<PAGE> 1
SCHEDULE 14A INFORMATION
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
FILED BY REGISTRANT [X]
FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
CHECK THE APPROPRIATE BOX:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission ONLY (AS PERMITTED BY
RULE 14a-6(e)(2))
VISX, INCORPORATED
- --------------------------------------------------------------------------------
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
- --------------------------------------------------------------------------------
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] NO FEE REQUIRED.
[ ] FEE COMPUTED ON TABLE BELOW PER EXCHANGE ACT RULES 14a-6(i)(4) AND 0-11.
(1) TITLE OF EACH CLASS OF SECURITIES TO WHICH TRANSACTION APPLIES:
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(2) AGGREGATE NUMBER OF SECURITIES TO WHICH TRANSACTION APPLIES:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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<PAGE> 2
VISX LOGO
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 19, 2000
To the Stockholders:
The Annual Meeting of Stockholders of VISX, Incorporated (the "Company")
will be held on Friday, May 19, 2000 at 8:00 a.m., local time, at The Embassy
Suites Santa Clara/Silicon Valley, 2885 Lakeside Drive, Santa Clara, California
95054 for the following purposes:
1. To elect six directors to serve until the next Annual Meeting and until
their successors have been elected and qualified;
2. To ratify the adoption of the 2000 Stock Plan;
3. To ratify the appointment of Arthur Andersen LLP as the Company's
independent public accountants for the year ending December 31, 2000;
and
4. To act upon such other matters as may properly come before the meeting
or any adjournment or postponement thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice. Only stockholders of record at the close of
business on March 22, 2000 are entitled to notice of, and to attend and vote at,
the meeting and at any postponement or adjournment thereof. A list of
stockholders entitled to vote at the Annual Meeting will be available for
inspection at the offices of the Company.
For the Board of Directors
/s/ Kina Lamblin
Kina Lamblin
Secretary
Santa Clara, California
April 4, 2000
YOUR VOTE IS IMPORTANT
IT IS IMPORTANT THAT ALL STOCKHOLDERS BE REPRESENTED AT THE ANNUAL MEETING.
THEREFORE, IN ORDER TO ASSURE YOUR REPRESENTATION WHETHER OR NOT YOU PLAN TO
ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN, AND RETURN THE ENCLOSED PROXY
CARD PROMPTLY IN THE ACCOMPANYING REPLY ENVELOPE. NO POSTAGE IS NECESSARY IF
MAILED IN THE UNITED STATES. YOU MAY REVOKE YOUR PROXY AT ANY TIME PRIOR TO THE
ANNUAL MEETING. IF YOU ATTEND THE ANNUAL MEETING AND WISH TO CHANGE YOUR PROXY
VOTE, YOU MAY DO SO AUTOMATICALLY BY VOTING IN PERSON AT THE ANNUAL MEETING.
<PAGE> 3
VISX, INCORPORATED
------------------------
PROXY STATEMENT
2000 ANNUAL MEETING OF STOCKHOLDERS
------------------------
INFORMATION CONCERNING VOTING AND PROXY SOLICITATION
GENERAL
These proxy materials are furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of VISX, Incorporated (the
"Company") for the Annual Meeting of Stockholders to be held on May 19, 2000 at
8:00 a.m., local time, and at any adjournment or postponement of the Annual
Meeting. The Annual Meeting will be held at The Embassy Suites Santa
Clara/Silicon Valley, 2885 Lakeside Drive, Santa Clara, California 95054. The
telephone number at the meeting location is (408) 496-6400. This Proxy
Statement, Notice of Annual Meeting and the accompanying proxy card will be
mailed to stockholders on or about April 4, 2000.
All share numbers provided in this Proxy Statement have been adjusted to
reflect the 2-for-1 splits of the Common Stock effected as 100% stock dividends
on January 13, 1999 and May 12, 1999.
PURPOSE OF MEETING
The specific proposals to be considered and acted upon at the Annual
Meeting are summarized in the accompanying Notice of Annual Meeting of
Stockholders. Each proposal is described in more detail in this Proxy Statement.
VOTING AND SOLICITATION
The Company's Common Stock is the only class of security entitled to vote
at the Annual Meeting. Only stockholders of record at the close of business on
March 22, 2000 will be entitled to vote on all matters to come before the
meeting. Each outstanding share of Common Stock entitles its holder to cast one
vote for each matter to be voted upon. On March 22, 2000, there were
approximately 61,601,940 shares of Common Stock outstanding and entitled to vote
at the Annual Meeting.
Votes cast by proxy or in person at the Annual Meeting will be tabulated by
the Inspector of Elections (the "Inspector") with the assistance of the
Company's Transfer Agent. The Inspector will also determine whether or not a
quorum is present. The presence at the Annual Meeting, in person or by proxy, of
the holders of a majority of the shares of Common Stock outstanding on March 22,
2000 will constitute a quorum. All proxies representing shares that are entitled
to vote at the meeting will be counted toward establishing a quorum, regardless
of whether such proxies contain abstentions or broker non-votes.
Whether or not you are able to attend the Annual Meeting, you are urged to
complete and return the enclosed proxy. All valid proxies received prior to the
meeting will be voted. If you specify a choice with respect to any item by
marking the appropriate box on the proxy, the shares will be voted in accordance
<PAGE> 4
with that specification. If no specification is made, the shares will be voted
FOR Proposals 1, 2, and 3 and, in the proxy holders' discretion, as to other
matters that may properly come before the Annual Meeting. If a broker indicates
on the enclosed proxy or its substitute that the broker does not have
discretionary authority as to certain shares to vote on a particular matter
(broker non-votes), those shares will not be considered as present with respect
to that matter.
The Company will bear the entire cost of solicitation, including the
preparation, assembly, printing and mailing of this Proxy Statement, the proxy
card and any additional soliciting material furnished to stockholders. In
addition, the Company expects to reimburse brokerage firms and other persons
representing beneficial owners of shares for their expense in forwarding
solicitation material to such beneficial owners. The original solicitation of
proxies by mail may be supplemented by solicitation by telephone, telegram,
facsimile, or personal communication by directors, officers, regular employees
or agents of the Company. No additional compensation will be paid to these
individuals for any such services. In addition, VISX may use the services of
professional proxy solicitation firms in connection with the solicitation of
proxies. VISX would pay the fees and expenses of such firms, which are estimated
not to exceed $25,000.
REVOCABILITY OF PROXIES
You may revoke or change your proxy at any time before the Annual Meeting.
To do this, send a written notice of revocation or another signed proxy with a
later date to the Secretary of the Company, Kina Lamblin, at the Company's
principal executive offices, before the beginning of the Annual Meeting. You may
also revoke your proxy by attending the Annual Meeting and voting in person.
Attendance at the Annual Meeting will not, in itself, constitute revocation of a
previously granted proxy.
STOCKHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
Stockholder proposals that are intended to be presented at the Company's
annual meeting of stockholders to be held in 2001 must be received by the
Company no later than December 6, 2000 in order to be included in the proxy
statement and related proxy materials.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
NOMINEES
A board of six directors is to be elected at the Annual Meeting. Unless
otherwise instructed, the proxy holders will vote the proxies received for the
Company's six nominees named below, all of whom are currently directors of the
Company. If any nominee of the Company is unable or declines to serve as a
director at the time of the Annual Meeting, the proxies will be voted for any
substitute nominee designated by the current Board of Directors to fill the
vacancy. The Company does not expect that any nominee listed below will be
unable or will decline to serve as a director. If additional persons are
nominated for election as directors, the proxy holders intend to vote all
proxies received in such a manner as will ensure the election of as many of the
nominees listed below as possible, and, in such event, the
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<PAGE> 5
proxy holders will determine the specific nominees to be voted for. In any
event, the proxy holders cannot vote for more than six persons. The term of
office of each person elected as a director will continue until the next Annual
Meeting of Stockholders or until his or her successor has been elected and
qualified.
The names of the nominees, and certain information about them, are set
forth below:
ELIZABETH H. DAVILA DIRECTOR SINCE 1995
Ms. Davila, 55, has served as President and Chief Operating Officer of the
Company since February 1999, Executive Vice President and Chief Operating
Officer from May 1995 through February 1999, and a Director since December 1995.
From 1977 to 1994, Ms. Davila held senior management positions with Syntex
Corporation which included Vice President of Quality and Reengineering, Vice
President and Director of the Drug Development Optimization Program, Vice
President of Marketing and Sales for the Syva Company Diagnostics Division and
Vice President of Marketing and Sales of the Syntex Ophthalmics Division. Ms.
Davila also serves on the Board of Directors of VidaMed, Inc.
GLENDON E. FRENCH DIRECTOR SINCE 1995
Mr. French, 66, has been a Director of the Company since May 1995. He
served as Chairman and Chief Executive Officer of Imagyn Medical, Inc.
("Imagyn") from February 1992 until his retirement as Chief Executive Officer in
December 1994. He continued to serve as Chairman of Imagyn until April 1995.
From 1989 until he joined Imagyn in February 1992, Mr. French was Chairman,
Chief Executive Officer and a director of Applied Immune Sciences, Inc. From
1982 to 1988, Mr. French was President of the Health and Education Services
Sector of ARA Services, Inc., and from 1972 to 1982, he was President of
American Critical Care (formerly a division of American Hospital Supply Corp.,
now known as Dupont Critical Care).
JOHN W. GALIARDO DIRECTOR SINCE 1996
Mr. Galiardo, 66, has been a Director of the Company since May 1996. He
served as Vice Chairman of the Board of Directors and General Counsel of Becton
Dickinson & Company from 1994 until his retirement in December 1999. Prior to
1994, he served as Vice President and General Counsel. Mr. Galiardo joined
Becton Dickinson in 1977 and was responsible for the Law and Patent Departments,
Medical Affairs, Corporate Regulatory and Quality Affairs, the Environment and
Safety Departments, and Government Affairs. Prior to joining Becton Dickinson,
Mr. Galiardo was Assistant General Counsel of E. R. Squibb & Sons, and before
that he was associated with the law firm of Dewey, Ballantine, Bushby, Palmer &
Wood in New York City. Mr. Galiardo is the past Chairman of the Health Industry
Manufacturers Association.
JAY T. HOLMES DIRECTOR SINCE 1999
Mr. Holmes, 57, has been a director of the Company since March 1999. He has
been a practicing attorney and business consultant since mid-1996. From 1981
until his retirement in mid-1996, Mr. Holmes held several senior management
positions at Bausch & Lomb Incorporated, the most recent being Executive Vice
President and Chief Administrative Officer (1995-1996) and Senior Vice President
and
3
<PAGE> 6
Chief Administrative Officer (1993-1995). From 1983-1993, Mr. Holmes was Senior
Vice President, Corporate Affairs, and from 1981-1983 Vice President and General
Counsel. Mr. Holmes was a member of the Board of Directors of Bausch & Lomb from
1986 until his retirement in 1996. Mr. Holmes also serves on the Board of
Directors of Rochester Energy Group.
MARK B. LOGAN DIRECTOR SINCE 1994
Mr. Logan, 61, has served as Chairman of the Board and Chief Executive
Officer of the Company since November 1994 and was also President of the Company
from November 1994 to February 1999. From January 1992 to October 1994, Mr.
Logan was Chairman of the Board, President and Chief Executive Officer of Insmed
Pharmaceuticals, Inc., a biopharmaceutical company based in Charlottesville,
Virginia. From 1967 to 1992, Mr. Logan held various senior management positions
with Bausch & Lomb Incorporated, Becton Dickinson & Company, and American Home
Products Corporation. His responsibilities included both medical devices and
pharmaceuticals, and domestic and international assignments. Mr. Logan also
serves on the Boards of Directors of Abgenix, Inc., Somnus Medical Technologies,
Inc. and VIVUS, Inc.
RICHARD B. SAYFORD DIRECTOR SINCE 1995
Mr. Sayford, 69, has been a Director of the Company since May 1995. He has
been President of Strategic Enterprises, Inc., a private business consulting
firm specializing in providing services to high technology and venture firms,
since 1979. He is a founding investor of MCI Communications Co., and served as a
member of the Board of Directors of MCI since 1980. He is also a director of
Brightlink Networks, Inc. and Columbia HealthOne, L.L.C. Mr. Sayford is former
President of Amdahl International, Ltd. and Corporate Vice President of Amdahl
Corporation.
VOTE REQUIRED AND BOARD OF DIRECTORS' RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES LISTED IN THIS
PROXY STATEMENT. The six nominees receiving the highest number of affirmative
votes of the shares of Common Stock of the Company present or represented and
entitled to be voted for them shall be elected as directors. Votes withheld from
any director will be counted for purposes of determining the presence or absence
of a quorum for the transaction of business at the meeting, but have no other
legal effect upon election of directors under Delaware law.
FURTHER INFORMATION CONCERNING
THE BOARD OF DIRECTORS
BOARD COMMITTEES AND MEETINGS
The Board of Directors of the Company held four meetings and one telephonic
meeting during 1999. All current directors and nominees attended all of the
meetings of the Board and the Board committees of which they were members during
1999. The Board of Directors has standing Audit and Compensation Committees.
4
<PAGE> 7
Audit Committee. In 1999, the Audit Committee was comprised of Directors
French (chair), Galiardo, Holmes and Sayford. Director Holmes was appointed to
the Committee in May of 1999. The Audit Committee oversees engagement of the
Company's independent public accountants, reviews the arrangements for and scope
of the audit by the Company's independent public accountants, and reviews and
evaluates the Company's accounting practices and its systems of internal
accounting controls. The Audit Committee held four meetings during 1999.
Compensation Committee. In 1999, the Compensation Committee was comprised
of Directors French, Galiardo, Holmes and Sayford (chair). Director Holmes was
appointed to the Committee in May of 1999. The Compensation Committee sets the
compensation of the Company's executive officers, including salary and bonuses,
and administers the Company's stock option plans. The Compensation Committee
held four meetings during 1999.
DIRECTOR COMPENSATION
In 1999, non-employee directors were paid an annual retainer of $15,000 and
a fee of $1,000 for each Board meeting the director attended ($250 for
attendance by telephone), and $500 for each Committee meeting the director
attended ($750 for the chairperson of the Committee). Non-employee directors
receive automatic annual grants of options to purchase 6,000 shares of the
Company's Common Stock. Non-employee directors also receive a one-time grant of
options to purchase 45,000 shares of the Company's Common Stock upon initial
election to the Board of Directors. In addition, directors are reimbursed for
out-of-pocket travel expenses associated with their attendance at Board and
Committee meetings.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors and persons who own more than ten percent of
the Company's Common Stock (collectively, "Reporting Persons") to file reports
of ownership and changes in ownership of the Company's Common Stock with the
Securities and Exchange Commission (the "SEC"). Reporting Persons are required
by SEC regulations to furnish the Company with copies of all Section 16(a) forms
that they file. Based solely on a review of the copies of reporting forms
furnished to the Company or written representations from certain Reporting
Persons that no annual forms were required, the Company believes that during
1999 all filing requirements were complied with.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Compensation Committee consists of Directors French,
Galiardo, Holmes and Sayford, all of whom are non-employee directors. Other than
Mark B. Logan, who serves on the compensation committees of Abgenix, Inc. and
VIVUS, Inc., no executive officer of the Company served on the compensation
committee of another entity or on any other committee of the board of directors
of another entity performing similar functions during 1999. No employee of
Abgenix, Inc. or VIVUS, Inc. serves on the Board of Directors or the
Compensation Committee of the Company.
5
<PAGE> 8
EXECUTIVE COMPENSATION
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
Compensation Committee. The Compensation Committee of the Board of
Directors is composed entirely of outside directors. The Committee is
responsible for setting and administering the policies and programs that govern
both annual compensation and stock ownership programs for the executive officers
of the Company. The Compensation Committee held four meetings during 1999.
Compensation Philosophy. The goals of the Company's compensation program
are to provide a strong and direct link between the Company's financial
performance and executive pay. The Company aligns management compensation with
business objectives and stockholder interests by setting performance measures
and objectives, and tying those objectives to a cash bonus plan and the use of
stock-based incentives. The Committee retains the services of an independent
compensation consulting firm to provide appropriate market survey data as well
as to make specific recommendations to the Committee with respect to base
salaries, cash bonuses, and stock incentive awards. The Committee retained this
consulting firm because of the firm's expertise in evaluating and assessing
compensation requirements in the Company's geographic region for attracting and
retaining high caliber candidates for executive management positions.
Other key elements of the Company's compensation philosophy include
establishing compensation programs that provide competitive pay systems to help
the Company attract, retain and motivate its executive management. The Company
positions its executive base salaries at the mid-point of survey data, and in
years in which bonuses are earned, total cash compensation is targeted to be
above the average survey data. The decision to grant bonuses or additional stock
incentive awards is keyed to achievement of the annual business plan for
Company-wide goals and individual performance.
Compliance With Internal Revenue Code Section 162(m). The Company is
subject to Section 162(m) of the Internal Revenue Code adopted in 1993, which
limits the deductibility of certain compensation payments to its executive
officers. The Company does not have a policy requiring the Committee to qualify
all compensation for deductibility under this provision. The Committee's current
view is that any non-deductible amounts will be immaterial to the Company's
financial or tax position, and that the Company derives substantial benefits
from the flexibility provided by the current system, in which the selection and
quantification of performance targets are modified from year to year to reflect
changing conditions. However, the Committee takes into account the net cost to
the Company in making all compensation decisions and will continue to evaluate
the impact of this provision on its compensation programs.
1999 Executive Compensation Program. In 1999, the Company's executive
compensation program integrated the following components: base salary, cash
bonuses and stock option grants. The Committee reviews each component of
executive compensation annually. As an executive's level of responsibility
increases, a greater portion of his or her potential total compensation is based
on performance incentives and less on salary and employee benefits, causing
potentially greater variability in the individual's absolute compensation level
from year to year.
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<PAGE> 9
BASE SALARY. The Committee establishes annual base salary levels for
executives based on competitive survey data, level of experience, position and
responsibility, the prior year's corporate performance and individual
recommendations of executive management.
INCENTIVE COMPENSATION PLAN. The Committee has approved a performance-based
executive compensation plan (the "Incentive Compensation Plan"). The Committee
awarded bonuses for 1999 using the criteria as set forth in that plan. The total
pool of monies available for bonuses was set based on the Committee's assessment
of 1999 performance. After reviewing the Company's 1999 performance, the
executives' individual performance and reports from the independent compensation
consulting firm, the Committee approved grants of bonuses for the executive
officers. All Named Officers (as defined below) were awarded cash bonuses in
2000 based on 1999 performance.
STOCK AWARDS. In 1999, the Committee approved stock option awards for the
executive officers, including four out of the five Named Officers. The fifth
Named Officer received a stock option award in late 1998 in connection with a
promotion. These awards were made in recognition of the performance of the
Company and the contributions made by the officers in achieving this level of
performance.
1999 Chief Executive Officer Compensation. Mr. Logan, in his capacity as
Chief Executive Officer, participated in the same compensation programs as the
other Named Officers. The Committee has targeted Mr. Logan's total compensation,
including compensation derived from the Incentive Compensation Plan and the
stock option plan, at a level it believes is competitive with the average amount
paid by the Company's competitors and companies with which the Company competes
for executive talent. Mr. Logan's salary was increased to $390,000 for 1999. Mr.
Logan received an Incentive Compensation Plan award in recognition of the
achievements of the Company during 1999 and of his contributions to those
achievements.
Submitted by the Compensation Committee
of the Company's Board of Directors:
Glendon E. French
John W. Galiardo
Jay T. Holmes
Richard B. Sayford
7
<PAGE> 10
COMPENSATION OF NAMED EXECUTIVES
Summary Compensation Table. The following table summarizes the total
compensation earned by or paid to the Chief Executive Officer and the four other
most highly compensated executive officers having total cash compensation for
1999 in excess of $100,000 (collectively, the "Named Officers") for services
rendered to the Company during each of the last three fiscal years.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION AWARDS
------------------------------------- -------------------------------------
OTHER ANNUAL NUMBER OF SHARES ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY(1) BONUS(2) COMPENSATION UNDERLYING OPTIONS COMPENSATION(3)
- --------------------------- ---- --------- -------- ------------ ------------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Mark B. Logan............... 1999 $389,135 $636,000 $ -- 300,000 $8,124
Chief Executive Officer
and 1998 364,388 730,000 -- 400,000 8,213
Chairman of the Board 1997 344,481 110,000 -- 980,000 6,458
Elizabeth H. Davila......... 1999 278,373 289,000 -- 180,000 9,294
President and 1998 232,600 303,000 -- 200,000 5,728
Chief Operating Officer 1997 219,596 50,000 -- 200,000 5,325
Timothy R. Maier............ 1999 198,962 183,000 -- -- 7,269
Executive Vice President
and 1998 169,384 134,000 -- 340,000 5,644
Chief Financial Officer 1997 149,731 30,000 -- 80,000 4,589
James W. McCollum........... 1999 174,550 110,000 -- 60,000 6,778
Vice President, Marketing 1998 161,690 138,000 -- 80,000 4,946
and Sales 1997 151,811 25,000 -- 100,000 4,351
David M. Patino............. 1999 172,619 105,000 -- 60,000 8,065
Vice President, Regulatory 1998 161,722 128,000 -- 100,000 5,566
and Clinical Affairs 1997 152,919 30,000 -- 80,000 5,000
</TABLE>
- ---------------
(1) No compensation is paid to officers of the Company for services rendered as
directors.
(2) Includes bonuses earned in the designated year but paid the following year.
(3) Represents premiums paid by the Company for Group Term Life Insurance and,
for fiscal years 1997 and 1998, the Company's contribution of $4,000 under
its 401(k) Plan matching program and, for fiscal year 1999, the Company's
contribution of $6,000 under its 401(k) Plan matching program.
8
<PAGE> 11
Option Grants in Last Fiscal Year. The table below provides details
regarding stock options granted to the Named Officers in 1999, and the potential
realizable value of those options. The values do not take into account risk
factors such as non-transferability and limits on exercisability. In assessing
these values it should be kept in mind that no matter what theoretical value is
placed on a stock option on the date of grant, its ultimate value will depend on
the market value of the Company's stock at a future date.
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF
SHARES TOTAL OPTIONS
UNDERLYING GRANTED TO EXERCISE GRANT DATE
OPTIONS EMPLOYEES IN PRICE EXPIRATION PRESENT
NAME GRANTED(1) FISCAL YEAR PER SHARE DATE VALUE(2)
---- ---------- ------------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Mark B. Logan.................... 300,000 15% $30.50 02/25/09 $3,510,540
Elizabeth H. Davila.............. 180,000 9 30.50 02/25/09 2,106,324
Timothy R. Maier................. -- -- -- -- --
James W. McCollum................ 60,000 3 30.50 02/25/09 702,108
David M. Patino.................. 60,000 3 30.50 02/25/09 702,108
</TABLE>
- ---------------
(1) Options granted in 1999 have a ten-year term and vest in increments of
1/24th per month measured from the date of grant. The exercisability of the
options is automatically accelerated upon a change in control of the
Company.
(2) Calculated using the Black-Scholes option pricing model. Assumes that
options have a ten-year term. Also assumes a weighted average stock price
volatility of 68%, a current dividend yield of zero, and an expected
weighted average interest rate of 5.43%.
Aggregate Option Exercises in Last Fiscal Year and Fiscal Year-End
Values. The following table provides information with respect to option
exercises in 1999 by the Named Officers and the value of such officers'
unexercised options as of December 31, 1999. The values for "in-the-money"
options represent the spread between the exercise price of any such existing
stock options and the year-end price of Common Stock.
<TABLE>
<CAPTION>
NUMBER OF SHARES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
SHARES OPTIONS AT FISCAL YEAR-END FISCAL YEAR-END(2)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Mark B. Logan.................. 982,606 $53,809,845 509,469 827,925 $20,182,837 $33,663,844
Elizabeth H. Davila............ 228,228 $13,587,306 337,600 292,508 $13,439,508 $10,829,268
Timothy R. Maier............... 150,934 $ 7,312,111 209,142 267,924 $ 8,896,326 $ 9,974,079
James W. McCollum.............. 261,971 $13,424,545 23,858 114,171 $ 710,753 $ 4,385,694
David M. Patino................ 135,414 $ 7,137,054 15,418 135,840 $ 578,017 $ 5,367,778
</TABLE>
- ---------------
(1) Market value of underlying shares at the exercise date minus the exercise
price.
(2) Value of unexercised options is based on the price of the last reported sale
of the Company's Common Stock on the Nasdaq National Market of $51.75 per
share on December 31, 1999 (the last trading day for fiscal 1999), minus the
exercise price.
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<PAGE> 12
EMPLOYMENT ARRANGEMENTS
The Company has entered into Change of Control Severance Agreements (the
"Severance Agreements") with the Named Officers. The Severance Agreements
provide that if the Named Officer is effectively terminated other than for cause
within two years after a change of control of the Company, the Named Officer is
entitled to receive a lump sum severance payment equal to one, one-and-a-half,
or two times the Named Officer's annual base salary and bonus, the exact
multiple depending on the level of the Named Officer's position within the
Company. In addition, pursuant to the terms of the Company's option plans, all
outstanding unvested options as of the date of a change of control, including
options held by the Named Officers, become fully vested and exercisable upon the
occurrence of a change of control.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In April 1998, the Company granted Jay T. Holmes an option to purchase
130,000 shares of the Common Stock of the Company. This grant was made in
exchange for consulting services performed in 1998. Other than the automatic
stock option grants made pursuant to the 1995 Director Option Plan, the Company
has not made any additional stock option grants to Mr. Holmes.
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<PAGE> 13
PERFORMANCE GRAPH
The SEC requires the Company to include in this proxy statement a
line-graph presentation comparing cumulative, five-year stockholder returns on
an indexed basis with a broad equity market index and either a nationally
recognized industry standard or an index of peer companies selected by the
Company. The following graph assumes that $100 was invested on December 30, 1994
(the last trading day of that year) in each of the Company's Common Stock and
each of the comparative markets, and that all dividends were reinvested. The
stock price performance shown on the graph is not necessarily indicative of
future price performance.
The following graph compares the performance of the Company's Common Stock
with the performance of the Standard & Poor's Biotechnical and Medical Products
Group Index, and the Nasdaq National Market (U.S. Composite) Index.
<TABLE>
<CAPTION>
VISX, INCORPORATED S&P MEDICAL PRODUCTS NASDAQ COMPOSITE
------------------ -------------------- ----------------
<S> <C> <C> <C>
12/30/94 100 100 100
12/29/95 371 169 141
12/31/96 211 194 173
12/31/97 211 242 212
12/31/98 833 348 297
12/31/99 1971 553 323
</TABLE>
11
<PAGE> 14
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information known to the Company
regarding the beneficial ownership of the Company's Common Stock as of March 22,
2000 by (1) each person known to the Company to own more than 5% of the issued
and outstanding Common Stock, (2) each of the Company's directors, (3) each of
the Named Officers, and (4) all directors, nominees and officers as a group.
Except as otherwise indicated, each person has sole voting and investment power
with respect to all shares shown as beneficially owned, subject to community
property laws where applicable.
<TABLE>
<CAPTION>
COMMON APPROXIMATE
STOCK PERCENT
BENEFICIALLY BENEFICIALLY
BENEFICIAL OWNER OWNED OWNED
---------------- ------------ ------------
<S> <C> <C>
Massachusetts Financial Services Company.................... 7,561,260(1) 12.3%
500 Boylston Street
Boston, Massachusetts 02116
Mark B. Logan............................................... 784,042(2) 1.3%
Elizabeth H. Davila......................................... 455,825(3) +
Glendon E. French........................................... 44,000(4) +
John W. Galiardo............................................ 60,000(5) +
Jay T. Holmes............................................... 88,480(6) +
Timothy R. Maier............................................ 287,151(7) +
James W. McCollum........................................... 109,300(8) +
David M. Patino............................................. 60,834(9) +
Richard B. Sayford.......................................... 58,800(10) +
All directors and officers as a group (14 persons).......... 2,259,729(11) 3.7%
</TABLE>
- ---------------
+ Represents less than 1% of the Company's outstanding Common Stock.
(1) As reported on Schedule 13G filed with the SEC on or about February 18,
2000. Massachusetts Financial Services Company has sole voting power and
sole dispositive power with respect to the 7,561,260 shares.
(2) Mr. Logan's total includes options to purchase 736,551 shares that will be
exercisable on or before May 21, 2000.
(3) Ms. Davila's total includes options to purchase 425,933 shares that will be
exercisable on or before May 21, 2000.
(4) Mr. French's total includes options to purchase 44,000 shares that will be
exercisable on or before May 21, 2000.
(5) Mr. Galiardo's total includes options to purchase 56,000 shares that will
be exercisable on or before May 21, 2000.
(6) Mr. Holmes' total includes options to purchase 85,000 shares that will be
exercisable on or before May 21, 2000.
12
<PAGE> 15
(7) Mr. Maier's total includes options to purchase 261,227 shares that will be
exercisable on or before May 21, 2000.
(8) Mr. McCollum's total includes options to purchase 59,274 shares that will
be exercisable on or before May 21, 2000.
(9) Mr. Patino's total includes options to purchase 60,834 shares that will be
exercisable on or before May 21, 2000.
(10) Mr. Sayford's total includes options to purchase 58,000 shares that will be
exercisable on or before May 21, 2000.
(11) The total includes options to purchase an aggregate of 2,058,657 shares
held by non-employee directors and officers that will be exercisable on or
before May 21, 2000.
13
<PAGE> 16
PROPOSAL NO. 2
APPROVAL OF ADOPTION OF 2000 STOCK PLAN
The Company presently grants options under its 1995 Stock Plan (the "1995
Plan"), which is scheduled to terminate in December 2000. The Company believes
that in order to be able to remain competitive in today's marketplace, it is
necessary to offer stock options as part of a total compensation package.
In February 2000, the Board of Directors approved, and recommended that the
Company's stockholders approve, a new 2000 Stock Plan (the "2000 Plan"). Upon
adoption by the stockholders of the 2000 Plan at the Annual Meeting, the 1995
Plan will immediately be terminated and replaced by the 2000 Plan and shares
that were available for grant under the 1995 Plan will no longer be available
for grant. Instead, options to purchase a total of 3,000,000 shares will be
available for grant under the 2000 Plan. This represents less than 5% of the
shares of the Company's Common Stock outstanding as of the record date. All
outstanding options granted under the 1995 Plan will continue to vest in
accordance with the terms of the 1995 Plan.
A description of the principal terms of the 2000 Plan and its purpose are
set forth below. This description is qualified in its entirety by the terms of
the 2000 Plan, which is attached to this Proxy Statement as EXHIBIT A and is
incorporated into this Proxy Statement by reference.
General. The purpose of the 2000 Plan is to attract and retain the best
available personnel for the Company, to provide additional incentive to the
employees and consultants of the Company and its subsidiaries, and to promote
the success of the Company's business. The 2000 Plan provides the Company with
the ability to grant a total of 3,000,000 shares pursuant to its terms. Options
granted under the 2000 Plan may be either "incentive stock options" or
nonstatutory stock options. The 2000 Plan does not permit the Board to grant any
option with an exercise price below 100% of fair market value per share of the
Company's Common Stock on the date of grant, nor does it permit the Board to
reprice any option without stockholder approval.
Administration. The 2000 Plan may generally be administered by the Board or
a Committee appointed by the Board (as applicable, the "Administrator"). The
Administrator may make any determinations deemed necessary or advisable for the
2000 Plan.
Eligibility. Nonstatutory stock options may be granted under the 2000 Plan
to employees, directors and consultants of the Company and any parent or
subsidiary of the Company. Incentive stock options may be granted only to
employees of the Company or any parent or subsidiary of the Company. The
Administrator, in its discretion, determines the employees, directors and
consultants to whom options may be granted, the time or times at which such
options shall be granted, the exercise price (subject to the terms of the 2000
Plan), and number of shares subject to each such grant.
Limitations. Section 162(m) of the Code places limits on the deductibility
for federal income tax purposes of compensation paid to certain executive
officers of the Company. In order to preserve the Company's ability to deduct
the compensation income associated with options granted to such persons, the
2000 Plan provides that no employee, director or consultant may be granted, in
any fiscal year of the Company, options to purchase more than 500,000 shares of
Common Stock. Notwithstanding this limit,
14
<PAGE> 17
however, in connection with such individual's initial service to the Company, he
or she may be granted options to purchase up to an additional 500,000 shares of
Common Stock.
Terms and Conditions of Options. Each option is evidenced by a stock option
agreement between the Company and the optionee, and is subject to the following
terms and conditions:
(a) Exercise Price. The Administrator determines the exercise price of
options at the time the options are granted. The exercise price of options
may not be less than 100% of the fair market value of the Common Stock on
the date such option is granted; provided, however, that the exercise price
of an incentive stock option granted to a 10% stockholder may not be less
than 110% of the fair market value on the date such option is granted. The
fair market value of the Common Stock is generally determined with
reference to the closing sales price for the Common Stock (or the closing
bid if no sales were reported) on the date the option is granted.
(b) Exercise of Option; Form of Consideration. The Administrator
determines when options become exercisable, and may in its discretion,
accelerate the vesting of any outstanding option. The means of payment for
shares issued upon exercise of an option is specified in each option
agreement. The 2000 Plan permits payment to be made by cash, check,
promissory note, other shares of Common Stock of the Company (with some
restrictions), cashless exercises, any other form of consideration
permitted by applicable law, or any combination thereof.
(c) Term of Option. The term of each option is specified in each
option agreement. The term of an incentive stock option may be no more than
ten (10) years from the date of grant; provided, however, that in the case
of an incentive stock option granted to a 10% stockholder, the term of the
option may be no more than five (5) years from the date of grant. No option
may be exercised after the expiration of its term.
(d) Termination of Service. If an optionee's service relationship
terminates for any reason (excluding death or disability), then the
optionee generally may exercise the option within three (3) months of such
termination to the extent that the option is vested on the date of
termination, but in no event later than the expiration of the term of such
option as set forth in the option agreement. If an optionee's service
relationship terminates due to the optionee's death or disability, the
optionee (or the optionee's estate or the person who acquires the right to
exercise the option by bequest or inheritance) generally may exercise the
option, to the extent the option was vested on the date of termination,
within twelve (12) months from the date of such termination.
(e) Nontransferability of Options. Unless otherwise determined by the
Administrator, options granted under the 2000 Plan are not transferable
other than by will or the laws of descent and distribution, and may be
exercised during the optionee's lifetime only by the optionee.
(f) Other Provisions. The stock option agreement may contain other
terms, provisions and conditions not inconsistent with the 2000 Plan as may
be determined by the Administrator.
Adjustments Upon Changes in Capitalization. In the event that the stock of
the Company changes by reason of any stock split, reverse stock split, stock
dividend, combination, reclassification or other similar change in the capital
structure of the Company effected without the receipt of consideration,
proportionate adjustments shall be made in the number and class of shares of
stock subject to the 2000
15
<PAGE> 18
Plan, the number and class of shares of stock subject to any option outstanding
under the 2000 Plan, and the exercise price of any such outstanding option.
In the event of a liquidation or dissolution, any unexercised options will
terminate. The Administrator may, in its sole discretion, provide that each
optionee shall have the right to exercise all or any part of the option until
fifteen (15) days prior to such transaction, including shares as to which the
option would not otherwise be exercisable.
Subject to the occurrence of a change of control of the Company (as
discussed below), in connection with any merger of the Company with or into
another corporation or the sale of all or substantially all of the assets of the
Company, each outstanding option shall be assumed or an equivalent option
substituted by the successor corporation. If the successor corporation refuses
to assume the options or to substitute substantially equivalent options, the
optionee shall have the right to exercise the option as to all the optioned
stock, including shares not otherwise vested or exercisable. In such event, the
Administrator shall notify the optionee that the option is fully exercisable for
fifteen (15) days from the date of such notice and that the option terminates
upon expiration of such period.
Change of Control. The agreements underlying the 2000 Plan generally
provide that in the event of a change of control, the optionee shall have the
right to exercise the option as to all the optioned stock, including shares not
otherwise vested or exercisable. In such event, the Administrator shall notify
the optionee that the option is fully exercisable. A change of control is
defined as (i) the acquisition of at least twenty percent (20%) of the Company
by a "person" (as defined in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934), (ii) certain changes in the composition of the Board of Directors
of the Company, (iii) a merger or consolidation where the Company's stockholders
do not own at least fifty percent (50%) of the voting power after the
transaction, or (iv) the sale or disposition of substantially all of the
Company's assets.
Amendment and Termination of the 2000 Plan. The Board may amend, alter,
suspend or terminate the 2000 Plan, or any part thereof, at any time and for any
reason, provided that the Board may not amend the 2000 Plan to permit the grant
of options with an exercise price below 100% of fair market value per share of
the Company's stock on the date of grant, or to permit the Board to reprice any
option without stockholder approval. The Company shall obtain stockholder
approval for any amendment to the 2000 Plan to the extent necessary and
desirable to comply with applicable law. No such action by the Board or
stockholders may alter or impair any option previously granted under the 2000
Plan without the written consent of the optionee. Unless terminated earlier, the
2000 Plan shall terminate ten (10) years from the date the 2000 Plan was adopted
by the Board.
FEDERAL INCOME TAX CONSEQUENCES
Incentive Stock Options. An optionee who is granted an incentive stock
option does not recognize taxable income at the time the option is granted or
upon its exercise, although the exercise is an adjustment item for alternative
minimum tax purposes and may subject the optionee to the alternative minimum
tax. Upon a disposition of the shares more than two years after grant of the
option and one year after exercise of the option, any gain or loss is treated as
long-term capital gain or loss. Currently, net capital gains on shares held more
than twelve (12) months may be taxed at a maximum federal rate of
16
<PAGE> 19
twenty percent (20%). Capital losses are currently allowed in full against
capital gains and up to $3,000 against other income. If these holding periods
are not satisfied, the optionee recognizes ordinary income at the time of
disposition equal to the difference between the exercise price and the lower of
(i) the fair market value of the shares at the date of the option exercise or
(ii) the sale price of the shares. Any gain or loss recognized in excess of the
amount treated as ordinary income is treated as long-term or short-term capital
gain or loss, depending on the holding period. Unless limited by Section 162(m)
of the Internal Revenue Code (the "Code"), the Company is entitled to a
deduction in the same amount as the ordinary income recognized by the optionee.
Nonstatutory Stock Options. An optionee does not recognize any taxable
income at the time he or she is granted a nonstatutory stock option. Upon
exercise, the optionee recognizes taxable income generally measured by the
excess of the then fair market value of the shares over the exercise price. Any
taxable income recognized in connection with an option exercise by an employee
of the Company is subject to tax withholding by the Company. Unless limited by
Section 162(m) of the Code, the Company is entitled to a deduction in the same
amount as the ordinary income recognized by the optionee. Upon a disposition of
such shares by the optionee, any difference between the sale price and the
optionee's exercise price, to the extent not recognized as taxable income as
provided above, is currently treated as long-term or short-term capital gain or
loss, depending on the holding period. Currently, net capital gains on shares
held more than twelve (12) months may be taxed at a maximum federal rate of
twenty percent (20%). Capital losses are currently allowed in full against
capital gains and up to $3,000 against other income.
The foregoing is only a summary of the effect of federal income taxation
upon optionees and the Company with respect to the grant and exercise of options
under the 2000 Plan. It does not purport to be complete, and does not discuss
the tax consequences of the employee's or consultant's death or the provisions
of the income tax laws of any municipality, state or foreign country in which
the employee or consultant may reside.
VOTE REQUIRED AND BOARD OF DIRECTORS' RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL NUMBER 2. The
affirmative vote by a majority of the shares of Common Stock of the Company
represented in person or by proxy and entitled to vote, and voting with respect
to this proposal, at the Annual Meeting will be required to approve the 2000
Plan.
PROPOSAL NO. 3
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Company is asking the stockholders to ratify the appointment of Arthur
Andersen LLP as the Company's independent public accountants for the year ending
December 31, 2000. Representatives of Arthur Andersen LLP are expected to attend
the Annual Meeting and will have the opportunity to make a statement if they
desire to do so and to answer appropriate questions.
17
<PAGE> 20
VOTE REQUIRED AND BOARD OF DIRECTORS' RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL NUMBER 3.
Ratification of the appointment of Arthur Andersen LLP as the Company's
independent public accountants for the year ending December 31, 2000 will
require the affirmative vote of a majority of the shares of Common Stock
represented in person or by proxy and entitled to vote, and voting with respect
to this proposal, at the Annual Meeting. If stockholders do not ratify the
appointment of Arthur Andersen LLP, the Audit Committee and the Board of
Directors will reconsider the appointment.
OTHER MATTERS
The Board knows of no other matters to be presented for stockholder action
at the Annual Meeting. However, if other matters do properly come before the
Annual Meeting or any adjournment or postponement thereof, the Board intends
that the persons named in the proxies will vote upon such matters in accordance
with their best judgment.
* * * *
18
<PAGE> 21
EXHIBIT A
VISX, INCORPORATED
2000 STOCK PLAN
1. Purposes of the Plan. The purposes of this 2000 Stock Plan are:
- to attract and retain the best available personnel for positions of
substantial responsibility,
- to provide additional incentive to Employees, Directors and Consultants,
and
- to promote the success of the Company's business.
Options granted under the Plan may be Incentive Stock Options or
Nonstatutory Stock Options, as determined by the Administrator at the time of
grant.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or any of its Committees as shall
be administering the Plan, in accordance with Section 4 of the Plan.
(b) "Applicable Laws" means the requirements relating to the
administration of stock option plans under U. S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or
quotation system on which the Common Stock is listed or quoted and the
applicable laws of any foreign country or jurisdiction where Options are,
or will be, granted under the Plan.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means a committee of Directors appointed by the Board
in accordance with Section 4 of the Plan.
(f) "Common Stock" means the common stock of the Company.
(g) "Company" means VISX, Incorporated, a Delaware corporation.
(h) "Consultant" means any person, including an advisor, engaged by
the Company or a Parent or Subsidiary to render services to such entity.
(i) "Director" means a member of the Board.
(j) "Disability" means total and permanent disability as defined in
Section 22(e)(3) of the Code.
(k) "Employee" means any person, including Officers and Directors,
employed by the Company or any Parent or Subsidiary of the Company. A
Service Provider shall not cease to be an Employee in the case of (i) any
leave of absence approved by the Company or (ii) transfers between
locations of the Company or between the Company, its Parent, any
Subsidiary, or any successor. For purposes of Incentive Stock Options, no
such leave may exceed ninety (90) days, unless reemployment upon expiration
of such leave is guaranteed by statute or contract. If reemployment upon
expiration of a leave of absence approved by the Company is not so
guaranteed, on the 181st day of such leave any
A-1
<PAGE> 22
Incentive Stock Option held by the Optionee shall cease to be treated as an
Incentive Stock Option and shall be treated for tax purposes as a
Nonstatutory Stock Option. Neither service as a Director nor payment of a
director's fee by the Company shall be sufficient to constitute
"employment" by the Company.
(l) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(m) "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:
(i) If the Common Stock is listed on any established stock exchange
or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock
Market, its Fair Market Value shall be the closing sales price for such
stock (or the closing bid, if no sales were reported) as quoted on such
exchange or system on the day of determination, as reported in The Wall
Street Journal or such other source as the Administrator deems reliable;
(ii) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market
Value of a Share of Common Stock shall be the mean between the high bid
and low asked prices for the Common Stock on the day of determination,
as reported in The Wall Street Journal or such other source as the
Administrator deems reliable; or
(iii) In the absence of an established market for the Common Stock,
the Fair Market Value shall be determined in good faith by the
Administrator.
(n) "Incentive Stock Option" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and
the regulations promulgated thereunder.
(o) "Nonstatutory Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.
(p) "Notice of Grant" means a written or electronic notice evidencing
certain terms and conditions of an individual Option grant. The Notice of
Grant is part of the Option Agreement.
(q) "Officer" means a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(r) "Option" means a stock option granted pursuant to the Plan.
(s) "Option Agreement" means an agreement between the Company and an
Optionee evidencing the terms and conditions of an individual Option grant.
The Option Agreement is subject to the terms and conditions of the Plan.
(t) "Optioned Stock" means the Common Stock subject to an Option.
(u) "Optionee" means the holder of an outstanding Option granted under
the Plan.
(v) "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.
A-2
<PAGE> 23
(w) "Plan" means this 2000 Stock Plan.
(x) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any successor
to Rule 16b-3, as in effect when discretion is being exercised with respect
to the Plan.
(y) "Section 16(b)" means Section 16(b) of the Exchange Act.
(z) "Service Provider" means an Employee, Director or Consultant.
(aa) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 12 of the Plan.
(bb) "Subsidiary" means a "subsidiary corporation", whether now or
hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 12 of
the Plan, the maximum aggregate number of Shares that may be optioned and sold
under the Plan is 3,000,000 Shares. The Shares may be authorized, but unissued,
or reacquired Common Stock.
If an Option expires or becomes unexercisable without having been exercised
in full, the unpurchased Shares which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has
terminated); provided, however, that Shares that have actually been issued under
the Plan, upon exercise of an Option, shall not be returned to the Plan and
shall not become available for future distribution under the Plan.
4. Administration of the Plan.
(a) Procedure.
(i) Multiple Administrative Bodies. Different Committees may
administer the Plan with respect to different groups of Service Providers.
(ii) Section 162(m). To the extent that the Administrator determines
it to be desirable to qualify Options granted hereunder as
"performance-based compensation" within the meaning of Section 162(m) of
the Code, the Plan shall be administered by a Committee of two or more
"outside directors" within the meaning of Section 162(m) of the Code.
(iii) Rule 16b-3. To the extent desirable to qualify transactions
hereunder as exempt under Rule 16b-3, the transactions contemplated
hereunder shall be structured to satisfy the requirements for exemption
under Rule 16b-3.
(iv) Other Administration. Other than as provided above, the Plan
shall be administered by (A) the Board or (B) a Committee, which committee
shall be constituted to satisfy Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of the Plan, and
in the case of a Committee, subject to the specific duties delegated by the
Board to such Committee, the Administrator shall have the authority, in its
discretion:
(i) to determine the Fair Market Value in accordance with Section 2(m)
of the Plan;
(ii) to select the Service Providers to whom Options may be granted
hereunder;
A-3
<PAGE> 24
(iii) to determine the number of shares of Common Stock to be covered
by each Option granted hereunder;
(iv) to approve forms of agreement for use under the Plan;
(v) to determine the terms and conditions, not inconsistent with the
terms of the Plan or any Option granted hereunder. Such terms and
conditions include, but are not limited to, the exercise price in
accordance with Section 9(a), the time or times when Options may be
exercised (which may be based on performance criteria), any vesting
acceleration or waiver of forfeiture restrictions, and any restriction or
limitation regarding any Option or the shares of Common Stock relating
thereto, based in each case on such factors as the Administrator, in its
sole discretion, shall determine;
(vi) to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan;
(vii) to prescribe, amend and rescind rules and regulations relating
to the Plan, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax treatment under
foreign tax laws;
(viii) to modify or amend each Option (subject to Section 14(c) of the
Plan), including the discretionary authority to extend the post-termination
exercisability period of Options longer than is otherwise provided for in
the Plan, provided that the Board may not amend any Option to reduce the
exercise price of the option below 100% of the Fair Market Value per Share
on the date of grant;
(ix) to authorize any person to execute on behalf of the Company any
instrument required to effect the grant of an Option previously granted by
the Administrator;
(x) to make all other determinations deemed necessary or advisable for
administering the Plan.
(c) Effect of Administrator's Decision. The Administrator's decisions,
determinations and interpretations shall be final and binding on all Optionees
and any other holders of Options.
5. Eligibility. Nonstatutory Stock Options may be granted to Service
Providers. Incentive Stock Options may be granted only to Employees.
6. Limitations.
(a) Each Option shall be designated in the Option Agreement as either an
Incentive Stock Option or a Nonstatutory Stock Option. However, notwithstanding
such designation, to the extent that the aggregate Fair Market Value of the
Shares with respect to which Incentive Stock Options are exercisable for the
first time by the Optionee during any calendar year (under all plans of the
Company and any Parent or Subsidiary) exceeds $100,000, such Options shall be
treated as Nonstatutory Stock Options. For purposes of this Section 6(a),
Incentive Stock Options shall be taken into account in the order in which they
were granted. The Fair Market Value of the Shares shall be determined as of the
time the Option with respect to such Shares is granted.
(b) Neither the Plan nor any Option shall confer upon an Optionee any right
with respect to continuing the Optionee's relationship as a Service Provider
with the Company, nor shall they interfere in any way with the Optionee's right
or the Company's right to terminate such relationship at any time, with or
without cause.
A-4
<PAGE> 25
(c) The following limitations shall apply to grants of Options:
(i) No Service Provider shall be granted, in any fiscal year of the
Company, Options to purchase more than 500,000 Shares.
(ii) In connection with his or her initial service, a Service Provider
may be granted Options to purchase up to an additional 500,000 Shares,
which shall not count against the limit set forth in subsection (i) above.
(iii) The foregoing limitations shall be adjusted proportionately in
connection with any change in the Company's capitalization as described in
Section 12.
(iv) If an Option is cancelled in the same fiscal year of the Company
in which it was granted (other than in connection with a transaction
described in Section 12), the cancelled Option will be counted against the
limits set forth in subsections (i) and (ii) above. For this purpose, if
the exercise price of an Option is reduced, the transaction will be treated
as a cancellation of the Option and the grant of a new Option.
7. Term of Plan. Subject to Section 18 of the Plan, the Plan shall become
effective upon its adoption by the Board. It shall continue in effect for a term
of ten (10) years unless terminated earlier under Section 14 of the Plan.
8. Term of Option. The term of each Option shall be stated in the Option
Agreement. In the case of an Incentive Stock Option, the term shall be ten (10)
years from the date of grant or such shorter term as may be provided in the
Option Agreement. Moreover, in the case of an Incentive Stock Option granted to
an Optionee who, at the time the Incentive Stock Option is granted, owns stock
representing more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company or any Parent or Subsidiary, the term of the
Incentive Stock Option shall be five (5) years from the date of grant or such
shorter term as may be provided in the Option Agreement.
9. Option Exercise Price and Consideration.
(a) Exercise Price. The per share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time the Incentive Stock
Option is granted, owns stock representing more than ten percent (10%)
of the voting power of all classes of stock of the Company or any Parent
or Subsidiary, the per Share exercise price shall be no less than 110%
of the Fair Market Value per Share on the date of grant.
(B) granted to any Employee other than an Employee described in
paragraph (A) immediately above, the per Share exercise price shall be
no less than 100% of the Fair Market Value per Share on the date of
grant.
(b) Waiting Period and Exercise Dates. At the time an Option is granted,
the Administrator shall fix the period within which the Option may be exercised
and shall determine any conditions that must be satisfied before the Option may
be exercised.
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(c) Form of Consideration. The Administrator shall determine the acceptable
form of consideration for exercising an Option, including the method of payment.
In the case of an Incentive Stock Option, the Administrator shall determine the
acceptable form of consideration at the time of grant. Such consideration may
consist entirely of:
(i) cash;
(ii) check;
(iii) promissory note;
(iv) other Shares which (A) in the case of Shares acquired upon
exercise of an option, have been owned by the Optionee for more than six
months on the date of surrender, and (B) have a Fair Market Value on the
date of surrender equal to the aggregate exercise price of the Shares as to
which said Option shall be exercised;
(v) consideration received by the Company under a cashless exercise
program implemented by the Company in connection with the Plan;
(vi) a reduction in the amount of any Company liability to the
Optionee, including any liability attributable to the Optionee's
participation in any Company-sponsored deferred compensation program or
arrangement;
(vii) any combination of the foregoing methods of payment; or
(viii) such other consideration and method of payment for the issuance
of Shares to the extent permitted by Applicable Laws.
10. Exercise of Option.
(a) Procedure for Exercise; Rights as a Stockholder. Any Option granted
hereunder shall be exercisable according to the terms of the Plan and at such
times and under such conditions as determined by the Administrator and set forth
in the Option Agreement. An Option may not be exercised for a fraction of a
Share.
An Option shall be deemed exercised when the Company receives: (i) written
or electronic notice of exercise (in accordance with the Option Agreement) from
the person entitled to exercise the Option, and (ii) full payment for the Shares
with respect to which the Option is exercised. Full payment may consist of any
consideration and method of payment authorized by the Administrator and
permitted by the Option Agreement and the Plan. Shares issued upon exercise of
an Option shall be issued in the name of the Optionee or, if requested by the
Optionee, in the name of the Optionee and his or her spouse. Until the Shares
are issued (as evidenced by the appropriate entry on the books of the Company or
of a duly authorized transfer agent of the Company), no right to vote or receive
dividends or any other rights as a stockholder shall exist with respect to the
Optioned Stock, notwithstanding the exercise of the Option. The Company shall
issue (or cause to be issued) such Shares promptly after the Option is
exercised. No adjustment will be made for a dividend or other right for which
the record date is prior to the date the Shares are issued, except as provided
in Section 12 of the Plan.
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Exercising an Option in any manner shall decrease the number of Shares
thereafter available, both for purposes of the Plan and for sale under the
Option, by the number of Shares as to which the Option is exercised.
(b) Termination of Relationship as a Service Provider. If an Optionee
ceases to be a Service Provider, other than upon the Optionee's death or
Disability, the Optionee may exercise his or her Option within such period of
time as is specified in the Option Agreement to the extent that the Option is
vested on the date of termination (but in no event later than the expiration of
the term of such Option as set forth in the Option Agreement). In the absence of
a specified time in the Option Agreement, the Option shall remain exercisable
for three (3) months following the Optionee's termination. If, on the date of
termination, the Optionee is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option shall revert to the Plan.
If, after termination, the Optionee does not exercise his or her Option within
the time specified by the Administrator, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.
(c) Disability of Optionee. If an Optionee ceases to be a Service Provider
as a result of the Optionee's Disability, the Optionee may exercise his or her
Option within such period of time as is specified in the Option Agreement to the
extent the Option is vested on the date of termination (but in no event later
than the expiration of the term of such Option as set forth in the Option
Agreement). In the absence of a specified time in the Option Agreement, the
Option shall remain exercisable for twelve (12) months following the Optionee's
termination. If, on the date of termination, the Optionee is not vested as to
his or her entire Option, the Shares covered by the unvested portion of the
Option shall revert to the Plan. If, after termination, the Optionee does not
exercise his or her Option within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.
(d) Death of Optionee. If an Optionee dies while a Service Provider, the
Option may be exercised within such period of time as is specified in the Option
Agreement (but in no event later than the expiration of the term of such Option
as set forth in the Notice of Grant), by the Optionee's estate or by a person
who acquires the right to exercise the Option by bequest or inheritance, but
only to the extent that the Option is vested on the date of death. In the
absence of a specified time in the Option Agreement, the Option shall remain
exercisable for twelve (12) months following the Optionee's termination. If, at
the time of death, the Optionee is not vested as to his or her entire Option,
the Shares covered by the unvested portion of the Option shall immediately
revert to the Plan. The Option may be exercised by the executor or administrator
of the Optionee's estate or, if none, by the person(s) entitled to exercise the
Option under the Optionee's will or the laws of descent or distribution. If the
Option is not so exercised within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.
11. Non-Transferability of Options. Unless determined otherwise by the
Administrator, an Option may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee. If the Administrator makes an Option
transferable, such Option shall contain such additional terms and conditions as
the Administrator deems appropriate.
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<PAGE> 28
12. Adjustments Upon Changes in Capitalization, Dissolution, Merger or
Asset Sale.
(a) Changes in Capitalization. Subject to any required action by the
stockholders of the Company, the number of shares of Common Stock covered by
each outstanding Option, and the number of shares of Common Stock which have
been authorized for issuance under the Plan but as to which no Options have yet
been granted or which have been returned to the Plan upon cancellation or
expiration of an Option, as well as the price per share of Common Stock covered
by each such outstanding Option, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the
number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option.
(b) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Administrator shall notify each Optionee as soon
as practicable prior to the effective date of such proposed transaction. The
Administrator in its discretion may provide for an Optionee to have the right to
exercise his or her Option until fifteen (15) days prior to such transaction as
to all of the Optioned Stock covered thereby, including Shares as to which the
Option would not otherwise be exercisable. In addition, the Administrator may
provide that any Company repurchase option applicable to any Shares purchased
upon exercise of an Option shall lapse as to all such Shares, provided the
proposed dissolution or liquidation takes place at the time and in the manner
contemplated. To the extent it has not been previously exercised, an Option will
terminate immediately prior to the consummation of such proposed action.
(c) Merger or Asset Sale. In the event of a merger of the Company with or
into another corporation, or the sale of substantially all of the assets of the
Company, each outstanding Option shall be assumed or an equivalent option
substituted by the successor corporation or a Parent or Subsidiary of the
successor corporation. In the event that the successor corporation refuses to
assume or substitute the Option, the Optionee shall fully vest in and have the
right to exercise the Option as to all of the Optioned Stock, including Shares
as to which it would not otherwise be vested or exercisable. If an Option
becomes fully vested and exercisable in lieu of assumption or substitution in
the event of a merger or sale of assets, the Administrator shall notify the
Optionee in writing or electronically that the Option shall be fully vested and
exercisable for a period of fifteen (15) days from the date of such notice, and
the Option shall terminate upon the expiration of such period. For the purposes
of this paragraph, the Option shall be considered assumed if, following the
merger or sale of assets, the option confers the right to purchase or receive,
for each Share of Optioned Stock subject to the Option immediately prior to the
merger or sale of assets, the consideration (whether stock, cash, or other
securities or property) received in the merger or sale of assets by holders of
Common Stock for each Share held on the effective date of the transaction (and
if holders were offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding Shares); provided,
however, that if such consideration received in the merger or sale of assets is
not solely common stock of the successor corporation or its Parent, the
Administrator
A-8
<PAGE> 29
may, with the consent of the successor corporation, provide for the
consideration to be received upon the exercise of the Option, for each Share of
Optioned Stock subject to the Option, to be solely common stock of the successor
corporation or its Parent equal in fair market value to the per share
consideration received by holders of Common Stock in the merger or sale of
assets.
13. Date of Grant. The date of grant of an Option shall be, for all
purposes, the date on which the Administrator makes the determination granting
such Option, or such other later date as is determined by the Administrator.
Notice of the determination shall be provided to each Optionee within a
reasonable time after the date of such grant.
14. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend, alter,
suspend or terminate the Plan, provided that the Board may not amend the Plan to
permit the grant of any Option with an exercise price below 100% of the Fair
Market Value of the Shares on the date of grant or to permit the repricing of
any option without stockholder approval.
(b) Stockholder Approval. The Company shall obtain stockholder approval of
any Plan amendment to the extent necessary and desirable to comply with
Applicable Laws.
(c) Effect of Amendment or Termination. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
Termination of the Plan shall not affect the Administrator's ability to exercise
the powers granted to it hereunder with respect to Options granted under the
Plan prior to the date of such termination.
15. Conditions Upon Issuance of Shares.
(a) Legal Compliance. Shares shall not be issued pursuant to the exercise
of an Option unless the exercise of such Option and the issuance and delivery of
such Shares shall comply with Applicable Laws and shall be further subject to
the approval of counsel for the Company with respect to such compliance.
(b) Investment Representations. As a condition to the exercise of an
Option, the Company may require the person exercising such Option to represent
and warrant at the time of any such exercise that the Shares are being purchased
only for investment and without any present intention to sell or distribute such
Shares if, in the opinion of counsel for the Company, such a representation is
required.
16. Inability to Obtain Authority. The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company's counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.
17. Reservation of Shares. The Company, during the term of this Plan, will
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
18. Stockholder Approval. The Plan shall be subject to approval by the
stockholders of the Company within twelve (12) months after the date the Plan is
adopted. Such stockholder approval shall be obtained in the manner and to the
degree required under Applicable Laws.
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VOTE BY TELEPHONE VOTE BY INTERNET
It's fast, convenient, and immediate! It's fast, convenient, and your vote
Call Toll-Free on a Touch-Tone Phone is immediately confirmed and posted.
1-877-PRX-VOTE (1-877-779-8683).
Follow these four easy steps: Follow these four easy steps:
1. Read the accompanying Proxy 1. Read the accompanying Proxy
Statement/Prospectus and Proxy Card. Statement/Prospectus and Proxy
Card.
2. Call the toll-free number 2. Go to the Website
1-877-PRX-VOTE (1-877-779-8683). http://www.eproxyvote.com/visx
For stockholders residing outside
the United States call collect on 3. Enter your 14-digit Voter Control
a touch-tone phone 1-201-536-8073. Number located on your Proxy Card
above your name.
3. Enter your 14-digit Voter Control
Number located on your Proxy Card 4. Follow the instructions provided.
above your name.
4. Follow the recorded instructions.
Your vote is important! Your vote is important!
Call 1-877-PRX-VOTE anytime! Go to http://www.eproxyvote.com/visx
anytime!
DO NOT RETURN YOUR PROXY CARD IF YOU ARE VOTING BY TELEPHONE OR INTERNET.
- ----------------------------DETACH HERE----------------------------------------
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE.
STOCKHOLDERS ARE URGED TO DATE, MARK, SIGN, AND RETURN THIS PROXY IN THE
ENVELOPE PROVIDED, WHICH REQUIRES NO POSTAGE IF MAILED WITHIN THE UNITED
STATES.
YOUR VOTE IS VERY IMPORTANT TO US.
DIRECTORS RECOMMEND A VOTE "FOR" THE FOLLOWING PROPOSALS
1. To elect the following six Directors:
For Withheld
[ ] [ ]
Elizabeth H. Davila
Glendon E. French
John W. Galiardo
Jay T. Holmes
Mark B. Logan
Richard B. Sayford
(continued on other side)
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(continued from other side)
[ ] ___________________________________________________________________________
INSTRUCTION: To withhold authority to vote for any individual Nominee, write
that nominee's name on the space provided above.
[ ] For all nominees except as noted above
<TABLE>
<S> <C> <C> <C> <C>
2. To ratify the 2000 Stock Plan. For Against Abstain
[ ] [ ] [ ]
3. To ratify the appointment of For Against Abstain
independent public accountants. [ ] [ ] [ ]
4. To act upon such other matters For Against Abstain
as may properly come before [ ] [ ] [ ]
the meeting or any adjournment or
postponement thereof.
</TABLE>
[ ] MARK HERE IF YOU PLAN TO ATTEND THE ANNUAL MEETING
[ ] MARK HERE FOR ADDRESS CHANGE AND NOTE BELOW
[ ] MARK HERE TO DISCONTINUE DUPLICATE MAILINGS
Please sign exactly as your name or names appear on your stock certificate. If
shares are issued in the names of two or more persons, all such persons should
sign the proxy. A proxy executed by a corporation should be signed in its name
by its authorized officers. Executors, administrators, trustees and partners
should indicate their positions when signing.
REGISTRATION
Signature: _________________________________ Date: _________________________
Signature: _________________________________ Date: _________________________
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<PAGE> 32
VISX, INCORPORATED
PROXY SOLICITED ON BEHALF OF BOARD OF DIRECTORS
The undersigned hereby appoints Mark B. Logan and Elizabeth H. Davila
as proxies to vote at the Annual Meeting of Stockholders of VISX, Incorporated
(the "Company") to be held on May 19, 2000 at 8:00 a.m. local time, and at any
adjournment or postponement thereof, hereby revoking any proxies previously
given, to vote all shares of Common Stock of the Company held or owned by the
undersigned as directed below, and in their discretion upon such other matters
as may come before the meeting. If no direction is made, this proxy will be
voted FOR each nominee for director, FOR proposals 2 and 3 and at the discretion
of the proxy holders upon such other business as may properly come before the
meeting. If any nominee for director is unable or declines to serve as director,
this proxy will be voted for any nominee that the present Board of Directors
designates.
(To be Signed on Reverse Side)
18
