<PAGE> 1
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee.
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
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(4) Proposed maximum aggregate value of transaction:
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Set forth the amount on which the filing fee is calculated and state how
it was determined.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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<PAGE> 2
IRIDEX CORPORATION
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 28, 1997
------------------------
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of IRIDEX
Corporation, a
Delaware corporation ("the Company") will be held on April 28, 1997 at 9:00
a.m., Pacific daylight savings time, at the Santa Clara Marriott Hotel, 2700
Mission College Boulevard, Santa Clara, California 95054 for the following
purposes:
1. To elect six (6) directors to serve for the ensuing year or until
their successors are elected and qualified (Proposal 1);
2. To approve the amendment of the Company's Amended and Restated 1989
Incentive Stock Option Plan to increase the number of shares of Common
Stock reserved for issuance thereunder by 500,000 shares from 1,000,000
shares to 1,500,000 shares (Proposal 2);
3. To approve the amendment of the Company's 1995 Employee Stock
Purchase Plan to increase the number of shares of Common Stock reserved for
issuance thereunder by 50,000 shares from 50,000 to 100,000 shares
(Proposal 3);
4. To ratify the appointment of Coopers & Lybrand L.L.P. as
independent accountants of the Company for the fiscal year ending December
31, 1997 (Proposal 4); and
5. To transact such other business as may properly be brought before
the meeting and any adjournment(s) thereof.
Stockholders of record at the close of business on February 28, 1997 shall
be entitled to notice of and to vote at the Annual Meeting.
All stockholders are cordially invited to attend the meeting. However, to
assure your representation at the meeting, you are urged to mark, sign, date and
return the enclosed proxy card as promptly as possible in the postage-prepaid
envelope enclosed for that purpose. Any stockholder attending the meeting may
vote in person even if he or she has returned a proxy.
Sincerely,
Theodore A. Boutacoff
President and Chief Executive Officer
Mountain View, California
March 24, 1997
YOUR VOTE IS IMPORTANT
IN ORDER TO ASSURE YOUR REPRESENTATION AT THE MEETING, YOU ARE REQUESTED TO
COMPLETE, SIGN AND DATE THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE AND
RETURN IT IN THE ENCLOSED ENVELOPE.
<PAGE> 3
IRIDEX CORPORATION
340 PIONEER WAY
MOUNTAIN VIEW, CA 94041
------------------------
PROXY STATEMENT
------------------------
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed Proxy is solicited on behalf of the Board of Directors of
IRIDEX Corporation (the "Company") for use at the Annual Meeting of Stockholders
to be held at the Santa Clara Marriott Hotel located at 2700 Mission College
Boulevard, Santa Clara, California 95054 on April 28, 1997 at 9:00 a.m., Pacific
daylight savings time, and at any adjournment(s) thereof, for the purposes set
forth herein and in the accompanying Notice of Annual Meeting of Stockholders.
The Company's principal office is located at 340 Pioneer Way, Mountain View,
California 94041 and its telephone number is (415) 962-8100. These proxy
solicitation materials were mailed on or about March 24, 1997 to all
stockholders entitled to vote at the meeting.
RECORD DATE AND SHARE OWNERSHIP
Stockholders of record at the close of business on February 28, 1997 (the
"Record Date") are entitled to notice of and to vote at the meeting and at any
adjournment(s) thereof. At the Record Date, 6,372,148 shares of the Company's
Common Stock, $.01 par value were issued and outstanding.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Company (Attention:
Susan Janssen) a written notice of revocation or a duly executed proxy bearing a
later date or by attending the meeting and voting in person.
VOTING AND SOLICITATION
Proxies will be solicited by certain of the Company's directors, officers
and regular employees, without additional compensation, personally or by
telephone or telegram. In addition, the Company may reimburse brokerage firms
and other persons representing beneficial owners of shares for their expenses in
forwarding solicitation material to such beneficial owners.
QUORUM; ABSTENTIONS; BROKER NON-VOTES
The Company's Bylaws provide that stockholders holding a majority of the
outstanding shares of the corporation entitled to vote on the Record Date and
represented by person or by proxy shall constitute a quorum at meetings of
stockholders. Shares that are voted "FOR," "AGAINST" or "WITHHELD" on a matter
are treated as being present at the meeting for purposes of establishing a
quorum and are also treated as "entitled to vote on the subject matter" (the
"Votes Cast") at the Annual Meeting with respect to such matter.
While there is no definitive statutory or case law authority in Delaware as
to the proper treatment of abstentions, the Company believes that abstentions
should be counted for purposes of determining the presence or absence of a
quorum for the transaction of business and the total number of Votes Cast with
respect to a particular matter (other than the election of directors). In the
absence of controlling precedent to the contrary, the Company intends to treat
abstentions in this manner. Accordingly, with the exception of the proposal for
the election of directors, abstentions will have the same effect as a vote
against the proposal. Because directors are elected by a plurality vote,
abstentions in the election of directors have no impact once a quorum exists.
<PAGE> 4
In a 1988 Delaware case, Berlin v. Emerald Partners, the Delaware Supreme
Court held that while broker non-votes may be counted for purposes of
determining the presence or absence of a quorum for the transaction of business,
broker non-votes should not be counted for purposes of determining the number of
Votes Cast with respect to the particular proposal on which the broker has
expressly not voted. Broker non-votes with respect to proposals set forth in
this Proxy Statement will therefore not be considered "Votes Cast" and,
accordingly, will not affect the determination as to whether the requisite
majority of Votes Cast has been obtained with respect to a particular matter.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
Proposals of stockholders of the Company that are intended to be presented
at the 1998 Annual Meeting of Stockholders must be received by the Company no
later than November 21, 1997 and must otherwise be in compliance with applicable
laws and regulations in order to be considered for inclusion in the proxy
statement and form of proxy relating to that meeting.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
(the "SEC"). Such officers, directors and ten-percent stockholders are also
required by SEC rules to furnish the Company with copies of all forms that they
file pursuant to Section 16(a). Based solely on its review of the copies of such
forms received by it, or written representations from certain reporting persons
that no filings were required for such persons, the Company believes that all
Section 16(a) filing requirements applicable to its officers, directors and
ten-percent stockholders were complied with except for Forms 4 for the month of
September 1996 which were filed one day late by Messrs. Arias, Boutacoff, Buzawa
and Haddad.
STOCKHOLDER INFORMATION
A copy of the Company's Annual Report on Form 10-K, including financial
statements and schedules is enclosed with these proxy solicitation materials. IN
COMPLIANCE WITH RULE 14A-3 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF
1934, THE COMPANY HEREBY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH PERSON
UPON WRITTEN REQUEST, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K,
INCLUDING THE FINANCIAL STATEMENTS AND FINANCIAL SCHEDULES THERETO. REQUESTS FOR
SUCH COPIES SHOULD BE DIRECTED TO IRIDEX CORPORATION, 340 PIONEER WAY, MOUNTAIN
VIEW, CALIFORNIA, 94041, ATTENTION: INVESTOR RELATIONS.
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PROPOSAL ONE
ELECTION OF DIRECTORS
NOMINEES
A board of six (6) directors is to be elected at the meeting. Unless
otherwise instructed, the proxy holders will vote the proxies received by them
for the election of the six nominees named below, all of whom are presently
directors of the Company. Each nominee has consented to be named a nominee in
this Proxy Statement and to continue to serve as a director if elected. Should
any nominee become unable or decline to serve as a director or should additional
persons be nominated at the meeting, the proxy holders intend to vote all
proxies received by them in such a manner as will assure the election of as many
nominees listed below as possible (or, if new nominees have been designated by
the Board of Directors, in such a manner as to elect such nominees) and the
specific nominees to be voted for will be determined by the proxy holders. The
Company is not aware of any reason that any nominee will be unable or will
decline to serve as a director. Each director elected at this Annual Meeting
will serve until the next Annual Meeting of Stockholders or until such
director's successor has been elected and qualified. There are no arrangements
or understandings between any director or executive officer and any other person
pursuant to which he is or was to be selected as a director or officer of the
Company.
The names of the nominees and certain information about them, are set forth
below:
<TABLE>
<CAPTION>
DIRECTOR
NAME OF NOMINEE AGE PRINCIPAL OCCUPATION SINCE
- - -------------------------------- --- ------------------------------------------------ --------
<S> <C> <C> <C>
Theodore A. Boutacoff........... 49 President, Chief Executive Officer and Director 1989
James L. Donovan................ 59 Chief Financial Officer and Director 1989
John M. Nehra(1)................ 48 General Partner, New Enterprise Associates 1989
William Boeger, III(1)(2)....... 47 Chairman of Calypte Biomedical Corporation 1989
Milton Chang(2)................. 53 Chairman of the Board and Chief Financial
Officer, New Focus, Inc. 1989
Donald L. Hammond(2)............ 69 Director 1990
</TABLE>
- - ---------------
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
Except as set forth below, each of the nominees has been engaged in his
principal occupation set forth above during the past five years.
Mr. Donovan resigned his position as the Company's Chief Financial Officer
in June 1996. In December 1996, at the request of the Board of Directors, he
resumed the duties of Chief Financial Officer.
Mr. Boeger served as Chief Executive Officer of Calypte Biomedical
Corporation from January 1994 to September 1995, and from January 1994 to
present, as Chairman of the Board. Mr. Boeger has also served as Managing
General Partner of Quest Ventures since 1985.
VOTE REQUIRED
Directors will be elected by a plurality vote of the shares of the
Company's Common Stock present or represented and entitled to vote on this
matter at the meeting. Accordingly, the six candidates receiving the highest
number of affirmative votes of shares represented and voting on this proposal at
the meeting will be elected directors of the Company. Votes withheld from a
nominee and broker non-votes will be counted for purposes of determining the
presence or absence of a quorum but because directors are elected by a plurality
vote, will have no impact once a quorum is present. See "Information Concerning
Solicitation and Voting -- Quorum; Abstentions; Broker Non-Votes."
MANAGEMENT RECOMMENDS THAT STOCKHOLDERS VOTE "FOR"
THE NOMINEES LISTED ABOVE
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BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held a total of four meetings and
took a total of five actions by written consent during the fiscal year ended
December 31, 1996. With the exception of Roger Quy, who resigned as a director
effective April 29, 1996, no director serving during the fiscal year attended
fewer than 75% of the aggregate of all meetings of the Board of Directors and
the committees of the Board upon which such director served. The Board of
Directors has two committees, the Audit Committee and the Compensation
Committee.
The Audit Committee of the Board of Directors which consists of Messrs.
Boeger and Nehra, held one meeting during the last fiscal year. The Audit
Committee reviews and advises the Board of Directors regarding the Company's
accounting matters and is responsible for reviewing and recommending the annual
appointment of the independent public accountants, recommending the engagement
of the Company's independent public accountants and the services to be performed
by them, and reviewing and evaluating the accounting principles being applied to
the Company's financial reports.
The Compensation Committee of the Board of Directors which consists of
Messrs. Boeger, Chang and Hammond, held two meetings during the last fiscal
year. The Compensation Committee reviews and advises the Board of Directors
regarding all forms of compensation to be provided to the officers, employees,
directors and consultants of the Company.
The Board of Directors has no nominating committee or any committee
performing such functions.
DIRECTOR COMPENSATION
Directors are not paid any cash compensation from the Company for their
services as members of the Board or any committee thereof, although they are
reimbursed for reasonable out-of-pocket expenses incurred by them in attending
such meetings.
The Company's 1995 Director Option Plan (the "Director Plan") was adopted
by the Board in October 1995 and approved by the stockholders in January 1996. A
total of 100,000 shares of Common Stock are reserved for issuance thereunder.
The Director Plan provides for the automatic and nondiscretionary grant of
nonstatutory stock options to purchase 11,250 shares of the Company's Common
Stock to each nonemployee director on the later of the effective date of the
Director Plan or the date on which such person becomes a director. Thereafter,
each non-employee director will be automatically granted an option to purchase
3,750 shares of Common Stock on July 1 of each year, if on such date he or she
has served on the Board for at least three months. The Director Plan provides
that the exercise price shall be equal to the fair market value of the Company's
Common Stock as of the date of grant.
Four non-employee directors have been granted initial options to purchase
11,250 shares of Common Stock at an exercise price of $2.00 per share. Such
directors have each been granted a subsequent option to purchase 3,750, shares
of Common Stock at an exercise price of $14.875 per share. On July 1, 1997,
additional options to purchase 3,750 shares of Common Stock will automatically
be granted to Messrs. Nehra, Boeger, Chang and Hammond at an exercise price
equal to the fair market value on the date of grant
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists of Messrs. Boeger, Chang and Hammond.
Mr. Boutacoff also participates in discussions regarding salaries and incentive
compensation for all employees (including officers) and consultants to the
Company, except that Mr. Boutacoff is excluded from discussions regarding his
own salary and incentive compensation.
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PROPOSAL TWO
AMENDMENT OF THE AMENDED AND RESTATED 1989 INCENTIVE STOCK PLAN
INTRODUCTION
In January 1997, the Board of Directors amended the Company's Amended and
Restated 1989 Incentive Stock Plan (the "Plan") to increase the number of shares
of Common Stock reserved for issuance thereunder by 500,000 from 1,000,000
shares to an aggregate of 1,500,000 shares.
During 1996, in order to address the requirements of its expanding
business, the Company began hiring a large number of new employees. The
competition for talented employees has intensified significantly and the Company
has utilized this Plan to provide the necessary incentives to retain and recruit
employees. Management believes stock incentive programs are essential to
maintain and grow the Company's business.
The material features of the Plan are outlined below.
SUMMARY OF THE AMENDED AND RESTATED 1989 INCENTIVE STOCK PLAN
General. The Plan provides for the grant of options to purchase shares of
the Company's Common Stock to employees (including officers and employee
directors)("Employees") and consultants. Options granted under the Plan may
either be "incentive stock options" as defined in Section 422 of the Internal
Revenue Code of 1986 (the "Code"), or nonstatutory stock options, as determined
by the Administrator at the time of grant. The administrator of the Plan also
has the discretion to grant stock purchase rights to Employees and consultants.
To date, no stock purchase rights have been granted.
Purpose. The purposes of the Plan are to attract and retain the best
available personnel and to provide incentive to key employees and consultants to
promote the success of the Company's business.
Administration. The Plan is administered by the Board of Directors or a
committee designated by the Board, as may be necessary to comply with the rules
governing plans intended to qualify as discretionary grant plans under Rule
16b-3 (the "Administrator"). The Administrator has complete authority to
construe, interpret, and administer the provisions of the Plan and the
provisions of the agreements governing awards granted thereunder. The
Administrator has the authority to prescribe, amend and rescind rules and
regulations pertaining to the Plan and to make all other determinations
necessary or deemed advisable in the administration of the Plan. The
determinations and interpretations made by the Administrator are final and
binding.
Grant Limitation. The Plan provides that no optionee may be granted
options and stock purchase rights to purchase more than 500,000 shares of Common
Stock in any fiscal year.
Eligibility. Nonstatutory options may be granted to Employees and
consultants of the Company and its subsidiaries or successor corporation.
Incentive stock options may be granted only to Employees. The Administrator
shall determine which eligible persons shall be granted options and stock
purchase rights.
Exercise of Options and Stock Purchase Rights. Options become exercisable
at such times as are determined by the Administrator and set forth in the
individual agreements. Generally, options vest as to one forty-eighth (1/48) of
the shares for each full month of service, however, the options are not
exercisable until at least six months of service has been completed. In the case
of stock purchase rights, the Company has a repurchase option exercisable upon
the termination of the purchaser's employment, unless the Administrator
determines otherwise at the time of grant. The Company's repurchase option
lapses at a rate determined by the Administrator. The purchase price for the
shares so repurchased is the original price paid by the purchaser.
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<PAGE> 8
An option or stock purchase right is exercised by giving written notice to
the Company specifying the number of full shares of Common Stock to be purchased
and tendering payment of the purchase price to the Company. The form of
consideration for exercising an option or stock purchase right, including the
method of payment, is determined by the Administrator.
Exercise Price. The exercise price of options and stock purchase rights
granted under the Plan is determined by the Administrator and must not be less
than 100% of the fair market value of the Company's Common Stock at the time of
grant; provided, however, that incentive stock options or stock purchase rights
granted to stockholders owning more than 10% of the voting stock of the Company,
if any, are subject to the additional restriction that the exercise price per
share of each option must be at least 110% of the fair market value per share on
the date of grant. The exercise price of nonstatutory options is determined by
the Administrator.
Termination. The Plan gives the Administrator authority to vary the terms
of the individual option agreements. However, generally, if the optionee ceases
to be an employee or consultant, the optionee shall have the right to exercise
the vested portion of an unexercised option within thirty (30) days after the
date of termination. If such termination is due to death or disability within
the meaning of Section 422(c) of the Code, the optionee (or the optionee's legal
representative) shall have the right to exercise the vested portion of an
unexercised option at any time within twelve (12) months of the termination
date. In no event shall an option be exercisable beyond its term.
Term of Options. Options granted under the Plan expire as determined by
the Administrator, but in no event later than ten (10) years after the date of
grant. Stock purchase rights granted under the Plan also expire as determined by
the Administrator, but in no event later than ninety (90) days after the date of
grant. No option or stock purchase right may be exercised by any person after
its expiration.
Non-Transferability of Options. Option is non-transferable by the optionee
other than by will or the laws of decent and distribution, and is exercisable
during the optionee's lifetime only by the optionee, or in the event of the
optionee's death, by a person who acquires the right by bequest or inheritance
or by reason of the death of the optionee.
Adjustments Upon Change in Capitalization. The number of shares covered by
each outstanding option, and the exercise price thereof, shall be
proportionately adjusted for any increase or decrease in the number of issued
shares resulting from a change in the Company's capitalization, such as a stock
dividend, stock split, reverse stock split, combination, reclassification, or
like change in the capital structure of the Company.
Transfer of Control. In the event the Company is a participant in any
merger or consolidation, each outstanding, unexercised option shall be assumed
or substituted by the surviving corporation. If such options are not assumed,
then, with respect to options issued prior to July 1995 or after the February
15, 1996, they become fully exercisable prior to the closing of such merger or
consolidation. Options issued during the period between July 1995 and February
15, 1996 and any options which are neither assumed nor exercised within fifteen
(15) days of written notice from the Company terminate upon the expiration of
such period.
Amendment or Termination of the Plan. The Administrator may at any time
amend, alter, suspend or terminate the Plan; provided that no amendment,
alteration, suspension or termination may impair the rights of any optionee,
unless mutually agreed otherwise. Options may be granted under the Plan during
the period expiring August 1999.
UNITED STATES TAX INFORMATION
An optionee who is granted an incentive stock option will not recognize
taxable income either at the time the option is granted or upon its exercise,
although the exercise may subject the optionee to the alternative minimum tax.
Upon the sale or exchange of the shares more than two years after the date of
grant and one year after exercising the option, any gain or loss will be treated
as long-term capital gain or loss. If these holding periods are not satisfied,
the optionee will recognize ordinary income at the time of sale or exchange
equal to the difference between the exercise price and the lower of (i) the fair
market value of the shares on the date of the option exercise or (ii) the sale
price of the shares. A different rule for measuring ordinary
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<PAGE> 9
income upon such a premature disposition may apply if the optionee is also an
officer, director or 10% stockholder of the Company. The Company will be
entitled to a deduction in the same amount as the ordinary income recognized by
the optionee. Any gain or loss recognized on such a premature disposition of the
shares in excess of the amount treated as ordinary income will be characterized
as long-term or short-term capital gain or loss, depending on the holding
period.
All other options which do not qualify as incentive stock options are
referred to as nonstatutory options. An optionee will not recognize any taxable
income at the time a nonstatutory option is granted. However, upon its exercise,
the optionee will recognize taxable income generally measured as the excess of
the then fair market value of the shares exercised over the exercise price. A
different rule may apply if the optionee is a director, officer or 10%
stockholder. Any taxable income recognized in connection with an option exercise
by an optionee who is also an employee of the Company will be subject to tax
withholding by the Company by payment in cash or out of the current earnings
paid to the optionee. Upon resale of such shares by the optionee, any difference
between the sales price and the optionee's exercise price, to the extent not
recognized as taxable income as described above, will be treated as long-term or
short-term capital gain or loss, depending on the holding period. The Company
will be entitled to a tax deduction in the same amount as the ordinary income
recognized by the optionee with respect to shares acquired upon exercise of a
nonstatutory option.
THE FOREGOING SUMMARY OF THE EFFECT OF THE UNITED STATES FEDERAL INCOME
TAXATION LAWS UPON THE OPTIONEE AND THE COMPANY IN CONNECTION WITH THE PLAN,
DOES NOT PURPORT TO BE COMPLETE, AND REFERENCE SHOULD BE MADE TO THE APPLICABLE
PROVISIONS OF THE CODE. IN ADDITION, THIS SUMMARY DOES NOT DISCUSS THE
PROVISIONS OF THE INCOME TAX LAWS OF ANY MUNICIPALITY, STATE OR FOREIGN COUNTRY
IN WHICH THE PARTICIPANT MAY RESIDE.
AMENDED AND NEW PLAN BENEFITS
The Company cannot now determine the number of options to be received in
the future by the named executive officers ("Executive Officers") individually,
all current Executive Officers as a group or all employees (including current
officers who are not Executive Officers) as a group. In 1996, options to
purchase 210,850 shares of the Company's Common Stock were granted to all
employees (including current officers who are not Executive Officers) and
options to purchase 50,000 shares of the Company's Common Stock were granted to
the Executive Officers as a group. See "Executive Compensation -- Stock Option
Grants and Exercises" for the number of stock options granted to the named
Executive Officers in 1996.
REQUIRED VOTE
The approval of the amendment of the Plan requires the affirmative vote of
a majority of the shares of the Company's Common Stock present or represented
and entitled to vote on this subject matter at the meeting. An abstention is not
an affirmative vote, and therefore, will have the same effect as a vote against
the proposal. A broker non-vote will not be treated as entitled to vote on this
subject matter at the meeting. See "Information Concerning Solicitation and
Voting -- Quorum; Abstentions; Broker Non-Votes."
MANAGEMENT RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR"
THE AMENDMENT OF THE AMENDED AND RESTATED 1989 INCENTIVE STOCK PLAN
PROPOSAL THREE
AMENDMENT OF THE 1995 EMPLOYEE STOCK PURCHASE PLAN
INTRODUCTION
The Company's 1995 Employee Stock Purchase Plan (the "Purchase Plan") was
adopted by the Board of Directors in November 1995 and was approved by the
stockholders in January 1996. A total of 50,000 shares of Common Stock were
reserved for issuance under the Purchase Plan. In January 1997, the Board of
Directors amended the Purchase Plan to increase the number of shares of Common
Stock reserved for issuance thereunder by 50,000 to an aggregate of 100,000
shares.
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<PAGE> 10
The material features of the Plan are outlined below.
SUMMARY OF THE 1995 EMPLOYEE STOCK PURCHASE PLAN
Purpose. The purpose of the Purchase Plan is to provide employees of the
Company with an opportunity to purchase Common Stock through accumulated payroll
deductions.
Administration. The Purchase Plan, which is intended to qualify under
Section 423 of the Code, is administered by the Board of Directors or a
committee designated by the Board, as may be necessary to comply with the rules
governing plans intended to qualify as discretionary grant plans under Rule
16b-3 (the "Administrator"). All questions of interpretation or application of
the Purchase Plan are determined by the Administrator, and its decisions are
final, conclusive and binding upon all participants.
Eligibility and Participation; Withdrawal. Employees of the Company and
its designated subsidiaries who are employed on a given enrollment date are
eligible to participate in the Purchase Plan if they are customarily employed
for at least 20 hours per week and more than five months per year, and do not
own or hold options to purchase as a result of such participation, five percent
or more of the total combined voting power or value of all classes of stock of
the Company. Notwithstanding the foregoing, no employee may be granted the right
to purchase more than $25,000 worth or more than 1,000 shares of Common Stock
annually. Eligible employees become participants in the Purchase Plan by
completing a subscription agreement authorizing payroll deductions of up to 10%
of the employees compensation, and filing it with the Company's Personnel
Department not later than the day before an enrollment date. An employee may
withdraw from the Purchase Plan at any time by giving written notice to the
Company. In such a case, all payroll deductions credited to the employee's
account and not yet used to purchase stock are refunded. Approximately 48
employees are currently participating in the Purchase Plan.
Offering Periods. The Purchase Plan is implemented by consecutive
six-month offering periods. The first offering period commenced on the effective
date of the Company's initial public offering and ended on August 31, 1996.
Subsequent offering periods commence on the first trading day on or after
September 1 and March 1 and terminate on the last trading day of the sixth month
following such commencement date. The Administrator may change the commencement
date and duration of the offering periods without stockholder approval.
Purchase Price. The purchase price per share at which shares may be sold
to employees under the Purchase Plan is 85% of the lower of the fair market
value of the Company's Common Stock on (a) the date of commencement of the
offering period or (b) the last trading day of the offering period. The fair
market value of the Company's Common Stock on a given date is the closing sale
price on the Nasdaq National Market. In the event the Company's Common Stock is
quoted on the Nasdaq system but not on the National Market thereof, the fair
market value is the mean of the closing bid and asked prices for the Company's
Common Stock on the date of determination. In the absence of an established
market for the Common Stock, the fair market value is established by the Board
of Directors.
Adjustments on Changes in Capitalization. In the event any change is made
in the Company's capitalization, such as a stock split or stock dividend, which
results in an increase or decrease in the number of outstanding shares of the
Company's Common Stock without receipt of consideration by the Company, the
number of shares remaining subject to the Purchase Plan and the purchase price
per share shall be appropriately adjusted. In the event of the proposed
dissolution or liquidation of the Company, the offering periods will terminate
immediately prior to such dissolution or liquidation, unless the Board provides
otherwise. In the event of a proposed sale of all or substantially all of the
assets of the Company, or the merger of the Company with or into another
corporation, each option under the purchase plan shall be assumed or an
equivalent option shall be substituted by such successor corporation or a parent
or subsidiary of such successor corporation, unless the Board determines, in the
exercise of its sole discretion and in lieu of such assumption or substitution,
to shorten the offering period then in progress by setting a new exercise date.
8
<PAGE> 11
Transferability. No rights or accumulated payroll deductions of a
participant may be assigned, transferred, pledged or otherwise disposed of in
any way (other than by will or the laws of descent and distribution).
Amendment and Termination of the Purchase Plan. The Board of Directors may
at any time and for any reason amend or terminate the Purchase Plan, except that
(i) such termination shall not affect any purchase rights previously granted
(except as permitted under the terms of the Purchase Plan), and (ii) no
amendment may adversely affect a purchase right previously granted under the
Purchase Plan (except to the extent permitted by the terms of the Purchase Plan
or as may be necessary to qualify the Purchase Plan as an employee stock
purchase plan pursuant to Section 423 of the Code or to obtain qualification or
registration of the shares under applicable foreign, federal or state securities
laws). The Purchase Plan shall continue in effect for a term of ten years unless
terminated earlier by the Board or until all of the shares reserved for issuance
thereunder have been issued.
UNITED STATES TAX INFORMATION
The Purchase Plan and the rights of participants to make purchases
thereunder, are intended to qualify under the provisions of Sections 421 and 423
of the Code. Under these provisions, no income will be taxable to a participant
until the shares purchased under the Purchase Plan are sold or otherwise
disposed of. Upon the sale or other disposition of the shares, the participant
will generally be subject to tax and the amount of the tax will depend upon the
holding period. If the shares are sold or otherwise disposed of more than two
years from the first day of the offering period and one year from the date the
shares are purchased, the participant will recognize ordinary income measured as
the lesser of (i) the excess of the fair market value of the shares on the date
of such sale or disposition over the purchase price, or (ii) an amount equal to
15% of the fair market value of the shares as of the first day of the offering
period. Any additional gain will be treated as long-term capital gain. If the
shares are sold or otherwise disposed of before the expiration of these holding
periods, the participant will recognize ordinary income generally measured as
the excess of the fair market value of the shares on the date the shares are
purchased over the purchase price. Any additional gain or loss on such sale or
disposition will be long-term or short-term capital gain or loss, depending on
the holding period. The Company is not entitled to a deduction for amounts taxed
as ordinary income or capital gain to a participant except to the extent of
ordinary income recognized by participants upon a sale or disposition of shares
prior to the expiration of the holding period(s) described above.
THE FOREGOING SUMMARY OF THE EFFECT OF THE UNITED STATES FEDERAL INCOME
TAXATION LAWS UPON THE PARTICIPANT AND THE COMPANY IN CONNECTION WITH THE
PURCHASE PLAN, DOES NOT PURPORT TO BE COMPLETE, AND REFERENCE SHOULD BE MADE TO
THE APPLICABLE PROVISIONS OF THE CODE. IN ADDITION, THIS SUMMARY DOES NOT
DISCUSS THE PROVISIONS OF THE INCOME TAX LAWS OF ANY MUNICIPALITY, STATE OR
FOREIGN COUNTRY IN WHICH THE PARTICIPANT MAY RESIDE.
AMENDED AND NEW PLAN BENEFITS
The Company cannot now determine the number of shares to be issued in the
future pursuant to the Purchase Plan to the named executive officers ("Executive
Officers"), all current Executive Officers as a group or all employees
(including current officers who are not Executive Officers) as a group. In 1996,
15,665 shares of the Company's Common Stock were issued to all employees
(including current officers who are not Executive Officers) and 1,099 shares of
the Company's Common Stock were issued to the Executive Officers as a group. As
of December 31, 1996, 34,335 shares remained available for issuance.
REQUIRED VOTE
The approval of the amendment of the Purchase Plan requires the affirmative
vote of a majority of the shares of the Company's Common Stock present or
represented and entitled to vote on this subject matter at the meeting. An
abstention is not an affirmative vote, and therefore, will have the same effect
as a vote against
9
<PAGE> 12
the proposal. A broker non-vote will not be treated as entitled to vote on this
subject matter at the meeting. See "Information Concerning Solicitation and
Voting -- Quorum; Abstentions; Broker Non-Votes."
MANAGEMENT RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR"
THE AMENDMENT OF THE 1995 EMPLOYEE STOCK PURCHASE PLAN
PROPOSAL FOUR
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors has selected Coopers & Lybrand L.L.P., independent
accountants, to audit the financial statements of the Company for the fiscal
year ending December 31, 1997, and recommends that stockholders vote for
ratification of such appointment. Representatives of Coopers & Lybrand L.L.P.
are expected to be present at the meeting with the opportunity to make a
statement if they desire to do so, and are expected to be available to respond
to appropriate questions.
REQUIRED VOTE
The ratification of the appointment of Coopers & Lybrand L.L.P. requires
the affirmative vote of a majority of the shares of the Company's Common Stock
present or represented and entitled to vote on this subject matter at the
meeting. An abstention is not an affirmative vote and, therefore, will have the
same effect as a vote against the proposal. A broker non-vote will not be
treated as entitled to vote on this subject matter at the meeting. See
"Information Concerning Solicitation and Voting-Quorum; Abstentions; Broker Non-
Votes."
MANAGEMENT RECOMMENDS THAT STOCKHOLDERS VOTE "FOR"
RATIFICATION OF THE APPOINTMENT OF COOPERS & LYBRAND L.L.P.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of the Record Date by (i) each person
(or group of affiliated persons) known to the Company to be the beneficial owner
of more than 5% of the Company's Common Stock, (ii) each director, (iii) each of
the Company's Executive Officers named in the Summary Compensation Table
appearing herein, and (iv) all of the Company's directors and Executive Officers
as a group.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP(1)
-----------------------------------
NAME AND ADDRESS NUMBER OF SHARES PERCENT OF TOTAL
- - ----------------------------------------------------------------- ---------------- ----------------
<S> <C> <C>
John M. Nehra(1)................................................. 401,183 6.31
c/o New Enterprise Associates
1119 St. Paul Street
Baltimore, MD 21202
Milton Chang(2).................................................. 388,582 6.11
c/o New Focus
2630 Walsh Avenue
Santa Clara, CA 95051
New Enterprise Associates........................................ 321,471 5.06
1119 St. Paul Street
Baltimore, MD 21202
Eduardo Arias(3)................................................. 270,375 4.25
Theodore A. Boutacoff(4)......................................... 270,208 4.25
David M. Buzawa(5)............................................... 267,875 4.21
James L. Donovan(6).............................................. 101,726 1.60
Robert A. Haddad(7).............................................. 53,375 *
William Boeger, III(8)........................................... 30,782 *
Donald L. Hammond(9)............................................. 52,969 *
All directors and Executive Officers as a group (9
persons)(10)................................................... 1,515,604 23.70
</TABLE>
10
<PAGE> 13
- - ---------------
* Represents beneficial ownership of less than 1%.
Based on 6,355,398 shares issued and outstanding at December 31, 1996.
(1) Includes 321,471 shares held by New Enterprise Associates ("NEA") of which
Mr. Nehra is a General Partner and therefore may be deemed to beneficially
own such shares. Mr. Nehra disclaims beneficial ownership of shares held by
these entities except to the extent of his pecuniary interest therein
arising from his general partnership interest therein. Includes 27,348
shares held by Mr. Nehra's spouse, as separate property as to which shares
Mr. Nehra disclaims beneficial ownership. Also includes 6,562 shares
subject to stock options held by Mr. Nehra that are exercisable within 60
days of the Record Date.
(2) Includes 21,562 shares subject to stock options held by Mr. Chang that are
exercisable within 60 days of the Record Date.
(3) Includes 251,042 shares held by the Arias Trust, dated October 19, 1994,
over which Mr. Arias exercises investment and voting control, 10,000 shares
held by Mr. Arias' spouse as custodian for their daughter under the Uniform
Transfers to Minors Act, and 8,333 shares subject to stock options held by
Mr. Arias that are exercisable within 60 days of the Record Date.
(4) Includes 20,000 shares held by Mr. Boutacoff as custodian for their
daughter under the Uniform Transfers to Minors Act and 20,208 shares
subject to stock options held by Mr. Boutacoff that are exercisable within
60 days of the Record Date.
(5) Includes 11,875 shares subject to stock options held by Mr. Buzawa that are
exercisable within 60 days of the Record Date.
(6) Includes 78,913 shares held by the Donovan Trust, dated March 14, 1978,
over which Mr. Donovan exercises investment and voting control and 17,813
shares subject to stock options that are exercisable within 60 days of the
Record Date.
(7) Includes 25,000 shares held by the Haddad Family Trust, dated July 17,
1995, over which Mr. Haddad exercises investment and voting control and
26,875 shares subject to stock options that are exercisable within 60 days
of the Record Date.
(8) Includes 30,782 shares subject to stock options held by Mr. Boeger that are
exercisable within 60 days of the Record Date.
(9) Includes 27,969 shares subject to stock options held by Mr. Hammond that
are exercisable within 60 days of the Record Date.
(10) Includes an aggregate of 171,979 shares subject to stock options that are
exercisable within 60 days of the Record Date. See footnotes (1) through
(9) above. Excludes 321,471 shares held by NEA.
11
<PAGE> 14
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION
The following table shows, as to the Chief Executive Officer and each of
the other four most highly compensated Executive Officers, information
concerning compensation awarded to, earned by or paid for services to the
Company in all capacities during 1996 and 1995.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------------------------------ AWARDS
OTHER ANNUAL ------------
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($)(1) COMPENSATION($) OPTIONS(#)
- - --------------------------------- ---- --------- ----------- --------------- ------------
<S> <C> <C> <C> <C> <C>
Theodore A. Boutacoff............ 1996 132,300 -- -- 20,000
Chief Executive Officer and
President 1995 131,040 29,188 -- 10,000
Eduardo Arias.................... 1996 125,402 -- 28,478 10,000
Senior Vice President 1995 129,872 16,290 -- 10,000
World-wide Sales
Robert A. Haddad................. 1996 112,350 -- -- 10,000
Vice President, 1995 110,879 14,399 -- 10,000
Operations
David M. Buzawa.................. 1996 100,008 -- -- 10,000
Vice President, 1995 98,906 12,975 -- 10,000
Product Development
</TABLE>
STOCK OPTION GRANTS AND EXERCISES
The following table shows, as to the individuals named in the Summary
Compensation Table above, information concerning stock options granted during
the fiscal year ended December 31, 1996.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE
INDIVIDUAL GRANTS OF ASSUMED ANNUAL
--------------------------------------------------------- RATES
NUMBER OF % OF TOTAL OF STOCK PRICE
SECURITIES OPTIONS APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM(3)
OPTIONS EMPLOYEES IN PRICE EXPIRATION ----------------------
NAME GRANTED(#)(1) FISCAL YEAR(2) ($/SH) DATE 5%($) 10%($)
- - ------------------------ ------------- -------------- -------- ---------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Theodore A. Boutacoff... 20,000 7.25% $ 7.25 12/30/06 91,190 231,093
Eduardo Arias........... 10,000 3.63% $ 7.25 12/30/06 45,595 115,546
David M. Buzawa......... 10,000 3.63% $ 7.25 12/30/06 45,595 115,546
Robert Haddad........... 10,000 3.63% $ 7.25 12/30/06 45,595 115,546
</TABLE>
- - ---------------
(1) See "Amendment of 1989 Incentive Stock Option Plan" for a description of the
terms of the Company's option plans.
(2) The Company granted options to purchase an aggregate of 210,850 shares of
Common Stock to all employees other than Executive Officers and granted
options to purchase an aggregate of 50,000 shares of Common Stock to all
Executive Officers as a group (4 persons), during fiscal 1996.
(3) This column sets forth hypothetical gains or "option spreads" for the
options at the end of their respective ten-year terms, as calculated in
accordance with the rules of the Securities and Exchange Commission. Each
gain is based on an arbitrarily assumed annualized rate of compound
appreciation of the market price at the date of grant of 5% and 10% from the
date the option was granted to the end of the option term. The 5% and 10%
rates of appreciation are specified by the rules of the Securities and
Exchange Commission and do not represent the Company's estimate or
projection of future Common Stock prices. The Company does not necessarily
agree that this method properly values an option. Actual gains, if any, on
option exercises are dependent on the future performance of the Company's
Common Stock and overall market conditions and the timing of option
exercises, if any.
12
<PAGE> 15
The following table shows, as to the individuals named in the Summary
Compensation Table above, information concerning stock options exercised during
the fiscal year ended December 31, 1996 and the value of unexercised options at
such date.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING
UNEXERCISED OPTIONS/ VALUE OF UNEXERCISE
SHARES SARS AT DECEMBER 31, 1996 IN-THE-MONEY OPTIONS AT
ACQUIRED ON VALUE (#)(2) DECEMBER 31, 1996($)(3)
EXERCISE REALIZED ----------------------------- -----------------------------
NAME (#) ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - ----------------------- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Theodore A.
Boutacoff............ -- -- 10,209 29,791 63,806.25 61,193.75
Eduardo Arias.......... -- -- 6,667 19,791 41,668.75 61,193.75
David M. Buzawa........ -- -- 10,209 19,791 63,806.25 61,193.75
Robert Haddad.......... -- -- 25,209 19,791 170,057.25 61,193.75
</TABLE>
- - ---------------
(1) Calculated by determining the difference between the closing price of the
Company's Common Stock on the Nasdaq National Market on the date of exercise
and the exercise price of the options.
(2) The Company has not granted any stock appreciation rights and its stock
plans do not provide for the granting of such rights.
(3) Calculated by determining the difference between the fair market value of
the securities underlying the options at year end ($7.50 per share) and the
exercise price of the options.
EMPLOYMENT AGREEMENTS
The Company has no employment contracts with any of its officers, and has
no compensatory plan or arrangement which are activated upon resignation,
termination or retirement of any such officer upon a change in control of the
Company. The Director Plan provides for the accelerated vesting of all
outstanding options upon a change in control. However, because competition for
talented employees is intense, the Company may in the future consider entering
into severance agreements with certain of its key employees.
OTHER EMPLOYEE BENEFIT PLANS
401(k) Plan
The Company sponsors a 401(k) Plan under which eligible employees may
contribute, on a pre-tax basis, up to 15% of the employee's total annual income
from the Company, excluding bonuses, subject to certain Code limitations. All
full-time employees who have attained age 18 are eligible to participate in the
plan. All contributions are allocated to the employee's individual account and,
at the employee's election, are invested in one or more investment funds
available under the plan. Contributions are fully vested and nonforfeitable.
REPORT OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Exchange Act of 1933, as amended, or the
Securities Act of 1934, as amended, that might incorporate future filings,
including this Proxy Statement, in whole or in part, the following report and
the Performance Graph included herein shall not be incorporated by reference
into any such filings.
GENERAL
The Compensation Committee (the "Committee") of the Board of Directors
establishes the overall executive compensation strategies of the Company and
approves compensation elements for the chief executive officer and other
executive officers. The Committee is comprised of three independent, non-
employee members of the Board of Directors, neither of whom have interlocking
relationships as defined by the Securities and Exchange Commission. The
Committee has available to it such external compensation advice and data as the
Committee deems appropriate to obtain.
13
<PAGE> 16
The compensation philosophy of the Committee is to provide a comprehensive
compensation package for each executive officer that is competitive with those
offered by companies of similar types and size, in the same geographical area
and whose executives perform similar skills to those performed by the executives
of the Company. Accordingly, the Committee follows a compensation strategy which
has used vesting terms to incentivize and reward executives as the Company
addresses the challenges associated with growth. As the Committee applies this
compensation philosophy in determining appropriate executive compensation levels
and other compensation factors, the Committee reaches its decisions with a view
towards the Company's overall financial performance. The Committee strives to
structure each officer's overall compensation package to enable the Company to
attract, retain and reward personnel who contribute to the success of the
Company.
EXECUTIVE OFFICER COMPENSATION
The objectives of the executive officer compensation program are to
attract, retain, motivate and reward key personnel who possess necessary
leadership and management skills through competitive base salary, annual cash
bonus incentives, long-term incentive compensation in the form of stock options,
and various benefits generally available to employees of the Company.
Base Salary. Base salary levels for the Company's executive officers are
generally targeted to be competitive with companies in the same stage of
development and in the same industry and geographic area. In determining
salaries, the Committee also takes into account the Chief Executive Officer's
recommendations, individual experience, contributions to corporate goals and the
Company's performance.
Incentive Bonuses. The Committee believes that a cash incentive bonus plan
can serve to motivate the Company's executive officers and management to address
annual performance goals, using more immediate measures for performance than
those reflected in the appreciation in value of stock options. In 1996, the
Company's goals were targeted toward longer-term objectives for corporate
development. As a consequence, the Company did not have an incentive bonus plan
for executive officers for fiscal 1996, although certain bonus payments were
made to sales executives. The Company expects to establish an incentive bonus
plan for fiscal 1997.
Stock Option Grants. Stock options are granted to executive officers and
other employees under the Company's option plan. See " Proposal Two -- Amendment
of the 1989 Stock Option Plan" above. Stock option grants are intended to focus
the recipient on the Company's long-term performance to improve stockholder
value and to retain the services of executive officers in a competitive job
market by providing significant long-term earning potential. To this end, stock
options generally vest over a four-year period, based on continued employment.
Factors considered in granting stock options to executive officers of the
Company are the duties and responsibilities of each individual, such individuals
contributions to the success of the Company and other relevant factors. The
Company views stock options as an important component of long-term compensation
for executive officers since options motive executive officers to manage the
Company in a manner that is consistent with stockholder interests.
CEO COMPENSATION
Compensation for the Chief Executive Officer is consistent with the
philosophies and practices described above for executive officers in general.
Mr. Boutacoff's salary was not increased in 1996 and no bonuses were paid to any
of the executive officers. Mr. Boutacoff was granted an option to purchase
20,000 shares in 1996 as a form of long-term compensation.
COMPENSATION COMMITTEE
William Boeger, III
Milton Chang
Donald L. Hammond
14
<PAGE> 17
COMPANY STOCK PRICE PERFORMANCE
The following graph demonstrates a comparison of cumulative total
stockholder returns, calculated on a dividend reinvestment basis and based upon
an initial investment of $100 in the Company's Common Stock as compared with the
CBOE Russell 2000 Index and the Standard and Poors 500 Index. No dividends have
been declared or paid on the Company's Common Stock during such period. The
stock price performance shown on the graph below is not necessarily indicative
of future price performance. The Company's Common Stock began trading on the
Nasdaq National Market on February 16, 1996. The graph reflects the Company's
stock price performance from the initial public offering through the end of
fiscal 1996.
<TABLE>
<CAPTION>
Measurement Period IRIDEX Corpora- Standard & Poors
(Fiscal Year Covered) tion 500 CBOE Russell 2000
<S> <C> <C> <C>
2/16/96 100.00 100.00 100.00
3/29/96 113.8888 99.0843 103.1341
6/28/96 166.6665 102.9417 108.07
9/30/96 91.6666 105.5021 108.0044
12/31/96 83.3333 113.7036 113.0618
</TABLE>
OTHER MATTERS
The Company knows of no other matters to be submitted to the meeting. If
any other matters properly come before the meeting, it is the intention of the
persons named in the enclosed form of Proxy to vote the shares they represent as
the Board of Directors may recommend.
THE BOARD OF DIRECTORS
Dated: March 24, 1997
15
<PAGE> 18
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
IRIDEX CORPORATION
1997 ANNUAL MEETING OF STOCKHOLDERS
APRIL 28, 1997
The undersigned stockholder of IRIDEX Corporation, a Delaware corporation,
hereby acknowledges receipt of the Notice of Annual Meeting of Stockholders and
Proxy Statement, and hereby appoints Theodore A. Boutacoff and James L. Donovan,
or either of them, proxies and attorneys-in-fact, with full power to each of
substitution, on behalf and in the name of the undersigned, to represent the
undersigned at the 1997 Annual Meeting of Stockholders of IRIDEX Corporation to
be held on April 28, 1997, at 9:00 a.m. Pacific daylight savings time, at the
Santa Clara Marriott Hotel located at 2700 Mission College Boulevard, Santa
Clara, California 95054, and at any adjournment(s) thereof and to vote all
shares of Common Stock which the undersigned would be entitled to vote if then
and there personally present, on the matters set forth below:
<TABLE>
<S> <C> <C>
1. ELECTION OF DIRECTORS: __ FOR all nominees listed below __ WITHHOLD authority to vote for
(except as indicated). all nominees listed below.
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C>
Theodore A. Boutacoff James L. Donovan Milton Chang Donald L. Hammond William Boeger, III John M. Nehra
</TABLE>
IF YOU WISH TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE(S),
STRIKE A LINE THROUGH THAT NOMINEE'S NAME IN THE LIST ABOVE.
2. PROPOSAL TO APPROVE THE AMENDMENT OF THE AMENDED AND RESTATED 1989
INCENTIVE STOCK PLAN:
__ FOR __ AGAINST __ ABSTAIN
3. PROPOSAL TO APPROVE THE AMENDMENT OF THE 1995 EMPLOYEE STOCK PURCHASE
PLAN:
__ FOR __ AGAINST __ ABSTAIN
4. PROPOSAL TO RATIFY THE APPOINTMENT OF COOPERS & LYBRAND L.L.P. AS
INDEPENDENT ACCOUNTANTS.
__ FOR __ AGAINST __ ABSTAIN
and, in their discretion, upon such other matter or matters which may properly
come before the meeting and any adjournment(s) thereof.
<PAGE> 19
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS
INDICATED, WILL BE VOTED FOR THE ELECTION OF DIRECTORS, FOR APPROVAL OF THE
AMENDMENT OF THE AMENDED AND RESTATED 1989 INCENTIVE STOCK PLAN FOR APPROVAL OF
THE AMENDMENTS TO THE 1995 EMPLOYEE STOCK PURCHASE PLAN FOR APPROVAL OF THE
AMENDMENT OF THE 1995 STOCK PURCHASE PLAN, AND FOR RATIFICATION OF THE
APPOINTMENT OF THE COMPANY'S INDEPENDENT ACCOUNTANTS, AND AS SAID PROXIES DEEM
ADVISABLE ON SUCH OTHER MATTERS AS MAY COME BEFORE THE MEETING AND ANY
ADJOURNMENT(S) THEREOF.
Dated: __________________, 1997 ___________________________________________
Signature
___________________________________________
Signature
(THIS PROXY SHOULD BE MARKED, DATED, SIGNED
BY THE STOCKHOLDER(S) EXACTLY AS HIS OR HER
NAME APPEARS HEREON, AND RETURNED PROMPTLY
IN THE ENCLOSED ENVELOPE. PERSONS SIGNING
IN A FIDUCIARY CAPACITY SHOULD SO INDICATE.
IF SHARES ARE HELD BY JOINT TENANTS OR AS
COMMUNITY PROPERTY, BOTH SHOULD SIGN.)
