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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 22, 1996
REGISTRATION NO. 333-__________
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
______________________________
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
______________________________
LASERTECHNICS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 3208 Commander Drive 85-0294536
(State or other Carrollton, Texas 75006 (I.R.S. Employer
jurisdiction of (214) 407-6080 Identification No.)
incorporation (Address, including zip code,
or organization) and telephone number,
including area code,
of registrant's principal
executive offices)
________________________________
E.A. Milo Mattorano
Vice President and Chief Financial Officer
Lasertechnics, Inc.
3208 Commander Drive
Carrollton, Texas 75006
(214) 407-6080
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
________________________________
Copies to:
Kenneth S. Siegel
Baker & Botts, L.L.P.
599 Lexington Avenue
New York, New York 10022
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO
THE PUBLIC: From time to time after the effective date of the registration
statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering.
[_]________________
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [_]________________
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [_]
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<CAPTION>
CALCULATION OF REGISTRATION FEE
====================================================================================================================
TITLE OF SHARES AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED REGISTERED AGGREGATE PRICE AGGREGATE OFFERING REGISTRATION
PER UNIT (2) PRICE (2) FEE
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $0.01 per 6,609,406 shares (1) $1.5938 $10,534,071 $3632.44
share..............................
====================================================================================================================
</TABLE>
(1) Represents the shares of the Registrant's Common Stock issuable upon
conversion of the Series D Preferred Stock of the Registrant and the
exercise of Warrants to purchase Common Stock, and is deemed to
include any additional shares of Common Stock that may be issuable
upon conversion of such Series D Preferred Stock or exercise of such
Warrants as a result of the antidilution provisions thereof or as a
result of any adjustment to the conversion price.
(2) Estimated solely for the purpose of calculating the registration fee
under Rule 457. The offering price has been estimated and the
conversion price has been computed pursuant to Rule 457(c) and (g),
based on the last sale price of $1.5938 reported on the Nasdaq
SmallCap Market on August 15, 1996.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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SUBJECT TO COMPLETION, DATED AUGUST __, 1996
PROSPECTUS
LASERTECHNICS, INC.
6,609,406 Shares of Common Stock
This Prospectus relates to the offering (the "Offering") and sale from time
to time of up to 6,609,406 shares (the "Shares") of Common Stock, par value $.01
per share (the "Common Stock"), of Lasertechnics, Inc., a Delaware corporation
("Lasertechnics" or the "Company"). Of the Shares being offered hereby, up to
6,00,00 shares are being offered by certain stockholders of the Company (the
"Selling Stockholders") from time to time upon and after conversion of the
Company's Series D Preferred Stock, par value $.01 per share (the "Series D
Preferred Stock"), and up to 609,406 shares are being offered by the Selling
Stockholders from time to time upon and after the exercise of certain
outstanding warrants (the "Warrants") granted by the Company. The Series D
Preferred Stock was issued in a private placement completed in July 1996 (the
"1996 Private Placement"). See "Recent Developments" and "The Offering." The
Warrants were issued to Swartz Investments, LLC (the "Placement Agent") and
certain designees of the Placement Agent in connection with the 1996 Private
Placement and certain other recent private offerings of the Company as
hereinafter described. See "Risk Factors - Shares Eligible for Future Sale;
Convertible Securities and Warrants."
The Common Stock is currently traded over-the-counter on the Nasdaq
SmallCap Market under the symbol "LASX." See "Risk Factors - NASDAQ Listing" and
"Description of Capital Stock." On August 15, 1996, the average of the high and
low bid price for the Common Stock was $1.63, as reported on the Nasdaq SmallCap
Market. Neither the Series D Preferred Stock nor the Warrants are listed on any
trading market, and the Company has no intention of listing the Series D
Preferred Stock or Warrants for trading on any exchange or quotation system.
SEE "RISK FACTORS" BEGINNING ON PAGE 3 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE SHARES OFFERED
HEREBY.
The Shares may be offered for sale and sold by the Selling Stockholders
from time to time in varying amounts (subject to certain restrictions described
under the caption "Selling Stockholders") on the Nasdaq SmallCap Market at then
prevailing prices or in private transactions at prices and on terms to be
determined at the time of sale. The Shares may be sold by the Selling
Stockholders directly or through agents designated from time to time or to or
through broker-dealers designated from time to time. See "Plan of Distribution."
To the extent required, the number of Shares to be sold, the purchase price, the
name of any agent or broker-dealer, and any applicable commissions, discounts or
other items constituting compensation to such agents or broker-dealers with
respect to a particular offering will be set forth in a supplement or
supplements to this Prospectus (each, a "Prospectus Supplement"). The aggregate
proceeds to the Selling Stockholders from the sale of the Shares so offered will
be the purchase price of the Shares sold less the aggregate underwriting
discounts and commissions and fees and expenses of counsel and accountants, if
any, paid by the Selling Stockholders. See "Selling Stockholders." The Company
knows of no selling arrangement between any agent or broker-dealer and the
Selling Stockholders. The Company will not receive any proceeds from the sale of
any of the Shares offered by the Selling Stockholders hereunder. However, the
Company will receive proceeds of approximately $1,477,759 in the event all of
the Warrants are exercised. See "Use of Proceeds."
The Selling Stockholders and any broker-dealers or agents that participate
with the Selling Stockholders in the distribution of any of the Shares may be
deemed to be "underwriters" within the meaning of the Securities Act of 1933, as
amended (the "Securities Act"), and any discount or commission received by them
and any profit on the resale of the Shares purchased by them may be deemed to be
underwriting discounts or commissions under the Securities Act.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is ______ __, 1996.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy and information statements and
other information with the Securities and Exchange Commission (the
"Commission"). Such reports, proxy and information statements and other
information filed by the Company with the Commission can be inspected and
copied at the Public Reference Section of the Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
regional offices of the Commission located at Seven World Trade Center,
13th Floor, New York, New York 10048 and Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can be
obtained from the Public Reference Section of the Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. Such reports, proxy and information statements and other
information can also be inspected at the offices of the Nasdaq Stock
Market, 1735 K Street, N.W., Washington, D.C. 20006. The Commission
maintains a Web site that contains reports, proxy and information
statements and other information regarding issuers that file electronically
with the Commission. The address of the Commission's Web site is
http://www.sec.gov.
The Company has filed with the Commission a Registration Statement on
Form S-3 (together with all amendments and exhibits thereto, the
"Registration Statement") under the Securities Act, with respect to the
Shares offered hereby. This Prospectus does not contain all of the
information set forth in the Registration Statement, certain parts of which
are omitted in accordance with the rules and regulations of the Commission.
For further information pertaining to the Shares and the Company, reference
is made to the Registration Statement. Statements contained herein
concerning the provisions of any document are not necessarily complete and,
in each instance, reference is made to the copy of such document filed as
an exhibit to the Registration Statement or otherwise filed with the
Commission. Each such statement is qualified in its entirety by such
reference. Copies of the Registration Statement and the exhibits may be
inspected, without charge, at the offices of the Commission, or obtained at
prescribed rates from the Public Reference Section of the Commission at the
address set forth above.
INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed with the Commission (File No. 0-11933)
are incorporated by reference into this Prospectus: (i) the Company's
Annual Report on Form 10-KSB/A-3 for the year ended December 31, 1995; (ii)
the Company's Quarterly Report on Form 10-QSB/A for the quarter ended March
31, 1996; (iii) the Company's Quarterly Report on Form 10-QSB for the
quarter ended June 30, 1996; and (iv) the description of the Company's
Common Stock contained in the Company's registration statement on Form 8-A
filed on April 27, 1984 pursuant to Section 12(b) of the Exchange Act,
including any amendments or reports filed by the Company for the purpose of
updating such description.
All documents filed by the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus
and prior to the termination of the offering of the Shares hereunder shall
be deemed to be incorporated herein by reference and shall be a part hereof
from the date of filing of such documents.
Any statement contained in documents incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained in this Prospectus, or
in any other subsequently filed document which is also incorporated herein
by reference, modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed to constitute a part of this
Prospectus except as so modified or superseded.
The Company hereby undertakes to provide without charge to each
person, including any beneficial owner, to whom a Prospectus is delivered,
upon written or oral request of any such person, a copy of any or all of
the documents incorporated by reference herein, other than exhibits to such
documents not specifically incorporated by reference. Requests for such
copies should be directed to the Company's Chief Financial Officer, 3208
Commander Drive, Carrollton, Texas 75006, whose telephone number is (214)
407-6080.
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RISK FACTORS
PRIOR TO MAKING AN INVESTMENT DECISION, PROSPECTIVE PURCHASERS OF THE
SHARES SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS IN ADDITION TO
THE OTHER INFORMATION AND FINANCIAL DATA PRESENTED IN THIS PROSPECTUS OR
INCORPORATED BY REFERENCE HEREIN:
ACCUMULATED LOSSES
From its incorporation in 1981 through June 30, 1996, Lasertechnics
has an accumulated loss of $44,560,521 and has been profitable in only one
fiscal year during that time. There can be no assurance that the Company
will generate sufficient revenues to achieve profitability in the future.
AUDITORS' REPORT
The Company's auditors have included an explanatory paragraph in their
report with respect to the Company's 1995 financial statements related to a
significant uncertainty with respect to the Company's financial position at
December 31, 1995, which states that the Company's recurring losses from
operations and resulting continued dependence on access to external
financing together with its default on its capital lease obligation raise
substantial doubts about its ability to continue as a going concern. Since
December 31, 1995, the Company has arranged an aggregate of $13.8 million
in additional financing. Although there can be no assurance that the
Company will achieve profitability in the future and losses are expected to
continue, the Company believes that such $13.8 million will be sufficient
to satisfy its capital requirements for the remainder of the year.
Nonetheless, the Company will require substantial additional funds in the
future, and there can be no assurance that the Company's future financial
statements will not include a similar explanatory paragraph if the Company
is unable to raise sufficient funds either through financings or from
operations to cover the cost of its operations. The factors leading to and
the existence of the explanatory paragraph may adversely affect the
Company's relationship with customers and suppliers and have an adverse
effect on its ability to obtain financing.
LIQUIDITY AND CAPITAL REQUIREMENTS
The Company's future capital requirements will depend upon many
factors, including the extent and timing of the Company's products in the
market, the Company's operating results and the status of competitive
products. The Company anticipates that its existing capital resources and
revenues from operations will be adequate to satisfy its capital
requirements for the remainder of the year. The Company's actual working
capital needs will depend upon numerous factors, however, including the
cost of increasing the Company's sales and marketing activities and the
amount of revenues generated from its operations, none of which can be
predicted with certainty, and there can be no assurance that the Company
will not require additional funding prior to such date. If the Company's
losses continue, the Company may have to obtain sufficient funds to meet
its cash requirements through alliances or partnerships with compatible
entities with resources to support its programs, the sale of assets or
securities or other financing arrangements, or it will be required to
curtail its programs or seek a merger partner. Any additional funding may
be on terms which are unfavorable to the Company or disadvantageous to
existing security holders. In addition, no assurance may be given that the
Company will be successful in raising additional funds or entering into
business alliances.
SMALL TRADING VOLUME AND VOLATILITY OF STOCK PRICE
The weekly trading volume of the Company's Common Stock in the over-
the-counter market has varied from several thousand shares to 3 or 4
million shares, which may tend to increase the volatility of the price.
Since January 1993, the bid price of Common Stock in the over-the-counter
market has varied from a low of $.91 to a high of $4.06 per share. There
can be no assurance that the price volatility will not continue in the
future.
PROPRIETARY TECHNOLOGY
Lasertechnics relies on a combination of patents, trade secrets and
other intellectual property law rights, nondisclosure agreements and other
protective measures to preserve its rights pertaining to its products. Much
of Lasertechnics' ability to compete in the laser marking and imaging
industries depends on trade secrets, know-how and proprietary technical
knowledge that is unprotected by patents. Although the Company continues to
implement
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protective measures and intends to defend its proprietary rights
vigorously, there can be no assurance that these efforts will be
successful. Such protections may not preclude competitors from developing
products similar to the Company's. In addition, the laws of certain foreign
countries do not protect intellectual property rights to the same extent as
do the laws of the United States.
There can also be no assurance that third parties will not assert
intellectual property infringement claims against the Company. Any such
infringement claim could result in protracted and costly litigation and
could have a material adverse effect on the Company's results of operations
regardless of its outcome.
TECHNOLOGICAL OBSOLESCENCE
The laser and imaging industries are undergoing, and are expected to
continue to undergo, rapid and significant technological change. There can
be no assurance that Lasertechnics' research and development programs will
enable it to compete effectively in the future. The development by others
of new or improved processes or products may make Lasertechnics' research
and its products obsolete.
COMPETITION
The imaging and laser marking industries are highly competitive in all
aspects, including research and development and marketing. Many of
Lasertechnics' competitors have considerably greater financial, technical
and marketing resources than Lasertechnics. The Company's laser marking
business faces competition not only from other laser marking companies, but
from several other marking technologies in widespread use such as ink jet
(currently the dominant technology in the packaging industry), embossing
and hot stamping.
DEPENDENCE ON KEY EMPLOYEES AND CONSULTANTS
Because of the specialized nature of its businesses, Lasertechnics is
dependent upon the efforts of its current officers, consultants and
scientists and upon its ability to attract and retain technologically
qualified personnel, particularly scientists and software designers highly
qualified in the areas of laser and imaging technology. There is intense
competition for qualified personnel in the laser and imaging industries,
including competition from companies with substantially greater resources
than Lasertechnics. Although the Company has been successful to date in
recruiting adequate numbers of qualified personnel, there is no assurance
that Lasertechnics will be successful in the future in recruiting or
retaining personnel of the requisite scientific caliber or in the requisite
numbers to enable Lasertechnics to compete effectively.
DEPENDENCE ON SUPPLIERS
The Company acquires all of its plastic card printers from a single
source. Although to date the Company has generally been able to obtain
adequate supplies of these products, the inability of the Company in the
future to obtain sufficient sole or limited source products, or to develop
alternative sources, could result in delays in product introductions or
shipments and could have material adverse effects on the Company's results
of operations.
DEPENDENCE ON CUSTOMERS
A substantial portion of the revenues in 1996 for the Company's
subsidiary, Sandia Imaging Systems Corporation, will be derived from two
contracts awarded during the first quarter of 1996. The loss of or the
inability to profitably complete either of these two contracts could have
material adverse effects on the Company's results of operations.
NASDAQ LISTING
Lasertechnics' Common Stock is listed on the NASDAQ SmallCap Market
which requires a minimum stockholders' equity of $1 million and tangible
assets of $2 million for continued listing. Because Lasertechnics'
stockholders' equity fell below this limit at September 30, 1995, NASDAQ
temporarily put the Company's stock on a conditional listing until a new
minimum of $2,450,000 in equity was met on December 30, 1995. This was
accomplished through the conversion of an aggregate of $1,045,342 of
convertible subordinated debentures of the Company and the issuance of
Series C Convertible Preferred Stock. See "Description of Capital Stock -
Series C Preferred Stock." On January 2, 1996, NASDAQ removed the
conditional listing and lowered the stockholders' equity requirement to $1
million. While
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management believes that in the event of future losses the Company will be
able to obtain additional equity financing to preserve such listing, there
can be no assurance that the Company will be able to do so.
In the event the Common Stock were delisted from NASDAQ, trading, if
any, would be conducted in the over-the-counter market on the NASD's
electronic bulletin board, in what are commonly referred to as the pink
sheets. As a result, an investor may find it more difficult to dispose of,
or to obtain accurate quotations as to the price of, the Company's
securities. In addition, the Common Stock would be subject to rules
promulgated under the Exchange Act applicable to penny stocks. The
Commission has adopted regulations that generally define a "penny stock" to
be an equity security that has a market price (as defined) or exercise
price of less that $5.00 per share, subject to certain exceptions. By
virtue of being listed on NASDAQ, the Company's Common Stock will be exempt
from the definition of "penny stock." If, however, the Common Stock is
removed from NASDAQ, the Company's securities may become subject to the
penny stock rules that impose additional sales practice requirements on
broker-dealers who sell penny stocks to persons other than established
customers and accredited investors. Consequently, the penny stock rules may
affect the ability of broker-dealers to sell the Company's securities and
may affect the ability of purchasers in the offering to sell their
securities in the secondary market.
SHARES ELIGIBLE FOR FUTURE SALE; CONVERTIBLE SECURITIES AND WARRANTS
Future sales of Common Stock in the public market by existing
stockholders, warrantholders and holders of convertible securities after
this offering could adversely affect the market price of Lasertechnics'
Common Stock. As of August 15, 1996, an aggregate of 24,080,681 shares of
Common Stock will be freely tradeable without restriction under the
Securities Act. In addition, up to 9,116,207 shares will be eligible for
resale in accordance with the manner of sale and volume limitations of Rule
144 promulgated under the Securities Act.
Lasertechnics has reserved approximately 13.2 million shares of Common
Stock for issuance upon the exercise of outstanding convertible securities
and warrants. Lasertechnics has also reserved 1.15 million shares of Common
Stock for issuance to key employees, officers, directors and consultants
pursuant to the Company's benefit plans. The Company's 10% Subordinated
Convertible Debentures due October 2, 1998 (the "1995 Debentures"), the
Company's 10% Subordinated Convertible Debentures due March 1, 1999 (the
"1996 Debentures" and, with the 1995 Debentures, the "Debentures"), in the
aggregate principal amount of $12.5 million, and the Company's Series D
Preferred Stock, with an aggregate stated value of $8.35 million, became or
will become convertible into Common Stock at various times during 1995 and
1996. Subject to certain exceptions, the conversion price for the 1995
Debentures is equal to the lesser of (i) $2.34 and (ii) a variable
conversion rate equal to the average closing bid price for the Common Stock
for the five trading days prior to conversion (the "Variable Conversion
Rate"). The conversion price for the 1996 Debentures is equal to the lesser
of (i) $2.00 and (ii) the Variable Conversion Rate. The conversion price
for the Series D Preferred Stock is equal to the lesser of (i) $2.14 and
(ii) the average closing bid price of the Common Stock for the 10 trading
days prior to the conversion date multiplied by a percentage which declines
from 90% to 85% over a 180 day period. These variable conversion rates for
the Debentures and the Series D Preferred Stock could result in substantial
dilution to the existing stockholders of the Company if the trading price
of the Company's Common Stock declines. This potential dilution may also
adversely affect the Company's ability to raise additional financing on
favorable terms in the future. In addition, because the conversion prices
are variable, Lasertechnics is unable to determine whether the number of
shares it has reserved or its remaining authorized shares of Common Stock
will be sufficient to satisfy all future requirements for the issuance of
Common Shares upon conversion of the Debentures and Series D Preferred
Stock. The governing instruments for both the Series D Preferred Stock and
the 1996 Debentures include substantial penalties in the event that the
Company has insufficient authorized or reserved shares to satisfy the
conversion requirements of the Series D Preferred Stock or the 1996
Debentures.
CONCENTRATION OF SHARE OWNERSHIP
Based upon shares outstanding at July 31, 1996, the Company's officers
and directors and their affiliates as a group will beneficially own
approximately 44.6% of the Company's outstanding Common Stock. As a result,
should these stockholders vote together, they will be able to exercise
significant influence over all matters requiring stockholder approval,
including the election of directors and the approval of significant
corporate transactions.
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CAPITAL LEASE OBLIGATION IN DEFAULT
In 1983, the City of Albuquerque issued 8% tax-exempt industrial
development revenue bonds in connection with a long-term 25-year capital
lease of the Company's Albuquerque facility. The principal amount
outstanding as of June 30, 1996 was $1,052,643. Pursuant to its agreement
with the City of Albuquerque, Lasertechnics is required to maintain a
current ratio of at least 1 to 1 and a debt to equity ratio of not more
than 3 to 1. At June 30, 1996, Lasertechnics' current ratio was 1.60 to 1
(excluding the capital lease obligations in default) and its debt to equity
ratio was 5.08 to 1. The Company has a prepayment agreement with the
bondholder whereby the bondholder agreed to waive its right to call the
bond for redemption through April 1, 1998 provided that the lessee pays the
base prepayment and an additional prepayment amount of $8,000 per month on
a timely basis. However, the Company is in the process of arranging new
long-term financing for this real estate and expects to obtain it by the
end of 1996. There can be no assurance that the Company will be able to do
so. Failure to obtain such financing could force the Company to relocate
its facilities and experience the associated disruption of business.
THE COMPANY
Lasertechnics, a Delaware corporation, was formed in October 1981. In
early 1995, the Company became a holding company with two independent
operating units, Sandia Imaging Systems Corporation ("Sandia") and
Lasertechnics Marking Corporation ("LMC"), both Delaware corporations. Each
of Sandia and LMC is run by separate management teams, produces different
products and serves different markets. Lasertechnics' wholly-owned inactive
subsidiary, Quantrad Corporation is in the process of dissolution.
Sandia, formed in August 1993 and based in Carrollton, Texas,
distributes, integrates and sells multi-station and mono-station card
printers and computer software systems for identification cards. Sandia has
awarded options to directors and employees, that, if and when vested and
exercised, will reduce the Company's ownership to approximately 85%. Sandia
has a wholly owned French subsidiary, Sandia Imaging Systems Europe, S.A.
("Sandia EUR"). Printis S.A.R.L., a wholly owned subsidiary of Sandia EUR,
was merged into Sandia EUR in June 1995.
LMC, which is based in Albuquerque, New Mexico and is comprised of the
Company's original marking business, designs, manufactures and sells laser
marking systems for use in marking a variety of products and containers.
The Company expects to hold over 80% of the equity of LMC after granting
its management the ability to own a significant stake in its business, as
has been granted to management of Sandia. In the first quarter of 1996, LMC
introduced a new product line, the BlazerJet Inkless Ink JetTM system,
which addresses a growing worldwide market need for more programmability
and portability while providing marking quality and operating performance
superior to inkjets of similar capacity.
The Company's principal offices are located at 3208 Commander Drive,
Carrollton, Texas 75006, and its telephone number is (214) 407-6080.
RECENT DEVELOPMENTS
The Company recorded consolidated net losses for the second quarter
ended June 30, 1996 of $3.9 million compared to net losses of $2.6 million
for the second quarter of 1995. Consolidated net losses for the six months
ended June 30, 1996, were $6.1 million compared to consolidated net losses
of $4.4 million for the same period in 1995.
The losses in the second quarter of 1996 have been negatively
impacted by delays in completion of two significant contracts. These delays
were partly due to changes in production schedules by the customer, and
will result in revenue that might have been recognized in the second
quarter being recognized in the third quarter. In addition, Sandia recorded
an expense of $1 million as the cost of settling a year-long dispute under
a manufacturing agreement with Singapore Precision Industries. Under the
settlement, the Company was granted the option to distribute two new
printer lines in North and South America and Western Europe. The Company
has also incurred higher interest expense in 1996.
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Consolidated revenue for the second quarter ended June 30, 1996, was
$3.5 million which was equal to revenue for the same period in 1995.
However, Sandia revenues for the six months ended June 30, 1996 increased
to $3.1 million from $1.7 million for the same period in 1995. Consolidated
revenues increased 11.8% to $7.6 million from $6.8 million for the six
months ended June 30, 1996, compared to the same period in 1995. The
increase in revenues is due primarily to two large contracts that were
awarded in March 1996.
In July 1996, the Company raised $8.35 million in cash from the sale
of 835 shares of Series D Preferred Stock at a price of $10,000 per share.
These shares are convertible into Common Stock in increments of up to 1/3
at a variable conversion rate. See "The Offering." Series D Preferred Stock
stockholders do not receive dividends, but there is an 8% per annum
accretion rate prior to conversion which is payable in Common Stock upon
conversion or redemption at the conversion or redemption price then in
effect. All shares of Series D Preferred Stock outstanding on August 2,
1999 are subject to automatic conversion at the conversion rate then in
effect.
THE OFFERING
The Company is registering 6,609,406 shares of Common Stock on behalf
of the Selling Stockholders pursuant to the terms of the Registration
Rights Agreement executed in connection with the 1996 Private Placement. Up
to 6,000,000 shares of the Common Stock are issuable to the Selling
Stockholders upon the conversion of shares of Series D Preferred Stock
which were acquired in the 1996 Private Placement. The exact number of
shares to be issued to the Selling Stockholders cannot be determined at
this time. The Series D Preferred Stock is convertible into Common Stock in
increments of up to 1/3 at a variable conversion rate (the "Preferred
Conversion Rate") equal to the lesser of (i) $2.14 per Share and (ii) (A)
the average closing bid price of the Common Stock for the 10 trading days
prior to the conversion date multiplied by (B) a percentage which is 90%
through October 1, 1996, 87.5% from November 30, 1996 through January 29,
1997 and 85% thereafter. Prior to conversion, the Series D Preferred Stock
is subject to an 8% per annum accretion rate (the "Series D Premium"). The
number of shares of Common Stock being registered will be sufficient to
permit resale of all shares issuable upon conversion of the Series D
Preferred if the average Preferred Conversion Rate is equal to or greater
than $1.43 (the "Minimum Conversion Price")./1/ If the Minimum Conversion
Price is less than $1.43, the Company will be obligated to register
additional Shares for resale by the Selling Stockholders.
The Company is also registering 609,406 shares of Common Stock for
resale upon the exercise of outstanding Common Stock Purchase Warrants
issued to the Placement Agent or its designees as compensation for
assistance in the 1996 Private Placement and in the offerings relating to
the 1995 Debentures and the 1996 Debentures (collectively, the "Private
Offerings"). The Warrants are exercisable for shares of Common Stock as
follows: (i) 221,867 Warrants at $2.87 per share; (ii) 192,500 Warrants at
$2.20 per share; and (iii) 195,039 Warrants at $2.1406 per share.
The number of shares of Common Stock outstanding prior to the
Offering, the number of shares of Common Stock being offered by the holders
of the Series D Preferred Stock, the number of shares of Common Stock being
offered by the holders of the Warrants and the number of shares of Common
Stock outstanding after the Offering are as follows:
<TABLE>
<S> <C> <C>
Common Stock Outstanding Before the Offering/2/ 33,196,888 shares
Common Stock Offered by Holders of the Warrants/3/ up to 609,406 shares
Common Stock Offered by Holders of the Series D Preferred Stock/4/ up to 6,000,000 shares
Common Stock Outstanding After the Offering up to 39,806,294 shares
</TABLE>
_______________________________
/1/ The Minimum Conversion Price of $1.43 was calculated based on the
assumption that all shares of Series D Preferred Stock will be converted
into shares of Common Stock in the maximum amounts and on the earliest
dates possible. If less than 1/2 of the Series D Preferred Stock is
converted on each of October 1, 1996, November 30, 1996 and January 29,
1997, or if any shares of the Series D Preferred Stock remain outstanding
after January 29, 1997, then, due to the Series D Premium, the Minimum
Conversion Price will increase.
/2/As of August 15, 1996.
/3/Assumes exercise in full of the outstanding Warrants.
/4/Assumes an average Preferred Conversion Rate of $1.43.
7
<PAGE>
USE OF PROCEEDS
The Company will not receive any of the proceeds from any resales of
the Shares by the Selling Stockholders pursuant to this Prospectus. The
Company may, in the future, receive proceeds from the sale of Shares
issuable upon exercise of the Warrants but only if the Warrants are
exercised and then only in an amount equal to the exercise price thereof
multiplied by the number of Warrants exercised. The Company expects to use
any such proceeds, which may total up to $1,477,759 if all of the Warrant
are exercised, for working capital and general corporate purposes. As of
August 15, 1996, the average high and low bid price of one share of Common
Stock was $1.63. In light of the current market price for one share of
Common Stock and the exercise price of the Warrants, it is unlikely at this
time that a holder of a Warrant would exercise the Warrant.
SELLING STOCKHOLDERS
The Series D Preferred Stock was initially issued and sold to Selling
Stockholders in July 1996, through the 1996 Private Placement. The Selling
Stockholders acquired the Series D Preferred Stock in transactions
complying with Regulation D under the Securities Act. Up to 6,000,000 of
the Shares will be acquired by the Selling Stockholders from time to time
upon conversion of the Series D Preferred Stock. The Warrants were
initially issued to the Placement Agent and certain designees of the
Placement Agent in conjunction with the Private Offerings.
Except as otherwise indicated, the tables below set forth certain
information with respect to the Selling Stockholders and the Shares as of
August 15, 1996. The term Selling Stockholders includes the beneficial
owners of the Shares listed below and their transferees, pledgees, donees
or other successors. Other than as a result of the ownership of Shares
indicated below, unless otherwise indicated, none of the Selling
Stockholders has had any material relationship with the Company or any of
its affiliates within the past three years, except that the Placement Agent
served as placement agent in connection with the Private Offerings for
which it received customary compensation.
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
SELLING STOCKHOLDERS HOLDING WARRANTS
--------------------------------------------------------------------------------------------------------------------
SHARES OF COMMON STOCK
AGGREGATE BENEFICIALLY OWNED AFTER THE
NUMBER OF SHARES OF NUMBER OF OFFERING(2)
COMMON STOCK SHARES FOR WHICH
BENEFICIALLY WARRANTS MAY BE PERCENTAGE OF
NAME OF WARRANTHOLDER OWNED(1) EXERCISED NUMBER CLASS
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
GLENN A. ADAMS 11,000
SUNDER ADVANI 8,250
GLENN R. ARCHER 13,000
LANCE T. BURY 21,000
DUNWOODY BROKERAGE SERVICES, INC. 12,000
ENIGMA INVESTMENTS, LTD. 4,049
P. BRADFORD HATHORN 29,000
DAVIS C. HOLDEN 6,000
MICHAEL C. KENDRICK 240,173
CHARLES KRUSEN 12,760
DAVID K. PETELER 9,000
ERIC S. SWARTZ 240,174
--------------------------------------------------------------------------------------------------------------------
TOTAL 609,406
--------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Excluding shares of Common Stock which may be acquired upon exercise
of the Warrants
(2) Assumes sale of all Shares received upon exercise of the Warrants.
8
<PAGE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
SELLING STOCKHOLDERS HOLDING SERIES D PREFERRED STOCK
----------------------------------------------------------------------------------------------------------------------
SHARES OF COMMON
SHARES OF STOCK BENEFICIALLY
COMMON STATED VALUE OWNED AFTER THE
STOCK OF SERIES D NUMBER OF SHARES OF OFFERINGS(5)
BENEFICIALLY PREFERRED STOCK THAT STOCK THAT MAY BE SOLD PERCENTAGE
NAME OF SHAREHOLDER OWNED(1)(2) MAY BE CONVERTED(3) IN THE OFFERING(4) NUMBER OF CLASS
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Ace Foundation, Inc. -- $ 250,000 174,825
AG Super Fund $ 150,000 104,895
International Partners, L.P. [104,798](6)
American European Group -- $ 700,000 489,510
Banque Scandinave En Suisse [415,730](7) $ 400,000 279,720
Clarion Capital Corporation -- $ 150,000 104,895
Faisal Finance -- $ 250,000 174,825
(Switzerland) SA
GAM Arbitrage Investments, Inc. [127,346](8) $ 300,000 209,790
Global Bermuda, L.P. -- $ 250,000 174,825
Gracechurch & Co. [760,610](9) $ 400,000 279,720
Lakeshore International, -- $ 250,000 174,825
Ltd.
Leonardo, L.P. [1,100,763](10) $1,500,000 1,048,951
Merced Partners, L.P. -- $ 250,000 174,825
Otato Limited Partnership [138,534](11) $ 300,000 209,790
Queensway Financial -- $ 150,000 104,895
Holdings Ltd.
Raphael, L.P. [62,215](12) $ 300,000 209,790
Richcourt $ Strategies, -- $ 350,000 244,755
The Matthew Fund N.V. -- $ 350,000 244,755
The Kaufman Fund, Inc. -- $1,500,000 1,048,951
The Tail Wind Fund Ltd. -- $ 350,000 244,755
Triage Capital Management -- $ 200,000 139,860
L.P.
----------------------------------------------------------------------------------------------------------------------
TOTAL [2,709,996] $8,350,000 5,839,157(13)
----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Excluding shares of Common Stock which may be acquired upon conversion
of the Series D Preferred Stock.
(2) Assumes conversion of all 1996 Debentures outstanding as of August 15,
1996 at a conversion price of $1.3175.
(3) Based solely on $10,000 price per share of Series D Preferred Stock,
without giving effect to any Series D Premium accrued to date.
(4) Assumes conversion of the Series D Preferred Stock into Common Stock
at a conversion rate of $1.43 per share. If the conversion rate is
less than $1.43 per share, the number of shares of Common Stock to be
sold by the Selling Stockholders is subject to increase.
(5) Assumes sale of all Shares received upon conversion of the Series D
Preferred Stock.
(6) Includes [25,631] shares of Common Stock which were acquired upon
conversion of certain of the Company's 1996 Debentures and [79,167]
shares of Common Stock which will be acquired upon conversion of
remaining 1996 Debentures.
9
<PAGE>
(7) Includes [217,814] shares of Common Stock which were acquired upon
conversion of certain of the Company's 1996 Debentures and [197,916]
shares of Common Stock which will be acquired upon conversion of
remaining 1996 Debentures.
(8) Includes [51,179] shares of Common Stock which were acquired upon
conversion of certain of the Company's 1996 Debentures and [79,167]
shares of Common Stock which will be acquired upon conversion of
remaining 1996 Debentures.
(9) Includes [760,610] shares of Common Stock which were acquired upon
conversion of certain of the Company's 1995 Debentures.
(10) Includes [406,581] shares of Common Stock which were acquired upon
conversion of certain of the Company's 1995 Debentures, [337,934]
shares of Common Stock which were acquired upon conversion of certain
of the Company's 1996 Debentures and [356,248] shares of Common Stock
which will be acquired upon conversion of remaining 1996 Debentures.
(11) Includes 138,534 shares of Common Stock which were acquired upon
conversion of certain of the Company's 1996 Debentures.
(12) Includes [25,631] shares of Common Stock which were acquired upon
conversion of certain of the Company's 1996 Debentures and [39,584]
shares of Common Stock which will be acquired upon conversion of
remaining 1996 Debentures.
(13) Does not reflect additional shares issuable due to the aggregate value
of the Series D Premium.
Information concerning the Selling Stockholders may change from time
to time and any such changed information will be set forth a Prospectus
Supplement if and when necessary.
PLAN OF DISTRIBUTION
The Shares may be offered for sale and sold by the Selling
Stockholders from time to time in varying amounts (subject to certain
restrictions described under the caption "Selling Stockholders"), on the
Nasdaq SmallCap Market at then prevailing prices or in private transactions
at prices and on terms to be determined at the time of sale. The Shares may
be sold by the Selling Stockholders directly or through agents designated
from time to time or to or through broker-dealers designated from time to
time. To the extent required, the number of Shares to be sold, the purchase
price, the name of any agent or broker-dealer, and any applicable
commissions, discounts or other items constituting compensation to such
agents or broker-dealers with respect to a particular offering will be set
forth in a Prospectus Supplement. The aggregate proceeds to the Selling
Stockholders from the sale of the Shares so offered will be the purchase
price of the Shares sold less the aggregate underwriting discounts and
commissions and fees and expenses of counsel and accountants, if any, paid
by the Selling Stockholders. See "Selling Stockholders." The Company knows
of no selling arrangement between any agent or broker-dealer and the
Selling Stockholders. The Company will not receive any proceeds from the
sale of any of the Shares offered by the Selling Stockholders hereunder.
However, the Company will receive proceeds of approximately $1,477,759 in
the event all of the Warrants are exercised. See "Use of Proceeds."
The Company has been advised that, as of the date hereof, the Selling
Stockholders have made no arrangement with any broker for the offering or
sale of the Shares. The Selling Stockholders and any broker-dealers or
agents that participate with the Selling Stockholders in the distribution
of any of the Shares may be deemed to be "underwriters" within the meaning
of the Securities Act, and any discount or commission received by them and
any profit on the resale of the Shares purchased by them may be deemed to
be underwriting discounts or commissions under the Securities Act.
To comply with the securities laws of certain jurisdictions, if
applicable, the Shares will be offered or sold in such jurisdictions only
through registered or licensed brokers or dealers. In addition, in certain
jurisdictions, the Shares may not be offered or sold unless they have been
registered or qualified for sale in such jurisdictions or unless an
exemption from such registration or qualification is available and is
complied with.
10
<PAGE>
The Company will use its reasonable best efforts to cause the
Registration Statement to become effective as promptly as is practicable
and to keep the Registration Statement effective for up to three years
after August 2, 1996, or until the Registration Statement is no longer
required for the transfer of the Shares. The Company is permitted to
suspend the use of the Prospectus if it determines, in its reasonable
business judgment, that this registration and offering could reasonably be
expected to interfere with or otherwise adversely affect any financing,
acquisition, corporate reorganization, or other material transaction or
development involving the Company or any of its affiliates or require the
Company to disclose matters that otherwise would not be required to be
disclosed at such time. The Company may then require the suspension of
resales of the Shares pursuant to this Prospectus by giving notice to the
holders of the Shares. Any such notice need not specify the reasons for
such suspension if the Company determines, in its reasonable business
judgment, that doing so could reasonably be expected to interfere with or
adversely affect such transaction or development or would result in the
disclosure of material non-public information. In the event that such
notice is given, then until the Company has determined, in its reasonable
business judgment, that this registration and offering would no longer
interfere with the matters described in the preceding sentence and has
given notice thereof to such holders of the Shares, the Company's
obligations with respect to registration will be suspended.
Selling Stockholders who sell Shares pursuant to the Registration
Statement will be required to deliver a Prospectus to purchasers of the
Shares. Expenses of preparing and filing the Registration Statement and all
post-effective amendments will be borne by the Company.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of 56,750,000
shares of Common Stock, par value $.01 per share, 2,250,000 shares of Non-
Voting Common Stock, par value $.01 per share (the "Non-Voting Common
Stock") and 7,000,000 shares of Preferred Stock, par value $.01 per share
(the "Preferred Stock"). As of August 15, 1996, a total of 33,196,888
shares of Common Stock and 2,249,842 shares of Non-Voting Common Stock were
issued and outstanding. As of August 15, 1996, 2,919,565 shares of
Preferred Stock were issued and outstanding as follows: (i) 1,153,856
shares of Series A Convertible Preferred Stock (the "Series A Preferred
Stock"); (ii) 1,056,338 shares of Series B Convertible Preferred Stock (the
"Series B Preferred Stock); (iii) 708,530 shares of Series C Convertible
Preferred Stock (the "Series C Preferred Stock); and (iv) 835 shares of
Series D Preferred Stock. All outstanding shares of the Company's Common
Stock, Non-Voting Common Stock and Preferred Stock are fully paid and
nonassessable. Except for shares of Series D Preferred Stock, none of the
shares of Common Stock or Preferred Stock has preemptive rights. See
"Series D Preferred Stock" below. All shares of Common Stock to be received
by Selling Stockholders upon conversion of the Series D Preferred Stock and
exercise of the outstanding Warrants will be fully paid and nonassessable.
COMMON STOCK AND NON-VOTING COMMON STOCK
Each share of Common Stock entitles its holder to one vote on all
maters submitted to a vote of shareholders. Holders of Non-Voting Common
Stock do not have voting rights, except as otherwise provided in the
Company's Certificate of Incorporation, as amended (the "Certificate of
Incorporation"), or as required by applicable law. Holders of Non-Voting
Common Stock are entitled to vote as a separate class on any amendment to
the Certificate of Incorporation that adversely affects the powers,
preferences or special rights of holders of Non-Voting Common Stock.
Holders of Non-Voting Common Stock are entitled to one vote per share for
matters on which such holders are entitled to vote. The Common Stock and
Non-Voting Common Stock are otherwise identical in all respects.
Regulated Stockholders (as defined in the Certificate of
Incorporation) are entitled to convert Common Stock into Non-Voting Common
Stock. Subject to certain conditions, all stockholders are entitled to
convert Non-Voting Common Stock into Common Stock. Upon conversion of
shares of the Common Stock or Non-Voting Common Stock, the shares of Common
Stock or Non-Voting Common Stock so converted will not be eligible for
reissuance except for reissuance in connection with the conversion of
shares of Common Stock or Non-Voting Common Stock held by Regulated
Stockholders.
The holders of Common Stock and Non-Voting Common Stock are entitled
to receive ratably such dividends, if any, as are declared by the Company's
Board of Directors out of funds legally available for that purpose. In the
event of the Company's liquidation, dissolution or winding up, the holders
of Common Stock and Non-Voting Common Stock would be entitled to share
ratably in all assets of the Company available for distribution to holders
of the Common Stock
11
<PAGE>
and Non-Voting Common Stock, subject to the preferential rights of holders, if
any, of shares of Preferred Stock. See "Preferred Stock" below.
The Company's Certificate of Incorporation provides that there can be no
stock dividend on, or stock split or combination of, either the Common Stock or
the Non-Voting Common Stock without a corresponding stock dividend on, or stock
split or combination of, the other class of such stock. For purposes of the
foregoing, if a dividend of shares of Common Stock were paid on the outstanding
shares of Common Stock, a corresponding dividend of shares of Non-Voting Common
Stock would be required to be paid on the shares of Non-Voting Common Stock.
PREFERRED STOCK
The Certificate of Incorporation authorizes the Company's Board of
Directors to issue shares of Preferred Stock, in one or more series and to fix
and state the designations, powers, preferences, qualifications, limitations,
restrictions and relative rights of the shares of each such series. The Board of
Directors may determine, without any vote or action by the holders of either
Common Stock or Non-Voting Common Stock, among other things, the payment and
rates of dividends, if any, whether dividends are to be cumulative or
noncumulative, whether the Preferred Stock is subject to redemption and, if so,
the manner of redemption and the redemption price, the preference of any series
of Preferred Stock over any other series of Preferred Stock or Common Stock or
Non-Voting Common Stock on liquidation or dissolution of the Company, any
sinking fund or other retirement provisions for the Preferred Stock and any
conversion or exchange rights or other privilege of the holders to acquire
shares of any other series of Preferred Stock or Common Stock or Non-Voting
Common Stock. The Board of Directors may also determine the number of shares in
each series, the voting rights of each series and the stated value for which the
Preferred Stock may be issued.
SERIES A PREFERRED STOCK. The Board of Directors has designated a maximum
of 1,500,000 shares of the Preferred Stock as Series A Convertible Preferred
Stock, $1.30 stated value per share. Each share of Series A Preferred Stock is
convertible at any time, at the option of the holder, into one share of Common
Stock, subject to anti-dilution adjustments. All shares of Series A Preferred
Stock are entitled to vote on matters brought before the Company's stockholders
as if such shares of Series A Preferred Stock had been converted into shares of
Common Stock, except upon matters as to which such shares of Series A Preferred
Stock are entitled by law to vote as a separate class.
Subject to the prior preferences and other rights of any class or series of
the Company's capital stock ("Senior Securities") ranking prior to the Series A
Preferred Stock, the holders of Series A Preferred Stock are entitled to receive
and, subject to any prohibition or restriction contained in any instrument
evidencing indebtedness of the Company, the Company will be obligated to pay
preferential cumulative cash dividends out of funds legally available therefor.
Dividends are payable quarterly and accrue cumulatively, whether or not such
dividends are declared or funds are legally or contractually available for
payment of dividends, at a variable rate per annum as follows: (i) 5% from
January 1, 1996 to March 31, 1996; (ii) 7 1/2% from April 1, 1996 through June
30, 1996; and (iii) 10% from July 1, 1996 and thereafter. Dividends are payable
in cash or in additional shares of Series A Preferred Stock, but since July 1,
1996, only holders of Series A Preferred Stock, rather than the Company, may
make such election. Any dividends paid in kind on the Series A Preferred Stock
are to be valued on the basis of the stated value of the Series A Preferred
Stock.
Upon dissolution, liquidation or winding up of the Company, holders of the
Series A Preferred Stock will be entitled, after payment of preferential amounts
on any Senior Securities, to receive from the assets of the Company available
for distribution to stockholders an amount in cash, per share, equal to the
stated value of such share and all accrued dividends attributable to such share
at the time of such dissolution, liquidation or winding up of the Company. The
Series A Preferred Stock ranks senior to the Common Stock and Non-Voting Common
Stock as to any such distributions.
The Series A Preferred Stock is subject to optional redemption at any time
by the Company, in whole or in part, at a redemption price per share equal to
the stated value of the shares of Series A Preferred Stock so redeemed and all
accrued dividends thereon. The Company's optional right of redemption is subject
to each Series A Preferred stockholder's right to convert such Series A
Preferred Stock into Common Stock within the 10 business days immediately
following the Company's notice of such redemption.
SERIES B PREFERRED STOCK. The Board of Directors has designated a maximum
of 1,500,000 shares of the Preferred Stock as Series B Convertible Preferred
Stock, $1.30 stated value per share. Each share of Series B Preferred Stock is
convertible at any time, at the option of the holder, into one share of Common
Stock, subject to anti-dilution adjustments. All shares of Series B Preferred
Stock are entitled to vote on matters brought before the Company's
12
<PAGE>
stockholders as if such shares of Series B Preferred Stock had been converted
into shares of Common Stock, except upon matters as to which such shares of
Series B Preferred Stock are entitled by law to vote as a separate class.
Subject to the prior preferences and other rights of any Senior Securities,
the holders of Series B Preferred Stock are entitled to receive and, subject to
any prohibition or restriction contained in any instrument evidencing
indebtedness of the Company, the Company will be obligated to pay preferential
cumulative cash dividends out of funds legally available therefor. Dividends are
payable quarterly and accrue cumulatively, whether or not such dividends are
declared or funds are legally or contractually available for payment of
dividends, at a variable rate per annum as follows: (i) 5% from January 1, 1996
to March 31, 1996; (ii) 7 1/2% from April 1, 1996 through June 30, 1996; and
(iii) 10% from July 1, 1996 and thereafter. Dividends are payable in cash or in
additional shares of Series B Preferred Stock, but since July 1, 1996, only
holders of Series B Preferred Stock, rather than the Company, may make such
election. Any dividends paid in kind on the Series B Preferred Stock are to be
valued on the basis of the stated value of the Series B Preferred Stock.
Upon dissolution, liquidation or winding up of the Company, holders of the
Series B Preferred Stock will be entitled, after payment of preferential amounts
on any Senior Securities, to receive from the assets of the Company available
for distribution to stockholders an amount in cash, per share, equal to the
stated value of such share and all accrued dividends attributable to such share
at the time of such dissolution, liquidation or winding up of the Company. The
Series B Preferred Stock ranks senior to the Common Stock and Non-Voting Common
Stock as to any such distributions.
The Series B Preferred Stock is subject to optional redemption at any time
by the Company, in whole or in part, at a redemption price per share equal to
the stated value of the shares of Series B Preferred Stock so redeemed and all
accrued dividends thereon. The Company's optional right of redemption is subject
to each Series B Preferred stockholder's right to convert such Series B
Preferred Stock into Common Stock within the 10 business days immediately
following the Company's notice of such redemption.
SERIES C PREFERRED STOCK. The Board of Directors has designated a maximum
of 1,500,000 shares of the Preferred Stock as Series C Convertible Preferred
Stock, $1.51 stated value per share. Each share of Series C Preferred Stock is
convertible at any time, at the option of the holder, into one share of Common
Stock, subject to anti-dilution adjustments. All shares of Series C Preferred
Stock are entitled to vote on matters brought before the Company's stockholders
as if such shares of Series C Preferred Stock had been converted into shares of
Common Stock, except upon matters as to which such shares of Series C Preferred
Stock are entitled by law to vote as a separate class.
Subject to the prior preferences and other rights of any Senior Securities
ranking prior to the Series C Preferred Stock, the holders of Series C Preferred
Stock are entitled to receive and, subject to any prohibition or restriction
contained in any instrument evidencing indebtedness of the Company, the Company
will be obligated to pay preferential cumulative cash dividends out of funds
legally available therefor. Dividends are payable quarterly and accrue
cumulatively, whether or not such dividends are declared or funds are legally or
contractually available for payment of dividends, at a rate of 10% per annum
commencing January 1, 1996. Dividends are payable in cash or in additional
shares of Series C Preferred Stock, but since October 1, 1996, only holders of
Series C Preferred Stock, rather than the Company, may make such election. Any
dividends paid in kind on the Series C Preferred Stock are to be valued on the
basis of the stated value of the Series C Preferred Stock.
Upon dissolution, liquidation or winding up of the Company, holders of the
Series C Preferred Stock will be entitled, after payment of preferential amounts
on any Senior Securities, to receive from the assets of the Company available
for distribution to stockholders an amount in cash, per share, equal to the
stated value of such share and all accrued dividends attributable to such share
at the time of such dissolution, liquidation or winding up of the Company. The
Series C Preferred Stock ranks senior to the Common Stock and Non-Voting Common
Stock as to any such distributions.
The Series C Preferred Stock is subject to optional redemption at any time
by the Company, in whole or in part, at a redemption price per share equal to
the stated value of the shares of Series C Preferred Stock so redeemed and all
accrued dividends thereon. The Company's optional right of redemption is subject
to each Series C Preferred stockholder's right to convert such Series C
Preferred Stock into Common Stock within the 10 business days immediately
following the Company's notice of such redemption.
13
<PAGE>
SERIES D PREFERRED STOCK. The Board of Directors has designated a maximum
of 850 shares of the Preferred Stock as Series D Preferred Stock. Each share of
Series D Preferred Stock is convertible at the option of the holder into Common
Stock at the Preferred Conversion Rate, subject to anti-dilution provisions. See
"The Offering." All shares of Series D Preferred Stock outstanding on August 2,
1999 are subject to automatic conversion at the Preferred Conversion Rate then
in effect. Upon the election of a holder of shares of Series D Preferred Stock
to convert such shares into Common Stock, the Company shall have the right to
redeem, rather than convert, such shares.
Holders of Series D Preferred Stock have preemptive rights from August 2,
1996 to January 29, 1997 (the "Preemptive Rights Period"). During the Preemptive
Rights Period, the Company may not, with certain exceptions, issue any debt or
equity securities for cash in private capital raising transactions ("Future
Offerings") without first providing the Selling Stockholders the option to
purchase the securities being so offered, on a pro rata basis based on the
proportion of each Selling Stockholder's participation in the 1996 Private
Placement. Future Offerings do not include, and Selling Stockholders are not
granted preemptive rights regarding, among other things, transactions involving
the issuance of securities in connection with (i) a merger, consolidation or
purchase or sale of assets, (ii) the exercise of existing or grant of additional
options under Company stock option or restricted stock plans by or to employees,
consultants or directors, (iii) the exercise or conversion of the Company's
options, warrants or other convertible securities outstanding as of June 30
1996, (iv) public offerings undertaken by the Company or (v) private offerings
to Wolfensohn Partners L.P. or its affiliates.
Holders of Series D Preferred Stock have no voting power whatsoever, except
as otherwise provided by the Delaware General Corporation Law, and no holder of
Series D Preferred Stock may vote or otherwise participate in any proceeding in
which actions are to be taken by the Company or the Company's stockholders or is
entitled to notification as to any meeting of the Company's Stockholders.
However, as long as shares of Series D Preferred Stock remain outstanding, the
Company is not permitted, without first obtaining approval of at least 75% of
the then outstanding shares of Series D Preferred Stock, to do any of the
following: (i) alter or change the rights, preferences or privileges of the
Series D Preferred Stock or any Senior Securities to adversely affect the Series
D Preferred Stock; (ii) create any new class or series of Common Stock or
Preferred Stock having a preference over the Series D Preferred Stock with
respect to distributions pursuant to the liquidation, dissolution or winding up
of the Company; or (iii) do any act or thing not authorized or contemplated by
the Series D Preferred Stock Certificate of Designation which would result in
taxation of the holders of shares of Series D Preferred Stock under Section 305
of the Internal Revenue Code of 1986, as amended.
The holders of Series D Preferred Stock are not entitled to receive any
dividends. However, prior to conversion, the Series D Preferred Stock accrues
the Series D Premium, which is payable in Common Stock upon conversion or
redemption at the Preferred Conversion Rate or Redemption Rate (as defined in
the Series D Preferred Stock Certificate of Designation) as then in effect.
Upon dissolution, liquidation or winding up of the Company, each holder of
Series D Preferred Stock will be entitled, after payment of preferential amounts
on any Senior Securities, to receive from the assets of the Company available
for distribution to stockholders an amount in cash, per share, equal to the sum
of (i) $10,000 per share of outstanding Series D Preferred Stock so held and
(ii) the Series D Premium that has accrued since August 2, 1996 (collectively,
the " Series D Stated Value"). The Series D Preferred Stock ranks senior to the
Common Stock and Non-Voting Common Stock as to any such distributions.
The Series D Preferred Stock is subject to optional redemption by the
Company at any time after August 3, 1997, in whole or in part, subject to a
minimum redemption of such Series D Preferred Stock having an aggregate Series D
Stated Value of at least $1,000,000. If the Company redeems any Series D
Preferred Stock it must do so at a redemption price per share equal to a
percentage ranging from 130% to 115% of the Series D Stated Value of the shares
of Series D Preferred Stock so redeemed, depending on the date of such
redemption. Any redemption of Series D Preferred Stock must give the holder of
such Series D Preferred Stock the same rate of return such holder would have
received had the holder converted his or her Series D Stock on the date of such
redemption. The Company's optional right of redemption is subject to each Series
D Preferred stockholder's right to convert such Series D Preferred Stock into
Common Stock within the 30 business days immediately following the Company's
notice of such redemption.
Any shares of Series D Preferred Stock that are converted or redeemed shall
be canceled and shall return to the status of authorized but unissued shares of
Preferred Stock of no designated series, and shall not be issuable by the
Company as Series D Preferred Stock.
14
<PAGE>
CHANGE OF CONTROL
The issuance of shares of Preferred Stock may have the effect of delaying,
deferring or preventing a change in control of the Company without further
action by the stockholders. The issuance of shares of Preferred Stock with
voting and conversion rights may adversely affect the voting power of the
holders of Common Stock and the Non-Voting Common Stock, including the loss of
voting control to others.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Company's Common Stock is American
Stock Transfer & Trust Company.
NASDAQ SMALLCAP LISTING
The Company's Common Stock is listed on the Nasdaq SmallCap Market under
the symbol LASX.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article Ninth of the Company's Articles of Incorporation provides for the
indemnification of directors of the Company for certain acts and to the fullest
extent permitted by the Delaware General Corporation Law. Further, Article VI of
the Company's bylaws provides authority for the Company to indemnify a director,
officer, employee or agent of the Company who was or is a party to civil or
criminal proceedings by reason of his or her position, if such person acted in
good faith on behalf of the Company. Article VI also provides for
indemnification in derivative actions and in certain other cases and authorizes
the Company to purchase liability insurance on behalf of any past or present
officer or director of the Company.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the small
business issuer pursuant to the foregoing provisions, or otherwise, the small
business issuer has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
LEGAL MATTERS
Certain legal matters with respect to the Shares will be passed upon by
Baker & Botts, L.L.P., counsel of the Company.
EXPERTS
The consolidated financial statements and schedules of Lasertechnics, Inc.
and its subsidiaries as of December 31, 1995 and 1994, and for each of the years
in the three-year period ended December 31, 1995, have been incorporated by
reference herein and in the Registration Statement in reliance upon the reports
of KPMG Peat Marwick LLP, independent certified public accountants, incorporated
by reference herein, and upon the authority of said firm as experts in
accounting and auditing.
The report of KPMG Peat Marwick LLP contains an explanatory paragraph that
states that the Company's recurring losses from operations and resulting
continued dependence upon access to additional external financing together with
the default on a capital lease obligation raise substantial doubt about its
ability to continue as a going concern. The consolidated financial statements
do not include any adjustments that might result from the outcome of that
uncertainty.
15
<PAGE>
================================================================================
No person has been authorized to give any information or to make any
representation other than those contained in this Prospectus or any Prospectus
Supplement in connection with the offering described herein and, if given or
made, such information or representation must not be relied upon as having been
authorized by the Company. Neither the delivery of this Prospectus or any
Prospectus Supplement nor any sale made hereunder shall, under any
circumstances, create an implication that the information contained or
incorporated by reference herein is correct as of any time subsequent to its
date or that there has been no change in the affairs of the Company since such
date. This Prospectus and any Prospectus Supplement do not constitute an offer
to sell or a solicitation of an offer to buy any securities other than those
specifically offered hereby or of any Securities offered hereby in any
jurisdiction in which such offer or solicitation is not authorized, or in which
the person making such offer or solicitation is not qualified to do so, or to
anyone to whom it is unlawful to make such offer or solicitation.
-----------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
AVAILABLE INFORMATION .................................................... 2
INCORPORATION OF DOCUMENTS BY
REFERENCE ............................................................. 2
RISK FACTORS ............................................................. 3
THE COMPANY .............................................................. 6
RECENT DEVELOPMENTS ...................................................... 6
THE OFFERING ............................................................. 7
USE OF PROCEEDS .......................................................... 8
SELLING STOCKHOLDERS ..................................................... 8
PLAN OF DISTRIBUTION ..................................................... 10
DESCRIPTION OF CAPITAL STOCK ............................................. 11
INDEMNIFICATION OF DIRECTORS
AND OFFICERS ......................................................... 15
LEGAL MATTERS ............................................................ 15
EXPERTS .................................................................. 15
</TABLE>
================================================================================
================================================================================
LASERTECHNICS, INC.
6,609,406 Shares of
Common Stock
-----------------------------------------
PROSPECTUS
-----------------------------------------
August ___, 1996
================================================================================
16
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
All of the expenses in connection with the distribution of the Shares are
set forth below and will be borne by the Registrant.
<TABLE>
<S> <C>
Registration Fee .................................. $ 3,632
*Blue Sky and Expenses (including counsel fees) ... 2,000
*Legal Fees and Expenses .......................... 50,000
*Accounting Fees and Expenses ..................... 10,000
Additional Listing Fees ........................... 0
*Miscellaneous .................................... 15,000
*Total ......................................... $ 80,632
</TABLE>
________________
*Estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law provides, generally,
that a corporation shall have the power to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding (other than an action by or in the right of
the corporation) by reason of the fact that such person is or was a director,
officer, employee or agent of the corporation against all expenses, judgments,
fines and amounts paid in settlement actually and reasonably incurred by such
person in connection with such action, suit or proceeding if such person acted
in good faith and in a manner such person reasonably believed to be in or not
opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his or her
conduct was unlawful. A corporation may similarly indemnify such person for
expenses (including attorneys' fees) actually and reasonably incurred by such
person in connection with the defense or settlement of any action or suit by or
in the right of the corporation, provided such person acted in good faith and in
a manner he or she reasonably believed to be in or not opposed to the best
interests of the corporation, and, in the case of claims, issues and matters as
to which such person shall have been adjudged liable to the corporation,
provided that a court shall have determined, upon application, that, despite the
adjudication of liability but in view of all of the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which such court shall deem proper.
Section 102(b)(7) of the Delaware General Corporation Law provides,
generally, that the certificate of incorporation may contain a provision
eliminating or limiting the personal liability of a director to the corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director, provided that such provision may not eliminate or limit the liability
of a director (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
section 174 of Title 8 of the Delaware General Corporation Law, or (iv) for any
transaction from which the director derived an improper personal benefit. No
such provision may eliminate or limit the liability of a director for any act or
omission occurring prior to the date when such provision became effective.
Article NINTH of the Company's Restated Certificate of Incorporation
provides as follows:
A director of the corporation shall not be personally liable to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of the law, (iii) under Section 174 of the Delaware General
Corporation Law, as the same exists or hereafter may be amended, or (iv) for any
transaction from which the director derived an improper personal benefit. If the
Delaware General Corporation law hereafter is amended to authorize the further
elimination or limitation of the liability of directors, then the liability of a
director of the corporation, in addition to the limitation
II-1
<PAGE>
on personal liability provided herein, shall be limited to the fullest extent
permitted by the amended Delaware General Corporation Law. Any repeal or
modification of this Article by the stockholders of the corporation shall be
prospective only, and shall not adversely affect any limitation on the personal
liability of a director of the corporation existing at the time of such repeal
or modification.
Article VI of the Company's Bylaws, "Indemnification of Directors and
Officers," provides as follows:
SECTION 1. General. The Corporation shall indemnify any person who was or
-------
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the Corporation, is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
---- ----------
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
SECTION 2. Derivative Actions. The Corporation shall indemnify any person
------------------
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the Corporation to
procure a judgment in its favor by reason of the fact that he is or was a
director, officer, employee or agent of the Corporation, or is or was serving at
the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to the Corporation unless and only to
the extent that the Court of Chancery of the State of Delaware or the court in
which such action or suit was brought shall determine upon application that,
despite the adjudication of liability but in view of all the circumstances of
the case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery or such other court shall deem proper.
SECTION 3. Indemnification in Certain Cases. To the extent that a
--------------------------------
director, officer, employee or agent of the Corporation has been successful on
the merits or otherwise in defense of any action, suit or proceeding referred to
in Sections 1 and 2 of this Article VI, or in defense of any claim, issue or
matter therein, he shall be indemnified against expenses (including attorney's
fees) actually and reasonably incurred by him in connection therewith.
SECTION 4. Procedure. Any indemnification under Sections 1 and 2 of this
---------
Article VI (unless ordered by a court) shall be made by the Corporation only as
authorized in the specific case upon a determination that indemnification of the
director, officer, employee or agent is proper in the circumstances because he
has met the applicable standard of conduct set forth in such Sections 1 and 2.
Such determination shall be made (a) by the Board of Directors by a majority
vote of a quorum consisting of directors who were not parties to such action,
suit or proceeding, or (b) if such a quorum is not obtainable, or, even if
obtainable a quorum of disinterested directors so directs, by independent legal
counsel in a written opinion, or (c) by the stockholders.
SECTION 5. Advances for Expenses. Expenses incurred in defending a civil
---------------------
or criminal action, suit or proceeding may be paid by the Corporation in advance
of the final disposition of such action, suit or proceeding as authorized by the
Board of Directors in the specific case upon receipt of an undertaking by or on
behalf of the director, officer, employee or agent to repay such amount unless
it shall be ultimately determined that he is entitled to be indemnified by the
Corporation as authorized in this Article VI.
SECTION 6. Rights Not-Exclusive. The indemnification provided by this
Article VI shall not be deemed exclusive of any other rights to which those
seeking indemnification may be entitled under any law, by-law, agreement, vote
of stockholders or disinterested directors or otherwise, both as to action in
his official capacity and as to action in
II-2
<PAGE>
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a person.
SECTION 7. Insurance. The Corporation shall have power to purchase and
---------
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any such capacity, or arising out of
his status as such, whether or not the Corporation would have the power to
indemnify him against such liability under the provisions of this Article VI.
SECTION 8. Definition of Corporation. For the purposes of this Article VI,
-------------------------
references to the "the Corporation" include all constituent corporations
absorbed in a consolidation or merger as well as the resulting or surviving
corporation so that any person who is or was a director, officer, employee or
agent of such a constituent corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise shall stand in the same position under the provisions of this Article
VI with respect to the resulting or surviving corporation as he would if he had
served the resulting or surviving corporation in the same capacity.
The Company expects to execute indemnification agreements for each member
of the Board of Directors and for certain officers of the Company.
ITEM 16. EXHIBITS
4.1 Articles of Incorporation (incorporated by reference to Exhibit 3.1 to
the Company's Registration Statement on Form S-1 (No. 2-80946)).
4.2 First Amendment to Certificate of Incorporation dated June 6, 1986
(incorporated by reference to Exhibit 3.3 to the Company's Annual Report
on Form 10-KSB for the year ended December 31, 1987 (No. 0-11933)).
4.3 Second Amendment to Certificate of Incorporation dated May 27, 1987
(incorporated by reference to Exhibit 3.4 to the Company's Annual Report
on Form 10-KSB for the year ended December 31, 1987 (No. 0-11933)).
4.4 Third Amendment to Certificate of Incorporation dated November 11, 1994.
4.5 Fourth Amendment to Certificate of Incorporation dated July 28, 1995.
4.6 Fifth Amendment to Certificate of Incorporation dated June 17, 1996.
4.7 Certificate of Designation of Series A, B and C Preferred Stock dated
December 27, 1995.
4.8 Certificate of Designation of Series D Preferred Stock (incorporated by
reference to Exhibit 4.1 to the Company's Quarterly Report on Form 10-QSB
for the period ended June 30, 1996 (No. 0-11933)).
5.1 Opinion of Baker & Botts, L.L.P. (to be filed by amendment).
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of Baker & Botts, L.L.P. (included in Exhibit 5.1).
24.1 Power of Attorney (included in signature pages).
ITEM 17. UNDERTAKINGS
The undersigned small business issuer hereby undertakes:
(1) To file, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:
II-3
<PAGE>
(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the information
in the registration statement. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of the prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement; and
(iii) Include any additional or changed material information on the
plan of distribution;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is incorporated by reference from periodic reports filed by the small
business issuer under the Exchange Act.
(2) For determining liability under the Securities Act, to treat each
post-effective amendment as a new registration statement of the securities
offered,and the offering of the securities at that time to be the initial bona
fide offering.
(3) To file a post-effective amendment to remove from registration any
of the securities that remain unsold at the end of the offering.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the small
business issuer pursuant to the provisions described under Item 15 above, or
otherwise, the small business issuer has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the small business issuer of expenses incurred or paid by a director,
officer or controlling person of the small business issuer in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
small business issuer will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act of 1933 and will be governed by the
final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
small business issuer certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Carrollton, State of Texas, August 21, 1996.
LASERTECHNICS, INC.
/s/ E.A. Milo Mattorano
By:______________________________________
Name: E.A. Milo Mattorano
Title: Vice President and Chief
Financial Officer
II-5
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the registrant and each person whose
signature appears below constitutes and appoints Richard C.E. Morgan, E.A. Milo
Mattorano and Ronald L. Bencke, and each of them, his true and lawful attorneys-
in-fact and agents with full power of substitution and re-substitution for him
and in his name, place and stead, in any and all capacities, to sign and file
(i) any and all amendments (including post-effective amendments) to this
Registration Statement, with all exhibits thereto, and other documents in
connection therewith, and (ii) a registration statement, and any and all
amendments thereto, relating to the offering covered hereby filed pursuant to
Rule 462(b) under the Securities Act of 1933, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents and each of them
full power and authority, to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, to all intents and
purposes and as fully as they might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or their substitutes may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons (which
persons constitute a majority of the Board of Directors) in the capacities and
on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Richard C.E. Morgan
_________________________ Chairman of the Board and Director August 21, 1996
Richard C.E. Morgan (Principal Executive Officer)
/s/ Jean-Pierre Arnaudo
_________________________ President and Chief Executive August 21, 1996
Jean-Pierre Arnaudo Officer of Sandia and Director
/s/ Eugene A. Bourque
_________________________ President and Chief Executive August 21, 1996
Eugene A. Bourque Officer of LMC and Director
_________________________ Director August , 1996
Richard M. Clarke
/s/ Paul J. Coleman, Jr.
_________________________ Director August 21, 1996
Paul J. Coleman, Jr.
/s/ C. Seth Cunningham
_________________________ Director August 21, 1996
C. Seth Cunningham
/s/ Alfred E. Paulekas
_________________________ Director August 21, 1996
Alfred E. Paulekas
/s/ E.A. Milo Mattorano
_________________________ Principal Financial and August 21, 1996
E.A. Milo Mattorano Accounting Officer
</TABLE>
II-6
<PAGE>
EXHIBIT INDEX
4.1 Articles of Incorporation (incorporated by reference to Exhibit 3.1 to
the Company's Registration Statement on Form S-1 (No. 2-80946)).
4.2 First Amendment to Certificate of Incorporation dated June 6, 1986
(incorporated by reference to Exhibit 3.3 to the Company's Annual Report
on Form 10-KSB for the year ended December 31, 1987 (No. 0-11933)).
4.3 Second Amendment to Certificate of Incorporation dated May 27, 1987
(incorporated by reference to Exhibit 3.4 to the Company's Annual Report
on Form 10-KSB for the year ended December 31, 1987 (No. 0-11933)).
4.4 Third Amendment to Certificate of Incorporation dated November 11, 1994.
4.5 Fourth Amendment to Certificate of Incorporation dated July 28, 1995.
4.6 Fifth Amendment to Certificate of Incorporation dated June 17, 1996.
4.7 Certificate of Designation of Series A, B and C Preferred Stock dated
December 27, 1995.
4.8 Certificate of Designation of Series D Preferred Stock (incorporated by
reference to Exhibit 4.1 to the Company's Quarterly Report on Form 10-QSB
for the period ended June 30, 1996 (No. 0-11933)).
5.1 Opinion of Baker & Botts, L.L.P. (to be filed by amendment).
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of Baker & Botts, L.L.P. (included in Exhibit 5.1).
24.1 Power of Attorney (included in signature pages).
<PAGE>
EXHIBIT 4.4
THIRD AMENDMENT
TO
CERTIFICATE OF INCORPORATION
OF
LASERTECHNICS, INC.
PURSUANT TO SECTION 242 OF THE
GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
------------------------------------------------
The undersigned, in order to amend the Certificate of Incorporation of
Lasertechnics, Inc. pursuant to Section 242 of the General Corporation Law of
the State of Delaware, does hereby certify that the following amendment to the
Certificate of Incorporation of Lasertechnics, Inc. was duly adopted by a
majority of the outstanding stock entitled to vote thereon at the special
meeting of stockholders called for that purpose on November 11, 1994 and further
certifies that:
I. Article FOURTH of the Certificate of Incorporation is deleted in its
entirety and replaced in its entirety by the following:
FOURTH: The total number of shares of capital stock which the Corporation
-------
shall have authority to issue is 50,000,000 shares consisting of 45,000,000
shares of Common Stock, par value $0.01 per share ("Common Stock") and 5,000,000
shares of Non-Voting Common Stock, par value $0.01 per share ("Non-Voting Common
Stock" and together with the Common Stock, "Common Shares").
Common Shares
- -------------
A statement of the designations, powers, preferences, rights,
qualifications, limitations and restrictions in respect of the Common Shares is
as follows:
(A) Dividends. The Board of Directors of the Corporation
---------
may cause dividends to be paid to the holders of shares of Common
Stock or Non-Voting Common Stock out of funds legally available
for the payment of dividends by declaring an amount per share as
a dividend. When and as dividends or other distributions are
declared, whether payable in cash, in property or in shares of
stock of the Corporation, other than in shares of Common Stock or
Non-Voting Common Stock, the holders of Common Stock and the
holders of Non-Voting Common Stock shall be entitled to share
equally, share for share, in such dividends or other
distributions. No dividends or other distributions shall be
declared or paid in shares of Common Stock or Non-Voting Common
Stock or options, warrants or rights to acquire such stock or
securities convertible into or exchangeable for shares of such
stock, except dividends or other distributions payable ratably
according to the number of shares of Common Stock and Non-Voting
Common Stock held by them,
-1-
<PAGE>
in shares of, or options, warrants or rights to acquire or
securities convertible into or exchangeable for, Common Stock to
holders of that class of stock and Non-Voting Common Stock to
holders of that class of stock.
(B) Liquidation Rights. In the event of any voluntary or
-------------------
involuntary liquidation, dissolution or winding up of the affairs
of the Corporation, the holders of Common Shares shall be
entitled to share, ratably according to the number of shares of
Common Stock and Non-Voting Common Stock held by them, in all
assets of the Corporation available for distribution to its
stockholders.
(C) Voting Rights.
--------------
(1) Except as otherwise provided in this Certificate of
Incorporation or required by applicable law, the holders of
Common Stock shall be entitled to vote on each matter on
which the stockholders of the Corporation shall be entitled
to vote, and each holder of Common Stock shall be entitled
to one vote for each share of such stock held by such
holder.
(2) The holders of Non-Voting Common Stock shall not
have any voting rights except as otherwise provided in this
Certificate of Incorporation or required by applicable law
and except that such holders shall be entitled to vote as a
separate class on any amendment to this paragraph (C)(2) and
on any amendment, repeal or modification of any provision of
this Certificate of Incorporation that adversely affects the
powers, preferences or special rights of holders of Non-
Voting Common Stock.
(3) Except as otherwise provided in paragraph (C)(2)
above, on any matter on which the holders of Common Stock
and the holders of Non-Voting Common Stock are entitled to
vote, both classes of Common Shares entitled to vote shall
vote together as a single class, and each holder of Common
Shares entitled to vote shall be entitled to one vote for
each share of Common Stock and one vote for each share of
Non-Voting Common Stock held by such holder.
(4) In addition to any affirmative vote required by law
or by this Certificate of Incorporation, the affirmative
vote or written consent of the holders of not less than a
majority of the then outstanding shares of both classes of
Common Shares, voting together as a single class, shall be
required for any of the following actions: (i) any increase,
reduction or other change in the authorized number of shares
of any class of Common Shares, (ii) the authorization of any
new series or class of stock of the Corporation senior to or
on a parity with Common Shares with respect to the payment
of dividends or the distribution of assets on liquidation,
and increases in the authorized
-2-
<PAGE>
shares of any such series or class, and (iii) any amendment
to the Certificate of Incorporation that adversely affects
the rights of the Common Stock or the Non-Voting Common
Stock. The affirmative vote or written consent specified in
the preceding sentence shall be required notwithstanding the
fact that no vote may be required, or that a lesser
percentage vote may be specified, by law, by the By-Laws of
the Corporation or otherwise.
(D) Conversion.
-----------
(1) Upon compliance with the provisions of paragraph
(D)(3) below, any Regulated Stockholder (as defined below)
shall be entitled to convert, at any time and from time to
time, any or all of the shares of Common Stock held by such
stockholder into the same number of Non-Voting Common Stock.
The term "Regulated Stockholder" shall mean (a) the
stockholder ("the SBIC Stockholder") that purchased shares
of Common Stock pursuant to the Common Stock and Convertible
Note Purchase Agreement dated July 8, 1994 (the "Purchase
Agreement"), (b) any stockholder that is subject to the
provisions of Regulation Y of the Board of Governors of the
Federal Reserve System (12 C.F.R. Part 225) or any successor
to such regulation ("Regulation Y"), and that holds shares
of Common Stock or Non-Voting Common Stock originally issued
pursuant to the Purchase Agreement or upon conversion of the
Convertible Note issued thereunder, or shares issued upon
conversion(s) of such shares, so long as such stockholder
shall hold any such shares of Common Stock or Non-Voting
Common Stock or shares issued upon conversion(s) of such
shares, (c) any Affiliate (as defined below) of any such
Regulated Stockholder specified in clause (a) or (b) above
that is a transferee of any shares of Common Stock or Non-
Voting Common Stock of the Corporation, so long as such
Affiliate shall hold any such shares of Common Stock or Non-
Voting Common Stock or shares issued upon conversion(s) of
such shares and (d) any individual, partnership, joint
venture, corporation, association, trust, or any other
entity or organization, including a government or political
subdivision or an agency or instrumentality thereof (a
"Person") (i) to which any such Regulated Stockholder
specified in clause (a) or (b) above or any of its
Affiliates has transferred such shares, so long as such
transferee shall hold, and only with respect to, any shares
transferred by such Regulated Stockholder or Affiliate or
any shares issued upon conversion(s) of such shares, and
(ii) which transferee is, or any Affiliate of which is,
subject to the provisions of Regulation Y. As used in this
Certificate of Incorporation, the term "Affiliate" shall
mean with respect to any Person, or any other Person
directly or indirectly controlling, controlled by or under
common control with such Person. For the purpose of this
definition, the term "control" (including with correlative
meanings, the terms "controlling", "controlled by" and
"under
-3-
<PAGE>
common control with"), as used with respect to any Person,
shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of
voting securities or by contract or otherwise.
(2) Upon compliance with the provisions of paragraph
(D)(3) below, any stockholder shall be entitled to convert,
at any time and from time-to-time, any and all shares of Non-
Voting Common Stock held by such stockholder into the same
number of shares of Common Stock; provided, however, that no
-------- -------
holder of any shares of Non-Voting Common Stock shall be
entitled to convert any such shares into shares of Common
Stock, to the extent that, as a result of such conversion,
such holder and its Affiliates, directly or indirectly,
would own, control or have the power to vote a greater
number of shares of Common Stock or other securities of any
kind issued by the Corporation than such holder and its
Affiliates shall be permitted to own, control or have the
power to vote under any law, regulation, rule or other
requirement of any governmental authority at the time
applicable to such holder or its Affiliates.
(3)(a) Each conversion of Common Shares of the
Corporation into another class of Common Shares of the
Corporation shall be effected by the surrender of the
certificate(s) evidencing the shares of the class of stock
to be converted (the "Converting Shares") at the principal
office of the Corporation (or such other office or agency of
the Corporation as the Corporation may designate by notice
in writing to the holders of Common Shares) at any time
during its usual business hours, together with written
notice by the holder of such Converting Shares, (i) stating
that the holder desires to convert the Converting Shares or
a specified number of such Converting Shares, evidenced by
such certificate(s) into an equal number of shares of the
class into which such shares may be converted (the
"Converted Shares"), and (ii) giving the name(s) (with
addresses) and denominations in which the certificate(s)
evidencing the Converted Shares shall be issued, and
instructions for the delivery thereof. The Corporation shall
promptly notify each Regulated Stockholder of record of its
receipt of such notice. Except as otherwise provided in
paragraph (D)(3)(b), upon receipt of the notice described in
the first sentence of this paragraph (D)(3)(a), together
with the certificate(s) evidencing the Converting Shares,
the Corporation shall be obligated to, and shall, issue and
deliver in accordance with such instructions the
certificate(s) evidencing the Converted Shares issuable upon
such conversion and a certificate (which shall contain such
legends, if any, as were set forth on the surrendered
certificate(s)) representing any shares which were
represented by the certificate(s) surrendered to the
Corporation in connection with such conversion but which
were not Converting Shares and, therefore,
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<PAGE>
were not converted; provided, however, that if such
-------- -------
conversion is subject to paragraph (D)(3)(d) below, the
Corporation shall not issue said certificate(s) until the
expiration of the Deferral Period referred to therein. Such
conversion, to the extent permitted by law, shall be deemed
to have been effected as of the close of business on the
date on which such certificate(s) shall have been
surrendered and such written notice shall have been received
by the Corporation, and at such time the rights of the
holder of such Converting Shares as such holder shall cease
(except that in the case of a conversion subject to
paragraph (D)(3)(d) below, the conversion shall be deemed
effective upon expiration of the Deferral Period referred to
therein), and the person(s) in whose name or names any
certificate(s) evidencing the Converted Shares are to be
issued upon such conversion shall be deemed to have become
the holder(s) of record of the Converted Shares.
(b) Notwithstanding any provision of paragraph
(D)(3)(a) to the contrary, the Corporation shall not be
required to record the conversion of, and no holder of
shares shall be entitled to convert, shares of Non-Voting
Common Stock into shares of Common Stock unless such
conversion is permitted under applicable law; provided,
--------
however, that the Corporation shall be entitled to rely
-------
without independent verification upon the representation of
any holder that the conversion of shares by such holder is
permitted under applicable law, and in no event shall the
Corporation be liable to any such holder or any third party
arising from such conversion whether or not permitted by
applicable law.
(c) Upon the issuance of the Converted Shares in
accordance with this paragraph (D), such shares shall be
deemed to be duly authorized, validly issued, fully paid and
non-assessable.
(d) The Corporation shall not convert or directly or
indirectly redeem, purchase or otherwise acquire any shares
of Common Stock or take any other action affecting the
voting rights of such shares, if such action will increase
the percentage of outstanding voting securities owned or
controlled by any Regulated Stockholder (other than the
stockholder which requested that the Corporation take such
action, or which otherwise waives in writing its rights
under this paragraph (D)) unless the Corporation gives
written notice (the "First Notice") of such action to each
such Regulated Stockholder. The Corporation will defer
making any conversion, redemption, purchase or other
acquisition or taking any such other action for a period of
30 days (the "Deferral Period") after giving the First
Notice in order to allow each such Regulated Stockholder to
determine whether it wishes to convert or take any other
action with respect to the Common Shares it owns, controls
or has the power to vote, and if any such Regulated
Stockholder then elects to convert
-5-
<PAGE>
any shares of Common Stock, it shall notify the Corporation
in writing within 20 days of the issuance of the First
Notice, in which case the Corporation (i) shall promptly
notify from time to time each other Regulated Stockholder
holding shares of each proposed conversion and the proposed
transactions, and (ii) effect the conversion requested by
all Regulated Stockholders in response to the notices issued
pursuant to this paragraph (D)(3)(d) at the end of the
Deferral Period or as soon thereafter as is reasonably
practicable. Notwithstanding the foregoing, at any time at
which any shares of Common Stock or Non-Voting Common Stock
are held by a Regulated Stockholder which is subject to the
provisions of Regulation Y, the Corporation will not
directly or indirectly redeem, purchase, acquire or take any
other action affecting outstanding shares of Common Stock or
Non-Voting Common Stock if such action will increase above
4.9% the percentage of any class of voting securities of the
Corporation, or increase above 24.9% the percentage of
outstanding Common Stock or Non-Voting Common Stock, owned,
held or controlled by any Regulated Stockholder and its
Affiliates (other than a stockholder which waives in writing
its rights under this paragraph (D)).
(e) The Corporation will at all times reserve and keep
available out of its authorized but unissued shares of
Common Stock and Non-Voting Common Stock or its treasury
shares, solely for the purpose of issue upon conversion of
shares of Common Stock and Non-Voting Common Stock, such
number of shares of such class as shall then be issuable
upon the conversion of all outstanding shares of Common
Stock and Non-Voting Common Stock.
(f) Shares of Common Stock and Non-Voting Common Stock
that are converted into shares of any other class shall not
be reissued, except, in the case of shares of Common Stock
and Non-Voting Common Stock, for reissuance in connection
with the conversion of shares of Common Stock held by
Regulated Stockholder or Non-Voting Common Stock into shares
of Non-Voting Common Stock or Common Stock.
(g) The issue of certificates evidencing shares of any
class of Common Shares upon conversion of shares of any
other class of Common Shares shall be made without charge to
the holder of such shares for any issue tax in respect
thereof or other cost incurred by the Corporation in
connection with such conversion; provided, however, the
-------- -------
Corporation shall not be required to pay any tax that may be
payable in respect of any transfer involved in the issuance
and delivery of any certificate in a name other than that of
the holder of the Common Shares converted.
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<PAGE>
(4) If the Corporation shall in any manner subdivide
(by stock split, stock dividend or otherwise) or combine (by
reverse stock split or otherwise) the outstanding shares of
the Common Stock or the Non-Voting Common Stock, the
outstanding shares of each other class of Common Shares
shall be proportionately subdivided or combined, as the case
may be, and effective provision shall be made for the
protection of all conversion rights hereunder. In case of
any reorganization, reclassification or change of shares of
Common Stock or Non-Voting Common Stock (other than a change
in par value, or from par value to no par value as a result
of a subdivision or combination), or in case of any
consolidation of the Corporation with one or more other
corporations or a merger of the Corporation with another
corporation (other than a consolidation or merger in which
the Corporation is the continuing corporation and which does
not result in any reclassification or change of outstanding
shares of Common Stock or Non-Voting Common Stock), or in
case of any sale, lease or other disposition to another
corporation (other than a wholly-owned subsidiary of the
Corporation) of all or substantially all the assets of the
Corporation, each holder of Common Shares, irrespective of
class, shall have the right at any time thereafter, so long
as the conversion right hereunder with respect to such
Common Shares would exist had such event not occurred, to
convert such shares into the kind and amount of shares of
stock and other securities and property (including cash)
receivable upon such reorganization, reclassification,
change, consolidation, merger, sale, lease or other
disposition by a holder of the number of shares of the class
of Common Shares into which such Common Shares might have
been converted immediately prior to such reorganization,
reclassification, change, consolidation, merger, sale, lease
or other disposition. In the event of such a reorganization,
reclassification, change, consolidation, merger, sale, lease
or other disposition, effective provision shall be made in
the certificate of incorporation of the resulting or
surviving corporation or otherwise for the protection of the
conversion rights of the Common Shares of each class that
shall be applicable, as nearly as reasonably may be, to any
such other shares of stock and other securities and property
deliverable upon conversion of Common Shares into which such
Common Shares might have been converted immediately prior to
such event. The Corporation shall not be a party to any
merger, consolidation or recapitalization pursuant to which
any holder of shares of Non-Voting Common Stock would be
required to take (i) any voting securities which would cause
such holder to violate any law, regulation or other
requirement of any governmental body applicable to such
holder, or (ii) any securities convertible into voting
securities which if such conversion took place would cause
such holder to violate any law, regulation or other
requirement of any governmental body applicable to such
holder other than securities which are
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<PAGE>
specifically provided to be convertible only in the event
that such conversion may occur without any such violation.
II. Except as amended above, the Certificate of Incorporation of
Lasertechnics, Inc., as previously filed and amended shall remain in full force
and effect.
IN WITNESS WHEREOF, I have hereunto set my hand this 14th day of November,
1994, and affirm that the foregoing Amendment to the Certificate of
Incorporation is the act and deed of the Corporation and that the facts stated
herein are true.
LASERTECHNICS, INC.
By: /s/ Eugene A. Bourque
---------------------
Eugene A. Bourque, President
ATTEST:
/s/ James B. Alley, Jr.
- -----------------------
James B. Alley, Jr., Secretary
-8-
<PAGE>
Exhibit 4.5
FOURTH AMENDMENT
TO
CERTIFICATE OF INCORPORATION
OF
LASERTECHNICS, INC.
Pursuant to Section 242 of the
General Corporation Law of the State of Delaware
------------------------------------------------
The undersigned, in order to amend the Certificate of Incorporation of
Lasertechnics, Inc. pursuant to Section 242 of the General Corporation Law of
the State of Delaware, does hereby certify that the following amendment to the
Certificate of Incorporation of Lasertechnics, Inc. was duly adopted by a
majority of the outstanding stock entitled to vote thereon at a special meeting
of stockholders called for that purpose on July 28, 1995 and further certifies:
I. Article FOURTH of the Certificate of Incorporation is deleted in
its entirety and replaced with the following:
FOURTH: (a) The total number of shares of capital stock that the
Corporation shall have authority to issue is 60,000,000, consisting of
41,500,000 shares of Common Stock, par value $.01 per share ("Common Stock"),
8,500,000 shares of Non-Voting Common Stock, par value $.01 per share ("Non-
Voting Common Stock" and together with the Common Stock, "Common Shares"), and
10,000,00 shares of preferred stock, par value $.01 per share ("Preferred
Stock").
(b) Preferred Stock. A statement of the designation, powers, preferences,
---------------
rights, qualifications, limitations and restrictions of the Preferred Stock is
as follows:
The Preferred Stock may be issued in one or more series at such time or
times and for such consideration or considerations as the Corporation's board of
directors (the "Board of Directors") may determine pursuant to a resolution or
resolutions providing for such issuance duly adopted by the Board of Directors
(authority to do so being hereby expressly vested in the Board of Directors) and
such resolution or resolutions shall also set forth, with respect to each such
series of Preferred Stock, the following:
(A) The distinctive designation, stated value and number of shares
comprising such series, which number may (except where otherwise provided
herein or by the Board of Directors in creating such series) be increased
or decreased (but not below the number of shares then outstanding) from
time to time by action of the Board of Directors;
<PAGE>
(B) The rate of dividend, if any, on the share of that series whether
dividends shall shall be cumulative and, if so, from which date or dates,
and the relative rights of priority, if any, of payment of dividends on
shares of that series over shares of any other series or class;
(C) Whether the shares of that series shall be redeemable in whole or
in part and, if so, the terms and conditions of such redemption, including
the date or dates upon or after which they shall be redeemable, and the
amount per share payable in case of redemption, which amount may vary under
different conditions and at different redemption dates, or the property
rights, including securities of any other corporation, payable in case of
redemption;
(D) Whether that series shall have a sinking fund for the redemption
or purchase of shares of that series, and, if so, the terms and amounts
payable into such sinking fund;
(E) The rights to which the holders of the shares of that series
shall be entitled in the event of voluntary or involuntary liquidation,
dissolution, distribution of assets or winding-up of the Corporation, and
the relative rights of priority, if any, of payment of shares of that
series;
(F) Whether the shares of that series shall be convertible in whole
or in part into or exchangeable in whole or in part for shares of capital
stock of any class or any other series of Preferred Stock and, if so, the
terms and conditions of such conversion or exchange, including the rate or
rates of conversion or exchange, the date or dates upon or after which they
shall be convertible or exchangeable, the duration for which they shall be
convertible or exchangeable, the event or events upon or after which they
shall be convertible or exchangeable and at whose option they shall be
convertible or exchangeable, and the method of adjusting the rates of
conversion or exchange in the event of a stock split, stock dividend,
combination of shares or similar event; provided, however, that any
Preferred Stock shall be convertible into Common Shares of the Company on a
one-share to one-share basis, as adjusted for any stock splits, dividends,
recapitalizations or similar events, and Common Shares shall be reserved
for issuance upon such conversion accordingly.
(G) Whether the shares of that series shall have voting rights in
addition to the voting rights provided by law, and if so, the terms of such
voting rights, provided however, Preferred Stock convertible into Common
Stock shall vote together with the Common Stock and shall have no greater
voting rights than the Common Stock into which it is convertible.
(H) Whether the issuance of any additional shares of such series, or
of any shares of any other series, shall be subject to restrictions as to
issuance, or as to the powers, preferences or rights of any such other
series; and
(I) Any other preferences, privileges and powers, and relative,
participation, option or other special rights, and qualifications,
limitations or restrictions of such series, as the Board of Directors may
deem advisable and as shall not be inconsistent with the provisions
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<PAGE>
of the Certificate of Incorporation, as amended, and to the full extent now
or hereafter permitted by the laws of the State of Delaware.
(c) Common Shares. A statement of the designations, powers, preferences,
-------------
rights, qualifications, limitations and restrictions in respect of the Common
Shares is as follows:
(A) Dividends. The Board of Directors of the Corporation may cause
---------
dividends to be paid to the holders of shares of Common Stock or Non-Voting
Common Stock out of funds legally available for the payment of dividends by
declaring an amount per share as a dividend. When and as dividends or
other distributions are declared, whether payable in cash, in property or
in shares of stock of the Corporation, other than in shares of Common Stock
or Non-Voting Common Stock, holders of Common Stock and the holders of Non-
Voting Common Stock shall be entitled to share equally, share for share,
in such dividends or other distributions, subject to the rights of holders
of Preferred Stock. No dividends or other distributions shall be declared
or paid in shares of Common Stock or Non-Voting Common Stock or options,
warrants or rights to acquire such stock or securities convertible into or
exchangeable for shares of such stock, except dividends or other
distributions payable ratably according to the number of shares of Common
Stock and Non-Voting Common Stock held by them, in shares of, or options,
warrants or rights to acquire or securities convertible into or
exchangeable for, Common Stock to holders of that class of stock and Non-
Voting Common Stock to holders of that class of stock.
(B) Liquidation Rights. Subject to the liquidation rights of holders
------------------
of Preferred Stock, in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Corporation,
the holders of Common Shares shall be entitled to share, ratably according
to the number of shares of Common Stock and Non-Voting Common Stock held by
them, in all assets of the Corporation available for distribution to its
stockholders.
(C) Voting Rights.
-------------
(1) Except as otherwise provided in this Certificate of
Incorporation or required by applicable law, the holders of Common
Stock shall be entitled to vote on each matter on which the
stockholders of the Corporation shall be entitled to vote, and each
holder of Common Stock shall be entitled to one vote for each share of
such stock held by such holder.
(2) The holders of Non-Voting Common Stock shall not have
any voting rights except as otherwise provided in this Certificate of
Incorporation or required by applicable law and except that such
holders shall be entitled to vote as a separate class on any amendment
to this paragraph (C)(2) and on any amendment, repeal or modification
of any provision of this Certificate of Incorporation that adversely
affects the powers, preferences or special rights of holders of Non-
Voting Common Stock.
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<PAGE>
(3) Except as otherwise provided in paragraph (C)(2) above,
on any matter on which the holders of Common Stock and the holders of
Non-Voting Common Stock are entitled to vote, both classes of Common
Shares entitled to vote shall vote together as a single class, and
each holder of Common Shares entitled to vote shall be entitled to one
vote for each share of Common Stock and one vote for each share of
Non-Voting Common Stock held by such holder.
(4) In addition to any affirmative vote required by law or
by this Certificate of Incorporation, the affirmative vote or written
consent of the holders of not less than a majority of the then
outstanding shares of both classes of Common Shares, voting together
as a single class, shall be required for any of the following actions:
(i) any single increase, reduction or other change in the authorized
number of shares of any class of Common Shares, (ii) the authorization
of any new series of class of stock of the Corporation senior to or on
a parity with Common Shares with respect to the payment of dividends
or the distribution of assets on liquidation, and increases in the
authorized shares of any sch series or class, and (iii) any amendment
to the Certificate of Incorporation that adversely affects the rights
of the Common Stock of the Non-Voting Common Stock. The affirmative
vote or written consent specified in the preceding sentence shall be
required notwithstanding the fact that no vote may be required, or
that a lesser percentage vote may be specified, by law, by the By-Laws
of the Corporation or otherwise.
(D) Conversion.
----------
(1) Upon compliance with the provisions of paragraph (D)(3)
below, any Regulated Stockholder (as defined below) shall be entitled
to convert, at any time and from time to time, any or all of the
shares of Common Stock held by such stockholder into the same number
of shares of Non-Voting Common Stock. The term "Regulated Stockholder"
shall mean (a) the stockholder ("the SBIC Stockholder") that purchased
shares of Common Stock pursuant to the Common Stock and Convertible
Note Purchase Agreement dated July 8, 1994 (the "Purchase Agreement"),
(b) any stockholder that is subject to the provisions of Regulation Y
of the Board of Governors of the Federal Reserve System (12 C.F.R.
Part 225) or any successor to such regulation ("Regulation Y"), and
that holds shares of Common Stock or Non-Voting Common Stock
originally issued pursuant to the Purchase Agreement or upon
conversion of the Convertible Note issued thereunder, or shares issued
upon conversion(s) of such shares, so long as such stockholder shall
hold any such shares of Common Stock or Non-Voting Common Stock or
shares issued upon conversion(s) of such shares, (c) any Affiliate (as
defined below) of any such Regulated Stockholder specified in clause
(a) or (b) above that is a transferee of any shares of Common Stock or
Non-Voting Common Stock of the Corporation, so long as such Affiliate
shall hold any such shares of Common Stock or Non-Voting Common Stock
or shares issued upon conversion(s) of such shares and (d) any
individual, partnership, joint venture, corporation, association,
trust, or any other entity or organization, including a government or
political subdivision or an agency or instrumentality thereof (a
"Person") (i) to which any such Regulated Stockholder specified
-4-
<PAGE>
in clause (a) or (b) above or any of its Affiliates has transferred
such shares, so long as such transferee shall hold, and only with
respect to, any shares transferred by such Regulated Stockholder or
Affiliate or any shares issued upon conversion(s) of such shares, and
(ii) which transferee is, or any Affiliate of which is, subject to the
provisions of Regulation Y. As used in this Certificate of
Incorporation, the term "Affiliate" shall mean with respect to any
Person, or any other Person directly or indirectly controlling,
controlled by or under common control with such Person. For the
purpose of this definition, the term "control" (including with
correlative meanings, the terms "controlling," "controlled by" and
"under common control with"), as used with respect to any Person,
shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities or by
contract or otherwise.
(2) Upon compliance with the provision of paragraph
(D)(3) below, any stockholder shall be entitled to convert, at any
time and from time-to-time, any and all shares of Non-Voting Common
Stock held by such stockholder into the same number of shares of
Common Stock; provided, however, that no holder of any shares of Non-
-------- -------
Voting Common Stock, to the extent that, as a result of such
conversion, such holder and its Affiliates, directly or indirectly,
would own, control or have the power to vote a greater number of
shares of Common Stock or other securities of any kind issued by the
Corporation than such holder and its Affiliates shall be permitted to
own, control or have the power to vote under any law, regulation, rule
or other requirement of any government authority at the time
applicable to such holder or its Affiliates.
(3)(a) Each conversion of Common Shares of the Corporation
into another class of Common Shares of the Corporation shall be
effected by the surrender of the certificate(s) evidencing the shares
of the class of stock to be converted (the "Converting Shares") at the
principal office of the Corporation (or such other office or agency of
the Corporation as the Corporation may designate by notice in writing
to the holders of Common Shares) at any time during its usual business
hours, together with written notice by the holder of such Converting
Shares, (i) stating that the holder desires to convert the Converting
Shares or a specified number of such Converting Shares, evidenced by
such certificate(s) into an equal number of shares of the class into
which such shares may be converted (the "Converted Shares"), and (ii)
giving the name(s) (with addresses) and denominations in which the
certificate(s) evidencing the Converted Shares shall be issued, and
instructions for the delivery thereof. The Corporation shall promptly
notify each Regulated Stockholder of record of its receipt of such
notice. Except as otherwise provided in paragraph (D)(3)(b), upon
receipt of the notice described in the first sentence of this
paragraph (D)(3)(a), together with the certificate(s) evidencing the
Converting Shares, the Corporation shall be obligated to, and shall,
issue and deliver in accordance with such instructions the
certificate(s) evidencing the Converted Shares issuable upon such
conversion and a certificate (which shall contain such legends, if
any, as were set forth on the surrendered certificate(s), representing
any shares which were represented by the same certificate(s)
surrendered to the Corporation
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<PAGE>
in connection with such conversion but which were not Converting
Shares and, therefore, were not converted; provided, however, that if
-------- -------
such conversion is subject to paragraph (D)(3)(d) below, the
Corporation shall not issue said certificate(s) until the expiration
of the Deferral Period referred to therein. Such conversion, to the
extent permitted by law, shall be deemed to have been effected as of
the close business on the date on which such certificate(s) shall have
been surrendered and such written notice shall have been received by
the Corporation, and at such time the rights of the holder of such
Converting Shares as such holder shall cease (except that in the case
of a conversion subject to paragraph (D)(3)(d) below, the conversion
shall be deemed effective upon expiration of the Deferral Period
referred to therein), and the person(s) in whose name or names any
certificate(s) evidencing the Converted Shares are to be issued upon
such conversion shall be deemed to have become the holder(s) of record
of the Converted Shares.
(b) Notwithstanding any provision of paragraph (D)(3)(a)
to the contrary, the Corporation shall not be required to record the
conversion of, and no holder of shares shall be entitled to convert,
shares of Non-Voting Common Stock into shares of Common Stock unless
such conversion is permitted under applicable law; provided, however,
-------- -------
that the Corporation shall be entitled to rely without independent
verification upon the representation of any holder that the conversion
of shares by such holder is permitted under applicable law, and in no
event shall the Corporation be liable to any such holder or any third
party arising from such conversion whether or not permitted by
applicable law.
(c) Upon the issuance of the Converted Shares in
accordance with this paragraph (D), such shares shall be deemed to be
duly authorized, validly issued, fully paid and non-assessable.
(d) The Corporation shall not convert or directly or
indirectly redeem, purchase or otherwise acquire any shares of Common
Stock or take any other action affecting the voting rights of such
shares, if such action will increase the percentage of outstanding
voting securities owned or controlled by any Regulated Stockholder
(other than the stockholder which requested that the Corporation take
such action, or which otherwise waives in writing it rights under this
paragraph (D)) unless the Corporation gives written notice (the "First
Notice") of such action to each such Regulated Stockholder. The
Corporation will defer making any conversion, redemption, purchase or
other acquisition or taking any such other action for a period of 30
days (the "Deferral Period") after giving the First Notice in order to
allow each such Regulated Stockholder to determine whether it wishes
to convert or take any other action with respect to the Common Shares
it owns, controls or has the power to vote, and if any such Regulated
Stockholder then elects to convert any shares of Common Stock, it
shall notify the Corporation in writing within 20 days of the issuance
of the First Notice, in which case the Corporation (i) shall promptly
notify from time to time each other Regulated Stockholder holding
shares of each proposed conversion and the proposed transactions, and
(ii) effect the conversion requested by all Regulated Stockholders in
response to the notices issued pursuant to this paragraph (D)(3)(d) at
the end of the Deferral Period or as soon thereafter as is reasonably
practicable.
-6-
<PAGE>
Notwithstanding the foregoing, at any time at which any shares of
Common Stock or Non-Voting Common Stock are held by a Regulated
Stockholder which is subject to the provisions of Regulation Y, the
Corporation will not directly or indirectly redeem, purchase, acquire
or take any other action affecting outstanding shares of Common Stock
or Non-Voting Common Stock if such action will increase above 4.9% the
percentage of any class of voting securities of the Corporation, or
increase above 24.9% the percentage of outstanding Common Stock or
Non-Voting Common Stock, owned, held or controlled by any Regulated
Stockholder and its Affiliates (other than a stockholder which waives
in writing its rights under this paragraph (D)).
(e) The Corporation will at all times reserve and keep
available out of its authorized but unissued shares of Common Stock
and Non-Voting Common Stock or its treasury shares, solely for the
purpose of issue upon conversion of shares of Common Stock and Non-
Voting Common Stock, such number of shares of such class as shall then
be issuable upon the conversion of all outstanding shares of Common
Stock and Non-Voting Common Stock.
(f) Shares of Common Stock and Non-Voting Common Stock
that are converted into shares of any other class not be reissued,
except, in the case of shares of Common Stock and Non-Voting Common
Stock, for reissuance in connection with the conversion of shares of
Common Stock held by Regulated Stockholders or Non-Voting Common Stock
into shares of Non-Voting Common Stock or Common Stock.
(g) The issue of certificates evidencing shares of any
class of Common Shares upon conversion of shares of any other class of
Common Shares shall be made without charge to the holder of such
shares for any issue tax in respect thereof or other cost incurred by
the Corporation in connection with such conversion; provided, however,
-------- -------
the Corporation shall not be required to pay any tax that may be
payable in respect of any transfer involved in the issuance and
delivery of any certificate in a name other than that of the holder of
the Common Shares converted.
(4) If the Corporation shall in any manner subdivide (by
stock split, stock dividend or otherwise) or combine (by reverse stock
split or otherwise) the outstanding shares of the Common Stock or the
Non-Voting Common Stock, the outstanding shares of each other class of
Common Shares shall be proportionately subdivided or combined, as the
case may be, and effective provision shall be made for the protection
of all conversion rights hereunder. In case of any reorganization,
reclassification or change of shares of Common Stock or Non-Voting
Common Stock (other than a change in par value, or from par value to
no par value as a result of a subdivision or combination), or in case
of any consolidation of the Corporation with one or more other
corporations or a merger of the Corporation with another corporation
(other than a consolidation or merger in which the Corporation is the
continuing corporation and which does not result in any
reclassification or change of outstanding shares of Common Stock or
Non-Voting Common Stock), or in case of any sale,
-7-
<PAGE>
lease or other disposition to another corporation (other than a
wholly-owned subsidiary of the Corporation) of all or substantially
all the assets of the Corporation, each holder of Common Shares,
irrespective of class, shall have the right at any time thereafter, so
long as the conversion right hereunder with respect to such Common
Shares would exist had such event not occurred, to convert such shares
into the kind and amount of shares of stock and other securities and
property (including cash) receivable upon such reorganization,
reclassification, change, consolidation, merger, sale, lease or other
disposition by a holder of the number of shares of the class of Common
Shares into which such Common Shares might have been converted
immediately prior to such reorganization, reclassification, change,
consolidation, merger, sale, lease or other disposition. In the event
of such a reorganization, reclassification, change, consolidation,
merger, sale, lease or other disposition, effective provision shall be
made in the certificate of incorporation of the resulting or surviving
corporation or otherwise for the protection of the conversion rights
of the Common Shares of each class that shall be applicable, as nearly
as reasonably may be, to any such other shares of stock and other
securities and property deliverable upon conversion of Common Shares
into which such Common Shares might have been converted immediately
prior to such event. The Corporation shall not be a party to any
merger, consolidation or recapitalization pursuant to which any holder
of shares of Non-Voting Common Stock would be require to take (i) any
voting securities which would cause such holder to violate any law,
regulation or other requirement of any governmental body applicable to
such holder, or (ii) any securities convertible into voting securities
which if such conversion took place would cause such holder to violate
any law, regulation or other requirement of any governmental body
applicable to such holder other than securities which are specifically
provided to be convertible only in the event that such conversion may
occur without any such violation.
II. Except as amended above, the Certificate of Incorporation of
Lasertechnics, Inc., as previously filed and amended shall remain in
full force and effect.
IN WITNESS WHEREOF, I have hereunto set my hand this 28th day of July,
1995, and affirm that the foregoing Amendment to the Certificate of
Incorporation is the act and deed of the Corporation and that the facts stated
herein are true.
LASERTECHNICS, INC.
By: /s/ Richard C.E. Morgan
--------------------------------
Richard C.E. Morgan
Chairman
ATTEST:
/s/ James B. Alley, Jr.
- -----------------------------------
James B. Alley, Jr., Secretary
-8-
<PAGE>
Exhibit 4.6
FIFTH AMENDMENT
TO
CERTIFICATE OF INCORPORATION
OF
LASERTECHNICS, INC.
Pursuant to Section 242 of the
General Corporation Law of the State of Delaware
------------------------------------------------
The undersigned, in order to amend the Certificate of Incorporation of
Lasertechnics, Inc. pursuant to Section 242 of the General Corporation Law of
the State of Delaware, does hereby certify that the following amendment to the
Certificate of Incorporation of Lasertechnics, Inc. was duly adopted by a
majority of the outstanding stock of each class entitled to vote thereon at the
annual meeting of stockholders called and held for that purpose, among others,
on June 17-21, 1996 and further certifies that:
I. Article FOURTH of the Certificate of Incorporation is deleted in
its entirety and replaced with the following:
FOURTH: (a) The total number of shares of capital stock that the
Corporation shall have authority to issue is 66,000,000, consisting of
56,750,000 shares of Common Stock, par value $.01 per share ("Common Stock"),
2,250,000 shares of Non-Voting Common Stock, par value $.01 per share ("Non-
Voting Common Stock" and together with the Common Stock, "Common Shares"), and
7,000,000 shares of preferred stock, par value $.01 per share ("Preferred
Stock").
(b) Preferred Stock. A statement of the designations, powers,
---------------
preferences, rights, qualifications, limitations and restrictions of the
Preferred Stock is as follows:
The Preferred Stock may be issued in one or more series at such time or
times and for such consideration or considerations as the Corporation's board of
directors (the "Board of Directors") may determine pursuant to a resolution or
resolutions providing for such issuance duly adopted by the Board of Directors
(authority to do so being hereby expressly vested in the Board of Directors) and
such resolution or resolutions shall also set forth, with respect to each such
series of Preferred Stock, the following:
(A) The distinctive designation, stated value and number of shares
comprising such series, which number may (except where otherwise provided
herein or by the Board of
<PAGE>
Directors in creating such series) be increased or decreased (but not below
the number of shares then outstanding) from time to time by action of the
Board of Directors;
(B) The rate of dividend, if any, on the shares of that series,
whether dividends shall be cumulative and, if so, from which date or dates,
and the relative rights of priority, if any, of payment of dividends on
shares of that series over shares of any other series or class;
(C) Whether the shares of that series shall be redeemable in whole or
in part and, if so, the terms and conditions of such redemption, including
the date or dates upon or after which they shall be redeemable, and the
amount per share payable in case of redemption, which amount may vary under
different conditions and at different redemption dates, or the property or
rights, including securities or any other corporation, payable in case of
redemption;
(D) Whether that series shall have a sinking fund for the redemption
or purchase of shares of that series, and, if so, the terms and amounts
payable into such sinking fund;
(E) The rights to which the holders of the shares of that series
shall be entitled in the event of voluntary or involuntary liquidation,
dissolution, distribution of assets or winding-up of the Corporation, and
the relative rights of priority, if any, of payment of shares of that
series;
(F) Whether the shares of that series shall be convertible in whole
or in part into or exchangeable in whole or in part for share of capital
stock of any class or any other series of Preferred Stock and, if so, the
terms and conditions of such conversion or exchange, including the rate or
rates of conversion or exchange, the date or dates upon or after which they
shall be convertible or exchangeable, the duration for which they shall be
convertible or exchangeable, the event or events upon or after which they
shall be convertible or exchangeable and at whose option they shall be
convertible or exchangeable, and the method of adjusting the rates of
conversion or exchange in the event of a stock split, stock dividend,
combination of shares or similar event.
(G) Whether the shares of that series shall have voting rights in
addition to the voting rights provided by law, and if so, the terms of such
voting rights, provided, however, Preferred Stock convertible into Common
Stock shall vote together with the Common Stock and shall have no greater
voting rights than the Common Stock into which it is convertible.
(H) Whether the issuance of any additional shares of such series, or
of any shares of any other series, shall be subject to restrictions as to
issuance, or as to the powers, preferences or rights of any such other
series; and
-2-
<PAGE>
(I) Any other preferences, privileges and powers, and relative,
participation, option or other special rights, and qualifications,
limitations or restrictions of such series, as the Board of Directors may
deem advisable and as shall not be inconsistent with the provisions of the
Certificate of Incorporation, as amended, and to the full extent now or
hereafter permitted by the laws of the State of Delaware.
(c) Common Shares. A statement of the designations, powers,
-------------
preferences, rights, qualifications, limitations and restrictions in respect of
the Common Shares is as follows:
(A) Dividends. The Board of Directors of the Corporation may cause
---------
dividends to be paid to the holders of shares of Common or Non-Voting
Common Stock out of funds legally available for the payment of dividends by
declaring an amount per share as a dividend. When and as dividends or
other distributions are declared, whether payable in cash, in property or
in shares of stock of the Corporation, other than in shares of Common Stock
or Non-Voting Common Stock, the holders of Common Stock and the holders of
Non-Voting Common Stock shall be entitled to share equally, share for
share, in such dividends or other distributions, subject to the rights of
holders of Preferred Stock. No dividends ore other distributions shall be
declared or paid in shares of Common Stock or Non-Voting Common Stock or
options, warrants or rights to acquire such stock or securities convertible
into or exchangeable for shares of such stock, except dividends or other
distributions payable ratably according to the number of shares of Common
Stock and Non-Voting Common Stock held by them, in shares of, or options,
warrants or rights to acquire or securities convertible into or
exchangeable for, Common Stock to holders of that class of stock and Non-
Voting Common Stock to holders of that class of stock.
(B) Liquidation Rights. Subject to the liquidation rights of holders
------------------
of Preferred Stock, in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Corporation,
the holders of Common Shares shall be entitled to share, ratably according
to the number of shares of Common Stock and Non-Voting Common Stock held by
them, in all assets of the Corporation available for distribution to its
stockholders.
(C) Voting Rights.
-------------
(1) Except as otherwise provided in this Certificate of
Incorporation or required by applicable law, the holders of Common
Stock shall be entitled to vote on each matter on which the
stockholders of the Corporation shall be entitled to vote, and each
holder of Common Stock shall be entitled to one vote for each share of
such stock held by such holder.
-3-
<PAGE>
(2) The holders of Non-Voting Common Stock shall not have any
voting rights except as otherwise provided in this Certificate of
Incorporation or required by applicable law and except that such
holders shall be entitled to vote as a separate class on any amendment
to this paragraph (C)(2) and on any amendment, repeal or modification
of any provision of this Certificate of Incorporation that adversely
affects the powers, preferences or special rights of holders of Non-
Voting Common Stock.
(3) Except as otherwise provided in paragraph (C)(2) above, on
any matter on which the holders of Common Stock and the holders of
Non-Voting Common Stock are entitled to vote, both classes of Common
Shares entitled to vote shall vote together as a single class, and
each holder of Common Shares entitled to vote shall be entitled to one
vote for each share of Common Stock and one vote for each share of
Non-Voting Common Stock held by such holder.
(4) In addition to any affirmative vote required by law or by
this Certificate of Incorporation, the affirmative vote or written
consent of the holders of not less than a majority of the then
outstanding shares of both classes of Common Shares, voting together
as a single class, shall be required for any of the following actions:
(i) any increase, reduction or other change in the authorized number
of shares of any class of Common Shares, (ii) the authorization of any
new series or class of stock of the Corporation senior to or on a
parity with Common Shares with respect to the payment of dividends or
the distribution of assets on liquidation, and increases in the
authorized shares of any such series or class, and (iii) any amendment
to the Certificate of Incorporation that adversely affects the rights
of the Common Stock or the Non-Voting Common Stock. The affirmative
vote or written consent specified in the preceding sentence shall be
required notwithstanding the fact that no vote may be required, or
that a lesser percentage vote may be specified, by law, by the By-Laws
of the Corporation or otherwise.
(D) Conversion.
----------
(1) Upon compliance with the provisions of paragraph (D)(3)
below, any Regulated Stockholder (as defined below) shall be entitled
to convert, at any time and from time to time, any or all of the
shares of Common Stock held by such stockholder into the same number
of shares of Non-Voting Common Stock. The term "Regulated
Stockholder" shall mean (a) the stockholder ("the SBIC Stockholder")
that purchased shares of Common Stock pursuant to the Common Stock and
Convertible Note Purchase Agreement dated July 8, 1994 (the "Purchase
Agreement"), (b) any stockholder that is subject to the provisions of
Regulation Y of the Board of
-4-
<PAGE>
Governors of the Federal Reserve System (12 C.F.R. Part 225) or any
successor to such regulation ("Regulation Y"), and that holds shares
of Common Stock or Non-Voting Common Stock originally issued pursuant
to the Purchase Agreement or upon conversion of the Convertible Note
issued thereunder, or shares issued upon conversion(s) of such shares,
so long as such stockholder shall hold any such shares of Common Stock
or Non-Voting Common Stock or shares issued upon conversion(s) of such
shares, (c) any Affiliate (as defined below) of any such Regulated
Stockholder specified in clause (a) or (b) above that is a transferee
of any shares of Common Stock or Non-Voting Common Stock of the
Corporation, so long as such Affiliate shall hold any such shares of
Common Stock or Non-Voting Common Stock or shares issued upon
conversion(s) of such shares and (d) any individual, partnership,
joint venture, corporation, association, trust, or any other entity or
organization, including a government or political subdivision or an
agency or instrumentality thereof (a "Person") (i) to which any such
Regulated Stockholder specified in clause (a) or (b) above or any of
its Affiliates has transferred such shares, so long as such transferee
shall hold, and only with respect to, any shares transferred by such
Regulated Stockholder or Affiliate or any shares issued upon
conversion (s) of such shares, and (ii) which transferee is, or any
Affiliate of which is, subject to the provisions of Regulation Y. As
used in this Certificate of Incorporation, the term "Affiliate" shall
mean with respect to any Person, or any other Person directly or
indirectly controlling, controlled by or under common control with
such Person. For the purpose of this definition, the term "control"
(including with correlative meanings, the terms "controlling",
"controlled by" and "under common control with"), as used with respect
to any Person, shall mean the possession, directly or indirectly, of
the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting
securities or by contract or otherwise.
(2) Upon compliance with the provisions of paragraph (D)(3)
below, any stockholder shall be entitled to convert, at any time and
from time to time, any and all shares of Non-Voting Common Stock held
by such stockholder into the same number of shares of Common Stock;
provided, however, that no holder of any shares of Non-Voting Common
-------- -------
Stock shall be entitled to convert any such shares into shares of
Common Stock, to the extent that, as a result of such conversion, such
holder and its Affiliates, directly or indirectly, would own, control
or have the power to vote a greater number of shares of Common Stock
or other securities of any kind issued by the Corporation than such
holder and its Affiliates shall be permitted to own, control or have
the power to vote under any law, regulation, rule or other requirement
of any governmental authority at the time applicable to such holder or
its Affiliates.
-5-
<PAGE>
(3)(a) Each conversion of Common Shares of the Corporation into
another class of Common Shares of the Corporation shall be effected by
the surrender of the certificate(s) evidencing the shares of the class
of stock to be converted (the "Converting Shares") at the principal
office of the Corporation (or such other office or agency of the
Corporation as the Corporation may designate by notice in writing to
the holders of Common Shares) at any time during its usual business
hours, together with written notice by the holder of such Converting
Shares, (i) stating that the holder desires to convert the Converting
Shares or a specified number of such Converting Shares, evidenced by
such certificate(s) into an equal number of shares of the class into
which such shares may be converted (the "Converted Shares"), and (ii)
giving the name(s) (with addresses) and denominations in which the
certificate(s) evidencing the Converted Shares shall be issued, and
instructions for the delivery thereof. The Corporation shall promptly
notify each Regulated Stockholder of record of its receipt of such
notice. Except as otherwise provided in paragraph (D)(3)(b), upon
receipt of the notice described in the first sentence of this
paragraph (D)(3)(a), together with the certificate(s) evidencing the
Converting Shares, the Corporation shall be obligated to, and shall,
issue and deliver in accordance with such instructions the
certificate(s) evidencing the Converted Shares issuable upon such
conversion and a certificate (which shall contain such legends, if
any, as were set forth on the surrendered certificate(s)) representing
any shares which were represented by the certificate(s) surrendered to
the Corporation in connection with such conversion but which were not
Converting Shares and, therefore, were not converted; provided,
---------
however, that if such conversion is subject to paragraph (D)(3)(d)
--------
below, the Corporation shall not issue said certificate(s) until the
expiration of the Deferral Period referred to therein. Such
conversion, to the extent permitted by law, shall be deemed to have
been effected as of the close of the business on the date on which
such certificate(s) shall have been surrendered and such written
notice shall have been received by the Corporation, and at such time
the rights of the holder of such Converting Shares as such holder
shall cease (except that in the case of a conversion subject to
paragraph (D)(3)(d) below, the conversion shall be deemed effective
upon expiration of the Deferral Period referred to therein), and the
person(s) in whose name or names any certificate(s) evidencing the
Converted Shares are to be issued upon such conversion shall be deemed
to have become the holder(s) of record of the Converted
(b) Notwithstanding any provision of paragraph (D)(3)(a) to the
contrary, the Corporation shall not be required to record the
conversion of, and no holder of shares shall be entitled to convert,
shares of Non-Voting Common Stock into shares of Common Stock unless
such conversion is
-6-
<PAGE>
permitted under applicable law; provided, however, that the
-------- -------
Corporation shall be entitled to rely without independent verification
upon the representation of any holder that the conversion of shares by
such holder is permitted under applicable law, and in no event shall
the Corporation be liable to any such holder of any third party
arising from such conversion whether or not permitted by applicable
law.
(c) Upon the issuance of the Converted Shares in accordance with
this paragraph (D), such shares shall be deemed to be duly authorized,
validly issued, fully paid and non-assessable.
(d) The Corporation shall not convert or directly or indirectly
redeem, purchase or otherwise acquire any shares of Common Stock or
take any other action affecting the voting rights of such shares, if
such action will increase the percentage of outstanding voting
securities owned or controlled by any Regulated Stockholder (other
than the stockholder which requested that the Corporation take such
action, or which otherwise waives in writing its rights under this
paragraph (D)) unless the Corporation gives written notice (the "First
Notice") of such action to each such Regulated Stockholder. The
Corporation will defer making any conversion, redemption, purchase or
other acquisition or taking any such other action for a period of 30
days (the "Deferral Period") after giving the First Notice in order to
allow each such Regulated Stockholder to determine whether it wishes
to convert or take any other action with respect to the Common Shares
it owns, controls or has the power to vote, and if any such Regulated
Stockholder then elects to convert any shares of Common Stock, it
shall notify the Corporation in writing within 20 days of the issuance
of the First Notice, in which case the Corporation (i) shall promptly
notify from time to time each other Regulated Stockholder holding
shares of each proposed conversion and the proposed transactions, and
(ii) effect the conversion requested by all Regulated Stockholders in
response to the notices issued pursuant to this paragraph (D)(3)(d) at
the end of the Deferral Period or as soon thereafter as is reasonably
practicable. Notwithstanding the foregoing, at any time at which any
shares of Common Stock or Non-Voting Common Stock are held by a
Regulated Stockholder which is subject to the provisions of Regulation
Y, the Corporation will not directly or indirectly redeem, purchase,
acquire or take any other action affecting outstanding shares of
Common Stock or Non-Voting Common Stock if such action will increase
above 4.9% the percentage of any class of voting securities of the
Corporation, or increase above 24.9% the percentage of outstanding
Common Stock or Non-Voting Common Stock, owned, held or controlled by
any Regulated Stockholder and its Affiliates (other than a stockholder
which waives in writing its rights under this paragraph (D)).
-7-
<PAGE>
(e) The Corporation will at all times reserve and keep available
out of its authorized but unissued shares of Common Stock and Non-
Voting Common Stock or its treasury shares, solely for the purpose of
issue upon conversion of shares of Common Stock and Non-Voting Common
Stock, such number of shares of such class as shall then be issuable
upon the conversion of all outstanding shares of Common Stock and Non-
Voting Common Stock.
(f) Shares of Common Stock and Non-Voting Common Stock that are
converted into shares of any other class shall not be reissued,
except, in the case of shares of Common Stock and Non-Voting Common
Stock, for reissuance in connection with the conversion of shares of
Common Stock held by Regulated Stockholders or Non-Voting Common Stock
into shares of Non-Voting Common Stock or Common Stock.
(g) The issue of certificates evidencing shares of any class of
Common Shares upon conversion of shares of any other class of Common
Shares shall be made without charge to the holder of such shares for
any issue tax in respect thereof or other cost incurred by the
Corporation in connection with such conversion; provided, however, the
--------- --------
Corporation shall not be required to pay any tax that may be payable
in respect of any transfer involved in the issuance and delivery of
any certificate in a name other than that of the holder of the Common
Shares converted.
(4) If the Corporation shall in any manner subdivide (by stock
split, stock dividend or otherwise) or combine (by reverse stock split
or otherwise) the outstanding shares of the Common Stock or the Non-
Voting Common Stock, the outstanding shares of each other class of
Common Shares shall be proportionately subdivided or combined, as the
case may be, and effective provision shall be made for the protection
of all conversion rights hereunder. In case of any reorganization,
reclassification or change of shares of Common Stock or Non-Voting
Common Stock (other than a change in par value, or from par value to
no par value as a result of a subdivision or combination), or in case
of any consolidation of the Corporation with one or more other
corporations or a merger of the Corporation with another corporation
(other than a consolidation or merger in which the Corporation is the
continuing corporation and which does not result in any
reclassification or change of outstanding shares of Common Stock or
Non-Voting Common Stock), or in case of any sale, lease or other
disposition to another corporation (other than a wholly-owned
subsidiary of the Corporation) of all or substantially all the assets
of the Corporation, each holder of Common Shares, irrespective of
class, shall have the right at any time thereafter, so long as the
conversion right hereunder with respect to such Common Shares
-8-
<PAGE>
would exist had such event not occurred, to convert such shares into
the kind and amount of shares of stock and other securities and
property (including cash) receivable upon such reorganization,
reclassification, change, consolidation, merger, sale, lease or other
disposition by a holder of the number of shares of the class of Common
Shares into which such Common Shares might have been converted
immediately prior to such reorganization, reclassification, change,
consolidation, merger, sale, lease or other disposition. In the event
of such a reorganization, reclassification, change, consolidation,
merger, sale, lease or other disposition, effective provision shall be
made in the certificate of incorporation of the resulting or surviving
corporation or otherwise for the protection of the conversion rights
of the Common Shares of each class that shall be applicable, as nearly
as reasonably may be, to any such other shares of stock and other
securities and property deliverable upon conversion of Common Shares
into which such Common Shares might have been converted immediately
prior to such event. The Corporation shall not be a party to any
merger, consolidation or recapitalization pursuant to which any holder
of shares of Non-Voting Common Stock would be required to take (i) any
voting securities which would cause such holder to violate any law,
regulation or other requirement of any governmental body applicable to
such holder, or (ii) any securities convertible into voting securities
which if such conversion took place would cause such holder to violate
any law, regulation or other requirement of any governmental body
applicable to such holder other than securities which are specifically
provided to be convertible only in the event that such conversion may
occur without any such violation
II. Except as amended above, the Certificate of Incorporation of
Lasertechnics, Inc., as previously filed and amended shall remain in full
force and effect.
IN WITNESS WHEREOF, I have hereunto set my hand this 25th day of June,
1996, and affirm that the foregoing Amendment to the Certificate of
Incorporation is the act and deed of the Corporation and that the facts stated
herein are true.
LASERTECHNICS, INC.
By:/s/ Richard C.E. Morgan
-----------------------
Richard C.E. Morgan, Chairman
ATTEST:
/s/ James B. Alley, Jr.
- -----------------------
Secretary
-9-
<PAGE>
EXHIBIT 4.7
CERTIFICATE OF DESIGNATIONS
FOR
SERIES A, B AND C CONVERTIBLE PREFERRED STOCK
OF
LASERTECHNICS, INC.
(Pursuant to Section 151 of the General Corporation Law of the State of
Delaware)
The undersigned, pursuant to Section 151(g) of the General Corporation Law
of the State of Delaware, does hereby certify that, attached hereto as Exhibits
A, B and C are copies of the resolutions duly adopted by the Board of Directors
of Lasertechnics, Inc., a Delaware corporation, on the dates indicated which
create and set forth the powers, designations, preferences, rights,
qualifications, limitations or restrictions for Series A, Series B and Series C
Convertible Preferred Stock of Lasertechnics, Inc. and authorize the number of
shares of each series of such convertible preferred stock to which the
resolutions apply.
IN WITNESS WHEREOF, I have hereunto set my hand this 27th day of December,
1995 and affirm that the foregoing Certificate of Designations is the act and
deed of the Corporation and that the facts stated herein are true.
LASERTECHNICS, INC.
By: /s/ Ronald Bencke
-----------------
Ronald Bencke, Vice President
and Chief Financial Officer
ATTEST:
/s/ James B. Alley, Jr.
- -----------------------
James B. Alley, Jr., Secretary
<PAGE>
LASERTECHNICS, INC.
RESOLUTION ADOPTED BY BOARD OF DIRECTORS
ON 7 AUGUST 1995 CREATING AND AUTHORIZING SERIES A
CONVERTIBLE PREFERRED STOCK
OUT OF THE CORPORATION'S AUTHORIZED PREFERRED STOCK
------------------------------------------------------------
RESOLVED, that there is hereby created from the authorized preferred
stock a class of convertible preferred stock known as "Series A Convertible
Preferred Stock," consisting of 1,500,000 shares, no par value, which shall
have the rights, duties and preferences set forth in Exhibit I-A attached
hereto.
EXHIBIT A
---------
<PAGE>
LASERTECHNICS, INC.
SERIES A CONVERTIBLE PERIOD STOCK OF LASERTECHNICS, INC.
(1,500,000 SHARES AUTHORIZED)
--------------------------------------------------------
The rights, duties and preferences of Series A Convertible Preferred Stock
are as follows:
(a) Stated value per share of $1.30;
(b) Cumulative dividends payable on stated value per share:
<TABLE>
<CAPTION>
RATE PERIOD
---- ------
<S> <C>
0% Through 31 Dec. 95
5% 1 Jan 96 through 31 March 96
7 1/2% 1 April 96 through 30 June 96
10% 1 July 96 and thereafter
</TABLE>
(c) Dividends payable within 15 days following the end of each calendar
quarter commencing 31 Dec. 95;
(d) Dividends payable in cash or in additional shares of such preferred
stock at the option only of the Company through 30 June 96 and thereafter
dividends payable in cash or in additional shares of such preferred stock at the
option only of stockholder;
(e) Any dividends paid in kind on such preferred stock valued on basis of
stated value per share;
(f) Each share of such preferred stock shall be convertible into a share
of common stock on a one for one basis at any time at the option of stockholder;
(g) A preference over all common stock of the Company in any liquidation
and/or dissolution of the Company equal to the stated value of all such shares
of preferred stock outstanding at the time thereof plus accrued dividends; and
(h) All such shares of preferred stock are redeemable by the Company at
their stated value plus accrued dividends at any time without penalty subject to
stockholder's right to convert to common stock for 10 business days following
receipt of Company's notice of redemption.
(i) All such shares of preferred stock are entitled to vote as if
converted into common stock except upon matters as to which such preferred stock
is entitled by law to vote as a separate class.
EXHIBIT I-A
-----------
<PAGE>
LASERTECHNICS, INC.
RESOLUTION ADOPTED BY BOARD OF DIRECTORS
ON 25 SEPTEMBER 1995 CREATING AND AUTHORIZING SERIES B
CONVERTIBLE PREFERRED STOCK
OUT OF THE CORPORATION'S AUTHORIZED PREFERRED STOCK
-------------------------------------------------------
RESOLVED, that there is hereby created from the authorized preferred
stock a class of convertible preferred stock known as "Series B Convertible
Preferred Stock," consisting of 1,500,000 shares, no par value, which shall
have the rights, duties and preferences set forth in Exhibit I-B attached
hereto.
EXHIBIT B
---------
<PAGE>
LASERTECHNICS, INC.
SERIES B CONVERTIBLE PERIOD STOCK OF LASERTECHNICS, INC.
(1,500,000 SHARES AUTHORIZED)
--------------------------------------------------------
The rights, duties and preferences of Series B Convertible Preferred Stock
are as follows:
(a) Stated value per share of $1.30;
(b) Cumulative dividends payable on stated value per share:
<TABLE>
<CAPTION>
RATE PERIOD
---- ------
<S> <C>
0% Through 31 Dec. 95
5% 1 Jan 96 through 31 March 96
7 1/2% 1 April 96 through 30 June 96
10% 1 July 96 and thereafter
</TABLE>
(c) Dividends payable within 15 days following the end of each calendar
quarter commencing 31 Dec. 95;
(d) Dividends payable in cash or in additional shares of such preferred
stock at the option only of the Company through 30 June 96 and thereafter
dividends payable in cash or in additional shares of such preferred stock at the
option only of stockholder;
(e) Any dividends paid in kind on such preferred stock valued on basis of
stated value per share;
(f) Each share of such preferred stock shall be convertible into a share
of common stock on a one for one basis at any time at the option of stockholder;
(g) A preference over all common stock of the Company in any liquidation
and/or dissolution of the Company equal to the stated value of all such shares
of preferred stock outstanding at the time thereof plus accrued dividends; and
(h) All such shares of preferred stock are redeemable by the Company at
their stated value plus accrued dividends at any time without penalty subject to
stockholder's right to convert to common stock for 10 business days following
receipt of Company's notice of redemption.
(i) All such shares of preferred stock are entitled to vote as if
converted into common stock except upon matters as to which such preferred stock
is entitled by law to vote as a separate class.
EXHIBIT I-B
-----------
<PAGE>
LASERTECHNICS, INC.
RESOLUTION ADOPTED BY BOARD OF DIRECTORS
ON 21 DECEMBER 1995 CREATING AND AUTHORIZING SERIES C
CONVERTIBLE PREFERRED STOCK
OUT OF THE CORPORATION'S AUTHORIZED PREFERRED STOCK
-----------------------------------------------------
RESOLVED, that there is hereby created from the authorized preferred
stock a class of convertible preferred stock known as "Series C Convertible
Preferred Stock," consisting of 1,500,000 shares, no par value, which shall
have the rights, duties and preferences set forth in Exhibit I-C attached
hereto.
EXHIBIT C
---------
<PAGE>
LASERTECHNICS, INC.
SERIES C CONVERTIBLE PERIOD STOCK OF LASERTECHNICS, INC.
(1,500,000 SHARES AUTHORIZED)
--------------------------------------------------------
The rights, duties and preferences of Series A Convertible Preferred Stock
are as follows:
(a) Stated value per share of $1.51;
(b) Cumulative dividends payable on stated value per share:
ANNUAL RATE PERIOD
----------- ------
10% Commencing 1 January 1996
(c) Dividends payable within 15 days following the end of each calendar
quarter commencing 31 March;
(d) Dividends payable in cash or in additional shares of such preferred
stock at the option only of the Company through 30 September 96 and thereafter
dividends payable in cash or in additional shares of such preferred stock at the
option only of stockholder;
(e) Any dividends paid in kind on such preferred stock valued on basis of
stated value per share;
(f) Each share of such preferred stock shall be convertible into a share
of common stock on a one for one basis at any time at the option of stockholder;
(g) A preference over all common stock of the Company in any liquidation
and/or dissolution of the Company equal to the stated value of all such shares
of preferred stock outstanding at the time thereof plus accrued dividends; and
(h) All such shares of preferred stock are redeemable by the Company at
their stated value plus accrued dividends at any time without penalty subject to
stockholder's right to convert to common stock for 10 business days following
receipt of Company's notice of redemption.
(i) All such shares of preferred stock are entitled to vote as if
converted into common stock except upon matters as to which such preferred stock
is entitled by law to vote as a separate class.
EXHIBIT I-C
-----------
<PAGE>
EXHIBIT 23.1
Independent Auditors' Consent
-----------------------------
The Board of Directors
Lasertechnics, Inc.
We consent to the use of our reports incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the prospectus.
Our report on the consolidated financial statements dated March 8, 1996, except
as to the last paragraph of note 12 and note 19 which are as of March 15, 1996,
contains an explanatory paragraph that states that the Company's recurring
losses from operations and resulting continued dependence upon access to
additional external financing together with the default on a capital lease
obligation raise substantial doubt about its ability to continue as a going
concern. The consolidated financial statements do not include any adjustments
that might result from the outcome of that uncertainty.
KPMG PEAT MARWICK LLP
Albuquerque, New Mexico
August 20, 1996
