-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TdJRFf15m6U61sPL3W27KXfhi4a3vCwYGV8mKhikaKoHb9VSDYEujEI22Etb/MvT AsjwDD3ZPiwGRFkmhMcahg== 0000891618-96-001065.txt : 19960701 0000891618-96-001065.hdr.sgml : 19960701 ACCESSION NUMBER: 0000891618-96-001065 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19960628 EFFECTIVENESS DATE: 19960717 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: LASERSCOPE CENTRAL INDEX KEY: 0000851737 STANDARD INDUSTRIAL CLASSIFICATION: ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845] IRS NUMBER: 770049527 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 333-07089 FILM NUMBER: 96587979 BUSINESS ADDRESS: STREET 1: 3052 ORCHARD DR CITY: SAN JOSE STATE: CA ZIP: 95134 BUSINESS PHONE: 4089430636 S-8 1 FORM S-8 DATED JUNE 28, 1996 1 As filed with the Securities and Exchange Commission on June 28, 1996 Registration No. 333-__________ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 LASERSCOPE (Exact name of Registrant as specified in its charter) CALIFORNIA 77-0049527 (State of incorporation) (I.R.S. Employer Identification No.) 3052 ORCHARD DRIVE SAN JOSE, CALIFORNIA 95134-2011 (Address of principal executive offices) 1989 EMPLOYEE STOCK PURCHASE PLAN (Full title of the Plan) ROBERT V. MCCORMICK PRESIDENT AND CHIEF EXECUTIVE OFFICER LASERSCOPE 3052 ORCHARD DRIVE SAN JOSE, CALIFORNIA 95134-2011 (408) 943-0636 (Name, address and telephone number, including area code, of agent for service) Copy to: ELIAS J. BLAWIE, ESQ. LAURA GORDON, ESQ. Venture Law Group 2800 Sand Hill Road Menlo Park, California 94025 (415) 854-4488 (Calculation of Registration Fee on following page) 2 CALCULATION OF REGISTRATION FEE
Proposed Maximum Amount Maximum Proposed Maximum Amount of to be Offering Price Aggregate Registration Title of Securities to be Registered Registered(1) Per Share Offering Price Fee - ------------------------------------------------------------------------------------------------------------------- 1989 EMPLOYEE STOCK PURCHASE PLAN Common Stock, $0.01 par value.......................... 156,388 shares $4.89(2) $764,737.32 $263.70 Common Stock, $0.01 par value.......................... 43,612 shares $4.89(3) $213,262.68 $ 73.54 Total 200,000 shares $4.89 $978,000.00 $337.24
- ----------------------- (1) This Registration Statement shall also cover any additional shares of Common Stock which become issuable under the Plan being registered pursuant to this Registration Statement by reason of any stock dividend, stock split, recapitalization or any other similar transaction effected without the receipt of consideration which results in an increase in the number of the Registrant's outstanding shares of Common Stock. (2) Estimated in accordance with Rule 457(h) under the Securities Act of 1933 (the "Securities Act") solely for the purpose of calculating the registration fee. The computation is based upon the closing price of the Common Stock as reported on the Nasdaq National Market on June 25, 1996, multiplied by 85%, which is the percentage of the trading purchase price applicable to purchases under the referenced Plan. (3) Computed in accordance with Rule 457(h) under the Securities Act solely for the purpose of calculating the registration fee. The computation is based upon the closing price of the Registrant's Common Stock as reported on the Nasdaq National Market on June 25, 1996, multiplied by 85%, which is the percentage of the trading purchase price applicable to purchases under the referenced plan. An aggregate of 43,612 shares of Common Stock issued under the referenced plan are registered hereby. See Item 7 below ("Exemption from Registration Claimed"). -2- 3 PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE. The following documents filed with the Securities and Exchange Commission (the "Commission") are hereby incorporated by reference: (a) The Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1995 filed pursuant to Section 13(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which contains audited financial statements for the Registrant's latest fiscal year for which such statements have been filed. (b) The Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 1996 and all other reports filed pursuant to Section 13(a) or 15(d) of the Exchange Act since the end of the fiscal year covered by the Annual Report referred to in (a) above. (c) The description of the Company's Common Stock which is contained in the following documents: (1) Items 1 and 2 of the Company's Registration Statement on Form 8-A filed pursuant to Section 12 of the Exchange Act on November 15, 1991, as amended by the Form 8-A/A filed on June 12, 1996, and (2) Items 1 and 2 of the Company's Registration Statement on Form 8-A filed pursuant to Section 12 of the Exchange Act on October 23, 1989, as amended by Amendment No. 1 thereto filed on November 27, 1989. All documents subsequently filed by the Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post-effective amendment which indicates that all securities offered hereby have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in this Registration Statement and to be part hereof from the date of filing such documents. Item 4. DESCRIPTION OF SECURITIES. Not applicable. Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL. Not applicable. Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The Registrant's Articles of Incorporation reduce the liability of a director to the corporation or its shareholders for monetary damages for breaches of his or her fiduciary duty of care to the fullest extent permissible under California law. The Bylaws of the Registrant further provide for indemnification of corporate agents to the maximum extent permitted by the California General Corporation Law. In addition, the Registrant has entered into Indemnification Agreements with its officers and directors. Item 7. EXEMPTION FROM REGISTRATION CLAIMED. On December 31, 1996, the Registrant issued 43,612 shares of its Common Stock at a purchase price of $1.647 per share (the "Restricted Shares") to certain employees under the 1989 Employee Stock Purchase Plan. The Restricted Shares were issued pursuant to the exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended, as transactions by the Registrant not involving any public offering. Each of the purchasers had adequate access to information about the Company through his relationship therewith. -3- 4 Item 8. EXHIBITS. Exhibit Number ------- 4.1 1989 Employee Stock Purchase Plan 5.1 Opinion of Venture Law Group, a Professional Corporation. 23.1 Consent of Venture Law Group, a Professional Corporation (included in Exhibit 5.1). 23.2 Consent of Independent Auditors (see p. 6). 24.1 Powers of Attorney (see p. 5). 99.1 Prospectus Item 9. UNDERTAKINGS. The undersigned Registrant hereby undertakes: (1) to file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. (2) that, for purposes of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Insofar as the indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in a successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered hereunder, the Registrant will, unless in the opinion of its counsel the question has already been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. [SIGNATURE PAGES FOLLOW] -4- 5 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant, Laserscope, a corporation organized and existing under the laws of the State of California, certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Jose, State of California, on June 27, 1996. LASERSCOPE By: /s/ Robert V. McCormick ------------------------------------- Robert V. McCormick, President and Chief Executive Officer POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Robert V. McCormick and Dennis LaLumandiere, jointly and severally, his or her attorneys-in-fact and agents, each with the power of substitution and resubstitution, for him or her and in his or her name, place or stead, in any and all capacities, to sign any amendments to this Registration Statement on Form S-8, and to file such amendments, together with exhibits and other documents in connection therewith, with the Securities and Exchange Commission, granting to each attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully as he or she might or could do in person, and ratifying and confirming all that the attorneys-in-fact and agents, or his or her substitute or substitutes, may do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
Signature Title Date --------- ----- ---- /s/ Benjamin L. Holmes Chairman of the Board of Directors June 27, 1996 - ------------------------------------ (Benjamin L. Holmes) /s/ Robert V. McCormick President, Chief Executive Officer and June 27, 1996 - ------------------------------------ Director (Robert V. McCormick) /s/ Dennis LaLumandiere Vice President of Finance (Principal June 27, 1996 - ------------------------------------ Financial and Accounting Officer) (Dennis LaLumandiere) /s/ E. Walter Lange Director June 27, 1996 - ------------------------------------ (E. Walter Lange) Director June 27, 1996 - ------------------------------------ (Rodney Perkins, M.D.) /s/ Robert J. Pressley, Ph.D. Director June 27, 1996 - ------------------------------------ (Robert J. Pressley, Ph.D.)
-5- 6 EXHIBIT 23.2 CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS We consent to the reference to our firm under the caption "Experts" in the Registration Statement (Form S-8) pertaining to the 1989 Employee Stock Purchase Plan of Laserscope and to the incorporation by reference therein of our report dated January 26, 1996, with respect to the consolidated financial statements and schedule of Laserscope included in its Annual Report (Form 10-K) for the year ended December 31, 1995, filed with the Securities and Exchange Commission. San Jose, California June 26, 1996 ERNST & YOUNG LLP -6- 7 INDEX TO EXHIBITS
Exhibit Number ------ 4.1 1989 Employee Stock Purchase Plan 5.1 Opinion of Venture Law Group, a Professional Corporation 23.1 Consent of Venture Law Group, a Professional Corporation (included in Exhibit 5.1). 23.2 Consent of Independent Auditors (see p. 6). 24.1 Powers of Attorney (see p.5). 99.1 Prospectus
-7- EX-4.1 2 1989 EMPLOYEE STOCK PURCHASE PLAN 1 EXHIBIT 4.1 LASERSCOPE 1989 EMPLOYEE STOCK PURCHASE PLAN (AS AMENDED THROUGH NOVEMBER 30, 1995) The following constitute the provisions of the 1989 Employee Stock Purchase Plan of Laserscope. 1. Purpose. The purpose of the Plan is to provide employees of the Company and its Designated Subsidiaries with an opportunity to purchase Common Stock of the Company through accumulated payroll deductions. It is the intention of the Company to have the Plan qualify as an "Employee Stock Purchase Plan" under Section 423 of the Internal Revenue Code of 1986, as amended. The provisions of the Plan shall, accordingly, be construed so as to extend and limit participation in a manner consistent with the requirements of that section of the Code. 2. Definitions. (a) "Board" shall mean the Board of Directors of the Company. (b) "Code" shall mean the Internal Revenue Code of 1986, as amended. (c) "Common Stock" shall mean the Common Stock of the Company. (d) "Company" shall mean Laserscope. (e) "Compensation" shall mean all regular straight time gross earnings, payments for overtime, shift premium, incentive compensation, incentive payments, bonuses and commissions (except to the extent that the exclusion of any such items for all participants is specifically directed by the Board or its committee). (f) "Continuous Status as an Employee" shall mean the absence of any interruption or termination of service as an Employee. Continuous Status as an Employee shall not be considered interrupted in the case of a leave of absence agreed to in writing by the Company, provided that such leave is for a period of not more than 90 days or reemployment upon the expiration of such leave is guaranteed by contract or statute. (g) "Designated Subsidiaries" shall mean the Subsidiaries which have been designated by the Board from time to time in its sole discretion as eligible to participate in the Plan. 2 (h) "Employee" shall mean any person, including any officer of the Company, whose customary employment with the Company or one of its Designated Subsidiaries is at least twenty (20) hours per week and more than` five (5) months in any calendar year. (i) "Exercise Date" shall mean the date one day prior to the date six months, twelve months, eighteen months, or twenty-four months after the first Offering Date of an Offering Period. (j) "Exercise Period" shall mean a period commencing on an Offering Date or on the day after an Exercise Date and terminating one day prior to the date six (6) months later. (k) "Offering Date" shall mean the first business day of each Offering Period of the Plan, except that in the case of an individual who becomes an eligible Employee after the first business day of an Offering Period, the term "Offering Date" shall mean the first business day following the Exercise Date coincident with or next succeeding the date on which that individual becomes an eligible Employee. Options granted after the first business day of an Offering Period will be subject to the same terms as the options granted on the first business day of such Offering Period except that they will have a different grant date (thus, potentially, a different exercise price) and, because they expire at the same time as the options granted on the first business day of such Offering Period, a shorter term. (1) "Offering Period" shall mean a period of six (6), eighteen (18) or twenty-four (24) months during which options granted pursuant to the Plan may be exercised. In general, the duration of an Offering Period will be twenty-four (24) months, consisting of four six-month Exercise Periods. However, Offering Periods that begin on or about January 1 as a result of the operation of Section 10 of the Plan will have a duration of either six (6) or eighteen (18) months, as provided in Section 10, and will consist of one (1) or three (3) six-month Exercise Periods, respectively. (m) "Plan" shall mean this 1989 Employee Stock Purchase Plan. (n) "Subsidiary" shall mean a corporation, domestic or foreign, of which not less than 50% of the voting shares are held by the Company or a Subsidiary, whether or not such corporation now exists or is hereafter organized or acquired by the Company or a Subsidiary. 3. Eligibility. (a) Any Employee as defined in paragraph 2 who (i) is employed on March 31, 1990 or (ii) has been continuously employed by the Company for at least six (6) consecutive months and who shall be employed by the Company on a given Offering Date shall be eligible to participate in the Plan. -2- 3 (b) Any provisions of the Plan to the contrary notwithstanding, no Employee shall be granted an option under the Plan (i) if, immediately after the grant, such Employee (or any other person whose stock would be attributed to such Employee pursuant to Section 425(d) of the Code) would own stock and/or hold outstanding options to purchase stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company or of any subsidiary of the Company, or (ii) which permits his or her rights to purchase stock under all employee stock purchase plans of the Company and its subsidiaries to accrue at a rate which exceeds Twenty-Five Thousand Dollars ($25,000) worth of stock (determined at the fair market value of the shares at the time such option is granted) for each calendar year in which such option is outstanding at any time. 4. Offering Periods. The Plan shall be implemented by consecutive Offering Periods with a new Offering Period commencing on or about July 1 of each year; provided, however, that an Offering Period may commence on or about January 1 in the event the provisions of Section 10 of the Plan become operative. The Plan shall continue thereafter until terminated in accordance with paragraph 20 hereof. Subject to the shareholder approval requirements of paragraph 20, the Board of Directors of the Company shall have the power to change the duration of Offering Periods with respect to future offerings without shareholder approval if such change is announced at least five (5) days prior to the scheduled beginning of the first Offering Period to be affected. 5. Participation. (a) An eligible Employee may become a participant in the Plan by completing a subscription agreement authorizing payroll deductions in the form of Exhibit A to this Plan and filing it with the Company's payroll office at least ten (10) business days prior to the applicable Offering Date, unless a later time for filing the subscription agreement is set by the Board for all eligible Employees with respect to a given Offering Period. (b) Payroll deductions for a participant shall commence on the first payroll following the Offering Date and shall end on the last payroll of the Offering Period to which such authorization is applicable, unless sooner terminated by the participant as provided in paragraph 11. 6. Payroll Deductions. (a) At the time a participant files his or her subscription agreement, he or she shall elect to have payroll deductions made on each payday during the Offering Period in an amount not exceeding ten percent (10%) of the Compensation which he or she receives on each payday during the Offering Period, and the aggregate of such payroll deductions during the Offering Period shall not exceed ten percent (10%) of the participant's aggregate Compensation during said Offering Period. (b) All payroll deductions made for a participant shall be credited to his or her account under the Plan. A participant may not make any additional payments into such account. -3- 4 (c) A participant may discontinue his or her participation in the Plan as provided in paragraph 11, or may change the rate of his or her payroll deductions one time during each Exercise Period (within the limitations of Section 6(a)) by completing or filing with the Company a new subscription agreement authorizing a change in payroll deduction rate. The change in rate shall be effective with the first full payroll period following the Company's receipt of the new subscription agreement. A participant's subscription agreement shall remain in effect for successive Offering Periods unless revised as provided herein or terminated as provided in paragraph 11. (d) Notwithstanding the foregoing, to the extent necessary to comply with Section 423(b)(8) of the Code and paragraph 3(b) herein, a participant's payroll deductions may be decreased to 0% at such time during any Exercise Period which is scheduled to end during the current calendar year that the aggregate of all payroll deductions accumulated with respect to such Exercise Period and any other Exercise Period ending within the same calendar year equal $21,250. Payroll deductions shall recommence at the rate provided in such participant's subscription agreement at the beginning of the first Exercise Period which is scheduled to end in the following calendar year, unless terminated by the participant as provided in paragraph 11. 7. Grant of Option. (a) On the first Offering Date of each Offering Period, each eligible Employee participating in such Offering Period shall be granted an option to purchase on each Exercise Date during such Offering Period a number of shares of the Company's Common Stock determined by dividing such Employee's payroll deductions accumulated prior to such Exercise Date and retained in the Participant's account as of the Exercise Date by the lower of (i) eighty-five percent (85%) of the fair market value of a share of the Company's Common Stock on the Offering Date or (ii) eighty-five percent (85%) of the fair market value of a share of the Company's Common Stock on the Exercise Date; provided, however, that the maximum number of shares an Employee may purchase during each Offering Period shall be determined by dividing $50,000 by the fair market value of a share of the Company's Common Stock on the Offering Date, and provided further that such purchase shall be subject to the limitations set forth in Section 3(b) and 12 hereof. The option shall be automatically exercised on the Exercise Dates during the Offering Period or as otherwise directed by the participant pursuant to Section 8, unless the participant has withdrawn pursuant to Section 11, and shall expire on the last day of the Offering Period. Fair market value of a share of the Company's Common Stock shall be determined as provided in Section 7(b) herein. (b) The option price per share of the shares offered in a given Offering Period shall be the lower of: (i) 85% of the fair market value of a share of the Common Stock of the Company on the Offering Date or (ii) 85% of the fair market value of a share of the Common Stock of the Company on the Exercise Date. The fair market value of the Company's Common Stock on a given date shall be its closing price for such date, as reported in the Wall Street Journal. -4- 5 8. Exercise of Option. Unless a participant withdraws from the Plan as provided in paragraph 11 below, his or her option for the purchase of shares will be exercised automatically on each Exercise Date of each Offering Period, and the maximum number of full shares subject to option shall be purchased for such participant at the applicable option price with the accumulated payroll deductions in his or her account. No fractional shares will be purchased. Any amount remaining in the participant's account after an Exercise Date shall be held in the account until the next Exercise Date in such Offering Period, unless the Offering Period has been over-subscribed or has terminated with such Exercise Date, in which case such amount shall be refunded to the participant. During a participant's lifetime, a participant's option to purchase shares hereunder is exercisable only by him or her. 9. Delivery. As promptly as practicable after each Exercise Date on which a purchase of shares occurs, the Company shall arrange the delivery to each participant, as appropriate, of a certificate representing the shares purchased upon exercise of his or her option. 10. Automatic Transfer to Low Price Offering Period. In the event that the fair market value of the Company's Common Stock is lower on an Exercise Date than it was on the first Offering Date for that Offering Period, all Employees participating in the Plan on the Exercise Date shall be deemed to have withdrawn from the Offering Period immediately after the exercise of their option on such Exercise Date and to have enrolled as participants in a new Offering Period which begins on or about the day following such Exercise Date. In the event the new Offering Period begins on or about July 1, the Offering Period shall have a duration of twenty-four (24) months, consisting of four six-month Exercise Periods. In the event the new Offering Period begins on or about January 1, such new Offering Period shall have a duration of either six (6) or eighteen (18) months, depending on the number of months remaining in the Offering Period that is replaced by such new Offering Period, and shall consist of one (1) or three (3) Exercise Periods, respectively. A participant may elect to remain in the previous Offering Period by filing a written statement declaring such election with the Company prior to the time of the automatic change to the new Offering Period. 11. Withdrawal; Termination of Employment. (a) A participant may withdraw all but not less than all the payroll deductions credited to his or her account and not yet used to exercise his or her option under the Plan at any time by giving written notice to the Company in the form of Exhibit B to this Plan. All of the participant's payroll deductions credited to his or her account will be paid to such participant promptly after receipt of notice of withdrawal and such participant's option for the Offering Period will be automatically terminated, and no further payroll deductions for the purchase of shares will be made during the Offering Period. If a participant withdraws from an Offering Period, payroll deductions will not resume at the beginning of the succeeding Offering Period unless the participant delivers to the Company a new subscription agreement. -5- 6 (b) Upon termination of the participant's Continuous Status as an Employee prior to the Exercise Date for any reason, including retirement or death, the payroll deductions credited to such participant's account during the Offering Period but not yet used to exercise the option will be returned to such participant or, in the case of his or her death, to the person or persons entitled thereto under paragraph 15, and such participant's option will be automatically terminated. (c) In the event an Employee fails to remain in Continuous Status as an Employee of the Company for at least twenty (20) hours per week during an Offering Period in which the Employee is a participant, he or she will be deemed to have elected to withdraw from the Plan and the payroll deductions credited to his or her account will be returned to such participant and such participant's option terminated. (d) A participant's withdrawal from an Offering Period will not have any effect upon his or her eligibility to participate in any similar plan which may hereafter be adopted by the Company or in succeeding Offering Periods which commence after the termination of the Exercise Period from which the participant withdraws. 12. Interest. No interest shall accrue on the payroll deductions of a participant in the Plan. 13. Stock. (a) The maximum number of shares of the Company's Common Stock which shall be made available for sale under the Plan shall be 450,000 shares, subject to adjustment upon changes in capitalization of the Company as provided in paragraph 19. If on a given Exercise Date the number of shares with respect to which options are to be exercised exceeds the number of shares then available under the Plan, the Board shall make a pro rata allocation of the shares remaining available for purchase in as uniform a manner as shall be practicable and as it shall determine to be equitable. (b) The participant will have no interest or voting right in shares covered by his option until such option has been exercised. (c) Shares to be delivered to a participant under the Plan will be registered in the name of the participant or in the name of the participant and his or her spouse. 14. Administration. The Plan shall be administered by the Board of the Company or a committee of members of the Board appointed by the Board. The administration, interpretation or application of the Plan by the Board or its committee shall be final, conclusive and binding upon all participants. Members of the Board who are eligible Employees are permitted to participate in the Plan, provided that: (a) Members of the Board who are eligible to participate in the Plan may not vote on any matter affecting the administration of the Plan or the grant of any option pursuant to the Plan. -6- 7 (b) If a Committee is established to administer the Plan, no member of the Board who is eligible to participate in the Plan may be a member of the Committee. 15. Designation of Beneficiary. (a) A participant may file a written designation of a beneficiary who is to receive any shares and cash, if any, from the participant's account under the Plan in the event of such participant's death subsequent to an Exercise Date on which the option is exercised but prior to delivery to such participant of such shares and cash. In addition, a participant may file a written designation of a beneficiary who is to receive any cash from the participant's account under the Plan in the event of such participant's death prior to exercise of the option. (b) Such designation of beneficiary may be changed by the participant at any time by written notice. In the event of the death of a participant and in the absence of a beneficiary validly designated under the Plan who is living at the time of such participant's death, the Company shall deliver such shares and/or cash to the executor or administrator of the estate of the participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its discretion, may deliver such shares and/or cash to the spouse or to any one or more dependents or relatives of the participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate. 16. Transferability. Neither payroll deductions credited to a participant's account nor any rights with regard to the exercise of an option or to receive shares under the Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of descent and distribution or as provided in paragraph 15 hereof) by the participant. Any such attempt at assignment, transfer, pledge or other disposition shall be without effect, except that the Company may treat such act as an election to withdraw funds from an Offering Period in accordance with paragraph 11. 17. Use of Funds. All payroll deductions received or held by the Company under the Plan may be used by the Company for any corporate purpose, and the Company shall not be obligated to segregate such payroll deductions. 18. Reports. Individual accounts will be maintained for each participant in the Plan. Statements of account will be given to participating Employees at least annually, which statements will set forth the amounts of payroll deductions, the per share purchase price, the number of shares purchased and the remaining cash balance, if any. 19. Adjustments Upon Changes in Capitalization. Subject to any required action by the shareholders of the Company, the number of shares of Common Stock covered by each option under the Plan which has not yet been exercised and the number of shares of Common Stock which have been authorized for issuance under the Plan but have not yet been placed under option (collectively, the "Reserves"), as well as the price per share of Common Stock covered by each option under the Plan which has not yet been exercised, shall be proportionately adjusted for any increase or decrease in -7- 8 the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other increase or decrease in the number of shares of Common Stock effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been "effected without receipt of consideration." Such adjustment shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issue by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to an option. The Board may, if it so determines in the exercise of its sole discretion, also make provision for adjusting the Reserves, as well as the price per share of Common Stock covered by each outstanding option, in the event that the Company effects one or more reorganizations, recapitalizations, rights offerings or other increases or reductions of shares of its outstanding Common Stock, and in the event of a consolidation of the Company or merger with or into any other corporation. 20. Amendment or Termination. The Board of Directors of the Company may at any time and for any reason terminate or amend the Plan. Except as provided in paragraph 19, no such termination can affect options previously granted, provided that an Offering Period may be terminated by the Board of Directors on any Exercise Date if the Board determines that the termination of the Plan is in the best interests of the Company and its shareholders. Except as provided in paragraph 19, no amendment may make any change in any option theretofore granted which adversely affects the rights of any participant. In addition, to the extent necessary to comply with Rule 16b-3 under the Securities Exchange Act of 1934, as amended, or under Section 423 of the Code (or any successor rule or provision or any other applicable law or regulation), the Company shall obtain shareholder approval in such a manner and to such a degree as so required. 21. Notices. All notices or other communications by a participant to the Company under or in connection with the Plan shall be deemed to have been duly given when received in the form specified by the Company at the location, or by the person, designated by the Company for the receipt thereof. 22. Shareholder Approval. (a) Continuance of the Plan shall be subject to approval by the shareholders of the Company within twelve (12) months before or after the date the Plan is adopted. Such shareholder approval shall be obtained in the manner and degree required under the California General Corporation Law. (b) If and in the event that the Company registers any class of equity securities pursuant to Section 12 of the Exchange Act, any required approval of the shareholders of the Company obtained after such registration shall be solicited substantially in accordance with Section 14(a) of the Exchange Act and the rules and regulations promulgated thereunder. -8- 9 (c) If any required approval by the shareholders of the Plan itself or of any amendment thereto is solicited at any time otherwise than in the manner described in paragraph 21(b) hereof, then the Company shall, at or prior to the first annual meeting of shareholders held subsequent to the later of (1) the first registration of any class of equity securities of the Company under Section 12 of the Exchange Act or (2) the granting of an option hereunder to an officer or director after such registration, do the following: (i) furnish in writing to the holders entitled to vote for the Plan substantially the same information which would be required (if proxies to be voted with respect to approval or disapproval of the Plan or amendment were then being solicited) by the rules and regulations in effect under Section 14(a) of the Exchange Act at the time such information is furnished, and (ii) file with, or mail for filing to, the Securities and Exchange Commission four copies of the written information referred to in subsection (i) hereof not later than the date on which such information is first sent or given to shareholders. 23. Conditions Upon Issuance of Shares. Shares shall not be issued with respect to an option unless the exercise of such option and the issuance and delivery of such shares pursuant thereto shall comply with all applicable provisions of law, domestic or foreign, including, without limitation, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, the rules and regulations promulgated thereunder, and the requirements of any stock exchange upon which the shares may then be listed, and shall be further subject to the approval of counsel for the Company with respect to such compliance. As a condition to the exercise of an option, the Company may require the person exercising such option to represent and warrant at the time of any such exercise that the shares are being purchased only for investment and without any present intention to sell or distribute such shares if, in the opinion of counsel for the Company, such a representation is required by any of the aforementioned applicable provisions of law. 24. Term of Plan. The Plan shall become effective upon the earlier to occur of its adoption by the Board of Directors or its approval by the shareholders of the Company as described in paragraph 22. It shall continue in effect for a term of ten (10) years unless sooner terminated under paragraph 20. -9- 10 EXHIBIT A LASERSCOPE 1989 EMPLOYEE STOCK PURCHASE PLAN SUBSCRIPTION AGREEMENT Original Application Offering Date: --- ---------------- Change in Payroll Deduction Rate --- Change of Beneficiary(ies) --- 1. _____________________________________________________________ hereby elects to participate in the Laserscope 1989 Employee Stock Purchase Plan (the "Stock Purchase Plan") and subscribes to purchase shares of the Company's Common Stock in accordance with this Subscription Agreement and the Stock Purchase Plan. 2. I hereby authorize payroll deductions from each paycheck in the amount of ______% of my Compensation on each payday (not to exceed 10%) during the Offering Period in accordance with the Stock Purchase Plan. Such deductions are to continue for succeeding Offering Periods under the Stock Purchase Plan until I give written instructions for a change in or termination of such deductions. 3. I understand that said payroll deductions shall be accumulated for the purchase of shares of Common Stock at the applicable purchase price determined in accordance with the Stock Purchase Plan. I further understand that shares will be purchased for me automatically on each Exercise Date unless I otherwise withdraw from the Offering Period by giving written notice to the Company. 4. I have received a copy of the complete "Laserscope 1989 Employee Stock Purchase Plan." I understand that my participation in the Employee Stock Purchase Plan is in all respects subject to the terms of the Plan. I understand that the grant of the option by the Company under this Subscription Agreement is subject to obtaining shareholder approval of the Employee Stock Purchase Plan. 5. Shares purchased for me under the Employee Stock Purchase Plan should be issued in the name(s) of: ----------------------------------------------------------------------- ----------------------------------------------------------------------- -------. 6. I acknowledge that, under the Internal Revenue Code, there are special tax "holding period" rules that govern the tax consequences of buying and selling shares under the Stock Purchase -1- 11 Plan. I understand that if I dispose of shares purchased under the Plan within two years of the Offering Date (i.e., the first day of the Offering Period) or within one year of the Exercise Date (i.e., the date the shares are purchased), I will be treated for federal income tax purposes as having received ordinary income at the time of the sale equal to the difference between my purchase price and the market value of the stock on the Exercise Date. Any amount in excess of that difference will be treated as capital gain. I hereby agree to notify the Company in writing within 30 days after the date of any such disposition. I further understand that if I hold the shares for both the 2-year and 1-year holding periods described above, at the time I dispose of the shares I will be treated for federal income tax purposes as having received ordinary income in an amount equal only to the lesser of (1) the difference between my purchase price and the market value of the stock on the Offering Date or (2) the difference between my purchase price and the actual sale price for my stock. Any additional gain I receive on the sale will be treated as capital gain. 7. I hereby agree to be bound by the terms of the Stock Purchase Plan. The effectiveness of this Subscription Agreement is dependent upon my eligibility to participate in the Stock Purchase Plan. 8. In the event of my death, I hereby designate the following as my beneficiary(ies) to receive all payments and shares due me under the Stock Purchase Plan: NAME: (Please print) ---------------------------------------------------------- (First) (Middle) (Last) - ---------------------------------- ---------------------------------------- Relationship ---------------------------------------- (Address) -2- 12 NAME: (Please print) ----------------------------------------------------------- (First) (Middle) (Last) - --------------------------------- ---------------------------------------- Relationship ----------------------------------------- (Address) Employee's Social Security Number: ------------------------------------------------ Employee's Address: ------------------------------------------------ ------------------------------------------------ ------------------------------------------------ I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME. Dated: --------------- --------------------------- Signature of Employee -3- 13 EXHIBIT B LASERSCOPE 1989 EMPLOYEE STOCK PURCHASE PLAN NOTICE OF WITHDRAWAL The undersigned participant in the Offering Period of the Laserscope 1989 Stock Purchase Plan which began on ____________, 19___ (the "Offering Date") hereby notifies the Company that he or she hereby withdraws from the Offering Period. He or she hereby directs the Company to pay to the undersigned as promptly as possible all the payroll deductions credited to his or her account with respect to such Offering Period. The undersigned understands and agrees that his or her option for such Offering Period will be automatically terminated. The undersigned understands further that no further payroll deductions will be made for the purchase of shares in the current Offering Period and the undersigned shall be eligible to participate in succeeding Offering Periods only by delivering to the Company a new Subscription Agreement. Name and Address of Participant -------------------------------------------- -------------------------------------------- -------------------------------------------- Signature -------------------------------------------- Date: --------------------------------------- -1- 14 EXHIBIT C LASERSCOPE 1989 EMPLOYEE STOCK PURCHASE PLAN NOTICE TO RESUME PAYROLL DEDUCTIONS The undersigned participant in the Offering Period of the Laserscope 1989 Stock Purchase Plan which began on ____________, 19___ hereby notifies the Company to resume payroll deductions for his or her account at the beginning of the next Exercise Period within such Offering Period in accordance with the terms of the Subscription Agreement executed by the undersigned at the beginning of the Offering Period. The undersigned understands that he or she may change the payroll deduction rate or the beneficiaries named in such Subscription Agreement by submitting a revised Subscription Agreement. Name and Address of Participant -------------------------------------------- -------------------------------------------- -------------------------------------------- Signature -------------------------------------------- Date: --------------------------------------- -1- EX-5.1 3 OPINION OF VENTURE LAW GROUP 1 EXHIBIT 5.1 June 27, 1996 Laserscope 3052 Orchard Drive San Jose, CA 95134-2011 Registration Statement on Form S-8 Ladies and Gentlemen: We have examined the Registration Statement on Form S-8 to be filed by you with the Securities and Exchange Commission on or about June 28, 1996 (the "Registration Statement") in connection with the registration under the Securities Act of 1933, as amended, of a total of 200,000 shares of your Common Stock (the "Shares") reserved for issuance under the 1989 Employee Stock Purchase Plan (the "Plan"). As your legal counsel, we have examined the proceedings taken and are familiar with the proceedings proposed to be taken by you in connection with the sale and issuance of the Shares under the Plan. It is our opinion that, when issued and sold in the manner referred to in the Plan and pursuant to the respective agreement which accompanies each grant under the Plan, the Shares will be legally and validly issued, fully paid and nonassessable. We consent to the use of this opinion as an exhibit to the Registration Statement and further consent to the use of our name wherever it appears in the Registration Statement and any amendments to it. Sincerely, VENTURE LAW GROUP A Professional Corporation EJB EX-99.1 4 PROSPECTUS 1 EXHIBIT 99.1 LASERSCOPE 43,612 SHARES COMMON STOCK This Prospectus relates to the public offering, which is not being underwritten, of 43,612 shares of Common Stock, $.01 par value per share, of Laserscope, a California corporation ("Laserscope," the "Company" or the "Registrant"). All 43,612 shares (the "Shares") may be offered by certain employees of the Company who received such Shares pursuant to the Company's 1989 Employee Stock Purchase Plan (the "Selling Shareholders"). The Shares have been registered under the Securities Act of 1933, as amended (the "Securities Act") pursuant to a Registration Statement on Form S-8. The Shares may be offered by the Selling Shareholders from time to time in transactions in the over-the-counter market, in negotiated transactions, or a combination of such methods of sale, at fixed prices which may be changed, at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices. The Selling Shareholders may effect such transactions by selling the Shares to or through broker-dealers, and such broker-dealers may receive compensation in the form of discounts, concessions or commissions from the Selling Shareholders and/or the purchasers of the Shares for whom such broker-dealers may act as agents or to whom they sell as principals, or both (which compensation as to a particular broker-dealer might be in excess of customary commissions). See "Sale of the Shares." The Company will not receive any of the proceeds from the sale of the Shares. The Company has agreed to bear certain expenses in connection with the registration of the Shares being offered and sold by the Selling Shareholders. The Company's Common Stock is quoted on the Nasdaq National Market under the symbol LSCP. On June 25, 1996 the closing price for the Common Stock was $5.75 per share. SEE "RISK FACTORS" BEGINNING ON PAGE 3 OF THIS PROSPECTUS FOR CERTAIN INFORMATION WHICH SHOULD BE CAREFULLY CONSIDERED BEFORE PURCHASING SHARES OF COMMON STOCK OFFERED HEREBY. The Selling Shareholders and any broker-dealers or agents that participate with the Selling Shareholders in the distribution of the Shares may be deemed to be "underwriters" within the meaning of Section 2(11) of the Securities Act, and any commissions received by them and any profit on the resale of the Shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. See "Sale of the Shares" herein for a description of indemnification arrangements. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. The date of this Prospectus is June 28, 1996 2 No person has been authorized to give any information or to make any representations other than those contained in this Prospectus in connection with the offering made hereby, and if given or made, such information or representations must not be relied upon as having been authorized by the Company, the Selling Shareholders or by any other person. Neither the delivery of this Prospectus nor any sale made hereunder shall, under any circumstances, create any implication that information herein is correct as of any time subsequent to the date hereof. This Prospectus does not constitute an offer to sell or a solicitation of an offer to buy any security other than the securities covered by this Prospectus, nor does it constitute an offer to or solicitation of any person in any jurisdiction in which such offer or solicitation may not lawfully be made. AVAILABLE INFORMATION Laserscope ("Laserscope," the "Company" or the "Registrant") is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports, proxy statements, information statements and other information with the Securities and Exchange Commission (the "Commission"). Reports, proxy statements and other information filed by the Company may be inspected and copied at the public reference facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's regional offices located at 75 Park Place, New York, New York 10007 and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such material can be obtained by mail from the Public Reference Branch of the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. The Common Stock of the Company is quoted on the Nasdaq National Market, and such material may also be inspected at the offices of Nasdaq Operations, 1735 K Street, N.W. Washington, D.C. 20006. The Company has filed with the Commission a registration statement on Form S-8 (herein, together with all amendments and exhibits, referred to as the "Registration Statement") under the Securities Act of 1933, as amended (the "Securities Act") with respect to the Common Stock offered hereby. This Prospectus does not contain all of the information set forth in the Registration Statement, certain parts of which are omitted in accordance with the rules and regulations of the Commission. For further information regarding the Company and the Common Stock offered hereby, reference is hereby made to the Registration Statement and to the exhibits and schedules filed therewith. The Registration Statement, including the exhibits and schedules thereto, may be inspected at the public reference facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and copies of all or any part thereof may be obtained from such office upon payment of the prescribed fees. INFORMATION INCORPORATED BY REFERENCE The following documents filed by the Company with the Commission (File No. 0-18053) pursuant to the Exchange Act are incorporated by reference in this Prospectus: 1. The Company's Annual Report on Form 10-K for the year ended December 31, 1995. 2. The Company's definitive Proxy Statement dated April 26, 1996, filed in connection with the June 7, 1996 Annual Meeting of Shareholders of Laserscope. 3. The description of the Company's Common Stock which is contained in the following documents: (1) Items 1 and 2 of the Company's Registration Statement on Form 8-A filed pursuant to Section 12 of the Securities Exchange Act on November 15, 1991, as amended by the Form 8-A/A filed on June 12, 1996, and (2) Items 1 and 2 of the Company's Registration Statement on Form 8-A filed -2- 3 pursuant to Section 12 of the Exchange Act on October 23, 1989, as amended by Amendment No. 1 thereto filed on November 27, 1989. 4. The Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1996. 5. The description of the Company's Common Stock set forth in the Company's Registration Statement on Form S-1 filed with the Commission on October 23, 1991. All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to the termination of the offering of the Common Stock offered hereby shall be deemed to be incorporated by reference in this Prospectus. Any statement contained in a document incorporated by reference herein shall be deemed to be modified or superseded for purposes hereof to the extent that a statement contained herein (or in any other subsequently filed document which also is incorporated by reference herein) modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed to constitute a part hereof, except as so modified or superseded. The Company will furnish without charge to each person, including any beneficial owner, to whom this Prospectus is delivered, on the written or oral request of such person, a copy of any or all of the documents incorporated by reference, other than exhibits to such documents. Requests should be directed to Laserscope, 3052 Orchard Drive, San Jose, California 95134-2011, Attention Dennis LaLumandiere, Vice President of Finance and Chief Financial Officer, telephone: (408) 943-0636. THE COMPANY Laserscope is a California corporation with executive offices located at 3052 Orchard Drive, San Jose, California 95134-2011. The Company was incorporated in the State of California in 1984 and is traded on the Nasdaq National Market under the symbol LSCP. RISK FACTORS PROSPECTIVE PURCHASERS OF SHARES OF THE COMPANY'S COMMON STOCK OFFERED HEREBY SHOULD CONSIDER CAREFULLY THE FOLLOWING RISK FACTORS, IN ADDITION TO THE OTHER INFORMATION IN THIS PROSPECTUS. -3- 4 Acquisition of Hereaus Surgical, Inc. The Company has entered into an acquisition agreement (the "Agreement") with Heraeus Med GmbH, a corporation organized under the laws of the Federal Republic of Germany ("HME"). The Agreement provides for a transaction (the "Acquisition") pursuant to which Laserscope will issue 4,609,345 shares of Laserscope Common Stock and pay $2 million in exchange for all of the outstanding capital stock (the "HSI Shares") of Heraeus Surgical, Inc. ("HSI"), a wholly-owned subsidiary of HME, and certain assets and liabilities of HME's laser distribution operations (the "LDB Assets and Liabilities"), consisting principally of inventory, trade payables and employee-related liabilities. The HSI Shares and the LDB Assets and Liabilities are collectively referred to herein as the "HME Assets." The anticipated benefits of the Acquisition will not be achieved unless the HME Assets are successfully integrated in a smooth and timely manner. The transition will require among other matters, integration of the respective companies' engineering, manufacturing and marketing and sales organizations, product offerings and research and development personnel and activities. The integration will require substantial attention from management, which does not have experience integrating businesses of this size. There can be no assurance that the integration can be accomplished smoothly or successfully. In addition, the diversion of management attention from the day-to-day operations of the businesses to the integration, and any difficulties encountered in the transition process could have a material adverse impact on the business, revenues and operating results of Laserscope. The transaction will be recorded as a purchase and as a result Laserscope will record certain non-recurring and recurring charges. In the period in which the transaction closes, the Company will record a non-recurring charge of approximately $1.1 million relating to the write-off of the in-process technology included in the Acquisition. In addition, the Company will record annually for a period of five to seven years, approximately $300,000 in charges resulting from the amortization of other intangibles determined by the purchase price allocation. Limited Working Capital; Potential Need to Raise Additional Capital. As of March 31, 1996, Laserscope's total assets and liabilities were $23.0 million and $5.6 million, respectively. As of such date, Laserscope's working capital was $12.8 million while cash and cash equivalents amounted to approximately $2.6 million. Laserscope's need for capital is affected by the current and anticipated demand for its products as well as procurement and production lead times in its manufacturing processes. In addition, pursuant to the Agreement, Laserscope has agreed to pay HME $2 million as partial consideration for the HME Assets. Laserscope also expects to pay approximately $1.5 million of additional costs relating to the Acquisition within the first six months after the closing of the Acquisition (the "Closing"). Changes in these factors could have a material impact on capital requirements. Although Laserscope currently intends to finance the Acquisition using existing cash resources, Laserscope is exploring alternatives for financing the Acquisition, including debt and equity. Such financing may not be available on satisfactory terms, or at all. In addition, future equity financings could result in dilution to Laserscope's shareholders, and future debt financings could result in certain financial and operational restrictions. Laserscope currently anticipates that while its remaining cash resources will be sufficient to fund its short term operating needs, including consummation of the Acquisition, additional financing either through the Company's bank line of credit or otherwise would be required for the Company's currently envisioned long term needs. History of Losses. At March 31, 1996, the Company had an accumulated deficit of $19.2 million. Although the Company generated net income of $137,000 for the three months ended March 31, 1996, the Company experienced annual net losses of $3.6 million, $931,000, $4.4 million and $5.2 million for the years ended December 31, 1995, 1994, 1992 and 1991, respectively. HSI has also experienced significant net losses, incurring net losses of $211,000 for the three months ended March 31, 1996, and $3.3 million, $439,000, $675,000, $5.1 million and $1.1 million for the years ended December 31, 1995, 1994, 1993, -4- 5 1992 and 1991, respectively. There can be no assurance that, following consummation of the Acquisition, the combined companies can achieve profitability. Dilution of Ownership of Laserscope; Significant Influence on Laserscope by HME. Upon the closing of the Acquisition, HME will beneficially own approximately 39.5% of the outstanding Laserscope Common Stock, and approximately 42% if Laserscope issues certain additional shares of its Common Stock in connection with HME's rights to indemnification under the Agreement. This represents substantial dilution of the ownership interest in Laserscope to its current shareholders. In addition, contingent upon the Closing, the Laserscope Board of Directors has amended the Laserscope Bylaws to increase the number of directors on the Laserscope Board to eight. Under the Agreement, Laserscope has agreed to reduce its Board of Directors to seven members one year from the closing of the Acquisition. Commencing one year after the closing of the Acquisition, for so long after such anniversary as HME owns at least 3.3 million shares of Laserscope Common Stock, Laserscope has agreed to use its best efforts to have three nominees of HME elected to the Laserscope Board of Directors; for so long after such anniversary as HME owns at least 1.6 million shares of Laserscope Common Stock, Laserscope has agreed to use its best efforts to have at least two nominees of HME elected to the Laserscope Board of Directors; and for so long after such anniversary as HME owns at least 600,000 shares of Laserscope Common Stock, Laserscope has agreed to use its best efforts to have one nominee of HME elected to the Board. Furthermore, for so long as HME owns at least 600,000 shares of Laserscope Common Stock, Laserscope has agreed not to increase, or ask its shareholders to increase, the number of directors beyond seven without the prior consent of HME. As a result of the above agreements and as a result of HME's ownership interest in Laserscope, HME will be in a position to have a significant influence on the election of directors and other corporate matters which require the vote of Laserscope shareholders. Government Regulation; Uncertainty of Obtaining Regulatory Approval. Government regulation in the United States and other countries is a significant factor in the development, manufacturing and marketing of many of the Company's products and in the Company's ongoing research and development activities. The Company and its products are regulated by the United States Food and Drug Administration ("FDA") under the Federal Food, Drug and Cosmetic Act (the "FDC Act") and the Radiation Control for Health and Safety Act. The FDC Act provides two basic review procedures for medical devices. Certain products qualify for a Section 510(k) ("510(k)") procedure under which the manufacturer gives the FDA premarket notification of the manufacturer's intention to commence marketing the product. The manufacturer must, among other things, establish that the product to be marketed is "substantially equivalent" to a previously marketed product. In some cases, the manufacturer may be required to include clinical data gathered under an investigational device exemption ("IDE") granted by the FDA allowing human clinical studies. If the product does not qualify for the 510(k) procedure, the manufacturer must file a premarket approval application ("PMA") based on testing intended to demonstrate that the product is both safe and effective. The PMA requires more extensive clinical testing than the 510(k) procedure and generally involves a significantly longer FDA review process. Approval of a PMA allowing commercial sale of a product requires preclinical laboratory and animal tests and human clinical studies conducted under an IDE establishing safety and effectiveness. Generally, -5- 6 because of the amount of information required, the 510(k) procedure takes less time than the PMA procedure. To date, all of the Company's products (except for the 600 Series Dye Module) have been marketed through the 510(k) procedure. Future applications, however, may require clearance through the PMA procedure. There can be no assurance that such marketing clearances can be obtained on a timely basis. Delays in receiving such clearances could have a significant adverse impact on the Company. The FDA may also require post-market testing and surveillance programs to monitor certain products. Certain other countries require the Company to obtain clearances for its products prior to marketing the products in those countries. The requirements vary widely from country to country and are subject to change. The European community is in the process of developing a new approach to the regulation of medical products which may significantly change how medical devices are marketed in those countries within the next several years. In February 1996, the Company achieved ISO 9001 and CE (European Conformation) Mark registration in anticipation of this approach. The Company is also required to register with the FDA and state agencies, such as the Food and Drug Branch of the California Department of Health Services, as a medical device manufacturer. The Company is inspected on a routine basis by both the FDA and the State of California for compliance with the FDA's Current Good Manufacturing Practice regulations. Those regulations impose certain procedural and documentation requirements upon the Company with respect to manufacturing, testing, and quality control activities. If violations of applicable regulations are noted during these inspections, the continued marketing of any products manufactured by the Company may be adversely affected. In addition, the Company's laser products are covered by a performance standard for laser products set forth in FDA regulations. The laser performance standard imposes certain specific record-keeping, reporting, product testing, and product labeling requirements on the Company. These requirements also include affixing warning labels to the Company's laser systems, as well as the incorporation of certain safety features in the design of the Company's products. In 1983, regulations were adopted under the Medicare program for the reimbursement of health care costs based on Diagnostic Related Groups ("DRGs"). The DRG regulations limit the dollar amount that a hospital may be reimbursed depending on the nature of the diagnosis. This provides an incentive for the hospital to treat a patient in the most cost-effective manner since the reimbursement will be fixed, regardless of how much it costs the hospital to provide the treatment. Changes in DRG regulations, such as those relating to reimbursement of capital equipment costs, could have an adverse effect on the Company. These regulations also influence reimbursements by private insurance companies. Changes in insurance coverage could impact such reimbursements and thereby adversely affect future sales of the Company's products. Complying with applicable governmental regulations and obtaining necessary clearances or approvals can be time consuming and expensive, and there can be no assurance that regulatory -6- 7 review will not involve delays or other actions adversely affecting the marketing and sale of the Company's products. The Company also cannot predict the extent or impact of future legislation or regulations. During the past four years, there has been substantial debate in the political arena related to prospective changes in the U.S. healthcare system. Cost containment is a major element of these policy reviews and to the extent that new policies and practices curtail hospital capital equipment and supplies procurement patterns or dictate which surgical procedures will be covered by applicable insurance or government funded or subsidized programs, this could have a negative impact on the Company. The Company is also subject to regulation under federal and state laws regarding, among other things, occupational safety, the use and handling of hazardous materials and protection of the environment. Uncertainty of Technological Change; Uncertainty of New Product Development. Laserscope and HSI operate in industries that are subject to rapid technological change. Their ability to remain competitive will depend upon, among other things, their ability to anticipate and respond to such change. As a result, the Company has devoted and will continue to devote substantial resources to research and development. Laserscope's current research and development programs are directed toward the development of new products and enhancements to existing laser, instrumentation and disposable products. Much of the Company's laser product development efforts have built on the earlier basic research of Du Pont related to the potassium titanyl phosphate ("KTP") crystal. A major element of the Company's current product development effort is related to instrumentation and disposable products. The Company's expenditures for research and development were approximately $3.8 million, $3.6 million, and $4.0 million in 1995, 1994 and 1993, respectively. No assurance can be given that the Company will be successful in designing, manufacturing or selling its enhanced or new products in a timely manner. Nor can any assurance be given that a competitor could not introduce a new or enhanced product or technology that could have an adverse effect on the Company's competitive position. Dependence on Single-Source Suppliers. Certain of the components used in the Company's products, including KTP crystals, molded and cast components, power supplies, and certain optical components, are purchased from single sources. While the Company believes that most of these components are available from alternate sources, an interruption of these or other supplies could adversely affect the Company. KTP crystals are currently available at appropriate quality levels from only one supplier, a division of Litton Industries. This supplier has a second crystal growing and fabrication facility at a second location in the United States geographically isolated from its original production facility. While the Company believes that an alternative supplier of KTP crystals could be qualified, if the supply of crystals from the present supplier were interrupted there could be an adverse effect on the Company's business and results of operations. -7- 8 Competition. The medical laser market is highly competitive. The ability of the Company to compete effectively depends on such factors as market acceptance of its laser systems, product performance and price, customer support, and success and timing of new product development by the Company and its competitors. Some of the Company's current and prospective competitors have or may have significantly greater financial, technical, manufacturing and marketing resources than the Company. Laserscope competes in the nonophthalmic surgical segment of the worldwide medical laser market, in which lasers are used in hospital operating rooms, outpatient surgery centers and individual physician offices for a wide variety of procedures. A large number of companies have entered the surgical laser market over the past several years, certain of which have significantly greater financial and other resources than the Company. Certain surgical laser manufacturers have targeted their efforts on narrow segments of the market, such as angioplasty and lithotripsy. To the extent that their products compete for the same capital equipment funds, these manufacturers may be deemed to compete with the Company. More generally, surgical laser manufacturers such as Laserscope compete with standard surgical methods and other medical technologies. There can be no assurance that the Company can compete effectively against such competitors. In addition, there can be no assurance that these or other companies will not succeed in developing technologies and products that are more effective than the Company's or that would render the Company's technology or products obsolete or uncompetitive. Reliance on Patents and Licenses. The Company's ability to compete effectively will depend in part on its ability to develop and maintain proprietary aspects of its technology. The Company holds several patents issued in the United States, generally covering surgical laser systems, delivery devices, calibration inserts, the laser resonator and the connector used to attach disposable and reusable instrumentation to the Company's laser systems. There can be no assurance that the patents that have been issued to the Company or any patents which may be issued as a result of the Company's patent applications will provide any competitive advantages for the Company's products or that they will not be successfully challenged, invalidated or circumvented in the future. In addition, there can be no assurance that competitors, many of which have substantial resources and have made substantial investments in competing technologies, will not seek to apply for and obtain patents that will prevent, limit or interfere with the Company's ability to make, issue, use and sell its products. In 1986, the Company acquired a license under certain United States patents from Du Pont relating to KTP and related crystalline material used in the Company's laser systems for $270,000. The license was exclusive for in vivo diagnostic and therapeutic applications of KTP material. Although the license has a 15-year term expiring in 2001, the principal patent licensed under this agreement expired in April 1993. Accordingly, the use by competitors of a key component in the Company's surgical laser systems has not been prohibited since the expiration date. Under the terms of the Company's license, the Company is required to achieve certain minimum sales of systems using KTP material to maintain the license. In addition, Du Pont has sole discretion whether or not to enforce the license against infringers. While the Company believes that it has developed proprietary technology that will be difficult for competitors to replicate without substantial time and expense, and while additional patents have issued or have -8- 9 been applied for by the Company, there can be no assurance that others will not develop substantially equivalent proprietary technology or otherwise obtain access to the Company's know-how. Failure to Attract or Retain Key Personnel Can Adversely Affect Results. Laserscope is and will continue to be dependent upon the efforts and abilities of a number of current key personnel. In addition, upon consummation of the Acquisition, Laserscope will be dependent upon the efforts and abilities of key personnel that will become employees in connection with the Acquisition. The success of Laserscope after the Acquisition will depend to a large extent upon its ability to attract and to retain key employees and to integrate former employees of HSI and HME. The loss of certain of these people or Laserscope's inability to attract and retain other key employees would have a material adverse effect on the business, financial condition and results of operations of Laserscope. Potential Adverse Effect on Price of Common Stock and Laserscope's Ability to Raise Capital upon Release of Lockup Restriction. Laserscope will issue 4,609,345 shares of Laserscope Common Stock to HME in connection with the Acquisition representing an approximately 39.5% ownership interest in Laserscope. HME has agreed not to sell any of such additional shares until after one year from the Closing. Laserscope has agreed to file a "shelf" registration statement with respect to HME's shares of Laserscope Common Stock by the end of such one year period. HME will have the ability, subject to certain restrictions set forth in the Agreement, to sell all or any of its shares of Laserscope Common Stock at any time after such one year period. Any sale of shares by HME would substantially alter the market float for Laserscope's Common Stock and could have an adverse effect on Laserscope's ability to raise capital. In addition, any such sales, especially in large amounts, could adversely affect the market price of Laserscope's Common Stock. Fluctuations in Quarterly Operating Results. A number of factors affect the Company's financial results and stock price, especially on a quarterly basis. One such factor is the timing of shipments. The Company's laser products are relatively expensive pieces of medical capital equipment and the precise shipment date of specific units can have a marked effect on the Company's results of operations on a quarterly basis. Any delay in product shipments near the end of a quarter could cause quarterly results to fall short of anticipated levels. Another related factor is the timing of orders. To the extent orders are received by the Company near the end of a quarter, the Company may not be able to fulfill the order during the balance of that same quarter. In addition, the Company typically receives a disproportionate percentage of its orders toward the end of each quarter. To the extent that anticipated orders are not received or are delayed beyond the end of the applicable quarter, the Company's revenues may be adversely affected and the Company's revenues may be unpredictable from quarter to quarter. Further, there can be no assurance that revenue growth or profitability on a quarterly or annual basis will be accomplished. Product Liability Risk; Limited Insurance Coverage. Laserscope's development, manufacture and sale of surgical, dermatological and therapeutic laser systems and related surgical instrumentation and disposable supplies and accessories entails significant risk of product liability claims. Laserscope has agreed to indemnify HME and its officers, directors, shareholders -9- 10 and affiliates, insurers, attorneys, successors and assigns, from, among other things, any and all liabilities, losses, damages, claims, costs and expenses not reimbursed by insurance resulting from any product liability claims (whether based on negligence, strict liability or any other legal theory) arising after the Closing and relating to products sold by Laserscope or HSI at any time before or after the Closing. The Company's current product liability insurance covers claims related to products sold by Laserscope and its subsidiaries and affiliated persons, including acquired products sold prior to the Closing by HSI and HME, in an amount up to $10 million (subject to a $100,000 deductible). There can be no assurance that Laserscope's product liability insurance coverage is adequate to protect the Company from any liabilities that it might incur in connection with the development, manufacture and sale of its products or in connection with the Company's indemnification obligations to HME. In addition, product liability insurance is expensive and in the future may not be available to the Company on acceptable terms, or at all. A successful product liability claim or series of claims, or an indemnification claim by HME brought against the Company in excess of its insurance coverage, would have a material adverse effect on the Company's business, financial condition and results of operations. Volatility of Stock Price. The market price of the Company's Common Stock may be subject to significant fluctuations. These fluctuations may be due to factors specific to the Company, such as quarterly fluctuations in the Company's financial results, changes in analysts' estimates of future results, changes in investors' perceptions of the Company or the announcement of new or enhanced products by the Company or its competitors as well as announcements relating to acquisitions and strategic transactions by the Company or its competitors, including the Acquisition. In addition, such fluctuations may be due to or exacerbated by general conditions in the medical equipment industry or conditions in the financial markets generally. -10- 11 SELLING SHAREHOLDERS The following table shows the Selling Shareholders' names, the number of shares of the Company's Common Stock beneficially owned by the Selling Shareholders as of June 20, 1996, and the number of shares covered by this Prospectus.
AMOUNT TO BE HELD AFTER NUMBER OF NUMBER OF OFFERING(1) SHARES SHARES COVERED ----------------------- BENEFICIALLY BY THIS NUMBER SELLING SHAREHOLDER OWNED(2) PROSPECTUS OF SHARES PERCENTAGE(3) - ------------------- ------------ -------------- --------- ---------- Thomas Boyd 46,847 1,474 45,373 * Kevin Candio 28,662 4,308 24,354 * Tammy Chavez 2,053 496 1,557 * Tony Coleman 2,344 837 1,507 * Scott Davenport 9,727 565 9,162 * Dennis Devincentis 686 145 541 * Adrian Esteban 669 669 0 * Susan Friedeberg 799 653 146 * Steven Griffiths 201 201 0 * John Haar 609 174 435 * Lillian Hadel 194 81 113 * Gerald Harrell 818 189 629 * Marcia Harris 886 258 628 * Bonnie Jones 64,516 2,023 62,493 * Donna Kadow 566 118 448 * Denise Kehoe 327 144 183 * Silvana Ladewig 1,249 210 1,039 * Dennis LaLumandiere 42,732 2,546 40,186 * Debra Lohmeyer 1,999 200 1,799 * Robert McCormick 336,640 20,599 316,041 4.3% Robert Myers 2,726 1,160 1,566 * Brent Nixon 4,189 499 3,690 * Rolson Reid 1,044 414 630 * Walter Robb 2,068 171 1,897 * Joseph Rondinone 1,121 399 722 * Sara Van Dusen 1,867 463 1,404 * Michael Whiteside 5,363 251 5,112 * Richard Wood 37,634 4,074 33,560 * Cletus York 1,303 317 986 * ------- ------ ------- --- Total 599,839 43,638 556,201 7.3% ======= ====== ======= ===
- ----------------------------- * Less than 1%. (1) Assumes that all shares offered hereby are sold. (2) Includes with respect to each named person options exercisable within 60 days of June 20, 1996. (3) As of June 20, 1996, the Company had 7,099,936 shares outstanding. SALE OF THE SHARES The Company will receive no proceeds from this offering. The Shares offered hereby may be sold by the Selling Shareholders from time to time in transactions in the over-the-counter market, in negotiated transactions, or a combination of such methods of sale, at fixed prices which may be changed, at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices. The Selling Shareholders may effect such transactions by selling the Shares to or through broker-dealers, and such broker-dealers may receive compensation in the form of discounts, concessions or commissions from the Selling Shareholders and/or the purchasers of the Shares for whom such broker-dealers may act as agents or to whom they sell as principals, or both (which compensation as to a particular broker-dealer might be in excess of customary commissions). In order to comply with the securities laws of certain states, if applicable, the Shares will be sold in such jurisdictions only through registered or licensed brokers or dealers. In addition, in certain states the Shares may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with. The Selling Shareholders and any broker-dealers or agents that participate with the Selling Shareholders in the distribution of the Shares may be deemed to be "underwriters" within the meaning of the Securities Act, and any commissions received by them and any profit on the resale of the Shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Under applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the Shares may not simultaneously engage in market making activities with respect to the Common Stock of the Company for a period of two business days prior to the commencement of such -11- 12 distribution. In addition and without limiting the foregoing, the Selling Shareholders will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including, without limitation, Rules 10b-6 and 10b-7, which provisions may limit the timing of purchases and sales of shares of the Company's Common Stock by the Selling Shareholders. The Company agreed to register the Shares under the Securities Act and to pay all reasonable fees and expenses incident to the filing of this Registration Statement. DESCRIPTION OF CAPITAL STOCK The Company has 52,000,000 shares of authorized capital stock of which 50,000,000 shares have been designated as Common Stock $0.01 par value, and 2,000,000 shares of which have been designated as Preferred Stock, $0.01 par value. The only equity securities currently outstanding are shares of Common Stock. Holders of shares of Common Stock are entitled to one vote per share on all matters to be voted on by shareholders. Subject to preferences that may be applicable to any outstanding Preferred Stock, holders of Common Stock are entitled to receive ratably such dividends as may be declared by the Board of Directors in its discretion from funds legally available therefor. In the event of a liquidation, dissolution or winding up of the Company, holders of Common Stock are entitled to share ratably in all assets remaining after payment of liabilities and the liquidation preference of any outstanding Preferred Stock. Holders of Common Stock have no preemptive rights and have no rights to convert their Common Stock into any other securities. The outstanding shares of Common Stock are, and the Common Stock to be outstanding upon completion of the offering will be, fully paid and nonassessable. In November 1991, the Company adopted a shareholder rights plan and distributed a dividend of one right to purchase one share of common stock (a "Right") for each outstanding share of Common Stock of the Company. The Rights become exercisable in certain limited circumstances involving a potential business combination transaction of the Company and are initially exercisable at a price of $34 per share. Following certain other events after the Rights have become exercisable, each Right entitles its holder to purchase for $34 an amount of Common Stock of the Company, or in certain circumstances, securities of the acquirer, having a then current market value of twice the exercise price of the Right. The Rights are redeemable at the Company's option at $0.01 per Right before they become exercisable. Until a Right is exercised, the holder of a Right, as such, has no rights as a shareholder of the Company. The Rights expire on November 20, 2001. The Company's Common Stock is traded over-the-counter on the Nasdaq National Market under the symbol LSCP. At June 25, 1996, the Company had approximately 894 holders of record of its Common Stock and 7,102,584 shares outstanding. LEGAL MATTERS Certain legal matters with respect to the validity of the Common Stock offered hereby will be passed upon for the Company by Venture Law Group, A Professional Corporation, 2800 Sand Hill Road, Menlo Park, California 94025. EXPERTS The consolidated financial statements of Laserscope incorporated in this prospectus by reference from Laserscope's Annual Report on Form 10-K for the year ended December 31, 1995 have been audited by Ernst & Young LLP, independent auditors, as stated in their report which is incorporated by reference, -12- 13 and have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. -13- -----END PRIVACY-ENHANCED MESSAGE-----