in the Company's Form S-1 Registration Statement under SEC
file number 333-59829. Accordingly, further information may be obtained through
the Commission's World Wide Web site utilized for Issuers (such as the Company)
that file electronically with the Commission. The address of such site is
http:\\www.sec.gov.
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.
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 2001, 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 Directorships Since Owned on 10/19/00 Outstanding
----------------- -------- ------------------- -------- ----------------- -----------
5
<PAGE>
<S> <C> <C> <C> <C> <C>
Ruedi G. Laupper 4-22-50 See below 1995 (a) 12.29%
Josef Laupper 7-22-45 See below 1995 (a) 1.36%
Dr. Erwin Zimmerli 7-22-47 See below 1995 (a) *%
Ueli Laupper 4-04-70 See below 1997 (a) 1.85%
Dr. Sc. Dov Maor 12-06-46 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".
* Represents less than 1% of the 23,767,129 shares outstanding as of October
19, 2000.
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 Registrant 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 from its inception in June 1988 until May 1995. He has
approximately 23 years of experience in the field of radiology. Ruedi G. Laupper
is the brother of Josef Laupper and the father of Ueli and Michael Laupper.
Josef Laupper has been Secretary, Treasurer (until January 1998 and
recommencing January 1999) and a director of the Registrant 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.
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 a Vice President of the
Company since March 1997 and a director of the Registrant since March 1997. He
was Chief Executive Officer of SR Medical AG from July 1995 until June 30, 1997
having previously been employed by the Company from January 1993 to July 1995 as
Export Manager. Since the beginning of July 1998 he has been in charge of the
Company's U.S. operations and currently serves as CEO of both Swissray America
Inc. since its formation in September 1998 and Swissray Healthcare, Inc.
Dr. Erwin Zimmerli has been a director of the Registrant since May 1995
and, since March 1998, a member of the Registrant'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
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.
Dr. Sc. Dov Maor, was appointed as a member of the Registrant's Board
of Directors and a member of its Independent Audit Committee effective March 26,
1998. Dr. Sc. Dov 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 years 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
6
<PAGE>
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, 2000, 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 (Dr. Sc. Dov
Maor) attended eight meetings. The Board of Directors does not currently have a
standing nominating nor 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
Company's Common Stock was quoted until delisting on October 26, 1998. For
certain information with respect to such delisting reference is herewith made to
the accompanying 2000 Annual Report to Stockholders and in particular to
subsection (d) to "Market Information" entitled "NASDAQ Delisting".
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 Michael Laupper (who serves as a Company officer) which summarized
information is as follows:
Michael Laupper (born 11-19-72) assumed the position of Interim Chief
Financial Officer of the Company effective January 1, 1999, having previously
worked in conjunction with the Company's former CFO and has been the Company's
CFO since August 1999. 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 positions at SR Management AG and SR Medical
AG, Company subsidiaries since 1999 and prior to assuming his current position.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following Summary Compensation Table sets forth certain information
for the years ended June 30, 1998, 1999 and 2000 concerning the cash and
non-cash compensation earned by or awarded to the Chief Executive Officer of the
Registrant and the three other most highly compensated executive officers of the
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Registrant as of June 30, 2000 (the "Named Executive Officers").
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
------------------- --------------------------
Fiscal Other Annual Stock All Other
Name and Principal Position Year Salary Bonus Compensation Options Compensation
--------------------------- ---- -------- ----- ------------- --------- -------------
<S> <C> <C> <C> <C> <C> <C>
Ruedi G. Laupper 2000 $200,878 --- $ 695,625 (1)(3) $181,250(4) ---
President and Chief Executive 1999 $194,121 $ 8,377 $4,335,000 (1)(2) --- ---
Officer, Chairman of the 1998 $173,587 $16,057 $ 15,000 (7) --- ---
Board of Directors
Josef Laupper 2000 $109,468 --- $ 383,250 (1)(3) $200,000(4) ---
Secretary, Treasurer 1999 $ 83,566 $6,494 $ 12,000 (1) --- ---
1998 $ 94,669 --- $ 12,000 (1) --- ---
Ueli Laupper 2000 $114,494 --- $ 628,750 (1)(3) $218,750(4) ---
Vice President International 1999 $ 94,924 $7,077 $ 10,000 (1) --- ---
Sales (2) 1998 $ 95,685 --- $ 10,000 (1) --- ---
Michael Laupper 2000 $ 80,600 --- $ 371,250 (3) $125,000(4) ---
Chief Financial Officer
--------------------
</TABLE>
(1) Fees for service on the Board of Directors of the Company.
(2) Dollar value assigned to the 2,000,000 shares of Common Stock issued
for relinquishment of EBIT bonus based upon Board members agreement
that such price would be based upon 90% of bid price at the time
proposal was initially made, i.e., 90% of the $2.40 average price on
June 30, 1999 - the date of the Board of Directors meeting.
(3) Includes 275,000, 150,000, 250,000 and 150,000 shares of common stock
issued to Ruedi G. Laupper, Josef Laupper, Ueli Laupper and Michael
Laupper respectively, all of which shares were valued at $2.475 per
share.
(4) See "Stock Option Grants in Fiscal Year Ended June 30, 2000".
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
The following sets forth certain information concerning the grant of
options to purchase shares of the Common Stock to each of the executive officers
of the Registrant, as well as certain information concerning the exercise and
value of such stock options for each of such individuals. Options generally
become exercisable upon issuance and expire no later than ten years from the
date of grant.
STOCK OPTION GRANTS IN FISCAL YEAR ENDED JUNE 30, 2000
With respect to the named Executive Officers there were no granting of
stock options under either the Company's 1996, 1997, 1999 or 2000 Stock Option
Plans (the "Plans") during fiscal year ended June 30, 2000 excepting for options
granted (October 27, 1999 when the bid price was $2.625) from the 1999 Plan as
follows: Ruedi G. Laupper, Josef Laupper, Ueli Laupper and Michael Laupper
181,250, 200,000, 218,750 and 125,000 options respectively. All of such options
are exercisable at $2.625 per share for a period of three years.
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.
8
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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. To the extent practicable, the Board has established
certain principals (applying equally to the Company's President and all other
executive officers) so as to provide the frame work for the Company's
compensation program. Such principals involve offering a competitive
compensation package that will attract the best talent to the Company; motivate
individuals to perform at their highest levels; reward outstanding achievement;
and retain those individuals with the leadership abilities and skills necessary
to achieve Company objectives and long-term stockholder value. In that respect
the Board attempts to evaluate the Company's performance relative to its
competitors and its progress towards achieving both short and long term business
goals.
With these generalized principals in mind the Board's goal is to
develop executive compensation policies and programs (taking into account
available resources) which are consistent with the strategic objectives of
growing the Company's business and maximizing stockholder value. A strong link
should exist between executive compensation and management's ability to maximize
stockholder value.
The Board believes that, amongst other factors, enhancing revenue
growth and improving cash flows should be recognized when considering
compensation levels as well as any significant improvements in overall
effectiveness, productivity and/or return on investment.
Base salaries for executives (including the Company's President) are
set at levels (where practicable and where funds are available) which are
intended to reflect the competitive marketplace for companies that are of
comparable size and complexity that would be considered competitors in
attracting and retaining quality executives as well as upon job
responsibilities, level of experience, overall business performance and
individual contributions to the Company. Salaries of the named officers
(including the Company's President) are reviewed with an assessment made of each
executive's performance. The Board believes that leadership and motivation of
the Company's executives (especially its President) are critical to establishing
the Company's goal towards preeminence both in the marketplace (as same relates
to its ddR-Systems) and as an investment for stockholders. The employment
agreements for Ruedi Laupper, Josef Laupper and Ueli Laupper set salary levels
which attempt to adequately compensate these individuals with salaries that are
commensurate with their abilities and are comparable to those paid by
competitors within the industry. Such salaries are, however, limited, to an
extent, by availability of Company resources (without creating material cash
flow difficulties).
The factors and criteria upon which the Company's Chief Executive
Officer's ("CEO") compensation is based are as indicated above. Such factors are
not directly related (by any set formula or otherwise) to the results of the
Company's performance but rather are related to the responsibilities assumed and
efforts extended by the Company's President for and on behalf of the Company so
as to enable the Company to achieve its long term objectives. Such objectives
relate primarily to the attempt to achieve preeminence in the direct digital
radiography industry. Where directors believe that sufficient funds are not
immediately available to compensate the Company's CEO in the manner intended and
referred to in the preceding paragraph, the Board will authorize the issuance
of restrictive common stock of the Company, i.e. to reward such President's
efforts.
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 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
9
<PAGE>
PERFORMANCE GRAPH
Set forth below is a line graph comparing the cumulative total
shareholder return on the Company's Common Stock with the cumulative total
return (including reinvested dividends) of the Nasdaq Composite Index and the
Standard & Poor's 500 Index, for the period commencing June 1, 1995, when the
Company registered under Section 12 of the Securities Exchange Act of 1934, as
amended, and the Company's Common Stock began publicly trading and ending June
30, 2000. The graph is based on an initial investment of $100.
Stock Performance Graph and Table
Comparison of Five-Year
Cumulative Total Returns Among
SWISSRAY International, Inc., Nasdaq Composite Index
and S&P 500 Index
SWISSRAY
Measurement Period International, Nasdaq Composite Standard & Poor's
(Fiscal Year Covered) Inc. Index 500 Index
--------------------- ---------------- ------------------- ----------------
June 30, 1995 100.00 100.00 100.00
June 30, 1996 100.00 101.00 109.00
June 30, 1997 50.00 177.76 161.32
June 30, 1998 15.50 211.53 174.23
June 30, 1999 22.32 279.23 235.20
June 30, 2000 25.22 443.97 254.02
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company had no Compensation Committee during the last completed
fiscal year. The Corporation's executive compensation was supervised by all
members of the Company's Board of Directors and the following directors were
concurrently officers of the Company in the following capacities: Ruedi G.
Laupper (Chairman of the Board of Directors, President and Chief Executive
Officer); Josef Laupper (Secretary, Treasurer and director) and Ueli Laupper
(Vice President and director). 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 in consideration of Mr.
Laupper's agreement to cancellation of 160,863 post split shares of Common Stock
held by Ruedi G. Laupper or companies controlled by him.
The Company did not issue any shares of its Common Stock to any of its
officers during fiscal year ended June 30, 1999 excepting for the issuance of
2,000,000 restrictive shares to Ruedi G. Laupper in exchange for and in
consideration of cancellation of certain bonus provisions contained in
employment contract. With respect to shares of common stock issued to officers
and directors during fiscal year ended June 30, 2000 see "Certain Transactions"
hereinafter.
BENEFIT PLANS
The Swiss and German Subsidiaries, mandated by government regulations,
are required to contribute approximately five (5%) percent of eligible, as
defined, employees' salaries into a government pension plan. The subsidiaries
also contribute approximately five (5%) percent of eligible employee salaries
into a private pension plan. Total contributions charged to operations for the
years ended June 30, 2000, 1999 and 1998, were $475,176, $509,959 and $347,854
respectively.
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<PAGE>
CERTAIN TRANSACTIONS
Reference is herewith made to Compensation Committee Interlocks and
Insider Participation, second and third paragraphs regarding (a) 48,259
restrictive shares of Company common stock issued to its President during fiscal
year ended June 30, 1998 and (b) 2,000,000 restrictive shares issued to its
President during fiscal year ended June 30, 1999. With respect to both
transactions referred to herein the Company's Board determined same to be as
fair to the Company as could have been made with unaffiliated parties and both
of such transactions were unanimously approved by its Board with the Company's
President abstaining from voting.
Subsequent to June 30, 1999 year end, 497,824 restrictive shares of
Company common stock were issued to corporations controlled by the Company's
President in consideration of his pledging as collateral (and subsequently
forfeiting) shares of Company common stock owned by corporations controlled by
him in order to enable the Company to obtain financing.
During October of 1999 and in accordance with unanimous Board approval
the Company issued an aggregate of 875,000 shares to certain of its officers
and/or directors as consideration for services rendered as per Board resolution.
Such shares were issued as follows:
No. Of
Name Position Shares
-------- --------- --------
Ruedi G. Laupper Chairman, President & 275,000
Chief Executive
Officer
Josef Laupper Secretary, Treasurer 150,000
& a Director
Michael Laupper Chief Financial Officer, 150,000
Controller
Ueli Laupper Vice President & a 250,000
Director
Erwin Zimmerli Director 50,000
PROPOSAL NO. 2 - PROPOSAL TO RATIFY THE BOARD OF DIRECTORS'
SELECTION OF FELDMAN SHERB & CO., P.C. AS
INDEPENDENT AUDITORS FOR THE COMPANY
On November 6, 1998 the Board of Directors selected Feldman Sherb
Horowitz & Co., P.C. as the Company's auditors for the fiscal years ending June
30, 1998 and 1999. Feldman Sherb Horowitz & Co., PC. (known as Feldman Sherb &
Co., P.C. since June 1, 2000 and hereinafter referred to as "Feldman Sherb") has
audited the books, records and accounts of the Company for the fiscal years
ended June 30, 1998, June 30, 1999 and June 30, 2000. Representatives of Feldman
Sherb 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.
Vote Required for Approval
Ratification of the selection of Feldman Sherb & 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
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<PAGE>
VOTE FOR THE RATIFICATION OF THE APPOINTMENT OF FELDMAN SHERB
& CO., P.C. AS INDEPENDENT ACCOUNTANTS TO EXAMINE THE
COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS FOR THE FISCAL YEAR
ENDED JUNE 30, 2001.
PROPOSAL NO. 3 - APPROVAL OF THE SWISSRAY INTERNATIONAL, INC.
2001 STOCK OPTION PLAN
The Board of Directors in September 2000 adopted the Company's 2001
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 2001 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 A.
The summary of the Stock Option Plan set forth below is not intended to be a
complete description thereof and such summary is qualified in its entirety by
the actual text of the Stock Option Plan to which reference is made.
Summary Description of the SWISSRAY International, Inc. 2001 Non-Statutory Stock
Option Plan
The purpose of the Non-Statutory Stock Option Plan ("Plan"), attached
hereto as Exhibit A, 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 2,000,000 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 50% of the fair market value of the
Common Stock on the date such option is granted. No NSO shall be assignable or
12
<PAGE>
otherwise transferable except by will or the laws of descent and distribution or
except as permitted in accordance with SEC Release No.33-7646 as effective
April 7, 1999 and in particular that portion thereof which expands upon
transferability as is contained in Article III entitled "Transferable Options
and Proxy Reporting" as indicated in Section A 1 through 4 inclusive and Section
B thereof.
The Stock Option Plan may be amended, altered, suspended, discontinued
or terminated by the Board of Directors without further stockholder approval,
unless such approval is required by law or regulation or under the rules of the
stock exchange or automated quotation system on which the Common Stock is then
listed or quoted. Thus, stockholder approval will not necessarily be required
for amendments which might increase the cost of the Stock Option Plan or broaden
eligibility 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
(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 non-forfeitable 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 optioned when a non-qualified stock option is granted.
Except as described below, upon exercise of a nonqualified stock option, an
optioned 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 optioned'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
13
<PAGE>
"restricted property" and, unless the optioned 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 optioned does not elect to
recognize income upon exercise, the insider will realize ordinary income in
an amount 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 HAS UNANIMOUSLY APPROVED THIS PROPOSAL
AND UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR
THE ADOPTION OF THE COMPANY'S 2001 STOCK OPTION PLAN
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors,
officers and persons who own more than 10% of a registered class of the
Company's equity securities, to file initial reports of ownership and reports of
changes in ownership with the Securities and Exchange Commission (the
"Commission"). Such persons are required by the Commission to furnish the
Company with copies of all Section 16(a) forms they file. Based solely on its
review of the copies of Forms 3, 4 and 5 received by it, the Company believes
that, with the exception of those persons indicated below, all directors,
officers and 10% stockholders complied with such filing requirements.
According to the Company's records, the following filings appear not to
have been timely made: one initial statement of beneficial ownership on Form 3
and three statements of changes in beneficial ownership on Form 5 covering four
transactions (such Form 5 representing a delinquent Form 4) were not filed
timely by Ruedi G. Laupper; one initial statement of beneficial ownership was
not filed timely by Ueli Laupper; one initial statement of beneficial ownership
on Form 3 and two statements of changes in beneficial ownership on Form 5
covering two transactions (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 was not filed timely by Ulrich Ernst; one initial
statement of beneficial ownership was not filed timely by Berkshire Capital
Management and one initial statement of beneficial ownership, 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 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) was not filed timely by Michael Laupper.
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 2001
ANNUAL MEETING OF STOCKHOLDERS
The Company anticipates that the 2001 Annual Meeting will be held on or
about November 30, 2001 and that the proxy materials for the 2001 Annual Meeting
will be mailed on or before October 30, 2001. If any stockholder wishes a
proposal to be considered for inclusion in the 2001 Proxy Statement, this
material must be received by the Chief Executive Officer no later than September
1, 2001.
14
<PAGE>
ANNUAL REPORT
The Company's Annual Report for the fiscal year ended June 30, 2000 is
being mailed on or about October 26, 2000, together with this Notice of Annual
Meeting of Shareholders, Proxy Statement and Proxy to each stockholder of record
on October 19, 2000.
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,
Chief Executive Officer and President
New York, New York
October 26, 2000
15
<PAGE>
EXHIBIT INDEX
Number Description
Exhibit A 2001 Non-Statutory Stock Option Plan
16
<PAGE>
Exhibit A
SWISSRAY International, Inc.
2001 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.
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.
1
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4. Stock Reserved for this Plan.
Subject to adjustment as provided in Paragraph 9 below, a total of
2,000,000 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:
(i) Upon termination of the optioned's employment with the
Company for cause;
(ii) At the expiration of twelve (12) months from the date of
termination of the optioned's employment with the Company for any reason other
than death, without cause; provided, that if the optioned 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 optioned.
(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 optioned'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.
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(b) NSOs may be exercised solely by the optioned during his lifetime,
or after his death (with respect to the number of shares which the optioned
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 optioned, the optioned'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.
8. Assignability.
No NSO shall be assignable or otherwise transferable (by the optioned
or otherwise) except by will or the laws of descent and distribution or except
as permitted in accordance with SEC Release No.33-7646 as effective April 7,
1999 and in particular that portion thereof which expands upon transferability
as is contained in Article III entitled "Transferable Options and Proxy
Reporting" as indicated in Section A 1 through 4 inclusive and Section B
thereof. 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.
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(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 optioned 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
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 September 13, 2000 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 September 12, 2010 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
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(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
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 optioned
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 optioned may elect to have the Company
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.
5
18. Transferability in Accordance With Form S-8 as Amended and Effective
April 7, 1999. Notwithstanding anything to the contrary as may be contained in
this Plan regarding rights as to transferability or lack thereof, all options
granted hereunder may and shall be transferable to the extent permitted in
accordance with SEC Release No. 33-7646 entitled "Registration of Securities on
Form S-8" as effective April 7, 1999 and in particular in accordance with that
portion of such Release which expands Form S-8 to include stock option exercise
by family members so that the rules governing the use of Form S-8 (a) do not
impede legitimate intra family transfer of options and (b) may facilitate
transfer for estate planing purposes - all as more specifically defined in
Article III, Sections A and B thereto, the contents of which are herewith
incorporated by reference.
SWISSRAY International, Inc.
By: Ruedi G. Laupper, President
ATTEST:
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 2001 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 November 30, 2000.
Josef Laupper, Secretary
(SEAL)
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OPTION AGREEMENT
The undersigned hereby grants __________(pursuant to the SWISSRAY International,
Inc. 2000 Non-Statutory Stock Option Plan dated September 13, 2000 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 optioned, the optioned'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: ___________, 2000
SWISSRAY International, Inc.
By: Ruedi G. Laupper, President
By: Josef Laupper, Secretary
