LASER PHOTONICS INC, PRER14A, 2000-05-26

LASER PHOTONICS INC
PRER14A, 2000-05-26
MISCELLANEOUS ELECTRICAL MACHINERY, EQUIPMENT & SUPPLIES

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<PAGE>

SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934

AMENDMENT NO. 1
FILED BY THE REGISTRANT [X]
FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]

CHECK THE APPROPRIATE BOX:

[X] PRELIMINARY PROXY STATEMENT
[ ] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY
(AS PERMITTED BY RULE 14A-6(e)(2))
[ ] DEFINITIVE PROXY STATEMENT
[ ] DEFINITIVE ADDITIONAL MATERIALS
[ ] SOLICITING MATERIAL PURSUANT TO SS.240.14A-11(c) ORSS.240.14A-12

LASER PHOTONICS, INC.
------------------------------------------------
(Name of Registrant as Specified in Its Charter)

JEFFREY F. O'DONNELL, CHIEF EXECUTIVE OFFICER
---------------------------------------------
(Name of Person(s) Filing Proxy Statement)

PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] NO FEE REQUIRED.
[ ] FEE COMPUTED ON TABLE BELOW PER EXCHANGE ACT RULES 14A-6(i)(4) AND 0-11.

1) TITLE OF EACH CLASS OF SECURITIES TO WHICH TRANSACTION APPLIES:

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2) AGGREGATE NUMBER OF SECURITIES TO WHICH TRANSACTION APPLIES:

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3) PER UNIT PRICE OR OTHER UNDERLYING VALUE OF TRANSACTION COMPUTED
PURSUANT TO EXCHANGE ACT RULE 0-11 (SET FORTH THE AMOUNT ON WHICH THE
FILING FEE IS CALCULATED AND STATE HOW IT WAS DETERMINED):

-----------------------------------------------------------------------

4) PROPOSED MAXIMUM AGGREGATE VALUE OF TRANSACTION:

-----------------------------------------------------------------------

5) TOTAL FEE PAID:

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[ ] FEE PAID PREVIOUSLY WITH PRELIMINARY MATERIALS.
[ ] CHECK BOX IF ANY PART OF THE FEE IS OFFSET AS PROVIDED BY EXCHANGE ACT
RULE 0-11(a)(2) AND IDENTIFY THE FILING FOR WHICH THE OFFSETTING FEE WAS
PAID PREVIOUSLY. IDENTIFY THE PREVIOUS FILING BY REGISTRATION STATEMENT
NUMBER, OR THE FORM OR SCHEDULE AND THE DATE OF ITS FILING.

1) AMOUNT PREVIOUSLY PAID:

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2) FORM, SCHEDULE OR REGISTRATION STATEMENT NO.:

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3) FILING PARTY:

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4) DATE FILED:

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<PAGE>

LASER PHOTONICS, INC.
A DELAWARE CORPORATION

EXECUTIVE OFFICES
FIVE RADNOR CORPORATE CENTER
SUITE 470
RADNOR, PENNSYLVANIA 19087
(610) 971-9292
------------------------

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY ___, 2000
------------------------

TO THE STOCKHOLDERS OF LASER PHOTONICS, INC.:

The Annual Meeting of Stockholders (the "Meeting") of Laser Photonics,
Inc., a Delaware corporation (the "Company"), will be held at
_______________________________________, on July ___, 2000, at 10:00 a.m., local
time, to consider and vote on the following proposals:

PURPOSE OF MEETING

(1) To elect to the Board of Directors six (6) directors, to serve
until the next Annual Meeting of Stockholders of the Company or until their
successors are elected and qualify, subject to their prior death, resignation or
removal.

(2) To adopt and approve a Restated Certificate of Incorporation and
revised Bylaws of the Company, which generally have the effect of certain
procedural changes to the Certificate of Incorporation and Bylaws, including,
increasing the maximum authorized number of directors from seven (7) to eight
(8), and in addition, expand the rights of indemnification of the Company's
directors.

(3) To adopt and approve certain amendments to the Certificate of
Incorporation and Bylaws of the Company, which generally have the effect of
adopting certain "anti-takeover" provisions in connection with changes of
control of the Company, including, supermajority requirements of 66 2/3% of the
voting power of all issued and outstanding shares of voting stock with respect
to the amendment, change or repeal of certain provisions of the Certificate of
Incorporation and Bylaws.

(4) To adopt and approve certain amendments to the Certificate of
Incorporation and Bylaws of the Company, which generally have the effect of
dividing the Board of Directors into three (3) classes to be elected for
separate terms of office.

(5) To consider and vote upon an amendment to the Company's Certificate
of Incorporation to increase the authorized number of shares of Common Stock to
50,000,000 shares of the Company.

(6) To consider and vote upon an amendment to the Company's Certificate
of Incorporation to authorize a class of up to 5,000,000 shares of Preferred
Stock of the Company.

(7) To change the Company's name to PhotoMedex, Inc.

(8) To adopt the Company's 2000 Stock Option Plan (the "2000 Stock
Option Plan") and to reserve up to 1,000,000 shares of the Company's Common
Stock for issuance under the 2000 Stock Option Plan.

(9) To adopt the Company's 2000 Non-Employee Director Stock Option Plan
(the "Non-Employee Director Plan") and to reserve up to 500,000 shares of the
Company's Common Stock for issuance under the Non-Employee Director Plan.

<PAGE>

(10) To transact such other business as may properly come before the
Meeting and any adjournments thereof.

ONLY STOCKHOLDERS OF RECORD AT THE CLOSE OF BUSINESS ON MAY 2, 2000
(THE "RECORD DATE") ARE ENTITLED TO NOTICE OF AND TO VOTE AT THE MEETING.

PLEASE FILL IN, SIGN, DATE, AND RETURN THE ENCLOSED PROXY TO AMERICAN
STOCK TRANSFER & TRUST CO., 40 WALL STREET, 46TH FLOOR, NEW YORK, NEW YORK
10005, ATTN: PROXY SERVICES, WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING. A
RETURN ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.

LASER PHOTONICS, INC.

By: /s/ Jeffrey F. O'Donnell
-------------------------
Jeffrey F. O'Donnell

Radnor, Pennsylvania
DATED: _______, 2000

<PAGE>

LASER PHOTONICS, INC.
A DELAWARE CORPORATION

EXECUTIVE OFFICES
FIVE RADNOR CORPORATE CENTER
SUITE 470
RADNOR, PENNSYLVANIA 19087
(610) 971-9292

------------------------

PROXY STATEMENT
-------------------------

This proxy statement is furnished to the stockholders of Laser
Photonics, Inc., a Delaware corporation (the "Company"), in connection with the
Annual Meeting of Stockholders (the "Meeting") to be held at
___________________, on July ___, 2000 at 10:00 a.m., local time.

The Meeting will be held to consider and vote on the following
proposals:

PURPOSE OF MEETING

(5) To consider and vote upon an amendment to the Company's Certificate
of Incorporation to increase the authorized number of shares of Common Stock to
50,000,000 shares of the Company.

(6) To consider and vote upon an amendment to the Company's Certificate
of Incorporation to authorize a class of up to 5,000,000 shares of Preferred
Stock of the Company.

(7) To change the Company's name to PhotoMedex, Inc.

(8) To adopt the Company's 2000 Stock Option Plan (the "2000 Stock
Option Plan") and to reserve up to 1,000,000 shares of the Company's Common
Stock for issuance under the 2000 Stock Option Plan.

2
<PAGE>

(10) To transact such other business as may properly come before the
Meeting and any adjournments thereof.

The list of all stockholders of record on May 2, 2000, will be
available at the Meeting and at the offices of the Company at Five Radnor
Corporate Center, Radnor, Pennsylvania 19087, (610) 971-9292 for the ten (10)
days preceding the Meeting.

Requests should be addressed to the Company, to the attention of Laser
Photonics, Inc., Jeffrey F. O'Donnell, Chief Executive Officer, Five Radnor
Corporate Center, Radnor, Pennsylvania 19087, (610) 971-9292.

INCORPORATION BY REFERENCE

Laser Photonics, Inc., a Delaware corporation (the "Company") is
currently subject to the reporting requirements of the Securities Exchange Act
of 1934, as amended (the "Exchange Act") and, in accordance therewith, files
reports, proxy and Proxy Statements and other information with the Securities
and Exchange Commission (the "Commission"). Such reports, proxy and Proxy
Statements and other information may be inspected and copied at the public
reference facilities of the Commission at Judiciary Plaza, 450 Fifth Street,
N.W., Room 1024, Washington D.C. 20549; at its New York Regional Office, 7 World
Trade Center, Suite 1300, New York, New York 10048; and at its Chicago Regional
Office, 500 West Madison Street, Suite 1400, Chicago Illinois 60661-2511, and
copies of such materials can be obtained from the Public Reference Section of
the Commission, 450 Fifth Street, N.W., Washington D.C. 20549 at prescribed
rates. In addition, such materials may be accessed electronically at the
Commission's site on the World Wide Web, located at http:/www.sec.gov. The
Company intends to furnish its stockholders with annual reports containing
audited financial statements and such other periodic reports as the Company may
determine to be appropriate or as may be required by law.

Portions of the Company's Annual Report on Form 10-K/A for the year
ended December 31, 1999, are incorporated by reference in this Proxy Statement.

As part of this Proxy Statement, the Company also incorporates by
reference a copy of the following documents filed herewith as exhibits to this
Proxy Statement:

1. Appendix A - Restated Certificate of Incorporation
2. Appendix B - Bylaws
3. Appendix C - 2000 Stock Option Plan
4. Appendix D - 2000 Non-Employee Director Stock Option Plan

Upon written request, the Company will provide, without charge: (i) a
copy of the exhibits to this Proxy Statement, and (ii) a copy of its Annual
Report on Form 10-K/A, for the year ended December 31, 1999, to any stockholder
of record or any stockholder who owned Common Stock listed in the name of a bank
or broker, as nominee, at the close of business on May 2, 2000.

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<PAGE>

INFORMATION CONCERNING SOLICITATION AND VOTING

The following information is provided to stockholders to explain the
use of this Proxy Statement for this Meeting:

RECORD DATE

Only stockholders of record at the close of business on May 2, 2000 are
entitled to vote at the Meeting. The Company's Common Stock is its only class of
voting securities. As of May 2, 2000, the Company had issued and outstanding
15,345,323 shares of Common Stock of record.

REVOCABILITY OF PROXIES

A PROXY FOR USE AT THE MEETING IS ENCLOSED. ANY STOCKHOLDER WHO
EXECUTES AND DELIVERS A PROXY HAS THE RIGHT TO REVOKE IT AT ANY TIME BEFORE ITS
EXERCISE BY FILING WITH THE SECRETARY OF THE COMPANY AN INSTRUMENT REVOKING IT
OR A DULY EXECUTED PROXY BEARING A LATER DATE. IN ADDITION, A STOCKHOLDER MAY
REVOKE A PROXY PREVIOUSLY EXECUTED BY HIM BY ATTENDING THE MEETING AND ELECTING
TO VOTE IN PERSON.

VOTING AND SOLICITATION

Proxies are being solicited by the Board of Directors of the Company.
The cost of this solicitation will be borne by the Company. Solicitation will be
primarily by mail, but may also be made by telephone, fax transmission or
personal contact by certain officers and directors of the Company, who will not
receive any compensation therefor. Shares of Common Stock represented by
properly executed proxies will, unless such proxies have been previously
revoked, be voted in accordance with the instructions indicated thereon. IN THE
ABSENCE OF SPECIFIC INSTRUCTIONS TO THE CONTRARY, PROPERLY EXECUTED PROXIES WILL
BE VOTED FOR EACH OF THE PROPOSALS DESCRIBED ABOVE. No business other than that
set forth in the accompanying Notice of Annual Meeting of Stockholders is
expected to come before the Meeting. Should any other matter requiring a vote of
stockholders properly arise, the persons named in the enclosed form of proxy
will vote such proxy in accordance with the recommendation of the Board of
Directors.

Each share of Common Stock is entitled to one vote for each share held
as of record, and there are no preemptive rights. The Company's current
Certificate of Incorporation (the "Certificate of Incorporation") and Bylaws do
not provide for cumulative voting for the election of directors or any other
purpose.

QUORUM; ABSTENTIONS; BROKER NON-VOTES

Shares representing 50% of the voting power of the 15,345,323 shares of
Common Stock outstanding on the Record Date, which have voting rights, must be
represented at the Meeting to constitute a quorum for conducting business. In
the absence of a quorum, the stockholders present in person or by proxy, by
majority vote and without further notice, may adjourn the meeting from time to
time until a quorum is attained. At any reconvened meeting following such
adjournment at which a quorum shall be present, any business may be transacted
which might have been transacted at the Meeting as originally notified.

The required quorum for the transaction of business at the Meeting is a
majority of the votes eligible to be cast by holders of shares of Common Stock
issued and outstanding on the Record Date. Shares that are voted "FOR" or
"AGAINST" a matter are treated as being present at the Meeting for purposes of
establishing a quorum and are also treated as shares entitled to vote at the
Meeting (the "Votes Cast") with respect to such matter.

The Company will count abstentions for purposes of determining both:
(i) the presence or absence of a quorum for the transaction of business, and
(ii) the total number of Votes Cast with respect to a proposal (other than the
election of directors). Accordingly, abstentions will have the same effect as a
vote against the proposal.

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<PAGE>

Further, the Company intends to count broker non-votes for the purpose
of determining the presence or absence of a quorum for the transaction of
business, although broker non-votes will not be counted for purposes of
determining the number of Votes Cast with respect to the particular proposal on
which the broker has expressly not voted. Thus, a broker non-vote will not
affect the outcome of the voting on a proposal.

DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS

Proposals of stockholders of the Company that are intended to be
presented by such stockholders at the Company's next Annual Meeting of
Stockholders for the fiscal year ending December 31, 2000 must be received by
the Company no later than September 30, 2000, in order to be considered for
inclusion in the proxy statement and form of proxy relating to that meeting.

DIRECTORS AND EXECUTIVE OFFICERS

The directors of the Company currently have terms which will end at the
next annual meeting of the stockholders of the Company or until their successors
are elected and qualify, subject to their prior death, resignation or removal.
Officers serve at the discretion of the Board of Directors. There are no family
relationships among any of the Company's directors and executive officers.

The following sets forth certain biographical information concerning
the following persons, certain of whom have been nominated by the Board of
Directors to be directors of the Company in connection with Proposal 1 of this
Proxy Statement and the current executive officers of the Company:
<TABLE>
<CAPTION>
NAME POSITION AGE
- ---- -------- ---
<S> <C> <C>
Warwick Alex Charlton Non-Executive Chairman of the Board of Directors 40
Jeffrey F. O'Donnell Director, President and Chief Executive Officer 40
Dennis McGrath Chief Financial Officer and Vice President-Finance and Administration 43
Michael Allen Vice President-Sales and Marketing 45
John J. McAtee, Jr. Director 62
Alan R. Novak Director 65
Harry Mittelman, M.D. Director 58
Steven Girgenti Director 54
Samuel E. Navarro Director 44
Richard DePiano Director 58
</TABLE>

WARWICK ALEX CHARLTON was appointed to the Board of Directors and
became the Non-Executive Chairman of the Board of Directors on March 8, 1999.
Mr. Charlton is the Managing Director of True North Partners LLC, a venture
capital firm with a specialty in the health care field. Mr. Charlton has 19
years of business experience, consisting of ten years of line management
experience and nine years in the consulting profession (previously with Booz
Allen & Hamilton and the Wilkerson Group). Mr. Charlton received an honors
degree in Marketing from the University of Newcastle and an MBA from Cranfield
Institute of Technology. Mr. Charlton was formerly a Vice President of CSC
Healthcare, Inc.

JEFFREY F. O'DONNELL has served as a director of the Company and the
Company's President and Chief Executive Officer since November, 1999. Mr.
O'Donnell served as the President of X-SITE Medical from March, 1999 to
November, 1999. From 1995 to March, 1999, he filled several senior positions at
Radiance Medical Systems, Inc., including serving as Vice-President-Sales and
Marketing from November, 1995 until October, 1997, and President and Chief
Executive Officer from October, 1997 to March, 1999. From January, 1994 to May,
1995, Mr. O'Donnell was the President and Chief Executive Officer of Kensey Nash
Corporation, a medical device manufacturer of cardiology products. Mr. O'Donnell
is currently a director of Radiance Medical Systems, Escalon Medical Corporation
and X-SITE Medical, Inc. Mr. O'Donnell graduated from La Salle University with a
B.S. in business administration.

5
<PAGE>

DENNIS MCGRATH was appointed Chief Financial Officer and Vice
President-Finance and Administration in January, 2000. From September, 1999 to
January, 2000, Mr. McGrath served as the Chief Financial Officer of the Think
New Ideas division of AnswerThink Consulting Group, Inc., a public company
specializing in installing and managing computer systems and software. Mr.
McGrath was the Chief Financial Officer and Executive Vice-President-Operations
of triSpan Internet Commerce Solutions, Inc., a technology consulting company,
from September, 1996 until February, 1999, at which time AnswerThink acquired
triSpan. Following the acquisition and until January, 2000, Mr. McGrath served
as the Chief Operating Officer of AnswerThink's Internet practice. Mr. McGrath
is a certified public accountant and graduated with a B.S. in accounting from La
Salle University in 1979. Mr. McGrath holds a license from the states of
Pennsylvania and New Jersey as a Certified Public Accountant.

MICHAEL ALLEN was appointed Vice President-Sales and Marketing in
January, 2000. From September, 1998 to December, 1999, Mr. Allen was Director of
North American Sales for KaraVision, Inc., a public company, which manufactures
intra-stromal corneal rings. From October, 1990 to September, 1998, Mr. Allen
was a distributor for the New Jersey area for Smith and Nephew PLC, a public
U.K. company, selling orthopedic spine trauma and joint reconstruction products
to hospitals and surgeons. Mr. Allen received a B.S. from the University of
Wisconsin in 1977.

JOHN J. MCATEE, JR., has been a member of the Board of Directors of the
Company since March 4, 1998. From March 4, 1998 until March 8, 1999, Mr. McAtee
served as the Non-Executive Chairman of the Board of Directors. From 1990 to
1996, Mr. McAtee was Vice Chairman of Smith Barney, Inc. (now Salomon Smith
Barney), one of the world's largest banking and brokerage firms. Before that, he
was a partner in the New York law firm of Davis Polk & Wardwell for more than
twenty years. Mr. McAtee is a graduate of Princeton University and Yale Law
School. Mr. McAtee is also a director of U.S. Industries, Inc., a diversified
industrial corporation.

ALAN R. NOVAK was appointed to the Board of Directors of the Company in
October, 1997. Mr. Novak is Chairman of Infra Group, L.L.C., an international
project finance and development company. He is also Chairman of Lano
International, Inc., a real estate development company. Mr. Novak is a graduate
of Yale University, Yale Law School, and Oxford University, as a Marshall
Scholar. Mr. Novak practiced law at Cravath, Swaine & Moore and Swidler &
Berlin, Chartered. His public service includes three years as an officer in the
United States Marine Corp., a U.S. Supreme Court clerkship with Justice Potter
Stewart, Senior Counsel, Senator E. M. Kennedy, Senior Executive Assistant to
Undersecretary of State, Eugene Rostow, and the Executive Director of President
Johnson's Telecommunications Task Force. Mr. Novak was appointed by President
Carter and served for five years as Federal Fine Arts Commissioner.

HARRY MITTELMAN, M.D., was appointed to the Board of Directors on April
20, 1999. Dr. Mittelman graduated from the University of Kansas, School of
Medicine in 1967. Dr. Mittelman practices medicine as a Cosmetic and Plastic
Surgeon and Otolaryngologist. Dr. Mittelman was a Foundation Board Member of the
American Academy of Facial Plastic and Reconstruction Surgery, 1997-1998, and
was the Chairman of the Laser Surgery and Safety Committee; American Academy of
Cosmetic Surgery, 1991-1993. Dr. Mittelman also is an Associate Clinical
Professor of Medicine at Stanford University Hospital and Medical Center.

STEVEN GIRGENTI was appointed to the Board of Directors on April 20,
1999. Mr. Girgenti has served as Chairman of the Board and Chief Executive
Officer of Healthworld Corporation, a public company ("Healthworld") since
August, 1997. Mr. Girgenti co-founded Girgenti, Hughes, Butler & McDowell, Inc.,
a wholly-owned subsidiary of Healthworld, in April, 1986, and has served as its
President and Chief Executive Officer since 1986. In 1969, Mr. Girgenti began
working in the pharmaceutical industry for advertising companies specializing in
medical communications, including William Douglas McAdams. Prior to that, Mr.
Girgenti held a variety of positions with pharmaceutical companies, including
Director of Marketing Research and Product Manager for DuPont pharmaceuticals
and Manager of Commercial Development for Bristol-Myers Squibb Company.

SAMUEL E. NAVARRO has been a director of the Company since January,
2000. Mr. Navarro is an acknowledged authority on the medical device and health
care business. Since 1999, he has served as the Global Head of Health Care
Corporate Finance at ING Barings LLC. Mr. Navarro joined ING Barings LLC in 1993
and has served as Associate Director of Americas Equity Research and Global Head
of Medical Technology Equity Research. Prior to joining ING Barings, Mr. Navarro
was managing director of equity research for the medical technology sector for
the Union Bank of Switzerland. Mr. Navarro holds a B.S. in engineering from the
University of Texas, an M.S. degree in engineering from Stanford University and
an M.B.A. from the Wharton School.

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<PAGE>

RICHARD DEPIANO has been nominated to serve on the Board of Directors
of the Company. He has been a director of Escalon Medical Corporation, a
publicly traded healthcare business specializing in the development and
marketing of ophthalmic devices, pharmaceutical and vascular access products,
since February, 1996, and has served as its Chairman and Chief Executive Officer
since March, 1997. He has been the Chief Executive Officer of the Sandhurst
Company, L.P. and Managing Director of the Sandhurst Venture Fund since 1986. He
is also the Chairman of the Board of Directors of Surgical Laser Technologies,
Inc.

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table sets forth certain information concerning
compensation of certain of the Company's executive officers, including the
Company's Chief Executive Officer and all executive officers (the "Named
Executives") whose total annual salary and bonus exceeded $100,000, for the
years ended December 31, 1999, 1998 and 1997:

<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION AWARDS PAYOUTS
------------------- ----------------------------- -------
SECURITIES
OTHER RESTRICTED UNDERLYING ALL
ANNUAL STOCK OPTIONS LTIP OTHER
COMPENSATION AWARDS /SARS PAYOUTS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) ($) ($) (#) ($) ($)
- --------------------------- ---- --------- -------- --- --- --- --- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Jeffrey O'Donnell(1)......... 1999 35,632 0 2,000 0 650,000 0 0

Raymond A. Hartman (CEO)(2).. 1999 248,546 0 12,000 0 0 0 0
1998 125,008 0 0 0 0 0 0
1997 125,000 0 0 0 250,000 0 270

Chaim Markheim (CFO)(3)...... 1999 227,962 0 137,100 0 180,000 0 0
1998 125,008 0 12,000 0 250,000 0 0
1997 0 0 0 0 0 0 0
</TABLE>

- -----------

(1) Mr. O'Donnell began serving as the Company's Chief Executive Officer on
November 19, 1999.

(2) Mr. Hartman served as the Company's Chief Executive Officer from
October, 1997 to November, 1999. Includes paid and accrued salary for
each such fiscal year.

(3) Mr. Markheim served as the Company's Chief Financial Officer and Chief
Operating Officer until January 15, 2000. Includes $77,000 paid in 1999
as past-due salary from prior years and $137,100 as additional
compensation in 1999 (which includes, among others: (i) a car allowance
of $12,000, and (ii) $54,600 which had been advanced to Mr. Markheim at
December 31,1998 and which was recognized as additional compensation in
lieu of repayment for 1999).

EMPLOYMENT AGREEMENT WITH JEFFREY F. O'DONNELL. As of November 19,
1999, the Company entered into a three-year employment agreement with Jeffrey F.
O'Donnell to serve as the Company's President and Chief Executive Officer. Mr.
O'Donnell's base salary is $265,000 per year, subject to upward adjustment from
time to time by the Board of Directors. In addition, Mr. O'Donnell was granted
options to acquire up to 650,000 shares of the Company's Common Stock at an
exercise price of $4.625. Of these options, 216,667 are currently vested,
216,667 will vest on November 19, 2000, and 216,666 will vest on November 19,
2001, so long as Mr. O'Donnell remains employed by the Company. Under the
employment agreement and the option agreement, if the Company terminates Mr.
O'Donnell, other than for "cause" (which definition includes nonperformance of
duties or competition of the employee with the Company's business), then he will
receive severance pay ranging from one to two years' compensation, and 100% of
all unvested options will vest immediately.

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<PAGE>

EMPLOYMENT AGREEMENT WITH DENNIS MCGRATH. As of November 24, 1999, the
Company entered into a three-year employment agreement with Dennis M. McGrath to
serve as the Company's Chief Financial Officer and Vice President of Finance and
Administration, replacing Chaim Markheim who now acts as a Consultant to the
Company. Mr. McGrath's base salary is $200,000 per year, subject to upward
adjustment from time to time by the Board of Directors. In addition, Mr. McGrath
was granted, as of November 24, 1999, options to acquire up to 350,000 shares of
the Company's Common Stock at an exercise price of $5.50. Of these options,
116,667 are currently vested, 116,667 will vest on November 24, 2000, and
116,666 will vest on November 24, 2002, so long as Mr. McGrath remains employed
by the Company. Under the employment agreement and the option agreement, if the
Company terminates Mr. McGrath, other than for "cause" (which definition
includes nonperformance of duties or competition of the employee with the
Company's business), then he will receive severance pay ranging from one to two
years' compensation, and 100% of all unvested options will vest immediately.

OPTION/SAR GRANTS TABLE

The following table sets forth certain information concerning grants of
stock options to certain of the Company's executive officers, including the
Named Executives for the year ended December 31, 1999:

<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rate of
Stock Price Appreciation
Individuals Grants For Option Term (1)
- -----------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g)
Number of % of
Securities Total
Underlying Options/
Options/ SARs Exercise
SARs Granted to Or Base
Granted Employees Price Expiration
Name (#) In Fiscal Year ($/Share) (1) Date (1) 5% ($) 10%($)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Jeffrey O'Donnell 650,000 55% 4.625 11/04 5,704,372 7,985,481
Chaim Markheim 180,000 15% 2.875 8/04 1,894,672 2,526,364
- -------------
</TABLE>

(1) This chart assumes a market price of $10.50 for the Common Stock, the
closing price for the Company's Common Stock in the Over-The-Counter
Market as of December 31, 1999, as the assumed market price for the
Common Stock with respect to determining the "potential realizable
value" of the shares of Common Stock underlying the options described
in the chart, as reduced by any lesser exercise price for such options.
Further, the chart assumes the annual compounding of such assumed
market price over the relevant periods, without giving effect to
commissions or other costs or expenses relating to potential sales of
such securities. The Company's Common Stock has a very limited trading
history. These values are not intended to forecast the possible future
appreciation, if any, price or value of the Common Stock.

OPTION EXERCISES IN 1999

No Named Executive exercised any stock option in 1999.

1995 NON-QUALIFIED OPTION PLAN

On January 2, 1996, the Company adopted the Company's 1995
Non-Qualified Option Plan for key employees, officers, directors and
consultants, and reserved up to 500,000 options to be granted thereunder. The
option exercise price is not less than 100% of market value on the date granted;
40% of granted options vest immediately; 30% vest beginning one year after
grant; and the remaining 30% vest and may be exercised beginning two (2) years
from grant.

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<PAGE>

No options may be exercised more than ten (10) years after grant,
options are not transferable (other than at death), and in the event of complete
termination "for cause" (other than death or disability) or "voluntary"
termination, all "unvested" options automatically terminate.

On January 2, 1996, the Company granted a total of 335,000 options at
an exercise price of $1.50 per share to certain directors, employees and
consultants.

LIMITATION ON DIRECTORS' LIABILITIES; INDEMNIFICATION OF OFFICERS AND DIRECTORS

The Company's Certificate of Incorporation and Bylaws designate the
relative duties and responsibilities of the Company's officers, establish
procedures for actions by directors and stockholders and other items. The
Company's Certificate of Incorporation and Bylaws also contain extensive
indemnification provisions, which will permit the Company to indemnify its
officers and directors to the maximum extent, provided by Delaware law. Pursuant
to the Company's Certificate of Incorporation and under Delaware law, directors
of the Company are not liable to the Company or its stockholders for monetary
damages for breach of fiduciary duty, except for liability in connection with a
breach of duty of loyalty, for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, for dividend
payments or stock repurchases illegal under Delaware law or any transaction in
which a director has derived an improper personal benefit.

The Company has adopted a form of indemnification agreement (the
"Indemnification Agreement"), which provides the Indemnitee with the maximum
indemnification allowed under applicable law. Since the Delaware statutes are
non-exclusive, it is possible that certain claims beyond the scope of the
statute may be indemnifiable. The Indemnification Agreement provides a scheme of
indemnification, which may be broader than that specifically provided by
Delaware law. It has not yet been determined, however, to what extent the
indemnification expressly permitted by Delaware law may be expanded, and
therefore the scope of indemnification provided by the Indemnification Agreement
may be subject to future judicial interpretation.

The Indemnification Agreement provides that the Company shall indemnify
an Indemnitee who is or was a party or becomes a party or is threatened to be
made a party to any threatened, pending or completed action or proceeding
whether civil, criminal, administrative or investigative by reason of the fact
that the Indemnitee is or was a director, officer, key employee or agent of the
Company or any subsidiary of the Company. The Company shall advance all
expenses, judgments, fines, penalties and amounts paid in settlement (including
taxes imposed on Indemnitee on account of receipt of such payouts) incurred by
the Indemnitee in connection with the investigation, defense, settlement or
appeal of any civil or criminal action or proceeding as described above. The
Indemnitee shall repay such amounts advanced only if it shall be ultimately
determined that he or she is not entitled to be indemnified by the Company. The
advances paid to the Indemnitee by the Company shall be delivered within 20 days
following a written request by the Indemnitee. Any award of indemnification to
an Indemnitee, if not covered by insurance, would come directly from the assets
of the Company, thereby affecting a stockholder's investment.

At present, there is no pending litigation or proceeding involving an
Indemnitee where indemnification would be required or permitted under the
Indemnification Agreements.

TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL AGREEMENTS

Except for the compensation plans covering Jeffrey O'Donnell and Dennis
McGrath, the Company has no compensatory plans or arrangements which relate to
the resignation, retirement or any other termination of an executive officer or
key employee with the Company, a change in control of the Company or a change in
such executive officer's or key employee's responsibilities following a change
in control. See "Compensation of Executive Officers and Directors- Employment
Agreement with Jeffrey O'Donnell" and "Compensation of Executive Officers and
Directors-Employment Agreement with Dennis McGrath."

9
<PAGE>

COMPENSATION AND AUDIT COMMITTEES; COMMITTEE INTERLOCKS AND INSIDER
PARTICIPATION

The Board has a Compensation Committee comprised of John J. McAtee, Jr.
and Alan R. Novak, and an Audit Committee comprised of Jeffrey F. O'Donnell,
John J. McAtee, Jr. and Alan R. Novak. Messrs. McAtee and Novak may be deemed to
be outside/non-employee directors. The Board has a standing committee on
nominations consisting of Messrs. O'Donnell, Charlton and McAtee.

The Compensation Committee reviews and approves the annual salary and
bonus for each executive officer (consistent with the terms of any applicable
employment agreement), reviews, approves and recommends terms and conditions for
all employee benefit plans (and changes thereto) and administers the Company's
stock option plans and such other employee benefit plans as may be adopted by
the Company from time to time.

The Audit Committee reports to the Board regarding the appointment of
the independent public accountants of the Company, the scope and fees of the
prospective annual audit and the results thereof, compliance with the Company's
accounting and financial policies and management's procedures and policies
relative to the adequacy of the Company's system of internal accounting
controls.

COMPENSATION OF DIRECTORS

On April 10, 1998, the Company's Board of Directors adopted a
resolution creating a stock option plan for outside/non-employee members of the
Board of Directors. Pursuant to the stock plan, each outside/non-employee
director is to receive an annual grant of options, in addition to any other
consideration they may receive, to purchase up to 20,000 shares of Common Stock
as compensation, at an exercise price equal to the market price of the Common
Stock on the last trading day of the preceding year (the "Option Plan for
Outside Directors"). The options granted pursuant to the Option Plan for Outside
Directors vest at the rate of 5,000 options per quarter during each quarter in
which such person has served as a member of the Board of Directors. See "Certain
Relationships and Related Transactions."

The Company has obtained directors' and officers' liability insurance
with a $10,000,000 limit of liability. The policy period expires on February 25,
2001. The Company intends to renew such policy or obtain comparable coverage
after the expiration of such policy. However, there can be no assurances to this
effect.

COMMON STOCK PERFORMANCE GRAPH

The Company's Common Stock has been listed for trading in The NASDAQ
Small Cap Market under the symbol "PHMD" since May 10, 2000. The Company's
Common Stock, subsequent to the confirmation of the Company's Third Amended Plan
of Reorganization (the "Bankruptcy Reorganization") on May 22, 1995, following
the filing of a Petition for Reorganization under Chapter 11 of the Federal
Bankruptcy Act on May 13, 1994 (the "Bankruptcy Proceeding"), was quoted on the
Electronic Bulletin Board from approximately January 22, 1996 until May 9, 2000
under the stock symbol "LSPT." The first available pricing date for the Common
Stock in the Over-the-Counter Market, following the Bankruptcy Reorganization,
was February 21, 1996.

The following stock performance graph illustrates the yearly percentage
change in the cumulative total stockholder return on the Company's Common Stock,
compared with the cumulative total return on: (i) the NASDAQ (U.S. Companies)
Stock Index (the "NASDAQ U.S. Index") and (ii) an index (the "Peer Group
Index"), based on a peer group (the "Peer Group") of eight (8) companies
selected by the Company, whose primary business includes the sale and
manufacture of electromedical surgical laser devices, during the period from
February 21, 1996 through December 31, 1999: The stock performance graph set
forth above was based on the following data:

10
<PAGE>

[COMMON STOCK PERFORMANCE GRAPH HERE]
<TABLE>
<CAPTION>
=====================================================================================================

COMPANY/INDEX/MARKET 2/21/96 12/31/96 12/31/97 12/31/98 12/31/99
- ----------------------------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C>
LASER PHOTONICS, INC. $100.00 $25.00 $98.61 $58.33 $233.33
- ----------------------------------------------------------------------------------------------------

PEER GROUP $100.00 $50.26 $24.95 $21.32 $34.43
- ----------------------------------------------------------------------------------------------------

NASDAQ U.S. INDEX $100.00 $115.81 $141.66 $199.79 $352.38
=====================================================================================================
</TABLE>

The entities included in the Peer Group are: Surgical Laser
Technologies, Inc., Palomar Medical Technologies, Inc., Eclipse Surgical
Technologies, Inc., Lasersight, Inc., PLC Systems, Inc., Spectranetics Corp.,
Summit Technology, Inc. and Trimedyne, Inc.

In all cases, the cumulative total return assumes, as contemplated by
Commission rules, the investment of $100 at February 21, 1996 in the Common
Stock and the traded securities of the entities which comprise the NASDAQ U.S.
Index and the Peer Group Index, and that any cash dividends on the common stock
of each entity included in the data presented above were reinvested in that
security. The Company has paid no dividends on its Common Stock.

All data contained in the stock performance graph and data chart set
forth above are derived from sources believed to be reliable, but, because of
the possibility of human and mechanical error and other factors, are provided
from such sources with no express or implied warranties of any kind, and without
any representations, warranties or guarantees as to either the accuracy or
timeliness of such data.

Historical stock price performance should not be relied upon as
indicative of future stock price performance.

Notwithstanding any reference in prior or future filings of the Company
with the Commission, which purport to incorporate this Proxy Statement by
reference into another filing, such incorporation does not include any material
included herein under the caption "Common Stock Performance Graph."

COMPLIANCE WITH SECTION 16 OF THE SECURITIES EXCHANGE ACT OF 1934

Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") requires the Company's directors and executive officers and
beneficial holders of more than 10% of the Company's Common Stock to file with
the Commission initial reports of ownership and reports of changes in ownership
and reports of changes in ownership of such equity securities of the Company. As
of the date of this Proxy Statement, the Company believes that all reports
needed to be filed have been filed in a timely manner for the year ended
December 31, 1999.

11
<PAGE>

VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF

The following table reflects, as of May 5, 2000 the beneficial Common
Stock ownership of: (a) each director of the Company, (b) each Named Executive
(See "Compensation of Executive Officer and Directors"), (c) each person known
by the Company to be a beneficial holder of five percent (5%) or more of its
Common Stock, and (d) all executive officers and directors of the Company as a
group:
<TABLE>
<CAPTION>
NUMBER OF
NAME AND ADDRESS OF BENEFICIAL OWNER SHARES # PERCENTAGE
- ------------------------------------ -------- ----------
<S> <C> <C>
Warwick Alex Charlton(1)............................................. 175,000 1.14
Jeffrey F. O'Donnell(2).............................................. 226,667 1.46
Dennis McGrath(3).................................................... 116,667 *
Alan R. Novak(4)..................................................... 145,000 *
John J. McAtee, Jr.(5)............................................... 224,000 1.45
Steven Girgenti(6)................................................... 244,000 1.57
Harry Mittelman(7)................................................... 384,014 2.48
Samuel E. Navarro(8)................................................. 43,334 *
Richard DePiano (9)
Joseph E. Gallo, Trustee(10)......................................... 987,943 6.44
Pennsylvania Merchant Group, Ltd.(11)................................ 1,213,647 7.61
Calvin Hori, Hori Capital Management, Inc. and Platinum Partners LP(12) 933,100 6.08
All directors and officers as a group (9 persons)(13)................ 1,563,682 9.55
</TABLE>
================================================================================

# Pursuant to the rules of the Commission, shares of Common Stock which
an individual or group has a right to acquire within 60 days pursuant
to the exercise of options or warrants are deemed to be outstanding for
the purpose of computing the percentage ownership of such individual or
group, but are not deemed to be outstanding for the purpose of
computing the percentage ownership of any other person shown in the
table.

* Less than 1%.

(1) Includes 170,000 shares of Common Stock and options to purchase 5,000
shares of Common Stock. Does not include options to acquire up to
15,000 shares of Common Stock, which may vest during 2000. Mr.
Charlton's address is 65 Broadway, 7th Floor, New York, New York 10006.
See "Certain Relationships and Related Transactions."

(2) Includes 10,000 shares registered in the name of 531 E. Lancaster Ave.
LLC, which shares have been registered in a registration statement,
dated May 12, 2000 (the "Registration Statement"), of which Mr.
O'Donnell is a partner, and options to purchase 216,667 shares of
Common Stock. Does not include options to purchase up to 433,333 shares
of Common Stock, which vest over the next two years. Mr. O'Donnell's
address is Five Radnor Corporate Center, Suite 470, Radnor,
Pennsylvania 19087. See "Certain Relationships and Related
Transactions."

(3) Includes options to purchase 116,667 shares of Common Stock. Does not
include options to purchase up to 233,333 shares of Common Stock, which
vest over the next two years. Mr. McGrath's address is Five Radnor
Corporate Center, Suite 470, Radnor, Pennsylvania 19087. See "Certain
Relationships and Related Transactions."

12
<PAGE>

(4) Includes 28,601 shares of Common Stock, which have been registered in
the Registration Statement and options to purchase up to 116,399 shares
of Common Stock. Does not include options to purchase up to 15,000
shares of Common Stock, which may vest during 2000. Mr. Novak's address
is 3050 K Street, NW, Suite 105, Washington, D.C. 20007. See "Certain
Relationships and Related Transactions."

(5) Includes 84,000 shares, which have been registered in the Registration
Statement and options to purchase up to 140,000 shares of Common Stock.
Does not include options to purchase up to 15,000 shares of Common
Stock, which may vest during 2000. Mr. McAtee's address is Two
Greenwich Plaza, Greenwich, Connecticut 06830. See "Certain
Relationships and Related Transactions."

(6) Includes options to purchase 70,000 shares of Common Stock issued to
Mr. Girgenti and Warrants to purchase 174,000 shares of Common Stock,
issued to Healthworld, of which Mr. Girgenti is Chairman and Chief
Executive Officer. The 174,000 shares underlying such Warrants have
been registered in the Registration Statement. Does not include options
to purchase up to 15,000 shares of Common Stock, which may vest during
2000. Mr. Girgenti's address is Healthworld Corporation, 100 Avenue of
the Americas, 8th Floor, New York, New York 10013. See "Certain
Relationships and Related Transactions."

(7) Includes 251,014 shares of Common Stock, Warrants to purchase 63,000
shares and options to purchase 70,000 shares of Common Stock
beneficially owed by Dr. Mittelman, including shares and Warrants
registered in the name of certain trusts of which he serves as the
trustee, his IRA and pension profit sharing plan, his wife, jointly
with his wife and in his own name. Of these securities, 141,100 shares
and 63,000 shares underlying such Warrants have been registered in the
Registration Statement. Does not include options to purchase up to
15,000 shares of Common Stock, which may vest during 2000. A total of
204,100 shares and shares underlying the Warrants have been registered
in the Registration Statement. Dr. Mittelman's address is 2200 Sand
Hill Road, Suite 110, Menlo Park, California 94025. See "Certain
Relationships and Related Transactions."

(8) Includes options to purchase 43,334 shares of Common Stock. Does not
include options to purchase up to 66,661 shares of Common Stock, which
may vest over the next two years. Does not include options to purchase
up to 15,000 shares of Common Stock, which may vest during 2000. Mr.
Navarro's address is 55 East 52nd St., 33rd Floor, New York, New York
10055. See "Certain Relationships and Related Transactions."

(9) Includes options to purchase up to 5,000 shares of Common Stock. Does
not include options to purchase up to 10,000 shares of Common Stock,
which may vest during 2000. Mr. DePiano's address is 351 East Conestoga
Road, Wayne, Pennsylvania 19087.

(10) Includes 987,943 shares of Common Stock. Mr. Gallo is the Trustee of
four (4) trusts, which own these securities. All of the shares of
Common Stock have been registered in the Registration Statement. Mr.
Gallo's address is 600 Yosemite Blvd., Modesto, California 95354. See
"Certain Relationships and Related Transactions."

(11) Pennsylvania Merchant Group, Ltd. is the registered owner of 179,543
shares of Common Stock and Warrants to purchase up to 468,104 shares of
Common Stock. Richard A. Hansen is the President and a director of PMG.
Mr. Hansen is the registered owner of 75,000 shares of Common Stock and
options to purchase 75,000 shares of Common Stock, and his wife,
Penelope S. Hansen is the registered owner of 25,000 shares of Common
Stock. Frank A. Abruzzese, Frank J. Campbell and Peter S. Rawlings are
directors of PMG. Mr. Abruzzese is the beneficial owner of 11,000
shares. Mr. Campbell is the beneficial owner of 165,000 shares and
warrants to purchase 25,000 shares. Mr. Rawlings is the registered
owner of 160,000 shares of Common Stock, and his wife Sarah P. Rawlings
is the registered owner of 40,000 shares of Common Stock. All of the
shares of Common Stock and the shares underlying the Warrants have been
registered in the Registration Statement. The address of PMG and each
of such persons is Four Falls Corporate Center, West Conshohocken,
Pennsylvania 19428. See "Certain Relationships and Related
Transactions-Convertible Debt and Conversion of Convertible Debt."

(12) The listed persons, Calvin Hori ("Hori"), Hori Capital Management, Inc.
("Hori Capital") and Platinum Partners, LP ("Platinum") have jointly
filed an Amendment No. 1 to Schedule 13D (the "Schedule 13D"), dated
December 1, 1997, with respect to 933,100 shares of Common Stock. The
Schedule 13D provides, in pertinent part, that: (a) Hori, Hori Capital
and Platinum may be deemed to be the beneficial owners of 759,000 of
these shares, and (b) Hori and Hori Capital may be deemed to be the
beneficial owners of an additional 174,100 of these shares. The address
for each of the listed persons is One Washington Mall, Boston,
Massachusetts 02108.

13
<PAGE>

(13) Includes 548,615 shares of Common Stock and Options and Warrants to
purchase up to 1,015,067 shares of Common Stock.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

CONVERTIBLE DEBT AND CONVERSION OF CONVERTIBLE DEBT

In March, 1999, the Company issued to 38 accredited investors
$2,380,000 of units of its securities (the "Units"), each Unit consisting of:
(i) $10,000 principal amount of convertible promissory notes (the "Convertible
Notes"); and (ii) common stock purchase warrants to purchase up to 2,500 shares
of Common Stock (the "Unit Warrants"). On August 2, 1999, the Convertible Note
holders converted the Convertible Notes and accrued and unpaid interest thereon
into 1,190,819 shares of Common Stock at a conversion price of $2.00 per share.
In March, 1999, the price of the Company's Common Stock in the Over The Counter
market ranged from $2.625 to $4.50 per share. On March 29, 1999, the price of
the Common Stock was $3.875. The Company used the proceeds of this financing to
fund marketing, research and development expenses, the purchase of equipment
relating to the manufacture of the Company's excimer lasers, other operating
activities, and the payment of certain liabilities. The shares issued from the
conversion of the Convertible Notes have been registered in the Registration
Statement.

The Unit Warrants are exercisable into an initial 1,250 shares of
Common Stock at any time after purchase until March 31, 2004. The balance of the
Unit Warrants are exercisable into an additional 1,250 shares of Common Stock
(the "Contingent Shares") if the Unit holder voluntarily converted at least a
portion of the principal amount of the Convertible Note, that make up a portion
of the Unit, into shares of Common Stock. As of the date of this Proxy
Statement, all of the Unit holders converted their Convertible Notes into shares
of Common Stock, aggregating 1,190,819 shares of Common Stock, including 819
shares of Common Stock to convert accrued and unpaid interest. As such, each
Unit holder has a fully vested Unit Warrant to purchase 2,500 shares of Common
Stock at $2.00 per share. The Unit Warrants provide that they may be adjusted in
the event that the Company issues shares of Common Stock for consideration of
less than $2.00 per share. In such event, the per share exercise price of the
Unit Warrants will be adjusted to the issue price of such additionally issued
shares of Common Stock.

ISSUANCES OF SHARES, OPTIONS AND WARRANTS

On March 8, 1999, the Company granted to Messrs. McAtee and Novak an
additional 20,000 options under the Option Plan for Outside Directors to
purchase a like number of shares of Common Stock, at an exercise price of
$2.8125 per share for services as outside members of the Board of Directors to
be rendered during 1999. All of these options are vested, as of the date of this
Proxy Statement. On the date of grant of these stock options, the price of the
Company's Common Stock was $2.875.

Upon Warwick Alex Charlton's joining the Company's Board of Directors,
on March 8, 1999, Mr. Charlton was granted options under the Option Plan for
Outside Directors, to purchase up to 20,000 shares of Common Stock at an
exercise price of $2.8125 per share for services to be rendered during 1999. On
the date of grant of these stock options, the price of the Company's Common
Stock was $2.875. Of these options all are vested, as of the date of this Proxy
Statement.

On March 8, 1999, the Company granted to Mr. Charlton, outside of the
Option Plan for Outside Directors, options to acquire 150,000 shares of Common
Stock, at $3.00 per share. On the date of this issuance of securities, the price
of the Company's Common Stock was $2.875. All of such options are vested, as of
the date of this Proxy Statement.

Upon Steve Girgenti's and Harry Mittelman's joining the Company's Board
of Directors, on April 20, 1999, each was granted options to purchase up to
15,000 shares of Common Stock, at an exercise price of $2.8125 per share, for
services to be rendered during 1999. On the date of grant of these stock
options, the price of the Company's Common Stock was $4.63. As of the date of
this Proxy Statement, all of these options are vested.

On April 20, 1999, the Company granted to Mr. Girgenti and Dr.
Mittelman options, outside of the Option Plan for Outside Directors, all of
which are vested, to acquire up to 50,000 shares of Common Stock, at $4.75 per
share. On the date of grant of these stock options, the price of the Company's
Common Stock was $4.63. All of such options are vested, as of the date of this
Proxy Statement.

14
<PAGE>

In 1999, in respect of the period August, 1998, through October 31,
1999, the Company granted to its current legal counsel, Matthias & Berg LLP
("M&B"), options to acquire an aggregate of 32,230 shares of the Company's
Common Stock, at exercise prices between $1.50 and $5.10 per share, in each case
equal to 85% of the trading price of the Company's Common Stock on the last day
of the month in respect of which the options were granted. The options are
exercisable for a period of 120 months from the date of grant. These options
were issued as a part of a fee agreement between the Company and M&B, whereby
M&B received options having an exercise price equal to 20% of its monthly fees
in the form of Common Stock of the Company, valued at the closing bid price on
the last day of each month. M&B agreed to forego collection of such fees in
cash, and use the uncollected fees against exercise price of the options.

On April 5, 1999, the Company issued to a non-executive employee
options to purchase 50,000 shares of the Company's Common Stock, at an exercise
price of $3.1875. Such options vest, pursuant to a schedule, over a period of
five (5) years. On the date of this issuance of securities, the price of the
Company's Common Stock was $4.56.

On August 9, 1999, the Company issued to 96 investors 2,068,972 shares
of the Company's Common Stock in connection with the August 9, 1999 Financing.
The Company paid PMG a commission of 8% of the gross proceeds, or $744,000,
$25,000 for reimbursement of expenses and, for each $1,000,000 of gross proceeds
received by the Company, warrants to purchase 10,000 shares of Common Stock at
$4.50 per share (an aggregate of 93,104 warrants). On the date of the closing of
the August 9, 1999 Financing, the price of the Company's Common Stock was $5.19.
The 2,068,972 shares of Common Stock sold in the August 9, 1999 Financing have
been registered in the Registration Statement.

On May 11, 1999, the Company, in exchange for various marketing
services to be provided by Healthworld at a discounted rate of $104 per person
hour, which is materially less then the normal hourly rate charged by
Healthworld for such services, granted the Healthworld Warrants to purchase
174,000 shares of the Company's Common Stock at an exercise price of $4.69 per
share. On the date of grant of the Healthworld Warrants, the price of the Common
Stock was $4.69. The Warrants have a term of ten years and are fully vested.

On August 26, 1999, the Company issued options to Chaim Markheim to
purchase up to 180,000 shares of Common Stock, at an exercise price of $5.25 per
share, with a five (5) year term. Of these options, 100,000 are vested, and the
remaining 80,000 vest over two (2) years, so long as Mr. Markheim continues to
be retained by the Company as a consultant. On the date of this issuance of
securities, the price of the Company's Common Stock was $5.25.

On November 19, 1999, Jeffrey F. O'Donnell, the Company's President and
Chief Executive Officer, was granted options to acquire up to 650,000 shares of
the Company's Common Stock at an exercise price of $4.625. Of these options,
216,667 are currently vested, 216,667 vest on November 19, 2000, and 216,666
vest on November 19, 2002, so long as Mr. O'Donnell remains employed by the
Company. If the Company terminates Mr. O'Donnell, other than for "cause" (which
definition includes nonperformance of duties or competition of the employee with
the Company's business), all unvested options will vest immediately. On the date
of grant of the options, the price of the Company's Common Stock was $4.625.

As of November 24, 1999, Dennis McGrath, the Company's Chief Financial
Officer, was granted options to acquire up to 350,000 shares of the Company's
Common Stock at an exercise price of $5.50. Of these options, 116,667 are
currently vested, 116,667 vest on November 24, 2000, and 116,666 vest on
November 24, 2002, so long as Mr. McGrath remains employed by the Company. If
the Company terminates Mr. McGrath, other than for "cause" (which definition
includes nonperformance of duties or competition of the employee with the
Company's business), all unvested options will vest immediately. On the date of
grant of the options, the price of the Company's Common Stock was $5.50 per
share.

On December 7, 1999, the Company granted to Samuel E. Navarro options
to acquire up to 100,000 shares of Common Stock at an exercise price of $5.9375
per share. Of these options, 33,334 are currently vested, 33,333 vest on
December 7, 2000, and 33,333 vest on December 7, 2002, so long as Mr. Navarro
remains a director of the Company. On the date of grant, the price of the
Company's Stock was $5.9375.

On December 7, 1999, the Company granted to Mr. Navarro options, all of
which are vested, to acquire up to 5,000 shares of Common Stock, at $2.8125 per
share. On the date of grant of these stock options, the price of the Company's
Common Stock was $5.9375. All of such options are vested, as of the date of this
Proxy Statement.

15
<PAGE>

CERTAIN ISSUANCES OF SECURITIES

On August 9, 1999, the Company completed the August 9, 1999 Financing
of 2,068,972 shares of Common Stock at a price of $4.50 per share, resulting in
aggregate gross proceeds to the Company of $9,310,374. The Company paid PMG a
commission of 8% of the gross proceeds, or $744,830, plus $25,000 for
reimbursement of offering expenses, and issued to PMG warrants to purchase
93,104 shares of Common Stock at an exercise price of $4.50 per share. On the
date of the closing of the August 9, 1999 Financing, the price of the Company's
Common Stock was $5.19 per share. The Company has used part of the proceeds of
this financing to pay marketing expenses, research and development expenses and
for working capital. As of March 16, 2000, the Company had $18,400,000 of cash
on hand.

OTHER TRANSACTIONS

As of May 11, 1999, the Company entered into the agreement with
Healthworld, of which Steven Girgenti, a director of the Company, is Chairman
and Chief Executive Officer, for provision of various services relating to the
marketing of the Company's products. The services include: (i) advertising and
promotion; (ii) development of market research and strategy; and (iii)
preparation and consulting on media and publicity. The term of the agreement is
indefinite, but may be terminated by either party on ninety days' notice.
Compensation for these services is approximately $40,000 per month, plus
reimbursement of expenses and payment of a 15% commission on media buys.
Services beyond those budgeted by the parties are to cost $104 per person hour.
Under a separate agreement, Healthworld has agreed to provide, as of October 1,
1999: (i) two fulltime managed-care specialists to make calls on potential
customers for a period of seven months at a cost of $30,000 per month; (ii) 20
fulltime sale representatives to market among dermatologists for a period of
four months at a cost of $125,000 per month; and (iii) certain general
management services for a period of seven months at $10,000 per month. Under
separate agreements, Healthworld will provide certain medical education and
publishing services (approximately $700,000 in fees and costs over a period in
excess of one year) and general public relations services ($10,000 per month).
See "Management."

As of May 21, 1999, the Company granted Rox Anderson, M.D., options to
acquire up to 250,000 shares of Common Stock, exercisable at $5.16 per share, of
which 100,000 are currently vested. The remainder will vest ratably over a
three-year period and, in addition, are contingent on either approval by the FDA
of a 510(k) submission by the Company or the FDA's approval of the Company's
excimer laser to be regulated as a Class II device for the treatment of
psoriasis. See "Management."

The Company had agreed to pay Raymond A. Hartman, the former President
and Director of the Company, for commissions earned in connection with the
Company's agreements with Edwards Lifesciences Corporation. In 1998, the Company
recognized $72,000 of commission expenses related to this agreement. At December
31, 1998, the Company owed $136,002 to Mr. Hartman. All amounts due to Mr.
Hartman were paid during the year ended December 31, 1999. At December 31, 1998,
the Company had made advances of approximately $54,600 to Chaim Markheim, former
Chief Operating Officer and director of the Company. During 1999, these advance
payments were recognized as compensation to Mr. Markheim in lieu of repayment.
In the year ended December 31, 1997, the Company made advance payments in the
amount of $48,000 to Helionetics, which were subsequently written off on the
Company's financial statements.

FORMER AGREEMENT WITH CSC HEALTHCARE, INC. On October 29, 1998, the
Company and CSC Healthcare, Inc. ("CSC") entered into an agreement ("the CSC
Agreement"), under which CSC is to develop a commercial strategy and to define
and obtain the required resources for the commercial exploitation of the
Company's excimer laser technology. Under the CSC Agreement, CSC was to provide
consulting services to various businesses, including the Company, regarding the
introduction of medical technology for commercialization. Subsequently, CSC
filed a complaint against the Company, alleging the failure to pay for
professional services performed by CSC, plus expenses. The dispute was resolved
by a settlement in which the Company paid CSC the sum of $700,000. Warwick Alex
Charlton, a former Vice President of CSC, is also the Non-Executive Chairman of
the Board of Directors of the Company. See "Management."

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The Company believes that all such transactions with affiliates of the
Company have been entered into on terms no less favorable to the Company than
could have been obtained from independent third parties. The Company intends
that any transactions and loans with officers, directors and five percent (5%)
or greater stockholders, following the date of this Proxy Statement, will be on
terms no less favorable to the Company than could be obtained from independent
third parties and will be approved by a majority of the independent,
disinterested directors of the Company.

MATTERS FOR CONSIDERATION BY STOCKHOLDERS

PROPOSAL 1. ELECTION OF DIRECTORS.

Six (6) directors will be elected at the Annual Meeting, each to hold
office until the next Annual Meeting of the Stockholders of the Company or until
their successors are elected and qualify, subject to their prior death,
resignation or removal. Officers serve at the discretion of the Board of
Directors. There are no family relationships among any of the Company's
directors and executive officers. In the absence of instructions to the
contrary, shares of Common Stock represented by properly executed proxies will
be voted for the six (6) nominees listed hereinbelow, all of whom are
recommended by management of the Company and who have consented to be named and
to serve if elected.

In the event that any management nominee is unable or declines to serve
as a director at the time of the Meeting, the proxies will be voted for any
nominee who is designated by the present Board of Directors to fill the vacancy.
It is not expected that any nominee will be unable or will decline to serve as a
director.

The Board of Directors met or adopted actions by unanimous written
consent approximately ten (10) times during the year ended December 31, 1999.
Except for John J. McAtee, Jr., who did not attend one meeting, all directors
who were members of the Board at the time of the meeting or the action and who
are standing for reelection attended 100% of the meetings of the Board.

The Board knows of no reason why any of the nominees will be
unavailable or decline to serve as a director. The information presented below
is as of ______, 2000 and is based in part on information furnished by the
nominees and, in part, from the records of the Company.

The affirmative vote of a plurality of the combined Votes Cast at the
Meeting is required to elect the directors nominated below.

THE BOARD OF DIRECTORS RECOMMENDS VOTING "FOR" THE ELECTION OF THE NOMINEES
LISTED BELOW.

NOMINEES FOR ELECTION AS DIRECTOR
---------------------------------

The following persons have been recommended by management of the
Company and have consented to be named and to serve as members of the Company's
Board of Directors if elected. Alex Charlton is the Non-Executive Chairman of
the Board of Directors. Biographies of persons who all such persons may be
reviewed in the section of this Proxy Statement entitled "Directors and
Executive Officers."

NAME DIRECTOR SINCE:
---- ---------------

Warwick Alex Charlton March, 1999
Jeffrey F. O'Donnell November, 1999
John J. McAtee, Jr. March, 1998
Alan R. Novak October, 1997
Samuel E. Navarro January, 2000
Richard DePiano May 4, 2000

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PROPOSAL 2. PROPOSED RESTATED CERTIFICATE OF INCORPORATION AND REVISED BYLAWS

GENERAL

The Board of Directors has approved a proposal to adopt a Restated
Certificate of Incorporation and revised Bylaws, subject to stockholder
approval. If approved, the Restated Certificate of Incorporation and revised
Bylaws will become the governing instrument of the Company and will differ in
several respects from the current Certificate of Incorporation and Bylaws. Some
of the changes in the proposed Restated Certificate of Incorporation will be
procedural, including, the proposed increase of the maximum authorized number of
directors in the Bylaws from seven (7) to eight (8). However, certain other
proposed changes will be more substantive, including a proposed expansion of the
provisions relating to indemnification of directors. A copy of the form of the
Restated Certificate of Incorporation and revised Bylaws are attached hereto as
Exhibits "A" and "B," respectively. Stockholders should carefully review such
Restated Certificate of Incorporation and revised Bylaws to determine the nature
and desirability of the proposed changes.

In addition, the Board of Directors has approved certain other
proposals with respect to the Restated Certificate of Incorporation and revised
Bylaws, which are the subject of Proposals 3-6 below. These proposals are set
forth in the form of the Restated Certificate of Incorporation and revised
Bylaws, attached as Exhibits "A" and "B" hereto. The additional proposals set
forth below in Proposals 3-6 with respect to the proposed Restated Certificate
of Incorporation and revised Bylaws of the Company will, if adopted, result in
material changes in stockholders' rights and corporate procedures from those
currently provided. These proposed changes will generally have the effect of
adopting certain measures the "Measures") affecting stockholders' rights and
adopting certain "anti-takeover" provisions in connection with changes of
control of the Company, including: (b) the division of the Board of Directors
into three (3) classes to be elected for separate terms of office, (a)
supermajority requirements of 66 2/3% of the voting power of all issued and
outstanding shares of voting stock with respect to the amendment, change or
repeal of certain provisions of the Certificate of Incorporation and Bylaws, (c)
the proposed increase of the authorized Common Stock from 25,000,000 shares to
50,000,000 shares, and (d) the authorization of a class of 5,000,000 shares of
preferred stock. These proposals will be voted upon separately by the Company's
stockholders at the Meeting and will be discussed in detail below within the
specific proposals. Any of these additional proposals which are approved by the
Company's stockholders will be adopted in the Restated Certificate of
Incorporation and revised Bylaws, and any proposals, which are not approved by
the Company's stockholders, will be excluded from such documents.

The following discussion generally summarizes certain of the changes
and is qualified in its entirety by reference to the Restated Certificate of
Incorporation and the revised Bylaws.

LIMITATION OF LIABILITY OF DIRECTORS; INDEMNIFICATION OF DIRECTORS AND OFFICERS

As discussed below, the proposed Restated Certificate of Incorporation
of the Company will contain a provision limiting director liability under
certain circumstances and the revised Bylaws of the Company will contain
provisions relating to indemnification of directors and officers. The inclusion
of these provisions could operate to the potential disadvantage of the
stockholders of the Company. For example, their inclusion may have the effect of
reducing the likelihood of the Company's recovering monetary damages from
directors as a result of derivative litigation against directors for breach of
their duty of care, even though such an action, if successful, might otherwise
have benefited the Company and its stockholders. In addition, if the limitation
on liability provision is part of the Certificate of Incorporation of the
Company, the stockholders of the Company will forego potential causes of action
for breach of duty of care involving grossly negligent business decisions,
including those relating to attempts to change control of the Company.

LIMITATION OF LIABILITY OF DIRECTORS. Delaware law permits a Delaware
corporation to include in its certificate of incorporation a provision which
eliminates or limits the personal liability of a director to the corporation or
its stockholders for monetary damages for breach of fiduciary duties as a
director. However, no such provision may 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) for
declaration of unlawful dividends or illegal redemptions or stock repurchases;
or (iv) for any transaction from which the director derived an improper personal
benefit. Under Delaware corporate law, a corporation may provide in its charter
that directors shall not be liable to the corporation or its stockholders for
monetary damages for breach of their fiduciary duty. Each of the Certificate of
Incorporation and proposed Restated Certificate of Incorporation contain
provisions limiting a director's liability for monetary damages to the fullest
extent permitted by Delaware law.

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INDEMNIFICATION OF DIRECTORS AND OFFICERS. In general, Delaware law
empowers a corporation to indemnify any person who was or is a party or who is
threatened to be made a party to any threatened, pending, or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
except in the case of an action by or in the right of the corporation, by reason
of the fact that he or she 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 or other enterprise.
Depending on the character of the proceeding, a corporation may indemnify
against expenses (including attorney's fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred in connection with such action,
suit or proceeding if the person indemnified 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 with respect to any criminal action or proceedings, had no
reasonable cause to believe his or her conduct was unlawful.

A corporation may 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 or she 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 or other
enterprise, against expenses, including amounts paid in settlement and
attorney's fees actually and reasonably incurred by him or her in connection
with the defense or settlement of the action or suit if he or she acted in good
faith and in a manner which he or she reasonably believed to be in or not
opposed to the best interests of the corporation. Indemnification may not be
made for any claim, issue or matter as to which such a person has been adjudged
by a court of competent jurisdiction, after exhaustion of all appeals therefrom,
to be liable to the corporation or for amounts paid in settlement to the
corporation unless and only to the extent that the court in which the action or
suit was brought or other court of competent jurisdiction determines upon
application that in view of all the circumstances of the case, the person is
fairly and reasonably entitled to indemnity for such expenses as the court deems
proper.

To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to above, or in defense of any claim, issue
or matter therein, he or she must be indemnified by the corporation against
expenses, including attorney's fees, actually and reasonably incurred by him in
connection with the defense. Any indemnification under this section, unless
ordered by a court or advanced pursuant to this section, must 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. The determination must be made: (a) by the stockholders; (b) by
the board of directors by majority vote of a quorum consisting of directors who
were not parties to the action, suit or proceeding; (c) if a majority vote of a
quorum consisting of directors who were not parties to the action, suit or
proceeding so orders, by independent legal counsel in a written opinion; or (d)
if a quorum consisting of directors who were not parties to the action, suit or
proceeding cannot be obtained, by independent legal counsel in a written
opinion.

The certificate of incorporation, the bylaws or an agreement made by
the corporation may provide that the expenses of officers and directors incurred
in defending a civil or criminal action, suit or proceeding must be paid by the
corporation as they are incurred and in advance of the final disposition of the
action, suit or proceeding upon receipt of an undertaking by or on behalf of the
director or officer to repay the amount if it is ultimately determined by a
court of competent jurisdiction that he or she is not entitled to be indemnified
by the corporation. The provisions of this section do not affect any rights to
advancement of expenses to which corporate personnel other than directors or
officers may be entitled under any contract or otherwise by law.

The indemnification and advancement of expenses authorized in or
ordered by a court: (a) does not exclude any other rights to which a person
seeking indemnification or advancement of expenses may be entitled under the
certificate of incorporation or any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, for either an action in his or her
official capacity or an action in another capacity while holding his or her
office, except that indemnification, unless ordered by a court pursuant to this
section or for the advancement of any director or officer if a final
adjudication establishes that his or her acts or omissions involved intentional
misconduct, fraud or a knowing violation of the law and was material to the
cause of action; and (b) continues for a person who has ceased to be a director,
officer, employee or agent and inures to the benefit of the heirs, executors and
administrators of such a person.

Delaware law provides that a director shall not be held personally
liable for monetary damages for breach of fiduciary duty as a director, provided
(as specified in the Delaware law) that such limitation of liability shall not
act to limit liability for the following conduct: (a) breaches of the director's
duty of loyalty to the corporation or its stockholders; (b) acts or omissions
not in good faith or which involve intentional misconduct or knowing violation
of law; (c) the payment of unlawful dividends or unlawful stock repurchases or
redemptions; or (d) any transaction from which the director derived an improper
personal benefit.

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<PAGE>

Each of the Certificate of Incorporation and proposed Restated
Certificate of Incorporation provide that the Company shall indemnify its
directors and officers to the fullest extent permitted under Delaware law.

The members of the Board of Directors of the Company have a personal
interest in seeing that the limitation on liability and indemnification
provisions are included as a part of the proposed Restated Certificate of
Incorporation and revised Bylaws.

VOTE REQUIRED; RECOMMENDATION OF THE BOARD OF DIRECTORS

Under the Company's Certificate of Incorporation and Delaware law, the
proposed Restated Certificate of Incorporation and revised Bylaws must be
approved by the affirmative vote of the holders of a majority of the issued and
outstanding shares of the Company's Common Stock.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL

PROPOSAL 3. PROPOSED ADOPTION OF CERTAIN ANTI-TAKEOVER PROVISIONS IN THE
CERTIFICATE OF INCORPORATION AND BYLAWS

GENERAL

In particular, these proposals include supermajority requirements of 66
2/3% of the voting power of all issued and outstanding shares of voting stock
with respect to the amendment, change or repeal of certain provisions of the
Certificate of Incorporation and Bylaws.

The proposed changes to the Certificate of Incorporation adopt certain
Measures, which are intended to protect the Company's stockholders by rendering
it more difficult for a person or persons to obtain control of the Company
without cooperation of the Company's management. These Measures include the
potential implementation of certain supermajority requirements for the amendment
of the Company's Certificate of Incorporation and Bylaws. Such Measures are
often referred to as "anti-takeover" provisions. The Company's current
Certificate of Incorporation and Bylaws do not include such anti-takeover
provisions.

The inclusion of such "anti-takeover" provisions in the proposed
changes to the Certificate of Incorporation may delay, deter or prevent a
takeover of the Company which the stockholders may consider to be in their best
interests, thereby possibly depriving holders of the Company's securities of
certain opportunities to sell or otherwise dispose of their securities at
above-market prices, or limit the ability of stockholders to remove incumbent
directors as readily as the stockholders may consider to be in their best
interests.

The Measures are not being proposed in response to any present attempt,
known by the Board of Directors of the Company to acquire control of the
Company, to obtain representation on the Company's Board of Directors or to take
significant corporate action. Rather, management believes that the Measures are
prudent and in the best interests of the Company and its stockholders and should
be adopted for their protection. The Board of Directors further believes that
the present is an appropriate time to adopt the proposed Measures, since they
would lessen the likelihood that the Company would be required to incur
significant expense and might be subject to substantial disruption in connection
with such an attempt.

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<PAGE>

The Board of Directors does not have any current plans to seek
stockholder approval of any amendments to, or make changes in, the Company's
charter documents that may be deemed to have "anti-takeover" implications,
except as described in this Proxy Statement or as set forth in the proposed
changes to the Certificate of Incorporation and Bylaws. The Board of Directors
may consider other "anti-takeover" measures in the future, including measures,
which do not require stockholder approval. Severance agreements, pension
agreements, restricted stock awards, acceleration of outstanding options and
plans and agreements of a similar nature which become applicable in the event of
"change in control" have become increasingly common in recent years for
executives of major public companies.

TRANSACTIONS WITH INTERESTED STOCKHOLDERS. Delaware law contains a
statutory provision, which is intended to curb abusive takeovers of Delaware
corporations. Section 203 of the Delaware General Corporation Law addresses the
problem by preventing certain business combinations of the corporation with
interested stockholders within three years after such stockholders become
interested. Section 203 provides, with certain exceptions, that a Delaware
corporation may not engage in any of a broad range of business combinations with
a person or an affiliate, or associate of such person, who is an "interested
stockholder" for a period of three (3) years from the date that such person
became an interested stockholder unless: (i) the transaction resulting in a
person becoming an interested stockholder, or the business combination, is
approved by the Board of Directors of the corporation before the person becomes
an interested stockholder; (ii) the interested stockholder acquired 85% or more
of the outstanding voting stock of the corporation in the same transaction that
makes such person an interested stockholder (excluding shares owned by persons
who are both officers and directors of the corporation, and shares held by
certain employee stock ownership plans); or (iii) on or after the date the
person becomes an interested stockholder, the business combination is approved
by the corporation's board of directors and by the holders of at least 66-2/3%
of the corporation's outstanding voting stock at an annual or special meeting,
excluding shares owned by the interested stockholder. Under Section 203, an
"interested stockholder" is defined as any person who is: (i) the owner of
fifteen percent (15%) or more of the outstanding voting stock of the corporation
or (ii) an affiliate or associate of the corporation and who was the owner of
fifteen percent (15%) or more of the outstanding voting stock of the corporation
at any time within the three (3) year period immediately prior to the date on
which it is sought to be determined whether such person is an interested
stockholder.

A corporation may, at its option, exclude itself from the coverage of
Section 203 by amending its certificate of incorporation or bylaws by action of
its stockholders to exempt itself from coverage, provided that such bylaw or
certificate of incorporation amendment shall not become effective until twelve
(12) months after the date it is adopted. The Company has not adopted such an
amendment to the Certificate of Incorporation or to the proposed Restated
Certificate of Incorporation. It is not anticipated that the Board of Directors
of the Company will seek stockholder approval to "opt out" of the operation of
this provision.

Because the provision may have a deterrent effect on the ability or
desire of third persons to acquire a substantial block of Common Stock and to
attempt to gain control of the Company, directors of the Company could be deemed
to have a personal interest in including the "interested stockholder" provisions
in the Certificate of Incorporation.

SUPERMAJORITY REQUIRED FOR AMENDMENT

Under Delaware law, unless the certificate of incorporation otherwise
provides, amendments to the certificate of incorporation generally require the
approval of the holders of a majority of the outstanding stock entitled to vote
thereon, and if the amendment would increase or decrease the number of
authorized shares of any class or series or the par value of such shares or
would adversely affect the rights, powers or preferences of such class or
series, a majority of the outstanding stock of such class or series also would
have to approve the amendment. The proposed changes to the Certificate of
Incorporation do not provide otherwise. However, the proposed changes to the
Certificate of Incorporation impose certain supermajority requirements on the
vote of stockholders to amend the Certificate of Incorporation, unless such
amendments are also adopted by the Board of Directors.

Under Delaware law, directors may amend the bylaws of a corporation
only if such right is expressly conferred upon the directors in its certificate
of incorporation. The proposed changes to the Certificate of Incorporation
permit the Board of Directors to adopt, alter or amend the proposed Bylaws of
the Company. However, the proposed changes to the Certificate of Incorporation
impose certain supermajority requirements on the vote of stockholders to amend
the proposed Bylaws of the Company, unless such amendments are also adopted by
the Board of Directors. The Company's current Certificate of Incorporation
provides the Board of Directors with the authority to adopt, alter or amend the
Bylaws.

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<PAGE>

The proposed changes to the Certificate of Incorporation permit the
Board of Directors to adopt, amend or repeal any or all of the Company's bylaws
without stockholder action and provide that such bylaws may also be adopted,
amended or repealed by its stockholders, but only if approved by holders of 66
2/3% or more of the voting power of all outstanding shares of voting stock,
including in any instance in which the alteration is proposed by an Interested
Stockholder or by affiliates or associate of any Interested Stockholder, the
affirmative vote of the holders of at least a majority of voting power of all
outstanding shares of voting stock held by persons other than the Interested
Stockholder who proposed such action. However, the only stockholder vote
required if the modification is approved by a majority of the continuing
directors is the affirmative vote of the majority of the voting power of all
outstanding shares of voting stock.

In order to insure that the substantive provisions set forth in the
proposed changes to the Certificate of Incorporation are not circumvented by the
amendment of the Certificate of Incorporation pursuant to a vote of a majority
of the voting power of the Company's outstanding shares, the proposed changes to
the Certificate of Incorporation also provide that any amendment, change or
repeal of the provisions contained in the Restated Certificate of Incorporation
with respect to: (i) the Company's capitalization, (ii) amendment of the Bylaws,
(iii) determination by the Board of the number of directors, (iv) filling Board
vacancies, (v) the requirement that stockholder action be taken at an annual or
special meeting, unless the action is approved by the majority of the continuing
board of directors (vi) requirements with respect to appraisal rights for
stockholders, (vii) the amendment of the provision imposing such supermajority
requirement for amendment of the Restated Certificate of Incorporation, or
(viii) classification of the Board of Directors (if adopted in accordance with
Proposal 4 of this Proxy Statement), shall require the affirmative vote of the
holders of at least 66 2/3% of the voting power of all outstanding shares of
voting stock, including, in any instance where the repeal or amendment is
proposed by an Interested Stockholder (as such term is defined in Section 203 of
the Delaware General Corporation Law) or its affiliate or associate, the
affirmative vote of a majority of the voting power of all outstanding shares of
voting stock held by persons other than such Interested Stockholder or its
affiliates or associates. However, only the affirmative vote of the majority of
the voting power of all outstanding shares of voting stock is required if the
amendment of any of the foregoing provisions is approved by a majority of the
Continuing Directors. The proposed changes to the Certificate of Incorporation
define a Continuing Director as: (i) any member of the Board of Directors who
(A) is not an Interested Stockholder or an affiliate or associate of an
Interested Stockholder, and (B) was a member of the Board of Directors prior to
the time that an Interested Stockholder became an Interested Stockholder, and
(ii) any person who is elected or nominated to succeed a Continuing Director, or
to join the Board of Directors, by a majority of the Continuing Directors. The
Company's current Certificate of Incorporation does not currently include such
provisions.

SPECIAL MEETINGS OF STOCKHOLDERS. The proposed Bylaws provide that a
special meeting of stockholders may be called by the Chairman of the Board of
Directors, the President, a majority of the Board of Directors or 66 2/3% of the
stockholders of record of all shares entitled vote. The current Bylaws of the
Company provide that a special meeting of stockholders may be called by the
Board of Directors or the President of the Company.

CORPORATE ACTION WITHOUT A STOCKHOLDER MEETING. Delaware law permits
corporate action without a meeting of stockholders upon the written consent of
the holders of that number of shares necessary to authorize the proposed
corporate action being taken, unless the certificate of incorporation expressly
provides otherwise.

The proposed changes to the Certificate of Incorporation provide
generally that any action required or permitted to be taken by the stockholders
of the Company must be effected at a duly called annual meeting or at a special
meeting of stockholders of the Company. However, in the event that the action is
approved by the majority of the Continuing Directors, the action may also be
effected by the written consent of the stockholders of the Company. The
Company's current Certificate of Incorporation and Bylaws permit corporate
action without a meeting of stockholders upon the written consent of the holders
of that number of shares necessary to authorize the proposed action being taken.

VOTE REQUIRED; RECOMMENDATION OF THE BOARD OF DIRECTORS

Under the Company's Certificate of Incorporation and Delaware law, the
proposed anti-takeover provisions to be added to the Certificate of
Incorporation and Bylaws must be approved by the affirmative vote of the holders
of a majority of the issued and outstanding shares of the Company's Common
Stock.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL

<PAGE>

PROPOSAL 4. PROPOSED ADOPTION OF CLASSIFIED BOARD OF DIRECTORS IN THE
CERTIFICATE OF INCORPORATION

GENERAL

The Board of Directors has approved a proposal to adopt certain
"anti-takeover" provisions to the Certificate of Incorporation and Bylaws of the
Company. These proposals, will, if adopted, result in material changes in
stockholder's rights and corporate procedures from those currently provided. In
particular, these proposals include dividing the Board of Directors into three
(3) classes and increasing the maximum authorized number of directors from seven
(7) to eight (8).

CLASSIFIED BOARD AND INCREASE OF MAXIMUM AUTHORIZED NUMBER OF DIRECTORS

The proposed Restated Certificate of Incorporation provides that at the
first annual meeting of the Company's stockholders after the authorized number
of directors is nine (9) or more, the Board of Directors shall be divided into
three classes, Class I, Class II and Class III. The current Certificate of
Incorporation does not include provision for a classified Board of Directors.
The current Bylaws provide that the authorized number of directors shall not
exceed seven (7) members. There are currently six (6) members of the Board of
Directors. This Proposal 4 also provides that the maximum authorized number of
directors in the Bylaws shall not exceed eight (8) members. In the event of the
approval of the proposed changes to the Certificate of Incorporation in
connection with this resolution, the provision for the classified Board of
Directors will take effect at the first annual meeting of the Company's
stockholders following the approval of an amendment, if any, to the Company's
Bylaws, which increases the authorized number of directors to nine (9) or more.

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Upon the effectiveness of the classified Board of Directors, the
initial Class I directors will serve for a term of one year, the Class II
directors for a term of two years, and the Class III directors for a term of
three years. Thereafter, all directors shall serve for three year terms. The
effect of these provisions is that not more than one-third of the Company's
directors will be elected at any single annual meeting. As a result, a person
seeking control of the Company might not necessarily be able to acquire a
controlling block of stock and effect an entire change in management at a single
annual meeting.

Both the current Bylaws and the proposed revised Bylaws in Proposal 2
of this Proxy Statement provide that the Bylaws may be revised by the approval
of a majority of the Company's Board of Directors. Delaware law also provides
that the Bylaws may be amended by a majority of the Company's stockholders. In
the event that Proposal 3 of this Proxy Statement is approved by the Company's
stockholders, these provisions relating to a classified Board of Directors will
have a supermajority requirement of 66 2/3% of the voting power of all issued
and outstanding shares of voting stock with respect to the amendment, change or
repeal of such provisions in the Certificate of Incorporation. However, under
such "anti-takeover" measures, the number of authorized directors in the Bylaws
may be amended by the vote of the continuing directors without additional
stockholder action.

VOTE REQUIRED; RECOMMENDATION OF THE BOARD OF DIRECTORS

Under the Company's Certificate of Incorporation and Delaware law, the
proposed provisions relating to a classified Board of Directors to be added to
the Certificate of Incorporation must be approved by the affirmative vote of the
holders of a majority of the issued and outstanding shares of the Company's
Common Stock.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL

PROPOSAL 5. INCREASE OF AUTHORIZED SHARES OF COMMON STOCK

GENERAL

The Company's current Certificate of Incorporation authorizes the
issuance of up to 25,000,000 shares of Common Stock, par value $0.01 per share.
This Proposal 3 seeks the approval of the Company's stockholders to increase the
authorized number of shares of Common Stock to 50,000,000 shares, par value
$0.01 per share.

As of ________, 2000, the Company had issued and outstanding 15,345,323
shares. The Board of Directors has approved an increase in the authorized number
of shares of Common Stock to 50,000,000 shares in order to facilitate the
Company's ability to raise capital, to facilitate acquisitions and mergers and
to attract qualified employees by offering stock options as incentive
compensation for such persons, by authorizing the issuance of additional
securities of the Company for purposes of effectuating such transactions. See
"Proposal 4 - Approval of the Company's 2000 Stock Option Plan" and "Proposal 5
- - Approval of 2000 Non-Employee Director Stock Option Plan."

In the event that the Company's stockholders approve Proposal 2 of this
Proxy Statement, and this Proposal 5 which includes a proposal to increase the
authorized number of shares of Common Stock to 50,000,000 shares, the Restated
Certificate of Incorporation will increase the number of authorized shares of
Common Stock set forth in the proposed Restated Certificate of Incorporation
from 25,000,000 shares to 50,000,000 shares. If the Company's stockholders do
not approve Proposal 2, but only approve this Proposal 5, the current
Certificate of Incorporation will be revised to increase the number of
authorized shares of Common Stock in the Certificate of Incorporation from
25,000,000 shares to 50,000,000 shares.

VOTE REQUIRED; RECOMMENDATION OF THE BOARD OF DIRECTORS

Under the Company's Certificate of Incorporation and Delaware law, this
Proposal 5 to increase the authorized number of shares of Common Stock in the
Company's Certificate of Incorporation must be approved by the affirmative vote
of the holders of a majority of the issued and outstanding shares of the
Company's Common Stock.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL

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PROPOSAL 6. AUTHORIZATION OF CLASS OF PREFERRED STOCK

GENERAL

The Company's current Certificate of Incorporation authorizes the
issuance of up to 25,000,000 shares of Common Stock, par value $0.01 per share.
The current Certificate of Incorporation does not include a provision for the
authorization of a class of preferred stock This Proposal 6 seeks the approval
of the Company's stockholders to authorize a class of up to 5,000,000 shares of
preferred stock, par value $0.001 per share (the "Preferred Stock").

The Board of Directors has approved the authorization of a class of up
to 5,000,000 shares of Preferred Stock commonly known as "blank check" preferred
stock. The preferred stock may be issued from time to time in one or more
series, and the Board of Directors, without further approval of its
stockholders, is authorized to fix the relative rights, preferences, privileges
and restrictions applicable to each series of preferred stock. Such shares of
preferred stock, if and when issued, may have rights, powers and preferences
superior to those of the Company's Common Stock. While there are no current
plans, commitments or understandings, written or oral, to issue any preferred
stock, in the event of any issuances, the holders of Common Stock will not have
any preemptive or similar rights to acquire any preferred stock

In the event that the Company's stockholders approve Proposal 2 of this
Proxy Statement, and this Proposal 6, which includes a proposal to authorize a
class of up to 5,000,000 shares of Preferred Stock, the Restated Certificate of
Incorporation will authorize a class of up to 5,000,000 shares of Preferred
Stock. If the Company's stockholders do not approve Proposal 2, but only approve
this Proposal 6, the current Certificate of Incorporation will be revised to
authorize a class of up to 5,000,000 shares of Preferred Stock.

VOTE REQUIRED; RECOMMENDATION OF THE BOARD OF DIRECTORS

Under the Company's Certificate of Incorporation and Delaware law, this
Proposal 6 to authorize a class of Preferred Stock in the Company's Certificate
of Incorporation must be approved by the affirmative vote of the holders of a
majority of the issued and outstanding shares of the Company's Common Stock.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL

PROPOSAL 7. CHANGE OF NAME OF THE COMPANY

GENERAL

On ____, 2000, the Company's Board of Directors voted to change the
name of the Company to "PhotoMedex, Inc.," subject to the approval of the
Company's stockholders.

In 1997, the Company changed its business strategy from focusing on the
manufacture and marketing of a variety of solid-state lasers to the manufacture,
and marketing of excimer lasers. In April, 2000, the Company sold certain of its
assets related to its non-excimer laser systems and discontinued its non-excimer
laser business operations at its former Florida and Massachusetts facilities.

The Board of Directors believes the proposed name change is more
descriptive of the Company's current focus on its excimer laser products.

VOTE REQUIRED; RECOMMENDATION OF THE BOARD OF DIRECTORS

Under the Company's Certificate of Incorporation and Delaware law, the
Proposal 7 to change the Company's name to "PhotoMedex, Inc." must be approved
by the affirmative vote of the holders of a majority of the issued and
outstanding shares of the Company's Common Stock.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL

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PROPOSAL 8. APPROVAL OF THE COMPANY'S 2000 STOCK OPTION PLAN

GENERAL

The 2000 Stock Option Plan (the "2000 Stock Option Plan") was adopted
by the Board of Directors on ______, 2000. The Company has reserved for issuance
thereunder an aggregate of 1,000,000 shares of Common Stock. The 2000 Stock
Option Plan provides for the grant to employees of the Company of incentive
stock options within the meaning of Section 422 of the Code, and for the grant
to employees and consultants of nonstatutory stock options.

The success of the Company depends upon its ability to attract and
retain highly qualified and competent employees. The 2000 Stock Option Plan
enhances that ability and provides additional incentive to such personnel to
advance the interests of the Company and its stockholders. Management of the
Company believes that the reservation of 1,000,000 shares of Common Stock for
issuance under the 2000 Stock Option Plan, would provide an adequate reserve of
shares for issuance under the 2000 Stock Option Plan in order to enable the
Company to compete with other companies to attract and retain valuable
employees.

A description of the 2000 Stock Option Plan is set forth below. The
description is intended to be a summary of the material provisions of the 2000
Stock Option Plan and does not purport to be complete. The following discussion
summarizes certain aspects of the 2000 Stock Option Plan, but is qualified in
its entirety by reference to the 2000 Stock Option Plan, which is attached
hereto as "Exhibit C."

2000 STOCK OPTION PLAN

The general purposes of the 2000 Stock Option Plan are to attract and
retain the best available personnel for positions of substantial responsibility,
to provide additional incentive to employees and consultants of the Company and
to promote the success of the Company's business. It is intended that these
purposes will be effected through the granting of stock options, which may be
either "incentive stock options" as defined in Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code") or nonstatutory stock options.

The 2000 Stock Option Plan provides that options may be granted to the
employees (including officers and directors who are employees) and consultants
of the Company, or of any parent or subsidiary of the Company. Incentive stock
options may be granted only to employees. An employee or consultant who has been
granted an option may, if otherwise eligible, be granted additional options.

As of ________, 2000, the Company's Board of Directors approved the
Company's 2000 Stock Option Plan, subject to the ratification of the Company's
stockholders.

The Company has reserved for issuance up to 1,000,000 shares of Common
Stock under the 2000 Stock Option Plan. No options have been granted under the
2000 Stock Option Plan as of the date of this Proxy Statement.

ADMINISTRATION OF AND ELIGIBILITY UNDER 2000 STOCK OPTION PLAN. The
2000 Stock Option Plan, as adopted, provides for the issuance of options to
purchase shares of Common Stock to officers, directors, employees, independent
contractors and consultants of the Company and its subsidiaries as an incentive
to remain in the employ of or to provide services to the Company and its
subsidiaries. The 2000 Stock Option Plan authorizes the issuance of incentive
stock options ("ISOs"), non-qualified stock options ("NSOs") and stock
appreciation rights ("SARs") to be granted by a committee (the "Committee") to
be established by the Board of Directors, to administer the 2000 Stock Option
Plan, or if no such Committee is established , then by the Board of Directors,
either of which will consist of at least two non-employee directors, as such
term is defined under Rule 16b-3 of the Exchange Act, and shall qualify as
outside directors of the Company, for purposes of Section 162(m) of the Code.

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<PAGE>

Subject to the terms and conditions of the 2000 Stock Option Plan, the
Committee will have the sole authority to: (a) determine the persons
("optionees") to whom options to purchase shares of Common Stock and SARs will
be granted, (b) determine the number of options and SARs to be granted to each
such optionee, (c) determine the price to be paid for each share of Common Stock
upon the exercise of each option and the manner in which each option may be
exercised, (d) determine the period within which each option and SAR will be
exercised and any extensions thereof, (e) determine the type of stock options to
grant (f) interpret the Plan and award agreements under the Plan, and (g)
determine the terms and conditions of each such stock option agreement and SAR
agreement which may be entered into between the Company and any such optionee.

All officers, directors and employees of the Company and its
subsidiaries and certain consultants and other persons providing significant
services to the Company and its subsidiaries will be eligible to receive grants
of options and SARs under the 2000 Stock Option Plan. However, only employees of
the Company and its subsidiaries are eligible to be granted ISOs.

STOCK OPTION AGREEMENTS. All options granted under the 2000 Stock
Option Plan will be evidenced by an option agreement or SAR agreement between
the Company and the optionee receiving such option or SAR. Provisions of such
agreements entered into under the 2000 Stock Option Plan need not be identical
and may include any term or condition, which is not inconsistent with the 2000
Stock Option Plan and which the Committee deems appropriate for inclusion.

INCENTIVE STOCK OPTIONS. Except for ISOs granted to stockholders
possessing more than ten percent (10%) of the total combined voting power of all
classes of the securities of the Company or its subsidiaries to whom such
ownership is attributed on the date of grant ("Ten Percent Stockholders"), the
exercise price of each ISO must be at least 100% of the fair market value of the
Company's Common Stock, based on the closing sales price of the Company's Common
Stock, as determined on the date of grant. ISOs granted to Ten Percent
Stockholders must be at an exercise price of not less than 110% of such fair
market value.

Each ISO must be exercised, if at all, within ten (10) years from the
date of grant, but, within five (5) years of the date of grant in the case of
ISO's granted to Ten Percent Stockholders.

An optionee of an ISO may not exercise an ISO granted under the 2000
Stock Option Plan so long as such person holds a previously granted and
unexercised ISO.

The aggregate fair market value (determined as of time of the grant of
the ISO) of the Common Stock with respect to which the ISOs are exercisable for
the first time by the optionee during any calendar year shall not exceed
$100,000.

NON-QUALIFIED STOCK OPTIONS. The exercise price of each NSO will be
determined by the Committee on the date of grant. The Company hereby undertakes
not to grant any non-qualified stock options under the 2000 Stock Option Plan at
an exercise price less than 85% of the fair market value, based on the closing
sales price of the Company's Common Stock, on the date of grant of any
non-qualified stock option under the 2000 Stock Option Plan.

The exercise period for each NSO will be determined by the Committee at
the time such option is granted, but in no event will such exercise period
exceed ten (10) years from the date of grant.

STOCK APPRECIATION RIGHTS. Each SAR granted under the 2000 Stock Option
Plan will entitle the holder thereof, upon the exercise of the SAR, to receive
from the Company, in exchange therefor, an amount equal in value to the excess
of the fair market value of the Common Stock on the date of exercise of one
share of Common Stock over its fair market value on the date of exercise of one
share of Common Stock over its fair market value on the date of grant (or in the
case of an SAR granted in connection with an option, the excess of the fair
market of one share of Common Stock at the time of exercise over the option
exercise price per share under the option to which the SAR relates), multiplied
by the number of shares of Common Stock covered by the SAR or the option, or
portion thereof, that is surrendered.

SARs will be exercisable only at the time or times established by the
Committee. If an SAR is granted in connection with an option, the SAR will be
exercisable only to the extent and on the same conditions that the related
option could be exercised. The Committee may withdraw any SAR granted under the
2000 Stock Option Plan at any time and may impose any conditions upon the
exercise of an SAR or adopt rules and regulations from time to time affecting
the rights of holders of SARs.

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<PAGE>

LIMIT TO OPTIONS GRANTED UNDER THE 2000 STOCK OPTION PLAN. Under
Section 162(m) of the Code, which was enacted in 1993, the deductibility for
federal income tax purposes of compensation paid to the Company's Chief
Executive Officer and the four other most highly compensated executive officers
who receive salary and bonus in excess of $100,000 in a particular year is
limited to $1,000,000 per year per individual. For purposes of this legislation,
compensation expense attributable to stock options and SARs would be subject to
this limitation unless, among other things, the option plan under which the
options and SARs is granted includes a limit on the number of shares with
respect to which awards may be made to any one employee in a fiscal year. Such a
potential compensation expense deduction could arise, for example, upon the
exercise by one of these executive of a nonstatutory option, i.e., an option
that is not an incentive stock option qualifying for favorable tax treatment, or
upon a disqualifying disposition of stock received upon exercise of an incentive
stock option.

In order to exclude compensation resulting from options granted under
the Company's 2000 Stock Option Plan from the $1,000,000 limit on deductibility,
the Board of Directors has approved a provision in the 2000 Stock Option Plan
which will place a 100,000 share limit on the number of options that may be
granted under the 2000 Stock Option Plan to an employee in any fiscal year. This
limit is subject to appropriate adjustment in the case of stock splits, reverse
stock splits and the like. The purpose of this provision, which is intended to
comply with Section 162(m) of the Code and the regulations thereunder, is to
preserve the Company's ability to deduct in full any compensation expense
related to stock options.

TERMINATION OF OPTION AND TRANSFERABILITY. In general, any unexpired
options and SARs granted under the 2000 Stock Option Plan will terminate: (a) in
the event of death or disability, pursuant to the terms of the option agreement
or SAR agreement, but not less than six (6) months or more than twelve (12)
months after the applicable date of such event, (b) in the event of retirement,
pursuant to the terms of the option agreement or SAR agreement, but no less that
thirty (30) days or more than three (3) months after such retirement date, or
(c) in the event of termination of such person other than for death, disability
or retirement, until thirty (30) days after the date of such termination.
However, the Committee may in its sole discretion accelerate the exercisability
of any or all options or SARs upon termination of employment or cessation of
services.

The options and SARs granted under the 2000 Stock Option Plan generally
will be non-transferable, except by will or the laws of descent and
distribution.

ADJUSTMENTS RESULTING FROM CHANGES IN CAPITALIZATION. The number of
shares of Common Stock reserved under the 2000 Stock Option Plan and the number
and price of shares of Common Stock covered by each outstanding option or SAR
under the 2000 Stock Option Plan will be proportionately adjusted by the
Committee for any increase or decrease in the number of issued and outstanding
shares of Common Stock resulting from any stock dividends, split-ups,
consolidations, recapitalizations, reorganizations or like event.

TERMINATION OF OPTIONS AND SAR'S ON MERGER, REORGANIZATION OR
LIQUIDATION OF THE COMPANY. In the event of a merger, consolidation or other
reorganization of the Company, in which the Company is not the surviving or
continuing corporation (as determined by the Plan Committee) or in the event of
the liquidation or dissolution of the Company, all options and SAR's granted
under the 2000 Stock Option Plan will terminate on the effective date of the
merger, consolidation, reorganization, liquidation or dissolution, unless there
is an agreement with respect to such agreement, which expressly provides for the
assumption of such options and SAR's by the continuing or surviving corporation.

AMENDMENT OR DISCONTINUANCE OF STOCK OPTION PLAN. The Board of
Directors has the right to amend, suspend or terminate the 2000 Stock Option
Plan at any time. Unless sooner terminated by the Board of Directors, the 2000
Stock Option Plan will terminate on _____, 2010, the tenth (10th) anniversary
date of the effectiveness of the 2000 Stock Option Plan.

CERTAIN FEDERAL INCOME TAX CONSIDERATIONS

Options granted under the 2000 Stock Option Plan may be either
"incentive stock options," as defined in Section 422 of the Code, or
nonstatutory options.

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<PAGE>

An optionee who is granted an incentive stock option will not recognize
taxable income either at the time the option is granted or upon its exercise,
although the exercise may subject the optionee to the alternative minimum tax.
Upon the sale or exchange of the shares more than two years after grant of the
option and one year after exercising the option, any gain or loss will be
treated as long-term capital gain or loss. If these holding periods are not
satisfied, the optionee will recognize ordinary income at the time of sale or
exchange equal to the difference between the exercise price and the lower of:
(i) the fair market value of the shares at the date of the option exercise, or
(ii) the sale price of the shares. A different rule for measuring ordinary
income upon such a premature disposition may apply if the optionee is also an
officer, director or Ten Percent Stockholder of the Company. Generally, the
Company will be entitled to a deduction in the same amount as the ordinary
income recognized by the optionee. Any gain or loss recognized on such a
premature disposition of the shares in excess of the amount treated as ordinary
income will be characterized as long-term or short-term capital gain or loss,
depending on the holding period.

All other options that do not qualify as incentive options are referred
to as nonstatutory options. An optionee will not recognize any taxable income at
the time he or she is granted a non-statutory option. However, upon its
exercise, the optionee will recognize taxable income generally measured as the
excess of the then fair market value of the shares purchased over the purchase
price. Any taxable income recognized in connection with an option exercise by an
option who is also an employee of the Company will be subject to tax withholding
by the Company. Upon the resale of such shares by the optionee, any difference
between the sale price and the optionee's purchase price, to the extent not
recognized as taxable income as described above, will be treated as long-term
capital gain or loss, depending on the holding period.

Generally, the Company will be entitled to a tax deduction in the same
amount as the ordinary income recognized by the optionee with respect to shares
acquired upon exercise of a nonstatutory option.

The foregoing is only a summary of the effect of federal income
taxation upon the optionee and the Company with respect to the grant and
exercise of options under the 2000 Stock Option Plan, does not purport to be
complete, and does not discuss the tax consequences of the optionee's death or
the income tax laws of any municipality, state or foreign country in which an
optionee may reside.

VOTE REQUIRED; RECOMMENDATION OF THE BOARD OF DIRECTORS

Approval of the 2000 Stock Option Plan requires the affirmative vote of
a majority of the combined Votes Cast.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL

PROPOSAL 9. APPROVAL OF 2000 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN

GENERAL

The Board of Directors adopted the Non-Employee Director Plan,
effective as of January 1, 2000, subject to stockholder approval.

The following description of the Non-Employee Director Plan is a
summary of the principal provisions of the Non-Employee Director Plan and is
qualified in its entirety by reference to the Non-Employee Director Plan, a copy
of which has been filed as an exhibit to this Proxy Statement.

2000 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN

PURPOSE OF THE PLAN. The purposes of the Non-Employee Director Plan are
to enable the Company to attract, retain, and motivate the non-employee
directors of the Company and to create a long-term mutuality of interest between
the non-employee directors and the Company's stockholders by granting options to
purchase Common Stock ("Options").

ADMINISTRATION. The Non-Employee Director Plan will be administered by
a committee (the "Committee") of the Board of Directors of the Company (the
"Board"), appointed from time to time by the Board. The Committee is intended to
consist of two or more directors, each of whom will be non-employee directors as
defined in Rule 16b-3 under Section 16(b) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"). If no Committee exists which has the
authority to administer the Non-Employee Director Plan, the functions of the
Committee will be exercised by the Board. The Committee has full authority to
interpret the Non-Employee Director Plan and decide any questions under the
Non-Employee Director Plan and to make such rules and regulations and establish
such processes for administration of the Non-Employee Director Plan as it deems
appropriate subject to the provisions of the Non-Employee Director Plan.

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<PAGE>

AVAILABLE SHARES. The Non-Employee Director Plan authorizes the
issuance of up to 500,000 shares of Common Stock upon the exercise of
non-qualified stock options granted to non-employee directors of the Company. In
general, if Options are for any reason canceled, or expire or terminate
unexercised, the shares covered by such Options will again be available for the
grant of Options.

The Non-Employee Director Plan provides that appropriate adjustments
will be made in the number and kind of securities receivable upon the exercise
of Options in the event of a stock split, stock dividend, merger, consolidation
or reorganization.

ELIGIBILITY. All non-employee directors of the Company are eligible to
be granted Options under the Non-Employee Director Plan. A non-employee director
is a director serving on the Company's Board who is not then a current employee
of the Company and/or a subsidiary or parent company of the Company, as defined
in Sections 424(e) and 424(f) of the Code.

GRANT OF OPTIONS. As of each January 1 following the effective date of
the Non-Employee Director Plan, commencing January 1, 2001 (the Initial Grant
Date"), each non-employee director shall be automatically granted an Option to
purchase 20,000 shares of Common Stock in respect of services to be rendered to
the Company as a director during the forthcoming calendar year, subject to the
terms of the Non-Employee Director Plan. Each non-employee director who is first
elected to the Board after January 1, 2000, but prior to January 1, 2001, will
be granted, as of the date of his election "First Grant Date"), an Option to
purchase that number of shares equal to the product of (i) 5,000 and (ii) the
number of fiscal quarters remaining in the Company's then current fiscal year
(including the quarter in which the date of such director's election falls),
subject to the terms of the Plan. As of January 1 of each year following the
Initial Grant Date or the First Grant Date, as the case may be, each
non-employee director shall be automatically granted an Option to purchase
20,000 Shares ("Annual Grant").

The purchase price per share ("Purchase Price") deliverable upon the
exercise of an Option shall be 100% of the Fair Market Value of such Shares as
follows:

(i) For Options issued on the Initial Grant Date, the Fair Market Value
shall be measured by the closing sales price of the Company's Common Stock as of
the last trading date of the fiscal quarter prior to the Initial Grant Date;

(ii) For Options issued on the First Grant Date, the Fair Market Value
shall be measured by the closing sales price of the Company's Common Stock as of
the First Grant Date;

(iii) For Annual Grants of Options issued as of January 1 of any fiscal
year, the Fair Market Value shall be measured by the closing sales price of the
Company's Common Stock as of the last trading date of the last day of the prior
year;

VESTING OF OPTIONS. Options granted under the Non-Employee Director
Plan shall vest and become exercisable to the extent of 5,000 Shares for each
fiscal quarter in which such Director shall have served at least one day as a
director of the Company.

Options that are exercisable upon a non-employee director's termination
of directorship for any reason except death, disability or cause (as defined in
the Non-Employee Director Plan), prior to the complete exercise of an Option (or
deemed exercise thereof), will remain exercisable following such termination
until the earlier of (i) the expiration of the ninety (90) day period following
the non-employee director's termination of directorship or (ii) the remaining
term of the Option.

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<PAGE>

Options that are exercisable upon a non-employee director's termination
of directorship for disability or death, will remain exercisable by the
non-employee director or, in the case of death, by the non-employee director's
estate or by the person given authority to exercise such Options by his or her
will or by operation of law, until the earlier of (i) the first anniversary of
the non-employee director's termination of directorship or (ii) the remaining
term of the Option.

Upon a non-employee director's removal from the Board, failure to stand
for reelection or failure to be renominated for cause, or if the Company obtains
or discovers information after termination of directorship that such
non-employee director had engaged in conduct during such directorship that would
have justified a removal for cause during such directorship, all outstanding
Options of such non-employee director will immediately terminate and will be
null and void.

The Non-Employee Director Plan also provides that all outstanding
Options will terminate effective upon the consummation of a merger,
consolidation liquidation or dissolution in which the Company is not the
surviving entity, subject to the right of non-employee director to exercise all
outstanding Options prior to the effective date of the merger, consolidation,
liquidation or dissolution.

All Options granted to a non-employee director and not previously
exercisable become vested and fully exercisable immediately upon the occurrence
of a change in control (as defined in the Non-Employee Director Plan).

AMENDMENTS. The Non-Employee Director Plan provides that it may be
amended by the Committee or the Board at any time, and from time to time, to
effect (i) amendments necessary or desirable in order that the Non-Employee
Director Plan and the Options granted thereunder conform to all applicable laws,
and (ii) any other amendments deemed appropriate. Notwithstanding the foregoing,
to the extent required by law, no amendment may be made that would require the
approval of the stockholders of the Company under applicable law or under any
regulation of a principal national securities exchange or automated quotation
system sponsored by the National Association of Securities Dealers unless such
approval is obtained. The Non-Employee Director Plan may be amended or
terminated at any time by stockholders of the Company.

MISCELLANEOUS. Non-employee directors may be limited under Section
16(b) of the Exchange Act to certain specific exercise, election or holding
periods with respect to the Options granted to them under the Non-Employee
Director Plan. Options granted under the Non-Employee Director Plan are subject
to restrictions on transfer and exercise. No Option granted under the
Non-Employee Director Plan may be exercised prior to the time period for
exercisability, subject to acceleration in the event of a change in control of
the Company (as defined in the Non-Employee Director Plan). Although Options
will generally be nontransferable (except by will or the laws of descent and
distribution), the Committee may determine at the time of grant or thereafter
that an Option that is otherwise nontransferable is transferable in whole or in
part and in such circumstances, and under such conditions, as specified by the
Committee.

U.S. FEDERAL INCOME TAX CONSEQUENCES. The following discussion of the
principal U.S. federal income tax consequences with respect to Options under the
Non-Employee Director Plan is based on statutory authority and judicial and
administrative interpretations as of the date of this Proxy Statement, which are
subject to change at any time (possibly with retroactive effect) and may vary in
individual circumstances. Therefore, the following is designed to provide only a
general understanding of the federal income tax consequences (state and local
income tax and estate tax consequences are not addressed below). This discussion
is limited to the U.S. federal income tax consequences to individuals who are
citizens or residents of the U.S., other than those individuals who are taxed on
a residence basis in a foreign country.

In general, an optionee will realize no taxable income upon the grant
of non-qualified stock options and the Company will not receive a deduction at
the time of such grant, unless the option has a readily ascertainable fair
market value (as determined under applicable tax law) at the time of grant. Upon
exercise of a non-qualified stock option, an optionee generally will recognize
ordinary income in an amount equal to the excess of the fair market value of the
stock on the date of exercise over the exercise price, but such amount will not
be subject to federal wage withholding or employment taxes. Upon a subsequent
sale of the stock by the optionee, the optionee will recognize short-term or
long-term capital gain or loss, depending upon his holding period for the stock.
The Company will generally be allowed a deduction equal to the amount recognized
by the optionee as ordinary income.

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An optionee should consult with his or her tax advisor as to whether,
as a result of Section 16(b) of the Exchange Act and the rules and regulations
thereunder, the timing of income recognition is deferred for any period
following the exercise of an Option (the "Deferral Period"). If there is a
Deferral Period, absent a written election (pursuant to Section 83(b) of the
Code) filed with the Internal Revenue Service within 30 days after the date of
transfer of the shares of Common Stock pursuant to the exercise of the
non-qualified stock option to include in income, as of the transfer date, the
excess (on such date) of the fair market value of such shares over their
exercise price, recognition of income by the recipient could, in certain
instances, be deferred until the expiration of the Deferral Period.

In addition, any entitlement to a tax deduction on the part of the
Company is subject to the applicable federal tax rules, and in the event that
the exercisability of an Option is accelerated because of a change in control,
payments relating to the Options, either alone or together with certain other
payments may constitute parachute payments under Section 280(g) of the Code,
which excess amounts may be subject to excise taxes and be nondeductible by the
Company.

The Non-Employee Director Plan is not subject to any of the
requirements of the Employee Retirement Income Security Act of 1974, as amended.
The Non-Employee Director Plan is not, nor is it intended to be, qualified under
Section 401(a) or 421 of the Code.

VOTE REQUIRED; RECOMMENDATION OF THE BOARD OF DIRECTORS

Approval of the 2000 Non-Employee Director Stock Option Plan requires
the affirmative vote of a majority of the combined Votes Cast.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL

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OTHER MATTERS

The Company knows of no other matters to be submitted at the Meeting.
If any other matters properly come before the Meeting, it is the intention of
the persons named in the enclosed proxy card to vote the shares they represent
as the Board of Directors may recommend.

By Order of the Board of Directors of

LASER PHOTONICS, INC.

By: /s/ Jeffrey F. O'Donnell
-------------------------------------
Jeffrey F. O'Donnell
Chief Executive Officer

Radnor, Pennsylvania
DATED: _______, 2000

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P R O X Y

LASER PHOTONICS, INC.

THIS PROXY IS BEING SOLICITED BY THE BOARD OF DIRECTORS

FOR AN ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY ___, 2000

THE UNDERSIGNED STOCKHOLDER APPOINTS JEFFREY F. O'DONNELL AND DENNIS
MCGRATH, OR EITHER OF THEM, AS PROXY WITH FULL POWER OF SUBSTITUTION, TO VOTE
THE SHARES OF VOTING SECURITIES OF LASER PHOTONICS, INC. (THE "COMPANY") WHICH
THE UNDERSIGNED IS ENTITLED TO VOTE AT THE ANNUAL MEETING OF STOCKHOLDERS TO BE
HELD AT _________________________________, ON JULY ___, 2000, AT 10:00 A.M.,
LOCAL TIME, AND AT ANY ADJOURNMENTS THEREOF, UPON MATTERS PROPERLY COMING BEFORE
THE MEETING, AS SET FORTH IN THE NOTICE OF ANNUAL MEETING AND PROXY STATEMENT,
BOTH OF WHICH HAVE BEEN RECEIVED BY THE UNDERSIGNED. WITHOUT OTHERWISE LIMITING
THE GENERAL AUTHORIZATION GIVEN HEREBY, SUCH PROXY IS INSTRUCTED TO VOTE AS
FOLLOWS:

THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO CONTRARY DIRECTION IS
INDICATED, WILL BE VOTED FOR THE PROPOSALS INDICATED ON THIS CARD AND AS
SUCH PROXIES DEEM ADVISABLE WITH DISCRETIONARY AUTHORITY ON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING AND ANY ADJOURNMENT OR
ADJOURNMENTS THEREOF.

(1) [ ] FOR ALL NOMINEES LISTED HEREIN (EXCEPT AS MARKED UP TO THE CONTRARY
BELOW).

[ ] WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES LISTED BELOW.

(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THE NOMINEE'S NAME LISTED BELOW)

WARWICK ALEX CHARLTON JEFFREY F. O'DONNELL JOHN J. MCATEE, JR.

ALAN R. NOVAK SAMUEL E. NAVARRO RICHARD DEPIANO

(2) TO ADOPT AND APPROVE A RESTATED CERTIFICATE OF INCORPORATION AND REVISED
BYLAWS OF THE COMPANY, WHICH GENERALLY HAVE THE EFFECT OF CERTAIN
PROCEDURAL CHANGES TO THE CERTIFICATE OF INCORPORATION AND BYLAWS,
INCLUDING, INCREASING THE MAXIMUM AUTHORIZED NUMBER OF DIRECTORS FROM SEVEN
(7) TO EIGHT (8), AND IN ADDITION, EXPAND THE RIGHTS OF INDEMNIFICATION OF
THE COMPANY'S DIRECTORS.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

(3) TO ADOPT AND APPROVE CERTAIN AMENDMENTS TO THE CERTIFICATE OF INCORPORATION
AND BYLAWS OF THE COMPANY, WHICH GENERALLY HAVE THE EFFECT OF ADOPTING
CERTAIN "ANTI-TAKEOVER" PROVISIONS IN CONNECTION WITH CHANGES OF CONTROL OF
THE COMPANY, INCLUDING, SUPERMAJORITY REQUIREMENTS OF 66 2/3% OF THE VOTING
POWER OF ALL ISSUED AND OUTSTANDING SHARES OF VOTING STOCK WITH RESPECT TO
THE AMENDMENT, CHANGE OR REPEAL OF CERTAIN PROVISIONS OF THE CERTIFICATE OF
INCORPORATION AND BYLAWS.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

(4) TO ADOPT AND APPROVE CERTAIN AMENDMENTS TO THE CERTIFICATE OF INCORPORATION
AND BYLAWS OF THE COMPANY, WHICH GENERALLY HAVE THE EFFECT OF DIVIDING THE
BOARD OF DIRECTORS INTO THREE (3) CLASSES TO BE ELECTED FOR SEPARATE TERMS
OF OFFICE.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

<PAGE>

(5) TO CONSIDER AND VOTE UPON AN AMENDMENT TO THE COMPANY'S CERTIFICATE OF
INCORPORATION TO INCREASE THE AUTHORIZED NUMBER OF SHARES OF COMMON STOCK
TO 50,000,000 SHARES OF THE COMPANY.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

(6) TO CONSIDER AND VOTE UPON AN AMENDMENT TO THE COMPANY'S CERTIFICATE OF
INCORPORATION TO AUTHORIZE A CLASS OF UP TO 5,000,000 SHARES OF PREFERRED
STOCK OF THE COMPANY.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

(7) TO CHANGE THE COMPANY'S NAME TO PHOTOMEDEX, INC.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

(8) TO ADOPT THE COMPANY'S 2000 STOCK OPTION PLAN (THE "2000 STOCK OPTION
PLAN") AND TO RESERVE UP TO 1,000,000 SHARES OF THE COMPANY'S COMMON STOCK
FOR ISSUANCE UNDER THE 2000 STOCK OPTION PLAN.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

(9) TO ADOPT THE COMPANY'S 2000 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN (THE "
NON-EMPLOYEE DIRECTOR PLAN") AND TO RESERVE UP TO 500,000 SHARES OF THE
COMPANY'S COMMON STOCK FOR ISSUANCE UNDER THE NON-EMPLOYEE DIRECTOR PLAN.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

<PAGE>

IN HIS DISCRETION, THE PROXY IS AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS
MAY PROPERLY COME BEFORE THE MEETING.

DATED: __________

SIGNATURE

SIGNATURE (IF HELD JOINTLY)

______________________
PRINT NAMES

(PLEASE SIGN EXACTLY AS YOUR NAME APPEARS HEREON.
WHEN SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR,
TRUSTEE OR GUARDIAN, PLEASE GIVE YOUR FULL TITLE.
IF SHARES ARE JOINTLY HELD, EACH HOLDER MUST SIGN.
IF A CORPORATION, PLEASE SIGN IN FULL CORPORATE
NAME BY PRESIDENT OR OTHER AUTHORIZED OFFICER. IF
A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY
AUTHORIZED PERSON).

PLEASE CHECK THE BOXES ABOVE, SIGN, DATE AND RETURN THIS PROXY TO AMERICAN STOCK
TRANSFER & TRUST CO., 40 WALL STREET, 46TH FLOOR, NEW YORK, NEW YORK 10005,
ATTN: PROXY SERVICES, IN THE SELF-ADDRESSED ENVELOPE PROVIDED.