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As filed with the Securities and Exchange Commission on September 27, 1996
REGISTRATION NO. 333-03765
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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Amendment No. 1 to
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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SUMMIT TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 04-287945
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
21 HICKORY DRIVE
WALTHAM, MASSACHUSETTS 02154
(617) 890-1234
(Address, of principal executive offices, including zip code)
PETER E. LITMAN
Executive Vice President and General Counsel
Summit Technology, Inc.
21 Hickory Drive
Waltham, Massachusetts 02154
(617) 890-1234
(Name and address, including zip code, and telephone
number, including area code, of agent for service)
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Approximate date of commencement of proposed sale to the public: From time to
time after the effectiveness of the Registration Statement.
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement under the earlier
effective registration statement for the same offering. [ ]
If this form is a post effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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PROSPECTUS
SUMMIT TECHNOLOGY, INC.
COMMON STOCK
1,708,500 SHARES
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All of the shares of Summit Technology, Inc. (the "Company") Common
Stock, par value $.01 per share (the "Common Stock"), offered hereby are being
sold by the holders of the Common Stock named herein under "Selling
Stockholders" (the "Selling Stockholders"). The outstanding Common Stock of
the Company is quoted on the Nasdaq National Market ("NNM") under the symbol
"BEAM." On September 26, 1996, the last reported sale price of the Common Stock
on the NNM was $6.00 per share.
The Company will not receive any of the proceeds from the sale of the
Common Stock. Any or all of such Common Stock covered by this Prospectus may
be sold, from time to time, by means of ordinary brokerage transactions or
otherwise. See "Plan of Distribution."
PROSPECTIVE INVESTORS SHOULD CONSIDER CAREFULLY THE INFORMATION SET
FORTH UNDER "RISK FACTORS" BEGINNING ON PAGE 2.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
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The Selling Stockholders named herein, or any pledgees, donees,
transferees or other successors in interest, directly, through agents to be
designated from time to time, or through dealers or underwriters also to be
designated, may sell the Common Stock from time to time in one or more
transactions in the over-the-counter market and in negotiated transactions, on
terms to be determined at the time of sale. To the extent required, the
specific Common Stock to be sold, the names of the Selling Stockholders, the
respective purchase prices and public offering prices, the names of any such
agent, dealer or underwriter, and any applicable commissions or discounts with
respect to a particular offer will be set forth in any accompanying Prospectus
Supplement or, if appropriate, a post-effective amendment to the Registration
Statement of which this Prospectus is a part. See "Plan of Distribution." By
agreement, the Company will pay all the expenses of the registration of the
Common Stock by the Selling Stockholders other than underwriting discounts and
commissions and transfer taxes, if any. Such expenses to be borne by the
Company are estimated at $47,000.
The Selling Stockholders and any broker-dealers, agents or
underwriters that participate with the Selling Stockholders in the distribution
of the Common Stock may be deemed to be "underwriters" within the meaning of
the Securities Act of 1933, as amended (the "Securities Act"), and any
commissions received by them and any profit on the resale of the Common Stock
purchased by them may be deemed underwriting commissions or discounts under the
1933 Act.
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The date of this Prospectus is September 27, 1996.
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RISK FACTORS
In addition to the information contained elsewhere in this Prospectus,
prospective investors should carefully consider the following risk factors
before purchasing the securities offered hereby.
Absence of Profitability; Possible Future Losses. The Company has
experienced losses in each year of operation since inception in 1986, except
for a modest profit in 1991. For the year ended December 31, 1995, the Company
incurred a net loss of $3.5 million, bringing its accumulated deficit to $33.5
million as of December 31, 1995. To implement its commercialization strategy,
the Company is making significant expenditures including expenditures in
connection with the marketing and operating of vision correction centers
("Vision Correction Centers"). A decrease in U.S. demand for the Company's
laser systems, continued competition, expenses relating to the opening of
Vision Correction Centers, initial operating losses experienced by such
Centers, and operating losses experienced in the Company's equipment business
all contributed to a significant loss for the second quarter of 1996. The
Company believes quarterly revenues are likely to remain unpredictable, and
there can be no assurances as to if, or when, the Company will achieve
long-term profitability and growth.
Competition. The vision correction industry is subject to intense
competition. Laser Vision Correction ("LVC") competes with eyeglasses, contact
lenses and radial keratotomy, as well as with other technologies and surgical
techniques currently under development, such as corneal implants and surgery
using different types of lasers. Certain of the Company's competitors may have
greater financial resources than the Company, which may enable them to market
their products or procedures to the consumer and to the ophthalmic community in
a more effective manner. The success of any competitive alternatives to LVC
would have a material adverse effect on the Company's business, financial
condition and results of operations.
The Company is aware of a number of businesses that have been formed
to provide U.S. consumers with treatment for nearsightedness using LVC, and
others may be formed. These providers of LVC will compete with the Vision
Correction Centers and may have greater financial resources than the Company
and/or may be or become more experienced in profitably performing LVC. The
Company's Vision Correction Centers also may compete with hospitals, clinics
and private ophthalmologists to the extent such providers perform LVC within
the same geographic areas as a Vision Correction Center. The success of these
providers of LVC using the Company's or similar products in capturing the
market for LVC could have a material adverse effect on the Company's business,
financial condition and results of operations.
The Company's excimer laser system ("Excimer System") currently
competes with other manufacturers' excimer laser systems sold in the U.S. and
abroad. On October 2, 1995 VISX, Incorporated ("VISX") announced that it had
received FDA approval to commercially market its excimer laser system for
phototherapeutic keratectomy ("PTK") and on March 27, 1996 VISX announced that
its premarket approval application for its excimer laser system for LVC to
treat nearsightedness was approved by the FDA. Neither the Company's Excimer
System nor VISX's excimer system have been approved by the FDA for treating
high myopia, astigmatism or hyperopia (and there can be no assurance that
either will ever be approved for such.) Were one system to be approved by the
FDA for any of such indications before the other, a competitive advantage would
arise. On August 26, 1996, VISX announced that it had submitted a premarket
approval supplement to the FDA requesting approval to treat 1.0D to 6.0D of
myopia with .75D to 4.50D of myopic astigmatism. The Company's Excimer System,
as currently being marketed in the U.S., will require hardware modification to
permit treatment of astigmatism and hyperopia with the Company's emphasis(R)
erodible mask, a single-use polymer disk developed by the Company to perform
LVC. VISX has indicated that its System, as currently approved in the U.S.,
does not require a hardware modification to permit treatment of astigmatism.
The version of the Excimer System currently sold by the Company internationally
treats moderate and high myopia, astigmatism and hyperopia without the need for
any hardware modifications. During the second quarter
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of 1996, VISX distributed excimer systems in the U.S. without the software
"locks" that would prevent their use for treating astigmatism and high myopia.
The Company believes VISX has now ceased this practice. The perception that
VISX's system does not require a hardware modification to treat astigmatism may
give rise to a competitive advantage. Sales by VISX of their excimer laser
systems during the second quarter of 1996 adversely affected the Company's
revenues and contributed to the loss for that quarter. There can be no
assurance that this trend will not continue. Additionally, competitors, both in
the U.S. and abroad, may enter the equipment manufacturing business or acquire
existing companies. Competing manufacturers of excimer laser systems may have
greater financial resources than the Company, may be able to offer their
products at a lower cost or may develop procedures that involve a lower per
procedure cost. Competition from new entrants may be particularly prevalent in
those countries where significant regulatory approvals are not required.
The Company is aware that certain U.S. physicians are performing
refractive procedures in the U.S. with used Excimer Systems purchased from
overseas third parties at prices below those charged by the Company for new
U.S. systems. These "grey market" systems do not conform to the specifications
required by the FDA and have been classified by the FDA as "adulterated" in an
FDA Import Alert dated February 23, 1996. The alert authorizes detention of
such systems without inspection at customs. The Company is also aware that
certain U.S. ophthalmologists are performing refractive procedures in the U.S.
with so-called "homemade" excimer lasers that have not been the subject of any
FDA-approved clinical testing. The Company believes that these lasers, which
generally sell for less than the Company's Excimer Systems, are also
adulterated within the meaning of the Federal Food, Drug and Cosmetic Act ("FDC
Act"). These grey market laser systems and homemade laser systems are
adversely affecting the Company's U.S. system sales. The Company believes that
the FDA is investigating the parties involved in grey market and homemade laser
activities, and is hopeful that regulatory action to curb these activities may
be forthcoming, although there can be no assurance of such regulatory action.
The users of the grey market laser systems and homemade laser systems are not
licensed under patents held by Pillar Point Partners (a partnership formed by
Summit and VISX) and have not been paying licensing fees. Accordingly, Pillar
Point Partners is pursuing patent infringement litigation against certain of
such users. In addition, the Company is pursuing litigation against certain
other parties involved in grey market activities, including an importer, a
service provider and certain ophthalmologists. There can be no assurance that
these lawsuits will be successful in curbing the use of grey market and
homemade lasers in the U.S., or that these systems will not proliferate. The
FDA has granted an Investigational Device Exemption ("IDE") for at least one
such system, and has indicated a willingness to grant IDEs to others.
Uncertain Market Acceptance. The Company believes that its
profitability and growth depend upon broad acceptance of LVC in the U.S.
There can be no assurance that LVC will be broadly accepted by either the
ophthalmic community or the general population as an alternative to existing
methods of treating refractive vision disorders. The acceptance of LVC may be
affected adversely by its cost (estimated to be between $1,250 and $2,000 per
eye), concerns relating to its safety and efficacy, the lack of third party
reimbursement for LVC, general resistance to surgery, the effectiveness of
alternative methods of correcting refractive vision disorders, the lack of
long-term follow-up data, the possibility of unknown side effects and the cost
of the Company's Excimer Laser System. Promotional efforts by suppliers of
products or procedures which are alternatives to LVC, including eyeglasses and
contact lenses, some of whom may have greater resources than the Company, may
also affect adversely the market acceptance of LVC. The Company believes a
significant number of ophthalmologists and other potential laser system
customers are continuing to evaluate the demand for LVC in the U.S.
marketplace. Many of these potential customers have elected to defer
acquisition of systems or have formed groups to share or acquire a single
system. This contributed to weak laser system sales in the second quarter of
1996 and there can be no assurance it will not continue. Even if broad
acceptance of LVC does occur, laser system sales may be negatively impacted by
competition, patent disputes, changing technologies and delays in regulatory
approvals. Participation in per-procedure royalties may
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be negatively impacted by challenges to Pillar Point Partners, the Company's
patents and/or the investigation by the Federal Trade Commission (the "FTC")
regarding Pillar Point Partners, VISX and the Company. The Company's failure to
achieve broad market acceptance of LVC is likely to have a material adverse
effect on the Company's business financial condition and results of operations.
Uncertainty of New Business Venture. The Company's three LVC centers
operating in the U.K. have incurred operating losses since their inception in
1992 and have been discontinued. During the second quarter of 1996, the
Company had 14 Vision Correction Centers in operation (of which 10 were open at
the beginning of the quarter). These Centers generated aggregate second
quarter revenues of approximately $600,000 and all sustained operating losses.
To date, the Company has opened 19 Vision Correction Centers in the U.S., all
of which have sustained initial operating losses. The Company anticipates
incurring significant ongoing expenses in connection with such Centers
including marketing, public relations, leasing costs, personnel and training
costs. As a result, the Company anticipates a loss for the year in the Vision
Correction Centers. The success of the Vision Correction Centers will depend
on the market acceptance of LVC. The Company has limited experience in the
operation of such centers and the marketing of LVC directly to consumers. The
Company believes establishment of the Vision Correction Centers has had, and
may in the future have, a negative impact on the Company's relationship with
certain ophthalmologists, who regard the Vision Correction Centers as a
potential competitive threat.
State and local laws and regulations relating to the Company's
operation of the Vision Correction Centers, which vary significantly from state
to state, may make it difficult or impossible for the Company to open or
profitably operate Vision Correction Centers in certain jurisdictions. The
Company currently does not anticipate opening Vision Correction Centers in
every state. In order to comply with these diverse regulatory frameworks, the
Company will be required to adopt varying strategies to establish and operate
its Vision Correction Centers in different states, which will increase its
costs of doing business. Any changes in the regulatory framework in any one or
more states could cause delays in the Company's operation of the Vision
Correction Centers in such states, or make continued operation unprofitable.
Continued significant marketing and operating expenditures and lack of
broad market acceptance of LVC in the U.S. could prevent the Vision Correction
Centers from becoming profitable. There can be no assurance that the Vision
Correction Centers will at any time become profitable. Failure of the Vision
Correction Centers to become profitable may have a material adverse effect on
the Company's business, financial condition and results of operations.
Patent Concerns. There are a number of U.S. and foreign patents
covering methods and apparatus for performing corneal surgery with excimer
lasers and holmium lasers that are not owned by the Company. If patents held
by others were considered valid and interpreted broadly in an adversarial
proceeding, they could be deemed to cover one or more aspects of the Excimer
Systems or the Company's holmium laser systems or their use to perform one or
more procedures. While the Company either owns or has obtained from Pillar
Point Partners a license to what it believes are the important U.S. LVC
patents, there can be no assurance that the Company will not be subject to one
or more claims for infringement.
In the event one of the Company's products is adjudged to infringe a
patent in a particular market with the likely consequence of a damage award,
the Company and its customers may be enjoined from making, using and selling
such products in such market or be required to obtain a royalty-bearing
license, if available on acceptable terms. Alternatively, in the event a
license is not offered, the Company might be required to redesign those aspects
of the products held to infringe so as to avoid infringement. Any redesign
efforts undertaken by the Company might be expensive and could necessitate
review by the United States Food and Drug Administration ("FDA"). Furthermore,
they could delay the reintroduction of the Company's products into certain
markets, or may be so significant as to be impractical. If redesign
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efforts were impractical, the Company could be prevented from manufacturing and
selling the infringing products, which would have a material adverse effect on
the Company's business, financial condition and results of operations.
Failure to maintain the protection afforded by certain of the
Company's patents and the patents licensed to the Company and VISX by Pillar
Point Partners would have a material adverse effect on the Company's future
revenues and earnings. Further, there can be no assurance that the Company's
patents (or those licensed from Pillar Point Partners) will ultimately be found
to be valid, or that the Company's patent rights (or those licensed from Pillar
Point Partners) will deter others from developing substantially equivalent or
competitive products. Even if an unlicensed competitor's products infringe
upon the Company's patents or those of Pillar Point Partners, it may be costly
to enforce such rights. An infringement action may require the diversion of
funds from the Company's operations and may require management to expend effort
that might otherwise be devoted to the Company's operations. Furthermore,
there can be no assurance that the Company or Pillar Point Partners will be
successful in enforcing its patent rights. Any failure by the Company or
Pillar Point Partners to prevail in patent infringement actions against others,
or any success by another company in enforcing a patent infringement claim
against the Company, could have a material adverse effect on the Company's
business, financial condition and results of operations.
On August 29, 1995, the Company filed suit in the U.S. District Court
for the District of Delaware against VISX for infringement of a certain U.S.
patent with a priority date of 1985, which was purchased by the Company in 1993
("the Azema Patent"). The Company is seeking damages for past infringement for
all excimer lasers manufactured by VISX in the U.S. for use outside the U.S.
In addition, the Company is seeking to enjoin VISX from manufacturing and
selling excimer lasers for any purpose other than U.S. clinical trials. On
October 10, 1995, VISX filed an answer to the Company's complaint. There can
be no assurance that the Company will prevail in this proceeding.
On September 5, 1995, VISX sued the Company and eight Canadian
ophthalmologists who use or have used the Company's Excimer System, in the
Federal Court of Canada, Trial Division, asserting that the Excimer System
infringed certain Canadian patents held by VISX. In such suit, VISX seeks,
among other things, damages for past infringement and a permanent injunction
preventing the Company and the other defendants from manufacturing, marketing,
selling, using and inducing others to use the Excimer System in Canada. The
Company believes that it has valid defenses to VISX's suit and intends to
defend such action vigorously; however, there can be no assurance that the
Company will be successful. The Company does not believe that the Canadian
market is material to its business. There can be no assurance that additional
patent infringement claims in the United States or in other countries will not
be asserted against the Company, or, if asserted, that the Company will be
successful in defending against such claims.
Risks of Pillar Point Partners. There can be no assurance that the
agreements between the Company and VISX relating to Pillar Point Partners will
preclude patent disputes with VISX with respect to technology not included in
Pillar Point Partners in the U.S. or with respect to any technology outside the
U.S., or that the Company's activities will not infringe patents held by other
parties. Under the agreements establishing Pillar Point Partners, the Company
must pay Pillar Point Partners a royalty fee each time its Excimer System is
used to perform LVC in the U.S., regardless of whether the Company performs the
procedure. The Company intends to maintain contractual arrangements permitting
it to collect such royalty fees from purchasers of its Excimer Systems, but
there can be no assurance that it will be able to collect such fees. The
Company and VISX have had disputes relating to Pillar Point Partners, including
disputes concerning royalty payments that may be due from Summit. The Company
and VISX have engaged in discussions in an attempt to resolve these disputes.
On August 28, 1996, an affiliate of VISX, purporting to act on behalf
of Pillar Point Partners, commenced a lawsuit against the Company in the United
States District Court for the District of
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Massachusetts. The suit alleges that the Company owes equipment royalties to
Pillar Point Partners of not less than $4.5 million together with interest,
costs and attorneys' fees. The Company disagrees with these allegations and
intends to contest them vigorously. However, there can be no assurance that
the lawsuit will be resolved in the Company's favor or that an adverse judgment
or settlement would not have a material adverse affect on the results of
operations of the Company in the period in which it occurs.
On October 13, 1995, the Company received notice that the FTC
initiated an investigation to determine whether Pillar Point Partners, VISX,
the Company or any of their predecessors, alone or in conjunction with others,
is engaging or has engaged in any unfair methods of competition in violation of
the Federal Trade Commission Act, relating to certain arrangements concerning
patents on devices and procedures, and or/practices relating to the sale or
distribution of certain ophthalmic surgical devices. The FTC issued a subpoena
requiring the Company to produce certain materials and information relating to
the subject matter of the investigation. In June 1996, a Texas
ophthalmologist, Robert G. Burlingame, sued Pillar Point, VISX, the Company
and certain affiliates of VISX and the Company in the Federal District Court
for the Northern District of California alleging that the defendants have
violated and are violating federal and state antitrust laws. The plaintiff
seeks damages of an unspecified amount, treble damages, attorneys' fees and a
permanent injunction against future violations. On September 5, 1996, a Nevada
ophthalmologist, John R. Shepard, through his professional corporation,
commenced a similar lawsuit against the same parties, in the same Court,
alleging substantially similar claims and seeking substantially similar relief.
Pillar Point has stated that it believes the California lawsuits are without
merit. In forming Pillar Point Partners, the Company has taken measures to
structure the partnership in a manner consistent with U.S. antitrust laws. The
compliance of Pillar Point Partners with these laws may depend upon the
activities of the partners, a determination of what constitutes the relevant
market for purposes of such laws, the number and relative strength of
competitors in such markets and numerous other factors, many of which are
presently unknown or are beyond the control of Pillar Point Partners. There
can be no assurance that the FTC's investigation will conclude that Pillar
Point Partners complies with U.S. antitrust laws or that the California lawsuit
will not result in a finding of liability. The Company is accordingly unable
to predict whether or not, or when, any proceeding may be brought by the FTC
following such investigation, or the scope of relief, if any, that may
ultimately be ordered in the event that any such proceeding were determined
adversely to the Company and/or Pillar Point Partners.
In March 1995, Pillar Point Partners sued LaserSight, Inc. for patent
infringement in the Federal District Court for Delaware. Although the suit is
based on a patent licensed to Pillar Point Partners by VISX, the Company will
share in the expenses of this litigation. In addition, the defendant,
LaserSight, Inc., has entered a declaratory judgment counterclaim challenging
Pillar Point Partners' ability to enforce its rights under one of its patents,
which counterclaim asserts, among other things, that the alleged pooling of
patents by Pillar Point Partners constitutes patent misuse. Any successful
challenge to the structure and operation of Pillar Point Partners or to its
patents could have a material adverse effect on the Company's business,
financial condition and results of operations.
Risks Associated with Lens Express. On May 15, 1996, the Company
acquired Lens Express, Inc. ("Lens"), a mail order distributor of replacement
contact lenses and related products to consumers. The operations of Lens could
be adversely affected by certain risks beyond its control, including: (i) lack
of consistent sources of supply, (ii) state regulations and (iii) competition
from other contact lens providers. Because some contact lens manufacturers have
refused to sell contact lenses directly to Lens, Lens must from time to time
obtain product through indirect channels. There can be no assurance that Lens
will continue to be able to obtain product through indirect channels at the
times and in the quantities it requires. If Lens is unable to obtain product
from indirect suppliers, or is forced to do so on unfavorable terms, Lens'
sales and/or profitability could be adversely affected. Lens' operations are
subject to numerous state laws and regulations concerning the dispensing of
replacement contact lenses. While some states impose little or no specific
regulation of mail order dispensing of replacement contact lenses, other states
have stricter requirements, and one state prohibits mail order contact lens
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dispensing altogether. Burdensome regulatory requirements imposed by certain
states, such as prohibiting dispensing of replacement lenses prior to receipt
of a written prescription, make it more difficult and expensive for Lens to
sell replacement contact lenses in such states. There can be no assurance that
other states will not enact or impose laws or regulations that prohibit mail
order dispensing of replacement contact lenses or otherwise impair Lens'
ability to sell lenses and operate profitably. In addition, the contact lens
dispensing industry is subject to intense competition. There can be no
assurance that Lens Express will not lose market share to other contact lens
providers electing to pursue a marketing strategy which, like that of Lens,
emphasizes convenience and price, or to discount chains, wholesale clubs and
other competitors.
On October 26, 1992, Joseph Seriani brought suit against Lens and
certain of its former shareholders in the Florida Circuit Court. The suit
alleges violations of the Florida Civil Remedies for Criminal Practices Act -
the Florida civil RICO statute - based on events which allegedly occurred in
the mid-1980s. Seriani's claims against Lens have been dismissed several times
for failure to state a viable claim, but in each instance with leave to amend
and refile. On May 15, 1996, the date of the Company's acquisition of Lens,
Seriani and his wife Rhonda Seriani filed, but have yet to serve on the
Company, an amended complaint which includes the Company as an additional
defendant. The amended Seriani complaint alleges, among other things, that the
Company is liable for the alleged actions of the other defendants by virtue of
its acquisition of Lens. The amended Seriani complaint seeks damages of an
unspecified amount, treble damages and attorneys' fees. Lens' current motion
to dismiss the suit is presently pending. The Company believes the Serianis'
suit against the Company and Lens is without merit and intends to contest it
vigorously.
Safety and Efficacy Concerns. Concerns with respect to the safety
and efficacy of the Company's Excimer System to perform LVC include
predictability and stability of results. Potential complications and side
effects include: post-operative discomfort (which can include pain, itching,
tearing and dryness of the eye); corneal haze during healing (an increase in
the light scattering properties of the cornea); glare/halos (undesirable visual
sensations produced by bright lights); decreases in contrast sensitivity (which
can lead to night vision difficulties); temporary increase in intraocular
pressure and/or pupil enlargement in reaction to post-procedure medication;
modest fluctuations in refractive capabilities during healing; modest decreases
in best corrected vision (i.e., vision with corrective eyewear); unintended
over- or under-corrections; disorders of corneal healing (including so-called
"central islands"); corneal scars; corneal ulcers; induced regular or irregular
astigmatism (which may cause blurred or double vision and/or shadow images);
drooping of the eyelid; and iris inflammation. There can be no assurance that
long-term follow-up data will not reveal additional complications that may have
a material adverse effect on acceptance of LVC which in turn would have a
material adverse effect on the Company's business, financial condition and
results of operations.
Possible Failure to Obtain Regulatory Approvals for Products. The
Company's Excimer Systems and related disposables are regulated as medical
devices by the FDA under the Federal Food, Drug, and Cosmetic Act ("FDC Act").
As such, these devices require premarket clearance or premarket approval
("PMA") by the FDA prior to commercialization in the U.S. The PMA approval
process (and underlying clinical studies) is lengthy and uncertain and requires
substantial commitments of the Company's financial resources and management's
time and effort. Delays in obtaining or failure to obtain required regulatory
approvals or clearances in the U.S. and other countries would prevent the
marketing of the Excimer System and other devices and impair the Company's
ability to generate funds from operations, which in turn would have a material
adverse effect on the Company's business, financial condition and results of
operations. There can be no assurance that the Company will be able to obtain
premarket approvals or premarket clearances in the U.S. or certain foreign
countries for intended uses of its Excimer Systems, or any of its other devices
for which the Company seeks approvals or clearances.
The Company believes that the Excimer System requires a PMA or PMA
supplement for each of the surgical procedures which it is intended to perform,
including PTK, LVC and Laser Assisted in situ
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Keratomileusis ("LASIK"). The FDA may grant premarket approval with respect to
a particular procedure performed with the Excimer System only when it is
satisfied that the use of the device for that particular procedure is safe and
effective. In granting premarket approval, the FDA may restrict the types of
patients who may be treated, thereby limiting the market acceptance of the
Excimer System. The FDA may grant approval of the Excimer System for use with
certain procedures but not others. Modifications to a device that is the
subject of an approved PMA, its labeling, or manufacturing process may require
approval by the FDA of PMA supplements or new PMAs. The Company has made
certain minor manufacturing changes to the Excimer System since the device was
approved by the FDA for PTK. Although the Company believes such changes are
minimal and do not require the filing of a PMA supplement or prior approval by
the FDA, there can be no assurance that the FDA would not require the Company
to file a PMA supplement, which would result in additional costs and delays in
marketing the modified device. Supplements to a PMA often require the
submission of the same type of information required for an initial PMA, except
that the supplement is generally limited to that information needed to support
the proposed change from the product covered by the original PMA.
On September 15, 1995, the Company received an Approvable Letter from
the FDA for the Company's PMA for use of the Excimer System in the U.S. to
treat nearsightedness using LVC. The Approvable Letter contained the final
conditions and product labeling requirements that the Company must satisfy
prior to the FDA's approval of the PMA. The Approvable Letter also required
the initiation of postmarket studies ("PMS") and surveillance. The data
generated by the PMS studies will be reviewed by the FDA in determining whether
future restrictions on device labeling are warranted. The Company received
from the FDA an Approval Letter dated October 20, 1995 for the Company's PMA
for use of the Excimer System in the U.S. to treat between 1.5D and 7.0D of
myopia using LVC. The Approval Letter authorizes the Company to commercially
distribute the device for its approved indications in the U.S. The Approval
Letter also places certain restrictions on the use, labeling, promotion and
advertising of the device and requires the Company to notify purchasers and
users of these restrictions. The restrictions concern, generally, the use of
the device only by trained practitioners, the information that must be provided
to prospective patients, and the inclusion of specified indications, risks and
benefits in all promotion and advertising for use of the Excimer System using
LVC.
The FDC Act authorizes any interested person to petition for
administrative review of the FDA's decision to approve the Company's PMA
application. Any such petition must be submitted by September 16, 1996. A
petitioner may request either a formal FDA administrative hearing or a review
of the PMA application and the agency's action by an independent advisory
committee of experts. The petitioner must submit supporting data and
information showing that there is a genuine and substantial issue of material
fact for resolution through administrative review. After reviewing the
petition, the agency decides whether to grant or deny the petition and
publishes a notice of its decision in the Federal Register. If the FDA grants
the petition, the notice will state the issue to be reviewed, the form of the
review to be used, the persons who may participate in the review, the time and
place where the review will occur, and other details. Challenges to an FDA
approval of a PMA application since enactment of the Medical Device Amendments
of 1976 on May 28, 1976 have been rare and, to the Company's knowledge, no PMA
application has ever been revoked by the agency based on such a challenge. The
Company is aware that at least one person has filed a petition with the FDA
calling for reconsideration of the FDA's approval of the Company's PMA for its
Excimer System as described above. If the FDA were to grant such a petition,
the Company could continue to market the device during the agency's
deliberations. If, however, the FDA, after a hearing, were to revoke its
approval of the Company's PMA application, the Company would be required to
cease marketing the device. Such an FDA action would have a material adverse
effect on the Company's business, financial condition, and results of
operations.
The Company has obtained FDA approval to conduct several additional
studies involving subsets of patients under the Company's IDEs for LVC. The
Company received FDA approval to initiate Phase III toric astigmatism trials on
April 12, 1996 and these U.S. clinical trials are now under way. In addition,
the Company is engaged in ongoing U.S. trials of its emphasis(R) erodible mask,
a single-use
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<PAGE> 10
polymer disc developed by the Company to perform LVC ("Erodible Mask"). There
can be no assurance that the device will be shown to be safe and effective, or
that it will be approved or cleared by FDA or foreign bodies, for the intended
uses for which it is being investigated.
In June 1992, the Company was granted 510(k) premarket clearance for
its holmium laser system ("Holmium System") and a related disposable hand-held
probe for performing Laser Sclerostomy ("LS"). In June 1993, the Company was
granted premarket clearance for a second hand-held tip for performing LS. If
the Company makes any modification to its cleared Holmium System or probes that
constitutes a major change to the intended use of the device or that could
significantly affect the safety or effectiveness of the device, the Company
will be required to file a new 510(k), or potentially a PMA, for the
modification. The Company believes that PMA approval is necessary to market
the Holmium System for performing Laser Thermal Keratoplasty ("LTK"). The
Company received approval from the FDA to conduct IDE studies of the Holmium
System using LTK to treat hyperopia and astigmatism, but has elected to
discontinue these studies.
Any products manufactured or distributed by the Company pursuant to a
premarket clearance notification or PMA are or will be subject to pervasive and
continuing regulation by the FDA. The FDC Act also requires the Company to
manufacture its products in registered establishments and in accordance with
its Good Manufacturing Practices ("GMP") regulations and to list its devices
with FDA. The Company's facilities in the U.S. and Ireland are subject to
periodic GMP inspections by the FDA. These regulations impose certain
procedural and documentation requirements upon the Company with respect to
manufacturing and quality assurance activities. The FDA has proposed changes
to the GMP regulations which will likely increase the cost of compliance with
GMP requirements. Labeling and promotional activities are subject to scrutiny
by the FDA and, in certain instances, by the Federal Trade Commission. Current
FDA enforcement policy prohibits the marketing of approved medical devices for
unapproved uses. Noncompliance with applicable requirements can result in,
among other things, fines, injunctions, civil penalties, recall or seizure of
products, total or partial suspension of production, denial or withdrawal of
premarket clearance or approval of devices, recommendation by the FDA that the
Company may not be allowed to enter into government contracts and criminal
prosecution. The FDA also has the authority to request the repair, replacement
or refund of the cost of any device manufactured or distributed by the Company.
The Company believes its relations with the FDA are good. However, there can
be no assurance that the departures from the Company of David F. Muller and
Kimberley A. Doney (see "Subsequent Events"), who were responsible for the
Company's relations with the FDA, will not adversely affect the Company's
ability to accomplish its regulatory goals. Changes in the existing regulatory
environment, changes in existing regulatory requirements or adoption of new
requirements could have a material adverse effect on the Company's business,
financial condition and results of operations. There can be no assurance that
the Company will not be required to incur significant costs to comply with laws
and regulations in the future or that laws and regulations will not have a
material adverse effect upon the Company's business, financial condition or
results of operations. All lasers manufactured by the Company are subject to
the Radiation Control for Health and Safety Act administered by the Center for
Devices and Radiological Health of the FDA which imposes record keeping,
reporting and safety requirements on manufacturers of lasers.
Furthermore, the introduction of the Company's products in foreign
countries may require obtaining foreign regulatory clearances. Sales of the
Company's products are currently unrestricted in approximately 40 countries.
Sales of the Company's laser systems are limited in several countries in
addition to the U.S., including Japan and Mexico. There can be no assurances
that the Company will be able to obtain regulatory clearances for its products
in the U.S. or foreign markets.
Manufacturing Concerns. The Company currently purchases certain
components used in the manufacture of the Excimer Systems from only one of the
available suppliers. If such supplier were to cease providing components to the
Company, the Company would be required to locate and contact with a substitute
supplier, and there can be no assurances that such substitute supplier could be
located in a
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<PAGE> 11
timely manner, or could provide required components on commercially reasonable
terms. A failure to increase production volumes in a cost-effective or timely
manner, or any interruption in the manufacturing of Excimer Systems, would have
a material adverse effect on the Company's business, financial condition and
results of operations.
Potential Liability Claims and Uninsured Risks; Limited Insurance.
The testing and use of human health care products entails an inherent risk of
physical injury to patients and physicians, and exposes the manufacturer to
potential product liability and other damage claims. In addition, the
Company's products include high voltage power supplies. While the Company
maintains product liability insurance with coverage of $5.0 million per
occurrence and an annual aggregate maximum of $5.0 million, as well as
liability coverage of $10 million per occurrence for its Vision Correction
Centers, with an aggregate annual maximum of $10 million, and $2 million of
liability coverage for Lens, there can be no assurance that any product
liability claim assessed against the Company would not exceed its insurance
coverage. There can be no assurance that adequate product liability insurance
will continue to be available, either at existing or increased levels of
coverage, on commercially reasonable terms, if at all, and that the Company's
existing insurance will be adequate to cover any future claims that may be
made. Even if a claim against the Company is covered by insurance, the costs
of defending a product liability, malpractice, negligence or other action,
and/or the assessment of damages in excess of insurance coverage, could have a
material adverse effect on the Company's business, financial condition and
results operations.
Volatility of Stock Price. The market price of the Company's Common
Stock historically has been volatile. Factors such as announcements of
technological innovations or new products by the Company or its competitors,
changes in domestic or foreign governmental regulations or regulatory approval
processes, developments or disputes relating to patent or proprietary rights
and public concern as to the safety and efficacy of the procedures for which
the Excimer System is used, has and may continue to have a significant impact
on the market price of the Common Stock. Moreover, the possibility exists that
the stock market (and in particular the securities of technology companies such
as the Company) could experience extreme price and volume fluctuations
unrelated to operating performance.
Certain Anti-takeover Provisions of the Company's Charter and By-Laws.
The Company's Articles of Organization and By-Laws, as well as certain state
statutes, contain provisions that could have the effect of discouraging persons
from pursuing a non-negotiated takeover of the Company and preventing certain
changes of control. The Company's Articles of Organization and By-Laws fix the
number of directors at five and provide for the election of directors to
staggered, three-year terms. The Company has authorized 5,000,000 shares of
preferred stock, $.01 par value, which could be issued with rights senior to
the Common Stock and once issued would impose various procedural and other
requirements that could make it more difficult for stockholders to effect
certain corporate actions. In addition, the Company has adopted a
shareholders' rights plan providing for discount purchase rights to the holders
of Common Stock upon certain acquisitions of the Company's Common Stock. These
provisions, together with the shareholders' rights plan, may discourage a third
party from attempting to acquire control of the Company and may lower the price
that an investor may be willing to pay for shares of the Company's Common
Stock.
Shareholder Securities Law Class Action Litigation. Between August 2,
1996 and September 26, 1996, ten actions were commenced against the Company
and, in some instances, against certain of its officers in the United States
District Court for the District of Massachusetts. The actions are the
following:
Pearl v. Summit Technology, Inc. et al., Civil Action No. 96-11589-JLT
Locke et al. v. Summit Technology, Inc. et al., Civil Action No.
96-11633-JLT
Kaliser et al. v. Summit Technology, Inc. et al., Civil Action No.
96-11647-JLT
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<PAGE> 12
Kleiman v. Summit Technology, Inc. et al., Civil Action No.
96-11648-JLT
Raphael v. Summit Technology, Inc. et al., Civil Action No.
96-11664-JLT
Grover v. Summit Technology, Inc. et al., Civil Action No.
96-11731-JLT
Shear et al. v. Summit Technology, Inc. et al., Civil Action No.
96-11747-JLT
Kaye v. Summit Technology, Inc., et al., Civil Action No. 96-11809-JLT
Markewich et al. v. Summit Technology, Inc., et al., Civil Action No.
96-11845-JLT
Teachers' Retirement System of Louisiana v. Summit Technology, Inc.,
et al., Civil Action No.96-11899 JLT
Copies of the complaints in these actions are filed as Exhibits to the
Registration Statement of which this Prospectus is a part.
Plaintiffs in these actions claim to have been purchasers of the
Company's common stock at various times between August, 1995 and July, 1996.
Plaintiffs claim violations of Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934 arising out of allegedly false and misleading public
statements made by the Company or its officers which plaintiffs allege
artificially inflated the market price of the Company's stock. Plaintiffs
claim that these public statements made material misrepresentations of fact, or
failed to disclose material information necessary to make statements made not
misleading, concerning a wide variety of matters -- including, for example, the
alleged inflation of the Company's publicly reported revenues and earnings
through the sale of laser systems for uses beyond FDA approval; the alleged
obtaining of FDA approval, for the Company's Excimer System on the basis of
flawed clinical data, the alleged adverse side effects of use of the Company's
laser products, the alleged size of the market for LVC systems and procedures
in the United States, the alleged competitive position (including cost, quality
and safety) of the Company's Excimer System compared with excimer systems under
development or sold by competitors, and the alleged position of LVC procedures
compared with competitive procedures for vision correction. Among the
statements which plaintiffs claim to have been misleading or to have unlawfully
omitted material information are statements contained in a number of the
Company's filings with the SEC pursuant to the reporting and other requirements
of the Securities Exchange Act of 1934 or other provisions of federal
securities laws. Such filings include:
The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994
The Company's Quarterly Report on Form 10-Q for the quarterly period
ended March 31, 1995
The Company's Preliminary Registration Statement on Form S-3 dated
September 19, 1995
The Company's Quarterly Report on Form 10-Q for the quarterly period
ended September 30, 1995
The Company's Registration Statement on Form S-3 dated October 23,
1995
The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995
The Company's Quarterly Report on Form 10-Q for the quarterly period
ended March 31, 1996
The Company's Preliminary Registration Statement on Form S-3 dated May
15, 1996.
Certain of the foregoing filings with the Securities and Exchange Commission
are incorporated by reference in this Prospectus and the Registration Statement
of which it is a part (see, "Incorporation Of Certain Documents By Reference").
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<PAGE> 13
In addition, in one action plaintiff claims violations of Section 20A
of the Securities Exchange Act of 1934 by certain officers of the Company due
to sales of common stock of the Company while allegedly in the possession of
material non-public information.
The Company expects that all of these actions will be consolidated by
the Court. If the cases are consolidated, the Company expects that plaintiffs
will file a single consolidated complaint which may restate, modify, delete, or
supplement the claims asserted in the nine individual actions.
Plaintiffs seek certification of these actions as class actions,
purportedly on behalf of all purchasers of the Company's common stock, other
than defendants, during certain periods of time beginning as early as March 31,
1995 and running through July 4, 1996 in the case of claims under Sections
10(b) and 20(a) and for the period of time between November 30, 1995 and May
10, 1996 in the case of claims under Section 20A. Plaintiffs seek unspecified
damages, interest, costs and expenses.
The Company believes that the allegations in these complaints are
without merit, and it intends to defend the actions vigorously. There can be
no assurance that the Company will not be served with additional complaints of
a similar nature in the future, that the Company will ultimately prevail in the
pending or any further actions, or that the actions, individually or in the
aggregate, will not have a material adverse effect on the Company.
Other Matters. On September 5, 1996, David F. Muller, the Company's
Chairman and Chief Executive Officer, was terminated from all positions with
the Company and its subsidiaries. D. Verne Sharma, the Company's President,
was elected interim Chief Executive Officer. There can be no assurance that
disputes will not arise between Dr. Muller and the Company relating to his
termination or that, if such disputes were to occur, they could be resolved
without litigation.
Kimberley A. Doney, the Company's Executive Vice President for
Quality, Regulatory and Clinical Affairs, has resigned from the Company
effective September 30, 1996. Andrew J. Jones, the Company's Vice President of
Manufacturing, has resigned from the Company effective October 4, 1996. The
Company depends to a significant extent on certain key management, technical
and other personnel, and the departure of one or more of such key individuals
could have a material adverse effect on the Company. The foregoing departures
and other recent events may also have an unsettling effect on the Company's
remaining workforce. There can be no assurance that these developments will
not result in further employee attrition or that, if such attrition were to
occur, it would not have a material adverse effect on the Company.
The Company has had disputes with a firm it retained to assist in the
promotion of LVC in the U.S. and the parties are presently negotiating a
consensual cancellation of the contract. However, there can be no assurance
that the disputes will be resolved without litigation or that an adverse
judgment or settlement would not have a material adverse effect on the results
of operations of the Company in the period in which it occurs.
The Company believes that the federal government has conducted, or may
be conducting, one or more investigations into the facts and circumstances
surrounding the delivery in November, 1995 to David F. Muller, the Company's
former CEO and Chairman, of a package that apparently included confidential FDA
documents. The Company has cooperated and intends to cooperate with any such
investigation to the extent its cooperation is or has been requested by any
appropriate government agency. There can be no assurance that any such
investigation will result in any conclusive findings, that any conclusive
findings will not entail a determination of culpability on the part of the
Company, or that further government action will not have a material adverse
effect on the Company, including, for example, a material adverse effect on the
Company's relationship with the FDA.
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<PAGE> 14
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549 and at its regional offices at
500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and at 7 World
Trade Center, 13th Floor, New York, New York 10048. Copies of such materials
can be obtained from the Public Reference Section of the Commission, 450 Fifth
Street, N.W., Washington, D.C. 20549, on payment of prescribed charges. Such
reports, proxy statements and other information concerning the Company can also
be inspected at the offices of the National Association of Securities Dealers,
Inc., 1735 K Street, N.W., Washington, D.C. 20006.
The Company has filed with the Commission a registration statement on
Form S-3 (the "Registration Statement") under the Securities Act, with respect
to the shares of Common Stock offered hereby. This Prospectus does not contain
all the information set forth in the Registration Statement, certain parts of
which have been omitted in accordance with the rules and regulations of the
Commission, and the exhibits relating thereto, which have been filed with the
Commission. Copies of the Registration Statement and the exhibits are on file
at the offices of the Commission and may be obtained upon payment of the fees
prescribed by the Commission, or examined without charge at the public
reference facilities of the Commission described above.
No person is authorized in connection with the offering made hereby to
give any information or to make any representation not contained or
incorporated by reference in this Prospectus, and any information or
representation not contained or incorporated herein must not be relied upon as
having been authorized by the Company, the Selling Stockholders set forth under
"Selling Stockholders" or any underwriter. This Prospectus relates solely to
the Common Stock and it may not be used or relied on in connection with any
other offer or sale of securities of the Company. This Prospectus does not
constitute an offer to sell or a solicitation of any offer to buy by any
person in any jurisdiction in which it is unlawful for such person to make such
an offer or solicitation. Neither the delivery of this Prospectus at any time
nor any sale made hereunder shall under any circumstance imply that the
information herein is correct as of any date subsequent to the date hereof.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously or simultaneously filed with the
Commission by the Company are incorporated herein by reference and made a part
hereof:
(a) The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995.
(b) The Company's Quarterly Report on Form 10-Q for the quarterly
period ended March 31, 1996.
(c) The Company's Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 1996.
(d) The Company's Current Report on Form 8-K dated May 24, 1996.
(e) The Company's Current Report on Form 8-K/A dated July 30,
1996.
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<PAGE> 15
(f) The description of the Company's Common Stock, contained in
the Company's Registration Statement on Form 8-A dated May 16,
1988, including any amendment or report filed for the purpose
of updating such description.
Certain of the foregoing documents have been specifically identified
in one or more complaints filed in the United States District Court for the
District of Massachusetts between August 2, 1996 and September 12, 1996, as
allegedly containing materially misleading statements or as unlawfully omitting
to disclose material information in violation of Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934. See, Shareholder Securities Law Class
Action Litigation, above. Those documents are the following:
The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995.
The Company's Quarterly Report on Form 10-Q for the quarterly
period ended March 31, 1996.
All documents subsequently filed by the Registrant pursuant to Section
13(a), Section 13(c), Section 14 and Section 15(d) of the Exchange Act after
the date of this Prospectus prior to the termination of the offering shall be
deemed incorporated herein by reference from the date of filing of such
documents. Any statement contained in a document incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein, or in any other
subsequently filed document that also is incorporated by reference herein,
modified or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon the written or oral request of such person, a
copy of any or all of the documents that have been incorporated by reference in
this Prospectus, other than exhibits to such documents. Such documents may be
obtained by writing to Summit Technology, Inc., 21 Hickory Drive, Waltham,
Massachusetts 02154, Attention: Corporate Clerk, or by calling (617) 890-1234.
THE COMPANY
The Company is a worldwide leader in the development, manufacture and
sale of ophthalmic laser systems designed to correct common refractive vision
disorders such as nearsightedness, farsightedness and astigmatism. On October
20, 1995, the Company's Excimer System became the first excimer laser system in
the world to be approved by the Food and Drug Administration for commercial
sale in the United States for laser correction of nearsightedness. Use of the
Company's Excimer System to treat astigmatism and farsightedness has not been
approved by the FDA.
The Company's current strategy is to become an integrated vision
correction business by (i) manufacturing and selling laser systems and related
products to correct vision disorders; (ii) participating in per procedure
royalties from its ownership in Pillar Point Partners; (iii) operating vision
correction centers; and (iv) selling contact lenses and related products. The
Company believes that this strategy will position it to participate in revenues
derived from the sale of Excimer Systems and revenues generated from laser
correction of nearsightedness. There can be no assurance, however, that the
Company will be successful in achieving these goals. The Company is evaluating
its operations and
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<PAGE> 16
strategies, which may result in the total or partial disposition of one or more
of the Company's businesses, or the acquisition by the Company of one or more
additional businesses.
SUBSEQUENT EVENTS
On July 11, 1996, the Company announced the consolidation of its laser
manufacturing operations into its Cork, Ireland facility and the elimination of
approximately 55 jobs, roughly 9% of the Company's consolidated worldwide
workforce. The Company announced that it would be taking a one-time
restructuring charge of $500,000 in the second quarter of 1996.
On May 15, 1996, the Company acquired Lens, a leading mail order
distributor of replacement contact lenses and related products to retail
consumers in the United States, in exchange for 1,708,500 shares of newly
issued Company Common Stock. Lens divides its business into three primary
areas: retail, wholesale and group sales. Retail sales consist of new orders
of contact lenses, reorders of contact lenses, program sales, sales of eye care
solutions, lens case sales, sunglass sales, membership sales and shipping and
handling fees. Wholesale sales are made to pharmacies and similar retail
outlets and consist of sales of contact lenses, sales of eye care solutions and
shipping and handling fees. In addition, in the wake of increasing employee
health care costs, Lens has begun to market certain of its eye care programs to
large employer groups as a cost effective alternative to more traditional
vision indemnity programs. Retail and group sales consisted of over 97% of
total sales in 1995. Expenses associated with the acquisition of Lens
contributed to a loss for the second quarter of 1996.
USE OF PROCEEDS
The Company will not receive any of the proceeds of the Common Stock
offered hereunder by the Selling Stockholders.
SELLING STOCKHOLDERS
The Selling Stockholders have acquired the 1,708,500 shares of Common
Stock offered hereby from the Company pursuant to an Agreement and Plan of
Merger (the "Merger Agreement") by and among the Company, Summit Acquisition
Corporation, a wholly-owned subsidiary of the Company, Creslin Limited,
Mordechai Golan, Menderes Akdag, Huseyin Kizanlikli and Lens Express, pursuant
to which Lens Express became a wholly-owned subsidiary of the Company. The
Company may from time to time supplement or amend this Prospectus, as required,
to provide other information with respect to the Selling Stockholders.
Except as set forth in this paragraph, none of the Selling
Stockholders has held any position or office with, been employed by, or
otherwise had a material relationship with the Company, or any of its
predecessors or affiliates, other than as stockholders and creditors of Lens.
Mr. Akdag has held the positions of Chief Executive Officer, Treasurer and
Secretary of Lens, and continues to serve as its President. Mr. Golan has held
the positions of director and Chairman of the Board of Directors of Lens and
performed, and continues to perform, services for Lens as a licensed optician,
and Mr. Kizanlikli has held the positions of director and Vice Chairman of the
Board of Directors of Lens. In addition, Mr. Akdag has held the positions of
director and President of Call Mart, Inc., a wholly owned subsidiary of Lens,
and continues to serve as its President, and Mr. Golan has held the positions
of director, Treasurer and Secretary of Call Mart, Inc.
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<PAGE> 17
The following table sets forth certain information regarding ownership
of the Company's Common Stock by the Selling Stockholders. Because the Selling
Stockholders may offer all or part of the Common Stock which they hold pursuant
to the offering contemplated by this Prospectus and because their offering is
not being underwritten on a firm commitment basis, no estimate can be given as
to the amount of the Common Stock that will be held by Selling Stockholders
upon termination of this offering.
<TABLE>
<CAPTION>
NUMBER OF SHARES OF NUMBER
COMMON STOCK PERCENTAGE OF OF SHARES
SELLING SECURITYHOLDER BENEFICIALLY OWNED OUTSTANDING SHARES OFFERED HEREBY(1)
---------------------- ------------------- ------------------ -----------------
<S> <C> <C> <C>
Mordechai Golan 854,045 2.92% 854,045
7792 Travelers Tree Drive
Boca Raton, FL 33433
Creslin Limited 852,114 2.91% 852,114
P.O. Box 535
Albert House, South Esplanade
St. Peter Port
Guernsey GY1 6HA
Menderes Akdag 427 .001% 427
298 NE 6th Street
Boca Raton, FL 33432
Huseyin Kizanlikli 1,914 .007% 1,914
3200 N. Port Royal Drive
#1011
Ft. Lauderdale, FL 33308
</TABLE>
(1) Of the total number of shares hereby offered by each Selling
Shareholder, 10% of the shares are held in escrow pursuant to the terms of
Merger Agreement.
PLAN OF DISTRIBUTION
The Company will not receive any of the proceeds from the sale by the
Selling Stockholders of the Common Stock offered hereby. Any or all of the
shares of Common Stock may be sold from time to time (i) to or through
underwriters or dealers, (ii) directly to one or more other purchasers, (iii)
through agents on a best-efforts basis, or (iv) through a combination of any
such methods of sale.
The shares of the Common Stock offered hereby (the "Shares") may be
sold from time to time by the Selling Stockholders, or by pledgees, donees,
transferees or other successors in interest. Such sales may be made on one or
more exchanges or in the over-the-counter market, or otherwise at prices and at
terms then prevailing or at prices related to the then current market price, or
in negotiated transactions. The Shares may be sold by one or more of the
following: (a) a block trade in which the broker or dealer so engaged will
attempt to sell the Shares as agent but may position and resell a portion of
the block as principal to facilitate the transaction; (b) purchases by a broker
or dealer as principal and resale by such broker or dealer for its account
pursuant to this Prospectus; (c) an exchange distribution in accordance with
the rules of such exchange; and (d) ordinary brokerage transactions and
transactions in which the broker solicits purchasers. In effecting sales,
brokers or dealers engaged by the Selling Stockholders may arrange for other
brokers or dealers to participate. Brokers or dealers will receive commissions
or discounts from Selling Stockholders in amounts to be negotiated prior to the
sale. In addition, any securities covered by this Prospectus which qualify for
sale pursuant to Rule 144 may be sold under Rule 144 rather than pursuant to
this Prospectus.
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<PAGE> 18
The Selling Stockholders and any such underwriters, dealers or agents
that participate in the distribution of the Common Stock may be deemed to be
underwriters within the meaning of the Securities Act, and any profit on the
sale of the Common Stock by them and any discounts, commissions or concessions
received by them may be deemed to be underwriting discounts and commissions
under the Securities Act. The Common Stock may be sold from time to time in
one or more transactions at a fixed offering price, which may be changed, or at
varying prices determined at the time of sale or at negotiated prices. Such
prices will be determined by the Selling Stockholders or by an agreement
between the Selling Stockholders and underwriters or dealers. Brokers or
dealers acting in connection with the sale of Common Stock contemplated by this
Prospectus may receive fees or commissions in connection therewith.
At the time a particular offer of Common Stock is made, to the extent
required, a supplement to this Prospectus will be distributed which will
identify and set forth the aggregate number of shares of Common Stock being
offered and the terms of the offering, including the name or names of any
underwriters, dealers or agents, the purchase price paid by any underwriter for
Common Stock purchased from the Selling Stockholders, any discounts,
commissions and other items constituting compensation from the Selling
Stockholders and/or the Company and any discounts, commissions or concessions
allowed or reallowed or paid to dealers, including the proposed selling price
to the public. Such supplement to this Prospectus and, if necessary, a
post-effective amendment to the Registration Statement of which this Prospectus
is a part, will be filed with the Commission to reflect the disclosure of
additional information with respect to the distribution of the Common Stock.
Under applicable rules and regulations under the Exchange Act, any
person engaged in a distribution of the Common Stock may not simultaneously
engage in market making activities with respect to the Common Stock for a
period of nine business days prior to the commencement of such distribution.
In addition and without limiting the foregoing, the Selling Stockholders and
any person participating in the distribution of the Common Stock will be
subject to applicable provisions of the Exchange Act and the rules and
regulations thereunder, including without limitation rules 10b-6 and 10b-7,
which provisions may limit the timing of purchases and sales of the Common
Stock by the Selling Stockholders or any such other person.
In order to comply with certain states' securities laws, if
applicable, the Common Stock will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In certain states the Common Stock
may not be sold unless its has been registered or qualified for sale in such
state, or unless an exemption from registration or qualification is available.
The Shares are offered pursuant to Section 15 of the Merger Agreement
which states that the Company will maintain the effectiveness of the
Registration Statement until the earlier of (i) such time as all of the Shares
have been disposed of in accordance with the intended methods of disposition
set forth in the Registration Statement and (ii) two years after the closing
under the Merger Agreement. In the event that any Shares remain unsold at the
end of such period, the Company may file a post-effective amendment to the
Registration Statement for the purpose of removing such Shares from registered
status.
The Company has agreed to indemnify the Selling Stockholders and
certain other persons against certain liabilities, including liabilities
arising under the Securities Act.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby will be
passed upon by Ropes & Gray, Boston, Massachusetts.
18
<PAGE> 19
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF DISTRIBUTION
<TABLE>
<S> <C>
SEC Registration Fee $9,979.00
Nasdaq National Market Listing Fee $17,500.00
Blue Sky Fees and Expenses* $0.00
Legal Fees and Expenses* $10,000.00
Printing Expenses* $5,000.00
Accounting Fees and Expenses* $3,000.00
Miscellaneous* $1,521.00
Total Expenses $47,000.00
</TABLE>
- ---------------
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 67 of the Massachusetts Business Corporation Law sets forth
certain circumstances under which directors, officers, employees and agents may
be indemnified against liability that they may incur in their capacity as such.
Section 67 of the Massachusetts Business Corporation Law provides as follows:
Indemnification of directors, officers, employees and other agents of
a corporation, and persons who serve at its request as directors, officers,
employees or other agents of another organization, or who serve at its request
in any capacity with respect to any employee benefit plan, may be provided by
it to whatever extent shall be specified in or authorized by (i) the articles
of organization or (ii) a by-law adopted by the stockholders or (iii) a vote
adopted by the holders of a majority of the shares of stock entitled to vote on
the election of directors. Except as the articles of organization or by-laws
otherwise require, indemnification of any persons referred to in the preceding
sentence who are not directors of the corporation may be provided by it to the
extent authorized by the directors. Such indemnification may include payment
by the corporation of expenses incurred in defending a civil or criminal action
or proceeding in advance of the final disposition of such action or proceeding,
upon receipt of an undertaking by the person indemnified to repay such payment
if he shall be adjudicated to be not entitled to indemnification under this
section which undertaking may be accepted without reference to the financial
ability of such person to make repayment. Any such indemnification may be
provided although the person to be indemnified is no longer an officer,
director, employee or agent of the corporation or of such other organization or
no longer serves with respect to any such employee benefit plan.
No indemnification shall be provided for any person with respect to
any matter as to which he shall have been adjudicated in any proceeding not to
have acted in good faith in the reasonable belief that his action was in the
best interest of the corporation or, to the extent that such matter relates to
service with respect to an employee benefit plan, in the best interests of the
participants or beneficiaries of such employee benefit plan.
<PAGE> 20
The absence of any express provision for indemnification shall not
limit any right of indemnification existing independently of this section.
A corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or other agent
of the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or other agent of another organization or with
respect to any employee benefit plan, against any liability incurred by him in
any such capacity, or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such liability.
The Company's Articles of Organization provide that directors are not
liable to the Company or its shareholders for monetary damages for breach of
fiduciary duty except for: (a) any breach of the director's duty of loyalty to
the Company or its shareholders; (b) acts or omissions not in good faith or
that involve intentional misconduct or knowing violations of law; (c) under the
Massachusetts Business Corporation Law provisions imposing joint and several
liability for improper distributions to shareholders or loans to officers or
directors; (d) transactions from which a director derived an improper personal
benefit; or (e) for any act or omission occurring prior to the effective date
of such provision.
The Company's By-Laws require the Company to indemnify all officers,
directors, employees and agents of the Company against all liabilities and
expenses they may incur on account of all actions threatened or brought against
them by reason of their services to the Company. No indemnification is
provided for any person with respect to any matter as to which such person has
been adjudicated in any proceeding not to have acted in good faith in the
reasonable belief that his action was in the best interests of the Company.
The Company maintains a director's and officer's liability insurance policy in
the aggregate amount of $3,000,000 on behalf of its directors and officers.
The insurance policy expires on October 28, 1996, unless renewed or earlier
terminated.
For the undertaking with respect to indemnification, see Item 17
herein.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Title of Exhibit
------- ----------------
<S> <C>
5.1 Opinion of Ropes & Gray re: legality
23.1* Consent of KPMG Peat Marwick LLP
23.2 Consent of Ropes & Gray (to be included in the opinion filed as
Exhibit 5.1)
24.1* Power of Attorney (to be included as part of signature page filed
herewith)
</TABLE>
- ---------------
* Previously filed.
ITEM 17. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions set forth in Item 15
above, or otherwise, the registrant has been advised that in the opinion of the
Securities
2
<PAGE> 21
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
a. To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
b. To reflect in the prospectus any facts or events arising
after the effective date of the registration statement
(or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
registration statement;
c. To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (1)(a) and (1)(b) do not apply if
the registration statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
registrant pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the registration
statement.
2. That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
3. To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
3
<PAGE> 22
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
registration statement on Form S-3 to be signed on its behalf by the
undersigned thereunto duly authorized, in the City of Waltham, Commonwealth of
Massachusetts, on the 27th day of September, 1996.
SUMMIT TECHNOLOGY, INC.
By:/s/ D. Verne Sharma
-----------------------------------
D. Verne Sharma
President and Chief Executive Officer
4
<PAGE> 23
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ D. Verne Sharma President and Chief September 27, 1996
- -------------------- Executive Officer
D. Verne Sharma
/s/ Rajiv P. Bhatt Treasurer and Chief September 27, 1996
- -------------------- Financial Officer
Rajiv P. Bhatt
/s/ Jeffrey A. Bernfeld Director September 27, 1996
- -----------------------
Jeffrey A. Bernfeld
/s/ Richard F. Miller Director September 27, 1996
- ---------------------
Richard F. Miller
/s/ John A. Norris Director September 27, 1996
- --------------------
John A. Norris
/s/ Richard M Traskos Director September 27, 1996
- ---------------------
Richard M. Traskos
</TABLE>
<PAGE> 24
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Title of Exhibit
------- ----------------
<S> <C>
5.1 Opinion of Ropes & Gray re: legality
23.1* Consent of KPMG Peat Marwick LLP
23.2 Consent of Ropes & Gray (to be included in the opinion filed as
Exhibit 5.1)
24.1* Power of Attorney (to be included as part of signature page filed
herewith)
</TABLE>
- ---------------
* Previously Filed.
<PAGE> 1
[ROPES & GRAY LETTERHEAD]
August 28, 1996
Summit Technology, Inc.
21 Hickory Drive
Waltham, MA 02154
Ladies and Gentlemen:
This opinion is furnished to you in connection with a registration
statement on Form S-3 (the "Registration Statement"), filed with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended, for the registration of 1,708,500 shares of Common Stock,
$.01 par value (the "Shares"), of Summit Technology, Inc., a Massachusetts
corporation (the "Company").
We have acted as counsel for the Company in connection with the issuance
of the Shares pursuant to the Agreement and Plan of Merger dated as of April
19, 1996 among the Company, Summit Acquisition Corporation, Mordechai Golan,
Creslin Limited, Menderes Akdag, Huseyin Kizanlikli and Lens Express, Inc. For
purposes of our opinion, we have examined and relied upon such documents,
records, certificates and other instruments as we have deemed necessary.
Based upon the foregoing, we are of the opinion that the Shares have been
duly authorized, validly issued and are fully paid and nonassessable.
We hereby consent to the filing of this opinion as part of the
Registration Statement and to the use of our name therein and in the related
prospectus under the caption "Legal Matters".
This opinion is to be used only in connection with the offer and sale of
the Shares while the Registration Statement is in effect.
Very truly yours,
/s/ ROPES & GRAY
Ropes & Gray
