SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
(Amendment No. 2)
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
LaserSight Incorporated
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
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[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class 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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Revised Preliminary Copy Dated December 19, 1997
LASERSIGHT INCORPORATED
12161 Lackland Road
St. Louis, Missouri 63146
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NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD FEBRUARY __, 1998
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To the Stockholders:
NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders (the
"Special Meeting") of LaserSight Incorporated (the "Company") will be held at
the Sheraton Plaza Hotel, 900 West Port Plaza, St. Louis, Missouri 63146, on
February __, 1998 at 10:00 a.m., local time, solely for the following purposes:
1. To vote on a proposal to approve and reserve for issuance shares of
the Common Stock issuable upon the conversion of shares of the
Company's Series B Convertible Participating Preferred Stock, $.001
par value (the "Series B Preferred Stock"), issued in an August 1997
private placement, as dividends and other payments relating to such
Series B Preferred Stock and in respect of related investor and
placement agent warrants. Such approval will remove the limitation on
the number of shares of Common Stock issuable upon conversion
currently required by a listing rule of the Nasdaq Stock Market.
2. To vote on a proposal to approve an amendment to the Company's
Certificate of Incorporation to increase the number of authorized
shares of Common Stock from 20 million to 40 million.
3. To vote on a proposal to approve an adjournment of the special meeting
to another date or place for the purpose of soliciting additional
proxies if there are not sufficient votes at the time of the Special
Meeting to approve the 1997 Private Placement Issuances or the Charter
Amendment.
The Board of Directors has fixed the close of business on January __, 1998
as the record date for the determination of the stockholders entitled to notice
of, and to vote at, the Special Meeting or any adjournment or postponement
thereof.
The enclosed proxy is solicited by the Board of Directors of the Company,
which unanimously recommends that stockholders vote FOR all proposals. Please
refer to the attached Proxy Statement, which forms a part of this Notice and is
incorporated herein by reference, for further information with respect to the
business to be transacted at the Special Meeting.
Whether or not you plan to attend the Special Meeting in person, it is
important that you sign, date and return promptly the enclosed proxy in the
envelope provided to assure that your shares are represented at the Special
Meeting. If you subsequently decide to attend the Special Meeting and wish to
vote your shares in person, you may do so. Your prompt attention will be much
appreciated.
By Order of the Board of Directors
Gregory L. Wilson
Secretary
St. Louis, Missouri
January __, 1998
THE ENCLOSED PROXY, WHICH IS BEING SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS OF THE COMPANY, CAN BE RETURNED IN THE ENCLOSED ENVELOPE,
WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
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LASERSIGHT INCORPORATED
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PROXY STATEMENT
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INTRODUCTION
General
The enclosed proxy is solicited by and on behalf of the Board of Directors
of LaserSight Incorporated, a Delaware corporation (the "Company"), in
connection with the Special Meeting of Stockholders of the Company (the "Special
Meeting") to be held at 10:00 a.m., local time, at the Sheraton Plaza Hotel, 900
West Port Plaza, St. Louis, Missouri 63146, on February __, 1998, and any
adjournment or postponement thereof. At the Special Meeting, stockholders will
be asked to consider and vote on the following proposals:
1. To approve and reserve for issuance shares of the Company's Common
Stock, $.001 par value ("Common Stock") issuable upon the conversion of
shares of the Company's Series B Convertible Participating Preferred Stock,
$.001 par value (the "Series B Preferred Stock"), issued in an August 1997
private placement, as dividends, if any, and payments thereon and in
respect of related investor and placement agent warrants (such issuances of
Common Stock are collectively referred to as the "1997 Private Placement
Issuances"),
2. To amend the Company's Certificate of Incorporation to increase the
authorized number of shares of Common Stock from 20,000,000 to 40,000,000
(the "Charter Amendment"), and
3. To approve an adjournment of the special meeting to another date or
place for the purpose of soliciting additional proxies if there are not
sufficient votes at the time of the Special Meeting to approve the 1997
Private Placement Issuances or the Charter Amendment (the "Adjournment
Proposal").
Only holders of record of shares of Common Stock at the close of business
on January __, 1998, the record date for the Special Meeting fixed by the Board
of Directors, are entitled to vote at the Special Meeting. On that date, there
were outstanding and entitled to vote at the Special Meeting ________ shares of
Common Stock, each of which is entitled to one vote at the Special Meeting.
Holders of the Series B Preferred Stock are not entitled to notice of, or to
vote at, the Special Meeting. This Proxy Statement and accompanying proxy card
are being mailed to stockholders on or about January __, 1998.
The cost of soliciting proxies will be paid by the Company. Proxies may be
solicited by directors, officers and employees of the Company in person or by
mail, telephone or facsimile transmission, but such persons will not be
specially compensated for such services. Kissel-Blake Inc., 110 Wall Street, New
York, NY 10005 (telephone: (212) 344-6733), has been retained to assist in
soliciting proxies by mail, telephone, facsimile or personal solicitation for a
fee of approximately $6,000, plus expenses.
The Company's executive offices are located at 12161 Lackland Road, St.
Louis, Missouri, 63146 (telephone: (314) 469-3220). References in this Proxy
Statement to the "Company" refer to LaserSight Incorporated and its
subsidiaries, unless the context otherwise requires.
Voting and Revocation of Proxies
All shares represented by the accompanying proxy, if the proxy is properly
executed, returned and not revoked, will be voted as specified by the
stockholder. If no contrary instructions are given, such shares will be voted
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FOR approval of the 1997 Private Placement Issuances, FOR approval of the
Charter Amendment and FOR approval of the Adjournment Proposal. As of the date
of this Proxy Statement, the Board of Directors does not know of any other
matter which will be brought before the Special Meeting. Under the Company's
bylaws, the only business that may be conducted at a special meeting of
stockholders is that which is set forth in the related notice of meeting.
Although not expected, if any other matter properly comes before the Special
Meeting, or any adjournment or postponement thereof, which may properly be acted
upon, the proxies solicited by this Proxy Statement will be voted on such matter
in accordance with the discretion of the proxy holders named in such proxies
unless otherwise indicated.
Any stockholder has the power to revoke his or her proxy at any time before
it has been voted by filing with the Corporate Secretary of the Company an
instrument revoking it, by submitting a substitute proxy bearing a later date or
by voting in person at the Special Meeting.
A majority of the outstanding shares of Common Stock, represented in person
or by proxy, will constitute a quorum at the Special Meeting. Shares represented
by proxies that reflect abstentions or "broker non-votes" will be counted as
shares that are present and entitled to vote for purposes of determining the
presence of a quorum. Proxies that reflect abstentions as to a particular
proposal will be treated as voted for purposes of determining the approval of
that proposal and will have the same effect as a vote against that proposal.
The affirmative vote of the holders of a majority of the shares of Common
Stock cast at the Special Meeting is required to authorize and approve the 1997
Private Placement Issuances and the Adjournment Proposal. Proxies that reflect
broker non-votes will be treated as unvoted for purposes of determining approval
and will not be counted as votes for or against Proposal No. 1 or Proposal No.
3.
Because the Charter Amendment requires the approval of the majority of the
shares of Common Stock outstanding, a broker non-vote will be counted as a vote
against Proposal No. 2.
PROPOSAL NO. 1:
APPROVAL OF 1997 PRIVATE PLACEMENT ISSUANCES
General
In a private placement completed on August 29, 1997, the Company sold to
several institutional investors a total of 1,600 shares of its Series B
Preferred Stock, and issued to such investors and to the Company's placement
agent warrants to purchase a total of 790,000 shares of Common Stock (the
"Series B Warrants"). The Company received net proceeds of approximately $15.0
million (after the payment of cash fees to the placement agent and estimated
transaction expenses) from its sale of the Series B Preferred Stock and the
Series B warrants. The proceeds were used to purchase various patents from
International Business Machines Corporation ("IBM") relating to the use of
ultraviolet light for laser vision correction as well as all non-ophthalmic
applications (the "IBM Patents"). The IBM Patents represent fundamental claims
in 13 countries including the United States. The IBM Patents include patents for
Far Ultraviolet Surgical and Dental Procedures, with expiration dates ranging
from December 2, 1998 to November 15, 2005, in the following countries: United
States, Australia, Austria, Belgium, Brazil, Canada, France, Germany, Italy,
Japan, Spain, Sweden, Switzerland and United Kingdom. The IBM Patents also
include patents for Enhancement of Ultraviolet Light Ablation and Etching
Organic Solids, with expiration dates ranging from October 28, 2008 to October
9, 2009, in the following countries: United States, France, Germany, Japan and
United Kingdom.
Such transactions are collectively referred to in this Proxy Statement as
the "1997 Private Placement," and the related securities issuances (including
shares of Common Stock issuable upon the conversion of shares of Series B
Preferred Stock, as payments in respect of shares of Series B Preferred Stock,
and upon exercise of the Series B Warrants) are collectively referred to as the
"1997 Private Placement Issuances."
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The Company is seeking approval of the 1997 Private Placement Issuances in
order to satisfy a requirement included in the terms of the Series B Preferred
Stock. Such requirement provides that the Company shall use its best efforts to
obtain the approval of its stockholder for the possible issuance of more than
approximately 1,995,534 shares of Common Stock (slightly less than 20% of the
shares outstanding on August 29, 1997) in connection with the 1997 Private
Placement Issuances. This 20% approval requirement is based on a listing rule of
the Nasdaq Stock Market and is accordingly referred to in this Proxy Statement
as the "20% Nasdaq Limit." The 20% Nasdaq Limit is calculated on the basis of
the number of shares of Common Stock actually outstanding and does not consider
any outstanding common stock-equivalents, such as shares issuable in respect of
outstanding options and warrants. See "--Introduction," "--Nasdaq Listing
Obligation" and "Description of Capital Stock."
On October 28, 1997, the Company voluntarily redeemed 305 shares of the
Series B Preferred Stock with an aggregate face amount of $3,050,000 and
representing approximately 19% of the $16 million face amount issued in August
1997. The Company paid the redemption price of $3,172,000 (including a 4%
redemption premium) with a portion of the $4 million proceeds which the Company
had received in September 1997 as a lump-sum payment for an exclusive,
world-wide royalty-free license to a third party covering the use in the
vascular and cardiovascular fields of the IBM Patents. As required by its
agreement with the Series B preferred shareholders, the Company had placed 80%
of such proceeds in a blocked account to secure the Company's obligation to
redeem the Series B Preferred Stock if it were to default in certain of its
obligations to the Series B preferred shareholders. The Company believes that
its continued holding of the restricted funds in the blocked account (in lieu of
redeeming the 305 preferred shares) would not have meaningfully enhanced the
Company's liquidity and would, under the terms of the Series B Preferred Stock,
have resulted in an increase in the redemption premium (to as much as 14%) or
the expiration on January 26, 1998 of the Company's option to redeem Series B
Preferred Stock. In addition, the Company believes that the redemption of such
305 shares reduced the potential dilutive effect of the Series B Preferred Stock
on the Company's common shareholders.
The Company is continuing to negotiate royalty arrangements relating to the
IBM Patents with other companies, including in one case a possible lump-sum
royalty payment that had been the subject of preliminary discussions at the time
of the transaction. However, there can be no assurance as to when or on what
terms the Company may be able to license the IBM Patents to other companies. To
date, the Company has not entered into any other material license agreements
relating to the IBM Patents.
Introduction
The exact number of shares of Common Stock issuable upon full consummation
of the 1997 Private Placement Issuances cannot currently be determined because
such number depends on future events, especially the future market prices of the
Common Stock and the timing of the conversion decisions of the holders of Series
B Preferred Stock. The number of shares of Common Stock issuable upon full
consummation of the 1997 Private Placement Issuances will generally increase or
decrease in the opposite direction of changes in the market price of Common
Stock and could be substantially greater than the 1,995,534 shares permitted by
the 20% Nasdaq Limit. Holders of Series B Preferred Stock can elect to convert
their shares into Common Stock on any date or dates before August 29, 2000, when
all Series B Preferred Stock remaining outstanding will automatically be
converted into Common Stock.
The number of shares of Common Stock issuable upon conversion of shares of
Series B Preferred Stock (the "Conversion Shares") equals the liquidation
preference of the shares being converted (presently $10,000 per share) divided
by the then-effective conversion price applicable to the Series B Preferred
Stock (the "Conversion Price"). The Conversion Price as of any date is the
lesser of (i) $6.68 per share or (ii) the "Variable Conversion Price," defined
as the average of the three lowest Closing Bid Prices per share of Common Stock
during the Lookback Period (as defined below) (subject to equitable adjustment
for any stock splits, stock dividends, reclassifications or similar events
during the Lookback Period), subject to adjustment as provided in this Proxy
Statement. For this purpose, the "Lookback Period" means the period of 20
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consecutive trading days ending on the trading day immediately preceding the
Conversion Date; provided, however, that in the event the average Closing Bid
Price of the Common Stock during the period of five consecutive trading days
ending on February 25, 1998 is less than $5.1375 per share, the Lookback Period
will be the period of 30 consecutive trading days ending on the trading day
immediately preceding the Conversion Date. As of December 10, 1997, the
Conversion Price would have been $3.40625 per share whether a 20-day or a 30-day
Lookback Period was used. The terms of the Series B Preferred Stock do not limit
the number of shares of Common Stock which the Company may be required to issue
upon its conversion.
The terms of the Series B Preferred Stock and the 20% Nasdaq Limit require
stockholder approval in the event that the 1997 Private Placement Issuances
require more than the 1,995,534 shares of Common Stock be issued in connection
therewith (slightly less than 20% of the shares of Common Stock outstanding on
the date of the 1997 Private Placement). Such outstanding share amount excludes
all common stock-equivalents outstanding as of such date, including shares
issuable in respect of outstanding options and warrants.
In addition, if the Company fails to meet any of its obligations to the
holders of the Series B Preferred Stock, including timely conversions of the
Series B Preferred Stock and the timely registration of the shares of Common
Stock issuable upon such conversion under the Securities Act of 1933, the
Company is required to make certain payments to such holders. The holders have
the option of receiving such additional payments in the form of either cash or
additional shares of Common Stock. Such shares would increase the
otherwise-required number of shares of Common Stock.
Unless the Company obtains the approval of its stockholders, the 20% Nasdaq
Limit will continue to prohibit the Company from issuing more than 1,995,534
shares of Common Stock in connection with the 1997 Private Placement Issuances.
If, but for the 20% Nasdaq Limit, the terms of the Series B Preferred Stock and
the Series B Warrants would require the Company to issue more than 1,995,534
shares of Common Stock, the Company is required to satisfy such excess with
cash. One such obligation would be to redeem a portion of the outstanding Series
B Preferred Stock at an estimated redemption price of at least $15,312,500,
including a premium of approximately $3,062,500 (25% of the face amount of the
shares redeemed), assuming a Conversion Price of $3.40625 per share (the average
of the three lowest closing bid prices of the Common Stock during the 20 trading
days preceding December 10, 1997) and completion of the redemption within five
business days after the Company's receipt of a redemption request. The Company
does not have sufficient cash and marketable securities to satisfy this
contingent obligation, and there can be no assurance that the Company will have
available the cash resources to satisfy future obligations which might arise, or
that such payments would not have a material adverse effect on the Company's
financial position or liquidity. See "--Consequences if Stockholder Approval Not
Obtained" and "--Use of Proceeds."
Of the $16.0 million in gross proceeds from the 1997 Private Placement,
$14.9 million was paid to IBM to finance the purchase of the IBM Patents,
$800,000 was paid to the Company's placement agent, and the balance for legal,
accounting, and other expenses relating to the transaction. See "---Use of
Proceeds."
Possible Disadvantages of Approving the Proposal
As noted above, the exact number of shares issuable upon full consummation
of the 1997 Private Placement Issuances cannot currently be estimated. Depending
on the ultimate financial results achieved by the Company pursuant to its
licensing of the IBM Patents, the current holders of Common Stock may be diluted
by the 1997 Private Placement Issuances and may be substantially diluted
depending on the future market price of the Common Stock. If, however, the
market price of the Common Stock increases significantly prior to the date any
of the Series B Preferred Stock is converted, the current holders of Common
Stock would benefit relative to a placement at market prices which prevailed on
August 29. The closing price of the Common Stock on the Nasdaq National Market
on such date was $5.00 per share. The holders of the Series B Preferred Stock
also have certain other rights under the Series B Preferred Stock which may,
among other things, have the effect of delaying, deferring or preventing a
<PAGE>
change in control of the Company, discouraging tender offers for the Company and
inhibiting certain equity issuances until substantially all such shares are
converted or redeemed.
Generally, the number of shares of Common Stock issuable upon the
conversion of the Series B Preferred Stock will vary inversely with the market
price of the Common Stock. Under the terms of the Series B Preferred Stock,
holders generally are not required to convert such shares prior to August 29,
2000. The ownership interest of current holders of Common Stock will be diluted
by the 1997 Private Placement Issuances (possibly substantially so), depending
on the market price of the Common Stock during the period preceding such
conversion. The dilution of earnings per share will be determined by both the
increase in the number of shares and earnings associated with the IBM Patents.
If, however, the market price of the Common Stock were to increase above $5.00
per share (the closing price of the Common Stock on August 29, 1997) before the
Series B Preferred Stock is converted, the current holders of Common Stock would
benefit relative to a placement at market prices prevailing on that date.
As of December 10, 1997, the average of the lowest three daily closing bid
prices of the Common Stock on the Nasdaq National Market during the 20 preceding
trading days was $3.40625 per share. If such average price were assumed to equal
to the Conversion Price as of each date on which the Series B Preferred Stock is
converted, the Company would be required to issue a total of approximately
3,801,834 shares of Common Stock if all 1,295 outstanding shares of Series B
Preferred Stock were converted as of such date. To the extent the Conversion
Price of the Common Stock is higher than $3.40625 as of any date on which shares
of Series B Preferred Stock are converted, fewer shares of Common Stock would be
issuable. Conversely, to the extent the Conversion Price is lower than $3.40625
on any such date, more shares of Common Stock would be issuable. This
information is not a prediction as to the future Conversion Price of the Common
Stock or as to when holders will elect to convert shares of Series B Preferred
Stock into shares of Common Stock.
The Board of Directors considered these disadvantages, and concluded that
they are outweighed by the advantages discussed in the following section. See
"---Effects of 1997 Private Placement Issuances on Holders of Common Stock."
The Board's Evaluation of the IBM Purchase and Its Financing
Negotiations Between the Company and IBM. The discussions between the
Company and IBM regarding the IBM patents began in June 1996 with an exploratory
meeting between Mr. Emmett Murtha, the Director of Business Development in IBM's
Office of the Vice President of Intellectual Property and Licensing - Corporate,
and Mr. Michael Farris, President and Chief Executive Officer of the Company,
together with a consultant retained by the Company. By letter dated July 17,
1997, Mr. Farris proposed to Mr. Murtha an acquisition by the Company of IBM's
entire interest in all of its issued and pending patents relating to medical and
dental applications for lasers in exchange for total consideration of $10
million, payable 50% in cash and 50% in unregistered Common Stock whose transfer
would be restricted for 24 months. (This proposal included patents which the
Company ultimately did not acquire.) IBM would have retained a 25% interest in
the Company's revenues from the patents (subject to a ceiling) and would have
shared equally in the cost of prosecuting and defending the patents. On July 23,
1996, Mr. Farris received IBM's response to the effect that payments at the time
of the transaction would have to reflect at least half of the total price and
that a minimum amount of post-closing payments should be specified. IBM's
response also indicated a willingness to explore alternative transactions, such
as an exclusive license rather than an outright purchase and sale of the
patents, a transaction involving fewer of the patents, and excluding IBM's
existing license agreements with VISX Incorporated ("Visx") and Summit
Technology, Inc. ("Summit"). On July 24, 1996, Mr. Farris wrote to Mr. Murtha to
propose that the Company would acquire both (i) a worldwide license only for the
ophthalmic applications and only involving certain of those patents relating to
the ablation of body tissue, and (ii) IBM's rights under its agreements with
Summit and VISX. In exchange, the Company would pay IBM $10 million in cash,
stock and notes and would give IBM a 50% share in the royalties collected. On
July 30, the Company received a letter from Mr. Murtha to the effect that IBM
<PAGE>
would proceed with the Company's proposal and would shortly forward a draft of
an agreement. The Company received IBM's draft agreement on August 9, 1996 and
exchanged comments with IBM during following weeks. On September 26, 1996, the
Company and IBM shifted their focus structure of towards a license arrangement
rather than a purchase and sale. By letter dated October 11, 1996, Mr. Farris
proposed to Mr. Murtha a schedule providing for payments of Common Stock and
cash over a five-year period. On December 2, 1996, the Company submitted two
alternative proposals to IBM in response to its request for an all-cash
transaction. The Company's first proposal was for IBM to receive $10 million in
increasing annual installments over five years, together with either 25% or 50%
of the royalties collected by the Company during such five years, payable after
the cumulative amount of such royalties were to exceed either $5 million (if IBM
were to elect the 25% royalty rate) or $8 million (if IBM were to elect the 50%
royalty rate). The Company's alternative proposal was for IBM to receive $10
million in increasing annual installments payable over five years and additional
annual payments in an aggregate amount of up to $5 million if and when certain
royalty revenue targets were met during such years. Neither proposal was
accepted by IBM. On December 16, 1996, the Company and IBM agreed to pursue the
a proposal for a fixed transaction price of $15 million, with a portion to be
paid into an escrow account at closing and the balance to be paid in July 1997.
IBM also agreed to transfer to the Company as an additional element of the
transaction both IBM's rights under its existing royalty agreements with Visx
and Summit and IBM's right to pursue patent infringement claims against
unlicensed third parties.
Factors Considered by the Board of Directors in February 1997. The Board
discussed the acquisition at a February 7, 1997 board meeting and authorized the
execution of the agreement between International Business Machines Corporation
and LaserSight Incorporated, as amended (the "IBM Patent Agreement"). The
factors considered by the Board at its February 7 meeting included:
. The proposed agreement and the price of $14.9 million were the result
of extensive negotiations (as described above).
. Certain of IBM's existing licenses of the IBM Patents to third parties
were not ultimately included in the transaction based on the fact that
the Company placed a lower value on them than IBM's requested price.
. Royalties were forecast with a financial model developed by the Company
with the help of an outside consultant and industry sources. (However,
the Company did not request any fairness opinion regarding the
transaction.)
. There were prospects for the Company to receive lump sum license fees
for certain of the IBM Patents.
. The proposed agreement did not require the Company to consummate its
acquisition of the IBM Patents and certain related licenses until July
1, 1997, thereby giving the Company some time to explore financing
alternatives.
. If the Company were to fail to satisfy its obligation to acquire the
IBM Patents by July 1, IBM's sole remedy would be a payment from the
Company of $1 million. The Company could choose to make such payment in
either cash or Common Stock.
. The value of the Company's LaserSight Technologies subsidiary could be
enhanced, thereby facilitating the Company's pursuit of strategic
alternatives that it had announced in October 1996.(1)
. The transaction would require the Company to obtain financing for all
or substantially all of the $14.9 million purchase price.
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(1) Upon the completion of its exploration and evaluation of possible strategic
alternatives, the Company determined in June 1997 not to pursue further any
such alternatives for the time being.
<PAGE>
The Board of Directors viewed all of these factors as positive, except that it
recognized the Company's need to finance the transaction and adverse
consequences of its obligation to pay IBM $1 million if the transaction did not
close by July 7, 1997. The Board of Directors determined that, taken as a whole,
the positive factors outweighed these negative factors.
Factors Considered by the Board of Directors in August 1997. In addition,
at two board meetings in August 1997, the Board of Directors discussed the
potential 1997 Private Placement Issuances and authorized a private placement of
the Series B Preferred Stock. The Board considered the benefits and risks of
raising equity based on future market prices relative to available alternatives
and concluded that the 1997 Private Placement Issuances were in the best
interest of the Company and its stockholders.
The factors that the Board of Directors considered to be positive to a
decision to proceed with the transaction included:
. The IBM Patents related to the use of an ultraviolet laser for the
ablation (i.e., surgical removal or shaping) of any human tissue rather
than only for vision correction, and management's belief that there is
a wide range of such potential uses.
. There would be an enhancement of the Company's strategic position in
use of the technology for vision applications and the fact that certain
other companies in the industry (but not including VISX, Summit and
Autonomous Technologies Corporation) lacked a license to use the IBM
Patents.
. The Company had preliminary discussions with alternate sources of
financing, including other companies in the same industry, but it had
received only one other proposal that would have yielded $16 million.
Management concluded that such other proposal was unlikely to be
concluded in a timely manner or to result in more favorable terms.
. If the Company did not consummate the IBM transaction, it would
required to pay IBM cash or stock with an aggregate value of $1
million.
. Although IBM had been willing to extend the original deadline for
closing from July 1, 1997 to August 1, 1997 and again to September 1,
1997, it appeared unlikely that IBM would grant any further extensions.
. The Company had prospects to enter into licensing arrangements
providing for lump-sum licensing fees in an amount sufficient to
recover some portion of the purchase price.(2)
The factors that the Board of Directors considered to be negative to a
decision to proceed with the transaction included:
. The Series B Preferred Stock financing could impair the Company's
ability to raise additional capital in the public or private markets.
. There was a potential for extensive dilution of the Company's existing
stockholders by the potentially unlimited number of shares of Common
Stock issuable upon conversion of the Series B Preferred Stock.
(However, the Board believed that this factor was somewhat offset by
the Company's right to redeem up to 70% of the face amount of the
Series B Preferred Stock on or before November 27, 1997 or up to 40% of
the face amount on or before January 26, 1998.)
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(2) Although there had been preliminary discussions and indications of interest
(one of which eventually developed into a September 1997 license for $4
million for a third party's use of the IBM Patents in the cardiovascular
and vascular fields) no definitive licensing arrangements had been entered
into as of August 1997.
<PAGE>
. Certain events could cause in the Series B Preferred Stock to become
redeemable at the Holders' option, including the failure of the
Company's stockholders to approve the 1997 Private Placement Issuances
by December 26, 1997 (or such later deadline as may be consented to by
all the holders of the Series B Preferred Stock) or any failure of the
Company's stockholders to approve amendments to the Company's
Certificate of Incorporation that may be needed from time to time to
keep available for issuance upon conversion of the Series B Preferred
Stock a number of shares of common stock equal to at least 175% of the
number of Conversion Shares then issuable.
The Board of Directors determined that, taken as a whole, the positive factors
outweighed these negative factors.
Summary of Transaction Terms
Set forth below is a summary of the material terms of the 1997 Private
Placement. The detailed provisions are provided in the transaction documents.
The Certificate of Designations, Preferences and Rights of Series B Convertible
Participating Preferred Stock is attached as an exhibit to the Company's amended
Form 8-A filed with the Securities and Exchange Commission ("SEC") on September
29, 1997. Copies of other transaction documents, including the Securities
Purchase Agreement, the Warrant Agreement, and the Registration Rights Agreement
are available from the Secretary of the Company upon request.
Series B Preferred Stock Placement. Pursuant to a Securities Purchase
Agreement dated as of August 29, 1997 (the "Securities Purchase Agreement"), the
Company issued and sold in a private placement to certain accredited investors
an aggregate of 1,600 shares of a newly-established series of preferred stock,
designated as Series B Convertible Participating Preferred Stock, at a price of
$10,000 per share, resulting in aggregate gross proceeds to the Company of $16.0
million.
Each holder of shares of Series B Preferred Stock is entitled to
participate in any dividends paid on the Common Stock while such shares of
Series B Preferred Stock remain outstanding, when and as declared by the Board
of Directors. However, the Company does not currently anticipate paying
dividends for the foreseeable future. Any dividend on the Series B Preferred
Stock shall be paid in cash concurrently with the dividend or distribution to
the holders of Common Stock. Each share of Series B Preferred Stock is also
entitled to a liquidation preference of $10,000 per share plus any accrued but
unpaid dividends, in preference to any other class or series of capital stock of
the Company. Except as otherwise provided by applicable law, holders of shares
of Series B Preferred Stock have no voting rights.
Each holder of Series B Preferred Stock has the option to convert any or
all of such shares into shares of Common Stock from time to time before August
29, 2000, on which date all shares of Series B Preferred Stock then outstanding
will automatically be converted into Common Stock. The number of shares of
Common Stock issuable upon any conversion of shares of Series B Preferred Stock
will equal the liquidation preference of the shares being converted divided by
the then-effective conversion price applicable to the Common Stock (the
"Conversion Price"). The Conversion Price as of any date shall be the lesser of
(i) $6.68 per share or (ii) the "Variable Conversion Price," defined as the
average of the three lowest Closing Bid Prices per share of Common Stock during
the Lookback Period (as defined below) (subject to equitable adjustment for any
stock splits, stock dividends, reclassifications or similar events during the
Lookback Period), subject to adjustment as provided in this Proxy Statement. For
purposes hereof, the "Lookback Period" means the period of 20 consecutive
trading days ending on the trading day immediately preceding the Conversion
Date, but if the average Closing Bid Price of the Common Stock during the period
of five consecutive trading days ending on February 25, 1998 is less than
$5.1375 per share, the Lookback Period shall be the period of 30 consecutive
trading days ending on the trading day immediately preceding the Conversion
Date. The terms of the Series B Preferred Stock do not limit the number of
<PAGE>
shares of Common Stock which the Company may be required to issue in respect
thereof, except for the limitations described in the following paragraph
relating to the Company's listing on the Nasdaq National Market. The Conversion
Price is also subject to adjustment for customary anti-dilution events such as
stock splits, stock dividends, reorganizations and certain mergers affecting the
Common Stock, as well as by any announcement of a tender offer, by a
distribution, and by issuance of securities with a discounted variable
conversion price. In addition, upon a merger or consolidation, holders shall
have the option of receiving 125% of the face amount of the Series B Preferred
Stock. The holders shall also participate in any purchase rights given to
holders of Common Shares. Notwithstanding the foregoing, no holder of Series B
Preferred Stock will be entitled to convert any shares of Series B Preferred
Stock into shares of Common Stock if, following such conversion, the holder and
its affiliates (within the meaning of the Securities Exchange Act of 1934) will
be the beneficial owners (as defined in Rule 13d-3 thereunder) of more than 9.9%
of the outstanding shares of Common Stock, without the approval of the Board of
Directors and a majority of the outstanding common shares, unless this provision
is waived by a majority of the holders.
Unless the Company's shareholders approve the 1997 Private Placement
Issuances, the 20% Nasdaq Limit and the terms of the Series B Preferred Stock
will continue to limit to 1,995,534 the aggregate number of shares that may be
issued upon the conversion of the Series B Preferred Stock and the exercise of
the 1997 Warrants. If such approval is not granted or is for any other reason
not received by December 26, 1997 (or such later deadline as may be consented to
by all of the holders of the Series B Preferred Stock), and thereafter
insufficient shares are available due to this limitation to allow conversion of
the outstanding Series B Preferred Stock plus a 75% reserve, the Company may be
obligated to redeem, at a 25% premium, a sufficient number of shares of Series B
Preferred Stock which, in its reasonable judgment, will permit conversion of the
remaining shares of Series B Preferred Stock without causing the Company to
violate the 20% Nasdaq Limit and, upon issuance of all such 1,995,534 shares of
Common Stock, the Company will be required upon subsequent conversion of shares
of Series B Preferred Stock to redeem such shares for cash at the Special
Redemption Price (as defined below). Any delay in payment will cause such
redemption amount to accrue interest at the prime rate (as provided by the Wall
Street Journal) plus 5% (or if lower, the highest rate permitted by law) until
paid. See "--Nasdaq Listing Obligation" and "---Consequences if Stockholder
Approval Not Obtained."
The Company has agreed to cause to be registered the shares of Common Stock
issuable upon conversion of the Series B Preferred Stock, including shares
payable as dividends, if any, thereon, for resale under the Securities Act,
together with a reserve of an additional 75%, no later than November 27, 1997.
Any delay in having such registration statement declared effective by the
Commission beyond November 27, 1997, or any unavailability to the holders of the
Series B Preferred Stock of a current prospectus after such period, will require
the Company to pay to each holder, an amount equal to 1% of the total purchase
price of the Series B Preferred Stock for the first 30-day period of the delay
(prorated for any shorter period), and 2% of the total purchase price for each
month thereafter (prorated for any shorter period). Based on the amounts of
Series B Preferred Stock outstanding as of the date of this Proxy Statement, the
aggregate amount of such payments is $129,500 during the first month of such
delay (or $4,317 per day) and $259,000 per month of additional delay (or $8,633
per day).
Placement Agent Compensation. The Placement Agent for the 1997 Private
Placement was Shoreline Pacific, the Institutional Finance Division of Financial
West Group (the "Placement Agent"). In consideration for placing such
securities, the Placement Agent was paid cash compensation of 5% of the gross
proceeds received by the Company. Further, the Company also issued to the
Placement Agent Series B Warrants to acquire an aggregate of 40,000 shares of
Common Stock at a price of $5.91 per share. Such Warrants are exercisable at any
time through August 2002. The Company is required to register the shares of
Common Stock issuable upon exercise of the Series B Warrants for resale under
the Securities Act. The Placement Agent will retain its compensation whether or
not the stockholder approval sought hereby is obtained.
<PAGE>
Nasdaq Listing Obligation
The Company's listing agreement regarding the trading of the Common Stock
on the Nasdaq National Market requires the Company to comply with certain
"non-quantitative designation criteria." These criteria include the requirement
that, with certain exceptions, issuers quoted on the Nasdaq National Market
obtain stockholder approval of the issuance of discounted or potentially
discounted Common Stock equal to 20% or more of the number of shares or voting
power then outstanding. Stockholder approval is also required for transactions
which result in "change in control." Although the Company does not believe that
the 1997 Private Placement Issuances contemplated by the 1997 Private Placement
Issuances constitute a "change in control" under the Nasdaq's rules, if the
transactions were to be so construed, the approval sought hereby would also be
effective to satisfy the stockholder vote required thereby. The Company's belief
is based on the fact that no voting rights were granted to holders of the Series
B Preferred Stock as such, that such holders do not have any contractual right
to elect a director or otherwise influence management of the Company, and there
has been no change in the Company's Chairman of the Board or its President and
Chief Executive Officer.
In order to assure continued compliance with the 20% Nasdaq Limit, the
transaction documents governing the 1997 Private Placement Issuances expressly
provide that no more than an aggregate of approximately 1,995,534 shares of
Common Stock (slightly less than 20.0% of the shares of Common Stock outstanding
on the date of the 1997 Private Placement) may be issued in connection therewith
unless and until the approval sought hereby is obtained. See "Description of
Capital Stock."
The approval of Proposal No. 1 by the Company's stockholders would result
in the approval of the issuance by the Company of shares of Common Stock in
satisfaction of its obligations under the securities issued in the 1997 Private
Placement as described in this Proxy Statement and would free the Company from
the requirements of the 20% Nasdaq Limit. No further stockholder vote or
approval related to the 1997 Private Placement Issuances will be sought or
required, unless a decline in the market price of the Common Stock causes the
Company's reserve of authorized but unissued shares of Common Stock reserved for
issuance as Conversion Shares to amount to less than 75% in excess of the
required amount based on ongoing conversion price changes shall exceed the
number of authorized shares. If the approval sought hereby is not obtained, the
Company will only be permitted to issue an aggregate of approximately 1,995,534
shares in connection with the 1997 Private Placement, and any other obligations
will have to be paid in cash as described below. See "--Consequences if
Stockholder Approval Not Obtained."
Consequences if Stockholder Approval Not Obtained
If the stockholder approval sought hereby is not obtained, the 20% Nasdaq
Limit and the terms of the Series B Preferred Stock will prohibit the Company
from issuing more than 1,995,534 shares of Common Stock in connection with the
1997 Private Placement Issuances (slightly less than 20% of the shares of Common
Stock outstanding on the date of the 1997 Private Placement). If the approval
sought hereby is declined by the stockholders or if such approval is not for any
reason received by December 26, 1997 (or such later deadline as may be consented
to by all of the holders of the Series B Preferred Stock), the Company may be
obligated to redeem, at the Special Redemption Price (as defined below), a
sufficient number of shares of Series B Preferred Stock which will permit
conversion of 200% of the remaining shares of Series B Preferred Stock without
breaching any obligation of the Company under the Company's listing agreement
with the Nasdaq National Market. The "Special Redemption Price" means a cash
payment equal to the greater of (i) the liquidation preference of $10,000
multiplied by 125% or (ii) the current value of the Common Stock based on the
price per share of Common Stock, which the holders of such shares of Series B
Preferred Stock would otherwise be entitled to receive upon conversion. Such
redemption must be completed within five business days of the Company's receipt
of a redemption request. Any delay in payment will cause such redemption amount
to accrue interest at the rate of 1% per month during the first 30 days,
prorated daily (2% monthly, prorated daily, thereafter).
<PAGE>
The amount of cash which the Company would be required to return in the
event of stockholder disapproval will depend on the per share market price
history of the Common Stock on the date such payment must be made. Assuming a
Conversion Price of $3.40625 per share (the average of the lowest three daily
closing bid prices during the 20-day Look-Back period ended on December 10,
1997), a $3.40625 per share market price, and completion of the redemption
within five business days after the Company's receipt of a redemption request,
the Company would be required to pay at least $15,312,500 (including a premium
of 25% or $3,062,500). The number of shares of Common Stock issuable upon
conversion of the Series B Preferred Stock will generally increase if the market
price of the Common Stock decreases. Accordingly, if the market price of the
Common Stock decreases significantly, the number of shares of Series B Preferred
Stock which could not be converted into Common Stock would increase and the
amount of cash that the Company could be required to pay to holders of the
Series B Preferred Stock would increase. The Company does not have sufficient
cash and marketable securities to satisfy this contingent obligation. There can
be no assurance that the Company will have available the cash resources to
satisfy future obligations which might arise depending on the future market
price of the Common Stock, or that such payments would not have a material
adverse effect on the Company's liquidity and financial position.
The Company has requested that each of the four holders of Series B
Preferred Stock extend to February 28, 1998 the current deadline (December 26,
1997) for the Company to obtain the required shareholder approvals. Such a
waiver would need to be unanimous. There can be no assurance as to whether, when
or on what terms such any such extension can be obtained.
Effects of 1997 Private Placement Issuances on Holders of Common Stock
Although the holders of the Series B Preferred Stock have voting rights
only under the limited circumstances required by Delaware corporate law and are
not entitled to receive any dividends unless dividends are concurrently paid on
the Common Stock, there is no limit on the number of shares which the holders of
the Series B Preferred Stock would be entitled to receive upon the conversions
thereof, subject to the approval of the Company's shareholders of the issuance
of more than 1,995,534 shares of Common Stock in connection with such
conversions. In addition, in the event of a liquidation of the Company, the
holders of the Series B Preferred Stock would be entitled to receive
distributions in preference to the holders of the Common Stock.
As noted in the above discussion captioned "-Possible Disadvantages of
Approving the Proposal," the exact number of shares issuable upon full
consummation of the 1997 Private Placement Issuances cannot currently be
estimated and the current holders of Common Stock will be diluted in their
percent of ownership of the Company by the 1997 Private Placement Issuances and
may be substantially diluted depending on the market price of the Common Stock
during such period, and the conversion formulas applicable to the Series B
Preferred Stock at the time of conversion. The dilution of earnings per share,
if any, will be determined by both the increase in the number of shares and
earnings associated with the IBM Patents.
The following table illustrates the effect of various Conversion Prices,
assuming (i) all Series B Preferred Stock was converted at the same time at
these prices and (ii) the Company's shareholders approve the 1997 Private
Placement Issuance and the Charter Amendment:
<PAGE>
Assumed Number of As Percent of Common
Conversion Conversion Shares Outstanding
Price (1) Shares Issuable After Conversion (2)
$1.00 12,950,000 56.5%
$2.00 6,475,000 39.3%
$3.00 4,316,667 30.2%
$3.40625 (3) 3,801,835 27.6%
$4.00 3,237,500 24.5%
$5.00 2,590,000 20.6%
$6.00 2,158,333 17.8%
$6.68 1,938,622 16.3%
(maximum Conversion Price)
(1) Such Conversion Price is based on the lesser of $6.68 per share or the
Variable Conversion Price, as defined under "Summary of Transaction
Terms-Series B Preferred Placement."
(2) Assumes that the aggregate number of shares outstanding at the time of
conversion equals the 9,984,672 shares of Common Stock outstanding on
December 18, 1997 plus the number of Conversion Shares issuable at the
price indicated.
(3) Equals the Conversion Price that would have been applicable if all of
the Series B Preferred Stock had been converted on December 10, 1997.
Under applicable Delaware law and the Company's Certificate of
Incorporation, the Board of Directors has the authority, without further action
by the stockholders, to issue additional shares of preferred stock in one or
more series and to fix the rights, preferences, privileges and restrictions
granted to or imposed upon any series of unissued preferred stock and to fix the
number of shares constituting any series and the designation of such series,
without any further vote or action by the stockholders. The issuance of
additional shares of preferred stock, and shares of Common Stock into which such
preferred stock may be converted, may, among other things, have the effect of
delaying, deferring or preventing a change in control of the Company,
discouraging tender offers for the Company and inhibiting certain equity
issuances until substantially all such shares of preferred stock are converted
or redeemed. The Company currently has no plans to designate and/or issue any
additional shares of preferred stock, except those pursuant to the Series B
Warrants and as dividends on shares of Series B Preferred Stock.
Board of Directors Approval
As previously disclosed, the Board of Directors has recognized for some
time that the purchase of the IBM Patents required that additional capital be
raised. The Board discussed this need for capital at two Board meetings during
1997 and authorized management to acquire the capital through this proposed
private placement of convertible preferred stock. The Board considered the
benefits and risks of raising equity based on future market prices relative to
other available alternatives and concluded that the 1997 Private Placement
Issuances were in the best interest of the Company and should be pursued. See
"---Use of Proceeds."
Use of Proceeds
The Company estimates that the aggregate net proceeds received by it from
the issuance of shares Series B Preferred Stock in the 1997 Private Placement
was approximately $15.0 million (after cash fees to the Placement Agent and
estimated transaction expenses). The Company used substantially all of such
funds to finance the purchase of the IBM Patents.
<PAGE>
Interests of Certain Persons
None of the purchasers of the Series B Preferred Stock was or is an
executive officer or director of the Company or, to the Company's knowledge, an
affiliate of any such officer or director. To the Company's knowledge, none of
such purchasers beneficially owned 5% or more of the Common Stock before the
1997 Private Placement.
No Appraisal or Dissenters' Rights; No Preemptive Rights
Under applicable Delaware law, stockholders are not entitled to any
statutory dissenters' rights or appraisal of their shares of Common Stock in
connection with the 1997 Private Placement or the 1997 Private Placement
Issuances. Existing stockholders have no preemptive rights in respect of any of
the securities to be issued in the 1997 Private Placement Issuances or any other
securities issuances by the Company.
Certain Voting and Market Standoff Undertakings
Messrs. Michael Farris and Gregory Wilson, the Company's Chief Executive
Officer and Chief Financial Officer, respectively, have each agreed with the
holders of the Series B Preferred Stock to vote all shares of Common Stock over
which they exercise voting authority in favor of Proposal No. 1. As of the date
of this Proxy Statement, the Company believes that such undertakings cover an
aggregate of approximately 430,200 shares, representing approximately 4.3% of
the shares outstanding on the record date for the Special Meeting.
Separately, Mr. Farris has agreed, effective through February 28, 1999, not
to sell, transfer or assign more than the lesser of 125,000 shares of Common
Stock or 15% of the shares of Common Stock owned by Mr. Farris as of August 29,
1997 without the prior consent of the holders of the Series B Preferred Stock.
Vote Required
Stockholder approval of the 1997 Private Placement Issuances requires the
affirmative vote of the holders of a majority of the shares of Common Stock
entitled to vote thereon present in person or by proxy at the Special Meeting.
The Board of Directors unanimously recommends that stockholders vote FOR the
1997 Private Placement Issuances. The directors and officers of the Company
intend to vote their shares in favor of this Proposal.
PROPOSAL NO. 2:
APPROVAL OF AN AMENDMENT TO THE COMPANY'S
CERTIFICATE OF INCORPORATION TO INCREASE THE
NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
General
The Board of Directors has unanimously adopted a resolution to submit to
shareholders a proposal to amend the first paragraph of Article IV of the
Company's Certificate of Incorporation to increase the number of shares of
Common Stock which the Company is authorized to issue from 20,000,000 to
40,000,000. The Board determined that such an amendment is advisable and
directed that the proposed amendment be considered by the Company's stockholders
at the Special Meeting.
The full text of Section 1(a) of Article IV of the Company's Certificate of
Incorporation, if amended as proposed, would read as follows:
(a) Common Stock. The aggregate number of shares of Common Stock which
the corporation shall have authority to issue is 40,000,000, each with
a par value of $.001 per share.
<PAGE>
The Charter Amendment will not increase the number of shares of preferred
stock authorized. The relative rights and limitations of the Common Stock and
preferred stock would remain unchanged under the Charter Amendment. However,
because shareholders have no preemptive rights to purchase any additional shares
of Common Stock which may be issued, the issuance of additional shares would
likely reduce the percentage interest of current shareholders in the total
outstanding shares. The terms of the additional shares of Common Stock will be
identical to those of the currently outstanding Common Stock.
Purposes and Effects of Increasing the Number of Authorized Shares of Common
Stock
The proposed Charter Amendment would increase the number of shares of
Common Stock which the Company is authorized to issue from 20,000,000 to
40,000,000. The additional 20,000,000 shares, if and when issued, would have the
same rights and privileges as the shares of Common Stock that are now
outstanding. The holders of Common Stock are not entitled to preemptive rights
or cumulative voting.
The Board of Directors recommends the proposed increase in the authorized
number of shares of Common Stock to ensure that an adequate supply of authorized
and unissued shares are available for (i) additional issuances under the
Company's employee benefit plans, (ii) the raising of additional capital for the
operations of the Company, (iii) the financing of the acquisition of other
businesses, (iv) the payment of contingent obligations for stock or (v)
conversion of the Company's equity securities described above. Except as
described above, there are currently no plans or arrangements relating to the
issuance of any of the additional shares of Common Stock proposed to be
authorized and such shares would be available for issuance without further
action by stockholders, unless required by the Company's Certificate of
Incorporation, its Bylaws or applicable law.
The increase in the number of authorized shares of Common Stock has not
been proposed for any anti-takeover purpose and the Board of Directors and
members of management of the Company have no knowledge of any current effort to
obtain control of the Company or to accumulate large amounts of its Common
Stock. However, the availability of additional shares of Common Stock could make
any attempt to gain control of the Company or of the Board more difficult.
Shares of authorized but unissued Common Stock could be issued in an effort to
dilute the stock ownership and voting power of any person or entity desiring to
acquire control of the Company, which might have the effect of discouraging or
making less likely such a change of control. Such shares could also be issued to
other persons or entities who support the Board in opposing a takeover attempt
that the Board considers not to be in the best interests of the Company and its
stockholders.
On December 18, 1997, the Company had 9,984,672 shares of Common Stock
issued and outstanding. In addition, an aggregate of approximately 5,849,569
shares of Common Stock were reserved for issuance by the Company, including
shares reserved for issuance (i) upon exercise of options granted and available
for grant under the Company's employee and director stock option plans, (ii)
upon exercise of warrants issued in connection with previous financing
arrangements of the Company in 1996 and 1997, (iii) upon conversion of the
issued and outstanding Series B Preferred Stock discussed in Proposal No. 1, as
currently limited pending shareholder approval of Proposal No. 1, and the
associated warrants and (iv) that are contingently issuable in connection with
all transactions the Company has consummated through the date hereof. The total
does not include an indeterminate and potentially unlimited number of shares
that may be issuable to Florida Laser Partners as royalties payable beginning on
March 11, 2002 or after all shares contingently issuable to the former
shareholders and former optionholders of LaserSight Centers have been issued,
whichever first occurs.
If all such options and warrants were exercised and all outstanding shares
of Series B Preferred Stock were converted under the current-applicable 20%
Nasdaq Limit, the Company would have an aggregate of approximately 15,834,239
shares of Common Stock issued and outstanding. (This number excludes the 343,300
shares that are contingently issuable to Mr. Farris as an earnout from the 1995
sale of The Farris Group to the Company because Mr. Farris has agreed to
renounce his earnout shares if Proposal No. 2 is not approved.) In addition, as
described above under Proposal No. 1, the Series B Preferred Stock is
<PAGE>
convertible into additional shares of Common Stock if the shareholders approve
Proposal No. 1. The Company must as of any date keep reserved for possible
issuance a number of shares of Common Stock equal to 175% of the number of
shares of Common Stock that would be issuable if all shares of the Series B
Preferred Stock then outstanding were converted into Common Stock as of such
date. After giving effect to the Company's redemption of Series B Preferred
Stock with an aggregate face amount of $3,050,000 on October 28, 1997 and the
resulting reduction in aggregate face amount of the remaining Series B Preferred
Stock to $12,950,000, the number of shares of Common Stock required to be
reserved to satisfy such 175% requirement would be 4,657,677, in addition to the
1,995,534 shares which are reserved prior to the approval of Proposal No. 1,
resulting in a total of 20,491,918 outstanding shares and reserved shares, or
491,918 shares more than the 20,000,000 shares presently authorized under the
Company's Certificate of Incorporation. (These share amounts are based on an
assumed Conversion Price of $3.40625 per share, the price that would have been
applicable if all of the Series B Preferred Stock had been converted on December
10, 1997.)
<TABLE>
<CAPTION>
The following table summarizes this analysis:
<S> <C> <C> <C>
Authorized shares 20,000,000
Issued and outstanding as of December 18, 1997 9,984,672
Reserved for future issuance:
Stock options-outstanding 1,021,150
Stock options-future grants 479,000
Warrants--previous financings 567,509
Series B Conversion Shares (20% Nasdaq limit) 1,995,534
Series B-related Warrants 790,000
Contingently issuable shares 996,376
---------
Total reserved 5,849,569
---------
Total Common Shares issued or reserved for issuance (15,834,241)
Additional Series B Conversion Shares to be reserved upon shareholder
approval of 1997 Private Placement
Issuances (assuming a Conversion Price of $3.40625) (4,657,677)
-----------
Total Common Shares available (shortfall) (491,918)
===========
</TABLE>
To elaborate, on August 29, 1997, the Company issued and sold the Series B
Preferred Stock for an aggregate purchase price of $16.0 million. The Series B
Preferred Stock is convertible into the number of shares of Common Stock
determined by dividing its $10,000 stated value per share (plus any accrued but
unpaid dividends) by the lesser of (x) the Variable Conversion Price or (y)
$6.68 per share. The Series B Preferred Stock is entitled to a dividend at the
rate of any dividend declared on the Common Stock. The Preferred Stock is
convertible into Common Stock at any time or times until August 29, 2000. The
Company has reserved 1,995,534 shares of Common Stock for issuance upon
conversion of, or payable as dividends on account of, the Preferred Stock. If
Proposal No. 1 is approved, and the Preferred Stock is converted to Common Stock
at the current Variable Conversion Rate, the Company will be required to issue
more shares of Common Stock upon conversion and than it has currently reserved
for this purpose. The Company cannot determine the ultimate number of shares
which will be issued upon conversion or as dividends on the new Preferred Stock.
Even if the proposed increase in the authorized number of shares of Common Stock
is approved by the stockholders, the Company will be required to continue to
keep reserved at all times a number of shares of Common Stock equal to 175% of
the number of Conversion Shares then issuable upon conversion of, or payable as
dividends on account of, the Series B Preferred Stock. If the number of
Conversion Shares reserved for issuance should ever fall below this 175%
threshold, the Company shall then be required to increase the number of its
authorized shares so as to increase the reserved share threshold to 200% put on
reserve 200% of the number of shares then issuable upon conversion of, or
payable as dividends on, the Series B Preferred Stock.
<PAGE>
In evaluating the proposed Charter Amendment, stockholders should consider
the effect of certain other provisions of the Company's Certificate of
Incorporation and Bylaws that may have anti-takeover consequences. These
provisions include (i) the authorization of 10,000,000 shares of Preferred
Stock, the terms of which may be fixed by the Board of Directors without further
action by the Company's stockholders, (ii) a provision that standing Directors
may be removed only by a majority vote of stockholders entitled to vote, (iii) a
limitation on the ability of the Company's stockholders to call special
stockholder meetings, and (iv) a provision that vacancies in, and newly created
directorships resulting from an increase in the authorized number of directors
on, the Board may be filled by a majority of the remaining Directors.
Vote Required; Effective Date of Proposed Amendment; Recommendation of the Board
of Directors
If the proposed Charter Amendment is approved by the holders of a majority
of the outstanding shares of Common Stock, it will become effective upon the
filing by the Company of a Certificate of Amendment to the Company's Certificate
of Incorporation with the Delaware Secretary of State, which is expected to be
done as soon as practicable after stockholder approval is obtained. The Board of
Directors unanimously recommends that stockholders vote FOR the proposed Charter
Amendment. The directors and executive officers of the Company intend to vote
their shares in favor of this Proposal.
RELATIONSHIP OF PROPOSAL No. 1 AND PROPOSAL No. 2
Proposal No. 1 and Proposal No. 2 are separate proposals; the adoption of
one is not conditioned upon the shareholders' approval of the other. However, if
Proposal No.1 is approved, and Proposal No. 2 is not approved, the Company would
not have enough authorized but unissued shares available to satisfy its
commitments to issue shares, after taking into account the Company's obligation
to reserve as of any date a number of Conversion Shares equal to 175% of the
number of Conversion Shares that would actually be issuable if all 1,295
outstanding shares of Series B Preferred Stock were to be converted as of such
date. The Company's current estimate of the amount of this shortfall in
authorized but unissued shares is 491,918, based on (i) the Conversion Price
that would have been in effect on December 10, 1997 and (ii) the renunciation by
Mr. Farris of his contingent right to up to 343,300 earnout shares if Proposal
No. 2 is not approved. The Company could also choose to discontinue granting
options to its employees and directors, for which 479,000 shares are presently
reserved. If the Company took such action, the shortfall of authorized but
unissued shares would then be would be reduced to 12,918. There can be no
assurances that sufficient authorized shares will remain if the market price of
the Common Stock decreases significantly in the future.
PROPOSAL NO. 3:
ADJOURNMENT OF SPECIAL MEETING, IF NEEDED
TO SOLICIT ADDITIONAL PROXIES
If a quorum is not obtained or if fewer shares are likely to be voted to
approve the 1997 Private Placement Issuance or the Charter Amendment than the
number required for approval, the Special Meeting may be adjourned for the
purpose of obtaining additional proxies or votes or for any other purposes, and,
at any subsequent reconvening of the Special Meeting, all proxies will be voted
in the same manner as such proxies would have been voted at the original
convening of the meeting (except for any proxies which have theretofore
effectively been revoked or withdrawn), notwithstanding that they may have been
effectively voted on the same or any other matter prior to the adjournment.
If there are not sufficient votes to approve the 1997 Private Placement
Issuance or the Charter Amendment at the Special Meeting, the approval of such
proposals would require the adjournment of the Special Meeting to permit further
solicitation of proxies. If it is necessary to adjourn the Special Meeting, no
notice of the time and place of the adjourned meeting is required to be given to
<PAGE>
the Company's stockholders other than the announcement of such time and place at
the Special Meeting. The affirmative vote of at least a majority of the Common
Stock present or represented, in person or by proxy, and voting at the Special
Meeting is required to approve such adjournment, whether or not a quorum is
present at the Special Meeting. An adjournment of the Special Meeting may be
necessary because the limited time between the mailing of the Proxy Statement
and the Special Meeting may result in the lack of a quorum at the Special
Meeting. To obtain the requisite vote, it may be necessary to adjourn the
Special Meeting to solicit additional proxies.
If the Special Meeting is postponed or adjourned, at any subsequent
reconvening of the Special Meeting, all proxies will be voted in the same manner
as such proxies would have been voted at the original convening of the Special
Meeting (except for any proxies that have theretofore effectively been revoked
or withdrawn).
The Board of Directors unanimously recommends that stockholders vote FOR
Proposal No. 3.
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of Common Stock as of December 18, 1997 by (i) each person known to
the Company to beneficially own 5% or more of the Common Stock, (ii) each
Director, and (iii) all officers and directors of the Company as a group. The
number of shares of Common Stock shown as owned below assumes the exercise of
all currently-exercisable options and conversion of all convertible securities
held by the applicable person or group, and the percentages shown assume the
exercise of such options, the conversion of such convertible securities, and
assume that no options or convertible securities held by others are exercised or
converted, as the case may be. Unless otherwise indicated below, the persons
named below have sole voting and investment power with respect to the number of
shares set forth opposite their respective names. For purposes of the following
table, each person's "beneficial ownership" of the Common Stock has been
determined in accordance with the rules of the SEC.
<TABLE>
<CAPTION>
Number of Percentage
Name of Shares of of Common
Individual or Group(1) Position Held Common Stock Stock Owned
<S> <C> <C> <C>
Francis E. O'Donnell, Jr., M.D. Chairman of the Board; 455,261 (2)(3) 4.4
Director
Michael R. Farris President and Chief 450,200 (3) 4.4
Executive Officer; Director
J. Richard Crowley Director; President, 48,000 (3) *
LaserSight Technologies, Inc.
Terry A. Fuller Director -- --
Richard C. Lutzy Director 16,000 (3) *
Thomas Quinn Director 25,000 (3) *
David T. Pieroni Director 102,500 (3) *
Richard Stensrud Chief Operating Officer 45,110 (3) *
Gregory L. Wilson Chief Financial Officer 25,000 (3) *
All directors and executive officers
as a group (9 persons) 1,167,071 (3) 11.3
Frederic Kremer, M.D. 535,515 5.4
200 Mall Boulevard
King of Prussia, PA 19406
Stark International and
Shepherd Investments International, Ltd. (4)
c/o Staro Asset Management, L.L.C. 1,373,536 (5) 12.1
1500 West Market Street
Mequon, WI 53092
CC Investments, LDC 856,919 (6) 7.9
Corporate Centre, West Bay Road
P.O. Box 31106 SMB
Grand Cayman, Cayman Islands
- ---------------------------------
<FN>
* Less than 1%.
<PAGE>
(1) Excludes Societe Generale, which holds Series B Preferred Stock and Series
B Warrants which are presently convertible into or exercisable for (as
applicable) an aggregate of 515,076 shares of Common Stock (or 4.9% of the
shares that would then be outstanding), based on the presently-applicable
20% Nasdaq Limit. If Proposal No. 1 is approved, the 20% Nasdaq Limit will
cease to be applicable and Societe Generale may, depending on the market
prices of the Common Stock, be considered to beneficially own additional
shares of Common Stock. For example, assuming a Conversion Price of
$3.40625 per share (based on prices of the Common Stock on the Nasdaq
National Market during the period preceding December 10, 1997), the number
of such shares of Common Stock so issuable would increase to 854,019 (or
7.9% of the shares that would be outstanding after giving effect to such
exercise and conversion by it).
(2) Includes 347,983 shares held by the Irrevocable Trust No. 7 for the benefit
of the Francis E. O'Donnell, Jr., M.D. Trust and 2,778 shares held by the
Francis E. O'Donnell, Jr. Descendants Trust. Ms. Kathleen M. O'Donnell, the
sister of Dr. O'Donnell, is trustee of both Trusts. Dr. O'Donnell disclaims
beneficial ownership of such shares.
(3) Includes options to acquire shares of Common Stock which are now
exercisable or will first become exercisable before February 16, 1998, as
follows: Dr. O'Donnell (91,000); Mr. Farris (35,000); Mr. Crowley (45,000);
Mr. Fuller (zero); Mr. Lutzy (15,000); Mr. Quinn (25,000); Mr. Pieroni
(100,000); Mr. Stensrud (45,000); Mr. Wilson (10,000); and all directors
and executive officers as a group (366,000).
(4) According to a Schedule 13D filed by Michael A. Roth and Brian J. Stark on
October 1, 1997, such shares may be deemed to be beneficially owned by
Messrs. Roth and Stark, who are investment fund managers for Staro Asset
Management, L.L.C., Stark & Roth, Inc., and Staro Partners. The business
address of Messrs. Roth and Stark is the same as that of Staro Asset
Management, L.L.C.
(5) Includes 375,000 shares issuable upon the exercise of presently-exercisable
Series B Warrants and 998,536 Conversion Shares issuable upon the
conversion of 340 shares of Series B Preferred Stock, based on the
presently-applicable 20% Nasdaq Limit. If Proposal No. 1 is approved, the
20% Nasdaq Limit will cease to be applicable and Stark International and
Shepherd Investments International, Ltd. may, depending on the market
prices of the Common Stock, be considered to beneficially own additional
shares of Common Stock. For example, assuming a Conversion Price of
$3.40625 per share (based on prices of the Common Stock on the Nasdaq
National Market during the period preceding December 10, 1997), they would
beneficially own an aggregate of 2,277,385 shares of Common Stock (or 18.6%
of the shares outstanding after giving effect to such exercise and
conversion by them). See "Proposal No. 1--Effects of 1997 Private Placement
Issuances on Holders of Common Stock."
(6) Includes 234,375 shares issuable upon the exercise of presently-exercisable
Series B Warrants and 622,544 Conversion Shares issuable upon the
conversion of 212 shares of Series B Preferred Stock, based on the
presently-applicable 20% Nasdaq Limit. If Proposal No. 1 is approved, the
20% Nasdaq Limit will cease to be applicable and CC Investments may,
depending on the market prices of the Common Stock, be considered to
beneficially own additional shares of Common Stock. For example, assuming a
Conversion Price of $3.40625 per share (based on prices of the Common Stock
on the Nasdaq National Market during the period preceding December 10,
1997), it would beneficially own an aggregate of 1,420,430 shares of Common
Stock (or 12.5% of the shares outstanding after giving effect to such
exercise and conversion by it). See "Proposal No. 1--Effects of 1997
Private Placement Issuances on Holders of Common Stock."
</FN>
</TABLE>
<PAGE>
DESCRIPTION OF SECURITIES
The following description of the Company's capital stock is not complete
and is subject in all respects to the Delaware General Corporation Law (the
"DGCL") and to the provisions of the Company's Certificate of Incorporation, as
amended (the "Existing Charter"), and By-Laws.
The authorized capital stock of the Company consists of 20,000,000 shares
of Common Stock and 10,000,000 shares of preferred stock, $.001 par value,
issuable in one or more series. As of December 18, 1997, 9,984,672 shares of
Common Stock were outstanding (not including outstanding options to acquire
Common Stock or any shares of Common Stock issuable upon the conversion or
exchange of outstanding preferred stock). The only shares of preferred stock
outstanding as of such date were 1,295 shares of Series B Preferred Stock (after
giving effect to the Company's optional redemption of 305 shares of Series B
preferred Stock) on October 28, 1997).
Common Stock
Holders of Common Stock are entitled to one vote for each share held on all
matters submitted to a vote of stockholders and do not have cumulative voting
rights. Accordingly, holders of a majority of the shares of Common Stock
entitled to vote in any election of directors may elect all of the directors
standing for election. Holders of Common Stock are entitled to share pro rata in
such dividends and other distributions, if any, as may be declared by the Board
of Directors out of funds legally available therefor, subject to any prior
rights accruing to any holders of preferred stock. Upon the liquidation or
dissolution of the Company, the holders of Common Stock are entitled to share
proportionally in all assets available for distribution to such holders. Holders
of Common Stock have no preemptive, redemption or conversion rights. The
outstanding shares of Common Stock issued are fully paid and nonassessable.
The transfer agent and registrar for the Common Stock is American Stock
Transfer & Trust Company.
Preferred Stock
The Board of Directors is authorized, subject to certain limitations
prescribed by law, without further stockholder approval, to issue from time to
time up to an aggregate of 10,000,000 shares of preferred stock in one or more
series and to fix or alter the designations, preferences, rights and any
qualifications, limitations or restrictions of the shares of each such series,
including the dividend rights, dividend rates, conversion rights, voting rights,
terms of redemption (including sinking fund provisions), redemption price or
prices, liquidation preferences and the number of shares constituting any series
or designations of such series. The rights, preferences and privileges of
holders of Common Stock are subject to, and may be adversely affected by, the
rights of the holders of shares of any series of preferred stock which the
Company may designate and issue.
Series A Convertible Preferred Stock
On January 10, 1996, the Company issued 116 shares of Series A Convertible
Preferred Stock. All of such shares have been converted into Common Stock.
Series B Convertible Participating Preferred Stock
The terms and conditions of the Series B Convertible Participating
Preferred Stock, including the rights of the holders thereof to dividends,
conversions, registration rights and voting are set forth under the caption
"Approval of 1997 Private Placement Issuances--Summary of Transaction
Terms--Series B Convertible Participating Preferred Stock Placement."
<PAGE>
Delaware Law and Certain Charter Provisions
The Company is subject to the provisions of Section 203 of the DGCL.
Subject to certain exceptions, Section 203 prohibits a publicly-held Delaware
corporation from engaging in a "business combination" with an "interested
stockholder" for a period of three years after the date of the transaction in
which the person became an interested stockholder, unless the interested
stockholder attained such status with the approval of the corporation's board of
directors or unless the business combination is approved in a prescribed manner.
A "business combination" includes mergers, asset sales and other transactions
resulting in a financial benefit to the interested stockholder which is not
shared pro rata with the other stockholders of the Company. Subject to certain
exceptions, an "interested stockholder" is a person who, together with
affiliates and associates, owns, or within three years did own, 15% or more of a
corporation's voting stock.
The DGCL provides generally that the affirmative vote of a majority of the
shares entitled to vote on any matter is required to amend a corporation's
certificate of incorporation or by-laws, unless a corporation's certificate of
incorporation or by-laws, as the case may be, requires a greater percentage. In
addition, the By-laws of the Company may, subject to the provisions of DGCL, be
amended or repealed by a majority vote of the Board of Directors.
The Existing Charter contains certain provisions permitted under the DGCL
relating to the liability of directors. These provisions eliminate a director's
liability for monetary damages for a breach of fiduciary duty, except in certain
circumstances involving certain wrongful acts, such as the breach of a
director's duty of loyalty or acts or omissions which involve intentional
misconduct or a knowing violation of law. The Existing Charter contains
provisions indemnifying the directors and officers of the Company to the fullest
extent permitted by the DGCL. The Company also has a directors' and officers'
liability insurance policy which provides for indemnification of its directors
and officers against certain liabilities incurred in their capacities as such.
The Company believes that these provisions will assist the Company in attracting
and retaining qualified individuals to serve as directors.
Warrants and Options
In connection with the private placement of Preferred Stock in January
1996, the Company issued to its placement agent, Spencer Trask Securities
Incorporated ("Spencer Trask") and to an assignee of Spencer Trask, the 1996
Warrants to purchase an aggregate of 17,509 shares of Common Stock at an
exercise price of $13.25 per share. The 1996 Warrants are exercisable at any
time through January 10, 1999.
In connection with the financing of a credit facility in April 1997, the
Company issued to Foothill Capital Corporation ("FCC"), the 1997 FCC Warrants to
purchase an aggregate of 500,000 shares of Common Stock at an exercise price of
$6.0667 per share. In addition, the 1997 FCC Warrants have certain anti-dilution
features which provide for approximately 50,000 additional shares pursuant to
the issuance of the Series B Preferred Stock and a corresponding reduction in
the exercise price to $5.52 per share. The 1997 FCC Warrants are exercisable at
any time after March 31, 1998 and before April 1, 2002.
In connection with the 1997 Private Placement, the Company agreed to issue
to the holders and the Placement Agent the Series B Warrants to purchase 750,000
and 40,000 shares, respectively, of Common Stock at $5.91 per share. The Series
B Warrants are exercisable at any time before August, 2002. The Company is
required to register the shares of Common Stock issuable upon exercise and
conversion of the Series B Warrants for resale under the Securities Act. See
"Proposal No. 1: Approval of 1997 Private Placement Issuances--Summary of
Transaction Terms--Placement Agent Compensation."
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Exchange Act and, in accordance therewith, files periodic reports, proxy
statements and other information with the Commission. A copy of the Registration
Statement, including exhibits and schedules thereto, filed by the Company with
the Commission, as well as other reports, proxy statements and other information
filed by the Company may be inspected without charge at the office of the
Commission, 450 Fifth Street, N.W., Washington, D.C., and at the following
Regional Offices of the Commission: 7 World Trade Center, Suite 1300, New York,
New York, and 500 West Madison Street, Suite 1400, Chicago, Illinois. Copies of
such material can be obtained, upon payment of prescribed fees at the Public
Reference Room of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549. The Commission maintains a Web site that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Commission. The address of such site is
http://www.sec.gov. Such reports, proxy statements and other information
concerning the Company can also be inspected at the offices of the National
Association of Securities Dealers, Inc., 1735 "K" Street, N.W., Washington, D.C.
20006.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the SEC are incorporated
by reference in this Proxy Statement:
A. The Company's Annual Report on Form 10-K for the year ended
December 31, 1996, as amended by a Form 10-K/A filed on December
12, 1997;
B. The Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, June 30, and September 30, 1997 (each as amended
by a Form 10-Q/A filed on December 11, 1997);
C. The Company's Current Reports on Form 8-K filed on February 25,
March 18, March 27, April 8, April 25, July 1, July 31, August 13,
September 2, September 11, September 15, September 24, and
November 7, 1997; and
D. The description of the Common Stock contained in the Company's
Form 8-A/A (Amend. No. 3) filed on September 29, 1997.
Any information in a document incorporated by reference in this Proxy
Statement shall be modified or superseded for purposes of this Proxy Statement
to the extent that information included in this Proxy Statement or in any
subsequently-filed document that is also incorporated by reference herein,
modifies or supersedes such information. Any such modified or superseded
information shall not be considered, except as so modified or superseded, to be
a part of the Proxy Statement.
This Proxy Statement incorporates by reference documents which are not
presented in this Proxy Statement or delivered herewith. The Company will
provide without charge to each person to whom a copy of this Proxy Statement is
delivered, upon the written or oral request of any such persons, copies of such
documents (other than certain exhibits). Requests for copies should be addressed
to: Corporate Secretary, LaserSight Incorporated, 12161 Lackland Road, St.
Louis, Missouri 63146, telephone: (314) 469-3220.
<PAGE>
STOCKHOLDER PROPOSALS
Proposals of stockholders which are intended to be presented by such
stockholders at the Company's 1998 annual meeting of stockholders must be
received by the Company no later than January 21, 1998 in order that they may be
included in the Company's proxy statement relating to the 1998 annual meeting.
OTHER MATTERS
Please sign, date and return the enclosed proxy in the envelope provided.
No postage is required if the envelope is mailed within the United States. If
you later decide to attend the Special Meeting and wish to vote your shares in
person, you may do so. We will appreciate your giving this matter your prompt
attention.
By Order of the Board of Directors
Gregory L. Wilson
Secretary
January __, 1998
<PAGE>
LASERSIGHT INCORPORATED
PROXY
SPECIAL MEETING OF STOCKHOLDERS, FEBRUARY __, 1998
This Proxy is solicited on behalf of the Board of Directors. The
undersigned hereby (i) appoints Michael R. Farris, Richard L. Stensrud, and
Gregory L. Wilson and each of them as Proxy holders and attorneys, with full
power of substitution to appear and vote all of the shares of Common Stock of
LaserSight Incorporated which the undersigned shall be entitled to vote at the
Special Meeting of Stockholders of the Company, to be held on , February __,
1998 at 10:00 a.m., St. Louis time, and at any adjournments thereof, hereby
revoking any and all proxies heretofore given and (ii) authorizes and directs
said Proxy holders to vote all of the shares of Common Stock of the Company
represented by this Proxy as follows. If no directions are given below, said
shares will be voted "FOR" items 1, 2 and 3.
(1) APPROVAL OF 1997 PRIVATE PLACEMENT ISSUANCES
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
(2) AUTHORIZATION OF ADDITIONAL SHARES OF COMMON STOCK
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
(3) ADJOURNMENT OF SPECIAL MEETING, IF NEEDED TO SOLICIT ADDITIONAL PROXIES
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
(4) In their discretion to act on any other matters which may properly come
before the Special Meeting.
PLEASE DATE, SIGN AND RETURN PROMPTLY IN THE ACCOMPANYING ENVELOPE The Board of
Directors unanimously recommends that you vote FOR the above proposals.
Signature______________________________________________
Signature______________________________________________
(IF JOINTLY HELD)
Dated: _______________, 1998
Note:
Your signature should be exactly the same as the name imprinted on this proxy.
Persons signing as executors, administrators, trustees or in similar capacities
should so indicate. For joint accounts, each joint owner must sign.
