<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-2.
</TABLE>
Semiconductor Laser International Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than 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)(4) and 0-12.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
SEMICONDUCTOR LASER INTERNATIONAL CORPORATION
15 LINK DRIVE, BINGHAMTON, NEW YORK 13904
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 20, 1997
------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the
"Meeting") of
Semiconductor Laser International Corporation, a New York corporation (the
"Company"), will be held at the Standard Club, 320 S. Plymouth Ct., Chicago,
Illinois 60604, on June 20, 1997, at 10:00 a.m., local time, for the following
purposes:
(1) To elect a board of five (5) directors to serve until the next
Annual Meeting of Shareholders or until their respective successors are
elected and qualified;
(2) To ratify the selection of Price Waterhouse LLP as independent
public accountants for the Company for fiscal year 1997; and
(3) To transact such other business as may properly be brought before
the Meeting or any adjournment thereof.
The shareholders of record of the Company at the close of business on May
19, 1997 are entitled to notice of and to vote at the Meeting or any adjournment
thereof.
We hope you plan to attend the Meeting in person, but in any event you are
urged to mark, date, sign and return your proxy in the enclosed self-addressed
envelope as soon as possible so that your shares may be voted in accordance with
your wishes. Any proxy given by a shareholder may be revoked by the shareholder
at any time prior to the voting of the proxy.
By Order of the Board of Directors
Dr. Geoffrey T. Burnham
Chairman of the Board
Binghamton, NY
May 30, 1997
<PAGE> 3
SEMICONDUCTOR LASER INTERNATIONAL CORPORATION
15 LINK DRIVE, BINGHAMTON, NEW YORK 13904
------------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
------------------------
The enclosed proxy is solicited by and on behalf of the Board of Directors
of Semiconductor Laser International Corporation, a New York corporation (the
"Company"), for use at the Annual Meeting of Shareholders of the Company to be
held on June 20, 1997, at 10:00 a.m., local time, at the Standard Club, 320 S.
Plymouth Ct., Chicago, Illinois 60604, and any adjournment thereof (the
"Meeting"). The matters to be considered and acted upon at the Meeting are
described in the foregoing Notice of Annual Meeting of Shareholders and this
Proxy Statement. This Proxy Statement and the related form of proxy are being
mailed on or about May 30, 1997, to all of the shareholders of record of the
Company on May 19, 1997. Shares of the Company's Common Stock, $.01 par value
("Common Stock"), represented by proxies will be voted as hereinafter described
or as otherwise specified by the shareholder. Any proxy given by a shareholder
may be revoked by the shareholder at any time prior to the voting of the proxy
by delivering a written notice to the Chairman of the Board of the Company, by
executing and delivering a later dated proxy or by attending the Meeting and
voting in person.
The persons named as proxies are Dr. Geoffrey T. Burnham, the Chairman of
the Board, Chief Executive Officer and President of the Company, and Nicholas L.
Prioletti, Jr., the Chief Financial Officer of the Company. The cost of
preparing, assembling and mailing the proxy, this Proxy Statement and the other
material enclosed and all clerical and other expenses of solicitation will be
borne by the Company. In addition to the solicitation of proxies by use of the
mails, directors, officers and employees of the Company may solicit proxies by
telephone, telegram or personal interview. The Company also will request
brokerage houses and other custodians, nominees and fiduciaries to forward
soliciting material to the beneficial owners of Common Stock held of record by
such custodians and will reimburse such custodians for all of their costs and
expenses in forwarding soliciting materials.
VOTING RIGHTS
Only holders of shares of Common Stock of record at the close of business
on May 19, 1997 will be entitled to vote at the Meeting. On May 19, 1997, the
Company had 3,530,838 outstanding shares of Common Stock, each such share
entitling the holder thereof to one vote on each matter. Holders of shares of
Common Stock are not entitled to cumulative voting rights.
The presence at the Meeting in person or by proxy of the holders of a
majority of the outstanding shares of Common Stock entitled to vote at the
meeting shall constitute a quorum for the transaction of business. If a quorum
is present, the affirmative vote of the holders of a plurality of the shares
cast at the Meeting and entitled to vote will be required to act on the election
of directors, and the affirmative vote by the holders of a majority of the
shares cast at the Meeting and entitled to vote will be required to act on all
other matters to properly come before the Meeting. If a shareholder, present in
person or by proxy, abstains on any matter, the shareholder's shares will not be
treated as a vote against such matter. Broker non-votes are treated as shares as
to which voting power has been withheld by the beneficial owners of such shares
and, therefore, as shares not cast. A shareholder may, with respect to that
election of Directors, (i) vote for the election of all nominees proposed by the
Board of Directors, (ii) withhold authority to vote for all such nominees or
(iii) withhold authority to vote for any of such nominees by so indicating in
the appropriate space on the proxy.
<PAGE> 4
SECURITY OWNERSHIP
The following table sets forth certain information as of May 19, 1997
regarding (i) the share ownership of the Company by each person who is known to
the Company to be the record or beneficial owner of more than five percent (5%)
of the Company's outstanding Common Stock, (ii) the share ownership of the
Company of each director of the Company and the share ownership of each named
executive officer of the Company and (iii) the share ownership of the Company of
all directors and executive officers of the Company as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE PERCENTAGE OF
OF BENEFICIAL OUTSTANDING
NAME AND ADDRESS OF BENEFICIAL OWNER (1) OWNERSHIP(2) SHARES OWNED(2)
- -------------------------------------------------------- ----------------- ------------------
<S> <C> <C>
Dr. Geoffrey T. Burnham................................. 430,894(3) 11.97%
Susan M. Burnham........................................ 430,894(4) 11.97%
Thomas J. Marquez....................................... 354,632(5) 10.04%
5526 Deloache
Dallas, Texas 75220
Theodore W. Konopelski.................................. 268,731(6) 7.55%
Ann Konopelski.......................................... 268,731(7) 7.55%
David L. Koffman........................................ 25,143(8) *
300 Plaza Drive
Vestal, New York 13850
Brian J. Thompson....................................... 12,351(9) *
692 Mount Hope Avenue
Rochester, New York 14620
George Barrett.......................................... 13,331(10) *
119 High Crest Drive
West Milford, New Jersey 07840
All directors and executive officers as a group (7
persons).............................................. 750,450(11) 20.52%
</TABLE>
- ---------------
* Less than 1%
(1) Unless otherwise indicated, the address of each beneficial owner identified
is 15 Link Drive, Binghamton, NY 13904.
(2) Unless otherwise indicated, the Company believes that all persons named in
the table have sole voting and investment power with respect to all shares
of Common Stock beneficially owned by them. A person is deemed to be the
beneficial owner of securities that can be acquired by such person within
60 days from May 19, 1997 upon the exercise of options, warrants or
convertible securities. Each beneficial owner's percentage ownership is
determined by assuming that options, warrants or convertible securities
that are held by such person (but not those held by any other person) and
which are exercisable within 60 days of May 19, 1997 have been exercised or
converted. Assumes a base of 3,530,838 shares of Common Stock outstanding,
before any consideration is given to outstanding options or warrants.
(3) Includes 23,823 shares held in trust by Dr. Burnham as trustee, as to which
Dr. Burnham disclaims any beneficial interest; 4,925 shares held in an IRA
trust for the benefit of Dr. Burnham; Non-Plan Options, as hereinafter
defined, to purchase 39,404 shares; and 165,405 shares owned by Susan
Burnham, the wife of Dr. Burnham, and 30,000 shares issuable upon the
exercise of Option Plan options, as hereinafter defined, granted to Ms.
Burnham, as to which Dr. Burnham disclaims any beneficial interest.
(4) Includes 167,337 shares owned by Dr. Burnham; 23,823 shares held in trust
by Dr. Burnham as trustee; 4,925 shares held in an IRA trust for the
benefit of Dr. Burnham; and 39,404 shares issuable upon exercise of
Non-Plan options held by Dr. Burnham, as to all of which Susan Burnham
disclaims any beneficial interest; and 30,000 shares issuable upon the
exercise of Option Plan options granted to Ms. Burnham.
(5) Includes 39,404 shares held in trust by an independent trustee for the
daughter of Mr. Marquez, Meredith Marquez, 39,404 shares held in trust for
the benefit of the family of Mr. Marquez by
2
<PAGE> 5
Mr. Marquez and an independent trustee, and 39,404 shares owned by Stephanie
Marquez, his daughter. Mr. Marquez disclaims any beneficial interest as to each
of said holdings.
(6) Includes 168,253 shares owned by Ann Konopelski, the wife of Mr.
Konopelski, and 3,942 shares held in trust by Ann Konopelski, as trustee
for the benefit of the children of Theodore and Ann Konopelski, as to all
of which Mr. Konopelski disclaims any beneficial interest; 4,925 shares
held in an IRA trust for the benefit of Mr. Konopelski; and Non-Plan
Options to purchase 29,553 shares.
(7) Includes 62,058 shares owned by Mr. Konopelski; 4,925 shares held in an IRA
trust for the benefit of Mr. Konopelski; 29,553 shares issuable upon
exercise of Non-Plan Options held by Mr. Konopelski; and 3,942 shares held
in trust by Ann Konopelski as trustee for the benefit of the children of
Ann and Theodore Konopelski, as to all of which Ann Konopelski disclaims
any beneficial interest.
(8) Includes 7,881 shares held by Koffman Corporate Ventures, Inc. and 4,881
shares held by Barbara Koffman, as to all of such shares Mr. Koffman
disclaims any beneficial interest. Also includes Option Plan options to
purchase 2,500 shares.
(9) Consists of Non-Plan Options to purchase 9,851 shares and Option Plan
options to purchase 2,500 shares.
(10) Consists of Non-Plan Options to purchase 9,851 shares and Option Plan
options to purchase 2,500 shares. Also includes 490 shares issuable upon
the exercise of warrants in the Public Offering, as hereinafter defined.
(11) Includes an aggregate of 126,649 shares of Common Stock issuable upon the
exercise of Option Plan options, Non-Plan Options and warrants purchased in
the Public Offering.
PROPOSAL I -- ELECTION OF DIRECTORS
NOMINATIONS AND ELECTION OF DIRECTORS
The Board of Directors has nominated Dr. Geoffrey T. Burnham, Susan M.
Burnham, George W. Barrett, David L. Koffman and Brian J. Thompson (all of whom
are members of the present Board of Directors of the Company) to serve as
directors of the Company until the Company's 1998 Annual Meeting of Shareholders
or until their respective successors have been elected and qualified.
Unless otherwise specified, shares represented by proxies will be voted in
favor of the election of all of the nominees, except that, in the event any
nominee should not continue to be available for election, such proxies will be
voted for the election of such persons as the Board of Directors may recommend.
Management does not presently contemplate that any of the nominees will become
unavailable for any reason.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE
ELECTION OF EACH OF THE NOMINEES.
INFORMATION COVERING NOMINEES
The following table sets forth the names of the nominees and certain
information with regard to each nominee.
<TABLE>
<CAPTION>
NAME OF NOMINEE AGE DIRECTOR SINCE POSITION WITH COMPANY
- ------------------------- --- -------------- -------------------------------------
<S> <C> <C> <C>
Dr. Geoffrey T. 49 September 1993 Chairman of the Board, President and
Burnham................ Chief Executive Officer
Susan M. Burnham......... 41 September 1993 Vice President, Treasurer and
Director
George W. Barrett........ 63 December 1993 Director
David L. Koffman......... 38 November 1995 Director
Brian J. Thompson........ 64 December 1993 Director
</TABLE>
Dr. Geoffrey T. Burnham, a founder of the Company, has also served as its
Chairman of the Board, Chief Executive Officer and President, since its
incorporation in September 1993, and devoted his full-time efforts to the
establishment of the Company commencing in May 1993. From April 1990 through
July 1990, Dr. Burnham served as a consultant to, and from July 1990 until May
1993, he was employed by, Northeast Semiconductor, Inc. ("NSI"), and served as
its President and as a director from October 1991 through May
3
<PAGE> 6
1993. Dr. Burnham resigned from NSI upon its acquisition in a hostile take-over.
Approximately five months after his resignation, NSI filed for Chapter 7
bankruptcy protection. Prior to April 1990, Dr. Burnham had over 16 years of
experience in the laser field, including 10 years in the semiconductor laser
field, holding management positions with Hercules Aerospace Corporation (1987 to
1989), General Optronics Corporation, a company involved in manufacturing laser
equipment for telecommunications applications (1984 to 1986) and General
Electric Co. ("General Electric") (1975 to 1984). Dr. Burnham founded and
directed General Electric's Laser Business Venture for five years. In addition,
he was corporate liaison between General Electric and the University of
Rochester on General Electric's Consortium on Inertial Confinement Fusion. Dr.
Burnham also served as General Electric's Corporate Technical Recruiter at the
University of Rochester as well as Chairman of the United States government's
laser section of the Military Critical Technologies List. Dr. Burnham is married
to Susan Burnham.
Susan M. Burnham has been Vice President, Treasurer and a director of the
Company since its incorporation in September 1993. From May 1993 to September
1993, Ms. Burnham assisted Dr. Burnham in the establishment of the Company and,
from February 1992 through April 1993, Ms. Burnham was not employed. From August
1986 through January 1992, she served as a national account executive in
marketing and sales for MLI Industries Inc., a company involved in turn-key
subcontract manufacturing of electronic components, electro-mechanical
assemblies, and copy machine refurbishment and manufacturing, and was
responsible for handling all major company accounts, as well as all new
accounts. She established a customer base that included several divisions of
General Electric, IBM and Eastman Kodak Company, initiating partnership
agreements for all major customers. Ms. Burnham was employed by General Electric
from December 1977 through July 1984 during which time she held administrative
positions in various laser and electronic programs with a particular emphasis on
the monitoring of operating budgets. Ms. Burnham is married to Dr. Burnham.
George W. Barrett was elected as a director of the Company in December
1993. Mr. Barrett has been Operations Manager of Universal Telephone &
Telegraph, a long distance telephone company, since June 1996. Prior to that,
from October 1995 through February 1996, Mr. Barrett was an independent
consultant, providing general business management services. From October 1989
through September 1995, he was President and General Manager of Engineered
Systems Division (Datron Inc.), a publicly owned company engaged in the
manufacture of aircraft arresting systems. Mr. Barrett was president of Auxilec,
Inc., a subsidiary of a publicly owned company engaged in the manufacture of
aircraft generation systems, from January 1988 to May 1989, Division President
of Simmonds Precision Engine Systems, a publicly held company engaged in the
manufacture of aircraft ignition systems, from January 1986 to August 1987 and
Vice President of Lucas Aerospace Inc., a publicly owned company engaged in the
manufacture of engine control systems, from October 1971 to December 1985.
David L. Koffman was elected as a director of the Company in November 1995.
Mr. Koffman has been a private investor since 1981. He currently serves as
President, Chief Executive Officer and a director of Jayark Corporation, a
publicly owned company which is an importer of household and seasonal
merchandise.
Dr. Brian Thompson was elected as a director of the Company in December
1993. He is Provost Emeritus, Professor Emeritus of Optics and Distinguished
University Professor of the University of Rochester. From July 1968 to July
1995, he was a professor of optics at the University of Rochester and, from July
1984 to July 1994, he was Provost of the University of Rochester. He is the
author of more than 150 scientific and technical papers, has won numerous awards
for his contributions to optics and is serving or has served on the editorial
boards of many international journals. Dr. Thompson is a member of the Board of
Directors of Welch Allyn, Inc., a company involved in manufacturing medical
instrumentation, Holotek, Ltd., a publicly held corporation involved in
producing scanning and imaging equipment, and Boydell & Brewer, a publications
company, and is also a member of the Link Foundation's Board of Trustees.
INFORMATION CONCERNING THE BOARD OF DIRECTORS AND COMMITTEES
The business and affairs of the Company are managed by the Board of
Directors, which met or acted by unanimous written consent nine times during
fiscal year 1996. During fiscal year 1996, all current directors
4
<PAGE> 7
except Dr. Thompson and Mr. Konopelski attended 75% or more of the meetings of
the Board of Directors. The Board of Directors maintains a standing Compensation
Committee.
The Compensation Committee consists of George W. Barrett, Brian J. Thompson
and David L. Koffman. The Compensation Committee makes recommendations to the
Board of Directors with respect to compensation of executive officers. In
addition, the Compensation Committee administers the Company's 1995 Stock Option
Plan (the "Option Plan"), determining the persons to whom options should be
granted and the number of options to be granted to such persons. The
Compensation Committee also administers plans and programs relating to employee
benefits, incentives and compensation.
EXECUTIVE OFFICERS
Set forth below is certain information, as of May 19, 1997, regarding the
executive officers of the Company:
<TABLE>
<CAPTION>
EXECUTIVE OFFICER
NAME AGE POSITION WITH COMPANY SINCE
- --------------------------------- --- --------------------------------- -----------------
<S> <C> <C> <C>
Dr. Geoffrey T. Burnham.......... 49 Chairman of the Board, Chief September 1993
Executive Officer and President
Susan M. Burnham................. 41 Vice President and Treasurer September 1993
Nicholas L. Prioletti, Jr........ 48 Chief Financial Officer December 1996
</TABLE>
Information with respect to Geoffrey T. Burnham and Susan M. Burnham is set
forth under "Information Covering Nominees."
Nicholas L. Prioletti, Jr. has been the Chief Financial Officer of the
Company since December 1996. From January 1996 until December 1996, Mr.
Prioletti was a self employed financial consultant. From June 1995 until
December 1995, Mr. Prioletti served as Vice President, Finance of Wilson Power &
Gas Smart, Inc., a power marketer/broker, and was responsible for all financial
aspects of the company. Prior to that, from August 1980 until January 1995, he
served as Vice President, Financial Planning of Niagara Mohawk Power
Corporation, a public utility, and was responsible for financial planning,
forecasting and regulatory matters.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the cash and other compensation paid by the
Company to Dr. Geoffrey T. Burnham, its Chairman of the Board, Chief Executive
Officer and President, during the fiscal years ended December 31, 1996, 1995 and
1994. No other executive officer of the Company received aggregate compensation
and bonuses which exceeded $100,000 during such years.
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
------------
AWARDS
ANNUAL COMPENSATION ------------
--------------------------------------- SECURITIES
YEAR ENDED UNDERLYING
NAME AND PRINCIPAL POSITION DECEMBER 31, SALARY($) BONUS($) OPTIONS
- ---------------------------------------- ------------ --------- -------- ------------
<S> <C> <C> <C> <C>
Dr. Geoffrey T. Burnham,................ 1996 $ 116,969 -- --
Chairman of the Board, Chief Executive 1995 $ 71,269 $30,000 39,404(1)(2)
Officer and President 1994 $ 71,637 -- --
</TABLE>
- ---------------
(1) Represents options to purchase 39,404 shares of Common Stock at an exercise
price of $2.54 per share, which were initially granted to Dr. Burnham in
June 1995. These options were subsequently cancelled when new options to
purchase 39,404 shares of Common Stock at an exercise price of $.05 per
share were granted to Dr. Burnham in November 1995.
(2) Does not include warrants (the "Private Warrants") issued during the period
from December 1994 through April 1995 to investors in the Company's December
1994 private placement (the "December 1994 Placement") to purchase 4,925
shares of Common Stock purchased by Dr. Burnham.
5
<PAGE> 8
STOCK OPTION TABLE
The following table sets forth all grants of options to purchase Common
Stock to Dr. Burnham for the fiscal year ended December 31, 1996.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------------------------------------------------
NUMBER OF PERCENT OF TOTAL
SECURITIES OPTIONS GRANTED EXERCISE OR
UNDERLYING TO EMPLOYEES BASE PRICE
NAME OPTIONS GRANTED IN FISCAL YEAR ($/SHARE) EXPIRATION DATE
- ---------------------------------- --------------- ----------------- ----------- ---------------
<S> <C> <C> <C> <C>
Dr. Geoffrey T. Burnham........... -- -- -- --
</TABLE>
YEAR END OPTION VALUES TABLE
The following table sets forth information concerning outstanding options
to purchase Common Stock held by Dr. Burnham as of the year ended December 31,
1996. Dr. Burnham did not exercise any options in fiscal 1996.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED "IN-THE-MONEY" OPTIONS
SHARES OPTIONS AT FISCAL YEAR-END AT FISCAL YEAR-END(1)
ACQUIRED VALUE --------------------------- ---------------------------
ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Dr. Geoffrey T. Burnham........... -- -- 39,404 0 $293,559.80 $ 0
</TABLE>
- ---------------
(1) Based upon an estimated fair market value of $7.50 per share of Common Stock
as of December 31, 1996 less the $.05 exercise price of such options.
COMPENSATION OF DIRECTORS
Other than compensation otherwise payable under employment agreements to
Dr. Burnham and Ms. Burnham, directors receive no cash compensation for serving
on the Board of Directors (other than reimbursement of reasonable expenses
incurred in attending meetings). The Company pays its non-employee directors
reasonable out-of-pocket expenses for each committee meeting attended. In
addition, all non-employee directors receive, pursuant to the Option Plan,
annual grants of options to purchase 2,500 shares of Common Stock for the
following year's service. Newly elected nonemployee directors receive a pro rata
portion of such share grant based on the period remaining until the next date of
grant following their date of election. Mr. Barrett and Dr. Thompson each
received options to purchase 9,851 shares of Common Stock at $.05 per share in
November 1995 in recognition of prior services to the Company. Messrs. Barrett
and Koffman and Dr. Thompson each received options to purchase 5,000 shares of
Common Stock under the Option Plan, 2,500 of which are currently exercisable at
$5.00 per share and 2,500 of which are exercisable at $6.50 per share on
September 19, 1997.
1995 STOCK OPTION PLAN
In October 1995, the Board of Directors and shareholders of the Company
adopted the Option Plan. The Option Plan is intended to recognize the
contributions made to the Company by key employees, officers and directors of
the Company, to provide such persons with additional incentive to devote
themselves to the future success of the Company, and to improve the ability of
the Company to attract, retain, and motivate individuals upon whom the Company's
sustained growth and financial success depend, by providing such persons with an
opportunity to acquire or increase their proprietary interest in the Company
through receipt of rights to acquire Common Stock.
The Company has reserved 250,000 shares of Common Stock for issuance upon
the exercise of options available for future grant under the Option Plan
designated as either (i) incentive stock options ("ISOs") under the Internal
Revenue Code of 1986, as amended (the "Code"), or (ii) non-qualified stock
options ("NQSOs"). ISOs may be granted under the Option Plan to employees
(including directors) and officers of the Company. NQSOs may be granted to
non-employee directors, employees and officers of the Company. In certain
circumstances, the exercise of options granted under the Option Plan may have an
adverse effect on the market price of the Common Stock.
The Option Plan is administered by the Compensation Committee, composed of
two or more persons appointed by the Board of Directors who are "disinterested
persons" as defined under Rule 16b-3 under the
6
<PAGE> 9
Exchange Act or "outside directors" as defined under Section 162(m) of the Code.
The Compensation Committee grants options in its discretion and may consider the
nature of the optionee's services and responsibilities, the optionee's present
and potential contribution to the Company's success and such other factors as it
may deem relevant. ISOs granted under the Option Plan may not be granted at a
price less than the fair market value of the Common Stock on the date of grant
(or 110% of fair market value in the case of persons holding 10% or more of the
voting stock of the Company). The aggregate fair market value of shares for
which ISOs granted to any employee are exercisable for the first time by such
employee during any calendar year (under all stock option plans of the Company
and any related corporation) may not exceed $100,000. Options granted under the
Option Plan will expire not more than ten years from the date of grant (five
years in the case of ISOs granted to persons holding 10% or more of the voting
stock of the Company). Options granted under the Option Plan are not
transferable during an optionee's lifetime but are transferable at death by will
or by the laws of descent and distribution.
The Option Plan also contains certain change in control provisions which
could cause options and other awards to become immediately exercisable, and
restrictions and deferral limitations applicable to other awards to lapse, in
the event any "person", as such term is used in Sections 13(d) and 14(d) of the
Exchange Act, including a "group" as defined in Section 13(d), but excluding
certain shareholders of the Company, acquires beneficial ownership of more than
50.1% of the Company's outstanding shares of Common Stock.
In November 1995, the Company granted options under the Option Plan
exercisable for the purchase of an aggregate of 11,000 shares of Common Stock,
including options to purchase 2,500, 2,500, and 2,500 shares granted to Messrs.
Barrett and Koffman and Dr. Thompson, respectively. All of these options are
exercisable at a price of $5.00 per share and are immediately exercisable.
During 1996, the Company granted options under the Option Plan exercisable for
the purchase of an aggregate of 93,000 shares of Common Stock, including options
to purchase 30,000 and 6,000 shares granted to Ms. Burnham and Mr. Prioletti,
respectively. Ms. Burnham's options are exercisable at a price of $5.25 per
share and are immediately exercisable. Mr. Prioletti's options are exercisable
at a price of $7.50 per share and vest as follows: Options to purchase 2,000
shares of Common Stock first become exercisable in December 1997, options to
purchase an additional 2,000 shares of Common Stock first become exercisable in
December 1998 and options to purchase an additional 2,000 shares of Common Stock
first become exercisable in December 1999. In March 1997, the Company granted
options under the Option Plan exercisable on September 19, 1997 for the purchase
of 2,500, 2,500 and 2,500 shares of Common Stock to Messrs. Barrett and Koffman
and Dr. Thompson, respectively.
NON-PLAN OPTIONS
The Company has issued options to purchase up to an aggregate of 90,630
shares of Common Stock (the "Non-Plan Options") outside of the Option Plan to
certain executive officers, non-employee directors and consultants. The Non-Plan
Options are immediately exercisable at prices ranging from $.05 to $.25 per
share of Common Stock. Of the Non-Plan Options, options to purchase 39,404,
29,553, 9,851, and 9,851 shares of Common Stock were granted to Dr. Burnham,
Messrs. Konopelski and Barrett and Dr. Thompson, respectively.
EMPLOYMENT AGREEMENTS
The Company entered into an employment agreement with each of Dr. Geoffrey
T. Burnham, Theodore W. Konopelski and Susan M. Burnham in October 1995. Mr.
Konopelski's employment with the Company was terminated for cause in August
1996. Each of Dr. Burnham's and Ms. Burnham's employment agreements provides for
an initial three-year term, commencing on October 1, 1995, and each requires
full-time service to the Company. Dr. Burnham's agreement provides for a base
salary of $110,000 per annum, and Ms. Burnham's agreement provides for a base
salary of $75,000 per annum. Each of the agreements provides for continuing
automatic one-year extensions to maintain its three-year term, until the
agreement is terminated by either party. Certain fringe benefits are also
provided, including split dollar life insurance and certain expense allowances.
Dr. Burnham and Ms. Burnham also may be granted annual increases of 10% per
annum at the discretion of the Board of Directors and bonuses based upon meeting
defined goals established by the Board of Directors. All such bonuses and other
increases must also be approved by Whale Securities Co., L.P., the underwriter
of the initial public offering of the Company's securities, which was
consummated on March 22, 1996 (the "Public Offering"), for a period of three
years following the effective date of the
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<PAGE> 10
Public Offering, or sooner in the event that the Company achieves annual
profitability prior to the end of the period. These agreements also provide that
the Company will continue to pay the base salary to the employee or the
employee's legal representative in the event of the employee's termination due
to disability or death, for a period commencing at the time of such termination
and ending at the end of the employment term. The agreements contain provisions
prohibiting the employee from competing with the Company during the term of
employment and for a period of two years thereafter. Dr. Burnham's agreement
provides that he will serve as Chairman of the Board, and Ms. Burnham's
agreement provides that she will serve as a director on the Board of Directors.
The Company also entered into a consulting agreement with George W. Barrett in
November 1995, pursuant to which Mr. Barrett agreed to provide consulting
services to the Company relating to the establishment of the Company's
manufacturing facility, as requested by the Company, for a consulting fee equal
to $400 per day. Such fees totaled $14,400 in 1996.
The Company is currently engaged in a dispute with Mr. Konopelski, a
director and a former employee and officer of the Company. The dispute involves
the termination of Mr. Konopelski's employment for cause. An arbitration
proceeding was instituted by Mr. Konopelski in Syracuse, New York challenging
his termination under his employment contract. Mr. Konopelski is seeking damages
in the aggregate of $500,000. The arbitration is currently proceeding and the
Company believes that the termination was proper and that no amount shall be
awarded to Mr. Konopelski. Subsequent to the commencement of the arbitration,
the Company brought an action against Mr. Konopelski in the New York Supreme
Court (Broome County) alleging violation by Mr. Konopelski of his obligations
under the terms of a non-disclosure agreement. The Court issued a temporary
restraining order barring Mr. Konopelski from making any disclosures or using
confidential information or trade secrets. The Company's request for a permanent
injunction has been denied and the temporary restraining order previously in
effect has been lifted, and all matters covered by the action before the Court
have been referred to arbitration. In a related action the Court denied Mr.
Konopelski access to the Company's shareholder list based on the Court's
conclusion that such request was for an improper purpose not related to the best
interests of the Company. The Company has filed a motion for reargument and has
filed a notice of appeal of the dismissal of the lawsuit and the Court's
decision not to grant a permanent injunction. Mr. Konopelski alleges that he
ceased to be a director on August 4, 1996 by virtue of his removal by the
Company. The Company maintains that Mr. Konopelski was removed as an officer and
employee and that if he chooses not to consider himself as a director, it is his
choice alone. Mr. Konopelski has not been renominated by the Board of Directors
to serve as a director of the Company.
PROPOSAL II -- RATIFICATION OF SELECTION OF INDEPENDENT
PUBLIC ACCOUNTANTS
The Board of Directors believes it is appropriate to submit for
ratification by the shareholders its selection of Price Waterhouse LLP as the
independent public accountants for the Company for fiscal year 1997. Price
Waterhouse LLP has served as independent accountants for the Company since
November 1995. Representatives of Price Waterhouse LLP are expected to be
present at the Meeting, 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. Unless otherwise specified, shares represented by proxies will be
voted for the ratification of Price Waterhouse LLP as the independent public
accountants for the Company. If the shareholders do not so approve, the
selection of independent public accountants will be reconsidered by the Board of
Directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
THE RATIFICATION OF PRICE WATERHOUSE LLP AS
THE INDEPENDENT PUBLIC ACCOUNTANTS FOR THE COMPANY.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Upon incorporation of the Company in New York in September 1993, Dr.
Burnham and Mr. Konopelski, the Company's founders, purchased 374,331 and
354,630 shares of Common Stock, respectively, for a purchase price of $19,000
and $18,000, respectively, some of which shares were subsequently transferred by
them to other related entities or individuals. In addition, in November 1995,
Dr. Burnham and Mr. Konopelski each transferred 22,693 of these shares back to
the Company, for no consideration, in order for the Company
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<PAGE> 11
to then reissue such shares to another individual in settlement of all
outstanding claims for services rendered by such individual on behalf of the
Company prior to its incorporation.
In connection with the December 1994 Placement, Dr. Burnham, in March 1995,
and Mr. Konopelski, in April 1995, each purchased an aggregate of 4,925 shares
of Common Stock and 4,925 Private Warrants for an aggregate purchase price of
$10,000 each.
In June and July 1995, Thomas J. Marquez bought a total of 354,632 shares
of Common Stock from the Company in a private placement for an aggregate price
of $900,000. Pursuant to such purchase, Mr. Marquez became a principal
shareholder of the Company.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and information furnished by the reporting
person, during the fiscal year ended December 31, 1996 all Section 16(a) filing
requirements applicable to the Company's officers, directors and greater than
10% beneficial owners were complied with.
INDEPENDENT ACCOUNTANTS
The Company has engaged Price Waterhouse LLP as independent public
accountants for the Company for fiscal year 1997. Price Waterhouse LLP has
served as the independent accountants for the Company since November 1995.
Representatives of Price Waterhouse LLP are expected to be present at the
Meeting, 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.
OTHER BUSINESS
Management of the Company knows of no other business which will be
presented for consideration at the Meeting, but should any other matters be
brought before the Meeting, it is intended that the persons named in the
accompanying proxy will vote such proxy in their discretion.
ANNUAL REPORT
The Annual Report of the Company on Form 10-KSB and Form 10-KSB/A for the
fiscal year ended December 31, 1996, including financial statements but
excluding exhibits, is being furnished herewith to shareholders of record of the
Company on May 19, 1997. The Annual Report does not constitute a part of the
proxy soliciting material.
SHAREHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
Any shareholder desiring to present proposals to shareholders at the 1998
Annual Meeting of the Company must transmit such proposal to the Company so that
it is received by the Company on or before January 30, 1998. All such proposals
should be in compliance with applicable SEC regulations.
By Order of the Board of Directors
Dr. Geoffrey T. Burnham
Chairman of the Board
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SEMICONDUCTOR LASER INTERNATIONAL CORPORATION
15 LINK DRIVE, BINGHAMTON, NEW YORK 13904
PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS -- JUNE 20, 1997
The undersigned hereby appoints GEOFFREY T. BURNHAM and NICHOLAS L.
PRIOLETTI, Jr., as Proxies, each with the power to appoint his substitute, and
hereby authorizes them to represent and to vote, as designated below, all of the
shares of Common Stock, $.01 par value, of SEMICONDUCTOR LASER INTERNATIONAL
CORPORATION held of record by the undersigned on May 19, 1997 at the Annual
Meeting of Shareholders (the "Meeting") of SEMICONDUCTOR LASER INTERNATIONAL
CORPORATION, on June 20, 1997 at 10:00 a.m., or at any adjournments thereof.
(1) Election of Directors
<TABLE>
<S> <C>
[ ] FOR all nominees listed below (except as indicated [ ] WITHHOLD AUTHORITY to vote for all nominees listed
otherwise below) below
</TABLE>
INSTRUCTION: To withhold authority to vote for an individual nominee, write such
nominees's name in the space below.
NOMINEES: George W. Barrett, Geoffrey T. Burnham, Susan M. Burnham, David L.
Koffman and Brian J. Thompson
- --------------------------------------------------------------------------------
(2) To ratify the selection of Price Waterhouse LLP as independent public
accountants for the Company for fiscal year 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournments
thereof.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE> 13
(To be signed below)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN ACCORDANCE WITH THE
INSTRUCTIONS GIVEN ABOVE.
Please sign exactly as name appears hereon. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please indicate the capacity in which signing. When a
ballot is given by a corporation, please give your full corporation name and
have the ballot signed by the president or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
Dated:
----------------------------------,
1997
Shareholder:
----------------------------------
----------------------------------
SIGNATURE
----------------------------------
SIGNATURE IF HELD JOINTLY
PLEASE MARK, SIGN, DATE AND RETURN
THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
