SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for use of the Commission Only (as permitted by Rule
14a-b(e)(2))
[X] 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)
Payment of Filing Fee (Check the appropriate box):
[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:
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:
[ ] 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:
................................................................................
<PAGE>
LaserSight Incorporated
12161 Lackland Road
St. Louis, Missouri 63146
Dear Fellow Stockholder:
You are invited to attend the Annual Meeting of Stockholders of
LaserSight Incorporated to be held at the Sheraton Plaza Hotel, 900 West Port
Plaza, St. Louis, Missouri (telephone: (314) 434-5010) on Friday, June 13, 1997
at 10:00 a.m. local time. We are pleased to enclose the notice of our 1997
annual stockholders' meeting, together with the attached Proxy Statement, a
proxy card and an envelope for returning the proxy card.
Please carefully review the Proxy Statement and then complete, date
and sign your Proxy and return it promptly. If you attend the meeting and decide
to vote in person, you may withdraw your Proxy at the meeting.
If you have any questions or need assistance in how to vote your
shares, please call Marti Benfield, Investor Relations Manager at (314)
469-3220. Your time and attention are appreciated.
Sincerely,
/s/ Michael R. Farris
----------------------------
Michael R. Farris
President and Chief Executive Officer
May 21, 1997
<PAGE>
LASERSIGHT INCORPORATED
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The Annual Meeting of Stockholders of LaserSight Incorporated, a Delaware
corporation (the "Company"), will be held on Friday, June 13, 1997 at 10:00 a.m.
local time, at the Sheraton Plaza Hotel, 900 West Port Plaza, St. Louis,
Missouri, for the following purposes:
1. To elect six directors to serve until the next annual meeting;
2. To vote on the amendment of the Company's Non-Employee Directors
Stock Option Plan (the "Directors Plan") (i) to increase the size of the annual
grant of stock options to each of the Company's non-employee directors, (ii) to
provide for an annual option grant to each non-employee director serving as
chair of a committee of the Board of Directors or as Chairman of the Board of
the Company, and (iii) to increase the aggregate number of shares available for
delivery under the Directors Plan;
3. To ratify the appointment of KPMG Peat Marwick LLP as auditors of
the Company for the 1997 fiscal year; and
4. To transact such other business that is properly brought before the
meeting.
Only holders of Common Stock of record on the books of the Company at the
close of business on May 7, 1997 will be entitled to vote at the Annual Meeting.
The Board of Directors' nominees for Director are set forth in the
accompanying Proxy Statement.
Your vote is important. All stockholders are invited to attend the Annual
Meeting in person. However, to assure your representation at the Annual Meeting,
please mark, date and sign your Proxy and return it promptly in the enclosed
envelope. Any stockholder attending the Annual Meeting may vote in person even
if the stockholder returned a Proxy.
By Order of the Board of Directors
/s/ Gregory L. Wilson
-----------------------------
Gregory L. Wilson
Secretary
St. Louis, Missouri
May 21, 1997
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.
<PAGE>
LASERSIGHT INCORPORATED
12161 Lackland Road
St. Louis, Missouri 63146
PROXY STATEMENT
Proxies in the accompanying form are being solicited by the Board of
Directors of the Company for use at the Annual Meeting of Stockholders on
Friday, June 13, 1997, or at any adjournment thereof. The Annual Meeting will be
held at the Sheraton Plaza Hotel, 900 West Port Plaza, St. Louis, Missouri at
10:00 a.m. local time. This Proxy Statement is being mailed to stockholders
commencing on or about May 21, 1997.
INFORMATION CONCERNING SOLICITATION AND VOTING
----------------------------------------------
Revocability of Proxies. Any stockholder who executes and returns a Proxy
may revoke it at any time before it is exercised by filing with the Secretary of
the Company written notice of such revocation or a duly executed proxy bearing a
later date, or by attending the Annual Meeting and voting in person. Attendance
at the Annual Meeting will not in and of itself constitute revocation of a
Proxy.
Record Date; Voting. Stockholders of record as of the close of business on
May 7, 1997 (the "Record Date") are entitled to notice of and to vote at the
Annual Meeting. At the Record Date, 9,360,685 shares of common stock,
$.001 par value (the "Common Stock"), of the Company were outstanding, each of
which is entitled to one vote upon each of the matters to be presented at the
Annual Meeting. The presence of holders of a majority of the outstanding shares
of Common Stock, whether in person or by proxy, will constitute a quorum at the
Annual Meeting. The Company's Certificate of Incorporation does not provide for
cumulative voting. Abstentions will be considered present for purposes of
determining whether a quorum exists. Votes withheld for director nominees will
be disregarded. "Broker non-votes" (that is, shares represented at the Annual
Meeting which are held by a broker or nominee and as to which (i) instructions
have not been received from the beneficial owner or the person entitled to vote
and (ii) the broker or nominee does not have discretionary voting power) are
considered not entitled to vote, and thus they do not count towards a quorum.
(However, if they are voted with respect to any item or if a proxy is signed and
returned, even if it is not marked with respect to any vote, they will count
towards a quorum.) A plurality of the votes of the shares present and entitled
to vote on the election at the Annual Meeting is required to elect directors.
The affirmative vote of the holders of a majority of the shares of Common Stock
present (either in person or by proxy) and entitled to vote at the Annual
Meeting is required to (i) approve the amendment and restatement of the
Directors Plan and (ii) ratify the selection of KPMG Peat Marwick LLP as
the Company's independent auditors for 1997. In accordance with Delaware law and
the Company's Certificate of Incorporation and Bylaws, (i) for the election of
directors, which requires a plurality of the votes present, votes withheld and
broker non-votes will not be counted, and (ii) for the adoption of all other
proposals, which require a majority of the shares of the Common Stock present in
person or by proxy and entitled to vote, broker non-votes will not be considered
present, but abstentions will have the effect of a vote against such proposals.
Solicitation. The cost of soliciting proxies will be borne by the Company.
In addition, the Company may reimburse brokerage firms and other persons
representing beneficial owners of shares for their expenses in forwarding
solicitation material to such beneficial owners. Proxies may also be solicited
by certain of the Company's directors, officers and regular employees, without
additional compensation, personally or by telephone or telecopier.
Deadline for Receipt of Stockholder Proposals. Proposals of stockholders
which are intended to be presented by such stockholders at the Company's next
<PAGE>
annual meeting of stockholders to be held in 1998 must be received by the
Company no later than January 21, 1998 in order that they may be included in the
proxy statement and form of proxy relating to that meeting.
SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS
-----------------------------------------------------------
The following table sets forth certain information regarding the beneficial
ownership of Common Stock as of April 11, 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 held by the applicable person or group, and the
percentage shown assumes the exercise of such options and assumes that no
options held by others are exercised. 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 Securities and Exchange
Commission ("SEC").
<TABLE>
<CAPTION>
Number of Percentage
Shares of of Common
Name of Individual or Group Position Held Common Stock Stock Owned
- --------------------------- ------------- ------------ -----------
<S> <C> <C> <C>
Francis E. O'Donnell, Jr., M.D. Chairman of the Board, 500,261 (1)(2) 5.1
1028 S. Kirkwood Director
St. Louis, MO 63122
Michael R. Farris President and Chief Executive 461,700 (2) 4.7
Officer, Director
Emanuela Dobrin-Charlton, Ph.D. Director 61,500 (2) *
J. Richard Crowley Director 25,000 (2) *
Richard C. Lutzy Director 15,000 (2) *
Thomas Quinn Director 25,000 (2) *
David T. Pieroni Director 102,500 (2) 1.1
Richard Stensrud Chief Operating Officer 25,110 (2) *
Gregory L. Wilson Chief Financial Officer 25,000 (2) *
All directors and executive officers
as a group (9 persons) 1,241,071 (2) 12.7
- ---------------------------------
* Less than 1%.
<FN>
(1) Includes 357,983 shares held by Irrevocable Trust No. 7 for the benefit
of Francis E. O'Donnell, Jr., M.D., of which Trust Ms. Kathleen M.
O'Donnell is trustee (the "O'Donnell Irrevocable Trust No. 7") and 22,778
shares held by Francis E. O'Donnell, Jr. Descendants Trust, of which
Trust Ms. O'Donnell is trustee (the "Descendant's Trust"). Ms. O'Donnell
is Dr. O'Donnell's sister. Dr. O'Donnell disclaims beneficial ownership
of these shares.
(2) Includes options to acquire shares of Common Stock exercisable on or
before June 10, 1997, as follows: Dr. Francis E. O'Donnell, Jr. (91,000);
Michael Farris (49,500); Emanuela Dobrin-Charlton (61,500); J. Richard
Crowley (25,000); Richard C. Lutzy (15,000); Thomas Quinn (25,000); David
T. Pieroni (100,000); Richard Stensrud (25,000); Gregory L. Wilson
(10,000); and all officers and directors as a group (402,000).
</FN>
</TABLE>
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
-------------------------------------------------
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's officers and directors, and persons who own more than 10%
of the outstanding Common Stock, to file reports of ownership and changes in
ownership of such securities with the SEC. Officers, directors and over-10%
beneficial owners are required to furnish the Company with copies of all Section
<PAGE>
16(a) forms they file. Based solely upon a review of the copies of the forms
furnished to the Company, and/or written representations from certain reporting
persons that no other reports were required, the Company believes that all
Section 16(a) filing requirements applicable to its officers, directors and
over-10% beneficial owners during or with respect to the year ended December 31,
1996 were met, except that Mr. Pieroni filed Form 3 after its required filing
date (no holdings were required to be disclosed on such form), Mr. Pieroni filed
a late form reporting a single transaction, and Robert Qualls, a former officer
and director, filed a late Form 4 reporting several transactions.
1. ELECTION OF DIRECTORS
The nominees for the Board of Directors are set forth below. At the Annual
Meeting, the shares of Common Stock represented by proxies in the form
accompanying this Proxy Statement, unless otherwise specified, will be voted to
elect the nominees named below. The terms of all incumbent directors expire at
the 1997 Annual Meeting of Shareholders or at such later time as their
successors have been duly elected and qualified. Nominees elected at the Annual
Meeting will serve until the Annual Meeting of Shareholders next succeeding and
until their election and until their successors have been duly elected and
qualified. All six of the nominees are currently directors of the Company
and are standing for reelection.
The nominees have agreed to serve if elected. However, if any nominee
becomes unable or unwilling to serve if elected, the Proxies will be voted for
the election of the person, if any, recommended by the Board of Directors or, in
the alternative, for holding a vacancy to be filled by the Board of Directors.
The Board of Directors has no reason to believe that any nominee will be unable
or unwilling to serve.
There follows the names and ages of the nominees, the year each individual
began continuous service as Director of the Company, and the business experience
of each, including principal occupations, at present and for at least the past
five years.
Nominees for Election at the Annual Meeting
- -------------------------------------------
Michael R. Farris (37) Director since 1995
Mr. Farris has been the Company's President and Chief Executive Officer
since November 1995. Previously, Mr. Farris was the President and Chief
Executive Officer of MRF, Inc. (which does business under the name "The Farris
Group") since 1990, a role he continued after its acquisition by the Company in
February 1994. Prior to 1990, Mr. Farris was President and Chief Executive
Officer of predecessor consulting and search firms for approximately seven
years.
Francis E. O'Donnell, Jr., M.D. (47) Director since 1992
Dr. O'Donnell has been the Company's Chairman of the Board since April
1993. He also was Chief Executive Officer of the Company from April 1993 to July
1993. He is a Clinical Professor of Ophthalmology at the St. Louis University
School of Medicine. He is also Medical Director of the O'Donnell Eye Institute,
St. Louis, Missouri, which has performed photorefractive keratectomy procedures
since 1989. Dr. O'Donnell is the Chairman of the Board, President and Chief
Executive Officer of PerArdua, Inc., a developmental stage pharmaceutical
company.
Thomas Quinn (48) Director since 1994
Mr. Quinn has since 1995 been Vice-President of the Hospital Alliance
Division of Olsten Kimberly QualityCare, of Melville, New York, a home health
care management services provider and a subsidiary of Olsten Corp. From 1992 to
1995, he was Vice President of Sales and Marketing of Integrated Health
Services, Inc., Hunt Valley, Maryland, a post-acute care provider. From 1989 to
<PAGE>
1992, Mr. Quinn was Vice President and a Chief Operating Officer of Info Tech,
Inc., a privately-held home infusion treatment company, Englewood Cliffs, New
Jersey. Mr. Quinn is a director of PerArdua, Inc., a developmental stage
pharmaceutical company.
Richard C. Lutzy (51) Director since 1995
Mr. Lutzy is the founder and since 1988 has been the Chief Executive
Officer of Palmer Capital Corporation, a financial advisory and venture capital
services company. Mr. Lutzy is a director of Acamedica, a privately-held, New
Jersey-based demand management company, and Markman Company, a privately-held,
Dallas-based insurance financial services organization. From 1981 through 1987,
Mr. Lutzy was an executive with Merrill Lynch & Company where he was Managing
Director of Merrill Lynch Private Capital, Ltd., a London-based investment
banking subsidiary.
J. Richard Crowley (42) Director since 1994
Mr. Crowley has been the Chief Operating Officer and Chief Financial
Officer of Clinical Diagnostic Systems, Inc., Orlando, Florida, a privately-held
medical diagnostic testing company, since 1991. From 1984 to 1991, he was
President and Chief Financial Officer of Control Laser Corporation, Orlando,
Florida, a privately-held manufacturer of industrial lasers. Mr. Crowley is a
director of Tel-Com Wireless Cable TV Corporation., a Daytona Beach, Florida
wireless cable pay-television firm.
David T. Pieroni (51) Director since 1996
Mr. Pieroni is President of Pieroni Management Counselors, Inc., a
management consulting company, and has served in such capacity from 1990 to
1991, during a portion of 1995 and since September 1996. Mr. Pieroni had been
President of The Farris Group from November 1995 to September 1996. From 1991 to
1995, Mr. Pieroni was President of Spencer & Spencer Systems, Inc., a
privately-held information systems consulting company. From 1977 to 1990, Mr.
Pieroni was a partner at a predecessor of Ernst & Young LLP, working in its
health care and management consulting practice. Mr. Pieroni is a director of
Citation Computer Systems Inc., a health care software company.
The Board of Directors recommends that stockholders vote "FOR" its nominees.
Director Not Standing For Reelection
- ------------------------------------
The member of the Board of Directors who is not standing for reelection
at the Annual Meeting is set forth below:
Emanuela Dobrin-Charlton, Ph.D. (63) Director since 1991
Dr. Dobrin-Charlton has been the Director of Regulatory Affairs of the
Company's LaserSight Technologies subsidiary since January 1993. Dr.
Dobrin-Charlton previously was the founder and president of North America Health
Resources, Sarasota, Florida, a privately-held health care and regulatory
consulting firm. Dr. Dobrin-Charlton is a director of PerArdua, Inc., a
developmental stage pharmaceutical company, for which she performs certain
consulting services without additional compensation.
Other Executive Officers
- ------------------------
The following executive officers of the Company are not directors:
<PAGE>
Richard L. Stensrud (60)
Mr. Stensrud has served as the Chief Operating Officer of the Company since
September 1996. He had previously served as a Director from June 1995 until
September 1996 and had operated a consulting practice serving small companies in
the health care industry since 1987. Mr. Stensrud served as the President and
Chief Executive Officer of Kimed Health Systems, Inc., of Fort Worth, Texas, a
privately-held health care provider, from 1991 to 1992 and was its Chairman of
the Board from March 1992 until December 1995. Mr. Stensrud is also a director
of Horizon Medical, Inc., of Santa Ana, California, a privately-held specialty
medical product manufacturer, and ADA Enterprises, Inc., of Northwood, Iowa, a
privately-held manufacturer of specialty flooring materials.
Gregory L. Wilson (39)
Mr. Wilson has served as Chief Financial Officer of the Company since July
1994. Mr. Wilson also has been Chief Financial Officer of The Farris Group, a
wholly-owned subsidiary of the Company, since 1993. Prior to joining The Farris
Group, Mr. Wilson served as a management consultant with Deloitte & Touche LLP,
an international accounting and consulting firm, from 1986 to 1993, planning and
managing financial and reorganization projects for a variety of clients.
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
------------------------------------------
During 1996, the Board of Directors met 12 times. No member of the Board
attended fewer than 75% of the aggregate of the total number of meetings of the
Board of Directors and of the meetings of committees on which such director
serves.
The Board of Directors has established an Executive Committee, an Audit and
Finance Committee, an Executive Compensation and Stock Option Committee and a
Nominating Committee. The Company's by-laws provide that each such committee
shall consist of one or more directors appointed by the Board of Directors.
The Executive Committee is responsible for facilitating certain executive
actions, thereby eliminating the need for full Board approval for such actions.
Specific duties, responsibilities and authority are established by the full
Board of Directors from time to time. In 1996, the Executive Committee met once.
The Executive Committee consists of Messrs. O'Donnell and Farris.
The Audit and Finance Committee is responsible for recommending the
appointment of independent accountants; reviewing the arrangements for and scope
of the audit by independent accountants; reviewing the independence of the
independent accountants; considering the adequacy of the system of internal
accounting controls and reviewing any proposed corrective actions; discussing
with management and the independent accountants the Company's draft annual
financial statements and key accounting and/or reporting matters; and reviewing
the terms of potential acquisitions. In 1996, the Audit and Finance Committee
met 11 times. The Audit and Finance Committee consists of Messrs. Lutzy, Crowley
and Pieroni.
The Nominating Committee is responsible for reviewing the qualifications
of, and recommending to the Board of Directors, candidates for election to the
Board of Directors. The Nominating Committee considers suggestions from many
sources regarding possible candidates for director. Although there are no formal
procedures for shareholders to recommend nominations, the Nominating Committee
will consider shareholder recommendations for the 1998 Annual Meeting. Any such
recommendation, together with appropriate biographical information and a
statement of the reasons for such recommendation, should be addressed to Mr.
Gregory L. Wilson, Secretary of the Company, and received at the Company's
<PAGE>
principal offices by December 31, 1997. In 1996, the Nominating Committee met
two times. The Nominating Committee consists of Messrs. Crowley, Lutzy and
Quinn.
The Executive Compensation and Stock Option Committee is responsible for
reviewing the Company's general compensation strategy; establishing salaries and
reviewing benefit programs for certain executive officers; reviewing, approving,
recommending and administering the Company's stock option plans and certain
other compensation plans; and approving certain employment contracts. In 1996,
the Executive Compensation and Stock Option Committee met six times. The
Executive Compensation and Stock Option Committee consists of Messrs. Quinn,
Crowley and Lutzy.
COMPENSATION OF DIRECTORS
-------------------------
Directors who are also full-time employees of the Company received no
additional cash compensation for services as directors. Each non-employee
Director received a fee of $500 for each board and committee meeting attended,
as well as reimbursement for travel expenses, except Dr. O'Donnell who has
historically declined such directors fees. In addition, during 1996, each
non-employee director was granted options to purchase a total of 10,000 shares
of Common Stock at an exercise price of $12.00 per share (100% of the market
price of Common Stock on the date of grant) under the Company's Non-Employee
Directors Stock Option Plan. See also "Amendment of Non-Employee Directors Stock
Option Plan" below.
In November 1996, the Company extended a consulting agreement with Ms.
Dobrin-Charlton, a director of the Company, that provides for compensation for
consulting services related to the Company's regulatory affairs. During 1996,
Ms. Dobrin-Charlton received $74,000 based on the original and extended terms of
the agreement. Ms. Charlton is currently being compensated for her consulting
services at the rate of $6,500 per month. In addition, Ms. Charlton is entitled
to receive an option to purchase 5,000 shares of Common Stock for each protocol
submitted to the FDA and an additional option to purchase 5,000 shares upon each
approval of a protocol by the FDA. The exercise prices of such options equal
100% of the market price of the Common Stock on the applicable date of grant.
Ms. Dobrin-Charlton received options for 10,000 shares under this arrangement
during 1996. Ms. Dobrin-Charlton also receives compensation as a director of the
Company.
In June 1995, the Company entered into a consulting agreement with Mr.
Lutzy, a director of the Company, that provides for compensation for consulting
services related to financing issues. Based on an oral modification of the terms
of the agreement, Mr. Lutzy received $25,000 during 1996. The agreement was
discontinued in May 1996. Mr. Lutzy also receives compensation as a director of
the Company.
EXECUTIVE COMPENSATION
----------------------
The following table sets forth summary information concerning the
compensation paid or earned for services rendered to the Company in all
capacities during 1994, 1995 and 1996 for (i) the Company's Chief Executive
Officer ("CEO"), (ii) each of the other executive officers of the Company
serving at December 31, 1996 whose total annual salary and bonus for 1996
exceeded $100,000, and (iii) the one former executive officer of the Company
whose total annual salary and bonus for 1996 exceeded $100,000 (collectively,
the "Named Executive Officers"). During such years, the Company did not make any
grants of stock appreciation rights ("SARs") or restricted stock or any awards
or payouts under any long-term incentive plan.
<PAGE>
<TABLE>
Summary Compensation Table
<CAPTION>
Long Term
Compen-
sation
Awards
------
Annual Compensation Other Securities All
------------------- Annual Underlying Other
Compen- Options/ Compen-
Name and Principal Position Year Salary ($) Bonus ($) sation SARs(#) sation ($)
--------------------------- ---- ---------- --------- ------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Michael R. Farris................ 1996 250,000 -- -- -- --
President and Chief Executive 1995 150,000 120,178 -- 35,000 --
Officer1 1994 137,500 77,258 -- 20,000 --
David T. Pieroni................. 1996 112,500 75,000 -- 200,000 (3) 75,000 (4)
Former President of MRF, Inc. 1995 35,000 25,000 -- -- --
(The Farris Group) and Chief 1994 -- -- -- -- --
Development Officer2
Gregory L. Wilson................ 1996 120,000 -- -- -- --
Chief Financial Officer5 1995 105,000 10,000 -- 10,000 --
1994 81,000 10,000 -- 15,000 --
<FN>
(1) Mr. Farris became an employee of the Company in February 1994 and has
served as President and CEO since November 1995.
(2) Mr. Pieroni served in such capacities from November 1995 to September
1996, when he resigned his positions as an officer and became a Director.
(3) In connection with Mr. Pieroni's resignation, his option was cancelled as
to 100,000 shares and became fully exercisable at any time until March
15, 2001 as to the remaining 100,000 shares subject to the option.
(4) Includes severance payments in the amount of $75,000 paid in 1996 and in
1997. See "Severance Arrangement" below.
(5) Mr. Wilson became an employee of the Company in February 1994 and has
served as CFO since July 1994.
</FN>
</TABLE>
The following table sets forth certain information concerning stock options
granted to the Named Executive Officers during 1996. No SARs were granted during
1996.
<TABLE>
Option/SAR Grants In Last Fiscal Year
Individual Grants
-----------------
<CAPTION>
Potential Realizable
Value at Assumed
Number of % of Total Annual Rates of Stock
Securities Options/ Price Appreciation for
Underlying SARs Option Term
Options/ Granted to Exercise or ---------------
SARs Employees in Base Price Expiration
Name Granted (#) Fiscal Year ($/Sh) Date 5% ($) 10% ($)
---- ----------- ----------- ----------- ---------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Michael R. Farris......... -- -- -- -- -- --
David T. Pieroni.......... 200,000 34.8% $11.25 3/15/01 $621,6341 $1,373,6481
Gregory L. Wilson......... -- -- -- -- -- --
<FN>
(1) Does not reflect cancellation of an option as to 100,000 shares in
September 1996.
</FN>
</TABLE>
<PAGE>
The following table sets forth certain information relating to options held
by the Named Executive Officers at December 31, 1996.
<TABLE>
Aggregated Option/SAR Exercises in Last Fiscal Year
and FY-End Option/SAR Values
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options/
Options/SARs at SARs at
Year-End(#)(1) Year-End($)(1)(2)
-------------- -----------------
Shares
Acquired on Value Exercisable/ Exercisable/
Name Exercise (#) Realized($)(1) Unexercisable Unexercisable
---- ------------ -------------- ------------- -------------
<S> <C> <C> <C> <C>
Michael R. Farris............ -- -- 55,000/0 $37,600/0
David T. Pieroni............. -- -- 100,000/0 $0/0
Gregory L. Wilson............ -- -- 10,000/0 $0/0
<FN>
(1) No SARs have been issued by the Company.
(2) Each amount has been determined by multiplying the number of option
shares by the positive difference, if any, between $6.50, the closing
price of the Common Stock on the Nasdaq National Market on December 31,
1996, and the exercise price for the applicable option.
</FN>
</TABLE>
Employment Agreements
- ---------------------
In December 1995, the Company entered into separate employment agreements
with Mr. Farris and Mr. Pieroni (the "Employment Agreements"). Each Employment
Agreement provides for a three-year term, an annual salary of $150,000, and an
annual bonus equal to 10% of the net pre-tax profit of MRF, Inc. (The Farris
Group). If either officer's employment is terminated by the Company without
"cause" or by either officer with "good reason" (as such terms are defined in
the Employment Agreements), such officer shall be entitled to all salary and
other benefits under his Employment Agreement through the lesser of (i) the
remaining term of the Agreement or (ii) one year after the date of his
termination. Under such circumstances, the amount of bonus for the
post-termination period shall equal the greater of (x) $100,000 or (y) the
product of the most recent actual quarterly bonus amount multiplied by the
number of full or fractional fiscal quarters during a one-year post-termination
period. Each Employment Agreement includes non-compete and confidentiality
covenants. Mr. Farris' current agreement was an amendment to the employment
agreement which has been in effect since February 1994. The Company intends to
revise Mr. Farris' employment agreement during 1997 to link his bonus
opportunity to company-wide performance rather than to the performance of The
Farris Group.
In September 1996, the Company entered into an employment agreement with
Mr. Stensrud (the "Stensrud Agreement"). The Stensrud Agreement provides for a
four-year term, an annual salary of $150,000, stock options for 100,000 shares
to be granted under the 1996 Equity Incentive Plan, a car allowance and other
expense reimbursements, and reimbursement of initiation fees and dues for a club
of Mr. Stensrud's choosing. If Mr. Stensrud's employment is terminated without
"cause" (as defined in the Stensrud Agreement), Mr. Stensrud shall be entitled
to his base salary for one year after the date of his termination. The Stensrud
Agreement includes non-compete and confidentiality covenants.
<PAGE>
Severance Arrangement
- ---------------------
In connection with the resignation of Mr. Pieroni as President of MRF, Inc.
(The Farris Group) and Chief Development Officer of the Company in September
1996, the Company agreed, in lieu of the provisions under his Employment
Agreement, to the following: (i) the payment of six months salary ($75,000) in
monthly installments, (ii) the amendment of Mr. Pieroni's Option Agreement to
provide that (x) as to 100,000 shares, such options become fully exercisable,
and (y) as to the remaining 100,000 shares, the options will be cancelled, and
(iii) the continuation of a car allowance, office space and clerical support for
six months. The Company is in the process of confirming in writing the agreement
as to Mr. Pieroni's options and, in connection with that process, is considering
whether the options should remain exercisable for more than 90 days after the
termination of Mr. Pieroni's service as a director.
Compensation Committee Interlocks and Insider Participation
- -----------------------------------------------------------
In October 1995, the Board of Directors revised the Executive Compensation
and Stock Option Committee to consist of Messrs. Lutzy and Stensrud. In
September 1996, Messrs. Quinn and Crowley replaced Mr. Stensrud on the
Committee. None of the members of this Committee were employees of the Company
while serving on the Committee. Mr. Stensrud became an officer and employee of
the Company after his resignation from the Board in September 1996.
Compensation Committee Report on Executive Compensation
- -------------------------------------------------------
The Compensation Committee of the Board of Directors, composed of
independent outside directors, is responsible for setting the policies that
govern the Company's compensation programs, administering the Company's equity
compensation plans, and establishing the cash compensation of executive
officers. The Committee's objectives are to establish compensation programs
designed to attract, motivate, retain, and reward executives who can lead the
Company in achieving its long-term business goals in a highly competitive and
rapidly changing industry, whose services the Company needs to maximize its
return to shareholders, and to ensure that management compensation is reasonable
in light of the Company's objectives, compensation for similar personnel in
other companies, and other relevant criteria. The compensation mix for executive
officers consists of base salaries, a cash bonus system, and stock option
awards. As a result, much of an executive officer's compensation is based upon
the financial performance of the Company.
The Committee periodically establishes each executive officer's base salary
based on the Committee's evaluation of the officer's performance and
contribution in the previous year and on competitive pay practices.
The Chief Executive Officer's cash and bonus compensation is based on an
employment agreement which has been in effect with only minor changes since
February 2, 1994 when Mr. Farris sold The Farris Group to the Company. The
agreement is partially based on the results of The Farris Group subsidiary.
After Mr. Farris assumed the role of CEO in November 1995, the agreement was
amended on December 29, 1995 to reflect that change, but Mr. Farris's bonus
remained linked to the performance of the Farris Group. See "Employment
Agreements" section. Due to the additional duties and Company-wide
responsibilities inherent in the new role the Committee authorized a higher base
salary of $250,000 for Mr. Farris in 1996 with any bonus at the Committee's
discretion and not tied to one subsidiary's results. In light of the
Company's loss in 1996, the Committee did not award Mr. Farris any bonus or
stock options for 1996. The Committee intends to continue its review of such
agreement during 1997 to ensure a proper alignment between compensation and the
company-wide duties of Mr. Farris.
The Compensation Committee and the Board of Directors believe that
management's ownership of a significant equity interest in the Company is a
major incentive in building shareholder wealth and aligning the long-term
<PAGE>
interests of management and stockholders. Stock options, therefore, are granted
by the Committee at option prices not less than the fair market value of Common
Stock on the grant date. Thus stock options have no value unless the share price
increases over the fair market value on the date of grant. Option awards
contribute to the retention of key executives since executives realize the
benefits of options only as they vest based on tenure after the grant. The
Compensation Committee determines which employees receive stock option grants by
evaluating the responsibilities and relative positions of key employees in
comparison to like or similar positions at competitor companies.
Section 162(m) of the Internal Revenue Code, enacted in 1993, generally
disallows a tax deduction to public companies for compensation over $1 million
paid to the corporation's Chief Executive Officer or four other most-highly
compensated executive officers named in the proxy statement. The Compensation
Committee has reviewed the possible effect on the Company of Section 162(m), and
it does not believe that such section will be applicable to the Company in the
foreseeable future, but will review compensation practices as circumstances
warrant. To this effect, the 1996 Equity Incentive Plan made it possible for the
Company to satisfy the conditions for an exemption from Section 162(m)'s
deduction limit. However, other characteristics of a grant effect whether or not
compensation received from a stock option is counted in determining whether an
executive officer has received compensation in excess of $1 million.
Compensation Committee
Thomas Quinn
J. Richard Crowley
Richard Lutzy
Performance Information
- -----------------------
The following graph compares the performance of the Company's cumulative
shareholder return at December 31 of each year between 1991 and 1996 in the with
shareholder returns on (i) the Nasdaq Non-Financial Composite Index, (ii) the
Nasdaq National Market Composite Index, (iii) the Standard & Poors High Tech
Composite Index and (iv) the Standard & Poors 500 Composite index. The graph
assumes that the value of the investment in the Common Stock and each index was
$100 at December 31, 1991 and that all dividends, if any, were reinvested.
Effective with this Proxy Statement, the Company has changed from the Standard &
Poor's indices (which it had used since 1991) to the Nasdaq indices because it
believes that the companies included in the Nasdaq indices provide a better
comparison, based on the Company's size and history. The information based on
the Standard & Poor's indices is displayed for comparative purposes as required
by the SEC's rules and will not be provided in the future.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
Base Point Return Return Return Return Return
Company/Index Name 1991 1992 1993 1994 1995 1996
- ------------------ ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
LASERSIGHT
INCORPORATED 100 256.89 183.91 289.00 306.52 151.80
NASDAQ NON-FINANCIAL 100 109.39 126.30 121.44 169.24 205.62
NASDAQ NATIONAL MARKET 100 116.38 122.91 130.59 184.68 227.17
S&P HIGH TECH COMPOSITE 100 104.13 128.09 149.29 215.04 305.07
S&P 500 100 107.62 118.46 120.03 165.13 203.05
</TABLE>
<PAGE>
Certain Relationships and Related Transactions
- ----------------------------------------------
LaserSight Centers. In March 1997, pursuant to an amendment to a
previously-reported 1993 acquisition agreement (as so amended, the "Amended
Centers Agreement"), the Company issued 625,000 unregistered shares of Common
Stock to a group of former shareholders and former optionholders (the "Former
Centers Holders") of LaserSight Centers Incorporated ("LaserSight Centers"), a
developmental stage company that the Company acquired in April 1993 and through
which the Company intends to begin to provide services for ophthalmic laser
surgical centers using excimer and other lasers. The Amended Centers Agreement
also provides for issuance of up to 600,000 additional shares of Common Stock to
the Former Centers Holders to the extent that a revised earnout (as described
below) is satisfied through March 31, 2002. Trusts for the benefit of Dr.
O'Donnell, the Chairman of the Board of the Company, or his descendants
(collectively, the "O'Donnell Trusts") received 226,644 (approximately 36%) of
the 625,000 shares and would be entitled to receive the same percentage of any
additional shares issued. Certain former officers and directors of the Company
are also parties to the Amended Centers Agreement.
Under the Amended Centers Agreement, Earnout Shares are issuable at the
rate of one share of Common Stock per $4.00 of PRK Earnings (as defined)
received by the Company between April 1, 1997 and March 31, 2002. For this
purpose, the following items are considered revenue: (i) per procedure revenues
received by the Company in connection with the utilization of a fixed or mobile
excimer laser owned or operated by the Company to perform photorefractive
keratectomy ("PRK") and treat myopia, astigmatism and hyperopia; (ii) revenues
received by the Company from managed care companies or employers which are
specifically designated as being in exchange for arranging for the delivery of
PRK, and (iii) any license fee, royalty or similar payment received by the
Company exclusively on account of patents which have been assigned to LaserSight
Centers. All of such patents presently held by LaserSight Centers were
assigned to it by Dr. O'Donnell prior to 1996 and include U.S. patents issued on
(i) the excimer laser treatment of Glaucoma or laser trabeculodissection
(assigned in exchange for reimbursement of attorney's fees and costs in the
amount of $6,121) and (ii) laser calibration (assigned in exchange for a 6%
royalty on the net sales or uses of the patented technology). The definition
of "PRK Earnings" is otherwise generally similar to that of operating income and
does not reflect general corporate overhead (unless directly attributable to the
performance of PRK procedures), depreciation of equipment, amortization (unless
associated with patents transferred to the Company by a Former Centers Holder or
patents related to PRK), taxes or interest expense. The Amended Centers
Agreement expressly excludes the following from the computation of PRK Earnings:
(i) revenues derived from the manufacture and servicing of excimer lasers, (ii)
fees from patents not assigned to LaserSight Centers, (iii) managed care fees
for non-PRK services, and (iv) revenues from non-excimer procedures.
The management of the Company believes that these exclusions will benefit
the Company by eliminating uncertainty as to how the LaserSight Centers earnout
is to be computed. In addition, the Company is no longer required to use
LaserSight Centers as its exclusive representative in the U.S. and Canada for
the sale and distribution of ophthalmic refractive lasers or related refractive
procedures. However, it may be in the interest of Dr. O'Donnell for the Company
to pursue business strategies that maximize the issuance of Earnout Shares.
The Company has granted "piggyback" registration rights to the Former
Centers Holders (including the O'Donnell Trusts) relating to the 600,000
contingently-issuable shares. The Company has not granted any registration
rights in respect of the 625,000 recently-issued shares except as follows: The
Amended Centers Agreement required the Former Centers Holders to deliver 73,965
of such 625,000 issued shares to Samuel S. Duffey on or before March 15, 1997.
Under the terms of a December 1996 litigation settlement agreement (as amended)
between the Company and Mr. Duffey, such 73,965 shares, together with an
additional 8,628 shares issued to Mr. Duffey under the Amended Centers
Agreement, are to be registered under the Securities Act of 1933 no later than
June 1, 1997.
<PAGE>
In March 1997, the Company also amended its previously-reported royalty
agreement (as so amended, the "Amended Royalty Agreement") with Laser Partners,
a Florida general partnership, that it had entered into shortly before the
LaserSight Centers acquisition. The Amended Royalty Agreement reduces the
maximum per eye royalty to be paid by the Company from $86 to $43 (payable
either in cash or unregistered shares of Common Stock), and will delay the
commencement of such royalty payments until after March 2002 or, if sooner, the
delivery of all of the 600,000 shares contingently issuable under the earnout
provisions of the Amended Centers Agreement. The Company's obligations under the
Amended Royalty Agreement are perpetual. The Company understands that one of the
O'Donnell Trusts is a partner of Laser Partners with a 36% partnership interest
and that certain former officers and directors of the Company are partners of
Laser Partners.
The Amended Royalty Agreement provides that the Company is not required to
pay a royalty in connection with any of the following: (i) procedures which do
not involve both an excimer laser and the performance of PRK (e.g., follow-up
treatment related to the removal of cataracts, iridotomy, treatment of glaucoma,
etc.), (ii) laser procedures which are performed by a third party in connection
with any license, royalty or other similar arrangement granted by the Company,
and (iii) laser procedures which are performed pursuant to a contract with an
insurance company, health maintenance organization, preferred provider
organization, or a similar managed care company or an employer, pursuant to
which the Company agrees to arrange for the delivery of eye care services other
than PRK or for eye care services which include PRK without any identifiable fee
attributable thereto. The management of the Company believes that these
exclusions will reduce the scope of the Company's obligation to make royalty
payments. It may be in the interest of Dr. O'Donnell for the Company to pursue
business strategies that maximize such royalty payments.
Both the Amended Centers Agreement and the Amended Royalty Agreement were
approved by a special committee of the Board of Directors consisting of
disinterested directors. The Board of Directors has discretion to discontinue,
sell or transfer at any time the Company's business related to arranging for the
performance of PRK.
As previously reported, in April 1993, a stockholder's derivative action
was filed against the Company's then-directors (including Dr. O'Donnell),
alleging breaches of fiduciary duty in connection with the acquisition of
LaserSight Centers and certain other matters. In July 1995, pursuant to the
terms of a previously-reported settlement of the shareholder action, the number
of Earnout Shares was reduced from 1,500,000 to 1,265,333 and the maximum per
eye royalty payable to Laser Partners was reduced from $100 to $86.
Sale of Laser System. As previously reported, in December 1995, the Company
sold one of its laser systems to a company owned by Dr. O'Donnell, the Chairman
of the Board of the Company, at a price of $235,000 for use in clinical trials.
The Company received payment of the purchase price in January 1997. The Company
believes that the terms of this transaction, including the absence of a
provision for interest on the outstanding receivable balance, were similar to
the terms provided to unaffiliated purchasers of laser systems for clinical
trials in the United States.
Manufacturer's Representative Agreement. In September 1995, the Company
entered into a manufacturer's representative agreement with a firm affiliated
with Mr. Randall Charlton, the spouse of Ms. Dobrin-Charlton, a director of the
Company. The agreement provides for the representation of the Company on an
exclusive basis in specified Middle Eastern countries for a period of 16 months,
with automatic renewals if specified sales targets are met. Under the agreement,
a commission of 12% of the sales price is payable on each laser system sold.
During 1996, a commission of $5,500 was paid under the agreement, with an
additional $20,750 to be payable upon the Company's collection of the
outstanding account receivable. The Company understands that Mr. Charlton
receives all commissions payable by the Company under the agreement.
<PAGE>
Acquisition of MRF, Inc. In December 1995, the Company and Mr. Farris, the
President and Chief Executive Officer of the Company, agreed to amend the
agreement pursuant to which the Company had acquired MRF, Inc. (The Farris
Group) from Mr. Farris in February 1994 in exchange for cash in the amount of
$635,000, a 8% promissory note in the principal amount $1,365,000, a contingent
right to receive up to an aggregate of 750,000 shares of Common Stock (the "MRF
Earnout Shares"). The purchase agreement for the transaction originally provided
that, for each year during the 1994-98 period, the number of MRF Earnout Shares
would equal the net pre-tax income of MRF, Inc. and its subsidiaries for that
year divided by $3.3 million. In December 1995, the Company and Mr. Farris
agreed that the MRF Earnout Shares would be issued in January 1997 (based on
MRF's annual performance during 1994, 1995, and 1996) and in January 1999 (based
on MRF's annual performance during 1997 and 1998). The balance due under the
promissory note was paid in January 1996. The 406,700 shares which had been
earned under the amended agreement for the three-year period ended December 31,
1996 were issued in April 1997. It may be in the interest of Mr. Farris for the
Company to pursue business strategies that maximize the issuance of MRF Earnout
Shares.
Consulting Arrangement. In January 1997, the Company's LaserSight
Technologies subsidiary entered into a consulting arrangement with Dr. Byron A.
Santos, an ophthalmologist employed by the O'Donnell Eye Institute
("Institute"). Dr. O'Donnell, the Chairman of the Board of the Company, is the
Medical Director and owner of the Institute. Such services are related to the
development of the Company's Laser Trabeculodissection technique for glaucoma
surgery, including use of the LaserScan 2000 excimer laser system for such
technique, clinical protocols for the study of this technique, and the training
of other ophthalmologists who may participate in studies and clinical trials as
well as supervision of a clinical research and development program for PRK and
PARK intended to quantify the proposed advantages of energy stabilization,
infrared tracking, 200 HZ pulse repetition, simulated PRK and topography-guided
PARK. The Company expects that this arrangement will be incorporated into a
written consulting agreement with Dr. Santos, subject to the approval of the
agreement by the Audit and Finance Committee of the Board of Directors. The
agreement is expected to provide for the availability of Dr. Santos for at least
40 hours per month, a consulting fee of $8,000 per month that does not depend on
the actual amount of consulting time, and a 60-month term ending December 31,
2001 with no provision for termination before that date, except in the event of
a failure to perform services.
2. AMENDMENT OF NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
The Non-Employee Directors Stock Option Plan (the "Directors Plan") was
approved by the Company's stockholders in June 1996. The Board of Directors has
unanimously approved an amendment of the Directors Plan (as so amended, the
"Amended Directors Plan"), subject to the approval of the Company's stockholders
at the 1997 Annual Meeting. As described in more detail below, the principal
changes reflected in the Amended Directors Plan are (i) to increase the size of
the annual grant of stock options to each of the Company's non-employee
directors from 10,000 shares of Common Stock to 15,000 shares, (ii) to add a
provision for annual grants of options to purchase 5,000 shares of Common Stock
to each non-employee director serving as chair of a standing committee of the
Board of Directors or as Chairman of the Board of the Company, and (iii) to
increase the aggregate number of shares of Common Stock available for delivery
under the Directors Plan from 200,000 to 300,000.
If the Amended Directors Plan is not approved by the stockholders of the
Company, options will continue to be automatically granted in accordance with
the terms of the current Directors Plan.
The summary of the Amended Directors Plan that appears below is qualified
in its entirety by reference to the full text of the plan document, a copy of
which is available upon request from the Secretary of the Company.
<PAGE>
Purpose of Plan. The purpose of the Directors Plan is to encourage
qualified persons to become and remain directors of the Company, and to provide
directors of the Company with a direct stake in its success. Except for an
attendance fee of $500 for each meeting of the Board of Directors or Board
committee attended, stock options are the only annual compensation offered by
the Company to its non-employee directors. Unlike some other publicly-held
companies, the Company does not presently pay any additional compensation to
non-employee directors serving as chairs of Board committees or as Chairman of
the Board.
Eligibility. Only directors of the Company who are not officers or
employees of the Company or any of its subsidiaries ("non-employee directors")
are eligible to participate in the Directors Plan.
Number of Shares Issuable. The Amended Directors Plan would provide for the
delivery of up to 300,000 shares of Common Stock, as compared to the current
limit of 200,000 shares. The number of shares available under the Directors Plan
is subject to adjustment in the event of stock splits, mergers,
recapitalizations, etc. If any options terminate or expire without being
exercised, new options may be granted covering the shares not purchased under
such terminated or expired options. As of May 13, 1997, the closing price of the
Common Stock as on the NASDAQ National Market was $5.375 per share.
Option Grants. The Amended Directors Plan provides for option grants to
non-employee directors pursuant to a fixed formula that establishes the timing,
size, and exercise price of each option grant. As of the close of business on
the date of each annual meeting of the Company's stockholders (beginning with
the 1997 annual meeting), the following options to purchase Common Stock would
automatically be granted:
(i) to each non-employee director, an option to purchase 15,000
shares,
(ii) to each non-employee director serving as chair of a standing
committee of the Board of Directors (other than the Executive Committee),
an option to purchase 5,000 shares, and
(iii) the non-employee director, if any, serving as Chairman of the
Board of the Company, an option to purchase 5,000 shares.
If a non-employee director serves as chairman of more than one committee (none
presently do), such non-employee director would receive a 5,000 share option for
each such committee chairmanship.
Option Terms. The exercise price of each option will remain equal to 100%
of the fair market value of a share of Common Stock on the option grant date.
Options will continue to become fully exercisable on the first anniversary of
the grant date and to remain exercisable on any date or dates thereafter until
the 10th anniversary of the option grant date, except that in no event can an
option be exercised more than three years after a non-employee director ceases
to be a director of the Company for any reason. The option exercise price
remains payable in cash.
Tax Consequences. Under present law, the following are the federal income
tax consequences generally arising with respect to awards granted under the
Directors Plan. The grant of an option has no tax consequences for the grantee
or the Company. Upon exercising an option, the grantee must recognize ordinary
income equal to the difference between (i) the exercise price of the option, and
(ii) and the fair market value of the Common Stock on the date of exercise; the
Company will be entitled to a deduction for the same amount.
Other. The Directors Plan is administered by the Board of Directors. The
Directors Plan may not be amended by the Board without stockholder approval if
the amendment would change (i) the criteria for eligibility to participate or
(ii) the vesting conditions, term of exercisability, grant timing, grant amount
or exercise price of options. The Directors Plan will terminate January 17,
2006.
<PAGE>
New Plan Benefits
Dollar Value Number of Units
------------ ---------------
Non-Executive Director Group Indeterminate 95,000(1)
(1) Represents options to purchase shares of Common Stock proposed to be
granted under the Amended Directors Plan as follows (assuming that the
persons indicated are re-elected to the Board of Directors and are
re-appointed to the positions indicated): (i) 15,000 shares to each of
the Company's non-employee directors (Dr. O'Donnell, Messrs. Crowley,
Lutzy, Pieroni and Quinn), (ii) 5,000 shares to each non-employee
director who serves as chairman of a standing committee of the Board of
Directors (Messrs. Crowley, Lutzy and Quinn) and (iii) 5,000 shares to
the non-employee Chairman of the Board (Dr. O'Donnell). If the Amended
Directors Plan is not approved by the stockholders of the Company, the
Non-Executive Director Group would receive options for an aggregate of
50,000 shares (assuming such re-election to the Board of Directors)
under the existing Directors Plan.
The Board of Directors recommends that stockholders vote "FOR"
the amendment of the Directors Option Plan.
3. INDEPENDENT AUDITORS
Ratification of Auditors
- ------------------------
The Board of Directors recommends that stockholders ratify the appointment
of KPMG Peat Marwick LLP by voting "FOR" ratification of KPMG Peat Marwick LLP
as the Company's auditors for 1997. In the event such selection is not ratified,
the Board of Directors will reconsider its selection.
KPMG Peat Marwick LLP has audited the Company's financial statements for
fiscal years 1995 and 1996. Representatives of KPMG Peat Marwick LLP are
expected to be present at the meeting with the opportunity to make a statement
if they desire to do so, and are expected to be available to respond to
appropriate questions.
The Board of Directors recommends that
stockholders vote "FOR" the ratification of KPMG Peat Marwick LLP
Change in Principal Accountants
- -------------------------------
Lovelace, Roby & Company, P.A. was previously the principal accountants for
the Company. On September 14, 1995, their appointment as principal accountants
was terminated and KPMG Peat Marwick LLP was engaged as principal accountants.
The decision to change accountants was recommended by the Audit and Finance
Committee of the Board of Directors. In connection with the audit of the fiscal
year ended December 31, 1994, and during the interim period through September
14, 1995, there were no disagreements with Lovelace, Roby & Company, P.A. on any
matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedures, which disagreements if not resolved to their
satisfaction would have caused them to make reference in connection with their
opinion to the subject matter of the disagreement.
4. OTHER MATTERS
The Board of Directors of the Company is not aware that any matter other
than those listed in the Notice of Meeting is to be presented for action at the
Annual Meeting. If any of the Board's nominees is unavailable for election as a
Director or any other matter should properly come before the meeting, it is
intended that votes will be cast pursuant to the Proxy in respect thereto in
accordance with the best judgment of the person or persons acting as proxies.
May 21, 1997
<PAGE>
LASERSIGHT INCORPORATED
PROXY
ANNUAL MEETING OF STOCKHOLDERS, JUNE 13, 1997
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
Annual Meeting of Stockholders of the Company, to be held on Friday, June 13,
1997 at 10:00 a.m. CDT, 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) ELECTION OF DIRECTORS.
FOR all nominees listed at right (except as marked to the contrary below) [ ]
Withhold Authority for all nominees located at right [ ]
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the following line.)________________________________
Nominees:
J. Richard Crowley
Michael R. Farris
Richard C. Lutzy
Francis E. O'Donnell, Jr., M.D.
David T. Pieroni
Thomas Quinn
(2) Amendment of Non-Employee Directors Stock Option Plan
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
(3) Ratify appointment of independent auditors.
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
<PAGE>
(4) In their discretion to act on any other matters which may properly come
before the Annual Meeting.
PLEASE DATE, SIGN AND RETURN PROMPTLY IN THE ACCOMPANYING ENVELOPE
The Board of Directors Recommends You Vote FOR the above proposals.
Signature______________________________________________
Signature______________________________________________
Dated: _______________, 1997
Note:
Your signature should be exactly the same as the name imprinted herein. Persons
signing as executors, administrators, trustees or in similar capacities should
so indicate. For joint accounts, each joint owner must sign.
LASERSIGHT INCORPORATED
AMENDED AND RESTATED
NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
The LaserSight Incorporated Non-Employee Directors Stock Option Plan, as
established by LaserSight Incorporated, a Delaware corporation (the "Company"),
effective January 19, 1996, is hereby amended and restated as set forth herein
effective May 10, 1997 (as so amended and restated, the "Plan"), subject to the
approval of the holders of a majority of the shares of Common Stock (as defined
below) present or represented and entitled to vote at the Company's 1997 annual
meeting of stockholders.
Article I: Purpose
------------------
The purpose of the Plan is to encourage qualified persons to become and
remain directors of the Company, and to provide directors of the Company with a
direct stake in its success.
Article II: Definitions
-----------------------
2.1 "Board of Directors" means the Board of Directors of the Company.
2.2 "Chairman of the Board" means the Chairman of the Board of Directors.
2.3 "Committee" means a standing committee of the Board of Directors, other
than the Executive Committee.
2.4 "Common Stock" means the common stock, par value $.001 per share, of
the Company.
2.5 "Director" means a member of the Board.
2.6 "Effective Date" means January 19, 1996.
2.7 "Eligible Director" means a Director who is not an employee of the
Company or any of its subsidiaries as of the date of any grant of an Option to
him or her.
2.8 "Exchange Act" means the Securities Exchange Act of 1934.
2.9 "Fair Market Value" of a security means, as of any date, (i) if the
security is listed for trading on a national securities exchange or the NASDAQ
National Market, the closing price, regular way, of the security as reported on
the consolidated transaction reporting system applicable to such security, or if
no such reported sale of the security shall have occurred on such date, on the
next preceding date on which there was such a reported sale, or (ii) if the
security is not listed for trading on a national securities exchange or the
NASDAQ National Market, but is listed on the NASDAQ SmallCap Market, the average
of the closing bid and asked prices, regular way, on the NASDAQ SmallCap Market
or, if no such prices shall have been so reported for such date, on the next
preceding date for which such prices were so reported.
2.10 "Grantee" means the holder of an Option or any person entitled to
exercise an Option.
2.11 "Option" means a right to purchase Common Stock granted under this
Plan.
2.12 "Term" shall have the meaning provided in Section 5.2.
Article III: Administration
---------------------------
Subject to the provisions of the Plan, the Board shall have the power to
construe and interpret the Plan, to determine all questions arising thereunder,
and to adopt and amend rules for the administration of the Plan; provided,
however, that no such interpretation or rule shall change the number of Options
that may be granted under the Plan or the terms upon which, or the times at
which, or the periods within which, such Options may be exercised. Any decision
of the Board in the administration of the Plan shall be final.
Article IV: Amount of Common Stock
----------------------------------
The aggregate number of shares of Common Stock in respect of which Options
may be exercised shall not exceed 300,000, subject to adjustment pursuant to
Article VII. Such shares of Common Stock may be either authorized but unissued
shares or previously-issued shares reacquired by the Company. If any Options
terminate or expire without being exercised in whole or in part, new Options may
be granted covering the shares not purchased under such terminated or expired
Options.
Article V: Grant of Options
---------------------------
5.1 Annual Grants of Options. As of the close of business on the date of
each annual meeting of the annual meeting of the stockholders of the Company:
(i) each Eligible Director shall automatically be granted an Option
for 15,000 shares of Common Stock,
(ii) each Eligible Director who is then serving as a chairman of a
Committee shall automatically be granted an additional Option for 5,000
shares of Common Stock, and
(iii) the Eligible Director, if any, who is then serving as the
Chairman of the Board shall automatically be granted an additional Option
for 5,000 shares of Common Stock.
For purposes of clause (ii) of this Section, if an Eligible Director is serving
as chairman of more than one Committee, such Eligible Director shall receive an
additional Option in respect of each such Committee chairmanship.
5.2 Term of Options. Each Option shall have a term ("Term") of 10 years
beginning on the date of grant, unless earlier terminated as provided herein.
5.3 Exercise Price. The exercise price per share for each Option shall be
100% of the Fair Market Value of a share of Common Stock on the date of grant,
subject to adjustment pursuant to Article VII.
5.4 Option Agreements. Each Option shall be evidenced by an agreement in
such form as the Board shall prescribe from time to time and shall be consistent
with the Plan.
Article VI: Exercise of Options
-------------------------------
6.1 Vesting. Each outstanding Option shall be fully exercisable at any time
on or after the first anniversary of its date of grant.
6.2 Exercise. An Option shall be exercised by delivery during the Term to
the Company of (i) written notice of the exercise specifying the number of
shares to be purchased and (ii) full payment in cash for the shares of Common
Stock being acquired thereunder.
6.3 Exercise After Termination of Directorship. If a person shall cease to
be a Director for any reason while holding an unexpired Option that has not been
fully exercised, such Option shall thereupon terminate; provided that such
person, or in the case of his death or adjudication of incompetency, his
executor, administrator, distributees, guardian or legal representative, as the
case may be, may exercise the Option (to the extent that it was exercisable
pursuant to Section 6.1 on the date the person ceased to be a Director) at any
time until the earlier to occur of (i) three years after the date such person
ceased to be a Director, or (ii) the expiration of the Term of such Option.
Article VII: Changes in Capitalization
--------------------------------------
7.1 Adjustments. If the outstanding Common Stock is changed by reason of
reorganization, merger, consolidation, recapitalization, reclassification, stock
split, reverse stock split, stock dividend, rights offering, combination,
spinoff, exchange of shares, or the like, an appropriate adjustment shall be
made by the Board to (i) the aggregate number of shares then-remaining available
under the Plan, (ii) the number of shares of Common Stock in respect of which
Options are subsequently to be granted, and (iii) to the extent that the
following adjustments are necessary to preserve the economic value of
unexercised Options, the number or type of shares of capital stock subject to,
and the exercise price of, outstanding Options.
7.2 No Fractional Shares. If a fraction of a share would otherwise result
from any adjustment pursuant to Section 7.1, the adjusted share amount shall be
rounded to the nearest whole number.
Article VIII: Miscellaneous
---------------------------
8.1 Options Non-Transferable. An Option shall not be transferable by its
Grantee except by will or the laws of descent and distribution and shall be
exercisable during the Grantee's lifetime only by the Grantee or his or her
guardian or legal representative; provided, however, that a Grantee may in a
manner and to the extent permitted by the Board (a) designate in writing a
beneficiary to exercise an Award after his or her death or (b) transfer an
Option to a revocable, inter vivos trust as to which the Grantee is the settlor
and trustee.
8.2 Expenses. The expenses of the Plan shall be borne by the Company. Any
taxes imposed on a Grantee upon exercise of an Option shall be paid by such
Grantee.
8.3 No Right to Re-Election. Neither the Plan nor any action taken
hereunder shall be construed as giving any Director any right to be retained or
re-elected as a Director.
8.4 Securities Registration. The Company shall not be obligated to deliver
any shares of Common Stock hereunder until such shares have been listed on each
securities exchange or national market system on which the Common Stock may then
be listed, or until there has been compliance with all applicable state or
federal securities laws; provided, however, that the Company shall use all
reasonable efforts to cause any such listing and compliance.
8.5 Taxes. The Company shall not be required to issue shares of Common
Stock upon the exercise of an Option unless the Grantee shall first pay to the
Company such amount, if any, as may be requested by the Company to satisfy any
liability to withhold federal, state, local or foreign income or other taxes
relating to such exercise.
8.6 Rights as Stockholder. A Grantee shall not by reason of any Option have
any right as a stockholder of the Company with respect to the shares of Common
Stock which may be deliverable upon exercise of such Option until such shares
have been delivered to him or her.
8.7 Severability. If all or any part of the Plan is declared by any court
or governmental authority to be unlawful or invalid, such unlawfulness or
invalidity shall not serve to invalidate any portion of the Plan not declared to
be unlawful or invalid. Any Section or part of a Section so declared to be
unlawful or invalid shall, if possible, be construed in a manner which gives
effect to the terms of such Section or part of a Section to the fullest extent
possible while remaining lawful and valid.
8.8 Applicable Law. The Plan shall be governed by the substantive laws
(excluding the conflict of laws rules) of the State of Delaware.
Article IX: Amendment
---------------------
The Plan may be amended from time to time by the Board as it shall deem
advisable, including amendments necessary to qualify for any exemption or to
comply with applicable law or regulations; provided, however, that no amendment
to the Plan may be made without the approval of the stockholders of the Company
which changes (i) the criteria for Eligible Directors or (ii) the vesting
conditions, term of exercisability, grant timing, grant amount or exercise price
of Options. No amendment of the Plan shall adversely affect the rights of any
Grantee under an Option without the consent of such Grantee.
Article X: Termination
----------------------
The Plan shall terminate on the 10th anniversary of the Effective Date of
the Plan, unless sooner terminated by the Board. Any termination of the Plan
shall not affect any Option then outstanding.
