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-6(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.
[ ] $125 per Exchange Act Rule O-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or Item
22(a)(2) of Schedule 14A
[ ] 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:
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<PAGE>
LASERSIGHT INCORPORATED
3300 University Blvd., Suite 140
Winter Park, Florida 32792
Dear Fellow Stockholder:
You are cordially invited to attend the 2000 Annual Meeting of
Stockholders of LaserSight Incorporated to be held at the Hyatt Regency Orlando
International Airport, Orlando, Florida, telephone (407) 825-1234, on Friday,
June 9, 2000 at 10:00 a.m. local time. We are pleased to enclose the notice of
our 2000 annual stockholders' meeting, together with the attached Proxy
Statement, a proxy card and an envelope for returning the proxy card. Also
enclosed is LaserSight's 1999 Annual Report to Stockholders.
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 William Kern, Vice President, Corporate Development, at
(407) 678-9900, ext. 163. Your time and attention are appreciated.
Sincerely,
/s/Michael R. Farris
-------------------------------------
Michael R. Farris
President and Chief Executive Officer
May 10, 2000
<PAGE>
LASERSIGHT INCORPORATED
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The 2000 Annual Meeting of Stockholders of LaserSight Incorporated, a
Delaware corporation, will be held on Friday, June 9, 2000 at 10:00 a.m. local
time, at the Hyatt Regency Orlando International Airport, Orlando, Florida, for:
1. The holders of LaserSight's common stock, Series C Preferred
Stock and Series D Preferred Stock, or the Voting Holders,
voting together, to elect seven directors, all of such persons
to serve until the next annual meeting of stockholders and
until their respective successors are duly elected and
qualified;
2. The Voting Holders to consider and vote on a proposal to
approve an amendment to LaserSight's 1996 Equity Incentive
Plan, or Equity Incentive Plan, to increase the aggregate
number of shares available for issuance under the Equity
Incentive Plan. We refer to this Proposal No. 2 as the Equity
Incentive Plan Proposal in this Proxy Statement;
3. The Voting Holders to consider and vote on a proposal to
approve an amendment to LaserSight's Certificate of
Incorporation to increase the number of authorized shares of
common stock from 40 million to 100 million. We refer to this
Proposal No. 3 as the Charter Amendment Proposal in this Proxy
Statement;
4. The Voting Holders to consider and vote on a proposal to
ratify the appointment of KPMG LLP as auditors of
LaserSight for the 2000 fiscal year. We refer to this
Proposal No. 4 as the Auditor Ratification Proposal in this
Proxy Statement; and
5. The Voting Holders to transact such other business that is
properly brought before the Annual Meeting.
These proposals are described in the attached Proxy Statement.
Only holders of LaserSight's common stock (together with the associated
preferred stock purchase rights), LaserSight's Series C Convertible
Participating Preferred Stock, or Series C Preferred Stock, and LaserSight's
Series D Convertible Participating Preferred Stock, or Series D Preferred Stock,
of record on the books of LaserSight at the close of business on April 14, 2000,
or the Record Date, will be entitled to notice of and to vote at the Annual
Meeting or any adjournments or postponements thereof. A list of stockholders as
of the Record Date will be available at the Annual Meeting.
<PAGE>
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
Winter Park, Florida
May 10, 2000
Please return the enclosed proxy, which is being solicited on behalf of
the Board of Directors of LaserSight, in the enclosed envelope, which requires
no postage if mailed in the United States.
<PAGE>
LASERSIGHT INCORPORATED
3300 University Blvd., Suite 140
Winter Park, Florida 32792
PROXY STATEMENT
Proxies in the accompanying form are being solicited by the Board of
Directors of LaserSight for use at the Annual Meeting of Stockholders on Friday,
June 9, 2000, or at any adjournment or postponement thereof. The Annual Meeting
will be held at the Hyatt Regency Orlando International Airport, Orlando,
Florida, at 10:00 a.m. local time. This Proxy Statement is first being mailed to
stockholders on or about May 10, 2000.
Proxies are being solicited from the holders of LaserSight's common
stock, Series C Preferred Stock and Series D Preferred Stock with respect to
each of the matters to be presented at the Annual Meeting. Because LaserSight's
common stock, Series C Preferred Stock and Series D Preferred Stock provide for
different voting rights, separate forms of proxy are being distributed to the
holders of common stock, Series C Preferred Stock and Series D Preferred Stock.
To the extent that any Voting Holder owns common stock and preferred stock, such
stockholder will receive separate proxy cards, and must complete and return each
such proxy in order to ensure that the voting power represented by the common
stock and preferred stock held by such person are voted by proxies.
INFORMATION CONCERNING SOLICITATION OF PROXIES AND VOTING
Record Date. The Board of Directors has fixed the close of business on
April 14, 2000 as the record date for the determination of stockholders entitled
to notice of, and to vote at, the Annual Meeting. On the Record Date, LaserSight
had outstanding 19,803,663 shares of common stock, 2,000,000 shares of Series
C Preferred Stock and 2,000,000 shares of Series D Preferred Stock. The common
stock, the Series C Preferred Stock and the Series D Preferred Stock are
sometimes referred to, collectively, in this Proxy Statement as the "Voting
Shares." A list of stockholders of record entitled to vote at the Annual Meeting
will be available for inspection by any stockholder, for any purpose germane to
the meeting, during normal business hours, for a period of 10 days prior to the
meeting at the office of LaserSight located at 3300 University Blvd., Suite 140,
Winter Park, Florida 32792. Such list will also be available at the Annual
Meeting.
Voting Rights. Each share of common stock outstanding as of the Record
Date is entitled to one vote upon each of the matters to be presented at the
Annual Meeting. Each share of Series C Preferred Stock and Series D Preferred
Stock outstanding as of the Record Date is entitled to one vote for each share
of common stock into which such Preferred Stock is then convertible upon each of
the matters to be presented at the Annual Meeting. The Series C Preferred Stock
and Series D Preferred Stock are convertible into common stock on a
share-for-share basis.
Although the holders of the Series D Preferred Stock, voting separately
as a single class, have the right to elect one director in addition to the other
seven nominees standing for election, the holders of the Series D Preferred
Stock have advised LaserSight that they do not currently intend to exercise such
right in connection with the Annual Meeting. See "Proposal No. 1: Election of
Directors--Nominee for Election by the Holders of Series D Preferred Stock at
the Annual Meeting."
Voting at the Annual Meeting. The presence of holders of a majority of
the outstanding Voting Shares, whether in person or by proxy, will constitute a
quorum at the Annual Meeting. LaserSight's Certificate of Incorporation does not
provide for cumulative voting. A plurality of the votes of the Voting Shares
present, either in person or by proxy, and entitled to vote on the election of
directors at the Annual Meeting is required to elect the seven directors to be
elected by the Voting Holders. The affirmative vote of the holders of a majority
<PAGE>
of the Voting Shares present, either in person or by proxy, and entitled to vote
at the Annual Meeting is required to approve the Equity Incentive Plan Proposal,
the Charter Amendment Proposal, and the Auditor Ratification Proposal.
Abstentions will be considered present for purposes of determining
whether a quorum exists. Shares represented at the Annual Meeting which are held
by a broker or nominee and as to which (1) instructions have not been received
from the beneficial owner or the person entitled to vote and (2) the broker or
nominee does not have discretionary voting power with respect to one or more
matters are considered not entitled to vote on such matters. We use the term
"broker non-votes" to refer collectively to these shares in this Proxy. Shares
that are broker non-votes with respect to all matters voted upon do not count
towards a quorum. However, if such shares are voted with respect to any item,
they will count towards a quorum. In accordance with Delaware law and
LaserSight's Certificate of Incorporation and Bylaws (1) for the election of
directors, which requires a plurality of the votes present, votes withheld and
broker non-votes will not be counted, and (2) for the adoption of all other
proposals, which require a majority of the Voting Shares 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.
Proxies; Revocation. Whether or not you plan to attend the Annual
Meeting, please sign, date and mail your proxy in the enclosed postage prepaid
envelope. The proxies will vote your shares according to your instructions. In
the absence of contrary instructions, shares represented by any proxy will be
voted for the election of the applicable nominees listed in Proposal No. 1 and
for all of the other proposals recommended by the Board of Directors in this
Proxy Statement. The proxy card gives authority to the proxies to vote your
shares in their discretion on any other matter presented at the Annual Meeting.
Any stockholder who executes and returns a proxy may revoke it at any
time before it is exercised by (1) filing with the Secretary of LaserSight
written notice of such revocation or a duly executed proxy bearing a later date,
or (2) 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.
Solicitation. The cost of soliciting proxies will be borne by
LaserSight. In addition, LaserSight 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 LaserSight's directors, officers and employees, without
additional compensation, personally or by telephone, telegraph or facsimile.
PROPOSAL NO. 1:
ELECTION OF DIRECTORS
The nominees for the Board of Directors are set forth below. The terms
of all incumbent directors expire at the Annual Meeting or at such later time as
their successors have been duly elected and qualified. Nominees elected at the
Annual Meeting will serve until the next annual meeting of stockholders and
until their successors have been duly elected and qualified. Six of the nominees
are currently directors of LaserSight and are standing for reelection, and one
of the nominees, Guy W. Numann, is standing for election for the first time.
The nominees have agreed to serve if elected. However, if any nominee
becomes unable or unwilling to serve if elected, the applicable 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.
Listed below are the names and ages of the nominees, the year each
individual began continuous service as director of LaserSight, and the business
experience of each, including principal occupations, at present and for at least
the past five years.
2
<PAGE>
NOMINEES FOR ELECTION BY THE VOTING HOLDERS AT THE ANNUAL MEETING:
Michael R. Farris (40).......................................Director since 1995
Mr. Farris has served as President and Chief Executive Officer of
LaserSight since November 1995. He had previously been President and Chief
Executive Officer of TFG (which LaserSight acquired from Mr. Farris in February
1994) and predecessor consulting and search firms for more than 10 years.
Francis E. O'Donnell, Jr., M.D. (50).........................Director since 1992
Dr. O'Donnell has served as the Chairman of the Board of LaserSight since
April 1993. Dr. O'Donnell also was Chief Executive Officer of LaserSight from
April 1993 to July 1993. He is the Medical Director of the O'Donnell Eye
Institute, St. Louis, Missouri, which has performed PRK procedures since 1989.
He is Chairman of PhotoVision, Inc. and BioKeys, Inc., privately-held
biopharmaceutical companies. He is Chairman of APP Specialty Pharmaceutical
Network, Inc., a privately-held retailer of biotech pharmaceuticals. He is a
member of Sublase, L.L.C., a privately-held medical laser company. Dr. O'Donnell
also serves as a Clinical Professor of Ophthalmology at the St. Louis University
School of Medicine and as the founder and managing partner of the Hopkins
Capital Group, L.L.C which specializes in key funding of so-called "disruptive"
technologies.
Terry A. Fuller, Ph.D. (51)..................................Director since 1997
Dr. Fuller has been President and Chief Executive Officer of Fuller
Research Corporation, a privately-held producer of high-technology surgical
devices and services, since March 1984. Since January 1999, he has also been the
President and Chief Executive Officer of PhotoVision Pharmaceuticals, Inc., an
ophthalmic drug and medical device development company. From December 1997
through August 1999, he was President and Chief Executive Officer of Laser Skin
Toner, Inc. From 1990 to November 1996, he was Chief Operating Officer and
Executive Vice-President of Surgical Laser Technologies, Inc., a producer of
laser systems for surgical use.
Gary F. Jonas (55)...........................................Director since 1998
Mr. Jonas has been the Executive Vice President, Strategic Growth for
with TLC Laser Eye Centers Inc. since 1997. Prior to joining TLC in 1997, Mr.
Jonas was a founder and Chief Executive Officer of 20/20 Laser Centers Inc. from
1993 to February 1997. From 1988 to 1993, Mr. Jonas served as the President and
Chief Operating Officer of Earle Palmer Brown, an advertising agency in the
U.S. From 1975 to 1988, Mr. Jonas was the Chief Executive Officer of University
Research Corporation, a health service consulting company.
David T. Pieroni (54)........................................Director since 1996
Mr. Pieroni has been President of Pieroni Management Counselors, Inc., a
management consulting company, since September 1996 and during a portion of
1995. He was President of LaserSight's TFG subsidiary from November 1995 to
September 1996. From 1991 to 1995, he was President of Spencer & Spencer
Systems, Inc., an information systems consulting company. From 1977 to 1990, he
was a partner in the health care and management consulting practice of a
predecessor of Ernst & Young LLP. Mr. Pieroni also serves as a director of
Citation Computer Systems Inc., a health care software company.
D. Michael Litscher (53).....................................Director since 2000
Mr. Litscher has served as LaserSight Technologies' Chief Operating
Officer since March 2000. Prior to joining LaserSight Mr. Litscher served as
General Manager for Frantz Tool and Design, the injection molding and plastics
device division of Frantz Medical Group, since 1995. From 1993 to 1995 Mr.
Litscher served as Vice President-Manufacturing Operations for Frantz Medical
Group. From 1988 to 1992 Mr. Litscher served as Manager of New Products
Manufacturing for Coulter Corporation's Hemotology Division.
3
<PAGE>
Guy W. Numann (68)
Mr. Numann recently retired from Harris Corporation where he served as
president of the company's Communication Sector from 1989 until his retirement.
From 1984 to 1989 Mr. Numann served as senior vice president and group executive
for the Communications Sector. Mr. Numann currently serves as a member of
Rensselaer Polytechnic Institute's School of Engineering Advisory Board.
The Board of Directors recommends that stockholders vote "FOR"
the forgoing nominees
NOMINEE FOR ELECTION BY THE HOLDERS OF SERIES D PREFERRED STOCK AT THE ANNUAL
MEETING:
The holders of the Series D Preferred Stock have the right to elect one
director voting separately as a single class. The holders of the Series D
Preferred Stock have not nominated and have advised LaserSight that they do not
currently intend to nominate a representative to stand for election at the
Annual Meeting. However, the holders of the Series D Preferred Stock may at any
time, either at or before the Annual Meeting, or at a special meeting called for
that purpose, elect a representative to the Board of Directors or take such
action by unanimous written consent.
DIRECTORS NOT STANDING FOR REELECTION
Information regarding the members of the Board of Directors who are not
standing for reelection at the Annual Meeting is set forth below:
Juliet Tammenoms Bakker (37).................................Director since 1998
Ms. Tammenoms Bakker has been a Vice President of Pequot Capital
Management, Inc., and its predecessor, Dawson Samberg Capital Management, Inc.,
both private investment firms, since March 1997. Pequot is the investment
manager of Pequot Equity Fund, L.P. Previously, Ms. Tammenoms Bakker served as
Director of Strategic Planning from 1993 to 1994 and Director, Operations from
1994 to 1996 at Waste Management International in London and the U.S.
J. Richard Crowley (44)......................................Director since 1994
Mr. Crowley has served as Chief Operating Officer of LaserSight since
October 1998. Mr. Crowley has also served as President of LaserSight's
LaserSight Technologies subsidiary since October 1997, and was its Chief
Operating Officer from June 1997 to March 2000. Prior to joining LaserSight, Mr.
Crowley had been the Chief Operating Officer and Chief Financial Officer of
Clinical Diagnostic Systems, Inc., a medical diagnostic testing company, since
1991. From 1984 to 1991, he was President and Chief Financial Officer of Control
Laser Corporation, a manufacturer of industrial lasers.
OTHER EXECUTIVE OFFICERS
The following executive officers of LaserSight are not directors:
Jack T. Holladay, M.D. (53)
Dr. Holladay has served as Medical Director of LaserSight since October
1999. Dr. Holladay has been a practicing ophthalmologist since 1978. Since 1978
Dr. Holladay has also served as a professor at the University of Texas Medical
School, and has been a visiting professor at several major ophthalmology
programs around the world. Dr. Holladay is an active member of the American
Academy of Ophthalmology, has served as chairman of its committee on low vision
and of its committee on optics, refraction and contact lenses, and is also a
member of its committee for ophthalmic technology development. He has also has
lectured extensively, authored numerous scientific articles and book chapters,
and has invented instruments and methods related to vision testing.
4
<PAGE>
Gregory L. Wilson (42)
Mr. Wilson has served as Chief Financial Officer of LaserSight since July
1994. Mr. Wilson has also served as Chief Financial Officer of our TFG
subsidiary since 1993. From 1986 to 1993, he was a management consultant with
Deloitte & Touche LLP, an international accounting and consulting firm.
L. Stephen Dalton (47)
Mr. Dalton has served as LaserSight's Senior Vice President and Chief
Scientific Officer since April 2000. Prior to joining LaserSight, Mr. Dalton
served as Vice President of Expertech Associates, Inc., a regulatory and quality
systems consulting firm, since 1994. Mr. Dalton's prior experience includes the
senior regulatory affairs/quality systems position in the following companies:
Xanar Surgical Lasers (Johnson & Johnson), Sharplan Lasers, Storz Instruments,
Inc., and Intermedics Orthopedics.
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
During 1999, the Board of Directors met in person or by telephone
conference call 13 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 an Executive Committee, an Audit and Finance
Committee, an Executive Compensation and Stock Option Committee and a Nominating
Committee. Each such committee consists 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 1999, the Executive Committee met
one time. The Executive Committee consisted of Messrs. O'Donnell and Farris and
Ms. Bakker until March 2000, when Ms. Bakker left the board.
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 LaserSight's draft annual
financial statements and key accounting and/or reporting matters; and reviewing
the terms of potential acquisitions. LaserSight will adopt a formal written
audit committee charter by June 14, 2000 and will be in compliance with the new
Nasdaq audit committee structure and membership requirements by June 14, 2001.
In 1999, the Audit and Finance Committee met nine times. The Audit and Finance
Committee consisted of Messrs. Pieroni, Fuller and Ms. Bakker until March 2000,
when Ms. Bakker left the board.
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.
LaserSight's Bylaws establish an advance notice procedure with respect to
stockholder nominations of candidates for election as directors. See
"Stockholder Proposals--Stockholder Proposals, In General." In 1999, the
Nominating Committee did not meet. The committee's duties were handled by the
board as a whole. The Nominating Committee consists of Messrs. Fuller, Jonas and
Pieroni.
The Executive Compensation and Stock Option Committee, or Compensation
Committee, is responsible for reviewing LaserSight's general compensation
strategy; establishing salaries and reviewing benefit programs for certain
executive officers; reviewing, approving, recommending and administering
LaserSight's stock option plans and certain other compensation plans; and
approving certain employment contracts. In 1999, the Compensation Committee met
five times. The Compensation Committee consisted of Mr. Jonas and Ms. Bakker
until March 2000, when Ms. Bakker left the board.
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<PAGE>
COMPENSATION OF DIRECTORS
Each non-employee director receives a fee of $500 for each board or
committee meeting attended. In addition, during 1999, each non-employee director
was granted an option under LaserSight's Non-Employee Directors Stock Option
Plan to purchase 15,000 shares of common stock and each committee chairman and
the Chairman of Board was granted an additional option to purchase 5,000 shares.
The exercise price of each such option on June 18, 1999, was $13.50 per share
(100% of the market price of common stock on the date of grant). Directors who
are also full-time employees of LaserSight received no additional cash
compensation for services as directors.
SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding ownership
of LaserSight common stock, as of March 31, 2000, by:
o each person known to LaserSight to own beneficially more than 5% of
LaserSight outstanding common stock;
o each of LaserSight's directors;
o each of LaserSight's executive officers named in the summary
compensation table; and
o all of LaserSight's directors and executive officers as a group.
The beneficial ownership of LaserSight's common stock set forth in this
table is determined in accordance with the rules of the Securities and Exchange
Commission. Unless otherwise indicated in the footnotes below, the persons and
entities named in the table have sole voting and investment power as to all
shares beneficially owned, subject to community property laws where applicable.
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<PAGE>
<TABLE>
<CAPTION>
Class of Voting Securities
Common Stock Voting Authority
Name and Address of Beneficial Owner Ownership (1) Series C Preferred Series D Preferred Ownership (7)
- ------------------------------------ ------------- ------------------ ------------------ -------------
Directors, Nominees and Executive Officers:
<S> <C> <C> <C> <C>
Francis E. O'Donnell, Jr., M.D 177,945 (2)(3) 0 0 177,945
* *
Michael R. Farris 667,250(3) 0 0 667,250
3.3% 2.8%
J. Richard Crowley 103,836(3) 0 0 103,836
* *
Terry A. Fuller, Ph.D. 17,187(3) 0 0 17,187
* *
David T. Pieroni 132,500(3) 0 0 132,500
* *
D. Michael Litscher 0(3) 0 0 0
* *
Gary F. Jonas 100(3) 0 0 100
* *
Gregory L. Wilson 40,000(3) 0 0 40,000
* *
Michael P. Dayton 95,000(3) 0 0 95,000
* *
Jack T. Holladay, M.D. 52,000 0 0 52,000
* *
Guy W. Numann 22,500 0 0 22,500
* *
All directors, nominees and executive 1,308,318 0 0 1,308,318
officers as a group (11 persons) 6.4% 6.4%
Other 5% Stockholders:
James W. Vaughan (4) 1,019,425 0 0 1,019,425
2470 Schuetz Road 5.1% 4.3%
Maryland Heights, MO 63043
TLC Laser Eye Centers Inc. 1,830,673(5) 2,000,000(6) 0 3,830,673
5600 Explorer Drive, Suite 101 9.2% 100% 16.1%
Mississaugua, Ontario
Canada L4W 4Y2
Pequot Capital Management, Inc. 550,000(5) 0 2,000,000(6) 2,550,000
500 Nyala Farm Road 2.8% 100% 10.7%
Westport, CT 06880
</TABLE>
- --------------------------
* Less than 1%.
(1) Each number of shares of common stock shown as owned in this column
assumes the exercise of all currently-exercisable options and warrants
held by the applicable person or group. Each percentage shown in this
column assumes the exercise of all such options and warrants by the
applicable person or group, but assumes that no options, warrants held
by any other persons are exercised or converted.
(2) Includes 79,445 shares held by the Irrevocable Trust No. 7 for the
benefit of the Francis E. O'Donnell, Jr., M.D. Trust or 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.
7
<PAGE>
(3) Includes options (warrants in the case of Mr. Numann) to acquire shares
of common stock which are now exercisable or will first become
exercisable on or before May 30, 2000, as follows: Dr. O'Donnell
(50,000); Mr. Farris (251,250); Mr. Crowley (90,000); Mr. Pieroni
(130,000); Mr. Wilson (25,000); Mr. Fuller (17,187); Mr. Dayton
(75,000); Dr. Holladay (50,000); Mr. Numann (22,500); and all directors
and executive officers as a group (710,937).
(4) Information derived from a beneficial owners report as of March 10,
2000.
(5) Represents (a) the number of actual shares of common stock presently
owned by such persons (based on written information supplied to
LaserSight as of February 29, 2000 and (b) such additional shares of
common stock that would have been issuable if the indicated person had
exercised all of its warrants at a price of $5.125 (50,000 each by TLC
and Pequot).
(6) Each share of Series C Preferred Stock and Series D Preferred Stock is
convertible into one share of common stock.
(7) On the basis of voting authority, as of March 31, 2000, a total of
23,803,663 shares of common stock would be outstanding. This amount is
composed of (a) 19,803,663 shares of common stock outstanding as of
March 31, 2000, (b) 2,000,000 shares of common stock issuable upon the
exercise of the Series C Preferred Stock, and (c) 2,000,000 shares of
common stock issuable upon the exercise of the Series D Preferred
Stock. Added to this total are the exercisable options and warrants
held by the applicable person or group.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires
LaserSight'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 LaserSight with copies of all Section 16(a) forms
they file. Based solely upon a review of the copies of the forms furnished to
LaserSight, and/or written representations from certain reporting persons that
no other reports were required, LaserSight 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, 1999
were met.
EXECUTIVE COMPENSATION
The following table sets forth summary information concerning the
compensation paid or earned for services rendered to LaserSight in all
capacities during 1997, 1998 and 1999 for LaserSight's Chief Executive Officer
and each of LaserSight's other executive officers serving at December 31, 1999
whose total annual salary and bonus for 1999 exceeded $100,000. No restricted
stock or stock appreciation rights were granted and no payouts under any
long-term incentive plan were made to any of the named executive officers in
1997, 1998 or 1999. We use the term "named executive officers" to refer
collectively to these individuals later in this Proxy.
8
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term
Compensation
Awards
Annual Compensation
Other
Annual Securities
Compen- Underlying All Other
Name and Principal Position Year Salary ($) Bonus ($) Sation Options/SARs (#) Compensation
- --------------------------- ---- ---------- --------- ------ ---------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Michael R. Farris 1999 $262,601 $100,406 -- 190,000 --
President and CEO 1998 250,000 50,000 -- 250,000 --
1997 250,000 -- -- -- --
J. Richard Crowley (1) 1999 162,401 -- -- 50,000 --
Chief Operating Officer 1998 154,800 -- -- -- --
1997 80,221 -- -- 80,000 --
Michael P. Dayton (2) 1999 157,901 -- -- 5,000 --
Senior Vice President and 1998 22,358 20,000 -- 75,000 --
Chief Technical Officer
Gregory L. Wilson 1999 164,808 -- -- 100,000 --
Chief Financial Officer 1998 155,400 -- -- 25,000 $13,192 (3)
1997 150,000 -- -- -- --
</TABLE>
(1) Mr. Crowley joined LaserSight in June 1997 and has been President and
Chief Operating Officer of LaserSight Technologies since that time and
Chief Operating Officer of LaserSight since October 1998.
(2) Mr. Dayton joined LaserSight in November 1998 and was named as an
executive officer in October 1999 and he served as LaserSight's Senior
Vice President and Chief Technical Officer until April 15, 2000, the
date his employment with LaserSight terminated.
(3) Consists of relocation allowance paid.
The following table sets forth certain information concerning stock
options granted to the named executive officers during 1999. No SARs were
granted during 1999.
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Individual Grants
-----------------
Number of % of Total
Securities Options/ Potential Realizable
Underlying SARs Value at Assumed
Options/ Granted to Exercise or Annual Rates of Stock
SARs Employees in Base Price Expiration Price Appreciation for
Name Granted (#) Fiscal Year ($/Sh) Date Option Term
- ---- ----------- ----------- ------ ---- -----------
5% ($) 10% ($)
------ -------
<S> <C> <C> <C> <C> <C> <C>
Michael R. Farris 131,250 12.0% $ 7.69 12/31/2006 $457,639 $1,091,015
58,750 5.4% 13.50 12/31/2006 350,782 1,619,706
J. Richard Crowley 50,000 4.6% 13.75 7/23/2004 189,944 419,726
Michael P. Dayton 5,000 0.5% 13.75 7/23/2004 18,994 41,973
Gregory L. Wilson 100,000 9.1% 13.75 7/23/2004 379,887 839,451
</TABLE>
9
<PAGE>
The following table sets forth certain information relating to options
held by the named executive officers at December 31, 1999:
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options/SARs at In-the-Money Options/
Year-End (#)(1) SARs at Year-End ($)(1)(2)
Shares --------------- --------------------------
Acquired on Value Exercisable/ Exercisable/
Name Exercise (#) Realized ($)(1) Unexercisable Unexercisable
- ------------------ ------------ --------------- ------------- -------------
<S> <C> <C> <C> <C>
Michael R. Farris -- -- 251,250/188,750 $1,392,888/300,560
J. Richard Crowley 4,000 $48,270 90,000/70,000 262,500/67,500
Michael P. Dayton -- -- 75,000/5,000 447,653/0
Gregory L. Wilson -- -- 25,000/100,000 189,850/0
</TABLE>
(1) No SARs have been issued by LaserSight.
(2) Based on the $10.00 closing price of the common stock on The Nasdaq
Stock Market on December 31, 1999 when such price exceeds the exercise
price for an option.
EMPLOYMENT AGREEMENTS
In October 1998, LaserSight entered into a revised employment agreement
with Mr. Farris, which LaserSight and Mr. Farris further amended in April 1999
(as amended, the "Farris Employment Agreement"). The Farris Employment Agreement
provides for a three-year term, an annual base salary of $250,000, a total of
210,000 stock options granted in 1998 and 190,000 stock options granted in 1999.
The Farris Employment Agreement also provides an opportunity for an annual cash
performance bonus of up to 25% of base salary based upon specific objectives
established by the Executive Compensation and Stock Option Committee, and an
opportunity for an additional annual cash bonus in an aggregate amount of 20% of
base salary if all or a portion of certain events or goals identified from time
to time by the Executive Compensation and Stock Option Committee occur or are
achieved. If the employment of Mr. Farris is terminated by LaserSight without
"cause" or by him with "good reason" (as such terms are defined in the Farris
Employment Agreement), Mr. Farris would be entitled to all salary and other
benefits under the Farris Employment Agreement through the later of (1) the
remaining term of the Agreement or (2) one year after the date of his
termination. The Farris Employment Agreement includes non-compete and
confidentiality covenants. The Compensation Committee reviews Mr. Farris'
employment arrangements from time to time and may grant Mr. Farris additional
stock options or otherwise modify his employment arrangements in the future
based on those reviews.
10
<PAGE>
In November 1998, LaserSight entered into an employment agreement with
Mr. Dayton (the "Dayton Employment Agreement"). The Dayton Employment Agreement
provided for a two-year term with automatic renewals of one-year each unless
either party provides the other with at least 60 days notice prior to the end of
the then current term that such party intends not to renew the agreement, an
annual base salary of $150,000, a signing bonus of $20,000 and a grant of 75,000
stock options. In April 2000, Mr. Dayton and LaserSight agreed to terminate this
agreement effective April 15, 2000. Mr. Dayton will continue to provide services
to LaserSight under a consulting agreement effective on that date. The Dayton
Employment Agreement included non-compete and confidentiality covenants.
In October 1999, LaserSight entered into an employment agreement with
Dr. Holladay (the "Holladay Employment Agreement"). The Holladay Employment
Agreement provides for a three-year term with automatic renewals of one-year
each unless either party provides the other with at least 60 days notice prior
to the end of the then current term that such party intends not to renew the
agreement, an annual base salary of $200,000 and a grant of 200,000 stock
options. The Holladay Employment Agreement includes non-compete and
confidentiality covenants.
RELOCATION AGREEMENT
In October 1999, LaserSight entered into a relocation agreement with
Mr. Wilson (the "Wilson Relocation Agreement"). The Wilson Relocation Agreement
provides for a severance payment of one year's compensation if his employment is
terminated without cause, as defined in the Wilson Relocation Agreement,
subsequent to his relocation to Orlando, Florida.
SEVERANCE ARRANGEMENT
In connection with the resignation of Mr. Pieroni as President of TFG
and Chief Development Officer of LaserSight in September 1996, LaserSight
agreed, in lieu of the provisions under his employment agreement, to the
following: (1) the payment of six months salary ($75,000) in monthly
installments, (2) the amendment of Mr. Pieroni's option to purchase 200,000
shares of common stock at an exercise price of $11.25 per share to provide that
as to 100,000 shares, such options become fully exercisable, and as to the
remaining 100,000 shares, the options will be canceled, and (3) the continuation
of a car allowance, office space and clerical support for six months. These
options may be exercised until they expire on March 15, 2001.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1999, the Compensation Committee consisted of Mr. Jonas and Ms.
Bakker. None of the members of this committee were employees of LaserSight
while serving on this committee; however, Mr. Jonas and Ms. Bakker have certain
relationships and related transactions which require disclosure in this Proxy
Statement under applicable federal securities laws. See "Certain Relationships
and Related Transactions --TLC Laser Sales," "--TLC License Agreement," "--1999
Private Placement.", "--TLC Private Placement."
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 LaserSight's compensation programs, administering LaserSight's equity
compensation plans, and establishing the cash compensation of executive
officers. The Compensation Committee's objectives are to establish compensation
programs designed to attract, motivate, retain, and reward executives who can
lead LaserSight in achieving its long-term business goals in a highly
competitive and rapidly changing industry, whose services LaserSight needs to
11
<PAGE>
maximize its return to stockholders, and to ensure that management compensation
is reasonable in light of LaserSight'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 LaserSight.
The Compensation 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.
Mr. Farris' employment agreement was revised in October 1998 after
several months of discussion and planning. At that time, the Compensation
Committee consisted of Messrs. Quinn, Lutzy and Fuller. See "Employment
Agreements" above. The Compensation Committee provides for an annual 5% increase
in the base salary of Mr. Farris beginning in 1999 and provided for bonus
opportunities to be based on specific goals to be defined, including budgeted
operations, starting in 1999. The Compensation Committee recommended and the
board concurred that Mr. Farris be awarded a $100,406 cash bonus for 1999
resulting from goals achieved during 1999. The Compensation Committee provided
written feedback to Mr. Farris on his performance based on agreed upon goals and
a comprehensive rating system for performance. The stock options granted to Mr.
Farris during 1998 and 1999 were the first option grants provided to Mr. Farris
since 1995, and were part of a comprehensive, multi-year employment agreement
intended to provide Mr. Farris with incentives to lead LaserSight to improved
performance.
The Compensation Committee and the Board of Directors believe that
management's ownership of a significant equity interest in LaserSight is a major
incentive in building stockholder wealth and aligning the long-term interests of
management and stockholders. Stock options, therefore, are granted by the
Compensation 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 in excess of $1
million paid to a 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 LaserSight of Section
162(m), and it does not believe that such section will be applicable to
LaserSight in the foreseeable future, but will review compensation practices as
circumstances warrant. In that connection, the Equity Incentive Plan made it
possible for LaserSight to satisfy the conditions for an exemption from Section
162(m)'s deduction limit. However, other characteristics of a grant affect
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
Gary F. Jonas
Juliet Tammenoms Bakker
12
<PAGE>
Performance Information
The following graph compares the performance of LaserSight's cumulative
stockholder return at December 31 of each year between 1994 and 1999 with
stockholder returns on (1) the Nasdaq Non-Financial Composite Index, (2) the
Nasdaq National Market Composite Index and (3) the Nasdaq Medical Devices,
Instruments and Supplies, Manufacturers and Distributors Index. Calculations for
the latter index began in December 1998, and we anticipate this index will
replace the Nasdaq Non-Financial Index in future proxy statements. The graph
assumes that the value of the investment in the common stock and each index was
$100 at December 31, 1994 and that all dividends, if any, were reinvested.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC.
<TABLE>
<CAPTION>
Base Point Return Return Return Return Return
Company/Index Name 1994 1995 1996 1997 1998 1999
- ------------------ ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
LaserSight Incorporated 100 106 53 22 39 81
Nasdaq Medical Devices,
Instruments and Supplies,
Manufacturers and Distributors 100 152 142 163 182 222
Nasdaq Non-Financial 100 139 169 198 290 559
Nasdaq National Market 100 141 174 213 300 542
</TABLE>
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"), LaserSight issued 625,000 unregistered shares of common
stock to a group of former stockholders and former optionholders (the "Former
Centers Holders") of LaserSight Centers Incorporated ("LaserSight Centers"), a
developmental stage company that LaserSight acquired in April 1993 and through
which LaserSight 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
(the "Earnout Shares") 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 LaserSight, or
his descendants (collectively, the "O'Donnell Trusts") received 226,644
(approximately 36%) of the 625,000 shares issued and would be entitled to
receive the same percentage of any additional shares issued.
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 LaserSight through March 31, 2002. No Earnout Shares have become
issuable as of the date of this Proxy Statement. For this purpose, the following
items are considered revenue: (1) per procedure revenues received by LaserSight
in connection with the utilization of a fixed or mobile excimer laser owned or
operated by LaserSight to perform photorefractive keratectomy, or PRK, and treat
myopia, astigmatism and hyperopia; (2) certain revenues received by LaserSight
from managed care companies or employers for arranging the delivery of PRK, and
(3) any royalties received by LaserSight on account of patents assigned to
LaserSight Centers. The Amended Centers Agreement excludes the following from
the computation of PRK Earnings: (1) revenues derived from the manufacture and
servicing of excimer lasers, (2) fees from patents not assigned to LaserSight
Centers, (3) managed care fees for non-PRK services, and (4) revenues from
non-excimer procedures. Management of LaserSight believes that these exclusions
will benefit LaserSight by eliminating uncertainty as to how the LaserSight
Centers earnout is to be computed. In addition, LaserSight 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
13
<PAGE>
refractive procedures. However, it may be in the interest of Dr. O'Donnell for
LaserSight to pursue business strategies that maximize the issuance of Earnout
Shares.
In March 1997, LaserSight 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 LaserSight from $86 to $43, and delays 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. LaserSight's obligations under the
Amended Royalty Agreement are perpetual. LaserSight understands that one of the
O'Donnell Trusts is a partner of Laser Partners with a 36% partnership interest.
The Amended Royalty Agreement provides that LaserSight is not required
to pay a royalty in connection with any of the following: (1) procedures which
do not involve both an excimer laser and PRK, (2) laser procedures performed by
a third party in connection with any license granted by LaserSight, and (3)
laser procedures performed pursuant to a contract with a managed care company or
an employer, pursuant to which LaserSight 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 LaserSight
believes that these exclusions reduce the scope of LaserSight's obligation to
make royalty payments. It may be in the interest of Dr. O'Donnell for LaserSight
to pursue business strategies that maximize such royalty payments.
The Board of Directors has discretion to discontinue, sell or transfer
at any time LaserSight's business related to arranging for the performance of
PRK.
CONSULTING ARRANGEMENT. In May 1997, LaserSight's LaserSight
Technologies subsidiary entered into an agreement, effective as of January 1,
1997, with Dr. Byron A. Santos, an ophthalmologist employed by the O'Donnell Eye
Institute, a corporation of which Dr. O'Donnell, the Chairman of the Board of
LaserSight, is the Medical Director and owner. The amount that became payable to
Dr. Santos under this agreement during 1999 was $96,000. Under the agreement,
Dr. Santos is required to be available to provide a minimum of 40 hours of
services each month. Such services have related to the development of the
LaserScan 2000 excimer laser system, the development of clinical protocols, and
training and other consulting services. The agreement provides for a term ending
December 31, 2002, subject to LaserSight Technologies' right to terminate the
agreement in the event that Dr. Santos fails to perform in accordance with the
terms of the agreement.
NUMANN CONSULTING AGREEMENT. In February 1999, in connection with a
consulting services agreement that LaserSight entered into with Guy W. Numann, a
nominee for election to the Board of Directors, LaserSight issued Mr. Numann
warrants to purchase a total of 67,500 shares of common stock at a price of
$5.00 per share. One-third of the warrants will vest on each annual anniversary
of the grant until all the warrants are vested. To the extent vested, the
warrants are exercisable at any time prior to February 22, 2004.
TLC LICENSE AGREEMENT. In October 1998, LaserSight entered into an
agreement with a subsidiary of TLC that grants LaserSight an exclusive license
under U.S. Patent No. 5,630,810 relating to a treatment method for preventing
formation of central islands during laser surgery. Central islands are a problem
generally associated with laser refractive surgery performed with broad beam
laser systems used to ablate corneal tissue. LaserSight has agreed during the
term of the patent license agreement to pay TLC 20% of the aggregate net
royalties it receives in the future from licensing of the TLC patent and certain
other patents owned by LaserSight.
TLC LASER SYSTEM SALES. During 1999 and 1998, LaserSight sold nine and
three laser systems, respectively, for $2,700,000 and $900,000, respectively, to
TLC. In addition, $306,000 of keratome related products were sold to TLC during
1999. LaserSight has received full payment for the products sold.
14
<PAGE>
1999 PRIVATE PLACEMENT. In connection with LaserSight's March 1999
private placement transaction, TLC and Pequot Capital Management, Inc. each
purchased 500,000 shares of common stock and received warrants to purchase
50,000 shares of common stock with an exercise price of $5.125 per share. Juliet
Tammenoms Bakker, Vice President of Pequot Capital Management, Inc. was a member
of LaserSight's Board of Directors until March 2000 and Gary F. Jonas, Executive
Vice President, Strategic Growth of TLC, is a member of LaserSight's Board of
Directors.
TLC PRIVATE PLACEMENT. In connection with a private placement
transaction, which was completed on January 31, 2000, TLC purchased 1,015,873
shares of common stock for an aggregate purchase price of $10,000,000. Gary F.
Jonas, Executive Vice President, Strategic Growth of TLC, is a member of
LaserSight's Board of Directors.
PROPOSAL NO. 2:
AMENDMENT TO EQUITY INCENTIVE PLAN
The Equity Incentive Plan was approved by LaserSight's stockholders in
June 1996, amended in June 1998 and amended in June 1999. The Board of Directors
has unanimously approved an amendment and restatement of the Equity Incentive
Plan (as so amended and restated, the "Amended and Restated Equity Incentive
Plan"), subject to the approval of LaserSight's stockholders. The only change
reflected in the Amended and Restated Equity Incentive Plan is an increase in
the aggregate number of shares of common stock available for delivery under the
Amended and Restated Equity Incentive Plan from 2,250,000 to 3,750,000. As of
March 31, 2000, only 4,000 shares remained available for future grants and
awards under the Equity Incentive Plan. The number of options granted under the
Equity Incentive Plan during 1998 and 1999 was 528,750 and 996,000,
respectively, and 286,000 options have been granted under the Equity Incentive
Plan this year through March 31, 2000. During 1999 and during 2000 to date, no
shares were granted to outside consultants who were eligible to receive shares
under the Equity Incentive Plan. As of March 31, 2000, the aggregate number of
outstanding options and shares granted under the Equity Incentive Plan was
1,991,778 and the aggregate market value of the underlying shares of common
stock was $13,071,043 (based on a closing price of $6.5625 as of such date).
If the Amended and Restated Equity Incentive Plan is not approved by
LaserSight's stockholders, awards will be limited to those available in
accordance with the terms of the current Equity Incentive Plan.
The summary of the Amended and Restated Equity Incentive 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 LaserSight's
secretary.
Purpose of Plan. The Amended and Restated Equity Incentive Plan is
intended to allow employees and consultants to acquire or increase equity
ownership in LaserSight, thereby strengthening their commitment to the success
of LaserSight and stimulating their efforts on behalf of LaserSight, and to
assist LaserSight in attracting new employees and consultants and retaining
existing employees and consultants.
Types of Awards. Under the Amended and Restated Equity Incentive Plan,
the Compensation Committee would be authorized to grant nonqualified stock
options, incentive stock options, stock appreciation rights, limited stock
appreciation rights, or LSARs, shares of restricted common stock, or "restricted
shares", performance shares, and shares of common stock awarded as a bonus (all
of the foregoing collectively, "Awards").
15
<PAGE>
Eligibility. All employees (including officers) and consultants of
LaserSight are eligible to receive Awards. The Amended and Restated Equity
Incentive Plan provides that no employee may receive Awards covering an
aggregate of more than 750,000 shares of common stock during any year. The
Compensation Committee is authorized, subject to certain limits specified in the
Amended and Restated Equity Incentive Plan, to determine to whom and on what
terms and conditions Awards shall be made.
Number of Shares Issuable. The Amended and Restated Equity Incentive
Plan would provide for the issuance of up to 3,750,000 shares of common stock,
as compared to the current limit of 2,250,000 shares, subject to anti-dilution
adjustments.
Stock Options. Options must be granted at an exercise price of no less
than 100% of the fair market value of a share of common stock on the date of
grant. Unless otherwise specified by the Compensation Committee, options will
become exercisable in four annual installments of 25% beginning on the first
anniversary of the grant date. The option exercise price may be paid by any one
or more of the following methods: (1) cash or, if approved in advance by the
Compensation Committee, (2) a "cashless" exercise pursuant to a sale through a
broker of a portion of the shares covered by the option. Options may be granted
as either (1) nonstatutory options upon exercise of which grantees would
recognize ordinary taxable income, and LaserSight would be entitled to a
compensation expense deduction or (2) as incentive stock options (ISOs) which,
subject to certain conditions, would not result in the recognition of taxable
income by the grantee upon exercise, nor a compensation deduction to LaserSight
until the shares are disposed of by the grantee.
SARs. An award of a stock appreciation right entitles the grantee to
receive a payment equal to the appreciation in value of the common stock over
the strike price. The strike price will equal either (i) at least 100% of the
fair market value of the common stock on the grant date of the SAR, or (ii) if
the SAR is linked to an option, the exercise price of such option. The amount of
appreciation will be payable in cash or common stock.
Restricted Shares. Restricted shares will be forfeited if the
conditions set by the Compensation Committee have not been satisfied or waived.
The Compensation Committee will determine whether or not a grantee shall be
required to pay for such restricted shares and, if so, what the price shall be.
Performance Shares. To the extent that the performance goals specified
by the Compensation Committee, such as stock price, market share, sales,
earnings per share, and return on equity, in a grant of performance shares have
been achieved, then a benefit shall be paid after the end of the
performance-measuring period specified by the Compensation Committee. The amount
of the benefit is based upon the percentage attainment of the performance goals
multiplied by the value of a share of common stock at the end of the performance
period. No benefit will be payable if the minimum performance goals have not
been met.
LSARs. LSARs may in the discretion of the Compensation Committee be
granted with any option or stock appreciation right, either in connection with
the original grant or at any later date.
16
<PAGE>
Termination of Employment. Unless otherwise approved by the
Compensation Committee, if a grantee's employment is terminated for cause, all
unexercised options (and any associated LSARs) and SARs will immediately
terminate and unvested restricted shares and performance shares will be
forfeited. In the event of death or permanent disability, any restricted shares
will be vested, any unexercised options (and any associated LSARs) or SARs,
whether or not previously exercisable, may be exercised by a beneficiary for six
months after the date of death or disability, and any unexercised performance
shares may be exercised for one year thereafter, provided that if a
performance-measuring period has not ended, the benefit will be pro-rated. If a
grantee terminates for any other reason, restricted shares will be forfeited,
any unexercised option (and any associated LSARs) or SARs may be exercised for
30 days following the date of termination, and any unexercised performance
shares may be exercised only as determined by the Compensation Committee.
Other. Options and SARs will have a maximum term of 10 years. In the
event of a "Change in Control" of LaserSight, restricted shares will become
nonforfeitable, all other Awards will become exercisable. The Amended and
Restated Equity Incentive Plan may be amended by the Board without stockholder
approval unless stockholder approval is required by federal securities law or
the listing requirements of a securities exchange on which any of LaserSight's
equity securities are listed. The Amended and Restated Equity Incentive Plan
will terminate on January 19, 2006. For purposes of this paragraph "Change of
Control" means, generally (1) certain acquisitions of the beneficial ownership
of 25% or more of the then-outstanding common stock, (2) certain changes in the
composition of the Board, and (3) certain transactions whereby stockholders who
immediately before such transaction do not, immediately, thereafter,
beneficially own, directly or indirectly, more than 60% of the then-outstanding
common stock, and the sale or other disposition of all or substantially all of
the assets of LaserSight or the dissolution or liquidation of LaserSight.
Tax Implications. Under present law, the following are the federal tax
consequences generally arising with respect to awards granted under the Amended
and Restated Equity Incentive Plan. The grant of an option or an SAR will create
no tax consequences for the grantee or LaserSight. The grantee will have no
taxable income upon exercising an ISO (except that the alternative minimum tax
may apply) and LaserSight will recognize no deduction when the ISO is exercised.
Upon exercising a non-qualified option or SAR, the grantee must recognize
ordinary income equal to the difference between (1) the exercise price of the
option or the strike price for an SAR, as applicable, and (2) and the fair
market value of the common stock on the date of exercise; LaserSight will be
entitled to a deduction for the same amount. With respect to other Awards under
the Amended and Restated Equity Incentive Plan that are either transferable or
not subject to a substantial risk of forfeiture, the grantee must recognize
ordinary income equal to the fair market value of the shares or other property
received. With respect to awards that are settled in stock or other property
that is restricted as to transferability and subject to a substantial risk of
forfeiture, the grantee recognizes ordinary income when the shares or other
property become transferable or not subject to a substantial risk of forfeiture,
whichever occurs first.
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PLAN BENEFITS
Except as described below, LaserSight has not yet determined which
persons will receive any of the awards which will be based on the additional
1,500,000 shares proposed to be made available under the Amended and Restated
Equity Incentive Plan. As of March 31, 2000, the only awards that have been made
under the Equity Incentive Plan are stock options except for stock grants made
to outside consultants in the aggregate amount of 40,000 shares. The table below
sets forth the number of stock options outstanding as of March 31, 2000, that
have been granted under the Equity Incentive Plan to the persons and groups
listed in the table. As of March 31, 2000, 257,690 options have been exercised.
Name and Position No. of Options
- ----------------- --------------
Michael R. Farris (President and CEO) 440,000
J. Richard Crowley (Chief Operating Officer of
LaserSight; President of LaserSight Technologies) 130,000
Gregory L. Wilson (Chief Financial Officer) 125,000
D. Michael Litscher (Chief Operating Officer of
LaserSight Technologies) 100,000
Michael Dayton (Chief Technical Officer) 80,000
Jack T. Holladay, M.D. (Medical Director of
LaserSight Technologies) 235,000
L. Stephen Dalton (Chief Scientific Officer) 100,000
All current executive officers as a group 1,210,000
All directors as a group (in consulting capacity) 8,750
All employees (excluding executive officers) as a group 1,048,250
No associate (as defined in the SEC's rules) of any of the persons
named or described in the table above has received any stock options under the
Equity Incentive Plan. The persons who have received 5% or more of the 2,250,000
options currently available for awards under the Equity Incentive Plan and the
number of options received by them are as follows: Michael Farris (440,000);
Jack T. Holladay (235,000); Charles Stewart (130,000); Richard Crowley
(130,000); and Gregory L. Wilson (125,000).
The Board of Directors recommends that stockholders vote "FOR"
the Equity Incentive Plan Proposal.
PROPOSAL NO. 3:
CHARTER AMENDMENT PROPOSAL
General
The Board of Directors has unanimously adopted a resolution to submit
to stockholders a proposal to amend the first paragraph of Article IV of
LaserSight's Certificate of Incorporation to increase the number of shares of
common stock which LaserSight is authorized to issue from 40,000,000 to
100,000,000. The Board determined that such an amendment is necessary.
The full text of Section 1(a) of Article IV of LaserSight'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
100,000,000, each with a par value of $.001 per share.
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The terms of the additional shares of common stock will be identical to
those of the currently outstanding common stock. However, because stockholders
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 stockholders in the total outstanding shares. The
Charter Amendment Proposal 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 Proposal.
PURPOSES AND EFFECTS OF INCREASING THE NUMBER OF AUTHORIZED SHARES OF COMMON
STOCK
If approved by LaserSight's stockholders, the Charter Amendment
Proposal would increase the number of shares of common stock which LaserSight is
authorized to issue from 40,000,000 to 100,000,000. The additional 60,000,000
shares, if and when issued, would have the same rights and privileges as the
outstanding shares of common stock.
The Board of Directors recommends the proposed increase in the
authorized number of shares of common stock to ensure an adequate supply of
authorized and unissued shares for (i) additional issuances under LaserSight's
employee benefit plans, (ii) the raising of additional capital for the
operations of LaserSight, (iii) the financing of the acquisition of other
businesses, and (iv) the satisfaction of LaserSight's contingent obligations to
issue common stock. 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 LaserSight'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 LaserSight have no knowledge of any current effort to
obtain control of LaserSight 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 LaserSight 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 LaserSight, 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 that support the Board in opposing a takeover attempt that
the Board considers not to be in the best interests of LaserSight and its
stockholders.
In evaluating the Charter Amendment Proposal, stockholders should
consider the effect of certain other provisions of LaserSight'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 LaserSight'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 LaserSight'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 Charter Amendment Proposal is approved by the holders of a
majority of the outstanding shares of common stock, it will become effective
upon the filing by LaserSight of a Certificate of Amendment to LaserSight'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 has unanimously recommended that stockholders
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vote FOR the Charter Amendment Proposal. The directors and executive officers of
LaserSight intend to vote their shares in favor of this Proposal.
The Board of Directors recommends that
stockholders vote "FOR" the Charter Amendment Proposal.
PROPOSAL NO. 4:
INDEPENDENT AUDITORS
The Board of Directors recommends that stockholders ratify the
appointment of KPMG LLP by voting "FOR" ratification of KPMG LLP as LaserSight's
auditors for the 2000 fiscal year. In the event such selection is not ratified,
the Board of Directors will reconsider its selection.
KPMG LLP has audited LaserSight's financial statements for fiscal years
1995 through 1999. Representatives of KPMG LLP are expected to be present at the
meeting, will have the opportunity to make a statement if they desire to do so,
and will be available to respond to appropriate questions.
The Board of Directors recommends that
stockholders vote "FOR" the Auditor Ratification Proposal.
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STOCKHOLDER PROPOSALS
STOCKHOLDER PROPOSALS, IN GENERAL
LaserSight's bylaws provide that stockholder nominations for persons
for election to LaserSight's board of directors and proposals for business to be
considered at an annual stockholders meeting must satisfy certain conditions
including submitting notice to LaserSight not more than 120 days or less than 90
days prior to the anniversary of the preceding year's annual meeting of
stockholders. If a stockholder intends to present such a proposal at the 2001
Annual Meeting of Stockholders but does not seek inclusion of that proposal in
LaserSight's proxy statement for that meeting, the proxy holders for that
meeting will be entitled to exercise discretionary authority on that proposal if
LaserSight has not received notice of the proposal by March 12, 2001; provided,
however, that if the date of the 2001 Annual Meeting of Stockholders is changed
by more than 30 calendar days from the date of the 2000 Annual Meeting of
Stockholders, notice of any such stockholder proposals must be received by
LaserSight a reasonable time before LaserSight solicits proxies for the 2001
Annual Meeting of Stockholders. If notice of any such proposal is timely
received, the proxy holders may exercise discretionary authority with respect to
such proposal only to the extent permitted by the regulations of the Securities
and Exchange Commission.
All stockholder proposals must contain all of the information required
under LaserSight's Bylaws, a copy of which is available, at no charge, from the
Secretary, and should be sent to LaserSight Incorporated, 3300 University
Boulevard, Suite 140, Winter Park, Florida 32792, addressed to the attention of
Gregory L. Wilson, Secretary.
STOCKHOLDER PROPOSALS FOR INCLUSION IN THE PROXY STATEMENT FOR THE 2001 ANNUAL
MEETING
In order to be considered for inclusion in LaserSight's proxy materials
for the 2001 Annual Meeting of Stockholders, any stockholder proposals must be
received by LaserSight no later than January 10, 2001. Proposals should be
sent to LaserSight Incorporated 3300 University Boulevard, Suite 140, Winter
Park, Florida 32792, addressed to the attention of Gregory L. Wilson, Secretary.
OTHER MATTERS
The Board of Directors of LaserSight 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.
By Order of the Board of Directors,
Gregory L. Wilson
Secretary
Winter Park, Florida
May 10, 2000
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LASERSIGHT INCORPORATED
PROXY
ANNUAL MEETING OF STOCKHOLDERS, JUNE 9, 2000
This Proxy is solicited on behalf of the Board of Directors
The undersigned hereby (i) appoints Michael R. Farris 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 LaserSight, to be held on Friday, June 9, 2000 at
10:00 a.m. EDT, and at any adjournments thereof, hereby revoking any and all
proxies previously given and (ii) authorizes and directs said Proxy holders to
vote all of the shares of common stock of LaserSight represented by this Proxy
as follows. If no directions are given below, said shares will be voted "FOR"
Items 1, 2, 3 and 4.
(1) ELECTION OF DIRECTORS. Michael R. Farris; Terry A. Fuller, Ph.D.; Gary
F. Jonas; D. Michael Litscher; Guy W. Numann; Francis E. O'Donnell,
Jr., M.D.; and David T. Pieroni.
[ ] FOR all nominees listed [ ] WITHHOLD AUTHORITY
(except as marked to the to vote for the
contrary below) nominees listed
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name on the following line.)
- --------------------------------------------------------------------------------
(2) Approve Amendment to Equity
Incentive Plan [ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) Approve Amendment to
Corporate Charter [ ] FOR [ ] AGAINST [ ] ABSTAIN
(4) Ratify appointment of
independent auditors [ ] FOR [ ] AGAINST [ ] ABSTAIN
(5) 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.
Dated: ________________________, 2000
-------------------------------------
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(If held jointly)
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.
The Board of Directors Recommends You Vote FOR the Above Proposals.
