SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule
14(a)-12
LUMENON INNOVATIVE LIGHTWAVE TECHNOLOGY, INC.
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(Name of Registrant as Specified in Charter)
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(Name of Person(s) filing Proxy Statement, if other than Registrant)
Payment of filing fee (check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
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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<PAGE>
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
--------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement no.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
LUMENON INNOVATIVE LIGHTWAVE TECHNOLOGY, INC.
8851 TRANS-CANADA HIGHWAY
VILLE SAINT LAURENT, (QC), CANADA H4S 1Z6
-------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 21, 2000
-------------------------
To Our Stockholders:
We invite you to attend our annual stockholders' meeting on November
21, 2000 at the Hilton Montreal Aeroport, 12505 Cote de Liesse, Dorval, Quebec
at 11:00 a.m. At the meeting, you will hear an update on our operations, have a
chance to meet some of our directors and executives and act on the following
matters:
1. To elect three class I directors to our Board of Directors to
serve for a three year term;
2. To approve an amendment to our employee stock option incentive
plan to increase the total number of shares of our common
stock available for issuance under such plan from 2,500,000
shares to 6,000,000 shares;
3. To ratify and approve the issuance of convertible notes and
warrants, and the common stock issuable upon their respective
conversion or exercise, under a securities purchase agreement
with two investors;
4. To ratify the appointment of KPMG LLP as our independent
auditors for the fiscal year ending June 30, 2001; and
5. To consider and act upon such other business as may properly
come before the meeting and any adjournment thereof.
This booklet includes this formal notice of the meeting and the proxy
statement. The proxy statement tells you more about the agenda and procedures
for the meeting. It also describes how our Board of Directors operates and gives
personal information about our director nominees.
Only stockholders of record at the close of business on October 24,
2000 will be entitled to vote at the annual meeting. Even if you only own a few
shares, we want your shares to be represented at the annual meeting. We urge you
to complete, sign, date, and return your proxy card promptly in the enclosed
envelope.
We have also provided you with the exact place and time of the meeting
if you wish to attend in person.
Dr. S. Iraj Najafi
President and Chief Executive Officer
October 27, 2000
Ville Saint Laurent, Quebec
<PAGE>
LUMENON INNOVATIVE LIGHTWAVE TECHNOLOGY, INC.
8851 TRANS-CANADA HIGHWAY
VILLE SAINT LAURENT, (QC), CANADA H4S 1Z6
(514)331-3738
PROXY STATEMENT
--------------------------------
GENERAL INFORMATION
This proxy statement contains information related to the annual meeting
of stockholders of Lumenon Innovative Lightwave Technology, Inc. to be held on
Tuesday, November 21, 2000, beginning at 11:00 a.m. at the Hilton Montreal
Aeroport, 12505 Cote de Liesse, Dorval, Quebec, and any adjournment thereof.
ABOUT THE MEETING
WHAT IS THE PURPOSE OF THE ANNUAL MEETING?
At the meeting, stockholders will hear an update on our operations,
have a chance to meet some of our directors and executives and will act on the
following matters:
1 To elect three class I directors to our Board of
Directors to serve for a three year term;
2. To approve an amendment to our employee stock option
incentive plan to increase the total number of shares
of our common stock available for issuance under such
plan from 2,500,000 shares to 6,000,000 shares;
3. To ratify and approve the issuance of convertible
notes and warrants, and the common stock issuable
upon their respective conversion or exercise, under a
securities purchase agreement with two investors;
4. To ratify the appointment of KPMG LLP as our
independent auditors for the fiscal year ending June
30, 2001; and
5. To consider and act upon such other business as may
properly come before the meeting and any adjournment
thereof.
WHO MAY VOTE
Stockholders of Lumenon Innovative Lightwave Technology, Inc., as
recorded in our stock register on October 24, 2000, may vote at the meeting. As
of that date, we had 35,769,153 shares of common stock outstanding. We have only
one class of voting shares. All shares in this class have equal voting rights of
one vote per share.
HOW TO VOTE
You may vote in person at the meeting or by proxy. We recommend that
you vote by proxy even if you plan to attend the meeting. You can always change
your vote at the meeting.
<PAGE>
Our Board of Directors is asking for your proxy. Giving us your proxy
means that you authorize us to vote your shares at the meeting in the manner you
direct. You may vote for all, some, or none of our director nominees. You may
also vote for or against the other proposals or abstain from voting.
If you sign and return the enclosed proxy card but do not specify how
to vote, we will vote your shares in favor of all our director nominees, the
approval of the increase of shares reserved for issuance under our employee
stock option incentive plan, the approval of the issuance of notes, warrants and
underlying shares of common stock to two investors and the ratification of the
appointment of KPMG LLP as our independent auditors.
You may receive more than one proxy or voting card depending on how you
hold your shares. If you hold shares through someone else, such as a broker, you
may get materials from it asking how you want to vote. The latest proxy card we
received from you will determine how we will vote your shares.
REVOKING A PROXY
There are three ways to revoke your proxy. First, you may submit a new
proxy with a later date up until the existing proxy is voted. Second, you may
vote in person at the meeting. Last, you may notify our corporate secretary,
Mark P. Andrews, in writing at 8851 Trans-Canada Highway, Ville Saint Laurent,
Quebec, Canada H4S 1Z6, that you are revoking your proxy.
QUORUM
In order to carry on the business of the meeting, we must have a
quorum. This means at least a majority of the outstanding shares eligible to
vote must be represented at the meeting, either by proxy or in person.
VOTES NEEDED
The director nominees receiving a majority of the votes cast during the
meeting will be elected to fill the seats of our class I directors. For the
other proposals to be approved, we require the favorable vote of a majority of
the votes cast. Only votes for or against a proposal will be counted. Votes that
are withheld from voting on a proposal will be excluded entirely and will have
no effect in determining the quorum or the majority of votes cast. Abstentions
and broker non-votes will count for quorum purposes only and not for voting
purposes. Broker non-votes occur when a broker returns a proxy but does not have
the authority to vote on a particular proposal. Brokers that do not receive
instructions are entitled to vote on the election of directors and the
ratification of auditors.
ATTENDING IN PERSON
Only stockholders, their proxy holders, and our invited guests may
attend the meeting. If you wish to attend the meeting in person but you hold
your shares through someone else, such as a broker, you must bring proof of your
ownership and an identification with a photo to the meeting. For example, you
could bring an account statement showing that you owned our shares as of October
24, 2000 as acceptable proof of ownership.
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<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information concerning ownership of our
common stock outstanding on October 24, 2000 by (i) each person known to be the
beneficial owner of more than five percent of our common stock, (ii) each
director, (iii) each of the executive officers named in the summary compensation
table and (iv) by all directors and executive officers as a group. Unless
otherwise indicated, each stockholder has sole voting power and sole dispositive
power with respect to the indicated shares. Unless otherwise indicated, the
address of each person listed below is c/o Lumenon Innovative Lightwave
Technology, Inc., 8851 Trans-Canada Highway, Ville Saint Laurent, Quebec, Canada
H4S 1Z6.
<TABLE>
<CAPTION>
Number of Shares
Directors, Executive of Common Stock Beneficially
Officers and 5% Stockholders Owned (1) Percentage
------------------------------ ---------- ----------
<S> <C> <C>
Dr. S. Iraj Najafi.................................. 5,037,500(2) 14.1%
Najafi Holding Inc. ................................ 5,037,500(2) 14.1%
Dr. Mark P. Andrews................................. 4,735,100(3) 13.2%
Andrewma Holdings Inc............................... 4,687,500(3) 13.1%
Dr. Anthony L. Moretti (4).......................... 25,000(5) (6)
Molex Incorporated (4) ............................. 10,466,667 29.3%
Denis N. Beaudry(7)................................. 50,000(7) (6)
Dr. Chia-Yen Li..................................... 50,000(8) (6)
Vincent Belanger.................................... 23,650(9) (6)
Reginald J.N. Ross.................................. 100,000(10) (6)
Guy Brunet.......................................... --(11) --
Gilles Marcotte..................................... 5,000(11)(12) (6)
Pierre-Paul Allard.................................. 25,000(13) (6)
Pierre-Andre Roy.................................... --(11) --
Felice Philip Meffe . . . . . . . . . . . . . . . . . . . . --(14) --
All directors and executive officers as a 10,051,250(15) 27.9%
group...............................................
</TABLE>
------------------------------------
(1) A person is deemed to be the beneficial owner of voting securities that
can be acquired by such person within 60 days after October 24, 2000
upon the exercise or conversion of options, warrants or convertible
securities. Each beneficial owner's percentage ownership is determined
by assuming that options, warrants and convertible securities that are
held by such person (but not those held by any other person) and that
are exercisable or convertible within 60 days after October 24, 2000
have been exercised or converted.
-3-
<PAGE>
(2) Represents 5,037,500 shares owned by Najafi Holding Inc., of which Dr.
Najafi is the sole stockholder.
(3) Represents (i) 47,600 shares of common stock issuable upon exercise of
options held by Dr. Andrews and (ii) 4,687,500 shares owned by Andrewma
Holdings Inc., of which Dr. Andrews is the sole stockholder.
(4) The address of Molex and Dr. Moretti is 2222 Wellington Court, Lisle,
Illinois 60532.
(5) Dr. Moretti is the representative of Molex Incorporated on our Board of
Directors. The shares reflected in the table above do not include the
shares beneficially owned by Molex, as to which Dr. Moretti disclaims
beneficial ownership. The shares reflected in such table represent
25,000 shares of common stock issuable upon exercise of an option held
by Dr. Moretti. Please see "Certain Relationships and Related
Transactions" on page 11 for a description of the agreements under
which Molex is entitled to designate a member of our Board of
Directors.
(6) Less than 1%.
(7) Mr. Beaudry is the representative of Polyvalor and McGill University on
our Board of Directors. The shares reflected in the table above do not
include the shares beneficially owned by Polyvalor and McGill, as to
which Mr. Beaudry disclaims beneficial ownership. The shares reflected
in such table represent 50,000 shares of common stock issuable upon
exercise of options held by Mr. Beaudry. Please see "Certain
Relationships and Related Transactions" on page 11 for a description of
the agreements under which Polyvalor is entitled to designate a member
of our Board of Directors.
(8) Includes 25,000 shares of common stock issuable upon exercise of
options held by Dr. Li. Does not include 200,000 shares issuable upon
exercise of additional options that are not currently exercisable or
exercisable within 60 days after October 24, 2000.
(9) Represents 23,650 shares of common stock issuable upon exercise of
options held by Mr. Belanger. Does not include 240,000 shares issuable
upon exercise of additional options that are not currently exercisable
or exercisable within 60 days after October 24, 2000.
(10) Includes 50,000 shares of common stock issuable upon exercise of
options held by Mr. Ross. Does not include 200,000 shares issuable upon
exercise of additional options that are not currently exercisable or
exercisable within 60 days after October 24, 2000.
(11) Does not include 50,000 shares of common stock issuable upon exercise
of options held by each of Messrs. Brunet, Marcotte and Roy that are
not currently exercisable or exercisable within 60 days after October
24, 2000.
(12) Includes 2,000 shares of common stock owned by Mr. Marcotte's wife and
2,000 shares of common stock owned by Gem Len Inc., a company which Mr.
Marcotte controls.
(13) Does not include 25,000 shares of common stock issuable upon exercise
of options held by Mr. Allard that are not currently exercisable or
exercisable within 60 days after October 24, 2000.
(14) Does not include 200,000 shares issuable upon exercise of additional
options that are not currently exercisable or exercisable within 60
days after October 24, 2000.
(15) Includes an aggregate of 221,250 shares of Common Stock issuable upon
exercise of options.
-4-
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Our amended and restated certificate of incorporation provides for the
classification of our Board of Directors into three classes. The current term of
the class I directors will expire at the annual meeting and when their
successors are duly elected and qualified. All of the nominees for election are
currently class I directors. Management has no reason to believe that any of the
nominees will be unable or unwilling to serve as a director, if elected. Should
any nominee not be a candidate at the time of the meeting (a situation which is
not now anticipated), proxies may be voted in favor of the remaining nominees
and may be also voted for a substitute nominee selected by the Board of
Directors.
Unless authority is specifically withheld, proxies will be voted for
the election of the nominees named below, to serve as class I directors for a
term of office to expire at the third succeeding annual meeting of stockholders
in 2003 and until their successors have been duly elected and qualified. Class I
directors must be elected by a plurality of the votes cast, in person or by
proxy, at the meeting. The class II and class III directors will continue to
serve for the remainder of their respective terms, which, in the case of the
three class II directors, will expire at the 2001 annual meeting of stockholders
and which, in the case of the three class III directors, will expire at the 2002
annual meeting of stockholders.
The names of the nominees and certain information concerning them are
set forth below:
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION FIRST YEAR
CLASS OF FOR THE PAST FIVE YEARS BECAME
NAME DIRECTOR AND CURRENT PUBLIC DIRECTORSHIPS AGE A DIRECTOR
---- -------- -------------------------------- --- ----------
<S> <C> <C> <C> <C>
S. Iraj Najafi I DIRECTOR, PRESIDENT AND CHIEF EXECUTIVE 46 1998
OFFICER. President and Chief Executive
Officer of the Company since 1998.
Researcher and professor at the
Department of Electrical Engineering at
the Ecole Polytechnique in Montreal since
1986 (presently on leave of absence).
Founded Photonics Research Group at
Ecole Polytechnique.
Pierre-Paul I (1) DIRECTOR. General Manager and other 40 1999
Allard executive capacities at Cisco Systems,
Canada since 1993.
Pierre-Andre Roy I (1)(2) DIRECTOR. Chairman of the Company's 59 2000
Compensation Committee. President of
Bombardier Capital from 1995 until his
retirement in February 2000. Treasurer of
Bombardier Inc. from 1995-1996.
</TABLE>
-5-
<PAGE>
The names of the class II and class III directors and certain
information concerning them are set forth below:
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION FIRST YEAR
CLASS OF FOR THE PAST FIVE YEARS BECAME
NAME DIRECTOR AND CURRENT PUBLIC DIRECTORSHIPS AGE A DIRECTOR
---- -------- -------------------------------- --- ----------
<S> <C> <C> <C> <C>
Mark P. Andrews III DIRECTOR, VICE PRESIDENT, CHIEF 48 1998
TECHNICAL OFFICER AND SECRETARY. Vice
President, Chief Technical Officer and
Secretary of the Company since 1998.
Professor at the Department of Chemistry
at McGill University since 1990
(presently on leave of absence). Member
of the Materials Research Society and the
International Society for Optical
Engineers.
Denis N. Beaudry II DIRECTOR. Director of the Centre de 56 1999
Developpement Technologique of the
Ecole Polytechnique since 1984.
President and General Manager of
Polyvalor since 1998. Member of the
Board of Directors of the Centre des
Technologies Textiles, the College
Rosemont, the Corporation de
Financement de l'Institut de Cardiologie
de Montreal, the Centre de Technologies
du Gaz Naturel, the Corporation
Commerciale de Materiaux Composites,
the Centre de Developpement Rapide de
Produits et de Procedes, and the firms
Sinlab Inc., BioSyntech Inc., a
biopharmaceutical company, Phytobiotech
Inc., Polyplan Inc., Odotech Inc. and
COESI Inc.
Guy Brunet II (1)(2) DIRECTOR. Branch Manager at Canaccord 48 2000
Capital Corporation since April 2000.
Investment Advisor for RBC Dominion
Securities, Wood Gundy and Richardson
Greenshields for over 20 years.
Gilles Marcotte III (2) DIRECTOR. Chairman of the Company's 61 2000
Audit Committee. Partner at KPMG LLP
and its predecessor firms from 1979 until
retirement in 1998. Member of the
Board of Directors of Marcotte
Multimedia Inc. and Gem Lem Inc.
President of the Quebec Symphony
Orchestra and Caisse Populaire
Desjardins de Charlesbourg.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION FIRST YEAR
CLASS OF FOR THE PAST FIVE YEARS BECAME
NAME DIRECTOR AND CURRENT PUBLIC DIRECTORSHIPS AGE A DIRECTOR
---- -------- -------------------------------- --- ----------
<S> <C> <C> <C> <C>
Anthony L. III DIRECTOR. Employed in various executive 48 1999
Moretti capacities with Molex Fiber Optics Inc.,
Chicago, Illinois, since 1997. Currently
Director-Optoelectronic Development,
Molex Fiber Optics Inc., a subsidiary of
Molex. Independent consultant for high
tech companies from 1994 to 1997.
</TABLE>
(1) Member of the compensation committee of the Board of Directors.
(2) Member of the audit committee of the Board of Directors.
MEETINGS AND COMMITTEES
The Board of Directors held three meetings during the fiscal year ended
June 30, 2000. From time to time during such periods, the Board of Directors
acted by unanimous written consent. The Board has an audit committee and a
compensation committee. We do not have a standing nominating committee. The
customary functions of such committees are performed by the entire Board of
Directors.
BOARD OF DIRECTORS COMPENSATION
We do not currently pay fees to directors for their service on the
Board of Directors. Our directors are reimbursed for their expenses incurred in
attending meetings of the Board of Directors. Under the terms of our stock
option incentive plan, directors are eligible for the grants of options.
During the fiscal year ended June 30, 2000, non-employee directors were
granted the following options to purchase common stock:
Pierre-Paul Allard was granted an option to acquire 50,000 shares at a
price of US$24.25 per share vesting over two years in equal tranches of
25,000 shares, exercisable for a period of two years after their
vesting dates of December 7, 2001 and December 7, 2002, respectively.
Guy Brunet was granted an option to acquire 50,000 shares at a price of
US$28.00 per share vesting over two years in equal tranches of 25,000
shares, exercisable for a period of two years after their vesting dates
of March 28, 2001 and March 28, 2002, respectively.
Gilles Marcotte was granted an option to acquire 50,000 shares at a
price of US$28.00 per share vesting over two years in equal tranches of
25,000 shares, exercisable for a period of two years after their
vesting dates of March 28, 2001 and March 28, 2002, respectively.
The Board of Directors will determine the remuneration of our directors
during the current and subsequent fiscal years.
-7-
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A
VOTE FOR ELECTION OF EACH OF THE NOMINEES.
MANAGEMENT
EXECUTIVE OFFICERS
The following table contains certain information regarding our
additional executive officers:
<TABLE>
<CAPTION>
NAME POSITION WITH THE COMPANY, OCCUPATION FOR THE PAST AGE
---- FIVE YEARS AND CURRENT PUBLIC DIRECTORSHIPS ---
-------------------------------------------
<S> <C> <C>
Dr. Chia-Yen Li CHIEF OPERATING OFFICER. Chief Operating Officer of the 38
Company since 1999. Senior Scientist at MicroTouch
Systems Incorporated from 1997 until joining the
Company. Staff Scientist at NZ Applied Technologies from
1995 to 1997. Visiting Scholar at the Optical Services
Center of the University of Arizona from 1994 to 1995.
Vincent Belanger, CA VICE PRESIDENT FINANCE, CHIEF FINANCIAL OFFICER AND 33
TREASURER. Vice President Finance of the Company since
August 2000. Chief Financial Officer and Treasurer of the
Company since June 1999. Vice President Finances and
Corporate Controller of Viper International Holdings Ltd.
from September 1998 until joining the Company.
Corporate finance department of KPMG LLP from 1989
until 1998.
Felice Philip Meffe VICE PRESIDENT OF BUSINESS DEVELOPMENT AND MARKETING. 46
Vice President of Business Development and Marketing of
the Company since May 2000. Strategic Planning Director
at Emerson-Astec from September 1998 until joining the
Company. International Accounts Director, among other
positions, at Nortel from 1981 to September 1998.
Reginald J.N. Ross VICE PRESIDENT OF CORPORATE DEVELOPMENT AND CHIEF OF 39
STRATEGIC OPERATIONS. Vice President of Corporate
Development and Chief of Strategic Operations of the
Company since November 1999. Independent consultant
assisting companies in the information technology industry,
focusing on optics and photonics, from September 1999
through December 1999. Chief Executive Officer and
President of Fiberview Technologies Limited from June
1999 to September 1999. Program Manager for
SpaceBridge Networks Corporation from August 1998 to
May 1999. Communications officer in the Department of
National Defense retiring at the rank of Major prior to
August 1998.
</TABLE>
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<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth, for the periods indicated, all
compensation awarded to, earned by or paid to our chief executive officer. None
of our other executive officers received compensation in excess of US$100,000 in
2000.
<TABLE>
<CAPTION>
Annual Long-Term
------ ---------
Compensation Compensation
------------ ------------
Name and Principal Position Year Salary(1) Bonus # of Options
--------------------------- ---- --------- ----- ------------
<S> <C> <C> <C> <C>
S. Iraj Najafi 2000 US$121,736 - -
Chief Executive Officer and 1999(2) US$ 36,798 - 200,000
President 1998 US$ 31,311 - -
</TABLE>
---------------------
(1) Certain of our executive officers routinely receive other benefits, the
amounts of which are customary in our industry. We have concluded,
after reasonable inquiry, that the aggregate amounts of such benefits
during each of the periods reflected in the table above did not exceed
the lesser of US$50,000 (CDN$73,600) or 10% of the compensation set
forth above in respect of any such period.
(2) In 1998, we changed our fiscal year end to June 30, effective in 1999.
Therefore, the amounts reported for fiscal year 1999 are for the six
months ended June 30, 1999.
The Board of Directors will determine the remuneration of our officers
during the current and subsequent fiscal years.
EMPLOYMENT AGREEMENTS
Dr. Mark P. Andrews is employed by us as Vice President and Chief
Technical Officer pursuant to an employment agreement entered into July 7, 2000
and effective January 1, 1999 for a term of three years. The agreement provides
for an initial base salary of US$84,539 (CDN$125,000) annually. On July 21,
2000, Dr. Andrews' base annual salary was increased to $202,893 (CDN$300,000).
We also granted Dr. Andrews an option to acquire up to 200,000 shares of common
stock. Throughout the employment period and for a period of three years
thereafter, the agreement restricts Dr. Andrews ' ability to engage in
activities competitive with those of ours. In addition, throughout the
employment period and for a period of two years thereafter, Dr. Andrews has
agreed that he will not solicit any person employed by us to leave our employ,
or employ or solicit for employment any person who is employed by us. The
agreement may be terminated by us (i) in the event of the bankruptcy,
liquidation, or dissolution of Lumenon, (ii) if he commits certain acts
constituting cause or (iii) if he is in material breach of the agreement. Dr.
Andrews may terminate the employment agreement upon three months' prior written
notice to us.
Dr. Chia-Yen Li is employed by us as Chief Operating Officer pursuant
to an employment agreement effective August 1, 1999 for a term of five years.
The agreement provides for an initial base salary of US$84,539 (CDN$125,000)
annually. We also granted Dr. Li an option to acquire up to 250,000 shares of
common stock. Throughout the employment period and for a period of three years
thereafter, the agreement restricts Dr. Li's ability to engage in activities
competitive with those of ours. In addition, throughout the
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<PAGE>
employment period and for a period of two years thereafter, Dr. Li has agreed
that he will not solicit any person employed by us to leave our employ, or
employ or solicit for employment any person who is employed by us. The agreement
may be terminated by us (i) in the event of the bankruptcy, liquidation, or
dissolution of Lumenon, (ii) if Dr. Li commits certain acts constituting cause
or (iii) if he is in material breach of the agreement. Dr. Li may terminate the
employment agreement upon three months' prior written notice to us.
Vincent Belanger, CA is employed by us as Vice-President Finance, Chief
Financial Officer and Treasurer pursuant to an employment agreement effective
June 14, 1999 for a term of five years. The agreement provides for a base salary
of US$101,447 (CDN$150,000) annually. We also granted Mr. Belanger an option to
acquire up to 300,000 shares of common stock. Throughout the employment period
and for a period of three years thereafter, the agreement restricts Mr.
Belanger's ability to engage in activities competitive with those of ours. In
addition, throughout the employment period and for a period of two years
thereafter, Mr. Belanger has agreed that he will not solicit any person employed
by us to leave our employ, or employ or solicit for employment any person who is
employed by us. The agreement may be terminated by us (i) in the event of the
bankruptcy, liquidation, or dissolution of Lumenon, (ii) if Mr. Belanger commits
certain acts constituting cause or (iii) if he is in material breach of the
agreement. Mr. Belanger may terminate the employment agreement upon one month's
prior written notice to us.
Reginald J.N. Ross is employed by us as the Vice President of Corporate
Development and Chief of Strategic Operations pursuant to an employment
agreement effective December 1, 1999 for a term of five years. The agreement
provides for an initial base salary of US$84,539 (CDN$125,000) annually. We also
granted Mr. Ross an option to acquire up to 300,000 shares of common stock.
Throughout the employment period and for a period of three years thereafter, the
agreement restricts Mr. Ross' ability to engage in activities competitive with
those of ours. In addition, throughout the employment period and for a period of
two years thereafter, Mr. Ross has agreed that he will not solicit any person
employed by us to leave our employ, or employ or solicit for employment any
person who is employed by us. The agreement may be terminated by us (i) in the
event of the bankruptcy, liquidation, or dissolution of Lumenon, (ii) if he
commits certain acts constituting cause or (iii) if he is in material breach of
the agreement. Mr. Ross may terminate the employment agreement upon one month's
prior written notice to us.
Felice Philip Meffe is employed by us as Vice President Marketing and
Business Development pursuant to an employment agreement effective June 9, 2000
for an indeterminate term. The agreement provides for an initial base salary of
US$84,539 (CDN$125,000) annually. We also granted Mr. Meffe an option to acquire
up to 250,000 shares of common stock. Throughout the employment period and for a
period of one year thereafter, the agreement restricts Mr. Meffe's ability to
engage in activities competitive with those of ours. In addition, throughout the
employment period and for a period of one year thereafter, Mr. Meffe has agreed
that he will not solicit any person employed by us to leave our employ, or
employ or solicit for employment any person who is employed by us. The agreement
may be terminated by us (i) in the event of the bankruptcy, liquidation, or
dissolution of Lumenon, (ii) if Mr. Meffe commits certain acts constituting
cause or (iii) if he is in material breach of the agreement. Mr. Meffe may
terminate the employment agreement upon one month prior written notice to us.
We have never granted any stock appreciation rights. No stock options
were granted to our chief executive officer during the fiscal year ended June
30, 2000.
-10-
<PAGE>
OPTION EXERCISED AND OPTION VALUES
The following table provides information related to options exercised
by our chief executive officer and the number of and value of options held by
him on June 30, 2000.
<TABLE>
<CAPTION>
Securities
Acquired Aggregate Value of Unexercised in the
On Value Realized Unexercised Options as of money options as of
Name Exercise ($) June 30, 2000 (#) June 30, 2000 ($)
---- -------- --- ----------------- -----------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
S. Iraj Najafi 200,000 US$5,100,000 _ _ _ _
(CDN$7,540,860)
</TABLE>
OTHER COMPENSATION PLANS
We have no pension plan or other compensation plans for our executive
officers or directors.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On May 19 and June 21, 1999, we entered into several agreements with
Molex Incorporated. The Molex agreements include a teaming agreement, a stock
purchase agreement, a stock restriction agreement and a registration rights
agreement. The teaming agreement was amended in March 2000. Under the teaming
agreement, as amended, we agreed with Molex to jointly develop certain DWDM
products related to the DWDM market and other photonics markets. Under the stock
purchase agreement, Molex purchased 3,000,000 shares of common stock at a price
of US$0.50 per share in two stages. We also issued to Molex a warrant to
purchase 1,666,667 additional shares of common stock at a price of US$0.90 per
share, which was exercised in November 1999. In addition, we issued the services
warrant, which was exercised in full during the past fiscal year by Molex. Under
the stock restriction agreement, (i) the consent of Molex is required for
certain extraordinary actions relating to our governance and our operations and
(ii) certain of our stockholders have agreed not to sell their respective shares
of common stock to a competitor of Molex without Molex's prior consent. Dr.
Moretti, an officer of Molex Fiber Optics Inc., is Molex's designee as a
director of the Company.
We have entered into a license agreement with Polyvalor, a limited
partnership, as represented by its General Partner, Polyvalor Inc. and McGill
University (together, Polyvalor and McGill University referred to as the
"licensor") pursuant to which we acquired the right through October 2017 to
produce, sell, distribute and promote products derived from using the patents
and know-how, as such terms are defined in the license agreement, of the
licensor. Using a licensed sol-gel process of the licensor, we will design and
develop integrated optical devices for DWDM and plastic optical fiber devices
for the telecommunications and data communications markets. We will pay a
royalty of 5% on gross sales, up to a maximum of US$2,367,104 (CDN$3,500,000)
over the term of the license agreement. Additionally, we issued 750,000 shares
of common stock to each of Polyvalor and McGill University. Mr. Beaudry, an
officer of Polyvalor, is the designee of Polyvalor and McGill University as a
director of Lumenon.
-11-
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE OF BOARD OF DIRECTORS ON
EXECUTIVE COMPENSATION
GENERAL
The Compensation Committee of the Board of Directors determines the
cash and other incentive compensation that we pay to our Chief Executive Officer
and other executive officers and is responsible for the administration of and
granting of options under our employee stock option incentive plan.
COMPENSATION PHILOSOPHY
The Compensation Committee's philosophy is to base management's
compensation, in part, on achievement of our annual and long-term performance
goals, to provide competitive levels of compensation, to recognize individual
initiative, achievement and length of service and to enable us to attract,
retain and reward executive officers who contribute to our overall success. The
Compensation Committee believes that it is important to align our compensation
program with our business objectives and performance and the long term interests
of our stockholders and establish a method of executive compensation that is
competitive with other companies that are similar to us in size, industry and
geographic location, yet does not hinder our long term objectives. We currently
use salary and stock options to meet these goals.
FORMS OF COMPENSATION
We provide our executive officers with a compensation package that
consists of cash, in the form of salary, equity in the form of stock options,
and participation in benefit plans generally available to other employees. In
setting total compensation, the Compensation Committee considers individual and
our overall performance, as well as market information regarding compensation
paid by other companies in our industry.
SALARY. Base salaries for our executive officers are initially set
based on negotiation with individual executive officers at the time of
recruitment and are based upon the responsibilities of the position and the
experience of the individual in our industry and in management, and by reference
to the competitive marketplace for management talent. The Compensation Committee
reviews base salaries for corresponding positions at comparable companies. The
Compensation Committee reviews annually the base salaries and bonuses, if any,
of our executive officers, and the Board of Directors acts upon the
recommendations of the Compensation Committee in this regard. Annual salary
adjustments are determined by evaluating the competitive marketplace; our
overall performance; our cash flow and cash management; the performance of the
executive; the length of the executive's service to us and any increase in the
responsibilities assumed by the executive. We believe that the salaries we pay
to our executives salaries are in the low range in relation to other comparable
companies in our industry and geographic location.
STOCK OPTIONS. The Compensation Committee grants stock options to our
executive officers under our employee stock option incentive plan. The plan is
intended to assist us in securing and retaining key employees by allowing them
to participate in our ownership and growth through the grant of stock options.
The granting of such options serves as partial consideration for employment
services and gives key employees an additional inducement to remain in our
employ and provides them with an increased incentive to work toward our success.
The number of shares subject to options granted to our employees is a key factor
in creating compensation packages that permit us to compete with other
prospective employers.
During the fiscal year ended June 30, 2000, the Compensation Committee
granted the following options to our executive officers: (i) options to purchase
250,000 shares of our Common Stock to Dr. Chia-Yen Li, our Chief Operating
Officer, (ii) options to purchase 300,000 shares of our Common Stock to
-12-
<PAGE>
Vincent Belanger, CA, our Vice President-Finance, Chief Financial Officer and
Treasurer, and (iii)options to purchase 300,000 shares of our Common Stock to
Reginald J.N. Ross, our Vice President of Corporate Development and Chief of
Strategic Operations. All of such options were granted when we entered into the
respective employment agreements with such individuals.
OTHER BENEFITS. Our executive officers are entitled to participate in
the benefit plans that we make available to our employees.
CHIEF EXECUTIVE OFFICER COMPENSATION
During fiscal year 2000, the compensation of the Chief Executive
Officer, Dr. S. Iraj Najafi, was determined in accordance with the policies and
criteria set forth above. Dr. Najafi's base annual salary of US$121,736
(CDN$180,000) for fiscal year 2000 reflects his position, duties and
responsibilities. On July 21, 2000, Dr. Najafi's base annual salary was
increased to $202,893 (CDN$300,000). The Compensation Committee did not grant
any stock options to Dr. Najafi during the fiscal year ended June 30, 2000.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
There are no transactions requiring disclosure under Item 402 (j) of
Regulation S-K of the Securities Exchange Act of 1934, as amended.
The Compensation Committee of the Board of Directors
Pierre-Paul Allard, Guy Brunet and Pierre-Andre Roy (Chairman)
-13-
<PAGE>
PERFORMANCE GRAPH
COMMON STOCK PERFORMANCE. The following graph compares, for each of the
fiscal years indicated, the yearly percentage change in our cumulative total
stockholder return on our common stock with the cumulative total return of (a)
the Russell 2000 Index, a broad equity market index, and (b) an index consisting
of the following companies: 8x8 Inc., Alliance Semiconductor CP, Atmel Corp.,
Dense-Pac Microsystems Inc., Galileo Technology Ltd., Integrated Silicon
Solution, Inc., IXYS Corporation, M- Systems Flash Disk Pioneers Ltd., Macronix
International Co. Ltd., Micron Technology Inc., Rambus Inc., Ramtron
International Corp., Silicon Storage Tech Inc., Smart Modular Tech Inc., Xicor
Inc.
COMPARE CUMULATIVE TOTAL RETURN AMONG LUMENON INNOVATIVE LIGHTWAVE
TECHNOLOGY, INC. RUSSELL 200 INDEX AND MG GROUP INDEX
<TABLE>
<CAPTION>
COMPANY/INDEX/MARKET FISCAL YEAR ENDING
----------------------------------------------------------------
9/30/1998 13/31/1998 3/31/1999 6/30/1999 9/30/1999
<S> <C> <C> <C> <C> <C>
Lumenon Innovative 100.00 25.00 56.00 200.00 953.00
Semiconductor-Memory Chips 100.00 161.16 144.82 150.36 218.66
Russell 2000 Index 100.00 116.00 109.33 125.91 117.55
</TABLE>
SOURCE: MEDIA GENERAL FINANCIAL SERVICES
P.O. BOX 85333
RICHMOND, VA 23293
PHONE: 1-(800) 446-7922
FAX: 1-(800) 649-6826
-14-
<PAGE>
PROPOSAL NO. 2
APPROVAL OF INCREASE OF SHARES RESERVED FOR ISSUANCE
UNDER THE EMPLOYEE STOCK OPTION INCENTIVE PLAN
The Board of Directors proposes that the amendment to our employee
stock option incentive plan to increase from 2,500,000 shares of common stock to
6,000,000 shares of common stock the number of shares reserved for issuance upon
the exercise of options granted or to be granted under the plan be approved.
The plan is administered by the compensation committee of the Board of
Directors. The compensation committee may from time to time designate
individuals to whom options to purchase shares of common stock may be granted
and the number of shares to be optioned to each. The total number of shares of
common stock to be optioned to any one individual may not exceed 5% of the total
of the issued and outstanding shares. The option price per share of common stock
that is the subject of any option is fixed by the compensation committee when
such option is granted and cannot involve a discount to the market price at the
time the option is granted. The period during which an option is exercisable may
not exceed 10 years from the date of grant. In the event of certain basic
changes in the Company, including a reorganization, merger or consolidation, or
the purchase of shares pursuant to a tender offer for shares of common stock, in
the discretion of the compensation committee, each option may become fully and
immediately exercisable.
The plan may be amended, suspended, reinstated or terminated by the
Board of Directors; provided, however, that without approval of affected
optionees, no amendment may be made that adversely affects the benefits accruing
to optionees under the Plan.
Options granted under the plan are not assignable or transferable,
except by will or the laws of intestate succession. Stock options granted under
the plan may be exercised by the optionee (or the optionee's legal
representative) only while the optionee is employed by us, or within 90 days
after termination of employment due to a permanent disability, or within one
year after termination of employment due to retirement. The executor or
administrator of a deceased optionee's estate or the person or persons to whom
the deceased optionee's rights thereunder have passed by will or by the laws of
descent and distribution will be entitled to exercise the option within one year
after the decedent's death. Stock options expire immediately in the event an
optionee is terminated with cause or resigns. All of the aforementioned exercise
periods are subject to the further limitation that an option will not, in any
case, be exercisable beyond its stated expiration date.
The Board of Directors, by unanimous vote at its meeting on March 1,
2000, and by unanimous written consent on July 21, 2000, voted to increase the
shares available for issuance under the plan from 2,500,000 to 6,000,000.
At last year's annual meeting, a majority of the stockholders ratified
our employee stock option incentive plan. The plan enables us to remain highly
competitive and provide sufficient equity incentives to attract and retain
highly-qualified and experienced employees. The Board of Directors believes that
approval of this amendment is in the best interest of us and our stockholders
because the availability of an adequate reserve of shares under the plan is an
important factor in attracting, motivating and retaining qualified officers and
employees essential to our success and in aligning their long-term interests
with those of the stockholders. Options may be granted to (i) our directors,
officers and other full-time salaried employees with managerial, professional or
supervisory responsibilities, and (ii) consultants and advisors who render us
bona fide services, in each case, if the compensation committee determines that
such officer, employee, consultant or advisor has the capacity to make a
substantial contribution to our success.
-15-
<PAGE>
The plan currently authorizes the issuance of a maximum of 2,500,000
shares of common stock pursuant to the exercise of options granted thereunder.
If the amendment is approved, then the plan will authorize the issuance of a
maximum of 6,000,000 shares. As of October 15, 2000, stock options to purchase
4,568,000 shares of common stock, at exercise prices ranging from $1.00 to
$28.00 per share, vesting over a 5 year period have been granted under the plan,
of which options to purchase 2,068,000 shares of common stock have been granted
subject to stockholder approval of the amendment. Options to purchase 897,350
shares of common stock were exercised through the record date for the meeting.
Options to purchase 3,590,150 shares of common stock were outstanding as of the
date hereof, taking into account options to purchase 30,000 shares which were
canceled. No options were granted to our chief executive officer during the
fiscal year ended June 30, 2000 and through the record date for the meeting,
options to purchase shares of common stock have been granted pursuant to the
plan to (i) the chief executive officer, (ii) all current executive officers as
a group (iii) all employees, including all current officers who are not
executive officers, as a group, and (iv) non-employee directors during the
fiscal year ended June 30, 2000 and through the record date as follows:
NUMBER OF OPTIONS (#)(1)(2)
Chief Executive Officer 300,000
Executive Group 1,150,000
Non-Executive Director Group 250,000
Non-Executive Officer Employee Group 1,257,000
-------------------------
(1) On the record date, the last reported sales price of the common stock
as reported on The Nasdaq National Market was $14.3125 per share.
(2) Information contained in this table is duplicative of information
contained in "Executive Compensation" and does not signify additional
grants of options to purchase shares of common stock.
The affirmative vote of a majority of the votes cast by holders of our
common stock is required to approve the increase.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR THE APPROVAL OF THE INCREASE OF SHARES RESERVED
FOR ISSUANCE UNDER THE EMPLOYEE STOCK OPTION INCENTIVE PLAN.
---------------------
-16-
<PAGE>
PROPOSAL NO. 3
ISSUANCE OF CONVERTIBLE NOTES AND WARRANTS
AND UNDERLYING SHARES OF COMMON STOCK
On July 25, 2000, we sold US$35,000,000 (CDN$51,751,000) aggregate
principal amount of convertible notes due July 25, 2005 to two institutional
investors. The securities purchase agreement and NASD Rule 4460(i) require us to
solicit the approval of our stockholders for the issuance of such securities at
the first meeting of our stockholders occurring after the issuance of the
securities. If we do not receive shareholder approval by such date, there will
be an event of default under the notes which would entitle the noteholders to
accelerate the maturity of the notes as described below. Accordingly, our Board
of Directors is seeking the vote of our stockholders to ratify and approve the
issuance of the convertible notes and warrants, and the common stock issuable
upon their respective conversion or exercise.
The notes bear interest at rate of 7 1/2% per annum, which is payable
upon the earlier to occur of the repayment or conversion of the notes. The notes
are convertible from and after issuance into shares of common stock at a price
equal to the average of the closing bid prices of our common stock for the five
consecutive trading days ending immediately prior to conversion, but in no event
less than US$7.00, nor more than US$25.00 per share (unless a default under the
notes has occurred). Commencing 30 months after the issuance of the notes, we
may require their conversion provided that (i) the volume weighted average price
for our common stock for any 40 consecutive trading days equals or exceeds
$50.00, (ii) the average trading volume of our common stock during such 40
consecutive trading days equals or exceeds 120,000 shares per day, (iii) the
shares of common stock issuable upon conversion of the notes are authorized and
reserved for issuance, registered for resale and eligible to be traded on the
New York Stock Exchange, the American Stock Exchange or The Nasdaq National
Market and (iv) there is not an uncured event of default under the notes.
The notes provide for various events of default, which would entitle
their holders to require the immediate repayment of the notes, together with an
additional default amount. The amount payable upon an event of default would be
equal to the greater of (i) 115% of aggregate principal amount of the notes plus
all accrued and unpaid interest on the notes and (ii) the quotient of (a) the
aggregate principal amount of the notes plus all accrued and unpaid interest on
the notes divided by (b) the conversion price on the date we receive notice of
the default multiplied by the highest closing bid price of our common stock
during the period beginning on the date we receive notice of the default and
ending the date preceding the payment of the default amount. Such events of
default include our failure to pay the principal amount of the notes or accrued
interest on the notes for five trading days after the due date, our failure to
make any payment with respect to any indebtedness greater than $100,000 to a
third party, our default under any agreement that would materially adversely
effect us, the suspension of our common stock from trading for an aggregate of
10 trading days in any nine month period, the failure to have an investor
registration statement declared effective by April 21, 2001, the suspension of
such effectiveness for more than 30 days, our failure to remove restrictive
legends from the certificates for our common stock, our indication to any holder
of the notes that we do not intend to issue shares of common stock upon
conversion of the notes, our breach of any material term of the notes or the
other agreements entered into in connection with the notes, the institution of
bankruptcy proceedings, and the failure to have the stock purchase agreement
approved by stockholders by December 31, 2000.
The holders of the notes may also require their repayment, together
with an additional redemption amount (calculated as described above for an event
of default), upon certain extraordinary events, such as the sale or disposition
of all or substantially all of our assets, a merger or consolidation where we
are not the surviving entity and the acquisition of at least 50% of the voting
power of common stock owned by one person, entity or group (other than our
current majority holders). The conversion price of the notes and the
-17-
<PAGE>
number of shares of our common stock issuable upon conversion are subject to
adjustment upon the occurrence of certain capital events and upon the occurrence
of certain dilutive issuances of our securities.
In connection with the financing, we issued to the purchasers five year
warrants to purchase an aggregate of 5,000,800 shares of common stock, vesting
18 months after issuance, based upon the volume weighted average price of the
common stock during the five consecutive trading days preceding vesting. If the
volume weighted average price is equal to or less than US$30.00, then the
exercise price will be US$10.00. If the volume weighted average price is greater
than US$30.00, but less than US$70.00, then the exercise price will be the sum
of US$10.00, plus one-half of the excess over US$30.00. If the volume weighted
average price is greater than US$70.00, then the exercise price will be
US$30.00. The number of shares of common stock issuable upon exercise of the
warrants and the exercise price of the warrants are subject to adjustment upon
the occurrence of certain dilutive issuances of our securities, including the
issuance of convertible securities at a conversion/exercise price that is less
than the then current market price, stock splits, stock dividends and other
recapitalizations. In addition, upon a consolidation, merger or sale in which we
are not the surviving entity, we must require that our successor assume our
obligations under the warrants. If we declare or make any distribution of assets
or rights to acquire shares to our stockholders, the holders of the warrants,
upon exercise thereof, will be entitled to receive the amount of such assets or
rights as if such holder had been a holder of common stock on the date of such
distribution. In the event of a default under the notes or in certain other of
our obligations to the purchasers, vesting of the warrants may be accelerated.
We agreed with the purchasers of the notes that for a period of 180
days after the issuance of the notes, we would not, without the prior consent of
the purchasers, obtain additional equity or equity-linked financing and that for
a further period of 180 days, should we propose to engage in any equity or
equity-linked financing, we would offer the purchasers the opportunity to
provide such financing upon the terms and conditions proposed. Such agreement is
not applicable to business combinations or firm commitment public offerings.
We also entered into a registration rights agreement that provides the
holders of the convertible notes and warrants with certain rights to the
registration of the shares of common stock issuable upon conversion of the notes
or exercise of the warrants. According to the terms of the agreement, we filed a
registration statement on September 11, 2000 with the Securities and Exchange
Commission. The investors have also been granted so-called "piggyback"
registration rights to participate in any registration by us in respect of the
resale of our common stock during a specified period that ends upon the earlier
of the time that all of the registrable securities become eligible for resale
under Rule 144 under the Securities Act of 1933, as amended, or that all of the
registrable securities have been sold by the investors.
We believe that the funds raised in the July 2000 financing, together
with cash on hand and term deposits, will enable us to meet our financial needs
until at least December 2001. The financing will enable management to focus its
time and efforts on research and development and our overall growth rather than
on financing activities. The proceeds of sale of the notes are also being used
in part to complete the buildout of our new manufacturing facility in Ville
Saint-Laurent, which has been designed for the high volume production of
packaged integrated optic devices in the form of compact hybrid glass circuits
on silicon chips.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR APPROVAL OF THE PROPOSAL TO RATIFY AND APPROVE
THE ISSUANCE OF THE CONVERTIBLE NOTES AND WARRANTS, AND THE
COMMON STOCK ISSUABLE UPON THEIR RESPECTIVE CONVERSION OR EXERCISE.
-18-
<PAGE>
PROPOSAL NO. 4
RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors appointed KPMG LLP to serve as our independent
auditors for the fiscal year ending June 30, 2001. While we are not required to
do so, the Board of Directors is submitting to stockholders for ratification the
appointment of KPMG LLP as our independent auditors in order to ascertain the
stockholders' views. Such ratification of the selection of KPMG LLP will require
the affirmative vote of the holders of a majority of the shares of our common
stock entitled to vote thereon and represented at the meeting. If the
stockholders do not ratify the appointment of KPMG LLP, the Board of Directors
will consider the selection of other independent auditors.
Representatives of KPMG LLP are expected to be present at the meeting
and to be available to respond to appropriate questions. Such representatives
will have the opportunity to make a statement if they desire to do so.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
THE SELECTION OF THE INDEPENDENT PUBLIC ACCOUNTANTS.
-------------------------
SOLICITATION STATEMENT
We will bear all expenses in connection with the solicitation of
proxies. In addition to the use of the mails, solicitations may be made by our
regular employees, by telephone, telegraph or personal contact, without
additional compensation. We will, upon their request, reimburse brokerage houses
and persons holding shares of common stock in the names of nominees for their
reasonable expenses in sending solicited material to their principals.
STOCKHOLDER PROPOSALS
Stockholder proposals made in accordance with Rule 14a-8 under the
Exchange Act and intended to be presented at the Company's 2001 Annual Meeting
of Stockholders must be received by the Company at its principal office at 8851
Trans-Canada Highway, Ville Saint Laurent, Quebec, Canada H4S 1Z6 no later than
June 30, 2001 for inclusion in the proxy statement for that meeting.
Our by-laws require that a stockholder give advance notice to us of
nominations for election to the Board of Directors and of other matters that the
stockholder wishes to present for action at an annual meeting of stockholders
(other than matters included in our proxy statement in accordance with Rule
14a-8 under the Securities Exchange Act of 1934, as amended). Such stockholder's
notice must be given in writing, include the information required by our by-laws
and the proxy rules, and be delivered or mailed by first class United States
mail, postage prepaid, to our secretary at our principal offices. We must
receive such notice not less than 45 days prior to the to the first anniversary
of the date of this year's annual meeting of stockholders. Thus, notice of a
director nomination or stockholder proposal for our 2001 annual meeting of
stockholders must be received by us no later than October 8, 2001.
The advance notice provisions of our by-laws supersede the notice
requirements contained in Rule 14a-4 under the Securities Exchange Act of 1934,
as amended. Any stockholder proposal must also comply with other applicable
provisions of our amended and restated certificate of incorporation and by-laws.
We will not consider a stockholder proposal unless it is presented in accordance
with the foregoing requirements.
-19-
<PAGE>
ANNUAL REPORTS
We have sent, or are concurrently sending, all of our stockholders of
record as of October 24, 2000 copies of our Annual Report on Form 10-K and our
Annual Report to Stockholders for the fiscal year ended June 30, 2000. Such
reports contain our certified consolidated financial statements for the fiscal
year ended June 30, 2000.
OTHER MATTERS
The Board of Directors knows of no other business that will be
presented to the meeting. If any other business is properly brought before the
meeting, it is intended that proxies in the enclosed form will be voted with
respect to any such matters in accordance with the judgment of the persons
voting the proxies.
By Order of the Board of Directors,
Dr. Mark P. Andrews
Secretary
October 27, 2000
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<PAGE>
PROXY
LUMENON INNOVATIVE LIGHTWAVE TECHNOLOGY, INC.
8851 TRANS-CANADA HIGHWAY
VILLE SAINT LAURENT, (QC), CANADA H4S 1Z6
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints S. Iraj Najafi, Mark P. Andrews and
Vincent Belanger and each of them, as proxy, each with the power to appoint his
substitute, and hereby authorizes each to represent and to vote as designated
below all the shares of common stock of Lumenon Innovative Lightwave Technology,
Inc., held of record by the undersigned on October 24, 2000, at the annual
meeting of stockholders to be held on November 21, 2000, and at any
postponements or adjournments thereof. The proposals referred to below are
described in our proxy statement for our annual meeting of stockholders dated
October 27, 2000.
The undersigned hereby instructs such proxies on their substitutes:
1. ELECTION OF DIRECTORS:
The election of S. Iraj Najafi, Pierre-Paul Allard and Pierre-Andre Roy
to class I of the Board of Directors for a three year term.
WITHHOLD AUTHORITY
FOR ALL TO VOTE FOR ALL ________________________
NOMINEES ___ NOMINEES ___ ________________________
TO WITHHOLD AUTHORITY TO
VOTE FOR ANY INDIVIDUAL
NOMINEE(S), PRINT NAME ABOVE.
2. APPROVAL OF THE INCREASE OF SHARES RESERVED FOR ISSUANCE UNDER OUR
EMPLOYEE STOCK OPTION INCENTIVE PLAN:
_______FOR _______AGAINST _______ABSTAIN
3. APPROVAL OF ISSUANCE OF CONVERTIBLE NOTES AND WARRANTS AND THE COMMON
STOCK ISSUABLE UPON THEIR RESPECTIVE CONVERSION OR EXERCISE:
_______FOR _______AGAINST _______ABSTAIN
4. RATIFICATION OF APPOINTMENT OF AUDITORS:
_______FOR _______AGAINST _______ABSTAIN
5. DISCRETIONARY AUTHORITY:
In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
<PAGE>
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR EACH OF PROPOSALS 1 THROUGH 4.
Dated: _______________________, 2000
----------------------------------
(Signature)
----------------------------------
(Signature)
Please sign your name exactly as it appears
hereon. When shares are held by joint owners, both
should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give
full title as such. If a corporation, please sign
in full corporate name by President or other
authorized officer. If a partnership or limited
liability company, please sign in full entity name
by authorized person.
<PAGE>
-------------------------
ATTENTION:
-------------------------
PLEASE NOTE THAT
THE ANNUAL MEETING OF STOCKHOLDERS
OF
LUMEMON INNOVATIVE LIGHTWAVE TECHNOLOGY, INC.
TO BE HELD ON NOVEMBER 21, 2000
WILL BE HELD AT
2:00 p.m.
at the Hilton Montreal Aeroport, 12505 Cote de Liesse, Dorval, Quebec.
This represents a change in the time of the Annual Meeting
from that indicated in the enclosed proxy materials.
All other information contained in the enclosed proxy
materials has not been effected by this revision.
-------------------------
