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SCHEDULE 14A
(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:
[X] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
SYMPHONIX DEVICES, INC.
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(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD______ , 2000
TO THE STOCKHOLDERS OF SYMPHONIX DEVICES, INC.:
NOTICE IS HEREBY GIVEN that a special meeting of the stockholders of
Symphonix Devices, Inc. will be held on _________, ________ ___, 2000 at 9:00
a.m., local time, 2331 Zanker Road, San Jose, California 95131, for the
following purposes:
1. To approve the terms of an equity financing of $26 million pursuant to
which Symphonix will issue to certain new investors the voting stock of
Symphonix in an amount equal to approximately 31% of the total number of
shares of the common stock of Symphonix outstanding after giving effect to
this financing.
2. To transact such other business as may properly come before the meeting or
any adjournment of the meeting.
The foregoing items of business are more fully described in the proxy
statement accompanying this notice.
Only stockholders of record at the close of business on _________ __, 2000,
the record date, are entitled to notice of and to vote at the special meeting.
All stockholders are cordially invited to attend the special meeting.
However, to assure your representation at the special meeting, you are urged to
mark, sign, date and return the enclosed proxy as promptly as possible in the
postage-prepaid envelope enclosed for that purpose. Any stockholder attending
the special meeting may vote in person even if he or she has returned a proxy.
FOR THE BOARD OF DIRECTORS
Kirk B. Davis
President and Chief Executive Officer
San Jose, California
_____________ ___, 2000
IN ORDER TO ASSURE YOUR REPRESENTATION AT THE SPECIAL MEETING, YOU ARE REQUESTED
TO COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE, AND
RETURN IT IN THE ENCLOSED ENVELOPE. YOUR STOCK WILL BE VOTED IN ACCORDANCE WITH
THE INSTRUCTIONS YOU HAVE GIVEN IN THE PROXY. YOUR PROXY MAY BE REVOKED AT ANY
TIME BEFORE IT IS VOTED BY SIGNING AND RETURNING A LATER-DATED PROXY WITH
RESPECT TO THE SAME SHARES, BY FILING WITH THE SECRETARY OF THE COMPANY A
WRITTEN REVOCATION BEARING A LATER DATE OR BY ATTENDING AND VOTING IN PERSON AT
THE SPECIAL MEETING.
<PAGE>
SYMPHONIX DEVICES, INC.
PROXY STATEMENT
INFORMATION CONCERNING SOLICITATION AND VOTING
General
The enclosed proxy is solicited on behalf of the board of directors of
Symphonix Devices, Inc., a Delaware corporation, for use at a special meeting of
stockholders to be held on _________ __, 2000, at 9:00 a.m., local time, or at
any adjournment of the meeting. The special meeting will be held at the
headquarters of Symphonix located at 2331 Zanker Road, San Jose, California
95131. The telephone number at that meeting location is (408) 232-0710.
These proxy solicitation materials were mailed on or about _________ __,
2000, to all stockholders entitled to vote at the meeting.
Record Date and Principal Share Ownership
Stockholders of record at the close of business on _________ __, 2000, the
record date, are entitled to notice of and to vote at the special meeting.
Symphonix has only one class of shares outstanding, designated common stock,
$0.001 par value per share. At the record date, _______ shares of common stock
were issued and outstanding and held of record by approximately _________
stockholders. No shares of the preferred stock of Symphonix were outstanding.
Revocability of Proxies
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Secretary of Symphonix
a written notice of revocation or a duly executed proxy bearing a later date or
by attending the special meeting and voting in person.
Voting and Solicitation
Each stockholder is entitled to one vote for each share of common stock
held as of the record date.
The cost of soliciting proxies will be borne by Symphonix. Symphonix
expects to reimburse brokerage firms and other persons representing beneficial
owners of shares for their expenses in forwarding solicitation material to such
beneficial owners. Proxies may also be solicited by certain of the directors,
officers and regular employees of Symphonix, without additional compensation,
personally or by telephone or facsimile.
Quorum; Abstentions; Broker Non-Votes
Votes cast by proxy or in person at the special meeting will be tabulated
by the Inspector of Elections appointed for the meeting and will determine
whether or not a quorum is present.
The required quorum for the transaction of business at the special meeting
is a majority of the votes eligible to be cast by holders of shares of common
stock issued and outstanding on the record date. Shares that are voted "FOR",
"AGAINST" or "WITHHELD FROM" a matter are treated as being present at the
meeting for purposes of establishing a quorum and are also treated as shares
entitled to vote at the special meeting with respect to such matter.
While there is no definitive statutory or case law authority in Delaware as
to the proper treatment of abstentions, Symphonix believes that abstentions
should be counted for purposes of determining both (i) the presence or absence
of a quorum for the transaction of business and (ii) the total number of votes
cast with respect to a proposal. In
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the absence of controlling precedent to the contrary, Symphonix intends to treat
abstentions in this manner. Accordingly, abstentions will have the same effect
as a vote against the proposal.
In a 1988 Delaware case, Berlin v. Emerald Partners, the Delaware Supreme
Court held that, while broker non-votes should be counted for purposes of
determining the presence or absence of a quorum for the transaction of business,
broker non-votes should not be counted for purposes of determining the number of
votes cast with respect to the particular proposal on which the broker has
expressly not voted. Accordingly, Symphonix intends to treat broker non-votes
in this manner. Thus, a broker non-vote will not affect the outcome of the
voting on a proposal.
Any proxy which is returned using the form of proxy enclosed and which is
not marked as to a particular item will be voted for the issuance of the shares
of common stock of Symphonix and as the proxy holders deem advisable on other
matters that may come before the meeting, as the case may be with respect to the
items not marked.
Deadline for Receipt of Stockholder Proposals
Stockholders are entitled to present proposals for action at a forthcoming
meeting if they comply with the requirements of the proxy rules established by
the Securities and Exchange Commission. Proposals of stockholders of Symphonix
that are intended to be presented by such stockholders at the 2001 annual
meeting of Symphonix stockholders must be received by Symphonix no later than
January 13, 2001 to be considered for inclusion in the proxy statement and form
of proxy relating to that meeting.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information known to Symphonix with respect
to the beneficial ownership of its common stock as of September 14, 2000, by (i)
each person who is known to Symphonix to own beneficially more than 5% of the
outstanding shares of common stock, (ii) each director, (iii) each named
executive officer as defined in Item 402(a)(3) of Regulation S-K, and (iv) all
directors and executive officers as a group. Except as otherwise noted, the
stockholders named in the table have sole voting and investment power with
respect to all common stock shown as beneficially owned by them, subject to
applicable community property laws.
<TABLE>
<CAPTION>
Common Stock Approximate Percentage
Beneficial Owner Beneficially Owned Owned (1)
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<S> <C> <C>
Siemens Audiologische Technik GmbH (2).......................... 2,026,062 14.1%
c/o Siemens Corporation
1301 Avenue of the Americas
New York, NY 10014
Roger Radke (3)................................................. 2,026,062 14.1%
Entities Affiliated with Mayfield (4)........................... 1,682,649 12.6%
2800 Sand Hill Road, 2/nd/ Floor
Building 4, Suite 210
Menlo Park, CA 94025
Entities Affiliated with Sierra Ventures (5).................... 1,175,007 8.8%
3000 Sand Hill Road
Building 4, Suite 210
Menlo Park, CA 94025
Coral Partners IV, Limited Partnership.......................... 1,099,964 8.2%
60 South Sixth Street, Suite 3510
Minneapolis, MN 55402
Kirk B. Davis (6)............................................... 700,000 5.0%
Geoffrey R. Ball (7)............................................ 636,239 4.8%
B.J. Cassin (8)................................................. 413,053 3.1%
Bob H. Katz (9)................................................. 288,950 2.1%
</TABLE>
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<TABLE>
<CAPTION>
Common Stock Approximate Percentage
Beneficial Owner Beneficially Owned Owned (1)
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<S> <C> <C>
R. Michael Crompton (10)........................................ 219,008 1.6%
Patrick J. Rimroth (11)......................................... 219,008 1.6%
Terence J. Griffin (12)......................................... 175,000 1.3%
Gary M. Saxton (13)............................................. 175,000 1.3%
James M. Corbett (14)........................................... 70,000 *
T. Vainio (15).................................................. 82,703 *
George G. Montgomery III (16)................................... 60,000 *
Alfred G. Merriweather (17)..................................... 115,476 *
617 Arboleda Drive
Los Altos, CA 94023
Harry S. Robbins (18)........................................... 88,000 *
1 Loggerhead Lane
Manalapan, FL 33462
All directors and executive officers as a group (13 persons).... 5,524,499 33.7%
</TABLE>
_____________________________
* Less than 1%
(1) Applicable percentage ownership is based on 13,352,124 shares of common
stock outstanding as of September 14, 2000 together with applicable options
or warrants for such stockholder. Beneficial ownership is determined in
accordance with the rules of the Securities and Exchange Commission, based
on factors including voting and investment power with respect to shares
subject to the applicable community property laws. Shares of common stock
subject to options or warrants currently exercisable or exercisable within
60 days after September 14, 2000 are deemed outstanding for computing the
percentage ownership of the person holding such options, but are not deemed
outstanding for computing the percentage of any other person.
(2) Includes 1,026,062 shares issuable within 60 days after September 14, 2000
pursuant to a Common Stock Purchase Agreement dated as of December 1, 1999.
(3) Consists of 2,026,062 shares beneficially owned by Siemens Audiologische
Technik GmbH, which includes 1,026,062 shares issuable within 60 days after
September 14, 2000 pursuant to a Common Stock Purchase Agreement dated as
of December 1, 1999. Dr. Radke, a director of the company, is managing
director of Siemens Audiologische GmbH and disclaims beneficial ownership
over these shares.
(4) Consists of 1,567,446 shares held by Mayfield VII, 82,499 shares held by
Mayfield Associates Fund II and 32,704 shares held by Mayfield VII
Management Partners.
(5) Consists of 1,130,812 shares held by Sierra Ventures IV, 44,115 shares held
by Sierra Ventures IV International.
(6) Includes options to purchase 600,000 shares exercisable within 60 days
after September 14, 2000. Mr. Davis joined Symphonix as President and
Chief Executive Officer in August 1999.
(7) Includes options to purchase 25,000 shares exercisable within 60 days after
September 14, 2000.
(8) Consists of 234,963 shares held in the name of the Cassin Family Trust,
over which Mr. Cassin holds voting and dispositive power, (ii) 95,387
shares held by Cassin Family Partners, a California Limited Partnership,
over which Mr. Cassin holds voting and dispositive power. Includes options
to purchase up to 82,703 shares exercisable within 60 days after September
14, 2000.
(9) Consists of 162,792 shares held in the name of the Bob Katz Trust, over
which Mr. Katz holds voting and dispositive power. Includes options to
purchase up to 126,158 shares exercisable within 60 days after September
14, 2000.
(10) Includes options to purchase up to 202,507 shares exercisable within 60
days after September 14, 2000.
(11) Includes options to purchase up to 108,698 shares exercisable within 60
days after September 14, 2000. 110,310 of such shares are held in the name
of the Rimroth Family Trust. Mr. Rimroth holds voting and dispositive
power over all such shares.
(12) Includes options to purchase up to 175,000 shares exercisable within 60
days after September 14, 2000. Mr. Griffin joined Symphonix as Chief
Financial Officer in April 2000.
(13) Includes options to purchase up to 175,000 shares exercisable within 60
days after September 14, 2000. Mr. Saxton joined Symphonix as Vice
President of Sales and Marketing in November 1999.
(14) Includes options to purchase up to 60,000 shares exercisable within 60 days
after September 14, 2000.
(15) Consists of options to purchase 82,703 shares exercisable within 60 days
after September 14, 2000.
(16) Includes options to purchase up to 60,000 shares exercisable within 60 days
after September 14, 2000.
(17) Consists of 115,476 shares held in the name of the Merriweather Family
Trust. Mr. Merriweather holds voting and dispositive power over all such
shares. Mr. Merriweather resigned as Chief Financial Officer effective
January 1, 2000 and is no longer involved with Symphonix.
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(18) All such shares are held in the name of the Robbins Family Trust. Mr.
Robbins holds voting and dispositive power over all such shares. Mr.
Robbins resigned as President and Chief Executive Officer of Symphonix
effective August 16, 1999. Mr. Robbins resigned from the board of
directors effective April 1, 2000 and is no longer involved with Symphonix.
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<PAGE>
PROPOSAL NO. 1
APPROVAL OF TERMS OF EQUITY FINANCING
Background of the Financing
General. The stockholders are being asked to approve the private issuance
and sale by Symphonix of shares of its common stock in a private placement of
$26 million to certain investors on the terms and conditions outlined below.
This financing, if approved by the stockholders of Symphonix, would only occur
upon the fulfillment of certain conditions.
THIS PROXY STATEMENT IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN
OFFER TO BUY ANY SECURITIES OF THE COMPANY. THE SECURITIES REFERRED TO IN THIS
PROXY STATEMENT HAVE NOT BEEN REGISTERED FOR SALE BY THE COMPANY UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE
SECURITIES LAWS AND MAY NOT BE SO OFFERED OR SOLD ABSENT SUCH REGISTRATION UNDER
THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS THEREOF.
The Financing. During the past year, the management and the board of
directors of Symphonix has recognized Symphonix's need for additional working
capital. After due investigation of the options available to Symphonix and due
deliberation, the board of directors determined the terms and conditions of the
financing, including the amount of money to be raised and the price at which the
shares would be offered. The major terms of the financing are set forth below:
(a) Equity Capital to Be Raised and Price of Shares to Be Issued. The
amount of equity capital to be raised pursuant to the financing is
$26 million. The shares of common stock issued in the financing will
be sold at a per share price of $4.064, which was determined as 80%
of the average of the closing price of Symphonix common stock for the
thirty-three (33) day period ending on September 18, 2000.
Accordingly, a total of approximately 6.4 million shares of Symphonix
common stock will be issued to the investors at the closing of the
financing.
(b) Adjustment to Purchase Price. In the event the market price of
Symphonix declines, Symphonix may be required to issue additional
shares of common stock to the investors at no additional cost to the
investors pursuant to a purchase price adjustment. The purchase price
adjustment allows the investors, at any time during the two-year
period following the closing of the financing, to calculate an
adjusted per share purchase price equal to the average closing market
price of the common stock as reported on the Nasdaq National Market
for the thirty-three (33) consecutive trading days immediately
preceding the date of the adjustment. Those investors who desire to
participate in this purchase price adjustment will receive additional
shares of common stock equal to the difference between the number of
shares which each investor could have purchased based on the adjusted
per share purchase price at the investor's original investment amount
and the number of shares originally purchased. Each investor may
participate in a purchase price adjustment only once during the two-
year period.
A possible consequence of the investors' right to adjust their
purchase price is that the investors could gain control of a majority
of the voting power of Symphonix. For purposes of example, assuming
no changes in the capitalization of Symphonix after _______ ___,
2000, the investors could hold more than 50% of the voting stock of
Symphonix if, as a result of the purchase price adjustment, the
adjusted per share price of Symphonix common stock fell below
approximately $1.80.
(c) Right to Maintain. If Symphonix issues any additional securities
after the financing (excluding certain issuances such as, for
example, stock options pursuant to the Symphonix's stock option
plans) the investors will have the right to purchase a portion of
these additional securities at the lowest price that such
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additional securities are sold in such an amount as to enable each
investor to maintain its percentage ownership of the total
outstanding common stock.
(d) Registration Obligations. Within 10 business days of the closing of
the financing, Symphonix, at its expense, is required to file with
the Securities and Exchange Commission a registration statement
registering the resale of the shares of common stock issued to the
investors. Symphonix is required to maintain the effectiveness of
such registration statement for up to one year.
In addition, once the effectiveness of the registration statement
described above has expired, Symphonix will be required to file a
registration statement on Form S-3 once every six months, at the
request of the investors, to register shares held by the investors
and to maintain the effectiveness of each such registration statement
for up to 90 days.
Finally, if Symphonix determines to register any shares of common
stock for itself or stockholders other than the investors, it will be
obligated to register the shares of any investor that so requests
(with certain exceptions).
(e) Indemnification of Investors. Symphonix has agreed to enter into
indemnification agreements with J.P. Morgan and Patricof, as
stockholders, to indemnify them for any event or occurrence related
to the fact that they are affiliates of Symphonix or arising from any
action or inaction on their part based upon their status as
affiliates of Symphonix. Symphonix has also agreed to add J.P. Morgan
and Patricof, as stockholders, to its current directors and officers
liability insurance policy.
(f) Appointment of Members to the Board of Directors. So long as J.P.
Morgan and Patricof each hold at least 1,203,315 shares of common
stock, Symphonix has agreed that its board of directors will nominate
one individual designated by each of J.P. Morgan and Patricof to the
slate of nominees recommended by the board of directors to the
stockholders at each annual meeting of the stockholders. In addition,
Symphonix has agreed that its board of directors and management will
vote all shares for which they hold proxies or otherwise are entitled
to vote in favor of the nominees designated by J.P. Morgan and
Patricof.
(g) Limitations on Acquisitions. Symphonix has agreed not to acquire any
other business or business entity in any transaction in which the
total consideration paid by Symphonix exceeds $10 million without the
prior written consent of J.P. Morgan and Patricof.
(h) Limitations on Issuance of New Securities. Symphonix has agreed not
to issue, for two years from the closing of the financing, securities
senior to the common stock with respect to dividends, liquidation
preference, voting rights, registration rights or redemption rights,
or any common stock sold at a discount from its fair market value in
a transaction in which Symphonix receives at least $5 million in
proceeds, without the prior written consent of J.P. Morgan and
Patricof.
(i) Exemption from Registration. The proposed financing is intended to be
exempt from the registration requirements of the Securities and
Exchange of 1933 Act, as amended, and Symphonix expects to rely upon
the Regulation D "safe harbor" provisions, or other exemptions,
promulgated thereunder.
Stockholder Approval
The 20% Rule. The issuance by Symphonix of the common stock is subject to
stockholder approval pursuant to Rule 4460(i)(D)(ii) of the Rules of the
National Association of Securities Dealers, Inc. This Rule requires companies
to obtain stockholder approval before the sale or issuance of common stock (or
securities convertible into common stock) in a transaction other than a public
offering where (i) the price per share is less than the greater of (a) the
market value of a share of common stock or (b) the per share book value, and
(ii) the amount of the common stock to be issued (or
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<PAGE>
issuable upon conversion) is or will be greater than 20% of the common stock or
voting power of Symphonix outstanding prior to such issuance.
The proposed financing will result in the issuance of common stock of
Symphonix of an amount in excess of 20% of the currently outstanding common
stock of Symphonix and at a price which is less than the market value of a share
of the common stock of Symphonix, based on recent closing prices.
Use of Proceeds
Symphonix intends to use the proceeds of the financing for general
corporate purposes.
Dilutive Effect
The financing will have a dilutive effect on current stockholders in that
the percentage ownership of current stockholders of Symphonix will decline as a
result of the financing. The number of shares issued pursuant to the financing
will increase substantially the number of shares of common stock currently
outstanding. In the event the investors exercise the purchase price adjustment,
the percentage ownership of current stockholders will decline further and the
number of shares of common stock outstanding will increase.
The pro forma net tangible book value of Symphonix as of August 31, 2000
was $_________ or $____ per share of common stock, based upon 14,458,832 shares
of common stock outstanding on that date (including 1,026,062 shares of common
stock to be issued to Siemens Audiologische Technik GmbH pursuant to a Common
Stock Purchase Agreement dated December 1, 1999). Pro forma net tangible book
value per share represents Symphonix's total tangible assets less total
liabilities divided by the pro forma number of outstanding shares of common
stock. For purposes of the table immediately below, dilution per share
represents the difference between the amount per share paid by the investors and
the pro forma net tangible book value per share after the financing. This
dilution illustration is based on the price per share of the stock and does not
reflect changes in percentage ownership of the common stock for voting purposes,
another form of dilution discussed below. After giving effect to the sale of
6,397,632 shares of common stock at a purchase price of $4.064 per share, and
after deducting estimated offering expenses of approximately [$_00,000], the pro
forma net tangible book value of Symphonix as of the closing would be
$___________ or $____ per share. This represents an immediate increase of pro
forma net tangible book value of $___ per share to existing stockholders and an
immediate dilution in pro forma net tangible book value of $____ per share to
the investors, as illustrated in the following table:
<TABLE>
<S> <C> <C>
Initial price per share $____
Pro forma net tangible book value per share before the offering........................ $____
Increase attributable to new investors................................................. $____
Pro forma net tangible book value per share after the offering.......................... $____
Dilution per share 2to the investors..................................................... $____
</TABLE>
The following table summarizes, on a pro forma basis as of August 31, 2000
the potential dilutive effect, for percentage ownership purposes, of the
financing on existing stockholders, where Symphonix raises $26 million through
the sale of 6,397,632 shares of common stock.
Shares Percentage
------ ----------
Outstanding Common Stock (1) 14,458,832 69%
New Common Stock 6,397,632 31%
Total 20,856,464 100%
______________________
(1) Includes 1,026,062 shares to be issued to Siemens Audiologische
Technik GmbH pursuant to a Common Stock Purchase Agreement dated
December 1, 1999.
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<PAGE>
Affiliates or Insiders. Symphonix will increase the beneficial ownership
in Symphonix of B.J. Cassin, a member of the board of directors, by 246,061
shares of common stock through the sale of those shares to certain of his
affiliates pursuant to the financing.
Advantages and Disadvantages of the Proposed Equity Financing
Advantages. Before voting, each stockholder should consider the following
advantages of the financing:
. the financing will provide capital to assist in the commercial
introduction into the U.S. market of the semi-implantable Vibrant
Soundbridge product, which was recently approved by the Food and Drug
Administration, and which Symphonix believes is critical to its long term
success;
. the financing will provide capital for ongoing research and
development efforts; and
. the financing will provide capital for general corporate purposes.
Disadvantages. Before voting, each stockholder should also consider the
following disadvantages of the financing:
. the investors, as a group, may control a majority of the voting power
of Symphonix if the market price of the common stock declines
sufficiently;
. the per share price of Symphonix common stock may decline because of
the issuance of the common stock to the investors at a below market
price and the subsequent registration of such common stock;
. the percentage ownership of Symphonix by existing stockholders will
decline;
. Symphonix will incur both one-time and recurring expenses as a result
of this financing;
. Symphonix has agreed that its board of directors will nominate and
vote for designees to its board of directors of J.P. Morgan and
Patricof; and
. Symphonix will face restrictions on acquisitions of more than $10
million and new stock issuances.
Stockholders are requested in this Proposal One to approve the issuance of
shares in a financing of $26 million pursuant to which Symphonix will issue
common stock that will result in the issuance of approximately 31% of the
outstanding securities of Symphonix, and the issuance of additional securities
if the investors subsequently elect to adjust their purchase price. The
affirmative vote of the holders of a majority of the common stock present in
person or represented by proxy and entitled to vote at the special meeting will
be required to approve such issuance.
Vote Required
Affirmative votes constituting a majority of the votes cast will be
required to approve and ratify the terms of the financing.
THE BOARD OF DIRECTORS OF SYMPHONIX UNANIMOUSLY RECOMMENDS A VOTE FOR THE
APPROVAL OF THE TERMS OF THE EQUITY FINANCING.
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OTHER MATTERS
Symphonix knows of no other matters to be submitted at the meeting. If any
other matters properly come before the meeting, it is the intention of the
persons named in the enclosed form of proxy to vote the shares they represent as
the board of directors may recommend.
THE BOARD OF DIRECTORS
San Jose, California
________________, 2000
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