<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
_____________________
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ____________ TO ____________
Commission File Number 1-10694
___________________
VISX, INCORPORATED
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
___________________
DELAWARE 06-1161793
------------- ----------------
(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
3400 CENTRAL EXPRESSWAY, SANTA CLARA, CALIFORNIA 95051
---------------------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE): (408) 733-2020
--------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes ___X___ No _______
Total number of shares of common stock outstanding as of
October 31, 1996: 15,410,066.
-----------
<PAGE>
VISX, INCORPORATED
TABLE OF CONTENTS
PAGE
PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
Condensed Consolidated Interim Balance Sheets as 3
of September 30, 1996 and December 31, 1995
Condensed Consolidated Interim Statements of Operations for 4
the Three Months Ended September 30, 1996 and 1995 and for
the Nine Months Ended September 30, 1996 and 1995
Condensed Consolidated Interim Statements of Cash Flows for 5
the Nine Months Ended September 30, 1996 and 1995
Notes to Condensed Consolidated Interim Financial Statements 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Overview 7
Results of Operations 7
Liquidity and Capital Resources 8
PART II OTHER INFORMATION
ITEM 1. Legal Proceedings 9
ITEM 6. Exhibits and Reports on Form 8-K 11
SIGNATURES 12
Page 2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
VISX, INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
ASSETS
September 30, December 31,
1996 1995
-------------- --------------
(unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 24,677 $ 32,332
Short-term investments 59,291 42,887
Accounts receivable, net of allowance for doubtful
accounts of $600 and $0, respectively 15,388 6,667
Inventories 6,618 6,742
Prepaid expenses 626 234
-------- -------
Total current assets 106,600 88,862
PROPERTY AND EQUIPMENT, NET 3,081 1,565
OTHER ASSETS 2,805 651
-------- -------
$112,486 $91,078
-------- -------
-------- -------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 3,314 $ 2,506
Accrued liabilities 16,249 8,691
-------- -------
Total current liabilities 19,563 11,197
-------- -------
STOCKHOLDERS' EQUITY:
Common stock - $.01 par value, 90,000,000 shares authorized;
15,415,259 and 15,173,855 shares issued, respectively 154 152
Additional paid-in capital 134,114 131,185
Treasury stock,at cost - 58,247 and 0 shares, respectively (1,229) --
Accumulated deficit (40,125) (51,568)
Unrealized holding gain on available-for-sale securities 9 112
-------- -------
Total stockholders' equity 92,923 79,881
-------- -------
$112,486 $91,078
-------- -------
-------- -------
</TABLE>
The accompanying notes are an integral part of these condensed
consolidated interim financial statements.
Page 3
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VISX, INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
--------------------- -------------------
1996 1995 1996 1995
------ ------- ------ ------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
REVENUES:
Product sales $ 14,484 $ 2,800 $ 39,385 $ 5,600
Product sales to Alcon, a related party -- -- -- 1,680
Service and other revenues 5,183 1,151 11,391 3,146
--------- -------- -------- --------
Total revenues 19,667 3,951 50,776 10,426
--------- -------- -------- --------
COSTS AND EXPENSES:
Cost of revenues 7,662 2,702 21,904 7,140
Marketing, general and administrative 4,227 1,737 12,869 5,653
Research, development and regulatory 2,845 2,069 6,804 6,677
--------- -------- -------- --------
Total costs and expenses 14,734 6,508 41,577 19,470
--------- -------- -------- --------
Income (loss) from operations 4,933 (2,557) 9,199 (9,044)
Interest and other income 1,146 179 3,106 637
Litigation settlement -- -- -- (2,250)
--------- -------- -------- --------
Income (loss) before income taxes 6,079 (2,378) 12,305 (10,657)
Provision for income taxes 466 -- 862 --
--------- -------- -------- --------
Net income (loss) $ 5,613 $ (2,378) $ 11,443 $(10,657)
--------- -------- -------- --------
--------- -------- -------- --------
Earnings (loss) per share $ 0.35 $ (0.20) $ 0.72 $ (0.90)
--------- -------- -------- --------
--------- -------- -------- --------
Weighted average number of shares and equivalents
outstanding 15,840 12,156 15,988 11,823
--------- -------- -------- --------
--------- -------- -------- --------
</TABLE>
The accompanying notes are an integral part of these condensed
consolidated interim financial statements.
Page 4
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VISX, INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
Nine months ended
September 30,
---------------------
1996 1995
------- -------
(unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 11,443 $(10,657)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization 618 462
CHANGES IN ASSETS AND LIABILITIES:
Increase in accounts receivable (8,721) (3,943)
Decrease in accounts receivable from Alcon, a related party -- 2,659
Decrease (increase) in inventories 124 (2,572)
Increase in prepaid expenses (392) (160)
(Increase) decrease in other assets (2,170) 253
Increase in accounts payable 808 685
Increase (decrease) in accrued liabilities 7,558 (431)
-------- --------
Net cash provided by (used in) operating activities 9,268 (13,704)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (2,118) (481)
Purchase of short-term investments (37,698) (8,712)
Proceeds from maturities of short-term investments 21,191 2,653
-------- --------
Net cash used in investing activities (18,625) (6,540)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of common stock 2,931 15,305
Purchases of treasury stock, net of shares used for option exercises (1,229) --
-------- --------
Net cash provided by financing activities 1,702 15,305
-------- --------
Net decrease in cash and cash equivalents (7,655) (4,939)
Cash and cash equivalents, beginning of period 32,332 11,161
-------- --------
Cash and cash equivalents, end of period $ 24,677 $ 6,222
-------- --------
-------- --------
</TABLE>
The accompanying notes are an integral part of these condensed
consolidated interim financial statements.
Page 5
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VISX, INCORPORATED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
September 30, 1996
(Unaudited)
The accompanying interim financial statements and related notes should be read
in conjunction with the financial statements and related notes included in the
Company's 1995 Annual Report and Form 10-K.
1. BASIS OF PRESENTATION:
The Condensed Consolidated Interim Financial Statements included herein have
been prepared by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information
and footnote disclosures normally included in financial statements prepared
in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations. These Condensed
Consolidated Interim Financial Statements should be read in conjunction with
the consolidated financial statements and the notes thereto included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1995.
The Condensed Consolidated Interim Financial Statements included herein
reflect, in the opinion of management, all adjustments (consisting primarily
only of normal recurring adjustments) necessary to present fairly the results
for the interim period. The results of operations for the three and nine
month periods ended September 30, 1996 are not necessarily indicative of
results to be expected for the full year ending December 31, 1996.
2. PILLAR POINT PARTNERS ROYALTIES:
The Company records a royalty payable to Pillar Point Partners when VISX
systems and VisionKey-Registered Trademark- cards are sold in the United
States. The Company records royalty revenue as service and other revenues
when Pillar Point Partners reports the amount of royalty distribution, net of
expenses, due the Company. The Company received its first report of royalty
distribution from Pillar Point Partners in the first quarter of 1996.
3. EARNINGS (LOSS) PER SHARE:
Earnings per share was computed based on the weighted average number of
common and common equivalent shares outstanding during 1996. Common share
equivalents were calculated using the treasury stock method, and represent
dilutive shares issuable upon the exercise of stock options.
Net loss per share was computed based on the weighted average number of
common shares outstanding during 1995. Common equivalent shares were excluded
from the computation since their effect would be to reduce the net loss per
share amount.
4. INVENTORIES (in thousands):
September 30, December 31,
1996 1995
------------ ------------
Raw materials and subassemblies $ 2,610 $ 2,878
Work in process 3,284 1,348
Finished goods 724 2,516
---------- ---------
Total $ 6,618 $ 6,742
---------- ---------
---------- ---------
Page 6
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following Management's Discussion and Analysis of Financial Condition and
Results of Operations contains forward-looking statements that involve risks
and uncertainties. The Company's actual results of operations could differ
materially from those anticipated in such forward-looking statements as a
result of certain factors, including those factors identified below. The
Management's Discussion and Analysis of Financial Condition and Results of
Operations should be read in conjunction with the Management's Discussion and
Analysis of Financial Condition and Results of Operations included in the
Company's 1995 Annual Report and Form 10-K.
OVERVIEW
Since its inception, VISX has been engaged in the design and development of
proprietary technologies and systems for laser vision correction ("LVC") and
has been manufacturing such systems since 1987. In March 1995, the Company
introduced a new model of the VISX System. The FDA approved pre-market
approval ("PMA") applications for use of the VISX System for phototherapeutic
keratectomy ("PTK") on September 29, 1995 and for photorefractive keratectomy
("PRK") treatment of low to moderate myopia on March 27, 1996.
Notwithstanding approval by the FDA and subsequent increases in sales, the
Company's future growth and profitability cannot be predicted with certainty
and will be influenced by a variety of factors. These factors include the
extent to which LVC is broadly accepted in the United States and key
international markets targeted by the Company, the degree to which Pillar
Point Partners is successful in generating royalty income from patent rights
and defending against legal challenges relating to its structure and
operation, developments in patent litigation both in support of the Company's
patents and in defense of claims of infringement such as pending patent
litigation against the Company brought by Summit Technology, developments
with respect to other litigation to which the Company is a party or in which
it may become involved, and competition from other vision correction products
and procedures which are currently in use or may be developed and introduced
in the future. Results of operations in the current or any prior fiscal
period should not be considered as indicative of results to be expected for
any future fiscal period.
RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------- --------------------------------
REVENUE 1996 1995 Change 1996 1995 Change
- ------- ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Product sales 14,484 2,800 417% 39,385 7,280 441%
PERCENT OF REVENUE 73.6% 70.9% 77.6% 69.8%
Service & other revenues 5,183 1,151 350% 11,391 3,146 262%
PERCENT OF REVENUE 26.4% 29.1% 22.4% 30.2%
Total 19,667 3,951 398% 50,776 10,426 387%
</TABLE>
Product sales increased due to the FDA's approval of the Company's PMA
application for use of the VISX System (for PTK on September 29, 1995 and for
PRK treatment of low to moderate myopia on March 27, 1996). This allowed the
Company to sell VISX Systems in the United States, which generated an
increase in unit sales over the comparable periods of the prior year. In
addition, average selling prices were higher in 1996 because the Company was
selling through its own direct sales force in the United States, as
contrasted to 1995 when the Company was only selling outside the United
States at lower prices through its distributor, Alcon Pharmaceuticals, Ltd.
Page 7
<PAGE>
Until May 26, 1995, Alcon was a related party to the Company by virtue of its
representation on the Company's board of directors. Alcon's representatives
did not stand for reelection at the Company's 1995 stockholders' meeting.
Accordingly, Alcon was no longer considered a related party after that time.
Certain portions of the derivative litigation brought by stockholders of the
Company relate to Alcon's marketing of the VISX System. On January 9, 1996
the California Superior Court approved a settlement reached by Alcon, VISX
and the other participants in VISX's stockholder derivative litigation
pursuant to which, among other things, the domestic and international
marketing agreement between VISX and Alcon was terminated. This settlement
became effective on March 12, 1996.
Service and other revenues increased principally due to continued growth in
Pillar Point Partners royalty revenue. Royalty license revenue and service
and parts revenue also contributed to the increase.
<TABLE>
<CAPTION>
Three Months Ended September 30, Nine Months Ended September 30,
------------------------------- -------------------------------
COSTS & EXPENSES 1996 1995 Change 1996 1995 Change
- ---------------- ------ ------ -------- ------ ------ --------
<S> <C> <C> <C> <C> <C> <C>
Cost of revenues 7,662 2,702 184% 21,904 7,140 207%
PERCENT OF REVENUE 39.0% 68.4% 43.1% 68.5%
Marketing, gen'l and admin 4,227 1,737 143% 12,869 5,653 128%
PERCENT OF REVENUE 21.5% 44.0% 25.3% 54.2%
R&D and regulatory 2,845 2,069 38% 6,804 6,677 2%
PERCENT OF REVENUE 14.5% 52.4% 13.4% 64.0%
</TABLE>
Gross profit margins improved mainly as the result of higher average selling
prices for systems and lower overhead cost per unit due to increased
production. Royalty revenue, principally from Pillar Point Partners, also
contributed significantly to higher gross profit margins in 1996.
Marketing, general and administrative expenses increased as the Company
created its own direct sales force to replace Alcon, developed marketing
programs and began direct advertising about the VISX System for LVC. In
addition, legal expenses were higher than in the prior year due to litigation
and other matters primarily related to the Company's patents.
Research & development costs increased 108% in the third quarter and 51% in
the first nine months of 1996 over the comparable periods of 1995. These
increases were the result of higher spending to develop new products and
technologies and a third quarter charge related to incremental compensation
expense. Research & development costs declined as a percentage of net sales
in both the third quarter and the first nine months of 1996 from the
comparable periods in 1995 due primarily to increased net sales during the
1996 periods. Regulatory costs were lower in both the third quarter and the
first nine months of 1996 than in the comparable periods of 1995 when the
Company incurred incremental costs for staff, consultants and other
regulatory expenses necessary to pursue PMA applications filed with the FDA.
Interest and other income increased in the third quarter and first nine
months of 1996 over the comparable periods in 1995 due to higher interest
income generated by funds raised in the November 1995 common stock offering.
LIQUIDITY AND CAPITAL RESOURCES
Higher sales in the third quarter of 1996 over the fourth quarter of 1995
contributed to the increase in accounts receivable. Increases in accrued
liabilities, principally cash received as deposits accompanying orders for
VISX Systems and warranty accruals, largely offset the increase in accounts
receivable. Purchases of short-term investments reflect reinvestment of the
proceeds from maturities of short-term investments and investment of cash and
cash equivalents in short-term investments.
Page 8
<PAGE>
The Company anticipates that its current cash, cash equivalents and
short-term investments, as well as anticipated cash flows from operations,
will be sufficient to cover working capital and capital equipment needs
through the end of 1997. The Company may, however, seek to raise additional
capital during this time frame and any such additional capital may not be
available on satisfactory terms.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The following discussion of legal proceedings contains forward-looking
statements that involve risks and uncertainties. The Company's actual results
of operations could differ materially from those anticipated in such
forward-looking statements as a result of certain factors, including those
factors identified below.
The Company is a party to various pending legal proceedings. For a complete
description of such proceedings, see the Company's report on Form 10-K
for the year ended December 31, 1995 and report on Form 10-Q for the quarter
ended June 30, 1996. During the quarter ended September 30, 1996 there were
no material developments with respect to such previously existing
proceedings, except as follows:
PRODUCT LIABILITY
VISX requires all investigators participating in clinical trials sponsored by
VISX to advise persons treated in United States clinical trials that the
procedure is investigational and has not been determined to be safe or
effective by the FDA and requires that signed consents be obtained prior to
treatment. Notwithstanding these requirements, certain individuals who were
treated in United States clinical trials of the VISX System have sued their
ophthalmologists and VISX following their surgery. Two lawsuits, one in
Michigan and one in New Jersey, were voluntarily dismissed by the plaintiffs
during the respective quarter ended September 30, 1996. In a third lawsuit,
brought in Pennsylvania, discovery is ongoing, and the plaintiff has recently
amended its complaint to add a claim for punitive damages. In addition to
punitive damages, plaintiff is seeking money damages of $2,000,000 from the
Company. VISX believes that it has meritorious defenses to the Pennsylvania
action, and that its resolution will not have a material adverse effect on
the Company's financial position or results of operations. Nevertheless, the
action is still in discovery, and there can be no assurance as to its
outcome. In particular, the prospect of punitive damages could, depending on
the results at trial, have an adverse impact on the Company. In addition to
the foregoing, the Company has been named as a "respondent in discovery" in a
lawsuit brought in Illinois. Under Illinois law, a respondent in discovery
must respond to discovery by a plaintiff as if it were a defendant, and the
respondent in discovery may be added as a defendant under certain
circumstances. There is no indication at this stage that VISX will be added
as a defendant in that case, and it is too early to determine what, if any,
impact the resolution of this case could have on the Company's financial
position or results of operations.
The following new proceedings have arisen since June 30, 1996.
VISX PARTNER, INC. V. SUMMIT TECHNOLOGY, INC. On August 28, 1996, the
Company's wholly-owned subsidiary, VISX Partner, Inc., brought suit against
Summit Technology, Inc. ("Summit"). The suit, filed in the United States
District Court for the District of Massachusetts, alleges breach of contract
by Summit under its license agreement with Pillar Point Partners. VISX Partner
brought the suit on behalf
Page 9
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of the Partnership in accordance with provisions of the partnership agreement
governing resolution of disputes. VISX Partner seeks damages in an amount not
less than $4,500,000. The action is in the early phase of discovery, and
there can be no prediction as to the outcome of the action or the effect, if
any, that the case will have on the Company's financial position or results
of operations.
PATENT LITIGATION
PILLAR POINT PARTNERS V. APPLER. On September 9, 1996, Pillar Point Partners
brought suit in the United States District Court for the District of Columbia
against William D. Appler, an individual. The suit alleges that Mr. Appler
has induced others to infringe the partnership's patents and interference
with prospective business relationships, and seeks money damages and
injunctive relief.
PILLAR POINT PARTNERS V. BARNET DULANEY EYE CENTER. On September 9, 1996,
Pillar Point Partners brought suit in the United States District Court for
the District of Arizona against David Dulaney and Anna Marie Dulaney (husband
and wife), Ronald Barnet and Teri Lynn Barnet (husband and wife) and Barnet
Dulaney Eye Center P.L.L.C. The suit alleges infringement of certain of the
partnership's patents, and seeks money damages and injunctive relief.
PILLAR POINT PARTNERS V. JON DISHLER, ET AL. On October 9, 1996, Pillar
Point Partners brought suit in the United States District Court for the
District of Colorado against Jon G. Dishler, DTC Eye Surgery Center, Inc.,
D.T.C. Eye Associates, P.C., and Laser Institute of the Rockies, LLC. The
suit alleges infringement of certain of the partnership's patents, and seeks
money damages and injunctive relief.
SHEPHERD V. PILLAR POINT PARTNERS, ET AL. On September 5, 1996, an action
was filed by a Nevada ophthalmologist against Pillar Point Partners, Summit
Technology, Inc., Summit Partner, Inc., VISX, and VISX Partner, Inc. The
action was filed in the United States District Court for the Northern
District of California. Generally, the plaintiff alleges that the per
procedure royalty charged by Pillar Point Partners to its licensees is a
violation of the Sherman Act, or alternatively a violation of corresponding
Nevada and California antitrust laws. The plaintiff is not a licensee of
Pillar Point Partners, and does not own a VISX System. The plaintiff seeks
money damages of $56,250 (plus $12,500 per month through the judgment date).
VISX believes that it has meritorious defenses to this action, and that its
resolution will not have a material adverse effect on the Company's financial
position or results of operations. However, the suit is in the early stages
of discovery and there can be no assurance as to its outcome.
AUTONOMOUS TECHNOLOGIES CORPORATION V. PILLAR POINT PARTNERS, ET AL. On
October 24, 1996, Autonomous Technologies Corporation ("Autonomous") brought
an action in the United States District Court for the District of Delaware,
against Pillar Point Partners, Summit, Summit Partner, Inc., VISX, and VISX
Partner, Inc. The action seeks declaratory relief that one of the
Partnership's patents is not infringed, is invalid and unenforceable, and
that the defendants are otherwise promissorily estopped from claiming that
the Autonomous system infringes the same patent. VISX believes that it has
meritorious defenses to this action, and that its resolution will not have a
material adverse effect on the Company's financial position or results of
operations. However, the suit is in the early stages of discovery and there
can be no assurance as to its outcome.
The patent litigation described above involves patent infringement issues
relating to whether or not patents licensed to Pillar Point Partners are
valid and/or are infringed by the activities of the other parties to such
actions. In addition, the structure and operation of Pillar Point Partners
has been alleged by certain of such other parties to be in violation of
federal and, in certain cases, state antitrust laws. Adverse determinations
in such proceedings with respect to the patents licensed to Pillar Point
Partners or with respect to whether or not the structure and operation of
Pillar Point Partners is in violation of
Page 10
<PAGE>
antitrust laws could have a material adverse effect on the business,
financial condition and results of operations of the Company.
AUTONOMOUS TECHNOLOGIES CORPORATION V. VISX. On October 24, 1996, Autonomous
brought an action in the Federal Court of Canada (Trial Division), against
VISX. The action seeks declaratory relief that one of VISX's patents is not
infringed, is invalid and unenforceable, and that VISX is otherwise
promissorily estopped from claiming that the Autonomous system infringes the
same patent. VISX believes that it has meritorious defenses to this action,
and that its resolution will not have a material adverse effect on the
Company's financial position or results of operations. However, the suit is
in the early stages of discovery and there can be no assurance as to its
outcome.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
a) EXHIBITS.
Ex. 3 Amended and Restated Certificate of Incorporation
Ex. 27 Financial Data Schedule
b) REPORTS ON FORM 8-K.
None
Page 11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
VISX, Incorporated
------------------
(REGISTRANT)
November 08, 1996 /s/Mark B. Logan
(Date) ---------------------------------
Mark B. Logan
Chairman of the Board and
Chief Executive Officer
November 08, 1996 /s/Timothy R. Maier
(Date) -----------------------------------
Timothy R. Maier
Vice President and
Chief Financial Officer (PRINCIPAL
FINANCIAL AND ACCOUNTING OFFICER)
Page 12
<PAGE>
EXHIBIT 3
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
VISX, INCORPORATED
------------------------
VISX, INCORPORATED (the "Company"), a corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware (the
"General Corporation Law"), having filed its original Certificate of
Incorporation on June 7, 1988, under the name of TTI Acquisition Corp., DOES
HEREBY CERTIFY: That the amendment and restatement of the Company's
Certificate of Incorporation was duly approved by the Company's Board of
Directors, and by a majority of the Company's Stockholders, in accordance
with the provisions of Sections 242 and 245 of the General Corporation Law of
the State of Delaware. Pursuant to Sections 242 and 245 of the General
Corporation Law, this Restated Certificate of Incorporation restates and
integrates and further amends the provisions of the Certificate of
Incorporation of the Company. The text of the Company's Certificate of
Incorporation as heretofore amended or supplemented is hereby amended and
restated in its entirety to read as follows:
I: The name of the Company is VISX, Incorporated.
II: The address of its registered office in the State of Delaware is
1209 Orange Street, City of Wilmington, County of New Castle, Delaware
19801. The name of the registered agent at such address is The Corporation
Trust Company.
III: The nature of the business or purposes to be conducted or promoted
is to engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.
IV: The total number of shares of all classes of stock that the
Company is authorized to issue is ninety million (90,000,000)
shares of Common Stock with a par value of $0.01 per share.
V: The Company reserves the right to amend, alter, change or repeal any
provision contained in this certificate of incorporation, in the manner now
or hereafter prescribed by statute, and all rights and powers conferred
herein upon stockholders and directors are granted subject to this
reservation.
VI: In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized to adopt, alter or
repeal the Bylaws of the Company.
VII: Meetings of stockholders shall be held at such place, within or
without the State of Delaware, as may be designated by or in the manner
provided in the Bylaws, or, if not so designated, at the registered office
of the Company in the State of Delaware. Elections of directors need not be
by written ballot unless and to the extent that the Bylaws so provide.
VIII: To the fullest extent permitted by the Delaware General Corporation
Law as the same exists or may hereafter be amended, a director of this
Company shall not be liable to the Company or its stockholders for monetary
damages for breach of fiduciary duty as a director. Without limiting the
foregoing in any respect, a director of this Company shall not be personally
liable to the Company or its stockholders for monetary damages for breach of
fiduciary duty as a director,
<PAGE>
except for liability (1) for any breach of the director's duty of loyalty to
the Company or its stockholders, (2) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (3)
under Section 174 of the Delaware General Corporation Law, or (4) for any
transaction from which the director derived an improper personal benefit.
IX: (A) RIGHT TO INDEMNIFICATION.
(1) Each person who was or is made a party or is threatened to be
made a party to or is involved in any action, suit or proceeding,
whether civil, criminal, administrative or investigative
(hereinafter, a "proceeding"), by reason of the fact that he or she,
or a person of whom he or she is the legal representative, is or was
a director or officer of the Company, including service with respect
to employee benefit plans, whether the basis of such proceeding is
alleged action in an official capacity as a director, officer,
employee or agent or in any other capacity while serving as a
director, officer , employee or agent, shall be indemnified and held
harmless by the Company to the fullest extent authorized by the
Delaware General Corporation Law, as the same exists or may hereafter
be amended (but, in the case of any such amendment, only to the
extent that such amendment permits the Company to provide broader
indemnification rights than said law permitted the Company to provide
prior to such amendment), against all expenses, liability and loss
(including attorneys' fees, judgments, fines, ERISA excise taxes or
penalties and amounts paid or to be paid in settlement) reasonably
incurred or suffered by such person in connection therewith and such
indemnification shall continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit
of his or her heirs, executors and administrators.
(2) The Company shall indemnify and hold harmless in such manner
any person who was or is made a party or is threatened to be made a
party to a proceeding by reason of the fact that he, she or a person
of whom he or she is the legal representative, is or was serving at
the request of the Company as a director, officer, employee or agent
of another corporation or a partnership, joint venture, trust or
other enterprise;
(3) Notwithstanding the foregoing, except as provided in
paragraph IX(B) below, the Company shall indemnify any such person
seeking indemnification in connection with a proceeding (or part
thereof) initiated by such person only if such proceeding (or part
thereof) was authorized by the Board of Directors of the Company. In
the event a director or officer of the Company shall serve as a
director, officer, employee or agent of any corporation, partnership,
joint venture, trust or other enterprise in which the Company
maintains an investment it shall be conclusively presumed for
purposes of the indemnification provided for in subsection (A)(2)
above that such service has been undertaken at the request of the
Company. The foregoing presumption shall apply regardless of whether
such director or officer is serving such entity at the request of a
third party or that his or her service with such entity was commenced
prior to the effectiveness of this Article of the Certificate of
Incorporation or prior to his or her becoming an officer or director
of the Company. The right to indemnification conferred in subsection
(A)(1) above shall be a contract right based upon an offer from the
Company which shall be deemed to be accepted by such person's service
or continued service with the Company for any period after the
adoption of this Article of the Certificate of Incorporation and
shall include the right to be paid by the Company the expenses
incurred in defending any such proceeding in advance of its final
disposition; PROVIDED, HOWEVER, that (if the Delaware General
Corporation Law requires) the payment of such expenses incurred by a
director or officer in his or her capacity as a director or officer
(and not in any other capacity in which service was or is rendered by
such person while a director or officer, including, without
limitation, service to an employee benefit plan) in advance of the
final disposition of a proceeding shall be made only upon delivery to
the Company of an undertaking, by or on behalf of such director or
officer, to repay all
<PAGE>
amounts so advanced if it shall ultimately be determined that such
director or officer is not entitled to be indemnified under this
Section or otherwise. The Company may, by action of its Board of
Directors, provide indemnification to employees or agents of the
Company with the same scope and effect as the foregoing
indemnification of directors and officers.
(B) RIGHT OF CLAIMANT TO BRING SUIT. If a claim under subsection
IX(A)(1) of this Article is not paid in full by the Company within thirty
days after a written claim has been received by the Company, the claimant
may at any time thereafter bring suit against the Company to recover the
unpaid amount of the claim, and, if successful in whole or in part, the
claimant shall be entitled to be paid also the expense of prosecuting
such claim. It shall be a defense to any such action (other than an
action brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required
undertaking, if any is required, has been tendered to the Company) that
the claimant has not met the standards of conduct which make it
permissible under the Delaware General Corporation Law for the Company to
indemnify the claimant for the amount claimed. Neither the failure of the
Company (including its Board of Directors, independent legal counsel, or
its stockholders) to have made a determination prior to the commencement
of such action that indemnification of the claimant is proper in the
circumstances because he or she has met the applicable standard of
conduct set forth in the Delaware General Corporation Law, nor an actual
determination by the Company (including its Board of Directors,
independent legal counsel, or its stockholders) that the claimant has not
met such applicable standard of conduct, shall be a defense to the action
or create a presumption that the claimant has not met the applicable
standard of conduct.
(C) NON-EXCLUSIVITY OF RIGHTS. The right to indemnification and the
payment of expenses incurred in defending a proceeding in advance of its
final disposition conferred in this Section shall not be exclusive of any
other right which any person may have or hereafter acquire under statute,
provision of the Certificate of Incorporation, by-law, agreement, vote of
stockholders or disinterested directors, or otherwise.
(D) INSURANCE. The Company may maintain insurance, at its expense, to
protect itself and any director, officer, employee or agent of the
Company or another corporation, partnership, joint venture, trust or
other enterprise against any such expense, liability or loss, whether or
not the Company would have the power to indemnify such person against
such expense, liability or loss under the Delaware Corporation Law.
X: Whenever a compromise or arrangement is proposed between the Company
and its creditors or any class of them and/or between the Company and its
stockholders or any class of them, any court of equitable jurisdiction
within the State of Delaware may, on the application in a summary way of the
Company or of any creditor or stockholder thereof or on the application of
any receiver or receivers appointed for the Company under the provisions of
Section 291 Title 8 of the Delaware Code or on the application of trustees
in dissolution or any receiver or receivers appointed for the Company under
the provisions of Section 279 of Title 8 of the Delaware Code, order a
meeting of the creditors or class of creditors, and/or of the stockholders
or class of stockholders of the Company, as the case may be, to be summoned
in such manner as the said court directs. If a majority in number
representing three-fourths in value of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of the Company, as the
case may be, agree to any compromise or arrangement and to any
reorganization of this Company as a consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been
made, be binding on all the creditors or class of creditors and/or on all
the stockholders or class of stockholders of the Company, as the case may
be, and also on the Company.
<PAGE>
RESOLVED FURTHER, that the foregoing Amended and Restated Certificate of
Incorporation is hereby approved and adopted.
IN WITNESS WHEREOF, VISX, INCORPORATED has caused this Restated Certificate
to be signed by Mark B. Logan, its President and Chief Executive Officer, this
20th day of September , 1996.
VISX, INCORPORATED
By: /s/ Mark B. Logan
-----------------------------------
Mark B. Logan
PRESIDENT AND CHIEF EXECUTIVE
OFFICER
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