UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE PRE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
[x] Filed by the Registrant
[ ] 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 Rule
14a-11(c) or Rule 14a-12
LASER CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing: (Check the appropriate box)
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and O-11
(1) Title of each class of securities to which transaction applies:_____________
(2) Aggregate number of securities to which transaction applies:________________
(3) Per unit price of other underlying value of transaction computed
persuant to Exchange Act Rule O-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 O-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:___________________
LASER CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 25, 199917, 2001
To the Shareholders:
The 19992001 Annual Meeting of Shareholders of Laser Corporation (the
"Company") will be held at the Company's headquarters, 2417 South 3850 West,
Salt Lake City, Utah 84120 on Tuesday, May 25, 199917, 2001 at 9:00 a.m. MDT, for the
following purposes:
1. To elect four directors, each to serve until the next annual meeting
of the Shareholders and until each of their successors is elected and shall
qualify;
2. To ratify andapprove an amendment to the Company's Articles of Incorporation
to increase the authorized number of shares of the Company's Common Stock to
40,000,000 shares;
3. To approve an amendment to the Company's Articles of Incorporation
to authorize up to 10,000,000 shares of Preferred Stock of the Company issuable
in one or more series;
4. To approve the Laser Corporation 1999 Stock Incentive
Plan.
3. To ratify the appointmentselection of Tanner + Co. as the independent auditors
of the Company; and
4.5. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Information regarding the matters to be acted upon at the meeting is
contained in the Proxy Statement attached to this Notice. Only Shareholders of
record at the close of business on April 8, 19996, 2001 will be entitled to notice of
and to vote at the meeting or any adjournment thereof.
Your vote is important. Please sign and date the enclosed Proxy and
return it promptly in the enclosed return envelope whether or not you expect to
attend the meeting. You may revoke your Proxy and vote in person should you
decide to attend the meeting.
By Order of the Board of Directors
Rod O. Julander, Secretary
Salt Lake City, Utah
April 14, 199916, 2001
=============================================================================
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
OF
LASER CORPORATION
-------------------------------------------------
GENERAL
This Proxy Statement is furnished in connection with the solicitation
of Proxies by the Board of Directors of Laser Corporation (the "Company") for
the 19992001 Annual Meeting of Shareholders of the Company to be held on May 25, 1999,17,
2001, at 9:00 a.m. MDT, at the Company's headquarters, 2417 South 3850 West,
Salt Lake City, Utah. Shareholders will consider and vote upon the proposals
described herein and referred to in the Notice of Annual Meeting accompanying
this Proxy Statement.
The close of business on April 8, 1999,6, 2001, has been fixed as the record
date for the determination of the Shareholders entitled to notice of, and to
vote at, the Annual Meeting. On such date there were outstanding and entitled to
vote 1,387,5381,630,107 shares of common stock. Each share of common stock is entitled to
one vote on each matter to be considered at the meeting. For a description of
the principal holders of such stock, see "Security Ownership of Certain
Beneficial Owners and Management" below.
Shares represented by Proxies will be voted in accordance with the
specifications made thereon by the Shareholders. Any Proxy not specifying the
contrary will be voted in favor of Management's nominees for directorsDirectors of the
Company, for ratificationapproval on an amendment to the Company's Articles of Incorporation
to increase the number of authorized shares of common stock and approvalto authorize the
issuance of the Laser Corporation 1999Preferred Stock,
Incentive Plan and for ratification of appointment of the
certified public accountants.
The Proxies being solicited by the Board of Directors may be revoked by
any Shareholder giving the Proxy at any time prior to the Annual Meeting by
giving notice of such revocation to the Company, in writing, at the address of
the Company provided below. The Proxy may also be revoked by any Shareholder
giving such Proxy who appears in person at the Annual Meeting and advises the
Chairman of the Meeting of his intent to revoke the Proxy.
The principal executive offices of the Company are located at 2417
South 3850 West, Salt Lake City, Utah 84120. This Proxy Statement and the
enclosed Proxy are being furnished to Shareholders on or about April 14, 1999.
==============================================================================16, 2001.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
Security Ownership of Certain Beneficial Owners
- -----------------------------------------------
The following table sets forth information as of March 31, 1999,15, 2001, as to
each person who owns of record, or is known by the Company to own beneficially,
more than five percent (5%) of any class of voting securities of the Company.
Amount and
Nature of
Percent
Title Name & Address Beneficial ofPercent
of Class of Beneficial Owner Ownership(1) of Class(2)
- --------- ------------------------- --------------------- ------------------- -------------- -----------
Common Reinhardt Thyzel(3) 521,739 35.4
Seestrasse 9,
8640 Rapperswil584,863 34.3
Rehweidstrasse 15
8738 Uetliburg, Switzerland
Common Dr. WilliamEstate of Wm. H. McMahan(4) 192,619 13.0151,819 9.0
3959 West 1820 South
Salt Lake City, UT 84104
Common Paula F. Julander(5) 83,750 5.7109,305 6.4
1467 Penrose Drive
Salt Lake City, UT 84103
(1) Except as otherwise indicated, all shares are directly owned with
voting and investment power held by the person named.
(2) Unless otherwise noted, based upon 1,475,0381,705,691 shares (including shares
subject to options that are exercisable within sixty days) outstanding
as of March 31, 1999.15, 2001.
(3) Based upon information included in a Schedule 13D filed with the
Securities and Exchange Commission ("SEC") on October 30, 1998.1998, and
subsequent Form 5 filed with SEC. Also includes 50,000 shares owned by
Mrs. Gisela Thyzel, his wife, as to which Mr. Thyzel disclaims
beneficial ownership and 4,000 shares which Mr. Thyzel has the right to
acquire through the exercise of stock options.
(4) Based upon information included on a Form 4 fileddocuments provided by Dr.
McMahan, former Chairman and Presidentthe executor of the Company, with
the SEC on January 15, 1990.
The Company has not received any amendments to this Form 4.Estate of William
H. McMahan. Includes 22,08010,579 shares held by Linda R. McMahan, Dr. McMahan's spouse.who is the
executor of the Estate.
(5) Based upon information provided by Ms.Mrs. Julander on a SEC Form 144
dated December 11, 1997.June 15, 2000. Also includes 13,555 shares held by Dr. Rod O.
Julander, her husband and 22,000 shares which Dr. Julander has the
right to acquire through the exercise of stock options. Mrs. Julander
disclaims beneficial ownership of stock held by her husband.
-2-
==============================================================================
Security Ownership of Management
- --------------------------------
The following table sets forth certain information as of March 31,
1999,15,
2001, regarding the ownership of each class of equity securities of the Company
by each directorDirector or nominee for directorDirector of the Company and by all executive
officers and directors as a group.
Amount and
Nature of
Percent
Title Name & Addressof Beneficial ofPercent
of Class of Beneficial Owner Ownership(1) of Class
- -------- --------------------- -------------------------------- -------------- --------
Common B. Joyce Wickham 25,000 1.726,600(2) 1.6
Common Rod O. Julander 110,250(2) 7.5109,305(3) 6.4
Common Mark L. Ballard 23,524 1.6
Common Elizabeth A. Whitsett 2,000 .122,024(4) 1.3
Common Reinhardt Thyzel 521,739 35.4584,863(5) 34.3
Common All Executive Officers 682,513 46.3742,692 43.5
and Directors as a
Group. (5Group (4 persons)
(1) Except as otherwise indicated, all shares listed include shares subject
to options that officers and directors have the right to exercise
within sixty days and are directly owned with voting and investment
power held by the person named.
(2) Includes 83,75016,000 shares which Ms. Wickham has the right to acquire
through the exercise of stock options.
(3) Includes 73,750 shares owned by Paula F. Julander, his wife, as to
which Dr. Julander disclaims beneficial ownership.ownership and 22,000 shares
which Dr. Julander has the right to acquire through the exercise of
stock options.
(4) Includes 16,000 shares which Mr. Ballard has the right to acquire
through the exercise of stock options.
(5) Includes 50,000 shares owned by Gisela Thyzel, his wife, as to which
Mr. Thyzel disclaims beneficial ownership and 4,000 shares which Mr.
Thyzel has the right to acquire through the exercise of stock options.
Ms. Wickham and Whitsett and Messrs. Julander, Ballard and Thyzel are required to
annually report the acquisition of options granted pursuant to stock option
plans of the Company on a Form 5. These reports were filed for 19982000 and evidence
the grant of options to the individuals named.
-3-
On October 9, 1998, Mr. Reinhardt Thyzel acquired 521,739 shares of the
Company's common stock for a purchase price of $600,000. Mr. Thyzel used his
personal funds to acquire the shares. Mr. Thyzel has acquired additional shares
through the exercise of stock options and shares issued in lieu of Directors
fees. Because Mr. Thyzel owns 35.4%32.6% of the issued and outstanding shares of
common stock of the Company, he could be deemed to control the Company.
Changes in Control
- ------------------
The Company is unaware of any arrangement which may at a subsequent
date result in any change of control of the Company.
=============================================================================
PROPOSAL 1 - ELECTION OF DIRECTORS
The Company's Articles of Incorporation provide that the Board of
Directors shall be elected each year at the annual meeting of the Shareholders
of the Company. At the 19992001 Annual Meeting, the Board of Directors will nominate
B. Joyce Wickham, Rod O. Julander, Mark L. Ballard and Reinhardt Thyzel for
election as directors of the Company. Upon election, the directors will serve
until the next Annual Meeting of the Shareholders or until their successors have
been elected and qualified. The Board of Directors believes that all of the
nominees will be available and able to serve as directors.
In the absence of instructions to the contrary, the persons named in
the Proxy will vote the Proxies "FOR" the election of the nominees listed below,
unless otherwise specified in the Proxy. The Board of Directors has no reason to
believe that any nominee will be unable to serve, but if any nominee should
become unable to serve, the Proxies will be voted for such other person as the
Board of Directors shall recommend.
Certain information concerning the nominees to the Board of Directors
is set forth below:
Name Of Company Has Served Name of Company as Director
Nominee Age Position Held Director Since
- ------- ---- -------------------------- -------------- ------------- --------------
B. Joyce 4749 Director, Chairman, President, 1989
Wickham President, Chief Executive Officer and
Treasurer
Rod O. 6567 Director and Secretary 1989
Julander
Mark L. 5153 Director, Vice President 1994*
Ballard and Assistant Secretary
Reinhardt 5052 Director 1998
Thyzel
-4-
* Mr. Ballard served as a Director of the Company from June 1983 to October
1987.
Board and Committee Meetings
- ----------------------------
There were tenseven meetings of the Board of Directors during the last
fiscal year. Each of the directors attended at least seventy-five (75%) of the
meetings held. For a description of directors' fees, see "Executive Compensation
- - Compensation of Directors." The Board of Directors has designated Audit, Stock
Option, and Executive and Compensation Committees. At the present time, Rod O.
Julander and Elizabeth A. WhitsettReinhardt Thyzel are the members of the Audit and Executive and
Compensation Committees. Dr.Rod O. Julander and Elizabeth A. WhitsettReinhardt Thyzel are members of the
Stock Option Committee, employee
============================================================================= plan. B. Joyce Wickham and Mark L. Ballard are
members of the Stock Option Committee, director plan.
The functions performed by the Audit Committee include (i) meeting with
the Company's independent auditors to discuss the scope of the auditors' annual
reviewaudit of the Company's financial statements, procedures recommended by the
auditors, and the results of the auditors' annual review,audit, and (ii) reporting and
making recommendations to the Board of Directors. The Audit Committee held one
meeting in 1998.2000.
The functions performed by the Executive and Compensation Committee
are to periodically review the compensation paid to officers of the Company and
to make recommendations to the Board of Directors concerning such compensation.
The Executive and Compensation Committee held one meeting in 1998.2000.
The functions performed by the Stock Option Committee, employee plan,
include (i) administering the Company's employee stock option plans, and (ii)
determining eligible officers and employees to whom any stock options should be
granted pursuant to the stock option plans, the number thereof, and the terms of
any such grants. This Stock Option Committee held two meetings in 1998.2000.
The functions performed by the Stock Option Committee, director plan,
include (i) administering the Company's director stock option plans, and (ii)
determining eligible directors to whom any stock options should be granted
pursuant to the stock option plans, the number thereof, and the terms of any
such grants. This Stock Option Committee held two meetings in 1998.2000.
Executive Officers and Directors
- --------------------------------
The executive officers, directors, and significant employees of the
Company are listed on the following table:
-5-
Name Position Age
- ------------------ -------------------------- --------- -------- ---
B. Joyce Wickham Chairman, Director, 47
President, 49
Chief Executive Officer and
Treasurer
Mark L. Ballard Director, Vice President
51
and Assistant Secretary 53
Rod O. Julander Director and Secretary 65
Elizabeth A. Whitsett Director 5267
Reinhardt Thyzel Director 50
=============================================================================52
The term of each executive officer is one year. Officers are elected
each year at the Annual Meeting of the Board of Directors.
Certain information regarding the business experience of these
executive officers, directors and significant employees is set forth below.below:
B. Joyce Wickham. Ms. Wickham was elected Chairman of the Board,
President and Chief Executive Officer, and Treasurer of the Company in 1989. She
has served in those capacities since that time, except for the period from June
1989 until December 1990 when she served solely as Chairman of the Board and
Treasurer. Ms. Wickham has been employed by the Company and its subsidiaries or
associated companies since 1981, with the exception of one year during 1988-1989
at which time she was employed with McMahan Enterprises and Kaye Corporation in General Management and as Director of Personnel and
Operations.Management.
Ms. Wickham has held various executive positions for the Company including
Manager of American Laser GmbH, Munich, Germany, Manager of the Company's
Taipei, Taiwan material procurement operations, Manager of Optical Computer,
Inc. and President of Southfork Electronics, Inc. Ms. Wickham holds a Bachelor
of Science Degree in Psychology from Brigham Young University.
Mark L. Ballard. Mr. Ballard was elected to the Board of Directors in
1994 and is currently is employed by the Company as Vice President of Laser
Corporation and President of American Laser.Laser and A.R.C. Laser Corporations. He
was elected to these positions in May 1991, June 1994, and June 1994,1996
respectively. Prior to May 1991, Mr. Ballard held various executive, officer and
director positions for the Company and its subsidiaries. He has been employed by
the Company since 1975, with the exception of one year during 1983-1984 at which
time he was President and a director of HGM. Mr. Ballard holds a Bachelor of
Arts degree in Accounting from Utah State University.
-6-
Rod O. Julander. Dr. Julander was elected to the Board of Directors and
as Secretary of the Company in 1989. Dr. Julander has been a Professor of Public
Administration at Weber State University, Ogden, Utah, since 1960 and is
Chairman of the Political Science Department. In 1984 he was a consultant for
University of Utah Center for Public Administration, and a lobbyist for the Utah
Chapter of the National Association of Social Workers and the Utah Society of
Radiologic Technologists. In 1967 he was Personnel Consultant at Hill Air Force
Base, Utah and from 1965 to 1966 was Executive Director of the Utah Committee on
Children and Youth. Dr. Julander received his Bachelor of Science and Master of
Science in Philosophy and his Ph.D. in Political Science from the University of
Utah.
Elizabeth A. Whitsett. Ms. Whitsett was elected to the Board of
Directors February 20, 1998. Ms. Whitsett has been a practicing attorney
since 1978. Currently she is employed by Huntsman Corporation, Salt Lake
City, Utah in the position of Associate General Counsel. Huntsman Corporation
and its affiliated companies manufacture and market a variety of specialty and
industrial chemicals and polymers worldwide. Prior to 1993 Ms. Whitsett was a
partner in the law firm of Van Cott, Bagley, Cornwall & McCarthy in Salt Lake
City, Utah. Ms. Whitsett received her Juris Doctorate from the University of
=============================================================================
Southern California in 1978, a MAT from Yale University in 1969 and a Bachelor
of Arts degree in 1967 from Stanford University.
Reinhardt Thyzel. Mr. Thyzel was elected to the Board of Directors
October 16, 1998. Mr. Thyzel is currently President and founder of A.R.C. AG,
Switzerland, a company engaged since 1997, in the development of medical lasers.
In 1996 Mr. Thyzel founded A.R.C. GmbH in Germany for the development and sales
of dermatological and dental lasers. From 1989 through 1996 Mr. Thyzel was a
consultant for Spectron Laser Systems, England. Mr. Thyzel provided the key
experience and management to expand Spectron's scientific product line to a
sucessfulsuccessful industrial laser line. During 1977 Mr. Thyzel founded Meditec, GmbH
in which he was the owner and President. This company developed, manufactured
and sold medical lasers primarily in the field of ophthalmology until 1989 when
it was sold. Mr. Thyzel received his degree in engineering in 1972 and is a
resident of Switzerland.
Dr. Julander Ms. Whitsett and Mr. Thyzel are employed full time in activities which
do not involve the Company. Ms. Wickham is employed full time by the Company as
its President, Chief Executive Officer and Treasurer. Mr. Ballard is employed
full time by the Company as its Vice President and Assistant Secretary. If any
outside director is requested to perform services for the Company beyond normal
service as a director, such director will be compensated for the performance of
such services at rates to be agreed upon by such director and the Company.
There are no family relationships between any directors or executive
officers of the Company.
-7-
EXECUTIVE COMPENSATION
The following table sets forth the aggregate cash remuneration paid by
the Company for services rendered in all capacities during the last fiscal year
by its Chief Executive Officer and by its most highly compensated executive
officers whose cash remuneration from the Company and its subsidiaries exceeded
$100,000. No executive officer received cash remuneration in excess of $100,000
in 1998.
Summary Compensation Table
Long Term Compensation
-----------------------
Annual Compensation Awards Payouts
--------------------- -----------------------2000.
Summary Compensation Table
Long Term Compensation
Annual Compensation Awards Payouts
------------------------ ------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other Re- Securities
Annual stricted Underlying LTIP All Other
Name and Year Compen- Stock Options/ Pay- Compen-
Principal Ended Salary Bonus sation(1) Award(s) SARs outs sation(2)
Position Dec. 31 ($) ($) ($) ($) (#) ($) ($)
- ------------------------------------------------------------------------------------------
B. Joyce Wickham 2000 $72,100 $ 8,208(3) $717 - -0- - $7,765
President, Chief 1999 $72,100 $ 7,971 $456 - 4,000 - $4,160
Executive Officer, 1998 $72,100 $20,505 $609 - 2,000 - -------------------------------------------------------------------------
B. Joyce Wickham 1998 $72,100 $20,505(3) $609 2,000 $4,715
President, Chief 1997 $72,100 $ 7,983 $416 5,000 $4,160
Executive Officer, 1996 $72,100 $ 7,983 $659 5,000 $5,547
and Director
No payments were made for Long Term Compensation-Restricted Stock Awards or Long
Term Compensation-LTIP Payout.
(1) Amounts include Company payments for additional health insurance coverage.
(2) Payments in lieu of vacation and sick time earned.
(3) Paid for bonus earned during fiscal 1997.
==============================================================================1999.
Other Compensation
- ------------------
Ms. Wickham's Employment Agreement provides to Ms. Wickham, as
additional compensation, a payment equal to fifty percent (50%) of the price
actually paid by her to purchase stock of the Company during any calendar year
of her employment, up to a maximum of ten percent (10%) of her annual
compensation for such year. Ms. Wickham has not purchased any shares pursuant to
this provision.
The Company does not have a key-man life insurance policy on the life
of any executive officer or director. The Company provides health and life
insurance to its employees. The Company had no other retirement, pension or
similar programs in 1998.2000. In 1990, the Company established a 401(k) retirement
program for employees. The Company did not make a contribution to the Plan in
1998.2000.
-8-
Stock Option Plans
The- ------------------
Until their expiration on June 30, 1998, the Company hashad two
shareholder approved stock option plans for key employees: an incentive stock
option plan pursuant to which incentive stock options to purchase a maximum of
62,500 shares of common stock maycould be issued and a non-statutory stock option
plan pursuant to which non-qualified stock options to purchase 62,500 shares
maycould be issued. Amounts shown have
been adjusted to take into account the five for four stock dividend issued to
the shareholders on February 18, 1998. No stock options were granted under
these plans in 1998. Both plans expired on June 30, 1998. There are 42,50015,000 shares that remain exercisable under the
incentive stock plan and 15,00012,500 shares that remain exercisable under the non-statutorynon-
statutory stock option plan. The maximum term of options granted under either
plan is five years. Each of the plans provides that if the optionee's employment
by the Company is terminated for any reason the option shall thereupon expire
and any and all right to purchase shares pursuant thereto shall terminate ninety
days after the optionee's employment terminates. On May 28, 1998,25, 1999, the
Shareholders ratified and approved the Laser Corporation 1999 Stock Incentive
Plan. The Stock Option Committee of the Board of Directors approved athe new non-qualified
stock incentive plan. The plan provides for the issuance of stock options,
performance stock units and restricted stock units. The maximum number shares of
the Company's common stock reserved and available for issuance under the non-qualified plan is
150,000 shares. The Stock Option Committee of the Board of Directors administers
the plan and has discretion to determine the terms of options granted under each
plan. Such terms include the exercise price of each option, the number of shares
subject to each option, and the exercisability of such options. Options issued
under the plan must be granted at the fair market value on the date of grant. A
stock option granted under the plan will become exercisable in two increments.
The first third is immediately exercisable and the remaining two-thirds is
exercisable upon the first anniversary date of the grant. The maximum term of
options granted under the plan is ten years. The plan provides that if the
optionee's employment by the Company is terminated for any reason the unvested
portion of any restricted stock unit awards or performance stock unit awards
will be canceled. Stock options held by an employee who is terminated for any
reason other than death, disability, without cause or constructive termination,
may be exercised within 90 days following such termination, to the extent the
===========================================================================
option was exercisable. DuringUnder the new plan in 1998, options to purchase an
aggregate of 4,000 shares of common stock at an exercise price of $1.125 per
share were granted to two officers.officers, with such grant subject to approval of the
1999 Stock Incentive Plan by the Shareholders. During 1999, options to purchase
an aggregate of 4,000 shares of common stock were granted to two officers at an
exercise price of $1.6875 and an aggregate of 4,000 shares of common stock were
granted to four non-officer employees at an exercise price of $1.6875 per share.
In addition during 1999, stock options to purchase an aggregate of 4,000 shares
of common stock were granted to two officers at an exercise price of $4.59 and
an aggregate of 10,000 shares of common stock were granted to ten non-officer
employees at an exercise price of $4.59. No stock options were issued during
2000. The stock incentive plan, as approved, expires on January 1, 2008.2009.
The following table sets forth information respecting all individual grants
of options and stock appreciation rights ("SARs") made during the last completed
fiscal year to any of the executives named in the Summary Compensation Table
above.
-9-
Option/SAR Grants in Last Fiscal Year
Individual Grants
- -----------------------------------------------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e)
Number of % of Total
Securities Options/SARs
Underlying Granted Exercise or Ex-
Options/SARs During Base Price piration
Name Granted (#) Fiscal Year(1) ($/share) Date
- -----------------------------------------------------------------------------------------------------------------------------------------------------
B. Joyce Wickham 2,000 20 % $1.125 Dec. 2008
(1) The percentage is based on the total of options to purchase 10,000 shares
granted in 1998.
Stock Bonus Plan
In January 1985, the Board of Directors adopted a Stock Bonus Plan
(the "Stock Bonus Plan") to provide stock bonuses to qualified employees of
the Company. 62,500 shares of the Company's common stock have been reserved
for issuance under the Stock Bonus Plan.
The Board of Directors has discretion to determine qualified
employees to whom stock bonuses should be awarded, the number of shares to be
granted to each qualified employee and any restrictions to be placed upon the
shares. No more than 1,000 shares may be granted to any one employee during
any fiscal year. Employees are not required to pay cash or other
consideration for shares awarded under the Stock Bonus Plan. As of March 31,
1999, the Company had granted 1,058 shares of common stock under the stock
bonus plan, all of which were issued prior to 1987.
=============================================================================none
Director Options
- ----------------
On October 16, 1987, the Board of Directors adopted a resolution,
ratified by the Shareholders of the Company, granting all non-employee directors
five-year options to purchase 10,000 shares of common stock, at the end of each
six months of service as a director, at the last reported sale price on the date
of grant. Such options will not be granted under the incentive or non-statutory
stock option plans. On March 22, 1990, the Board of Directors adopted a
resolution terminating the director option program. On May 29, 1992 the Board of
Directors reinstated this option plan whereby each outside director would be
granted a five-year option to purchase 2,000 shares of common stock at the end
of each six months of service as a director beginning on June 1, 1992. The plan
provides that if a director shall cease to be a director of the Corporation for
any reason the option may be exercised by the former director at any time within
one year after such cessation. A formalized Stock Option Plan and Stock Option
Agreement was adopted on September 10, 1992, effective May 29, 1992. On June 1,
1993 the plan was amended to change the method of calculating the exercise price
to that of the employee's Incentive Stock Option Plan. All amounts shown have
been adjusted to take into account the five for four stock dividend. During
1994,1998, options to purchase an aggregate of 2,500 shares of common stock at an exercise price
of $1.144 per share and an aggregate of 2,500 shares of common stock at an
exercise price of $4.104 per share were granted. Options were granted in 1995
to purchase an aggregate of 2,500 shares of common stock at the exercise price
of $2.90 per share and an aggregate of 2,500 shares of common stock at an
exercise price of $1.90 per share. In 1996, options to purchase an aggregate
of 2,500 shares of common stock at an exercise price of $2.40 per share and an
aggregate of 2,500 shares of common stock at an exercise price of $2.00 per
share were granted. Options were granted in 1997 to purchase a aggregate of
2,500 shares of common stock at the exercise price of $1.30 per share and an
aggregate of 2,500 shares of common stock at the exercise price of $3.728 per
share. During 1998, options to purchase as aggregate 2,000 shares of common stock at an
exercise price of $2.0155 and an aggregate of 4,000 shares of common stock at an
exercise price of $1.125 per share were granted. In 1999, options to purchase an
aggregate of 4,000 shares of common stock at an exercise price of $1.6875 per
share and an aggregate of 4,000 shares of common stock at an exercise price of
$4.59 per share were granted. During 2000, options to purchase an aggregate
4,000 shares of common stock at an exercise price of $6.0625 per share were
granted and an aggregate of 4,000 shares of common stock at an exercise price of
$6.00 per share were granted.
-10-
Termination of Employment Arrangement
- -------------------------------------
Employment Agreements between B. Joyce Wickham and the Company and Mark
L. Ballard and the Company, provided that in the event of termination by the
Company of their employment, Ms. Wickham shall be entitled to twelve months of
severance benefits at the time of termination and Mr. Ballard shall be entitled
to eleven months of severance benefits at the time of termination, unless such
termination shall be for cause, lack of performance, resignation or by reason of
death.
===============================================================================
Compensation of Directors
- -------------------------
Board members who are also employees of the Company do not receive any
directors' fees. Non-employee Board members receive $10,000 per year in
directors' fees, however, during 2000 the Directors received the Company's
common stock in lieu of cash fees. Directors are reimbursed for their expenses
of attending meetings outside the area in which they live.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Reinhardt Thyzel, a director and significant stockholder of the
Company, is an owner and officer of A.R.C. GmbH, Germany and A.R.C. AG,
Switzerland (collectively "A.R.C."). The Company is currently selling laser
products to and purchasing componentslaser products and sub assembliessystems from these entities.
During 19982000 sales to A.R.C. totaled $269,860.$678,245. Purchases by the Company from
A.R.C. in 19982000 totalled $57,992.$496,435. In addition, the Company and A.R.C. have
formed a stratgicstrategic partnership for the development, marketing and sales of new
medical products. The Company has a distribution agreement with A.R.C. AG for
rights to sell and manufacture the complete Dodick Photolysis medical system.
This agreement includes a royalty fee to be paid to A.R.C. and exclusive rights
to sell in the U.S.A., Canada, Mexico and Brazil.
PROPOSED AMENDMENTS TO THE COMPANY'S ARTICLES OF INCORPORATION
The Board of Directors has unanimously approved two (2) amendments to
the Company's administrative offices and assembly facilities for
its laser products are located in an approximately 46,000 square foot building
in Salt Lake City, Utah,Articles of Incorporation as follows:
(1) the amendment of Article IV to increase to 40,000,000 from
10,000,000 the number of shares of Common Stock, par value $.05 per
share (the "Common Stock"), which the Company is owned by Dr. McMahan, former Chairman and
Presidentauthorized to issue
without further approval of the Company, who owns approximately thirteen percent (13%)shareholders of the stockCompany; and
(2) an additional amendment of Article IV to authorize the issuance
by the Company of up to 10,000,000 shares of Preferred Stock, without
par value (the "Preferred Stock"), in one or more series, from time to
time, and having such rights, preferences, privileges, designations and
other terms, as the Board of Directors may determine without further
approval of the shareholders of the Company.
The Company leasesshareholders will be requested to consider and vote upon each of
these two amendments separately at the building from Dr. McMahan
pursuantAnnual Meeting. These proposed amendments
are attached as Exhibit A to a lease agreement which terminates on April 30, 1999.this Proxy Statement. The annual
base rent forBoard of Directors
recommends that the facility is $236,725.shareholders approve these amendments.
-11-
PROPOSAL 2 - RATIFICATION AND APPROVALAMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION
TO INCREASE THE LASER CORPORATION
1999NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
INCENTIVE PLAN
Background
AsThe Company's Articles of June 30, 1998,Incorporation currently authorize 10,000,000
shares of Common Stock. Of the two stock option plans10,000,000 shares of Common Stock currently
authorized for employees
terminated by their terms. As a result,issuance, approximately 8,281,809 shares are unissued and
unreserved for issuance. The proposed amendment would increase the number of
authorized shares of the Company's Common Stock to 40,000,000.
If the proposed amendment to the Articles of Incorporation is approved,
the authorized shares of Common Stock in excess of those issued and reserved
will be available for issuance at such times and for such corporate purposes as
the Board of Directors believing
that the ability to grant stock option to key employees is necessary to
attract and retain key employees, authorized the adoption of the Laser
Corporation Stock Incentive Plan (the "1999 Plan") to make an additional
150,000 shares of Company Common Stock available for distribution tomay deem advisable without further action by the
Company's key officers and employees.
Consequently, the shareholders, will be asked at the Annual Meeting
to vote onunless such action is required in a proposal to ratify and approve the adoption of the 1999 Plan.
The 1999 Plan was approvedspecific case by
the Board of Directors on March 30, 1998,
subject to stockholder approval.applicable laws or regulations or stock exchange rules.
The Board of Directors believes that substantial benefits accrueit is in the Company's best
interests to increase the number of authorized shares of Common Stock in order
to have additional authorized shares available for issuance to meet business
needs as they may arise. The Board of Directors believes that the availability
of such additional shares will provide the Company fromwith the grantingflexibility to issue
Common Stock for proper corporate purposes which may be identified by the Board
of stock awards under the 1999 Plan to its
=============================================================================
key officers and employees. Such awards encourage such persons to acquire a
proprietary interestDirectors in the Company throughfuture, including stock ownership and thereby afford
them a greater incentivesplits, stock dividends, financing
or acquisitions. Management currently has no arrangements, agreements,
understandings or plans for the issuance of the additional shares of Common
Stock proposed to enhancebe authorized.
The issuance of additional Common Stock could have the effect of
diluting voting power per share or the book value per share of the outstanding
Common Stock. Holders of the Company's Common Stock through their own effortsdo not have preemptive
rights to purchase shares in improvingfuture issuances. Also, the Company's business.existence of unissued
and unreserved Common Stock could, in certain instances, render more difficult
or discourage a merger, tender offer, or proxy contest, and thus potentially
have an "anti-takeover" effect. An issuance of stock can make acquisition of a
company more difficult or more costly. An issuance of stock could deter the
types of transactions that may be proposed or could discourage or limit the
shareholders' participation in certain types of transactions that might be
proposed (such as a tender offer), whether or not such transactions were favored
by the majority of the shareholders.
The grantingBoard of awards under the 1999 Plan will also assistDirectors of the Company will, however, consider any
proposals to acquire control of the Company that may arise in obtainingthe future in
accordance with their fiduciary duties and attracting competent personnel who will contributetheir judgment as to the Company's success by
their ability, ingenuity and industry and will provide incentive tobest
-12-
interests of the
participating personnel which will inure to the benefit of all shareholders of the Company. For these reasons,Company at that time. The Company's
Articles of Incorporation and Bylaws do not presently contain provisions having
an anti-takeover effect. The proposed amendments to increase the Board adoptedauthorized
Common Stock and to authorize Preferred Stock are not part of a plan by
management of the 1999 Plan.
Accordingly, theCompany to adopt a series of anti-takeover measures, and
management has no present intention or plans to propose anti-takeover measures
in future proxy solicitations.
The Board of Directors and management believe that ratification
and approval ofdoes not intend to issue any Common Stock except
on terms which the 1999 Plan isBoard deems to be in the best interests of the Company and
recommend thatits then-existing shareholders.
If approved by the shareholders, vote in favorthe proposed amendment to Article IV
of the proposal.Company's Articles of Incorporation regarding its Common Stock will
become effective upon filing of Articles of Amendment with the Utah Division of
Corporations and Commercial Code, which is expected to be accomplished on May
17, 2001, or as soon thereafter as practicable.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO AMEND
ARTICLE IV OF THE COMPANY'S ARTICLES OF INCORPORATION TO INCREASE THE AUTHORIZED
COMMON STOCK.
PROPOSAL 3 - AMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION TO
AUTHORIZE THE ISSUANCE OF SHARES OF PREFERRED STOCK IN ONE OR MORE SERIES
No preferred stock is presently authorized by the Company's Articles of
Incorporation. The followingproposed amendment would authorize the Board of Directors,
without any further shareholder action (unless such action is required in a
summaryspecific case by applicable laws or regulations or stock exchange rules), to
issue from time to time Preferred Stock as one class without series or in one or
more series and to fix by resolution the designations, preferences, limitations
and relative rights of the material features of the 1999
Plan and is qualified in its entirety by reference to it. A copy of the 1999
Plan is attached heretosuch class or each such series. The class as Exhibit A.
General
The 1999 Plan provides for the issuance of stock options,
performance stock units, restricted stock unitsa whole or
any combination thereof
(each an "Award").series of Preferred Stock options may be granted to Eligible Employees (as
such term is defined within the 1999 Plan). Eligible Employees may be granted
"incentive stock options" within the meaning of Section 422A of the Code and
non-qualified (for federal income tax purposes) stock options.
Performance stock units and restricted stock units may be granted
to Eligible Employees and represent the right to receive one share of Company
Common Stock. In the case of performance stock units, Company Common Stock
would be received upon the attainment of certain Company performance
objectives. Such performance objectives would be set by the Committee (as
defined below). In the case of restricted stock units, Company Common Stock
would be received upon completion of a restriction period, the duration of
which would becould, as determined by the Committee.
In all cases, Awards are subjectBoard of Directors at
the time of issuance, rank, with respect to dividends, limited voting rights,
redemption and liquidation rights, senior to the terms and provisionsCompany's Common Stock.
Under the proposed amendment, the Preferred Stock would have no voting
rights except for the following:
(a) voting rights required by applicable law (which currently
provides for a vote of a class or series for certain amendments to the
1999 Plan described below. The maximum numberarticles of shares of Company Common
Stock reserved and available for issuance underincorporation affecting the 1999 Plan is 150,000
shares,class or series);
(b) voting rights which constitutes approximately 10.8% of the outstanding shares of
company Common Stock (as of March 1, 1999).
Duration and Administration of the 1999 Plan
The 1999 Plan will terminate on January 1, 2009, unless otherwise
terminated by resolution of the Board of Directors. Initially,Directors may grant to the
1999 Plan
will be administered byclass or a series of the Preferred Stock with respect to any amendment
of the Company's Stock Option Committee (the
"Committee"). The Committee is composed solelyArticles of twoIncorporation which adversely affects any
right, preference or more Directors who
are non-employee Directors. The current membersa limitation of the Committee are Rod O.
Julanderclass or series; and
Elizabeth A. Whitsett (see, "The-13-
(c) voting rights which the Board of Directors and
Committeesmay grant to the
class or a series of the Board"). It is anticipated that Reinhardt Thyzel will
replace Mrs. Whitsett asPreferred Stock to elect a membercertain number of
directors of the Committee. SubjectCompany if there is a failure to pay dividends on the
terms and
=============================================================================
conditionsclass or series for a period of the 1999 Plan, the Committee has full and final authority in its
absolute discretiontime or to without limitation: (i) determine the terms and
conditions of Awards; (ii) construe and interpret the 1999 Plan and any
agreement or instrument entered into thereunder; (iii) adopt, amend, or
rescind rules and regulations that may be advisable in the administration of
the 1999 Plan; (iv) establish, amend or waive the rules and regulations and
the instruments evidencing Awards granted under the 1999 Plan; and (v) make all other determinations deemed necessary or advisablea mandatory redemption
payment when due for the administration
of the 1999 Plan. Any decision madeclass or action taken by the Committee in
connection with the administration, interpretationseries.
The terms, conditions and implementation of the
1999 Plan and of its rules and regulations will be, to the extent permitted by
law, conclusive and binding upon all Eligible Employees and upon any person
claiming under or through any of them. Neither the Committee nor any of its
members is liable for any action taken by the Committee pursuant to the 1999
Plan. No member of the Committee is liable for the actlimitations of any other member.
Securities Subject to the 1999 Plan
No more that 150,000 shares of Company Common Stock may be issued
pursuant to the 1999 Plan in the aggregate, subject to equitable adjustment by
the Committee in the event of stock splits, stock dividends, combinations,
exchanges of shares or similar capital adjustments. If any Award expires
without having been fully exercised, the shares with respect to which such Award has not been exercised will be available for further Awards.
Grant and Method of Exercise of Awards
Subject to certain conditions, the duration of each Award granted
under the 1999 Planvoting rights will be
determined by the Committee, provided that no
Award shallBoard of Directors, including the number of directors to be
granted afterelected and the tenth anniversarytime period for which there must be a failure to pay any
dividends for voting rights to occur. The Board of Directors of the establishmentCompany
believes that the Common Stock should be the only class with unlimited voting
power.
In the Board of Directors' opinion, the primary reason for authorizing
the Preferred Stock is to provide flexibility for the Company's capital
structure. The Board of Directors believes that this flexibility is necessary to
enable it to tailor the specific terms of a class or series of Preferred Stock
that may be issued to meet market conditions and financing opportunities as they
arise, without the expense and delay that would be entailed in calling a
shareholders meeting to approve the specific terms of the 1999 Plan and no such Award shallclass or any series of
Preferred Stock.
The Preferred Stock may be exercisableused by the Company for any proper corporate
purpose. Such purpose might include, without limitation, issuance as part or vest, as applicable, later
than the tenth anniversaryall
of the dateconsideration required to be paid by the Award was granted.
Each stock option granted underCompany in the 1999 Plan will have an
exercise priceacquisition of
other businesses or properties, or issuance in public or private sales for cash
as a means of obtaining additional capital for use in the Company's business and
operations. The Company currently has no less thanarrangements, agreements,
understandings or plans for the issuance of any Preferred Stock.
It is not possible to state the precise effects of the authorization of
the Preferred Stock upon the rights of the holders of the Company's Common
Stock, until the Board of Directors determines the respective preferences,
limitations, and relative rights of the holders of the class as a whole or of
any series of the Preferred Stock. Such effects might include:
(a) reduction of the amount otherwise available for the payment of
dividends on Common Stock, to the extent dividends are payable on any
issued Preferred Stock;
(b) restrictions on dividends on the Common Stock;
(c) voting rights of any series or the class of Preferred Stock to
vote separately, or to vote with the Common Stock, on limited matters
as indicated above;
(d) conversion of the Preferred Stock into Common Stock at such
prices as the Board determines, which could include issuance at below
the fair market value ator original issue price of the dateCommon Stock,
diluting the book value per share of grant
which will be determined by averaging the highestoutstanding Common Stock; and
lowest sales prices for-14-
(e) the holders of Common Stock not being entitled to share in the
Company's assets upon liquidation until satisfaction of any liquidation
preference granted to holders of the Preferred Stock.
In regards to (a) and (b) above, the Company has not paid nor does it
anticipate paying any dividends on Common Stock.
In addition, the existence of unissued Preferred Stock on the datecould, in
certain instances, render more difficult or discourage a merger, tender offer,
or proxy contest and thus potentially have an "anti-takeover" effect, especially
if stock were issued in response to a potential takeover. Issuances of stock,
including preferred stock with conversion rights, can and have been implemented
by some companies in a manner intended to make acquisition of the grant. A stock option grantedcompanies more
difficult or more costly. Please see a further discussion of such effects under
"Proposal to Amend the 1999 Plan will become exercisable in incrementsCompany's Articles of one-third (1/3)Incorporation to Increase the
Number of the sharesAuthorized Shares of Company Common Stock which are coveredStock".
If approved by the stock option.
The first third is immediately exercisable on the date of the grant with the
remaining two-thirds (2/3)shareholders, this proposed additional amendment to
become exercisable on the first anniversary date
of the grant.
Shares of the Company Common Stock shall be deliverable upon the
vesting of performance stock unit Awards or restricted stock unit Awards for
no consideration other than services rendered or, in the Committee's sole
discretion, the minimum amount of consideration other than services, required
to be received by the Company in order to assure compliance with applicable
state law, which amount shall not, in any case, exceed ten percent (10%) of
the fair market value of such shares of Company Common Stock on the date of
issuance.
==============================================================================
Awards may be exercised by the giving of written notice to the
Company of the exercise of the Award accompanied by full payment of the
exercise price (if applicable) in cash or, in the Committee's discretion, its
equivalent. The Committee also may allow cashless exercise as permitted under
the Federal Reserve Board's Regulation T.
Exercise of Stock Options upon Termination of Employment
Termination due to Death or Disability
If an Eligible Employee's employment with the Company and all
subsidiaries ceases because of death or disability, the option may be
exercised by the Eligible Employee (or, in the event of death, such person's
estate or personal representative) until the earlier of either: (i) the first
anniversary of such termination of employment, or (ii) the expiration of the
option, but only to the extent the option was exercisable at the date of such
termination of employment.
Termination Without Cause or Due to Constructive Termination
If an Eligible Employee's employment with the Company and all
subsidiaries is terminated by the Company without "cause" or in the event of
"Constructive Termination" (including a "Change in Control") (as all such
terms are defined within the 1999 Plan) the option may be exercised by the
Eligible Employee (or, in the event of death, such person's estate or personal
representative) until the expiration of the option, but only to extent the
option was exercisable at the date of such termination of employment. The
option agreementsArticle IV, with respect to the Awards granted under the 1999 Plan to
date provide for the immediate and full vestingPreferred Stock, will become effective upon filing
Articles of the option if the
optionee's employment is terminated without "cause" or in the event of the
optionee's "Constructive Termination."
Termination for any other Reason
If an Eligible Employee's employmentAmendment with the CompanyUtah Division of Corporations and all
subsidiaries ceases for any reason other than death, disability, without cause
or Constructive Termination, the option may be exercised by the Eligible
Employee (or, in the event of death, such person's estate or personal
representative) until the earlier of either: (i) the 90th day following such
termination of employment, or (ii) the expiration of the option, but only to
the extent the option was exercisable at the date of such termination of
employment.
Subject to certain limitations set forth in the 1999 Plan, the
Committee may waive any restrictions or conditions set forth in an option
agreement concerning an Eligible Employee's right to exercise any stock option
and/or the time and method of exercise.
===============================================================================
Cancellation of Restricted Stock Unit
Awards or Performance Stock Unit Awards
If an Eligible Employee's employment with the Company and all
subsidiaries terminates for any reason, the unvested portion of any restricted
stock unit Awards or performance stock unit Awards will be canceled and the
Eligible Employee shall not be entitled to receive any consideration in
respect of such cancellation; provided, however, that the Committee, subject
to certain limitations set forth in the 1999 Plan, may waive any restrictions
or conditions relating to the vesting of restricted stock unit Awards and
performance stock unit Awards.
Income Tax Treatment
The Company has been advised that under current law certain of the
income tax consequences under the laws of the United States to Eligible
Employees and the Company of Awards granted under the 1999 Plan generally
should be as set forth in the following summary. This summary only addresses
income tax consequences for Eligible Employees and the Company.
An Eligible Employee who is granted an incentive stock option
which qualifies under Section 422 of theCommercial
Code, will not recognize income at the
time of grant or exercise of such Award. No federal income tax deduction will
be allowable to the Company upon the grant or exercise of such Award. Upon
the exercise of an incentive stock option, however, special alternative
minimum tax rules apply for the Eligible Employee. When the Eligible Employee
sells such shares more than one (1) year after the date of exercise of an
Award and more than two (2) years after the date of grant of the incentive
stock option, the employee will normally recognize a long term capital gain or
loss equal to the difference, if any, between the sales price of such shares
and the option exercise price. If the Eligible Employee does not hold such
shares for the period, when the employee sells such shares, the employee will
recognize ordinary compensation income and possible capital gain or loss in
such amounts as are prescribed by the Code and the regulations thereunder.
Subject to applicable provisions of the Code and regulation, the Company
generally will be entitled to a federal income tax deduction in the amount of
such ordinary compensation income.
An Eligible Employee to whom a non-qualified option (an option which is not an incentive stock option) is granted will not recognize income
at the time of grant of such option. When the Eligible Employee exercises
such non-qualified option, such person will recognize ordinary compensation
income equal to the difference, if any, between the option exercise price and
the fair market value, as the date of the option exercise, of the shares such
person receives. The tax basis of such shares to such person will be equal to
the fair market value, as of the date of the option exercise, of the shares
such person receives (or the exercise price, if greater) and the holding
period for such shares will commence on the day on which such person
recognized taxable income in respect to such shares. Subject to applicable
provisions of the Code and regulations, the Company generally will be entitled
to a federal income tax deduction in respect of non-qualified options in the
=============================================================================
amount of such ordinary compensation income recognized by the Eligible
Employee.
An Eligible Employee to whom a restricted stock unit award or a
performance stock unit award is granted will not recognize income at the time
of grant to such Award. When such Eligible Employee receives shares of
Company Common Stock, the Eligible Employee will recognize ordinary
compensation income equal to the fair market value of any shares received.
Subject to applicable provisions of the Code and regulations thereunder, the
Company generally will be entitled to a federal income tax deduction in
respect of the Award of Company Common Stock in an amount equal to the
ordinary compensation income recognized by the Eligible Employee.
The discussion set forth above does not purportexpected to be a complete
analysis of all potential tax consequences relevant to recipients of Awards of
the Companyaccomplished on May 17, 2001, or to describe tax consequences based on particular circumstances.
It is based on the United States federal income tax law and interpretational
authorities as of the date of this Proxy Statement, which are subject to
change at any time. This discussion does not address state or local income
tax consequences or income tax consequences for taxpayers who are not subject
to taxation in the United States.
Vote Required
The action of the Board of Directors in adopting the 1999 Plan
requires the ratification and approval by an affirmative vote of the holders
of a majority of shares of Company Common Stock present in person or
represented by proxy at the Annual Meeting.soon
thereafter as practicable.
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS A VOTE FOR THE RATIFICATION AND APPROVALPROPOSAL TO AMEND
ARTICLE IV TO AUTHORIZE THE ISSUANCE OF THE LASER CORPORATION STOCK
INCENTIVE PLAN.PREFERRED STOCK.
PROPOSAL 34 - RATIFICATION OF APPOINTMENT OF INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS
The Board of Directors of the Company has selected Tanner + Co. as the
independent public accountants of the Company for the fiscal year ending
December 31, 1999.2001. Tanner + Co. has served as the Company's independent public
accountants since November 4, 1994.
During the two most recent years the Company has not consulted with
Tanner + Co. on items which (i) were or should have been subject to SAS 50 or
(ii) concerned the subject matter of a disagreement or reportable event with the
former auditor, (as described in Regulation S-K Item 304(a)(2)).
Representatives of Tanner + Co. are expected to attend the Annual
Meeting of Shareholders and will be available to respond to appropriate
questions and will be afforded the opportunity to make a statement if they
desire to do so.
AUDIT FEES
The aggregate fees billed or to be billed by Tanner + Co. for
professional services rendered for the audit of the Company's annual financial
statements for the fiscal year ended December 31, 2000 and for the reviews of
the financial statements included in the Company's Quarterly Reports on Form
10-QSB for that fiscal year were approximately $22,000. All fees for other
services were immaterial.
-15-
=============================================================================
In the absence of instructions to the contrary, the persons named in
the Proxy will vote the Proxies FOR ratification of the selection of Tanner +
Co. as independent public accountants for the Company.
SHAREHOLDER PROPOSALS
If a Shareholder wishes to present a proposal at the 20002002 Annual
Meeting of Shareholders, the proposal must be received by Laser Corporation,
2417 South 3850 West, Salt Lake City, Utah 84120 prior to December 15, 1999.14, 2001. The
Board of Directors will review any proposal which is received by that date and
determine whether it is a proper proposal to present at the 20002002 Annual Meeting.
VOTE REQUIRED
A majority of the 1,387,5381,630,109 issued and outstanding shares of common
stock of the Company shall constitute a quorum at the Annual Meeting. Under the
Utah Revised Business Corporation Act, the affirmative vote of at least a
majority of the shares represented at the meeting is required for all proposals
to come before the meeting.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors of the
Company does not intend to present and has not been informed that any other
person intends to present, a matter for action at the 19992001 Annual Meeting other
than as set forth herein and in the Notice of Annual Meeting. If any other
matter properly comes before the meeting, it is intended that the holders of
Proxies will act in accordance with their best judgment. The Board of Directors
may read the minutes of the 19982000 Annual Meeting of Shareholders and make
reports, but Shareholders will not be requested to approve or disapprove such
minutes or reports.
In addition to the solicitation of proxies by mail, certain of the
officers and employees of the Company, without extra compensation, may solicit
proxies personally or by telephone. The Company will also request brokerage
houses, nominees, custodians and fiduciaries to forward soliciting materials to
the beneficial owners of common stock held of record and will reimburse such
persons for forwarding such material. The cost of this solicitation of proxies
will be borne by the Company.
COPIES OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB (INCLUDING
FINANCIAL STATEMENTS AND FINANCIAL STATEMENTS SCHEDULES) FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION (THE "10-KSB") MAY BE OBTAINED WITHOUT CHARGE
BY WRITING TO THE COMPANY, ATTENTION: ROD O. JULANDER, SECRETARY, 2417 SOUTH
3850 WEST, SALT LAKE CITY, UTAH 84120. COPIES OF THE COMPANY'S 19982000 ANNUAL
REPORT TO SHAREHOLDERS, INCLUDING THE 10-KSB, ARE BEING MAILED WITH
-16-
THIS PROXY STATEMENT. ADDITIONAL COPIES MAY BE OBTAINED BY WRITING TO
LASER CORPORATION, ATTENTION: ROD O. JULANDER, SECRETARY, 2417 SOUTH 3850 WEST,
SALT LAKE CITY, UTAH 84120.
=============================================================================
The enclosed Proxy is furnished for you to specify your choices with
respect to the matters referred to in the accompanying Notice and described in
this Proxy Statement. If you wish to vote in accordance with the Board's
recommendations, merely sign, date and return the Proxy in the enclosed
envelope, which requires no postage if mailed in the United States. A prompt
return of your Proxy will be appreciated.
By Order of the Board of Directors
Rod O. Julander, Secretary
Salt Lake City, Utah
April 14, 199916, 2001
-17-
=============================================================================
EXHIBIT A
LASER CORPORATION
STOCK INCENTIVE PLAN
TO BE EFFECTIVE JANUARY 1, 1999
SECTIONPROXY STATEMENT
Dated April 16, 2001
Text of Proposed Amendment to Articles of Incorporation
1. GENERAL PURPOSE OF PLAN; DEFINITIONS.
The name of this PlanArticle IV is the Laser Corporation Stock Incentive Plan
(the "Plan"). The purpose of this Plan is to enable the Corporation (as
hereinafter defined) and its Subsidiaries (as hereinafter defined) to obtain
and retain competent personnel who will contribute to the Corporation's
success by their ability, ingenuity and industry and to provide incentives to
the participating officers and key employees which are related to increases in
stockholder value and will therefore inure to the benefit of all stockholders
of the Corporation.
For purposes of this Plan, the following terms shall be defined as set
forth below:
(a) "Award" means any grant under this Plan in the form of Stock Options,
Performance Stock Units, Restricted Stock Units or any combination of the
foregoing.
(b) "Board" means the Board of Directors of the Corporation.
(c) "Code" means the Internal Revenue Code of 1986, ashereby amended from time
to time, or any successor thereto.
(d) "Committee" means the Stock Option Committee or any other committee
the Board may subsequently appoint to administer this Plan. The Committee
shall be composed entirely of directors who meet the qualifications referred
to in Section 2 of this Plan.
(e) "Corporation" means Laser Corporation, a corporation incorporated
under the laws of the State of Utah (or any successor corporation).
(f) "Disability" means an event of illness or other incapacity of
Optionee resulting in Optionee's failure or inability to discharge Optionee's
duties as an employee of the Corporation, any Subsidiary or any Related Entity
for ninety (90) or more days during any period of 120 consecutive days.
(g) "Eligible Employee" means an employee of the Corporation, any
Subsidiary or any Related Entity as described in Section 4 of this Plan.
============================================================================
(h) "Fair Market Value" means, as of any given date, with respect to any
Awards granted hereunder, the mean of the high and low trading price of the
Stock on such date as reported on The Nasdaq Stock Market or if the Stock is
not then traded on The Nasdaq Stock Market, on such other national securities
exchange on which the Stock is admitted to trade or, if none, on the National
Association of Securities Dealers Automated Quotation System if the Stock is
admitted for quotation thereon; provided, however, that if any such system,
exchange or quotation system is closed on any day on which Fair Market Value
is to be determined, Fair Market Value shall be determined as of the first day
immediately proceeding such day on which such system, exchange or quotation
system was open for trading; provided, further, that in all other
circumstances, "Fair Market Value" means the value determined by the Committee
after obtaining an appraisal by one or more independent appraisers meeting the
requirements of regulations issued under Section 170(a)(1) of the Code.
(i) "Incentive Stock Option" means any Stock Option intended to qualify
as an "incentive stock option" within the meaning of Section 422 of the Code.
(j) "Non-Employee Director" shall have the meaning set forth in Rule
16b-3 ("Rule 16b-3"), as promulgated by the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as amended from time to time (the
"Exchange Act"), or any successor definition adopted by the Securities and
Exchange Commission.
(k) "Nonqualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
(l) "Optionee" means a Participant granted a Stock Option pursuant to
Section 5 of this Plan which remains outstanding.
(m) "Participant" means any Eligible Employee selected by the Committee,
pursuant to the Committee's authority in Section 2 of this Plan, to receive
Awards.
(n) "Performance Stock Unit" means the right to receive one share of
Stock as set forth in an Award granted pursuant to Section 7 of this Plan.
(o) "Related Entity" means any corporation, joint venture or other
entity, domestic or foreign, other than a Subsidiary, in which the Corporation
owns, directly or indirectly, a substantial equity interest.
(p) "Restricted Stock Unit" means the right to receive one share of Stock
as set forth in an Award granted pursuant to Section 7 of this Plan.
(q) "Retirement" means (i) retirement from active employment under a
retirement plan of the Corporation, any Subsidiary or Related Entity or under
an employment contract with any of them or (ii) termination of employment at
or after age 55 under circumstances which the Committee, in its sole
discretion, deems equivalententirety to retirement.
(r) "Stock" means the common stock, par value $0.05 per share, of the
Corporation.
=============================================================================
(s) "Stock Option" means any option to purchase shares of Stock granted
pursuant to Section 5 of this Plan.
(t) "Subsidiary" means anyread as follows:
"The corporation in an unbroken chain of
corporations beginning with the Corporation, if each of the corporations
(other than the last corporation in the unbroken chain) owns stock possessing
50% or more of the total combined voting power of all classes of stock in one
of the other corporations in the chain.
SECTION 2. ADMINISTRATION.
This Plan shall be administered by the Committee, composed solely of
two or more directors who are Non-Employee Directors, who shall be appointed
by the Board and who shall serve at the pleasure of the Board. In the event
that a Committee has not been appointed or in the Board's sole discretion,
this Plan shall be administered by the Board which shall have all of the power
and authority of the Committee set forth below. The Committee shall have the
power and authority in its sole discretion to grant Awards pursuant to the
terms and provisions of this Plan.
In particular, the Committee shall have the full authority, not
inconsistent with this Plan:
(a) to select Participants;
(b) to determine whether and to what extent Awards are to be granted to
Participants hereunder;
(c) to determine the number of shares of Stock to be covered by each such
Award granted hereunder, but in no case shall such number be in the aggregate
greater than that allowed under this Plan;
(d) to approve or ratify transactions by Participants involving
acquisitions from the Corporation or dispositions to the Corporation of equity
securities of the Corporation made pursuant to the terms of this Plan;
(e) to determine the terms and conditions of any Award granted hereunder
(including, without limitation, (i) the restrictive periods applicable to
Restricted Stock Unit Awards and (ii) the performance objectives and periods
applicable to Performance Stock Unit Awards);
(f) to waive compliance by a Participant with any obligation to be
performed by such Participant under any Award and to waive any term or
condition of any such Award (provided, however, that no such waiver shall
detrimentally affect the rights of the Participant without such Participant's
consent); and
(g) to determine the terms and conditions which shall govern all written
agreements evidencing the Awards.
=============================================================================
The Committee shall have the authority to adopt, alterissue 40,000,000 shares of
common stock, each having a par value of $.05 per share. All common shares
issued by the corporation shall be fully paid and repeal
such administrative rules, guidelinesnonassessable and practices governing this Plan as it
shall from timehave
equal rights."
2. Article IV is hereby further amended by the addition of the following
three paragraphs:
"In addition, the corporation shall have the authority to time deem advisable;issue
10,000,000 shares of preferred stock, without par value. Such preferred stock
may be issued in series. Notwithstanding the rights of common stock stated
above, the entitlement of the common stock to interpretreceive net assets of the
provisions of this
Plancorporation upon dissolution, and the termsvoting rights of common stock, shall be
subject to the voting and conditionsother rights, if any, provided to the holders of
preferred stock by these Articles of Incorporation. Except for and subject to
those rights expressly granted to the holders of the preferred stock, or except
as may be provided by law, the holders of common stock shall have exclusively
all other rights of shareholders.
This corporation's Board of Directors shall have the authority, without
shareholder action, to determine the preferences, limitations and relative
rights of any Award issued, expired, terminated,
canceledpreferred stock (whether in a series or surrendered under this Plan (and any agreements relating thereto);
and to otherwise superviseas a class), including
without limitation the administration of this Plan.
All decisions made byfollowing:
(i) the Committee pursuant to the provisions of
this Plan and as to the terms and conditionsdesignation of any Award (and any agreements
relating thereto) shall be final and binding on all persons, includingseries or class of preferred stock;
(ii) the
Corporation and the Optionees.
SECTION 3. NUMBER OF SHARES OF STOCK SUBJECT TO PLAN.
The total number of shares of Stock reserved and available for
issuance under this Plan shall be one hundred fifty thousand (150,000). Such
shares of Stock may consist, in wholeconstituting the series or in part, of authorized and unissued
shares of Stock, treasury shares or issued shares of Stock reacquired by the
Corporation atclass;
(iii) voting rights , if any, time, as the Board may determine.
To the extent that (a) a Stock Option expires or is otherwise
terminated, canceled or surrendered without being exercised (including,
without limitation, in connectioncomplying with the grant of a replacement option)limitations on voting
rights stated in this Article IV for preferred stock, except that no condition,
limitation, or (b)prohibition on voting shall eliminate any Restricted Stock Unit Award or Performance Stock Unit Award granted
hereunder expires or is otherwise terminated or is canceled, the shares of
Stock underlying such Stock Option or subjectright to such Restricted Stock Unit
Award or Performance Stock Unit Award shall again be available for issuance in
connection with future Awards under this Plan.
In the event ofvote required
by Utah law;
(iv) any merger, reorganization, consolidation,
recapitalization, stock dividend, spin-off, or other change in corporate
structure or capitalization affecting the Stock, the Committee shall make an
equitable adjustment or substitution in the numberredemption rights and, class of shares
reserved for issuance under this Plan, the number and class of shares covered
by outstanding Awards and the option price per share of Stock Options to
reflect the effect of such change in corporate structure or capitalization on
the Stock;if provided, however, that any fractional shares resulting from such
adjustment shall be eliminated; provided further, however, that if by reason
of any such change in corporate structure or capitalization a Participant
holding a Restricted Stock Unit Award or Performance Stock Unit Award shall be
entitled, subject to the terms and conditions
of such Award, to additionalredemption, including without limitation the date or dates upon or after
which any preferred stock shall be redeemable, and the amount per share payable
in case of redemption, which amount may vary under different conditions and at
different redemption dates;
-1-
(v) any sinking fund for the redemption or purchase of shares of any security, the issuance of such additionala
series or different
shares shall thereupon be subject to all ofclass, and, if provided, the terms and conditions
(including restrictionsamount of such sinking fund;
(vi) conversion rights and, performance criteria) which were applicable to
such Award prior to such change in corporate structure or capitalization; and,if provided, further, however, that unless the Committee in its sole discretion
determines otherwise, any issuance by the Corporation of shares of stock of
any class or securities convertible into shares of stock of any class shall
not affect, and no such adjustment or substitution by reason thereof shall be
made with respect to, the number or class of shares reserved for issuance
=============================================================================
under this Plan, the number or class of shares covered by outstanding Awards
or any option price or applicable price.
SECTION 4. ELIGIBILITY.
Officers and other key employees of the Corporation, its Subsidiaries
and its Related Entities who are responsible for or contribute to the
management, growth or profitability of the business of the Corporation, its
Subsidiaries or its Related Entities shall be eligible to be granted Awards;
provided however, with respect to an employee of a Related Entity, that such
person was an employee of the Corporation, a Subsidiary or, if originally an
employee of the Corporation or a Subsidiary, of another Related Entity
immediately prior to becoming employed by such Related Entity and accepted
employment with such Related Entity at the request of the Corporation or a
Subsidiary. The Participants under this Plan shall be selected, from time to
time, by the Committee, in its sole discretion, from among those Eligible
Employees.
SECTION 5. STOCK OPTIONS.
(a) GRANT AND EXERCISE. Stock Options may be granted either alone or
in addition to other Awards granted under this Plan. Any Stock Option granted
under this Plan shall be in such form as the Committee may, from time to time,
approve, and the terms and conditions of
Stock Option Awards need not besuch conversion, including provision for adjustment of the sameconversion rate in
such events as the Board of Directors shall determine;
(vii) distribution rights, including without limitation a dividend rate
and the determination of whether such rights are cumulative, noncumulative or
partially cumulative; and
(viii) preference rights over any other class or series of shares with
respect to each Optionee. Each Optioneedistributions, including without limitation any priority as to
dividends and as to distributions upon the dissolution of the corporation.
The preferred stock of the corporation shall enter intohave no voting rights
except:
(i) the preferred stock shall have voting rights required by applicable
law (which required voting rights may be set forth in the preferences,
limitations and relative rights of a Stock
Option agreement ("Stock Option Agreement")class or series);
(ii) any preferred stock of a class or series may have voting rights
with respect to any amendment, alteration or repeal of any provision of the
Corporation's Articles of Incorporation which adversely affects any right,
preference or limitation of the class or series; and
(iii) any preferred stock of a class or series may have voting rights
to elect a certain number of directors of the corporation in the event of the
corporation's failure to pay dividends on the class or series for a period of
time or to make a mandatory redemption payment when due for the class or series.
The Board of Directors shall, in accordance with the Corporation,authority granted
to Board of Directors in this Article IV, determine whether any such form
as the Corporationvoting
rights, not required by applicable law, shall determine, which agreementexist and shall set forth, among
other things, the option price of the option, the term of the option and
conditions regarding exercisability of the option granted thereunder.
(i) NATURE OF OPTIONS. The Committee shall have the authority
to grant any Participant either Incentive Stock Options, Nonqualified Stock
Options or both types of Stock Options, except that the Committee shall not
grant any Incentive Stock Options to an employee of a Related Entity. Any
Stock Option which does not qualify as an Incentive Stock Option, oralso determine the
terms, conditions and limitations of which at the time of its grant provide that it shall not be treated as an
Incentive Stock Option, shall constitute a Nonqualified Stock Option.
(ii) EXERCISABILITY. Subject toany such terms and conditions as
shall be determined by the Committee in its sole discretion at or after the
time of grant, Stock Options shall be exercisable from time to time to the
extent of 33% ofvoting rights, including without
limitation the number of shares of Stock covered by the Stock Option
immediately upon the date of grant of the Stock Option, and time period for any such failures to the extent of
100% ofpay dividends
necessary for voting rights to occur and the number of directors to be elected
by a class or series after such an event."
-2-
LASER CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
MAY 17, 2001
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints B. Joyce Wickham and Rod O. Julander and each of
them (acting jointly or, if one be present, then by that one alone) as Proxies,
with full power of substitution, and hereby authorizes them to represent and
vote, as designated below, all shares of Common Stock coveredof the Company held of
record by the Stock Option on and after
the first anniversary and before the expiration of the stated term of the
Stock Option (or to such lesser extent as the Committee in its sole discretion
shall determine at the time of grantundersigned or to such greater extent as the
Committee in its sole discretion shall determine at or after the time of
grant).
=============================================================================
(iii) METHOD OF EXERCISE. Stock Options may be exercised by
giving written notice of exercise delivered in person or by mail as required
by the terms of any Stock Option Agreement at the Corporation's principal
executive office, specifying the number of shares of Stock with respect to which the Stock Optionundersigned is being exercised, accompanied by payment in fullentitled
to vote and act on April 6, 2001 at the Annual Meeting of Shareholders to be
held at the option price in cashCompany's corporate offices at 2417 South 3850 West, Salt Lake City,
Utah, on Tuesday, May 17, 2001 at 9:00 a.m., local time, or its equivalentat any adjournment
thereof, and especially to vote as determined by the Committee in
its sole discretion. If requested by the Committee, the Optionee shall deliverfollows:
1. Election of Directors
FOR all nominees listed WITHHOLD AUTHORITY
below (except as marked to vote for all
to the Corporation the Stock Option Agreement evidencing the Stock Option
being exercised for notation thereon of such exercise and return thereafter of
such agreementcontrary below) nominees listed below
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE
A LINE THROUGH A NOMINEE'S NAME IN THE LIST BELOW:)
B. Joyce Wickham Rod O. Julander Mark L. Ballard Reinhardt Thyzel
2. To approve an amendment to the Optionee. As determined byCompany's Articles of Incorporation to
increase the Committee in its sole
discretion at or after the time of grant, payment of the option price in full
or in part may also be made in the form of shares of unrestricted Stock
already owned by the Optionee (based on the Fair Market Value of the Stock on
the date the Stock Option is exercised); provided however, that in the case of
an Incentive Stock Option, the right to make payment of the option price in
the form of already owned shares of Stock may be authorized only at the time
of grant. The Committee also may allow cashless exercise as permitted under
Federal Reserve Board's Regulation T, subject to applicable securities law
restrictions, or by any other means which the Committee determines to be
consistent with this Plan's purpose and applicable law. An Optionee shall
generally have the rights to dividends or other rights of a stockholder with
respect to shares of Stock subject to the Stock Option when the Optionee has
given written notice of exercise, has paid in full for such shares of Stock,
and, if requested, has made representations described in Section 9(a) of this
Plan.
(b) TERMS AND CONDITIONS. Stock Options granted under this Plan shall
be subject to the following terms and conditions and shall contain such
additional terms and conditions, not inconsistent with the terms of this Plan,
as the Committee shall deem desirable.
(i) OPTION PRICE. The option price per share of Stock
purchasable under a Stock Option shall be determined by the Committee at the
time of grant, but shall be not less than 100% of the Fair Market Value of
the Stock on the date of the grant; provided, however, that if any Participant
owns or is deemed to own (by reason of the attribution rules of Section 424(d)
of the Code) more than 10% of the combined voting power of all classes of
stock of the Corporation or any Subsidiary when an Incentive Stock Option is
granted to such Participant, the option price of such Incentive Stock Option
(to the extent required by the Code at the time of grant) shall be not less
than 110% of the Fair Market Value of the Stock on the date such Incentive
Stock Option is granted.
(ii) OPTION TERM. The term of each Stock Option shall be
fixed by the Committee at the time of grant, but no Stock Option shall be
exercisable more than ten years after the date such Stock Option is granted;
provided, however, that if any Participant owns or is deemed to own (by reason
of the attribution rules of Section 424(d) of the Code) more than 10% of the
combined voting power of all classes of stock of the Corporation or any
Subsidiary when an Incentive Stock Option is granted to such Participant, such
Stock Option (to the extent required by the Code at time of grant) shall not
be exercisable more than five years from the date such Incentive Stock Option
is granted.
==============================================================================
(iii) TRANSFERABILITY OF OPTIONS. Except as otherwise
determined by the Committee, no Stock Options shall be transferable by the
Optionee otherwise than by will or by the laws of descent and distribution and
all Stock Options shall be exercisable, during the Optionee's lifetime, only
by the Optionee, or in the case of Optionee's legal incompetency, only by
Optionee's guardian or legal representative.
(iv) OPTION EXERCISE AFTER TERMINATION BY REASON OF DEATH OR
DISABILITY. If an Optionee's employment with the Corporation, any Subsidiary
or any Related Entity terminates by reason of death or Disability, and Stock
Option held by such Optionee may thereafter be exercised for a period of one
year (or such shorter period as the Committee in its sole discretion shall
specify at or after the time of grant) from the date of such termination or
until the expiration of the stated term if such Stock Option, whichever period
is shorter, to the extent to which the Optionee would on the date of
termination have been entitled to exercise the Stock Option (or to such
greater or lesser extent as the Committee in its sole discretion shall
determine at or after the time of grant). In the event of a termination of
employment by reason of death or Disability, if an Incentive Stock Option is
exercised after the expiration of the exercise period that applies for
purposes of Section 422 of the Code, such Stock Option will thereafter be
treated as a Nonqualified Stock Option.
(v) OPTION EXERCISE AFTER TERMINATION WITHOUT CAUSE OR
CONSTRUCTIVE TERMINATION. If an Optionee's employment with the Corporation,
any Subsidiary, or any Related Entity is terminated, by the Corporation or
such Subsidiary or such Related Entity, without "Cause" (as such term is
defined within the Stock Option Agreement) or in the event of "Constructive
Termination" (as such term is defined within the Stock Option Agreement) of
the Optionee's employment with the Corporation or such Subsidiary or such
Related Entity is so terminated the Committee, in its sole discretion, may
permit the Optionee to exercise any Stock Option held by such Optionee, to the
extent not theretofore exercised, in whole or in part with respect to all
remaining shares covered by the Stock Option at any time prior to the
expiration of the Stock Option (or such shorter period as the Committee in its
sole discretion shall specify at or after the time of grant), to the extent to
which the Optionee would on the date of termination have been entitled to
exercise the Stock Option (or to such greater or lesser extent as the
Committee in it sole discretion shall determine at or after the time of
grant). An Optionee's acceptance of employment, at the request of the
Corporation or a Subsidiary, with a Related Entity (or acceptance of
employment, at the request of the Corporation or a Subsidiary, with any
other Related Entity), shall not be deemed a termination of employment
hereunder and any Stock Option held by Optionee may be exercised thereafter to
the extent that the Optionee would on the date of exercise have been entitled
to exercise such Stock Option if such Optionee had continued to be employed by
the Corporation or such Subsidiary (or such initial Related Entity), provided
that the Optionee has been in continuous employ with the Related Entity to
which such Optionee has moved from the date of acceptance of employment
therewith until the date of exercise. In the event of termination of
employment by the Corporation, any Subsidiary or any Related Entity without
=============================================================================
Cause or in the event of Constructive Termination of the Optionee's employment
or the acceptance of employment with a Related Entity, if an Incentive Stock
Option is exercised after the expiration of the exercise period that applies
for purposes of Section 422 of the Code, such Stock Option will thereafter be
treated as a Nonqualified Stock Option.
(vi) OPTION EXERCISE AFTER TERMINATION OR RESIGNATION. If an
Optionee's employment with the Corporation, any Subsidiary, or any Related
Entity terminates for any reason not set forth in Sections 5(iv) or (v) above,
the Committee, in its sole discretion, may permit the Optionee to exercise any
Stock Option held by such Optionee to the extent such Option was exercisable
on the date of such termination (or to such greater or lesser extent as the
Committee in its sole discretion shall determine at or after the time of
grant) for a period of ninety (90) days from the date of such termination (or
such shorter period as the Committee in its sole discretion shall specify at
or after the time of grant).
(vii) OTHER TERMINATION. Except as otherwise provided in
this Section 5 of this Plan, or as determined by the Committee in its sole
discretion, if an Optionee's employment with the Corporation, any Subsidiary
or any Related Entity terminates, all Stock Options held by the Optionee will
terminate.
(viii) ANNUAL LIMIT ON INCENTIVE STOCK OPTIONS. To the
extent required for incentive stock option treatment under Section 422 of the
Code, the aggregate Fair Market Value (determined as of the date of Incentive
Stock Option is granted) of the shares of Stock with respect to which
Incentive Stock Options granted under this Plan and all other option plans of
the Corporation or any Subsidiary become exercisable for the first time by an
Optionee during any calendar year shall not exceed $100,000; provided,
however, that if the aggregate Fair Market Value (so determined) of the shares
of Stock covered by such options exceeds $100,000 during any year in which
they become exercisable, such options with a Fair Market Value in excess of
$100,000 will be Nonqualified Stock Options.
SECTION 6. RESTRICTED STOCK UNITS AND PERFORMANCE STOCK UNITS.
(a) GRANT. Awards of Restricted Stock Units or Performance Stock
Units may be granted either alone or in addition to other Awards granted under
this Plan. Each Restricted Stock Unit or Performance Stock Unit represents the
right to receive, subject to the terms and provisions of this Plan and any
agreements evidencing such Awards, one share of Stock. If the Committee in its
sole discretion so determines at the time of grant, a Participant to whom a
Restricted Stock Unit Award or Performance Stock Unit Award has been granted
may be credited with an amount equivalent to all cash dividends ("Dividend
Equivalents") that would have been paid to the holder of such Restricted Stock
Unit Award or Performance Stock Unit Award if one share of Stock for every
Restricted Stock Unit or Performance Stock Unit awarded had been issued to the
holder on the date of grant of such Restricted Stock Unit Award or Performance
Stock Unit Award. The Committee shall determine the terms and conditions of
each Restricted Stock Unit Award and Performance Stock Unit, including without
=============================================================================
limitation, the number of Restricted Stock Units or Performance Stock Units to
be covered by such Awards, the restricted period applicable to Restricted
Stock Unit Awards and the performance objectives applicable to Performance
Stock Unit Awards. The Committee in its sole discretion may prescribe terms
and conditions applicable to the vesting of such Restricted Stock Unit Awards
or Performance Stock Unit Awards in addition to those provided in this Plan.
The Committee shall establish such rules and guidelines governing the
crediting of Dividend Equivalents, including the timing, form of payment and
payment contingencies of Dividend Equivalents, as it may deem desirable. The
Committee in its sole discretion may at any time accelerate the time at which
the restrictions on all or any part of a Restricted Stock Unit Award lapse or
deem the performance objectives with respect to all or any part of a
Performance Stock Unit Award to have been attained. Restricted Stock Units
Awards and Performance Stock Unit Awards shall not be transferable otherwise
than by will or by the laws of descent and distribution. Shares of Stock shall
be deliverable upon the vesting of Restricted Stock Unit Awards and
Performance Stock Unit Awards for no consideration other than services
rendered or, in the Committee's sole discretion, the minimum amount of
consideration other than services (such as the par value of Stock) required to
be received by the Corporation in order to assure compliance with applicable
state law, which amount shall not exceed 10% of the Fair Market Value of such
shares of Stock on the date of issuance. Each such Award shall be evidenced by
a Restricted Stock Unit agreement ("Restricted Stock Unit Award Agreement") or
Performance Stock Unit Award agreement ("Performance Stock Unit Award
Agreement").
(b) TERMS AND CONDITIONS. Unless otherwise determined by the
Committee in its sole discretion:
(i) a breach of any term or condition provided in this Plan,
the Restricted Stock Unit Award Agreement or the Performance Stock Unit Award
Agreement or established by the Committee with respect to such Restricted
Stock Unit Award or Performance Stock Unit Award will cause a cancellation of
the unvested portion of such Restricted Stock Unit Award or Performance Stock
Unit Award (including any Dividend Equivalents credited in respect thereof)
and the Participant shall not be entitled to receive any consideration in
respect of such cancellation; and
(ii) termination of such holder's employment with the
Corporation, any Subsidiary or any Related Entity prior to the lapsing of the
applicable restriction period or attainment of applicable performance
objectives will cause a cancellation of the unvested portion of such
Restricted Stock Unit Award or Performance Stock Unit Award (including any
Dividend Equivalents credited in respect thereof) and the Participant shall
not be entitled to receive any consideration in respect of such cancellation.
(c) COMPLETION OF RESTRICTION PERIOD AND ATTAINMENT OF PERFORMANCE
OBJECTIVES. To the extent that restrictions with respect to any Restricted
Stock Unit Award lapse or performance objectives with respect to any
Performance Stock Unit Award are attained and provided that other applicable
terms and conditions have been satisfied:
===============================================================================
(i) such of the Restricted Stock Units or Performance Stock
Units as to which restrictions have lapsed or performance objectives have been
attained shall become vested and the Committee shall cause to be issued and
delivered to the Participant a stock certificate representing a number of shares of the Company's Common Stock equal to
such number of Restricted Stock Units or Performance
Stock Units, and, subject to Section 11(a) hereof, free of all restrictions;
and
(ii) any Dividend Equivalents credited in respect of such
Restricted Stock Units or Performance Stock Units shall become vested40,000,000 shares.
FOR AGAINST ABSTAIN
3. To approve an amendment to the extent that such Restricted Stock Units or Performance Stock Units shall have
become vested and the Committee shall cause such Dividend EquivalentsCompany's Articles of Incorporation to
be
deliveredauthorize up to the Participant.
Any such Restricted Stock Unit Award or Performance Stock Unit Award
(including any Dividend Equivalents credited in respect thereof) that shall
not have become vested at the end of the applicable restricted period or the
period given for the attainment of performance objectives shall expire,
terminate and be cancelled and the Participant shall not thereafter have any
rights with respect to the Restricted Stock Units or Performance Stock Units
(or any Dividend Equivalents credited in respect thereto) covered thereby.
SECTION 7. AMENDMENT AND TERMINATION.
The Board may amend, alter, or discontinue this Plan, but no
amendment, alteration, or discontinuation shall be made which would impair the
rights of a Participant under any Award theretofore granted without such
Participant's consent, or which, without the approval of the stockholders of
the Corporation (where such approval is necessary to satisfy then applicable
requirements of Rule 16b-3 under the Exchange Act, any Federal tax law
relating to Incentive Stock Options or applicable state law), would:
(a) except as provided in Section 3 of this Plan, increase the total
number of10,000,000 shares of Stock which may be issued under this Plan;
(b) except as provided in Section 3 of this Plan, decrease the
option price of any Stock Option to less than 100% of the Fair Market Value on
the date of the grant of the Option;
(c) change the class of employees eligible to participate in this
Plan; or
(d) extend (i) the period during which Stock Options may be granted
or (ii) the maximum period of any Award under Sections 5(b)(ii) or 6(b)(i) of
this Plan.
Except as restricted herein with respect to Incentive Stock Options,
the Committee may amend or alter the terms and conditions of any Award
theretofore granted, and of any agreement evidencing such Award, prospectively
or retroactively, but no such amendment or alteration shall impair the rights
of any Optionee under such Award or agreement without such Optionee's consent.
===============================================================================
SECTION 8. UNFUNDED STATUS OF PLAN.
This Plan is intended to constitute an "unfunded" plan. With respect
to any payments not yet made and due to a Participant by the Corporation,
nothing contained herein shall give any such Participant any rights that are
greater than those of a general unsecured creditor of the Corporation.
SECTION 9. GENERAL PROVISIONS.
(a) The Committee may require each Optionee purchasing shares of
Stock pursuant to a Stock Option to represent to and agree with the
Corporation in writing that such Optionee is acquiring the shares of Stock
without a view to distribution thereof. All certificates for shares of Stock
delivered under this Plan and, to the extent applicable, all evidences of
ownership with respect to Dividend Equivalents delivered under this Plan,
shall be subject to such stock-transfer orders and other restrictions as the
Committee may deem advisable under the rules, regulations and other
requirements of the Securities and Exchange Commission, any stock exchange
upon which the Stock is then listed or quotation system on which the Stock is
admitted for trading and any applicable Federal or state securities law, and
the Committee may cause a legend or legends to be put on any such certificates
to make appropriate reference to such restrictions.
(b) Nothing contained in this Plan shall prevent the Board from
adopting other or additional compensation arrangements, subject to stockholder
approval if such approval is required, and such arrangements may be either
generally applicable or applicable only in specific cases. The adoption of
this Plan shall not confer upon any employee of the Corporation, any
Subsidiary or any Related Entity any right to continued employment with the
Corporation, any Subsidiary or any Related Entity as the case may be, nor
shall it interfere in any way with the right of the Corporation, any
Subsidiary or any Related Entity to terminate the employment of any of its
employees at any time.
(c) Each Participant shall be deemed to have been granted an Award on
the date the Committee took action to grant such Award under this Plan or such
later date as the Committee in its sole discretion shall determine at the time
such grant is authorized.
(d) Unless the Committee otherwise determines, each Participant
shall, no later than the date as of which the value of an Award first becomes
includable in the gross income of the Participant for federal income tax
purposes, pay to the Corporation, or make arrangements satisfactory to the
Committee regarding payment of, any federal, state or local taxes of any kind
required by law to be withheld with respect to the Award. The obligations of
the Corporation under this Plan shall be conditional on such payment or
arrangements and the Corporation (and, where applicable, its Subsidiaries and
its Related Entities) shall, to the extent permitted by law, have the right to
===============================================================================
deduct any such taxes from any payment of any kind otherwise due to the
Participant. A Participant may elect to have such tax withholding obligation
satisfied, in whole or in part, by (i) authorizing the Corporation to withhold
from shares of Stock to be issued upon the exercise of a Stock Option or upon
the vesting of any Restricted Stock Unit Award or the Performance Stock Unit
Award a number of shares of Stock with an aggregate Fair Market Value that
would satisfy the withholding amount due, or (ii) transferring to the
Corporation shares of Stock owned by the Participant with an aggregate Fair
Market Value that would satisfy the withholding amount due. With respect to
any Participant who is an executive officer, the election to satisfy the tax
withholding obligations relating to the exercise of a Stock Option or to the
vesting of a Restricted Stock Unit Award or Performance Stock Unit Award in
the manner permitted by this subsection (d) shall be made during the "window
period" as described within the Corporation Insider Trading Policy unless
otherwise determined in the sole discretion of the Committee of the Board.
(e) No member of the Board or the Committee, nor any officer or
employee of the Corporation acting on behalf of the Board or the Committee,
shall be personally liable for any action, failure to act, determination or
interpretation taken or made in good faith with respect to this Plan, and all
members of the Board or the Committee and each and any officer or employee of
the Corporation acting on their behalf shall, to the extent permitted by law,
be fully indemnified and protected by the Corporation in respect of any such
action, failure to act, determination or interpretation.
(f) This Plan is intended to satisfy the conditions of Rule 16b-3
under the Exchange Act, and all interpretations of this Plan shall, to the
extent permitted by law, regulations and rulings, be made in a manner
consistent with and so as to satisfy the conditions of Rule 16b-3 under the
Exchange Act. The term "executive officer" as used in this Plan means any
director or officer who is subject to the provisions of Section 16(b) of the
Exchange Act. Any provisions of this Plan or the application of any provision
of this Plan inconsistent with Rule 16b-3 under the Exchange Act shall be
inoperative and shall not affect the validity of this Plan.
(g) In interpreting and applying the provisions of this Plan, any
Stock Option granted as an Incentive Stock Option pursuant to this Plan shall,
to the extent permitted by law, regulations and rulings be construed as, and
any ambiguity shall be resolved in favor of preserving its status as, an
"incentive stock option" within the meaning of Section 422 of the Code. Once
an Incentive Stock Option has been granted, no action by the Committee that
would cause such Stock Option to lose its status under the Code as an
"incentive stock option" shall be effective as to such Incentive Stock Option
unless taken at the request of or with the consent of the Participant.
Notwithstanding any provision to the contrary in this Plan or in any Incentive
Stock Option granted pursuant to this Plan, if any change in law or any
regulation or ruling of the Internal Revenue Service shall have the effect of
disqualifying any Stock Option granted under this Plan which is intended to be
an "incentive stock option" within the meaning of Section 422 of the Code, the
Stock Option granted shall nevertheless continue to be outstanding as and
shall be deemed to be a Nonqualified Stock Option under this Plan.
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(h) Notwithstanding any other provision herein to the contrary, the
maximum number of shares with respect to which Awards may be granted to the
same Participant under this Plan may not exceed, in the aggregate, 20,000
shares, except to the extent of adjustments authorized by Section 3 of this
Plan.
SECTION 10. EFFECTIVE DATE OF PLAN.
This Plan shall be effective January 1, 1999, subject to the approval
by the affirmative vote of the holders of a majority of the shares ofPreferred Stock of the Corporation presentCompany issuable in
personone or by proxy atmore series.
FOR AGAINST ABSTAIN
4. To approve the meetingselection of stockholders
on that date.
SECTION 11. TERM OF PLAN.
No Award shall be granted under this Plan on or afterTanner + Co. as the tenth
anniversaryindependent certified public
accountants of the effective date of this Plan; provided, however, that Awards
granted priorCompany for the fiscal year ending December 31, 2001.
FOR AGAINST ABSTAIN
5. In their discretion, the Proxies are authorized to vote upon such tenth anniversaryother
business as may extend beyond that date.properly come before the Annual Meeting or any adjournment
thereof.
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THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR THE ELECTION OF THE NOMINEES FOR DIRECTOR AS SELECTED BY THE BOARD OF
DIRECTORS AND FOR PROPOSALS 2, 3, AND 4.
PLEASE SIGN AND DATE THIS PROXY WHERE SHOWN BELOW AND RETURN IT PROMPTLY:
Date:__________________________,2001
Signed:_____________________________
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(Please sign above exactly as the shares are issued. When shares are held by
joint tenants, both should sign. When signing as attorney, as executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership please sign in partnership name by authorized person.)
No Postage Is Required If This Proxy Is Returned In The Enclosed Envelope And
Mailed In The United States.
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