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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Helisys, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(4) Date Filed:
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Notes:
HELISYS, INC.
24015 GARNIER STREET
TORRANCE, CALIFORNIA 90505
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
January 29, 1999
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To the Stockholders of Helisys, Inc.:
The Annual Meeting of Stockholders of Helisys, Inc., a Delaware corporation
(the "Company"), will be held at the Torrance Marriott Hotel, 3635 Fashion
Way, Torrance, California 90503, on January 29, at 10:00 a.m. Pacific Time, to
consider and vote on the following matters described in the attached Proxy
Statement:
(1) The election of four (4) directors to serve until the next Annual
Meeting of Stockholders or until their successors are elected and duly
qualified (Proposal 1); and
(2) The approval (recommended by the Board of Directors) of an Amendment to
the Company's 1995 Stock Incentive Plan to increase the authorized number of
shares of Common Stock issuable thereunder from 900,000 to 1,500,000 (Proposal
2); and
(3) Such other business as may properly come before the meeting or any
adjournment thereof.
The Board of Directors has fixed the close of business on December 30, 1998
as the record date for the determination of stockholders entitled to notice of
and to vote at the meeting or any postponement and adjournment thereof. The
stock transfer books will not be closed.
The Board of Directors welcomes the personal attendance of stockholders at
the meeting. HOWEVER, PLEASE SIGN AND RETURN THE ENCLOSED PROXY, which you may
revoke at any time prior to its use, WHETHER OR NOT YOU EXPECT TO ATTEND THE
MEETING. A self-addressed, postage prepaid envelope is enclosed for your
convenience. Your proxy will not be used if you attend the meeting and choose
to vote in person.
By Order of the Board of Directors
Dave T. Okazaki
Secretary
Torrance, California
January 5, 1999
HELISYS, INC.
24015 GARNIER STREET
TORRANCE, CALIFORNIA 90505
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PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
To Be Held January 29, 1999
10:00 a.m.
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SOLICITATION AND REVOCATION OF PROXIES
The accompanying proxy is solicited by and on behalf of the Board of
Directors of Helisys, Inc., a Delaware corporation (the "Company"), and the
Company will bear the cost of such solicitation. Solicitation of proxies will
be primarily by mail, although some of the officers, directors and employees
of the Company may solicit proxies personally or by telephone. The Company
will also reimburse brokerage houses and other custodians, nominees or
fiduciaries for their expenses in sending proxy materials to their principals.
The persons named as proxies were designated by the Board of Directors and
are directors of the Company. All properly executed proxies will be voted
(except to the extent that authority to vote has been withheld) and where a
choice has been specified by the stockholder as provided in the proxy it will
be voted in accordance with the specification so made. Proxies submitted
without specification will be voted FOR the election as directors of the
nominees proposed by the Board of Directors and FOR the amendment to the
Company's 1995 Stock Incentive Plan to increase the authorized number of
shares of Stock issuable thereunder from 900,000 to 1,500,000.
Any stockholder may revoke a proxy at any time before it is voted at the
meeting by a proxy bearing a later date. A proxy may also be revoked by any
stockholder by delivering written notice of revocation to the Secretary of the
Company or by voting in person at the meeting.
This Proxy Statement and proxy are being mailed to stockholders of the
Company on or about January 6, 1999. The mailing address of the executive
offices of the Company is 24015 Garnier Street, Torrance, California 90505.
VOTING AT THE MEETING
Only record holders of Common Stock and Preferred Stock of the Company at
the close of business on December 30, 1998 will be entitled to notice of, and
to vote at, the meeting. As of the record date, there were 4,542,760 shares of
the Company's Common Stock outstanding. Each share of the Company's Common
Stock is entitled to one vote at the meeting. Additionally, as of the record
date, there were 144,000 shares of the Company's Preferred Stock outstanding.
Each share of the Company's Preferred Stock is entitled to 125 votes at the
meeting. Abstentions and broker non-votes are counted for purposes of
determining the presence or absence of a quorum for the transaction of
business. Abstentions are counted in tabulating the votes cast on proposals
presented to stockholders, whereas broker non-votes are not counted for
purposes of determining whether a proposal has been approved.
PROPOSAL ONE
ELECTION OF DIRECTORS
The persons named in the enclosed proxy will vote to elect the four (4)
proposed nominees named below unless contrary instructions are given in the
proxy. The election of directors shall be by the affirmative vote of the
holders of a plurality of the shares voting in person or by proxy at the
meeting. Each director is to hold office until the next annual meeting and
until his successor is elected and qualified.
The names and certain information concerning the persons nominated by the
Board of Directors to become directors at the meeting are set forth below. THE
COMPANY'S BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF EACH
OF THE NOMINEES NAMED BELOW. It is intended that shares represented by the
proxies will be voted FOR the election to the Board of Directors of the
persons named below unless authority to vote for nominees has been withheld in
the proxy. Although each of the persons named below has consented to serve as
a director if elected and the Board of Directors has no reason to believe that
any of the nominees named below will be unable to serve as a director, if any
nominee withdraws or otherwise becomes unavailable to serve, the persons named
as proxies will vote for any substitute nominee designated by the Board of
Directors. The following information regarding the nominees is relevant to
your consideration of the slate proposed by the Board of Directors:
NOMINEES FOR DIRECTOR
Michael Feygin, 45, co-founded the Company's predecessor in 1985 and has
served as Chairman of the Board, Chief Executive Officer and Chief Technical
Officer since the Company's inception. Mr. Feygin invented the Laminated
Object Manufacturing technology ("LOM") and has assigned his patents to the
Company. He is considered one of the pioneers in the rapid prototyping
industry. Mr. Feygin completed his degree in Mechanical Engineering in Moscow
at the Technological Institute of Food Industry and earned a Master of Science
degree at the Illinois Institute of Technology in Chicago. He is a registered
Professional Engineer in Illinois.
Gary Moskovitz, 51, has been President since March, 1998, Chief Executive
Officer since July 1998 and Director since March 1998. Mr. Moskovitz served as
Executive Vice President and Chief Operating Officer of Quintar Company in the
color hard copy and desktop publishing industry from 1992 until January 1998.
From 1991 until 1992, Mr. Moskovitz served as President, Chief Executive
Officer and Director of Personanfile Incorporated, a document processing
company and from 1989 until 1991, Mr. Moskovitz served as President, Chief
Executive Officer and Director of Genesis Electronics Corporation, a voice
mail systems company. Mr. Moskovitz received a Bachelor of Science degree in
Electrical Engineering from Carnegie Mellon University and an MBA in Marketing
from the University of Pittsburgh.
Robert D. Crangle, 55, co-founded the Company's predecessor in 1985 and has
served as Director of the Company since its inception. Mr. Crangle became a
Certified Management Consultant in 1980. He has been President of Rose &
Crangle Ltd., a management consulting firm, since 1984. He is admitted to
practice law in Massachusetts, Illinois, and Kansas, where he has been a
practicing attorney with Metz and Crangle since 1987, and the Lincoln County
(KS) Attorney since 1997. Mr. Crangle earned a degree in nuclear engineering
from Kansas State University and a law degree from Harvard Law School. He once
was a faculty member, responsible for entrepreneurial studies, at the business
school of the Illinois Institute of Technology. He is a fellow of the American
Association for the Advancement of Science.
Gregory J. Chambers, 53, is President of Telantis Research, Inc., a
Management Consulting Firm specializing in technology research, legal and
human resource strategy research, and development of joint venture
opportunities in the Pacific rim areas, and has served as a Director of the
Company since September 1998. Mr. Chambers was Senior Vice President of
Corporate Affairs of Telxon Corporation from October 1995 through December
1997. Prior to that assignment he was Director of Planning for Employee
Benefits and Compensation for Reliance Electric Company. Mr. Chambers received
a Bachelor of Arts degree from Western
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Reserve University and a Juris Doctor degree from Cleveland Marshall College
of Law. Mr. Chambers is a member of the Ohio bar.
BOARD COMMITTEES
The Board of Directors of the Company has a standing Compensation Committee,
Audit Committee and Executive Committee. The Board of Directors does not have
a standing nominating committee. The functions of the Compensation Committee
include advising the Board of Directors on officer compensation and on
employee compensation generally. The Compensation Committee held one meeting
during the fiscal year ended July 31, 1998, and currently consists of Mr.
Crangle and Mr. Chambers. The Audit Committee has the responsibility of
recommending to the Board of Directors the appointment of the Company's
outside auditors, examining the results of audits and reviewing internal
accounting controls. The Audit Committee held one meeting during the fiscal
year ended July 31, 1998. The Audit Committee currently consists of Mr.
Crangle and Mr. Chambers. The function of the Executive Committee is to
determine the persons entitled to participate in stock option, bonus and other
similar plans. The Executive Committee held one meeting during the fiscal year
ended July 31, 1998, and currently consists of Mr. Moskovitz, Mr. Feygin, Mr.
Crangle and Mr. Chambers.
ATTENDANCE AT MEETINGS
During the fiscal year ended July 31, 1998, the Board of Directors held a
total of 12 meetings. No member of the Board of Directors attended fewer than
75% of the meetings of the Board and of the committees of which he was a
member.
EXECUTIVE COMPENSATION
The following table sets forth information regarding compensation paid or
accrued by the Company for services rendered during the three fiscal years
ended July 31, 1998, to the Company's Chief Executive Officer and other
executive officers employed by the Company as of July 31, 1998.
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION
FISCAL YEAR SECURITIES
ENDED UNDERLYING
JULY 31, SALARY BONUS OPTIONS (#)
----------- -------- ------- ------------
Michael Feygin
Chairman of the Board, Founder
and Chief Technical Officer..... 1998 $202,933 -- --
1997 $225,000 $ 2,647 --
1996 $159,614 $91,942 --
Gary Moskovitz
President and Chief Executive
Officer........................ 1998 $ 77,022 $ 8,500 350,000
Dave Okazaki
Chief Financial Officer......... 1998 $101,365 -- 21,000
1997 $105,000 -- 16,300
1996 $ 88,308 $15,619 22,600
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OPTION MATTERS
Option Grants. The following table sets forth certain information concerning
grants of stock options to each of the Company's executive officers named in
the Summary Compensation Table during the fiscal year ended July 31, 1998.
OPTION GRANTS IN LAST FISCAL YEAR
% OF
TOTAL OPTIONS
GRANTED TO
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION
NAME GRANTED FISCAL YEAR PRICE ($/SH) DATE
---- ------- ------------- ------------ ----------
Michael Feygin............. -- -- -- --
Gary Moskovitz............. 350,000 44.9% $0.48 3/8/08
Dave Okazaki............... 21,000 2.7% $0.78 12/4/07
Option Exercises. No options were exercised by any of the Company's
executive officers named in the Summary Compensation Table during the fiscal
year ended July 31, 1998.
The following table includes the number of shares covered by both
exercisable and unexercisable stock options as of July 31, 1998. None of the
options reflected below were "in the money" at July 31, 1998 (i.e., with a
positive spread between the closing sales price as reported by OTC/BB of
$0.375 per share of Common Stock as of July 31, 1998, and the exercise price
of such stock options).
AGGREGATE FISCAL YEAR-END OPTION VALUES
NUMBER OF UNEXERCISED
OPTIONS AT FISCAL YEAR-END
---------------------------
EXERCISABLE UNEXERCISABLE
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Michael Feygin.................................. -- --
Gary Moskovitz.................................. 36,458 313,542
Dave Okazaki.................................... 18,755 41,145
CONSULTING AGREEMENTS
On April 1, 1996, the Company entered into a Professional Services Agreement
with Mr. Crangle and Rose & Crangle, Ltd., a Kansas corporation of which Mr.
Crangle is a 50% shareholder. Under the terms of this Agreement, Rose &
Crangle is paid $6,600 per month for consulting services performed on behalf
of the Company and the Company reimburses Rose & Crangle's expenses incurred
in connection with performing such consulting services. The monthly fee was
amended to $5,610 in January 1998. In addition, the Company exercised its
right to terminate the consulting agreement, effective December 31, 1998.
DIRECTOR COMPENSATION
Each non-employee director is paid $10,000 annually except for Robert
Crangle, who is compensated by Rose & Crangle, Ltd., pursuant to a consulting
agreement between the Company and Rose & Crangle, Ltd. This consulting
agreement has been terminated effective December 31, 1998. Each non-employee
director was granted options to purchase a total of 15,000 shares of Common
Stock on January 16, 1997. The Company has and will continue to pay the
expenses of its non-employee directors incurred in attending Board meetings.
Pursuant to the terms of the Company's 1995 Stock Incentive Plan, each non-
employee director of the Company, so long as they beneficially own less than
1% of the outstanding Common Stock of the Company, including any outstanding
options to purchase Common Stock which are exercisable within 60 days of the
date of grant, will be granted
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nonstatutory options to purchase 15,000 shares of Common Stock upon
commencement of service as a director and every four years thereafter. These
nonqualified options have an exercise price equal to 100% of the fair market
value of the Common Stock on the date of grant, have a ten-year term and vest
in equal increments of 25% on the anniversary dates of the dates of grant. In
addition, any such options which are unvested shall terminate upon the
termination of the non-employee director's service on the Board of Directors.
CERTAIN TRANSACTIONS
Robert D. Crangle, a director of the Company, owns 50% of the outstanding
equity of Rose & Crangle, Ltd., a management consulting firm that provides a
professional consulting services to the Company. Such services include the
administration of research grants, preparation of business plans and other
documents, and certain contractual and other matters. The Company paid Rose &
Crangle, Ltd. aggregate fees and reimbursed expenses of $92,460 in the fiscal
year ended July 31, 1997 and $81,190 in the fiscal year ended July 31, 1998,
for such services, the majority of which were performed by Mr. Crangle. As
part of an agreement between the Company and Rose & Crangle, Ltd., Mr. Crangle
is neither compensated directly by the Company for serving in any capacity,
nor reimbursed directly by the Company for his expenses in providing services
to the Company. This agreement with Rose & Crangle, Ltd., scheduled to
terminate on December 31, 1998, has a reduced fee schedule for calendar 1998
as compared with earlier years.
The Company believes that all of the transactions set forth above were made
on terms no less favorable to the Company than could otherwise be obtained
from unaffiliated third parties. In the future, the Company will not enter
into any transaction with its officers and directors unless such transaction
is approved by the independent directors of the Company.
The Company's Restated Certificate of Incorporation provides that, pursuant
to Delaware Law, directors of the Company shall not be liable for monetary
damages for breach of the directors' fiduciary duty of care to the Company and
its stockholders. This provision does not eliminate the duty of care, and in
appropriate circumstances equitable remedies such as injunctions or other
forms of non-monetary relief remain available under Delaware Law. In addition,
each director will continue to be subject to liability for breach of the
director's duty of loyalty to the Company, for acts or omissions not in good
faith or involving intentional misconduct, for knowing violations of law, for
actions leading to improper personal benefit to the director and for payment
of dividends or approval of stock repurchases or redemptions that are unlawful
under Delaware Law. The provision also does not affect a director's
responsibility under any other law, such as the federal securities laws. The
Company has entered into Indemnification Agreements with each of its officers
and directors that obligate the Company to indemnify them as permitted by
applicable law.
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PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of December 31, 1998 by each
director, director nominee and Named Executive Officer of the Company, each
person known to the Company to be the beneficial owner of more than 5% of the
outstanding Common Stock, and all directors and executive officers of the
Company as a group. Except as otherwise indicated below, the Company believes
that each person listed below has sole voting and investment power with
respect to the shares owned, subject to applicable community property laws.
SHARES OF
COMMON STOCK
BENEFICIALLY
OWNED(1)
-----------------
NAME AND ADDRESS OF BENEFICIAL OWNER NUMBER PERCENT
------------------------------------ --------- -------
Michael Feygin (2)........................................ 1,993,260 19.2%
Gary Moskovitz (4)........................................ 500,000 4.8%
Rose & Crangle, Ltd. (3).................................. 372,928 3.6%
Robert D. Crangle (3)(6).................................. 19,750 *
Dave T. Okazaki (5)....................................... 28,720 *
Gregory Chambers (6)...................................... 3,750 *
All directors and officers as a group (5 persons) (6)..... 2,918,408 28.1%
Walter W. Cruttenden III (7).............................. 2,150,000 20.8%
Robert F. Meyerson (8).................................... 1,630,000 15.7%
Reed Harman (9)........................................... 900,000 8.7%
- --------
* Less than one percent.
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Shares of Common Stock subject
to options or warrants currently exercisable or convertible, or exercisable
or convertible within 60 days of December 31, 1998, are deemed outstanding
for computing the percentage of the persons holding such options but are
not deemed outstanding for computing the percentage of any other person.
(2) Does not include 120,000 shares held in irrevocable trust for the benefit
of Mr. Feygin's children, over which Mr. Feygin disclaims beneficial
ownership.
(3) The shares shown owned of record by Rose & Crangle, Ltd., a Kansas
corporation ("Rose & Crangle") and management consulting firm, are
beneficially owned by Robert Crangle, a Director of the Company. Mr.
Crangle owns 50% of the shares of Rose & Crangle and his spouse owns the
remaining 50%. Pursuant to an arrangement entered into between Mr.
Crangle and Rose & Crangle, Mr. Crangle is entitled to vote 100% of the
shares of the Company owned of record by Rose & Crangle. In addition, Mr.
Crangle's IRA owns 8,500 shares and he personally holds 7,500 shares
subject to options exercisable.
(4) Includes 500,000 shares of Common Stock of the Company purchased pursuant
to a Restricted Stock Purchase Agreement dated as of December 9, 1998
("Agreement").
(5) Includes 9,965 shares subject to options which shall vest by January 15,
1999.
(6) Includes 3,750 shares subject to options which shall vest by January 15,
1999.
(7) Includes 2,000,000 shares of Common Stock issuable upon the conversion of
80,000 shares of the Company's Series A Preferred Stock, $.001 par value
("Preferred Stock") and 150,000 shares of Common Stock issuable upon the
exercise of stock subscription warrants.
(8) Includes 1,000,000 shares of Common Stock issuable upon the conversion of
40,000 shares of the Company's Preferred Stock beneficially owned by Mr.
Meyerson and 600,000 shares of Common Stock issuable upon the exercise of
stock subscription warrants beneficially owned by Mr. Meyerson.
(9) Includes 600,000 shares of Common Stock issuable upon the conversion of
40,000 shares of the Company's Preferred stock beneficially owned by Mr.
Harman and 300,000 shares of Common Stock issuable upon the exercise of
stock subscription warrants beneficially owned by Mr. Harman.
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PROPOSAL TWO
AMENDMENT TO THE 1995 STOCK INCENTIVE PLAN,
TO INCREASE THE TOTAL NUMBER OF SHARES
ISSUABLE THEREUNDER FROM 900,000 TO 1,500,000
Subject to approval by the Company's stockholders, the Board of Directors
has amended the 1995 Stock Incentive Plan ("1995 Plan") to increase the number
of shares of Common Stock issuable under the 1995 Plan by 600,000 shares of
Common Stock, and to reserve such additional shares for issuance under the
1995 Plan, bringing the total number of shares of Common Stock subject to the
1995 Plan to 1,500,000. The additional shares available for issuance under the
1995 Plan will enable the Company to continue to use equity incentives to
attract, retain and motivate its officers, directors and key employees. The
last reported sale price for the Company's Common Stock on December 31, 1998
as reported by OTC/BB, was $0.0625.
Approval of the additional shares of Common Stock reserved for issuance
under the 1995 Plan will require the affirmative vote of the holders of a
majority of the shares of outstanding Common Stock present or represented at
the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE PROPOSAL TO
AMEND THE 1995 PLAN TO INCREASE THE TOTAL NUMBER OF SHARES OF COMMON STOCK
ISSUABLE THEREUNDER FROM 900,000 TO 1,500,000.
The essential features of the 1995 Plan are summarized below. The summary
does not purport to be a complete description of the 1995 Plan. The Company's
stockholders may obtain a copy of the 1995 Plan upon written request to the
Secretary of the Company.
GENERAL NATURE AND PURPOSE
The 1995 Plan provides for the granting of incentive stock options
("incentive options") within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), options that do not qualify as
incentive stock options ("nonqualified options") and rights to purchase Common
Stock subject to restrictions as more fully described in the 1995 Plan
("restricted stock").
The 1995 Plan was adopted by the Board of Directors and the Company's
Stockholders in October 1995. Pursuant to the terms of the 1995 Plan, options
may be granted or rights of purchase may be offered on or prior to October 30,
2005. Options outstanding at that time or at the time the 1995 Plan is
otherwise terminated will remain outstanding and will continue to be
exercisable within the period specified in stock option agreements between the
optionees and the Company.
The purposes of the 1995 Plan are to promote the interests of the Company by
providing incentives for the retention of the services of existing directors,
executive personnel and key employees of the Company or its affiliates, to
attract and retain competent new directors, executive personnel and key
employees, and to provide incentives to all such directors, executive
personnel and key employees to devote their utmost effort and skill to the
advancement and betterment of the Company, by permitting them to participate
in the success and increased value of the Company. Approximately 45 persons
are eligible for participation in the 1995 Plan.
The 1995 Plan has been designed to be exempt from the provisions of the
Employee Retirement Income Security Act of 1974 ("ERISA") and is not a
qualified deferred compensation plan under Section 401(a) of the Code.
ELIGIBILITY
Incentive Options. In general, any officer or other key employee of the
Company, including any director who is also an employee, is eligible to
receive incentive options under the 1995 Plan, subject to the following
limitations imposed by the Code. An incentive option may not be granted under
the 1995 Plan to any person who, at the time the option is granted, owns more
than 10% of the total combined voting power of all classes of
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stock of the Company or any subsidiary corporation (a "ten-percent
stockholder"), unless the exercise price of the shares of Common Stock covered
by the option is at least 110% of the fair market value of the shares as of
the date of grant, and such incentive option by its terms is not exercisable
after the expiration of five years from the date such option is granted. In
addition, the aggregate fair market value (determined as of the date of grant)
of the Common Stock with respect to which incentive options become exercisable
for the first time under all incentive options held by any ten-percent
stockholder may not exceed $100,000 in any calendar year.
Nonqualified Options and Restricted Stock. Nonqualified options and/or
rights to purchase restricted stock may be granted under the 1995 Plan to
officers, key employees or directors (whether or not employed by the Company)
of the Company.
Subject to the foregoing limitations applicable to incentive options and the
total number of shares reserved for issuance under the 1995 Plan, there is no
maximum or minimum number of shares for which stock options may be granted or
offered to any one person under the 1995 Plan.
ADMINISTRATION
The 1995 Plan is administered by the Executive Committee of the Board of
Directors (the "Committee"). Subject to the limitations on eligibility
discussed above and the specific provisions of the 1995 Plan, the Committee
has authority to determine which persons are to receive incentive options,
nonqualified options and rights to purchase restricted stock under the 1995
Plan, the number of shares of Common Stock to be covered by each option or
right to purchase restricted stock, the exercise price, form of consideration
and all other terms and conditions of each option, and, generally, to take all
actions and make all determinations necessary or appropriate to administer the
1995 Plan. Determinations of the Committee as to all matters of interpretation
of the 1995 Plan are final and binding upon all participants and prospective
participants.
AMENDMENT AND TERMINATION OF THE 1995 PLAN
Except as restricted with respect to formula grants of stock options to non-
employee directors, the 1995 Plan may be modified, amended, suspended or
terminated by the Board at any time. In addition, to the extent necessary and
desirable to comply with Section 422 of the Code (or any other applicable law
or regulation), the Company shall obtain stockholder approval of any amendment
or modification to the 1995 Plan. No amendment, modification or termination of
the 1995 Plan shall affect or impair any rights or obligations under any
option or right to purchase restricted stock granted prior to the date of such
amendment, modification or termination without the consent of the holder of
such option or right to purchase restricted stock. Unless previously
terminated by the Board, the 1995 Plan will terminate on October 30, 2005.
TERMS AND CONDITIONS OF OPTIONS AND RESTRICTED STOCK
Exercise or Purchase Price. The purchase price of a share of Common Stock
payable upon the exercise of an incentive option granted under the 1995 Plan
may not be less than the fair market value per share on the date the option is
granted; except that with respect to an incentive option granted to a ten-
percent stockholder, the exercise price may not be less than 110% of the fair
market value on the date of grant. The purchase price of a share of Common
Stock payable upon the exercise of a nonqualified option granted under the
1995 Plan may not be less than 85% of the fair market value per share on the
date the option is granted.
Under the 1995 Plan, the fair market value per share on a specified date
shall be determined by the Committee. If the shares of Common Stock are
publicly traded, the "fair market value" as of such date shall be the closing
price of a share of Common Stock on the principal exchange on which shares of
Common Stock are listed on such date, or if shares were not traded on such
date, then on the next preceding day during which a sale occurred; or, if the
shares are not so listed but are traded in the over-the-counter market, the
closing bid price; or, if none of the above is applicable, the value of a
share as established by the Committee for such date using any reasonable
method of evaluation.
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The purchase price of restricted stock shall be fixed by the Committee but
may not be less than 85% of the fair market value per share at the time the
right to purchase the restricted stock is granted.
Vesting of Options. The Committee has discretionary authority at the time an
option is granted under the 1995 Plan to determine when and in what increments
shares covered by the option may be purchased. An option may be granted on
terms providing that it will vest (i.e., become exercisable) either in whole
or in part at any time during its term, or only in specified percentages at
stated time periods or intervals during the term of the option. Vesting may be
based upon tenure of employment or affiliation with the Company, upon
achievement of specified goals, or upon such other events as the Committee
determines. The Committee also may accelerate any optionee's right to exercise
options granted under the 1995 Plan.
Term of Options. The term of each option granted under the 1995 Plan is
determined by the Committee at the time the option is granted; provided,
however, that no option granted under the 1995 Plan may have a term in excess
of ten years from the date of grant. Further, with respect to an incentive
option granted to a ten-percent stockholder, the term may not be in excess of
five years from the date of grant.
Assignability. Options granted under the 1995 Plan are not assignable or
transferable except by will or under the laws of descent and distribution and,
during the lifetime of an optionee, are exercisable only by such optionee;
provided, however, that a nonqualified option may be transferred pursuant to a
"qualified domestic relations order" as defined in the Code.
Termination of Employment Other Than by Death or Disability. Under the 1995
Plan, in the event that an optionee who is an employee of the Company shall
cease to be employed by the Company for any reason other than his or her death
or disability, all options granted to such optionee under the 1995 Plan may be
exercised (but only to the extent they were exercisable as of the date of the
cessation of the optionee's employment), at any time within three months after
such cessation, but in any event no later than the expiration date of the
option.
Termination of Employment by Reason of Death or Disability. Under the 1995
Plan, in the event that an optionee who is an employee of the Company shall
cease to be employed by the Company by reason of his or her death or
disability, all options granted to such optionee under the 1995 Plan may be
exercised (but only to the extent they were exercisable as of the date of the
cessation of the optionee's employment as the result of such death or
disability), at any time within 12 months after the optionee's death or
disability, but in any event no later than the expiration date of the option.
Restrictions, Repurchase and Forfeiture of Restricted Stock. Restricted
stock may not be sold, assigned, transferred, pledged, hypothecated or
otherwise encumbered or disposed of until the restrictions thereon are removed
or expire. The Committee may require that the certificates representing
restricted stock remain in the physical custody of an escrow holder or the
Company until all restrictions are removed or expire. Each certificate
representing restricted stock will bear such legend or legends making
reference to the restrictions imposed upon such restricted stock as the
Committee in its discretion deems necessary or appropriate to enforce such
restrictions. The Committee may impose such other conditions on restricted
stock as it may deem appropriate including, without limitation, restrictions
under federal and state securities laws.
Restrictions imposed upon restricted stock will lapse in accordance with
such schedule or other conditions as are determined by the Committee and set
forth in the Restricted Stock Agreement. Under such provisions, if the
purchaser's employment with the Company terminates before all of the shares
have vested, the Company will have the right to repurchase any unvested shares
at the original purchase price. Until the shares have become vested, they will
be held by the Company and may not be sold or otherwise transferred by the
purchaser, but the purchaser will retain the right to vote the shares and all
other rights incident to the ownership of the shares, subject to the
restrictions contained in the Stock Purchase Agreement. In addition, the
Committee may at any time, in its sole discretion, accelerate the time at
which all restrictions with respect to any restricted stock will lapse or
remove any and all such restrictions.
9
Payment. The form of consideration payable upon exercise of an option or
upon issuance of restricted stock, including the method of payment, shall be
determined in the sole discretion of the Committee (and, in the case of an
incentive option, shall be determined at the time of grant). In the case of
options, such consideration may consist of: (i) cash; (ii) check; (iii)
subject to applicable legal restrictions, other shares of Common Stock of the
Company owned by the optionee having a fair market value on the date of
exercise equal to the aggregate exercise price of the shares as to which such
option is exercised; or (iv) any combination of the foregoing methods of
payment as shall be permitted by the Board of Directors or the Committee and
applicable corporate law. Consideration payable for restricted stock may, at
the discretion of the Committee, consist of: (i) cash; (ii) check; (iii)
secured promissory notes; or (iv) any combination of the foregoing methods of
payment as shall be permitted by the Committee.
FORMULA GRANTS TO NON-EMPLOYEE DIRECTORS
Under the 1995 Plan, each non-employee director, so long as they
beneficially own less than 1% of the outstanding Common Stock of the Company,
including any outstanding options to purchase Common Stock which are
exercisable within 60 days of the date of grant, shall be automatically
granted options to purchase 15,000 shares of Common Stock upon commencement of
service as a director and every four years thereafter. These nonqualified
options have an exercise price equal to 100% of the fair market value of the
Common Stock on the date of grant, have a ten-year term and vest in equal
increments of 25% on the anniversary dates of the dates of grant. In addition,
any such options which are unvested shall terminate upon the termination of
the non-employee director's service on the Board of Directors.
ADJUSTMENTS UPON CHANGES OF CAPITALIZATION AND REORGANIZATIONS
In order to preserve, but not increase, the benefits to holders of options
under the 1995 Plan, in the event that the outstanding shares of Common Stock
of the Company are increased, decreased, changed into or exchanged for a
different number or kind of shares or other securities of the Company by
reason of a stock split, reverse stock split, stock dividend, reclassification
or similar change in the capital structure of the Company, appropriate
adjustments shall be made by the Committee in the aggregate number and kind of
shares subject to the 1995 Plan, and the number and kind of shares and the
price per share subject to outstanding options granted under the 1995 Plan.
In the event that the Company at any time proposes to merge into, or
consolidate with, any other corporation, or enters into any other
reorganization (including the sale of substantially all of its assets) in
which the Company is not the surviving corporation, the 1995 Plan, and all
outstanding options and rights of purchase under the 1995 Plan not exercised
prior to such transaction, shall terminate, unless provision is made in
connection with such transaction for the continuance of the 1995 Plan and for
the assumption by the successor corporation of the options and rights of
purchase or substitution of new options and rights of purchase with
appropriate adjustments. If no provision is made in such transaction for the
continuance of the 1995 Plan and the assumption or substitution of options and
rights of purchase, all holders of options and rights of purchase under the
1995 Plan shall be given written notice of such proposed transaction not less
than 30 days prior to the proposed effective date, and prior to the
anticipated effective date, such persons shall have the right to exercise all
or any portion of the options and rights of purchase held by such holder with
respect to any or all shares then subject thereto.
10
INDEPENDENT AUDITORS
The Board of Directors has appointed Stonefield Josephson, Inc. as the
Company's independent auditors for the fiscal year ending July 31, 1999. A
representative of Stonefield Josephson will be present at the Annual Meeting
to respond to questions and to make a statement on behalf of Stonefield
Josephson if the representative so desires.
On September 23, 1998, the Board of Directors of Helisys, Inc., a Delaware
corporation (the "Company"), filed a Form 8-K acknowledging its acceptance of
the resignation of Deloitte & Touche LLP as the Company's auditors. On October
16, 1998 the Company engaged Stonefield Josephson as its auditors.
Deloitte & Touche LLP's report on the financial statements for the year
ended July 31, 1998 contained no adverse opinion or disclaimer of opinion, nor
was it qualified or modified as to audit scope or accounting principles.
Deloitte & Touche LLP did add an explanatory language to its unqualified
report to indicate that the financial statements were affected by
uncertainties about the entity's ability to continue as a going concern.
STOCKHOLDER PROPOSALS
Any stockholder desiring to submit a proposal for action at the 2000 Annual
Meeting of the Stockholders and presentation in the Company's proxy statement
with respect to such meeting should arrange for such proposal to be delivered
to the Company's offices, 24015 Garnier Street, Torrance, California 90505,
addressed to the Secretary, no later than September 8, 1999, in order to be
considered for inclusion in the Company's proxy statement relating to the
meeting. Matters pertaining to such proposals, including the number and length
thereof, eligibility of persons entitled to have such proposals included and
other aspects are regulated by the Securities Exchange Act of 1934, Rules and
Regulations of the Securities and Exchange Commission and other laws and
regulations to which interested persons should refer.
On May 21, 1998, the Securities and Exchange Commission adopted an amendment
to Rule 14a-4, as promulgated under the Securities and Exchange Act of 1934,
as amended. The amendment to Rule 14a-4(c)(1) governs the Company's use of its
discretionary proxy voting authority with respect to a stockholder proposal
which is not addressed in the Company's proxy statement. The new amendment
provides that if a proponent of a proposal fails to notify the Company at
least 45 days prior to the month and day of mailing of the prior year's proxy
statement, then the Company will be allowed to use its discretionary voting
authority when the proposal is raised at the meeting, without any discussion
of the matter in the proxy statement.
With respect to the Company's 2000 Annual meeting of Stockholders, if the
Company is not provided notice of a stockholder proposal, which the
stockholder has not previously sought to include in the company's proxy
statement, by November 22, 1999, the Company will be allowed to use its voting
authority as described above.
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers and persons who own more than ten percent of
a registered class of the Company's equity securities to file with the
Securities and Exchange Commission (the "SEC") initial reports of ownership
and reports of changes in ownership of Common Stock and other equity
securities of the Company. Officers, directors and ten-percent stockholders
are required by SEC regulations to furnish the Company with copies of all
Section 16(a) forms they file. To the Company's knowledge, based solely on the
review of copies of such reports furnished to the Company and written
representations that no other reports were required, during the fiscal year
ended July 31, 1998 the Company's officers, directors and ten-percent
stockholders complied with all applicable Section 16(a) filing requirements.
11
TRANSACTION OF OTHER BUSINESS
As of the date of this Proxy Statement, the Board of Directors is not aware
of any matters other than those set forth herein and in the Notice of Annual
Meeting of Stockholders that will come before the meeting. Should any other
matters arise requiring the vote of stockholders, it is intended that proxies
will be voted in respect thereto in accordance with the best judgment of the
person or persons voting the proxies.
Please return your proxy as soon as possible. Unless a quorum consisting of
a majority of the outstanding shares entitled to vote is represented at the
meeting, no business can be transacted. Therefore, PLEASE BE SURE TO DATE AND
SIGN YOUR PROXY EXACTLY AS YOUR NAME APPEARS ON YOUR STOCK CERTIFICATE AND
RETURN IT IN THE ENCLOSED POSTAGE PREPAID RETURN ENVELOPE. PLEASE ACT PROMPTLY
TO ENSURE THAT YOU WILL BE REPRESENTED AT THIS IMPORTANT MEETING.
A COPY (WITHOUT EXHIBITS) OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB,
INCLUDING FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES, AS FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION FOR THE FISCAL YEAR ENDED JULY 31,
1998 IS BEING MAILED TO STOCKHOLDERS TOGETHER WITH THIS PROXY STATEMENT.
COPIES OF THE EXHIBITS TO THE ANNUAL REPORT ON FORM 10-KSB WILL BE PROVIDED
WITHOUT CHARGE, AT THE WRITTEN REQUEST OF ANY BENEFICIAL OWNER OF SHARES
ENTITLED TO VOTE AT THE ANNUAL MEETING OF STOCKHOLDERS. REQUESTS SHOULD BE
MAILED TO THE SECRETARY, HELISYS, INC., 24015 GARNIER STREET, TORRANCE,
CALIFORNIA 90505.
By Order of the Board of Directors
Dave T. Okazaki
Secretary
January 5, 1999
12
PROXY PROXY
HELISYS, INC.
PROXY SOLICITED BY BOARD OF DIRECTORS
Dave T. Okazaki and Gary Moskovitz, and each or either of them, with full
power of substitution, are hereby appointed proxies to vote the stock of the
undersigned in Helisys, Inc. at the Annual Meeting of Stockholders on January
29, 1999, and at any postponement and adjournment thereof, to be held at the
Torrance Marriott Hotel, 3635 Fashion Way, Torrance, California 90503 at 10:00
a.m. Pacific Time.
MANAGEMENT RECOMMENDS THAT YOU VOTE "FOR" PROPOSAL 1 AND "FOR" PROPOSAL 2.
1. PROPOSAL 1 ELECTION OF DIRECTORS.
[_] FOR all Nominees listed below (except as indicated to the contrary below)
[_] WITHHOLD AUTHORITY to vote for all Nominees listed below
Michael Feygin, Robert Crangle, Gary Moskovitz and Gregory Chambers.
INSTRUCTION: To withhold authority to vote for any individual Nominee, write
that Nominee's name in the space provided below.
______________________________________
2. PROPOSAL 2 AMENDMENT TO EMPLOYEE STOCK PURCHASE PLAN.
[_] FOR [_] AGAINST [_] ABSTAIN
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment thereof,
including procedural and other matters relating to the conduct of the meeting.
THIS PROXY WILL BE VOTED AS DIRECTED. UNLESS OTHERWISE DIRECTED, THIS PROXY
WILL BE VOTED FOR THE ELECTION OF THE FOUR DIRECTOR NOMINEES LISTED ABOVE AND
FOR PROPOSAL 2.
Please sign exactly as name appears
hereon.
______________________________________
______________________________________
Dated: _______________________, 199___
When shares are held by joint tenants,
both should sign. When signing as
attorney, 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.
PLEASE IMMEDIATELY DATE, SIGN AND RETURN THIS CARD IN THE ENCLOSED ENVELOPE.
THANK YOU FOR YOUR PROMPT ATTENTION TO THIS IMPORTANT MATTER.