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 the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the
[X] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
LIGHTPATH TECHNOLOGIES, INC.
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(Name of Registrant as Specified In Its Charter)
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(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:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
1) Amount previously paid:
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2) Form, Schedule or Registration Statement No.:
--------------------
3) Filing Party:
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4) Date Filed:
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<PAGE>
LIGHTPATH TECHNOLOGIES, INC.
6820 Academy Parkway East N.E.
Albuquerque, NM 87109
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 21, 1999
To the Shareholders of LightPath Technologies, Inc.:
The annual meeting of the shareholders of LightPath Technologies, Inc., (the
"Company") will be held at the Courtyard by Marriott, 5151 Journal Center Blvd.,
N.E., Albuquerque, New Mexico, 87109 on Monday, October 21, 1999 at 12:00 noon
M.S.T. for the following purposes:
To be voted on by the holders of Class A and Class E Common Shares voting
together:
1) To elect Directors to Class III of the Board of Directors to serve for
a three year term in accordance with the Certificate of Incorporation;
2) To consider and act upon a proposal to ratify the selection of KPMG
LLP as the Company's independent public accountants for the fiscal
year ending June 30, 2000; and
3) To transact such other business as may properly come before the
meeting.
Shareholders of record at the close of business on September 15, 1999, are
entitled to vote at the meeting and at any adjournment or postponement thereof.
Shares can be voted at the meeting only if the holder is present or represented
by proxy. A list of shareholders entitled to vote at the meeting will be
available for inspection at the Company's corporate headquarters for any purpose
germane to the meeting during ordinary business hours for ten (10) days prior to
the meeting.
A copy of the Company's 1999 Annual Report on Form 10-KSB, which includes
certified financial statements, is enclosed. Management and the Board of
Directors cordially invite you to attend the annual meeting.
By order of the Board of Directors,
Leslie A. Danziger
Chairwoman
Albuquerque, New Mexico
September 15, 1999
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IMPORTANT: IT IS IMPORTANT THAT YOUR SHAREHOLDINGS BE REPRESENTED AT THIS
MEETING. PLEASE COMPLETE, DATE, SIGN AND PROMPTLY MAIL THE ENCLOSED PROXY CARD
IN THE ACCOMPANYING ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED WITHIN THE
UNITED STATES.
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<PAGE>
PROXY STATEMENT FOR THE ANNUAL MEETING OF SHAREHOLDERS
LIGHTPATH TECHNOLOGIES, INC.
6820 Academy Parkway East N.E.
Albuquerque, NM 87109
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The accompanying proxy is solicited by the Board of Directors of LightPath
Technologies, Inc., a Delaware corporation ("Company"), for use at its annual
meeting of shareholders to be held on October 21, 1999, or any adjournments or
postponements thereof, for the purposes set forth in the accompanying Notice of
Annual Meeting of Shareholders. This Proxy Statement and the accompanying form
of proxy are first being mailed to shareholders on or about September 17, 1999.
SOLICITATION AND VOTING OF PROXIES
The cost of soliciting proxies, including the cost of preparing and mailing
the Notice and Proxy Statement, will be paid by the Company. Solicitation will
be primarily by mailing this Proxy Statement to all shareholders entitled to
vote at the meeting. Proxies may be solicited by officers and Directors of the
Company personally or by telephone or facsimile, but at no additional
compensation. The Company may reimburse brokers, bankers, and others holding
shares in their names for the benefit of others for the cost of forwarding proxy
material and obtaining proxies from their beneficial owners.
Only shareholders of record at the close of business on September 15, 1999
(the "Record Date"), may vote at the meeting or any adjournment or postponement
thereof. As of the Record Date, there were approximately 5,088,431 shares of
$.01 par value Class A Common Stock and 3,979,939 shares of $.01 par value Class
E Common Stock of the Company outstanding. Holders of Class E Common Stock vote
together as a single class with the Class A Common Stock, and each shareholder
of record is entitled to one vote for each share of Common Stock registered in
his, her or its name.
Should they wish to vote at the meeting by proxy, holders of Class A Common
Stock and Class E Common Stock should complete and return the enclosed proxy
card. The Company's Bylaws provide that a majority of all the outstanding shares
of stock entitled to vote, whether present in person or represented by proxy,
shall constitute a quorum for the transaction of business at the meeting. Votes
withheld from any proposal or director nominee are counted for purposes of
determining the presence of a quorum, but have no legal effect under Delaware
law. Abstentions and broker non-votes will also be included in the determination
of the number of shares represented for a quorum. For purposes of determining
whether the requisite amount of shares have been cast in favor of a proposal,
"Abstentions" will have the same effect as a vote against the proposal. However,
broker non-votes will not be counted for purposes of voting on proposals. The
Company shall in advance of the meeting, appoint one or more Inspectors of
Election to count all proxies, votes and ballots at the meeting and make a
written report thereof.
All valid proxies received before the meeting and not revoked will be
exercised. All shares represented by proxy will be voted, and where a
shareholder specifies by means of his or her proxy a choice with respect to any
matter to be acted upon, the shares will be voted in accordance with the
specifications so made. If no choice is indicated on the proxy, the shares will
be voted in accordance with the recommendations of the Board of Directors as to
such matters. Proxies may be revoked at any time prior to the time they are
voted by: (a) delivering to the Secretary of the Company a written instrument of
revocation bearing a date later than the date of the proxy; or (b) duly
executing and delivering to the Secretary a subsequent proxy relating to the
same shares; or (c) attending the meeting and voting in person (although
attendance at the meeting will not in and of itself constitute revocation of a
proxy).
<PAGE>
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table sets forth, as of August 20, 1999, the number and
percentage of outstanding shares of the Company's Class A and Class E Common
Stock, each as a separate class and taken together, owned by (i) each
stockholder known by the Company to own beneficially five percent or more of the
outstanding Class A and Class E Common Stock of the Company taken together, (ii)
each director, (iii) each of the Named Officers identified in the Summary
Compensation Table and (iv) all executive officers and Directors of the Company
as a group.
<TABLE>
<CAPTION>
Class A Common Stock Class E Common Stock
------------------------- ------------------------ % of Vote of all
Name and Address of Number of Percent Number of Percent Classes of
Beneficial Owner (1) Shares Owned Shares (2) Owned Common Stock
- -------------------- --------- ------- ---------- ------- ----------------
<S> <C> <C> <C> <C> <C>
Leslie A. Danziger 291,349 (3) 6% 751,756 (4) 19% 11.5%
Donald E. Lawson 247,200 (5) 5% 25,000 1% 3%
Mark Fitch 80,000 (6) 2% -- -- 1%
James Adler, Jr. 43,510 (7) 1% -- -- *
Katherine Dietze 30,510 (8) 1% -- -- *
Milton Klein 39,278 (9) 1% 119,786 (10) 3% 2%
Louis Leeburg 50,115 (11,16) 1% 29,088 (16) 1% 1%
Haydock H. Miller, Jr. 65,297 (12) 1% 73,819 (13) 2% 1%
James Wimbush 36,509 (14) 1% -- -- *
The John E. Fetzer
Institute, Inc. (15) 118,447 2% 473,789 12% 8%
All executive officers and
Directors as a group (9
persons) 883,768 17% 999,449 25% 21%
</TABLE>
- ----------
* Less than one percent.
1. Except as otherwise noted, each of the parties listed above has sole voting
and investment power over the securities listed. The address for all
Directors and Mr. Fitch is care of LightPath Technologies, Inc., 6820
Academy Parkway East N.E., Albuquerque, New Mexico, 87109.
2. Includes Classes E-1, E-2 and E-3 Common Stock.
3. Includes (i) options to purchase 200,399 Class A shares, all of which are
immediately exercisable by Ms. Danziger and (ii) options to purchase 37,591
Class A shares, all of which are immediately exercisable held by Joel
Goldblatt, Ms. Danziger's spouse. Excludes 152,592 shares of Class A common
stock subject to a voting trust, of which Ms. Danziger is voting trustee,
and held for the benefit of third parties. See "Voting Trust Agreement".
4. Includes options to purchase 101,466 Class E shares represented by
immediately exercisable options and 36,363 Class E shares represented by
immediately exercisable options held by Joel Goldblatt, Ms. Danziger's
spouse. Excludes 974,651 shares of Class E common stock subject to a voting
trust, of which Ms. Danziger is voting trustee, and held for the benefit of
third parties. See "Voting Trust Agreement".
5. Includes options to purchase 235,000 Class A shares, of which 160,000
shares are immediately exercisable and the balance which vest by June 2001.
6. Includes options to purchase 80,000 Class A shares, of which 12,500 shares
are immediately exercisable and the balance which vest by June 2003.
7. Includes options to purchase 43,510 Class A shares, of which 25,393 shares
are immediately exercisable and the balance which vest by June 2001.
8. Includes options to purchase 30,510 Class A shares, of which 12,393 shares
are immediately exercisable and the balance which vest by June 2001.
9. Includes options to purchase 21,054 Class A shares, all of which are
immediately exercisable.
10. Includes options to purchase 46,880 Class E shares, all of which are
immediately exercisable.
2
<PAGE>
11. Includes options to purchase 42,843 Class A shares, of which 27,426 shares
are immediately exercisable and the balance vest by June 2001.
12. Includes options to purchase 48,579 Class A shares, of which 30,462 shares
are immediately exercisable and the balance vest by June 2001.
13. Includes 34,945 Class E shares represented by immediately exercisable
options.
14. Includes options to purchase 33,509 Class A shares, of which 15,392 shares
are immediately exercisable and the balance vest by June 2001.
15. The address of The John E. Fetzer Institute, Inc. is 9292 KL Avenue,
Kalamazoo, Michigan 49009. 16. Includes 5,454 Class A shares and 21,816
Class E shares held directly and indirectly by Mr. Leeburg's brother.
Shares held by the John E. Fetzer Institute are not, however, included in
the beneficial ownership amounts for Mr. Leeburg.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and Directors, and persons who own more than 10% of a registered class
of the Company's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission ("SEC"). Officers,
Directors and greater than 10% stockholders are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms they file. Based
solely upon a review of the copies of such forms furnished to the Company, or
written representations that no Forms 5 were required, the Company believes that
during the year ended June 30, 1999, all Section 16(a) filing requirements
applicable to its officers, Directors and greater than 10% beneficial owners
were satisfied.
VOTING TRUST AGREEMENT
Stockholders of the Company owning an aggregate of 1,127,243 shares of
Common Stock, which represents 12.4% of the total voting power outstanding at
June 30, 1999, entered into a Voting Trust Agreement dated January 10, 1996.
Pursuant to that Agreement, Leslie A. Danziger, Chairwoman of the Company, is
designated as the trustee of the trust and empowered to vote all shares subject
to the trust with respect to any matter submitted to a vote by the Company's
stockholders, including voting in favor of the election of herself as a director
of the Company and in favor of ratification and approval of acts of herself as a
director in the conduct of business affairs of the Company. Consequently,
combined with her individual holdings, Ms. Danziger effectively controls 20% of
the total voting power of the Company outstanding as of August 20, 1999. Parties
to the agreement may withdraw their shares upon ten days' prior written notice.
The Voting Trust Agreement terminates upon the earlier of January 10, 2001
and/or the date on which Ms. Danziger ceases to be Chairwoman of the Board or
resigns as trustee under the Agreement.
PROPOSAL NO. 1 - BOARD OF DIRECTORS
ELECTION OF CLASS III DIRECTORS - TERM EXPIRING IN 1999
The term of the Class III Directors on the Company's Board of Directors
expires as of the date of the annual meeting. At the meeting, two Class III
Directors will each be elected to serve a term of three years and until the
election and qualification of his or her respective successor. Louis Leeburg has
served as a Class III director of the Company since May 1996 and is standing for
reelection. Donald Lawson has served as Class III director of the Company since
April 1998 and is standing for reelection.
The two nominees receiving the greatest number of votes cast at the annual
meeting of shareholders will be elected to Class III of the Board of Directors.
The Board of Directors has nominated Louis Leeburg and Donald Lawson for
reelection to the Board of Directors as members of Class III thereof. THE BOARD
OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING "FOR" ELECTION OF EACH OF THE
NOMINEES AS CLASS III DIRECTORS TO SERVE UNTIL THE ANNUAL MEETING OF
SHAREHOLDERS IN 2002.
3
<PAGE>
LOUIS LEEBURG, (age 45) has served as a Director of the Company since May
1996. Mr. Leeburg is a self-employed business consultant. From December 1988
until August 1993 he was the Vice President, Finance of The Fetzer Institute,
Inc. From 1980 to 1988 he was in financial positions with different
organizations with an emphasis in investment management. Mr. Leeburg was an
audit manager for Price Waterhouse & Co. until 1980. Mr. Leeburg received a B.S.
in accounting from Arizona State University. Mr. Leeburg is a member of
Financial Foundation Officers Group and since January 1991, has served as the
treasurer and trustee for the John E. Fetzer Memorial Trust Fund and as trustee
for the John E. Fetzer ILM Trust Fund, affiliated with a significant stockholder
of the Company.
DONALD E. LAWSON (age 48) has served as a Director of the Company and has
been CEO since April 1998, President since October 1997 and Treasurer since
September 1995. He previously held the position of Executive Vice President
since May 1995 until April 1998. Mr. Lawson has also served as the Company's
Chief Operating Officer since June 1995 and is responsible for the Company's
financial activities, manufacturing, sales, research and development, and
intellectual property management. From 1991 to 1995, Mr. Lawson served as Vice
President, Operations for Lukens Medical Corporation, a medical device
manufacturer. From 1980 to 1990, Mr. Lawson served in various capacities,
including Production Superintendent, for Ethicon, Inc., a division of Johnson &
Johnson and a manufacturer of medical products. Mr. Lawson received a B.B.A.
degree in Finance from Texas A & M University.
UNLESS OTHERWISE INSTRUCTED, THE PROXY HOLDERS WILL VOTE TO ELECT EACH OF THE
ABOVE LISTED NOMINEES. SHAREHOLDERS ARE NOT ENTITLED TO CUMULATE VOTES. IF A
NOMINEE BECOMES UNAVAILABLE FOR REELECTION FOR ANY REASON, OR IF A VACANCY ON
THE BOARD SHOULD OCCUR BEFORE THE ANNUAL MEETING, WHICH EVENTS ARE NOT
ANTICIPATED, THE SHARES REPRESENTED BY THE ENCLOSED PROXY MAY BE VOTED FOR SUCH
OTHER PERSONS AS THE BOARD OF DIRECTORS MAY RECOMMEND.
CONTINUING DIRECTORS
CLASS I DIRECTORS - TERMS EXPIRING IN 2001
LESLIE A. DANZIGER (age 46) has served as Chairwoman of the Company since
its incorporation in June 1992, and also held the position of CEO from 1992
until April 1998, and President from August 1995 until October 1997. Effective
January 1, 1999, Ms. Danziger, with approval of the Board, modified the terms
and responsibilities of her position. With a change from full to part time
status, Ms. Danziger became a consultant to the Company. Ms. Danziger was a
partner or executive officer of the Company's predecessors from 1985 until
incorporation of the Company. Ms. Danziger is a founder of the Company and a
co-inventor of the first two LightPath patents. She has developed and guided the
execution of the Company's long-term business strategies and the development and
commercialization of the Company's technologies. She represents the Company as a
member of the LightChip, Inc. Board of Directors. From 1974 to 1979 she served
as an Executive Vice President of COS, Inc., and from 1979 to 1982 she served as
Executive Vice President of Arctic Communications Corporation. Both of these
communication consulting firms developed tools designed to assist clients in
resolving conflicts relating to economic development, land use and natural
resource issues. Ms. Danziger attended the University of Texas. Ms. Danziger is
married to Joel Goldblatt, who until September 1998, was a Vice President of the
Company, and is the sister-in-law of Milton Klein, M.D., who served as a
Director of the Company until October 1998.
HAYDOCK H. MILLER, JR. (age 74) has served as a Director of the Company
since January 1993. Since that time he has advised the Company on
administrative, management and financial matters. Mr. Miller served as an
executive with the Aluminum Company of America (ALCOA), an aluminum
manufacturer, from 1949 until his retirement in 1983. Mr. Miller received a B.A.
degree from Yale University. His last position with ALCOA was Manager of
Organization Analysis, an internal consulting group for all ALCOA departments
and divisions prior thereto he was Manager for salaried job evaluations for
ALCOA and its subsidiaries and immediately before that, was Superintendent of
several ALCOA plants, concentrating on quality control and production
techniques, and consultant to its operations in the United Kingdom. Since 1983,
Mr. Miller has been an independent management consultant.
4
<PAGE>
JAMES A. WIMBUSH (age 63) has served as a Director of the Company since May
1998. He currently provides consulting services to venture capital groups and
small cap companies. From 1984 until 1995 he served as Chairman and CEO of
Lukens Medical Corporation, a medical device manufacturer. Prior to that he
spent twenty years with Ethicon, Inc., a manufacturer of medical products, the
Somerville, NJ division of Johnson & Johnson, concluding with four years as
President. Mr. Wimbush received a B.S. in Finance and attended graduate school
at Saint Louis University. He completed the Advanced Management Program at the
Harvard Graduate School of Business.
CLASS II DIRECTORS - TERMS EXPIRING IN 2000
JAMES L. ADLER JR. (age 71) has served as a Director of the Company since
October 1997. Since 1989 he has been a partner at the law firm of Squire Sanders
& Dempsey L.L.P., which has acted as general counsel to the Company since
February 1996. Mr. Adler was formerly a partner of Greenbaum, Wolff & Ernst, New
York City and of Storey & Ross, Phoenix, until the merger of the latter firm
with Squire Sanders & Dempsey L.L.P. in 1989. Mr. Adler is a corporate,
securities and international lawyer. In 1998-1999, Mr. Adler served as President
of the Arizona Business Leadership Association (of which he remains a director),
is a member of the Arizona District Export Council, and a Trustee of the Phoenix
Committee on Foreign Relations. In March 1999, Mr. Adler was appointed by the
government of Japan to a five year term as Honorary Counsel General of Japan at
Phoenix for Arizona. He has previously served as Chairman of the International
Law Section of the Arizona State Bar Association and, by gubernatorial
appointments, as a Member of the Investment Committee of the Arizona State
Retirement System and as a Member and Chairman of the Investment Committee of
the State Compensation Fund. Mr. Adler graduated from Carleton College, magna
cum laude in 1949 and in 1952 from Yale Law School. He is a member of the
Arizona State Bar.
KATHERINE E. DIETZE (age 41) has served as a Director of the Company since
October 1998. She currently is a managing director in the Global
Telecommunications and Media Group in the Investment Banking Department of
Credit Suisse First Boston, a leading global investment bank which she joined in
September 1996. For the prior eleven years she was with the investment banking
firm of Salomon Brothers. Ms. Dietze received her B.A. from Brown University and
her M.B.A. from Columbia University Graduate School of Business.
MILTON KLEIN, M.D. (age 51) served as a Director of the Company since its
inception until October 1998. Dr. Klein specializes in cardiology and from 1979
to 1994 practiced with Cardiovascular Specialists of Houston. Since 1994, Dr.
Klein has practiced with Houston Cardiovascular Associates. In addition, since
1982 Dr. Klein has also been a Clinical Associate Professor of Medicine at The
Baylor College of Medicine, Houston, Texas. He is a Fellow of the American
College of Cardiology and the American College of Physicians. Dr. Klein received
a B.S. degree from McGill University and M.D. from the University of California
in San Diego. Dr. Klein is the brother-in-law of Leslie A. Danziger.
5
<PAGE>
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors held nine meetings, including telephonic meetings,
during the fiscal year ended June 30, 1999. Two of the Directors missed one
meeting, the remaining Directors attended all of the meetings of the Board of
Directors and of the meetings held by committees of the Board on which he or she
served. The Board of Directors has a Compensation Committee which consists of
Haydock H. Miller, Jr. and James Wimbush, which met five times during the fiscal
year ended June 30, 1999. The Compensation Committee reviews and recommends to
the Board of Directors the compensation and benefits of all officers of the
Company and also administers the Company's Omnibus Incentive Plan, pursuant to
which incentive awards, including stock options, are granted to officers, key
employees and consultants of the Company. The Audit Committee met once during
the fiscal year ended June 30, 1999. The Audit Committee, which consists of
Louis Leeburg and Haydock H. Miller, Jr., met with the Company's independent
accountants, to review the annual financial statements of the Company, and the
effectiveness of the Company's financial and accounting functions and
organization. The Board of Directors does not have a standing nominating
committee.
DIRECTORS' COMPENSATION
During the period from June 30, 1998 until May 1, 1999, non-employee
Directors were compensated for their services at $1,000 per meeting attended.
There was no compensation paid for telephonic meetings. Non-employee Directors
serving on the Company's Board of Directors previously received nonqualified
stock options of Class A Common Stock as part of the Directors Stock Plan. Each
Director received an initial option initial option grant for 10,000 shares at
the time the Director commenced service on the Board as well as an annual grant
of 3,000 shares during the term served. Effective May 1, 1999 non-employee
Directors are being compensated for their services in cash on a quarterly basis
($1,840 per quarter) plus options to acquire shares of Class A common stock
based on a formula as provided by the Plan. On May 1, 1999, each director
received a nonqualified stock option for 27,176 shares granted pursuant to the
Directors Stock Option Plan adopted in June 1992 and amended in May 1999. The
number of options received was based on the fair market value of the Class A
Common Stock on the date of grant and the options vest ratably over their three
year term. All Directors are reimbursed for their reasonable out-of-pocket
expenses incurred in connection with attendance at meetings of the Board of
Directors and Committees thereof. Directors who are employees of the Company do
not receive compensation for service on the Board or Committees of the Board
other than their compensation as employees.
PROPOSAL NO. 2 - RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed the independent public accounting firm
of KPMG LLP to audit the Company's financial statements for the year ending June
30, 2000. Although it is not required to do so, the Board of Directors has
submitted the selection of KPMG LLP to the shareholders for ratification. Unless
a contrary choice is specified, proxies will be voted for ratification of the
selection of KPMG LLP. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THE
RATIFICATION OF ITS SELECTION OF KPMG LLP AS THE COMPANY'S INDEPENDENT PUBLIC
ACCOUNTANTS FOR THE FISCAL YEAR ENDING JUNE 30, 2000.
6
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid or accrued by the
Company for the services rendered during the fiscal years ended June 30, 1999,
1998 and 1997 to the Company's Chief Executive Officer and the only other
executive officer of the Company who earned in excess of $100,000 during the
last fiscal year (collectively, the "Named Officers").
SUMMARY COMPENSATION TABLE
Long Term
Annual Compensation Compensation
--------------------- Class A
Name and Position Year Salary Bonus Options (1)
- ----------------- ---- ------ ----- -----------
Leslie Danziger
Chairwoman, FY 1999 $ 125,000 (3) 0
Former CEO(2) FY 1998 150,000 0 225,000 (4)
FY 1997 150,000 0
Donald E. Lawson
CEO and President (2) FY 1999 $ 141,333 (5) 0 50,000 (8)
FY 1998 125,000 (6) 0 125,000 (9)
FY 1997 97,500 (7) 0 35,000 (10)
Mark Fitch
Senior Vice President FY 1999 $ 101,000 (11) 0 30,000 (13)
FY 1998 70,500 (12) 0 50,000 (14)
- ----------
(1) Options are for Class A Common Stock only.
(2) Ms. Danziger served as Chief Executive Officer until April 1998, at which
time Mr. Lawson assumed such position.
(3) Of this amount, $87,500 was paid as annual base salary and $37,500 was paid
under the terms of Ms. Danzigers modified employment agreement.
(4) Options to purchase 225,000 Class A shares, of which 175,000 shares are
immediately exercisable and the balance was forfeited under the terms of
Ms. Danziger's modified employment agreement.
(5) Base salary was increased to $160,000 on March 1, 1999. Mr. Lawson
purchased Company Class A stock at fair market value through a payroll
deduction on a quarterly basis for a total of $12,560.
(6) Base salary was increased to $132,000 on February 1, 1998. Mr. Lawson
purchased Company Class A stock stock at fair market value through a
payroll deduction on a quarterly basis for a total of $8,160.
(7) Base salary was increased to $120,000 on April 1, 1997. Mr. Lawson
purchased Company Class A stock stock at fair market value through a
payroll deduction on a quarterly basis for a total of $4,080.
(8) Options to purchase 50,000 Class A shares, of which 25,000 shares are
immediately exercisable and the balance which vest by June 2000.
(9) Options to purchase 125,000 Class A shares, of which 75,000 shares are
immediately exercisable and the balance which vest as follows; 25,000
shares in June 2000 and 25,000 shares in June 2001.
(10) Options to purchase 35,000 Class A shares, all of which are immediately
exercisable.
(11) Base salary was increased to $115,000 on March 1, 1999.
(12) Mr. Fitch was hired effective October 1, 1997.
(13) Options to purchase 30,000 Class A shares, none of which are immediately
exercisable and the balance which vest as follows: 7,500 shares annually
each September until September 2002.
(14) Options to purchase 50,000 Class A shares, of which 12,500 shares are
immediately exercisable and the balance which vest as follows: 12,500 each
October until October 2001.
7
<PAGE>
The following table sets forth information regarding Options granted to
each of the Named Officers during the fiscal year ended June 30, 1999:
OPTION GRANTS FOR THE
YEAR ENDED JUNE 30, 1999
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS
OPTIONS GRANTED TO EXERCISE PRICE EXPIRATION
NAME GRANTED(1) EMPLOYEES PER SHARE DATE
- ---- ----------- ---------- -------------- ----------
Leslie A. Danziger -- -- --
Donald E. Lawson 50,000 19% $2.84 April 2009
Mark Fitch 30,000 11% $3.94 September 2008
- ----------
(1) Each option represented entitles the holder to purchase one share of Class
A Common Stock and have a ten year life. Mr. Lawson's option vests as
follows; 25,000 shares April 1999 and 25,000 shares in April 2000. Mr
Fitch's vest 7,500 shares annually each September through 2002.
The following table sets forth information regarding options exercised by
each of the Named Officers during the fiscal year ended June 30, 1999 and the
value of options held by each of the Named Officers at the fiscal year end.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR END VALUES
<TABLE>
<CAPTION>
# OF SECURITIES
UNDERLYING
UNEXERCISED OPTIONS VALUE OF UNEXERCISED
SHARES AT FY END, IN-THE-MONEY OPTIONS
ACQUIRED ON EXERCISABLE/ AT FY END EXERCISABLE/
NAME EXERCISE VALUE REALIZED UNEXERCISABLE UNEXERCISABLE
- ---- -------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
Leslie A. Danziger (1) 0 $0 200,399/0 $19,500/0 (3)
Donald E. Lawson (2) 0 $0 160,000/75,000 $0/0
Mark Fitch (2) 0 $0 12,500/67,500 $0/0
</TABLE>
- ----------
(1) Stock options granted prior to the February 1996 IPO were bundled into
Class A and Class E shares due to the recapitalization of the Company. The
Bundled Stock Options total 101,466 of shares presented. Bundled Stock
Options consist of 20% shares of Class A Common Stock, 30% shares of Class
E-1 Common Stock, 30% shares of Class E-2 Common Stock, and 20% shares of
Class E-3 Common Stock.
(2) Options represented are solely to purchase shares of Class A Common Stock.
(3) Value shown relate solely to unexercised options to purchase Class A Common
Stock and assumes a fiscal year end value of $1.97 per share of Class A
common stock, based on the Nasdaq closing price for the Class A Common
Stock on June 30, 1999. To compute the unrealized value of Class A Common
Stock, the underlying Class E shares were excluded and 20% of the option
exercise price was attributed to the Class A portion of the options. If the
Class E shares were included, the shares held by Ms. Danziger would not be
in-the-money at June 30, 1999.
8
<PAGE>
EMPLOYMENT AGREEMENTS
Donald E. Lawson executed a three-year employment agreement in April 1998,
when he became the Chief Executive Officer of the Company. Mark Fitch executed a
three-year employment agreement in March 1999, when he became the Senior Vice
President of the Company. These agreements provide for annual base salaries of
$160,000 and $115,000 for Mr. Lawson and Mr. Fitch, respectively. In the event
the Company terminates the executive's employment during the term of the
agreement without cause, or in the event the executive terminates the agreement
for "good reason", the executive is entitled to (i) continue to receive salary
until the earlier of obtaining comparable employment with another company or,
the lapse of one year with respect to Mr. Lawson, and six months with respect to
Mr. Fitch, (ii) continue to receive benefits until the earlier of obtaining
comparable employment with another company or the corresponding periods stated
in (i) above, (iii) have all unvested stock options become immediately
exercisable, and (iv) receive a lump sum payment equal to the average of the
annual bonuses paid to the executive during the previous three fiscal years. The
Agreement defines "cause" to mean termination due to felony conviction, willful
disclosure of confidential information or willful failure to perform the
executive's duties. In addition, if the termination without cause occurs after a
change in control of the Company, the executive shall also receive a lump sum
severance payment equal to 2.99 times the executive's annual compensation,
including bonuses. The Agreement defines "change in control" as an acquisition
of 40% of Company's combined voting power by any party, a change in the majority
of the Directors over a two-year period (unless supported by the incumbent
Directors), a reorganization or other business combination resulting in the
present stockholders of the Company no longer owning more than 50% of the
combined voting power of the Company, a sale of substantially all of the assets
of the Company or other similar transactions. The employment agreements reaffirm
the executives' agreements pursuant to previously executed confidential
information and invention agreements to, among other things, not compete with
the Company for a period of two years following termination of employment and to
assign any inventions, patents and other proprietary rights to the Company. Any
controversies regarding the employment agreements are to be settled by binding
arbitration.
Leslie Danziger had entered into an Employment Agreement with the Company
in November 1995 as Chief Executive Officer of the Company for which she
received a base salary of $150,000. In April 1998, Ms. Danziger resigned as
Chief Executive Officer but continued as Chairwoman of the Board. Effective
January 1, 1999, Ms. Danziger, with approval of the Board, modified the terms
and responsibilities of her position. With a change from full to part time
status, Ms. Danziger became a consultant to the Company whereby she is entitled
to receive $75,000 through October 31, 1999 after which time her compensation
will equal that amount paid to Non-employee Directors. She is also entitled to
receive a lump sum cash payment of $54,650 by October 31, 1999 representing
deferred salary at June 30, 1999.
CERTAIN TRANSACTIONS
During the period from November 1993 through August 1995, the Company
deferred payment of salary to its executive officers due to a shortage of
working capital. In November 1995, Leslie A. Danziger and Donald E. Lawson
agreed to convert $300,000 and $25,000, respectively, of deferred salary into
shares of Class E Common Stock at an average per share conversion price of $1.00
per share. Consequently, Ms. Danziger received 112,500 shares of Class E-1
Common Stock, 112,500 shares of Class E-2 Common Stock and 75,000 shares of
Class E-3 Common Stock. Mr. Lawson received 9,375 shares of Class E-1 Common
Stock, 9,375 shares of Class E-2 Common Stock and 6,250 shares of Class E-3
Common Stock. An aggregate of $7,500 of deferred salary is owed to Mr. Lawson at
June 30, 1999 and was placed into a contingent liability account to be paid only
upon the accomplishment of the milestones for conversion of the Class E-1 Common
Stock into Class A Common Stock.
During the fiscal years ended June 30, 1999 and 1998, Directors (or their
firms) of the Company, provided legal and consulting services to the Company for
which they billed the Company approximately $127,000 and $145,000, respectively.
None of these Directors own more than 1% of the Company's outstanding common
stock
9
<PAGE>
In June 1997, the Company entered into a joint venture agreement with
Invention Machine Corporation (IMC), which owns 40,000 shares of unregistered
Class A common stock, to create LightChip Inc., to develop and manufacture
wavelength division multiplexing (WDM) systems for use by telecommunication
carriers, and network system integrators. Under the terms of the agreement,
LightChip utilized office equipment, office space and some personnel at no
charge from LightPath during the year ended June 30, 1998. The estimated fair
value of these services was approximately $137,000. In addition, LightChip
reimbursed LightPath for personnel, services and working capital during fiscal
year 1998 totaling, approximately $161,000.
The Company believes that all of the transactions set forth above were made
on terms no less favorable to the Company than could have been obtained from
unaffiliated third parties. In addition, ongoing and future transactions with
affiliates will be on terms no less favorable than may be obtained from third
parties, and any loans to affiliates will be approved by a majority of the
disinterested Directors.
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed KPMG LLP to audit the financial
statements of the Company for the fiscal year ending June 30, 2000. KPMG LLP has
served as the Company's independent public accountants since June 1996.
Representatives of KPMG LLP are expected to be present at the Annual Meeting and
will have the opportunity to make a statement if they desire to do so and are
expected to be available to respond to appropriate questions.
SHAREHOLDER PROPOSALS TO BE PRESENTED AT THE NEXT ANNUAL MEETING
Any shareholder proposals intended to be presented at the Company's 2000
annual shareholders' meeting must be received by the Company no later than May
20, 2000, to be evaluated by the Board for inclusion in the proxy statement for
that meeting.
OTHER BUSINESS
The Board of Directors is not aware of any other business to be considered
or acted upon at the annual meeting of shareholders other than that for which
notice is provided, but in the event other business as to which the Company did
not have notice of prior to August 2, 1999 is properly presented at the meeting,
requiring a vote of shareholders, the proxy will be voted in accordance with the
judgment on such matters of the person or persons acting as proxy. If any matter
not appropriate for action at the meeting should be presented, the holders of
the proxies shall vote against the consideration thereof or action thereon.
1999 ANNUAL REPORT ON FORM 10-KSB
Copies of the Company's annual report included in the Form 10-KSB for the
fiscal year ended June 30, 1999, as filed with the Securities and Exchange
Commission have been included in this mailing. Additional copies may be obtained
without charge by any shareholder to whom this proxy statement is delivered upon
written request to Investor Relations, LightPath Technologies, Inc., 6820
Academy Parkway East N.E., Albuquerque, New Mexico 87109.
By order of the Board of Directors,
Leslie A. Danziger
Chairwoman
Albuquerque, New Mexico
September 15, 1999
10
<PAGE>
LightPath Technologies, Inc.
6820 Academy Parkway East N.E.
Albuquerque, NM 87109
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Leslie A. Danziger, as the attorney and
proxy of the undersigned, with full power of substitution, for and in the name
and stead of the undersigned, to attend the Annual Meeting of Stockholders of
LightPath Technologies, Inc. (the "Company") to be held on October 21, 1999, at
noon, M.S.T. at the Courtyard by Marriott, 5151 Journal Center Blvd., NE,
Albuquerque, New Mexico, 87109 and any adjournments or postponements thereof,
and thereat to vote all shares of Class A and Class E Common Stock which the
undersigned would be entitled to cast if personally present at indicated herein:
PLEASE MARK YOUR CHOICES IN BLUE OR BLACK INK
(1) Proposal No. 1: Election of Class III Directors: Nominees are Louis Leeburg
and Donald Lawson.
[ ] FOR [ ] WITHHOLD AUTHORITY to vote for the following nominees:
(2) Proposal No. 2: Ratify the selection of KPMG LLP as independent accountants
for the Company for the fiscal year ending June 30, 2000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
In his/her discretion, the proxy is authorized to vote on such other business as
may properly be brought before the meeting or any adjournment or postponement
thereof.
(PLEASE DATE AND SIGN ON THE REVERSE SIDE)
(CONTINUED FROM OTHER SIDE)
IF THIS PROXY IS PROPERLY EXECUTED, THE SHARES REPRESENTED HEREBY WILL BE
VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO SUCH
DIRECTION IS GIVEN, THE SHARES WILL BE VOTED "FOR" THE ELECTION OF THE NOMINEES
FOR CLASS III DIRECTORS, AND "FOR" THE RATIFICATION OF THE SELECTION OF KPMG LLP
AS INDEPENDENT ACCOUNTANTS FOR THE COMPANY FOR THE FISCAL YEAR ENDING JUNE 30,
2000. THIS PROXY ALSO DELEGATES AUTHORITY TO VOTE WITH RESPECT TO ANY OTHER
BUSINESS WHICH MAY PROPERLY COME BEFORE THE MEETING.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting,
Proxy Statement and Form 10-KSB of LightPath Technologies, Inc.
PLEASE SIGN, DATE AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED REPLY ENVELOPE
WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
----------------------------------------
SIGNATURE
----------------------------------------
SIGNATURE
Dated;______________________________1999
(When signing as an attorney, executor,
administrator, trustee or guardian,
please give title as such. If
stockholder is a corporation please sign
in full corporate name by a duly
authorized officer or officers. Where
stock is issued in the name of two or
more persons, all such persons should
sign.)
