<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
LASERMASTER TECHNOLOGIES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
LASERMASTER TECHNOLOGIES, INC.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[_] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] 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:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[X] 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:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
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<PAGE>
[LOGO OF LASERMASTER TECHNOLOGIES]
7090 Shady Oak Road
Eden Prairie, Minnesota 55344
NOTICE OF ANNUAL MEETING
To the Shareholders of LaserMaster Technologies, Inc.:
Notice is hereby given that the Annual Meeting of Shareholders of LaserMaster
Technologies, Inc. (the "Company") will be held at 4:00 p.m. on Thursday, May
23, 1996 at the Company's location at 6900 Shady Oak Road, Eden Prairie,
Minnesota, for the following purposes:
1. To re-elect two people to the Board of Directors for three-year terms
or until their successors are elected.
2. To approve the adoption of the 1996 Stock Incentive Plan.
3. To approve the issuance to TimeMasters, Inc. of warrants to purchase
277,953 shares of the Company's common stock and a right to convert $1
million of a promissory note into the Company's common stock.
4. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The Board of Directors has fixed the close of business on April 5, 1996 as the
record date for the determination of Shareholders entitled to notice of and to
vote at the meeting and any adjournment thereof.
A copy of the Company's Annual Report is included with this mailing, which is
being first made on approximately the date shown below.
We encourage you to take part in the affairs of the Company either in person or
by executing and returning the enclosed proxy.
BY ORDER OF THE BOARD OF DIRECTORS
Melvin L. Masters
April 19, 1996 Chief Executive Officer
IF YOU ARE UNABLE TO ATTEND THIS MEETING, YOU ARE URGED TO DATE AND SIGN
THE ENCLOSED PROXY AND TO RETURN IT IN THE POSTAGE-PAID ENVELOPE
ENCLOSED HEREWITH FOR YOUR CONVENIENCE.
<PAGE>
PROXY STATEMENT
The Annual Meeting of Shareholders of LaserMaster Technologies, Inc. (the
"Company") will be held at 4:00 p.m. on Thursday, May 23, 1996 at the Company's
location at 6900 Shady Oak Road, Eden Prairie, Minnesota, for the purposes set
forth in the Notice of Annual Meeting. The accompanying form of proxy for use at
the meeting and any adjournments thereof is solicited by the Board of Directors
of the Company and may be revoked by written notice to the Secretary of the
Company at any time prior to its exercise, by voting in person at the meeting,
or by giving a later dated proxy to the Secretary of the Company at any time
before voting. Shares represented by a proxy will be voted in the manner
directed by a Shareholder. If no direction is made, the proxy will be voted for
the election of the nominees for director named and for the other proposals
described in this Proxy Statement. Shares voted as abstentions on any matter (or
a "withheld vote for" as to directors) will be counted as shares that are
present and entitled to vote for purposes of determining a quorum at the meeting
and as unvoted, although present and entitled to vote, for purposes of
determining the approval of each matter as to which the Shareholder has
abstained. If a broker submits a proxy and indicates the broker does not have
discretionary authority as to certain shares to vote on one or more matters,
those shares will be counted as shares that are present and entitled to vote for
purposes of determining the presence of a quorum at the meeting, but will not be
considered as present and entitled to vote with respect to such matters. This
Proxy Statement and the accompanying form of proxy are being mailed to
Shareholders commencing on or about April 19, 1996.
All expenses in connection with the solicitation of this proxy will be paid by
the Company. In addition to solicitation by mail, officers, directors and
regular employees of the Company who will receive no extra compensation for
their services may solicit proxies by telephone, telegraph or personal calls.
The Board of Directors knows of no other matters that may be brought before the
meeting. However, if any other matters are properly brought before the meeting,
persons named in the enclosed proxy or their substitutes will vote in accordance
with their best judgment on such matters.
VOTING SECURITIES AND PRINCIPAL HOLDERS
Only the holders of the Company's common stock whose names appear of record on
the Company's books at the close of business on April 5, 1996 will be entitled
to vote at the Annual Meeting. At the close of business on April 5, 1996, the
Company had 11,395,634 shares of common stock (the Company's only voting
securities) outstanding and entitled to vote. Each share of such common stock
entitles the holder thereof to one vote upon each matter to be voted upon.
The following table sets forth, as of March 31, 1996, certain information with
respect to beneficial share ownership by the directors individually; by all
persons known to management to own more than 5% of the Company's outstanding
common stock, individually; and by all officers and directors as a group. Except
as otherwise indicated, the Shareholders listed below have sole investment and
voting power with respect to their shares.
1
<PAGE>
VOTING SECURITIES AND PRINCIPAL HOLDERS (continued)
<TABLE>
<CAPTION>
Percent of
Number of Shares Outstanding
Name of Beneficial Owner Beneficially Owned Shares
- ---------------------------- ------------------ ------------
<S> <C> <C>
Melvin L. Masters 554,000 4.8%
7090 Shady Oak Road
Eden Prairie, MN 55344
Lawrence J. Lukis (1) 2,199,531 19.3%
7090 Shady Oak Road
Eden Prairie, MN 55344
Ralph D. Rolen (2) 293,561 2.5%
First Tennessee Bank
300 Court Street
Memphis, TN 38103
Jean-Louis Gassee (3) 60,000 *
Be, Inc.
800 El Camino Real
Menlo Park, CA 94025
Robert J. Wenzel (4) 41,800 *
7090 Shady Oak Road
Eden Prairie, MN 55344
James E. Retterath (5) 25,000 *
7090 Shady Oak Road
Eden Prairie, MN 55344
Randall Ruegg (6) 26,000 *
7090 Shady Oak Road
Eden Prairie, MN 55344
All officers and directors
as a group (8 persons) (7) 3,254,041 28.2%
</TABLE>
- ------------------
* Less than 1%
(1) Includes shares owned by Donna Lukis, Mr. Lukis' spouse. Includes 183,000
shares held by the Lukis Foundation, of which Mr. Lukis is a director. Mr.
Lukis disclaims beneficial ownership both of Ms. Lukis' shares and those
held by the Lukis Foundation.
2
<PAGE>
(2) Includes 185,787 shares held as trustee for the Masters Trust I, an
irrevocable trust established by Mr. Masters for the benefit of his
children.
(3) Includes 60,000 shares issuable to Mr. Gassee under options which are
exercisable.
(4) Includes 30,000 shares issuable to Mr. Wenzel under options which are
exercisable or will become exercisable within 60 days. Also includes shares
held as trustee for four education trusts.
(5) Includes 25,000 shares issuable to Mr. Retterath under options which are
exercisable or will become exercisable within 60 days.
(6) Includes 26,000 shares issuable to Mr. Ruegg under options which are
exercisable or will become exercisable within 60 days.
(7) Includes 152,483 shares issuable under options which are exercisable or
will become exercisable within 60 days.
PROPOSAL 1: ELECTION OF DIRECTORS
The Board of Directors is divided into three classes. Pursuant to the Bylaws of
the Company, directors are elected for staggered terms of three years, with
approximately one-third of the directors to be elected each year. The Bylaws of
the Company also currently provide that in the event of any vacancy on the Board
of Directors occurring during the year, the vacant directorship may be filled by
the vote of the remaining directors for the remainder of the unexpired term.
There are currently five members of the Board of Directors. During the last year
two directors have resigned. The Board of Directors has filled one vacancy with
Robert J. Wenzel, the Company's Chief Operating Officer. Mr. Wenzel's term is
due to expire in 1997.
At this Annual Meeting, the terms of two current directors will expire. The
Board of Directors has designated Melvin L. Masters and Ralph D. Rolen as
nominees for re-election to three-year terms ending in 1999 or until their
successors are duly elected and qualified.
The persons named in the accompanying proxy will vote for the election of the
nominees described above, unless authority to vote is withheld. The Board of
Directors has been informed that all nominees are willing to serve as directors;
however, if anyone is unable to serve, the proxy may be voted for such other
person as the proxies shall, in their discretion, determine.
3
<PAGE>
THE FOLLOWING TABLE SETS FORTH INFORMATION, AS OF MARCH 31, 1996, CONCERNING THE
DIRECTORS OF THE COMPANY:
<TABLE>
<CAPTION>
Year
Became
Name, Age, Positions, Principal Occupations, Directorships Director
- ---------------------------------------------------------- --------
<S> <C>
Directors whose terms expire in 1996
MELVIN L. MASTERS; age 42; Mr. Masters co-founded LaserMaster in February, 1989
1986 and has been Chairman, Chief Executive Officer and President of the
Company since it acquired LaserMaster in May 1989. Mr. Masters also owns
TimeMasters, Inc., a company established for the purpose of property management
which has an investment in the field of wireless voice and data communications.
RALPH D. ROLEN; age 42; Mr. Rolen is Senior Vice President and Manager of 1989
the Retail Credit Division of First Tennessee National Bank of Memphis, Tennessee,
a position he has held since January, 1989.
Directors whose terms expire in 1997
ROBERT J. WENZEL; age 46; Mr. Wenzel has been Chief Operating Officer of the 1996
Company since October 1991 and President of LaserMaster Corporation, the
Company's principal operating subsidiary, since October 1989. He joined LaserMaster
as General Manager of the PC Division in May 1989 and became Executive Vice
President shortly thereafter. Prior to joining LaserMaster, Mr. Wenzel was
employed by CPT Corporation, a company specializing in the manufacture and
sale of word processing systems, where he served as General Manager of the Computer
Division from January 1988 through April 1989, and in other capacities before that time.
Directors whose terms expire in 1998
LAWRENCE J. LUKIS; age 47; Mr. Lukis co-founded LaserMaster in February, 1986 1989
and has been Chief Technical Officer of the Company since May 1989.
JEAN-LOUIS GASSEE; age 52; Since 1990, Mr. Gassee has been Chairman and 1990
Chief Executive Officer of Be, Inc. of Menlo Park, California. That company is
involved in personal computer technology. From August of 1988 until September,
1990, Mr. Gassee was President of the Apple Products Division of Apple Computer,
Inc. Prior to that time he held the offices of Senior Vice President of Research and
Development (1987 to August, 1988) and Vice President of Product Development of
Apple Computer, Inc. from 1985 to 1987. Mr. Gassee is also a director of Electronics
for Imaging of San Bruno, California and 3COM, Sunnyvale, California.
</TABLE>
4
<PAGE>
The Board of Directors met two times during the fiscal year ended June 30, 1995.
All directors attended each meeting. The Board of Directors has; (i) an Audit
Committee composed of Mr. Masters, Mr. Gassee and Mr. Rolen (ii) a Stock
Option Committee composed of Mr. Gassee and Mr. Rolen, and (iii) a Compensation
Committee composed of Mr. Masters, Mr. Gassee and Mr. Rolen. The audit
committee, including all members, met once in fiscal 1995. The Stock Option and
Compensation Committees did not meet but took action in writing. The Board of
Directors has no standing nominating committee.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS ELECT THE NOMINEES NAMED
HEREIN TO THE TERMS DESCRIBED ABOVE. THE PERSONS NAMED IN THE ACCOMPANYING PROXY
INTEND TO VOTE THE PROXIES HELD BY THEM IN FAVOR OF SUCH NOMINEES, UNLESS
OTHERWISE DIRECTED. AN AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF THE
SHARES OF THE COMMON STOCK REPRESENTED AT THE MEETING IS REQUIRED FOR THE
ELECTION OF THE NOMINEES AS DIRECTORS.
THE FOLLOWING TABLE SETS FORTH INFORMATION, AS OF MARCH 31, 1996, REGARDING THE
EXECUTIVE OFFICERS OF THE COMPANY:
<TABLE>
<CAPTION>
Name Age Positions
- ---- --- ---------
<S> <C> <C>
Melvin L. Masters 42 Chief Executive Officer, President and Chairman of the Board
Lawrence J. Lukis 47 Chief Technical Officer
Robert J. Wenzel 46 Chief Operating Officer and President, LaserMaster Corp.
James E. Retterath 35 Secretary
Randall L. Ruegg 38 Chief Financial Officer
Timothy N. Thurn 39 Treasurer
</TABLE>
MR. RETTERATH has been Secretary of the Company since March 1994. He joined the
Company in June 1990 and has held a variety of management positions in Research
and Development, most recently serving as Vice President which position he has
held since December 1992. From July 1986 to June 1990, Mr. Retterath was a
Senior Design Engineer for Printware, Inc. of Mendota Heights, Minnesota.
MR. RUEGG has been Chief Financial Officer since November 17, 1992. He joined
LaserMaster Corporation as Controller in March 1991 and became Controller of the
Company in 1992. From July of 1987 until joining LaserMaster, Mr. Ruegg was
Director of Accounting and Director of Tax and Treasury for Sinclair &
Valentine, Ltd., a manufacturer of printing inks. Mr. Ruegg is a Certified
Public Accountant (CPA).
MR. THURN has been Treasurer of the Company since June 1989 and of LaserMaster
Corporation since March 1987. Mr. Thurn has experience as both a public and
private accountant. Mr. Thurn is a Certified Public Accountant (CPA) and
Certified Management Accountant (CMA).
Officers of the Company are elected annually by the Board of Directors. All of
the current officers are expected to be re-elected to serve in the same
positions for the coming year.
5
<PAGE>
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
Under federal securities laws, the Company's directors and officers, and any
beneficial owner of more than 10 percent of a class of equity securities of the
Company, are required to report their ownership of the Company's equity
securities and any changes in such ownership to the Securities and Exchange
Commission (the "Commission") and the securities exchange on which the equity
securities are registered. Specific due dates for these reports have been
established by the Commission, and the Company is required to disclose in its
Form 10-K any delinquent filing of such reports and any failure to file such
reports.
Based upon its review of Forms 3, 4 and 5 and any amendments thereto furnished
to the Company pursuant to Section 16 of the Securities Exchange Act of 1934,
all such forms were filed on a timely basis by reporting persons.
6
<PAGE>
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Compensation of the Company's Chief Executive Officer is set by the Board of
Directors as a whole, with the Chief Executive Officer abstaining.
The Company's compensation policy is designed to reward individuals for
outstanding performance in recent fiscal periods. In furtherance of this policy,
the company believes it is important for officers and significant employees to
share with Shareholders in the Company's successes and failures through
interests in the Company's equity securities as well as through salary and bonus
adjustments. For officers with significant equity interest, such as Mel Masters
and Larry Lukis, the Company's Chief Executive Officer and Chief Technical
Officer, this policy is currently implemented primarily through salary
adjustments. For other officers and employees, the Company maintains a stock
option plan to provide longer-term incentives to increase value to Shareholders.
BASE SALARY. Salaries for executives are reviewed by the Committee on a periodic
basis and may be increased (or decreased) at any time based on: (1) the
Committee's evaluation of the individual's performance; and (2) the Company's
financial condition. Increases in median competitive pay levels are a secondary
factor.
Annual compensation to the Chief Executive Officer and the Chief Technical
Officer during fiscal 1995 was set at $250,000. These salaries were set based on
a proposal from management and represented no increase over fiscal 1994 levels.
These levels were not increased given the substantial increases given in fiscal
1994.
Base salaries for the other executive officers increased between 10-27% over
fiscal 1994 levels, based on the Company's performance in fiscal 1994. Mr.
Retterath and Mr. Ruegg received the largest increases based on their
performance in their new executive positions.
ANNUAL INCENTIVE. The Company did not establish a cash incentive plan for its
officers for fiscal 1995. The Compensation Committee pays bonuses at year end
based on an evaluation of performance of the individual and the Company during
the prior fiscal year. The Compensation Committee's determination at such times
is discretionary and normally is based primarily on overall Company performance
and the contribution of each individual to such performance. No specific
formulae or criteria are established prior to the time such incentive
compensation is allocated to the individual.
For fiscal 1995, Mr. Masters did not receive any incentive bonus. Mr. Wenzel,
Mr. Retterath and Mr. Ruegg each received a bonus with respect to fiscal 1994.
The bonuses paid to executive officers in fiscal 1995 reflects the greatly
improved results of operations during fiscal 1994. These bonuses aggregated
$95,000 for fiscal 1994, averaging 21% of these executive's salaries.
LONG TERM INCENTIVES. The Company believes that significant incentives should be
provided to executive officers to maximize Shareholder value when such officers
hold substantial positions in
7
<PAGE>
the Company's common stock or hold benefit awards that are based on the
appreciation of such common stock. For those executives that are not substantial
equity holders, the Company currently grants stock options that become
exercisable over a period of time.
Stock options are granted at the prevailing market value and will only have
value if the Company's stock price increases. Generally, grants made vest in
equal amounts over five to eight years; executives must be employed by the
Company at the time of vesting in order to exercise the option.
The Committee determines the number of options to be granted based on the
expected value of an individual's contribution, or to reflect historical
contributions. No additional options were granted to executive officers during
fiscal 1995 because the Committee believed that outstanding, unvested options
provided adequate incentive to those officers.
Melvin L. Masters
Ralph D. Rolen
Jean-Louis Gassee
8
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the cash and noncash compensation for each of the
last three fiscal years awarded to or earned by the Chief Executive Officer of
the Company and the four executive officers of the Company whose salary and
bonus earned in the fiscal year ended June 30, 1995 exceeded $100,000 for
services rendered.
<TABLE>
<CAPTION>
Annual compensation Long term compensation
--------------------------------------------------------------------------
Awards
-------------------------
Other All other
annual Restricted Payouts/ compen-
Name and principal Year Salary ($) Bonus compen- stock Options/ LTIP sation ($)
position ($) sation ($) award(s) SARs (#) payouts
($) ($)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Melvin Masters 1995 $250,000 $6,016/2/
Chief Executive Officer 1994 250,000 $5,096/2/
1993 100,000
- -------------------------------------------------------------------------------------------------------------------------------
Larry Lukis 1995 $250,000 $9,898/2/
Chief Technical Officer 1994 250,000 $7,923/2/
1993 100,000
- -------------------------------------------------------------------------------------------------------------------------------
Robert Wenzel 1995 $165,625 $35,000
Chief Operating Officer 1994 150,000 1,000
1993 120,833 5,000 50,000/1/
- -------------------------------------------------------------------------------------------------------------------------------
James E. Retterath 1995 $161,667 $35,000
Secretary 1994 127,500
1993 #
- -------------------------------------------------------------------------------------------------------------------------------
Randall L. Ruegg 1995 $118,167 $25,000
Chief Financial 1994 92,708
Officer 1993 59,687 8,000
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
# Became executive officer during fiscal 1994.
/1/ Grants were the result of cancellation of previously granted options and
reissuance at the exercise price indicated in the option grant table.
/2/ Premiums for life insurance where the Company is not the beneficiary.
9
<PAGE>
STOCK OPTIONS
The Company maintains a Restated Stock Option Plan pursuant to which executive
officers, other employees and certain non-employees providing services to the
Company may receive options to purchase the Company's common stock. The
following table summarizes exercises of stock options during fiscal 1995 by the
Chief Executive Officer and the Executive Officers named in the Summary
Compensation Table. None of the named Executive Officers received option grants
during fiscal 1995.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Value of unexercised
Number of unexercised in-the-money
options/SARs at FY- options/SARs at FY-
Shares acquired Value end (#) exercisable/ end ($) exercisable/
Name on exercise (#) realized ($) unexercisable unexercisable (1)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Melvin L. Masters -0- -0- -0- -0-
- ----------------------------------------------------------------------------------------------------------------------------------
Lawrence J. Lukis -0- -0- -0- -0-
- ----------------------------------------------------------------------------------------------------------------------------------
Robert J. Wenzel 10,000 $152,950 16,250/48,750 $49,900/$177,300
- ----------------------------------------------------------------------------------------------------------------------------------
James E. Retterath 20,000 $237,500 10,000/80,000 $30,000/$240,000
- ----------------------------------------------------------------------------------------------------------------------------------
Randall L. Ruegg -0- -0- 16,000/54,000 $48,000/$162,000
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Represents the difference between the closing price of the Company's common
stock on June 30, 1995 and the exercise price of the options.
LONG-TERM INCENTIVE PLAN AWARDS
Other than the Stock Option Plan reported on above, the Company does not
maintain any long-term incentive plans.
DIRECTOR COMPENSATION
For fiscal year 1995, there was no plan for compensation to non-employee
directors. All directors were reimbursed for their expenses incurred in
attending meetings. Jean-Louis Gassee acts as a consultant to the Company.
Consulting fees of $72,000 were accrued, but not paid, on behalf of Mr. Gassee
during fiscal 1995.
10
<PAGE>
EMPLOYMENT AGREEMENTS
At September 30, 1995, the Company had employment agreements with Messrs.
Masters, Lukis, Retterath, Ruegg and Wenzel. Those agreements renew
automatically on an annual basis. The agreements for Mr. Lukis and Mr. Masters
provide for continuation payments equal to 36 months pay upon termination of
employment in certain circumstances, including change of control. The agreements
for Mr. Wenzel, Mr. Retterath and Mr. Ruegg provide for 12 months notice of
termination, other than for cause, or payment in lieu of notice. As of September
30, 1995 minimum salary levels of $250,000 for each Messrs. Masters and Lukis,
$175,000 for Mr. Wenzel and Mr. Retterath and $144,000 for Mr. Ruegg were set.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Chief Executive Officer of the Company, Melvin L. Masters, is a member of
the Compensation Committee. Mr. Masters' compensation is set by the Board of
Directors as a whole with Mr. Masters abstaining.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has the following arrangements with certain of its directors,
executive officers or five percent shareholders;
(1) The Company has provided key employees, including its directors and
officers, with electronic and telecommunications equipment and service
allowing them remote access to the Company's network and management
information resources.
(2) Under a Use Indemnification Agreement and certain related Board of
Director's actions, the Company has the right to sponsor business and
business related occasions at facilities owned by Masters Trust I and or
Melvin L. Masters and or TimeMasters, Inc. For those occasions, the Company
indemnifies the owners against loss or damage, reimburses out-of-pocket
expenses and pays a facility charge based on market rates. The Company paid
$63,128 for use of such facilities during fiscal 1995.
(3) The Company leases approximately 163,276 square feet of space in Shady View
I & II. During fiscal 1995, Grandchildren's Realty Alternative Management
Partnership I (GRAMPI), a Minnesota limited partnership, purchased the Shady
View property. The general partner of GRAMPI is TimeMasters, Inc., a
Minnesota corporation which is owned by Melvin L. Masters, the Company's
Chief Executive Officer. One of the limited partners of GRAMPI is the
Masters Trust I, of which Ralph Rolen, a director of the Company, is
Trustee. The Company retained the services of an outside law firm as well as
an independent commercial real estate brokerage firm, to negotiate the lease
with GRAMPI. Annual rent, maintenance and taxes for the fiscal year ended
June 30, 1995 were $1,125,785 and are expected to be $1,355,411 for the
fiscal year ending June 30, 1996.
11
<PAGE>
(4) The Company has currently installed a campus-wide TimeMasters, Inc. wireless
voice system in its Eden Prairie facility. There are no monthly call
operating charges for unlimited use of that system. The system hardware was
acquired for $211,000, based on competitive proposals for two other
comparable systems. TimeMasters, Inc. is a Minnesota corporation wholly
owned by Melvin L. Masters.
(5) During September 1995, LaserMaster Corporation's ("LaserMaster") cash needs
exceeded available cash. To cover short-term cash needs, LaserMaster
borrowed $1.765 million in September and October under a demand note from
TimeMasters, Inc., a corporation controlled by the Company's Chief Executive
Officer. LaserMaster also agreed to issue TimeMasters a warrant if the
demand note was required to become a longer term obligation. In January
1996, LaserMaster completed negotiation of a new credit agreement with a
commercial finance company that refused to allow any proceeds from the
credit line to be applied to reduction of the indebtedness to TimeMasters
and, in addition, required that the indebtedness to TimeMasters be
subordinated to the line of credit and not be repaid unless certain
financial covenants were achieved. In return for such subordination and for
the significant restrictions on repayment, the Company issued to TimeMasters
a warrant to purchase common stock and a new promissory note, a portion of
which was convertible into common stock of the Company. In February 1996,
Nasdaq notified the Company that it believed that the issuance of the
warrants and the conversion right were not in compliance with Nasdaq Non-
Quantitative Listing Standards. To satisfy Nasdaq's concerns, the Company
and TimeMasters agreed to rescind the warrants and the conversion right and
to submit the transaction to shareholders for approval. See "Proposal 3:
APPROVAL OF ISSUANCE OF WARRANTS AND CONVERSION RIGHT TO TIMEMASTERS."
12
<PAGE>
PERFORMANCE GRAPH
The following table compares the cumulative total return on the common stock of
the Company for the last five years with the Nasdaq Index and with an index of
computer corporations listed on Nasdaq, in each case assuming an investment of
$100 on 6/30/90 and the reinvestment of all dividends:
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION> LMTS NASDAQ NASDAQ
Measurement Period STOCK COMPUTER US
(Fiscal Year Covered) PRICE INDEX INDEX
- --------------------- ----- --------- -------
<S> <C> <C> <C>
6/30/90 $100 $100 $100
12/31/90 $ 46 $ 80 $ 82
6/30/91 $ 43 $ 96 $106
12/31/91 $ 33 $112 $132
6/30/92 $ 33 $111 $127
12/31/92 $ 13 $151 $154
6/30/93 $ 20 $137 $160
12/31/93 $ 47 $143 $177
6/30/94 $ 41 $112 $162
12/31/94 $ 39 $157 $173
6/30/95 $ 29 $201 $216
</TABLE>
13
<PAGE>
PROPOSAL 2: TO APPROVE THE 1996 STOCK INCENTIVE PLAN
On March 29, 1996, the Board of Directors voted for a resolution authorizing the
adoption of the "LaserMaster Technologies, Inc. 1996 Stock Incentive Plan" (the
"1996 Plan"), subject to approval by the shareholders of the Company. The 1996
Plan will be in addition to the Company's 1990 Restated Stock Option Plan, under
which only 264,895 shares were available for future option grants at March 31,
1995.
The purpose of the 1996 Plan is to promote the interests of the Company and its
shareholders by attracting and retaining employees, by stimulating the efforts
of such employees to contribute to the current and long-term success of the
Company, and by providing an opportunity for such employees to increase their
proprietary interests in the Company. These goals are consistent with the
principles of the Company's executive compensation program described above in
the Committee's Report and, if approved by the Company's shareholders, the 1996
Plan will become an important component of that program.
The 1996 Plan is administered by the Company's Stock Option Committee (the
"Committee"). The Committee is composed of non-employee directors of the Company
who have not received grants of options under the Plan during the 12 months
preceding their service. The Committee has the authority to select the
individuals to whom awards are granted, to determine the types of awards to be
granted and the number of shares of common stock covered by such awards, to set
the terms and conditions of such awards, and to determine whether the payment of
any amounts received under any award shall or may be deferred. The Committee has
the authority to establish rules for the administration of the 1996 Plan, and
determinations and interpretations with respect to the 1996 Plan are at the sole
discretion of the Committee, whose determinations and interpretations are
binding on all interested parties. The Committee may delegate to one or more
officers, or the Board of Directors may exercise, the Committee's powers and
duties under the 1996 Plan with respect to individuals who are not subject to
Section 16 of the Exchange Act.
The 1996 Plan permits the granting of a variety of different types of awards:
(a) stock options, including incentive stock options ("Incentive Stock Options")
meeting the requirements of Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"), stock options that do not meet such requirements
("Nonqualified Stock Options") and restoration options; (b) stock appreciation
rights ("SARs"); (c) restricted stock and restricted stock units; (d)
performance awards; (e) dividend equivalents; and (f) other awards valued in
whole or in part by reference to or otherwise based upon the Company's stock
("other stock-based awards"). Awards may be granted alone, in addition to, in
tandem with or in substitution for any other award granted under the 1996 Plan
or any other plan. Awards may be granted for no cash consideration or for such
minimal cash consideration as may be required by applicable law. Awards may
provide that upon the grant or exercise thereof the holder will receive cash,
shares of common stock, or other securities, awards or property, or any
combination thereof, as the Committee shall determine. The exercise price per
share under any stock option, the grant price of any SAR, and the purchase price
of any security which may be purchased under any other stock-based award may not
be less than 100% of the fair market value of the Company's common stock on the
date of the grant of such option, SAR or right. Determinations
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of fair market value under the 1996 Plan are made in accordance with methods and
procedures established by the Committee.
Options may be exercised by payment in full of the exercise price, either in
cash or, at the discretion of the Committee, in whole or in part by the
tendering of shares of common stock or other consideration having a fair market
value on the date the option is exercised equal to the exercise price.
The 1996 Plan provides that the Committee may grant restoration options,
separately or together with another option, and may establish the terms and
conditions of such restoration options. Pursuant to a restoration option, the
optionee would be granted a new option when the payment of the exercise price of
the option to which such restoration option relates is made by using shares of
common stock owned by the optionee. The new option granted upon such exercise
would be an option to purchase the number of shares not exceeding the sum of (i)
the number of shares of common stock tendered as payment upon the exercise of
the option to which such restoration option relates and (ii) the number of
shares of the Company's common stock tendered or withheld as payment of the
amount to be withheld under applicable tax laws in connection with the exercise
of the option to which such restoration option relates. Restoration options may
be granted with respect to options previously granted under the 1996 Plan or any
other stock option plan of the Company, and may be granted in connection with
any option granted under the 1996 Plan or any other such plan at the time of
such grant.
The holder of an SAR is entitled to receive the excess of the fair market value
(calculated as of the exercise date or, if the Committee shall so determine, as
of any time during a specified period before or after the exercise date) of a
specified number of shares over the grant price of the SAR.
Shares of restricted stock and restricted stock units will be subject to such
restrictions as the Committee may impose (including any limitations on the right
to vote or the right to receive dividends), which restrictions may lapse
separately or in combination at such time or times, in such installments or
otherwise as the Committee may determine. Restricted stock may not be
transferred by the holder until the restrictions established by the Committee
lapse. Holders of restricted stock units have the right, subject to any
restrictions imposed by the Committee, to receive shares of common stock at some
future date. Upon termination of the holder's employment during the restriction
period, restricted stock and restricted stock units are forfeited, unless the
Committee determines otherwise.
Performance awards provide the holder thereof the right to receive payments, in
whole or in part, upon the achievement of such goals during such performance
periods as the Committee shall establish. A performance award granted under the
1996 Plan may be denominated or payable in cash, shares of common stock or
restricted stock, or other securities, awards or property. Dividend equivalents
entitle the holder thereof to receive payments (in cash, shares or otherwise, as
determined by the Committee) equivalent to the amount of cash dividends with
respect to a specified number of shares. The Committee is also authorized to
establish the terms and conditions of other stock-based awards.
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No award granted under the 1996 Plan may be assigned, transferred, pledged or
otherwise encumbered by the individual to whom it is granted, otherwise than by
will, by designation of a beneficiary, or by laws of descent and distribution.
Each award is exercisable, during such individual's lifetime, only by such
individual, or, if permissible under applicable law, by such individual's
guardian or legal representative.
The aggregate number of shares of the Company's common stock which may be issued
under all awards granted pursuant to the 1996 Plan is 1,500,000 (subject to
adjustment as described below). If any shares of common stock subject to any
award or to which an award relates are not purchased or are forfeited, or if any
such award terminates without the delivery of shares, the shares previously used
for such awards will be available for future awards under the 1996 Plan.
Notwithstanding the forgoing, no executive officer of the Company may receive in
any single calendar year options under the 1996 Plan to purchase more than
300,000 shares of common stock. Except as otherwise provided under procedures
adopted by the Committee to avoid double counting with respect to awards granted
in tandem with or in substitution for other awards, all shares relating to
awards which allow the holder to receive or purchase shares will be counted
against the aggregate number of shares available for granting awards under the
1996 Plan.
If any dividend or other distribution, recapitalization, stock split, reverse
stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, or exchange of shares of common stock or other
securities of the Company, issuance of warrants or other rights to purchase
shares of common stock or other securities of the Company, or other similar
corporate transaction or event affects the shares of common stock so that an
adjustment is appropriate in order to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the 1996
Plan, the Committee may, in such manner as it deems equitable, adjust (a) the
number and type of shares (or other securities or property) which thereafter may
be made the subject of awards, (b) the number and type of shares (or other
securities or property) subject to outstanding awards, and (c) the exercise
price with respect to any award.
The 1996 Plan terminates ten years from the 1996 Annual Meeting, and no awards
may be made after that date. However, unless otherwise expressly provided in the
1996 Plan or an applicable award agreement, any award granted may extend beyond
the end of such period.
The Board of Directors may amend, alter or discontinue the 1996 Plan at any
time, provided that stockholder approval must be obtained for any such action
that, absent such stockholder approval, (i) would cause Rule 16b-3 under the
Exchange Act to become unavailable with respect to the 1996 Plan; (ii) would
violate the rules or regulations of the New York Stock Exchange, any other
securities exchange or the National Association of Securities Dealers, Inc.
applicable to the Company; or (iii) would cause the Company to be unable, under
the Code, to grant Incentive Stock Options under the 1996 Plan. The Committee
may correct any defect, supply any omission, or reconcile any inconsistency in
the 1996 Plan or any award agreement in the manner and to the extent it shall
deem desirable to carry the 1996 Plan into effect. The Committee may waive any
condition of, or rights of the Company under any outstanding award,
prospectively or retroactively, but the Committee may
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not amend, suspend or terminate any outstanding award, prospectively or
retroactively, without the consent of the holder or beneficiary of the award.
The following is a summary of the principal federal income tax consequences
generally applicable to awards under the 1996 Plan. The grant of an option or
SAR is not expected to result in any taxable income for the recipient. The
holder of an Incentive Stock Option generally will have no taxable income upon
exercising the Incentive Stock Option (except that a liability may arise
pursuant to the alternative minimum tax), and the Company will not be entitled
to a tax deduction when an Incentive Stock Option is exercised. Upon exercising
a Nonqualified Stock Option, the optionee must recognize ordinary income equal
to the excess of the fair market value of the shares of common stock acquired on
the date of exercise over the exercise price, and the Company will be entitled
at that time to a tax deduction for the same amount. Upon exercising an SAR, the
amount of any cash received and the fair market value on the exercise date of
any shares of common stock received are taxable to the recipient as ordinary
income and deductible by the Company. The tax consequence to an optionee upon a
disposition of shares acquired through the exercise of an option will depend on
how long the shares have been held and upon whether such shares were acquired by
exercising an Incentive Stock Option or by exercising a Nonqualified Stock
Option or SAR. Generally, there will be no tax consequence to the Company in
connection with disposition of shares acquired under an option, except that the
Company may be entitled to a tax deduction in the case of a disposition of
shares acquired under an Incentive Stock Option before the applicable Incentive
Stock Option holding periods set forth in the Code have been satisfied.
With respect to other awards granted under the 1996 Plan that are payable either
in cash or shares of common stock that are either transferable or not subject to
substantial risk of forfeiture, the holder of such an award must recognize
ordinary income equal to the excess of (a) the cash or the fair market value of
the shares of common stock received (determined as of the date of such receipt)
over (b) the amount (if any) paid for such shares of common stock by the holder
of the award, and the Company will be entitled at that time to a deduction for
the same amount. With respect to an award that is payable in shares of common
stock that are restricted as to transferability and subject to substantial risk
of forfeiture, unless a special election is made pursuant to the Code, the
holder of the award must recognize ordinary income equal to the excess of (i)
the fair market value of the shares of common stock received (determined as of
the first time the shares become transferable or not subject to substantial risk
of forfeiture, whichever occurs earlier) over (ii) the amount (if any) paid for
such shares of common stock by the holder, and the Company will be entitled at
that time to a tax deduction for the same amount.
Special rules may apply in the case of individuals subject to Section 16 of the
Exchange Act. In particular, unless a special election is made pursuant to the
Code, shares received pursuant to the exercise of a stock option or SAR may be
treated as restricted as to transferability and subject to a substantial risk of
forfeiture for a period of up to six months after the date of exercise.
Accordingly, the amount of any ordinary income recognized, and the amount of the
Company's tax deduction, are determined as of the end of such period.
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Under the 1996 Plan, the Committee may permit participants receiving or
exercising awards, subject to the discretion of the Committee and upon such
terms and conditions as it may impose, to surrender shares of common stock
(either shares received upon the receipt or exercise of the award or shares
previously owned by the optionee) to the Company to satisfy federal and state
tax obligations.
The 1996 Plan is intended to qualify for an exemption from Section 162(m) of the
Internal Revenue Code of 1986, as amended. If the 1996 Plan so qualifies, income
created by options granted to executive officers under the 1996 Plan would not
be included in income paid to the executive for purposes of determining whether
the Company is entitled to a deduction for payments to the executive under
section 162(m). If an executive's income from the Company exceeds $1,000,000 and
an exemption is not available under Section 162(m), the Company would not be
entitled to a deduction for the compensation paid to the executive. Although the
Company does not believe that any executive officer is currently, or will be in
the foreseeable future, entitled to income related to the Company in an amount
that would approach $1,000,000, appreciation in the market value of certain
stock related benefits, such as nonqualified stock options, could create income
that would normally be deductible by the Company but excludable under Section
162(m). Accordingly, the Board of Directors believes that provisions designed to
qualify the 1996 Plan under 162(m) is in the best interests of the Company.
Any employee, officer, non-employee director, consultant or independent
contractor of the Company and its affiliates selected by the Committee is
eligible to receive awards under the 1996 Plan.
The amount, type and recipients of awards under the 1996 Plan have not yet been
determined. The Company does, however, plan to grant stock options to several of
its executive officers if the Plan is adopted. The Company believes that
additional awards of stock-based incentive are essential to retain and provide
an incentive to executive officers who have evidenced considerable commitment to
the success of the Company, but that have not been given commensurate
compensation during the past several years because of the increased competition
the Company has encountered and the effect that such competition, and the
Company's development efforts, have had on its results of operations. Further,
the Company plans to embark on several new development and marketing initiatives
during the next several years that it believes will be more successful if the
individuals who manage the effort are provided stock-based incentives that
accelerate if they are successful in such efforts.
The Company plans to grant options that vest in the distant future, such as nine
and a half years from the date of grant, but whose exercisability accelerates if
certain performance objectives are achieved. Although the Company has not
formulated performance objectives, has not yet determined the number of shares
subject to options that would be granted on such terms, and has not finally
committed to the individuals that would receive such options, it currently
anticipates that options of this form would be granted to Robert Wenzel and
James Retterath. Such options, or other forms of stock based incentives, may be
granted to other officers or employees in the future.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS APPROVE THE 1996 STOCK
INCENTIVE PLAN. THE AFFIRMATIVE VOTE OF A MAJORITY OF THE SHARES OF COMMON STOCK
REPRESENTED AT THE MEETING IN PERSON OR BY PROXY IS REQUIRED FOR APPROVAL OF THE
1996 PLAN.
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PROPOSAL 3: APPROVAL OF ISSUANCE OF WARRANTS AND CONVERSION RIGHT TO TIMEMASTERS
The Company's Board of Directors has approved, subject to shareholder approval,
the issuance of warrants to purchase 277,953 shares of common stock (the
"Warrants") to TimeMasters, Inc. and a right to convert (the "Conversion Right")
up to $1,000,000 of the Company's indebtedness held by TimeMasters into common
stock in the event either the Company is unable to repay such indebtedness
before January 17, 1998 or an event of default occurs. The Warrants and the
Conversion Right would be issued to TimeMasters in consideration of aggregate
advances of $1.765 million from TimeMasters to LaserMaster Corporation
("LaserMaster"), the subordination of such advances to indebtedness to a
commercial lender, and significant limitations placed by such lender on the
ability of TimeMasters to collect payment on such indebtedness.
LaserMaster borrowed $1,565,000 from TimeMasters in September 1995 and an
additional $200,000 in October 1995 to cover short-term cash requirements.
LaserMaster had negotiated with its then principal lender (a commercial bank)
during the Summer of 1995 to increase its borrowing availability under its
credit line. LaserMaster had been in technical default of a cash flow covenant
under that credit line and negotiations with the lender were not successful.
When LaserMaster's cash requirements exceeded available cash in September 1995,
TimeMasters, a corporation wholly owned by Melvin Masters, the Company's Chief
Executive Officer, agreed to lend the money to LaserMaster on an unsecured
demand basis. In consideration of such loan, the Company agreed that, if the
loan was changed to term indebtedness, it would issue to TimeMasters a warrant
to purchase the number of shares of common stock as was equal to the principal
amount of the indebtedness to TimeMasters divided by an exercise price of $6.35
per share (the fair market value of such common stock at the time that the
initial commitment from TimeMasters was received). A disinterested Board of
Directors of the Company approved the borrowings from TimeMasters and the
agreement to issue a warrant to TimeMasters.
In January 1996, LaserMaster completed negotiations with a commercial finance
company for a new line of credit, replacing the previous line of credit with the
commercial bank. The commercial finance company refused to allow any proceeds
from the credit line to be applied to reduction of the indebtedness to
TimeMasters and, in addition, required that the indebtedness to TimeMasters be
subordinated to the line of credit and not be repaid unless certain financial
covenants were achieved. In return for such subordination and for the
significant restrictions on repayment, the Company issued to TimeMasters a new
promissory note representing the $1,765,000 indebtedness taxfree with a warrant
to purchase 277,953 shares of common stock at a price of $6.35 per share. One
million dollars of the promissory note was convertible into common stock of the
Company in the event it was not repaid within two years or in the event of
certain defaults.
The terms of the indebtedness from TimeMasters, and of the Warrants and
Conversion right, were approved by a disinterested majority of the Board of
Directors of the Company at two meetings in January 1996. The Company believes
that the terms of such indebtedness, and related consideration, were at least as
favorable to the Company as could have been obtained from an unaffiliated
lender.
In February 1996, Nasdaq Stock Market ("Nasdaq") notified the Company that it
believed that the issuance of the Warrants and the Conversion Right were not in
compliance with Nasdaq
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Non-Quantitative Listing Standards which require approval by shareholders when
"a stock option or purchase plan is established or other arrangement made
pursuant to which stock is to be acquired by officers and directors." To satisfy
Nasdaq's concerns, the Company and TimeMasters agreed to rescind the Warrants
and the Conversion Right and to submit the transaction to shareholders for
approval. TimeMasters also agreed not to declare its indebtedness in default
because of such recision until the Warrants and the Conversion Right could be
presented to shareholders at the Annual Meeting, or until a reasonable time
thereafter, not to exceed 120 Days without TimeMasters' consent, so that the
Company could locate alternative financing.
The proposed Warrants will be exercisable until January 17, 2002 at a price of
$6.35 per share (subject to adjustment for stock splits, stock dividends,
recapitalization and similar events). TimeMasters will be prohibited from
transferring the Warrants to any person not affiliated with TimeMasters or Mel
Masters, or related to Mel Masters. TimeMasters will have the right to include
the shares issued upon exercise of the Warrants in a registration statement
filed by the Company under the Securities Act of 1933 or to cause the Company to
file no more than two such registration statements on its behalf.
The Conversion Right will allow TimeMasters to convert up to $1 million of the
indebtedness represented by the promissory note into common stock of the Company
if an event of default has occurred under such note or LaserMaster otherwise
fails to repay the note prior to January 17, 1998. The conversion price will be
equal to the lesser of $5.875 per share (the fair market value of the common
stock on the date the note was executed), or the fair market value of the common
stock on the date the conversion right is exercised. The conversion right
generally carries the same registration rights as the warrants.
The issuance of the Warrants and the Conversion Right will not constitute a
"change of control" under any agreement to which the Company or LaserMaster is a
party, nor will it affect any change in the rights or privileges under any such
agreement other than the warrant or the Note.
The Board of Directors believes that the issuance of the Warrant and the
Conversion Right is in the best interests of the Company and represents fair
consideration for the loan accommodations made by TimeMasters. The Company and
TimeMasters were each represented by outside counsel during negotiations of the
indebtedness and such consideration. The issuance of the Conversion Right and
the Warrants were approved by the Board of Directors of the Company at two
separate meetings, with Mr. Masters recusing himself from the voting process.
After considerable discussion, the Board of Directors concluded that the Company
could not obtain better terms from an unaffiliated party.
Further, the Board of Directors believes that finding an alternative lender that
would replace indebtedness from TimeMasters and that would agree to subordinate
its financing to the borrowings from, and subject repayment of such financing to
the limitations imposed by, the commercial finance company would be difficult,
time consuming and likely result in less favorable terms than those obtained
from TimeMasters. ACCORDINGLY, THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR
OF THE ISSUANCE OF THE WARRANTS AND THE CONVERSION RIGHT TO TIMEMASTERS.
APPROVAL OF THIS PROPOSAL REQUIRES THE AFFIRMATIVE VOTE OF A MAJORITY OF THE
SHARES OF THE COMMON STOCK WHICH ARE REPRESENTED AT THE MEETING.
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AUDITORS
The Board of Directors of the Company has appointed Deloitte & Touche, LLP as
independent auditors for the Company for the year ending June 30, 1995. Deloitte
& Touche, LLP audited the books and accounts of the Company for the years ended
June 30, 1994 and 1995. Representatives of Deloitte & Touche, LLP will be
present at the Annual Meeting and will be given an opportunity to make a
statement if they desire to do so and to respond to appropriate questions raised
at the meeting.
INCORPORATION BY REFERENCE
The information contained under "Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Item 8. Financial Statements
and Supplementary Data" of the Company's Annual Report on Form 10-K for the year
ended June 30, 1995 and the information contained under "Item 1. Financial
Statements" and "Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations" of the Company's quarterly report on Form
10-Q for the quarter ended December 31, 1995, each as filed with the Securities
and Exchange Commission is hereby incorporated by reference. Such information is
contained in the Company's Annual Report to Shareholders and Form 10-Q for the
quarter ended December 31, 1995 both delivered with this Proxy Statement.
SHAREHOLDER PROPOSALS FOR THE
1996 ANNUAL MEETING OF SHAREHOLDERS
Any Shareholder who wishes to present a proposal for action at the next Annual
Meeting of Shareholders and who wishes to have it set forth in the Proxy
Statement and identified in the form of proxy prepared by the Company must
notify the Company at the Company's principal executive offices, 7090 Shady Oak
Road, Eden Prairie, Minnesota 55344, in such manner so that such notice is
received by the Company on or before December 21, 1996. Any such proposal must
be in the form required under the rules and regulations promulgated by the
Securities and Exchange Commission.
OTHER MATTERS
The Board of Directors of the Company knows of no other matters which may come
before the Annual Meeting. However, if any matters other than those referred to
above should properly come before the Annual Meeting, it is the intention of the
persons named in the enclosed proxy to vote such proxies in accordance with
their discretion.
BY ORDER OF THE BOARD OF DIRECTORS
Melvin L. Masters
Chief Executive Officer
April 19, 1996
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APPENDIX A
[LOGO OF LASERMASTER]
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned having duly received the Notice of Annual Meeting and Proxy
Statement dated April 19, 1996, hereby appoints Melvin L. Masters and Lawrence
J. Lukis proxies (each with the power to act alone and with the power of
substitution and revocation), to represent the undersigned and to vote, as
designated below, all common shares of LaserMaster Technologies, Inc. which the
undersigned is entitled to vote at the annual meeting of shareholders of
LaserMaster Technologies, Inc. to be held at 4:00 p.m. on Thursday, May 23,
1996, and at any adjournment thereof.
1. ELECTION OF DIRECTORS ___ FOR the nominees ___ WITHHOLD AUTHORITY
AUTHORITY listed below to vote for all
nominees listed below
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
Ralph D. Rolen Melvin L. Masters
2. ADOPTION OF THE 1996 ___ FOR Adoption ___ AGAINST Adoption ___ ABSTAIN
STOCK INCENTIVE PLAN
(CONTINUED ON OTHER SIDE -- PROXY MUST BE DATED AND SIGNED)
<PAGE>
(CONTINUED FROM OTHER SIDE)
3. WARRANTS AND ___ FOR warrants and ___ AGAINST warrants and ___ ABSTAIN
CONVERSION RIGHT conversion right conversion right
TO TIMEMASTERS
4. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR THE DIRECTORS NAMED IN ITEM 1, FOR THE AMENDMENT IN ITEM 2, AND FOR THE
WARRANTS AND CONVERSION RIGHT IN ITEM 3.
PLEASE SIGN, DATE AND MAIL THIS PROXY STATEMENT IN THE ENCLOSED ADDRESSED
ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. Sign exactly
as your name appears below; in case of joint ownership, all owners must sign;
fiduciaries please indicate title and authority.
Date:_____________________ , 1996
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Signature
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Signature
