As filed with the Securities and Exchange Commission on December 12, 2003.
Registration No. 333-_____
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
-------------------
STAAR SURGICAL COMPANY
(Exact name of registrant as specified in its charter)
-------------------
Delaware 95-3797439
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
1911 Walker Avenue
Monrovia, California 91016
(Address of Principal Executive Offices) (Zip Code)
STAAR SURGICAL COMPANY 2003 OMNIBUS EQUITY INCENTIVE PLAN
Stock Option Agreement for John Edwards dated April 17, 2000
Stock Option Agreement for Robert Mitchell dated May 9, 2000
Stock Option Agreement for Robert Mitchell dated June 16, 2000
Stock Option Agreement for Dr. David W. Shoemaker dated November 30, 1999
Stock Option Agreement for Philip Stoney dated May 9, 2000
Stock Option Agreement for Philip Stoney dated June 16, 1999
(Full title of the plan)
---------------------------
John Bily
Chief Financial Officer
STAAR Surgical Company
1911 Walker Avenue
Monrovia, California 91016
(Name and address of agent for service)
(626) 303-7902
(Telephone number, including area code, of agent for service)
Copy to:
Charles S. Kaufman, Esq.
Sheppard, Mullin, Richter & Hampton LLP
333 South Hope Street, 48th Floor
Los Angeles, California 90071
(213) 620-1780
CALCULATION OF REGISTRATION FEE
------------------------------------------------------------------------------------------
Title of each
class of Proposed maximum Proposed maximum Amount of
securities to be Amount to be offering price aggregate registration
registered registered(1) per share(2) offering price(2) fee(2)(3)
------------------------------------------------------------------------------------------
Common Stock, par 4,508,481 shares $10.765 $48,533,798 $3,926
value $0.01 per
share
------------------------------------------------------------------------------------------
(1) In addition, this Registration Statement also covers such indeterminate
number of shares of Common Stock as may be issued pursuant to the employee
benefit plan described herein as a result of the adjustment provisions
thereof.
(2) Pursuant to Rule 457(h), the maximum offering price, per share and in the
aggregate, and the registration fee were calculated based upon the average
of the high and low prices of the Common Stock on December 5, 2003, as
reported on the Nasdaq Stock Market.
(3) On December 12, 2003, STAAR Surgical Company deregistered (i) 200,000
shares of Common Stock that remained unissued pursuant to Form S-8 No.
333-104643 (originally filed on April 21, 2003), (ii) 1,998,929 shares of
Common Stock that remained unissued pursuant to Form S-8 No. 333-104644
(originally filed on April 21, 2003), and (iii) 200,000 shares of Common
Stock that remained unissued pursuant to Form S-8 No. 333-90018 (originally
filed on June 7, 2002), and (iv) 63,736 shares of Common Stock that
remained unissued pursuant to Form S-8 No. 333-51064 (originally filed on
December 1, 2000), and (v) 134,316 shares of Common Stock that remain
unissued pursuant to Form S-8 No. 333-52096 (originally filed on December
18, 2000). Pursuant to Rule 457(p), the $3, 926 registration fee for this
Form S-8 may be reduced by the fees previously paid by STAAR Surgical
Company in respect of the shares that were deregistered on December 12,
2003. The fee associated with the 200,000 shares that were deregistered
under Form S-8 No. 333-104643 was $86, and the fee associated with the
1,998,929 shares that were deregistered under Form S-8 No. 333-104644 was
$1,004, and the fees associated with the 200,000 shares that were
deregistered under Form S-8 No. 333-90018 was $84, and the fees associated
with the 63,736 shares of Common stock deregistered under Form S-8 No.
333-51064 was $233, and the fees associated with the 134,316 shares of
Common Stock deregistered under Form S-8 No. 333-52096 was $533.
Accordingly, the adjusted registration fee for this Form S-8 (after
offsetting the fees paid for the shares that were deregistered on December
12, 2003) is $1,986.
EXPLANATORY NOTE
This registration statement on form S-8 registers the 4,423,481shares of
common stock available for issuance under the STAAR Surgical Company 2003
Omnibus Equity Incentive Plan. 2,838,616 of these shares are subject to
outstanding options that were issued pursuant to STAAR's 1995, 1996, 1998 and
Executive plans (the "Prior Plans"). The Prior Plans have been amended by and
are incorporated into the Omnibus Plan. However, the Omnibus Plan provides that
an outstanding option that was granted under a Prior Plan will continue to be
governed by the terms of that Prior Plan and the original option agreement under
which it was issued. STAAR will not grant any new awards under the Prior Plans.
The 2,596,981 unissued shares subject to outstanding options or that were
available for awards under the Prior Plans have been de-registered on December
12, 2003 and are being re-registered under this registration statement.
This registration statement also registers 85,000 shares of common stock
subject to the following option agreements, which comprise individual benefit
plans:
Number of Date of Option
Name of Optionee Shares Agreement
---------------- ------ ---------
John Edwards.................... 10,000 April 17, 2000
Robert Mitchell................. 15,000 May 9, 2000
Robert Mitchell................. 15,000 June 16, 1999
Dr. David W. Shoemaker.......... 15,000 November 30, 1999
Philip Stoney................... 15,000 May 9, 2000
Philip Stoney................... 15,000 June 16, 1999
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PART I
INFORMATION REQUIRED IN THE
SECTION 10(a) PROSPECTUS
The document(s) containing the information specified in Part I of
Form S-8 will be sent or given to participants in the STAAR Surgical Company
2003 Omnibus Equity Incentive Plan of STAAR Surgical Company, a Delaware
corporation (the "Company"), as specified by Rule 428(b)(1) promulgated by the
Securities and Exchange Commission (the "Commission") pursuant to the Securities
Act of 1933, as amended (the "Securities Act"). These documents need not be
filed with the Commission either as part of this Registration Statement or as
prospectuses or prospectus supplements pursuant to Securities Act Rule 424 in
accordance with the Note to Part I of Form S-8. These documents, and the
documents incorporated by reference in this Registration Statement pursuant to
Item 3 of Form S-8, taken together, constitute a prospectus that meets the
requirements of Section 10(a) of the Securities Act.
The following reoffer prospectus filed as part of this registration
statement has been prepared in accordance with General Instruction C of Form S-8
and, pursuant thereto, may be used for reofferings and resales of the shares of
common stock registered hereby. The reoffer prospectus is for use in reoffering
and reselling shares of common stock that may be deemed to be "control
securities" or "restricted securities."
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SUBJECT TO COMPLETION, DATED DECEMBER 12, 2003
REOFFER PROSPECTUS
------------------
[STAAR LOGO]
STAAR Surgical Company
1,585,000 Shares
Common Stock
($0.01 Par Value)
--------------
This is an offering of common stock of STAAR Surgical Company, or STAAR.
All of the shares are being offered by the selling stockholders listed in the
section of this prospectus entitled "Selling Stockholders." These stockholders
are our current or former directors, officers or employees. They acquired the
common stock pursuant to grants under our various benefit plans, including
individual employment agreements. We will not receive any proceeds from the
potential sale of the 1,585,000 shares being offered by the selling
stockholders.
The shares of common stock are "control securities" or "restricted
securities" under the Securities Act of 1933, as amended, before their sale
under this reoffer prospectus. The selling stockholders may resell all, a
portion, or none of the shares of common stock from time to time.
Our common stock trades on the Nasdaq National Market under the symbol
"STAA." On December 11, 2003, the closing sales price for our common stock on
the Nasdaq National Market was $11.16 per share.
--------------
Investment in our common stock involves a high degree of risk. Please
carefully consider the "Risk Factors" beginning on page 4 of this prospectus.
--------------
Neither the Securities and Exchange Commission, nor any state securities
commission, has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
--------------
The date of this prospectus is December 12, 2003.
TABLE OF CONTENTS
Page
----
Special Note Regarding
Forward-Looking Statements............1
Prospectus Summary.......................2
Risk Factors.............................4
Use of Proceeds.........................12
Selling Stockholders....................13
Plan of Distribution....................15
Legal Matters...........................17
Experts.................................17
Where You Can Find More Information.....17
Information Incorporated by Reference...18
You should rely only on the information contained in this prospectus or to
which this prospectus specifically refers you. We have not authorized anyone
else to provide you with different information. This document may be used only
where it is legal to sell these securities. The information in this prospectus
may only be accurate on the date of this prospectus.
--------------
Unless the context otherwise requires, the terms "we," "our," "us" and
"STAAR" refer to STAAR Surgical Company and its subsidiaries.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Statements in this prospectus that are not statements of historical fact
are forward-looking statements. These statements relate to our future plans,
objectives, expectations and intentions. You may generally identify these
statements by the use of words such as "expect," "anticipate," "intend," "plan"
and similar expressions.
You should not place undue reliance on our forward-looking statements. Our
actual results could differ materially from those anticipated in these
forward-looking statements as a result of numerous risks and uncertainties that
are beyond our control, including those we discuss in "Risk Factors" and
elsewhere in this prospectus, and in our other reports we file with the
Securities and Exchange Commission. The forward-looking statements in this
prospectus speak only as of the date of this prospectus, and you should not rely
on these statements without also considering the risks and uncertainties
associated with these statements and our business.
-1-
PROSPECTUS SUMMARY
STAAR Surgical Company
STAAR is a provider of products for eye care professionals operating in
three sectors of the ophthalmic products industry: cataract surgery, refractive
surgery and glaucoma surgery. Our overall mission is to develop, manufacture and
market innovative, high margin visual implants that improve a patient's quality
of vision.
Cataract Surgery. Initially, our main product was a foldable, implantable
silicone lens for use after small incision cataract extraction. The production
and sale of intraocular lenses, or IOLs, remains our core business. Since that
time we have expanded our range of IOLs and other products used in cataract
surgery to also include the following:
o Silicone Toric IOLs, used in cataract surgery to treat astigmatic
vision abnormalities;
o Collamer(R) IOLs, made of a proprietary collagen-based material, which
are used in cataract surgery to treat spherical vision abnormalities;
o STAARVISC(TM)II, a viscoelastic material;
o the SonicWAVE(TM)Phacoemulsification System, which is used to remove a
cataract patient's diseased lens and has unique low energy and high
vacuum characteristics; and
o UltraVac(TM) V1 tubing for use with certain Venturi-type
phacoemulsification machines.
These give us a rounded portfolio of products to meet the needs of the cataract
surgeon. Currently, these products generate the majority of our revenues.
Refractive Surgery. In the area of refractive surgery, we have used our
uniquely biocompatible Collamer material to develop and manufacture the
Implantable Contact Lens(TM), or ICL(R), and the Toric Implantable Contact Lens,
or TICL(R), to treat refractive disorders such as myopia (near-sightedness),
hyperopia (far-sightedness) and astigmatism. These disorders of vision affect a
large proportion of the population. Unlike the IOL, which replaces a cataract
patient's diseased lens, these products are designed to work with the patient's
natural lens to correct refractive errors.
The ICL has not yet been approved for use in the United States, but in May
2003, STAAR submitted the final module of its Pre-Market Approval Submission for
the ICL to the United States Food and Drug Administration. On October 3, 2003,
the FDA Ophthalmic Devices Panel of the Center for Devices and Radiological
Health recommended that, with certain conditions, the FDA approve the ICL for
use in correcting myopia in the range of -3 to -15 diopters and reducing myopia
in the range of -15 to -20 diopters. If approved, STAAR believes that the ICL
will have a significant market as an alternative to LASIK and other available
refractive surgical procedures and will likely replace cataract surgery products
as STAAR's largest source of revenue. The ICL is approved for use in the
countries comprising the European Union and in Korea and Canada. The TICL is in
clinical trials in the United States, and is approved for use in the countries
comprising the European Union.
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Glaucoma Surgery. STAAR has developed the AquaFlow(TM) Collagen Glaucoma
Drainage Device (the "AquaFlow Device") as a surgical treatment for glaucoma
surgery. The AquaFlow Device, approved by the FDA in July 2001, is an
alternative to current methods of treating open angle glaucoma. The AquaFlow
Device is implanted in the sclera (the white of the eye), using a minimally
invasive procedure, for the purpose of reducing intraocular pressure.
Within each of these sectors, we also sell other instruments, devices and
equipment that we manufacture or that are manufactured by others in the
ophthalmic industry. In general, these products complement STAAR's proprietary
product range and allow us to compete more effectively.
Our executive offices are located at 1911 Walker Avenue, Monrovia,
California 91016, and our telephone number is (626) 303-7902. Our website
address is www.staar.com. The information on our website is not a part of this
prospectus.
The Offering
The selling stockholders listed in the section of this prospectus entitled
"Selling Stockholders" may offer and sell up to 1,585,000 shares of our common
stock. These stockholders are our current or former directors, officers or
employees. They acquired the common stock pursuant to grants under our various
benefit plans, including individual employment agreements. We will not receive
any proceeds from the potential sale of the 1,585,000 shares being offered by
the selling stockholders.
The shares of common stock offered by this prospectus have the status of
"control securities" or "restricted securities" under the Securities Act of
1933, as amended, until their sale under this reoffer prospectus. The selling
stockholders may resell all, a portion, or none of the shares of common stock
from time to time.
Under this prospectus, the selling stockholders may sell their shares of
common stock in the open market at prevailing market prices or in private
transactions at negotiated prices. They may sell the shares directly, or may
sell them through underwriters, brokers or dealers. Underwriters, brokers or
dealers may receive discounts, concessions or commissions from the selling
stockholders or from the purchaser, and this compensation might be in excess of
the compensation customary in the type of transaction involved. See the section
of this prospectus entitled "Plan of Distribution."
-3-
RISK FACTORS
An investment in our common stock involves a high degree of risk. In
addition to the other information contained in this prospectus, you should
carefully consider the following risks and uncertainties before purchasing our
common stock. If any of these risks or uncertainties were to occur, our
business, financial condition and operating results could suffer serious harm.
In that case, the trading price of our common stock could decline and you could
lose all or part of your investment.
Risks Related to Our Business
We have a history of losses.
We have reported losses in each of the last three fiscal years and have an
accumulated deficit of $45.6 million as of October 3, 2003. If losses from
operations continue, they could adversely affect the market price for our common
stock and our ability to obtain new financing. In June 2000, we began
implementing a restructuring plan aimed at reducing costs and improving
operating efficiency. In connection with this plan, we recognized pre-tax
charges to earnings of $15.3 million, $7.8 million, and $1.5 million in fiscal
2000, 2001, and 2002. While the restructuring plan has generally improved our
profit margins, we cannot be certain that we will succeed in restoring our
profitability.
We have been in default of the terms of our domestic loan agreement and
have limited access to credit.
We have recently failed to comply with some of the financial covenants of
our principal domestic loan agreement, including a failure to maintain minimum
levels of tangible net worth in the first fiscal quarter of 2003, a failure to
maintain minimum levels of operating income in the second and third fiscal
quarters of 2002 and a failure to maintain minimum levels of cash flow in the
second fiscal quarter of 2002. Accordingly, we have had to obtain waivers from
our lender or modifications of our loan agreement. As of June 19, 2003, we have
paid off and eliminated our domestic loan, and have outstanding balances on the
loans of our European subsidiaries of approximately $3.3 million, based on
exchange rates on October 3, 2003. In the near term, we believe that sufficient
cash to fund operations and current growth plans will be provided by cash
generated from operations and the proceeds of our June 11, 2003 private
placement, in which we raised proceeds, net of placement agent fees, of
approximately $9 million by selling 1,000,000 shares of our common stock.
However, it is likely that in the future we will need access to credit to
finance operations and fund future growth. Because of our history of losses we
may not be able secure adequate financing for these purposes on terms that are
favorable to us or on any terms.
Our success depends on the ICL, which has not been approved for use in
the United States.
We have devoted significant resources and management attention to the
development and introduction of our ICL and TICL. Our management believes that
the future success of STAAR depends on the approval of the ICL by the FDA and a
successful launch of the ICL in North America. The ICL is already approved for
use in the countries comprising the European Union and Canada and in parts of
Asia. The TICL is approved for use in the countries comprising the European
Union. In May 2003, we submitted the final module of our Pre-Market Approval
Submission for the ICL to the FDA, and on October 3, 2003 the FDA Advisory
Committee recommended that FDA approve, with conditions, specified uses of the
ICL. The FDA has not yet acted on this recommendation, and it could decide to
reject the Advisory Committee's recommendations. If the FDA does not grant
approval of the ICL, or significantly delays its approval, our prospects for
success will be severely diminished.
-4-
Our success depends on the successful marketing of the ICL in the
United States market.
Even if it is approved by the FDA, the ICL will not reach its full sales
potential unless we successfully plan and execute its launch and marketing in
the United States. This will present new challenges to our sales and marketing
staff and to our independent manufacturers' representatives. In countries where
the ICL has been approved to date, our sales have grown steadily, but slowly. In
the United States in particular, patients who might benefit from the ICL have
already been exposed to a great deal of advertising and publicity about laser
refractive surgery, but have little if any awareness of the ICL. As a result, we
expect to make extensive use of advertising and promotion targeted to potential
patients through providers, and to carefully manage the introduction of the ICL.
We do not have unlimited resources and we cannot predict whether the particular
marketing, advertising and promotion strategies we pursue will be as successful
as we intend. If we do not successfully market the ICL in the United States, we
will not achieve our planned profitability and growth.
Our core domestic business has suffered declining sales, which sales of
new products have only partially offset.
STAAR pioneered the foldable IOL for use in cataract surgery, and the
foldable silicone IOL remains our largest source of revenue. Since we introduced
the product, however, competitors have introduced IOLs employing a variety of
designs and materials. Over the years these products have gradually taken a
larger share of the IOL market, while the market share for STAAR IOLs has
decreased. In particular, many surgeons now choose lenses made of acrylic
material rather than silicone for their typical patients. In an effort to
maintain our competitive position we have introduced a new biocompatible lens
material, Collamer, to our line of IOLs. We have also introduced new IOL
designs, such as the Toric IOL, pioneered cartridge-injector systems for lens
insertion, and have continued to improve and refine the silicone IOL. Sales of
these new products, however, have only partially offset declining sales of our
silicone IOLs.
We depend on independent manufacturers' representatives.
In an effort to reduce costs and bring our products to a wider market, we
have entered into long-term agreements with several independent regional
manufacturers' representatives, who introduce our products to eye surgeons and
provide the training needed to begin using some of our products. Under our
agreements with these representatives, each receives a commission on all of our
sales within a specified region, including sales on products we sell into their
territories without their assistance. Because they are independent contractors,
-5-
we have a limited ability to manage these representatives or their employees. In
addition, a representative may represent manufacturers other than STAAR,
although not in competing products. We have been relying on the independent
representatives to introduce our new products like Collamer IOLs, Toric IOLs and
the AquaFlow Device, and we will rely on them, in part, to help introduce the
ICL if it is approved. However, we are also introducing direct application
specialists to assist in proctoring and surgeon training to ensure physician
compliance and enhance patient outcomes as a means of growing this segment of
the market. If the introduction of direct application specialists is not
successful, or our independent manufacturers' representatives do not devote
sufficient resources to marketing our products, or if they lack the skills or
resources to market our new products, our new products will fail to reach their
full sales potential and sales of our established products could decline.
Product recalls have been costly and may be so in the future.
Implantable medical devices must be manufactured to the highest standards
and tolerances, and often incorporate newly developed technology. Despite all
efforts to achieve the highest level of quality control and advance testing,
from time to time defects or technical flaws in our products may not come to
light until after the products are sold or consigned. In those circumstances, we
have previously made voluntary recalls of our products. Recalls significantly
impacted our revenue in 2001 when, in separate instances, we voluntarily
recalled our three-piece Collamer lens and certain silicone lenses, and as a
result wrote down approximately $3.4 million in inventory in that year. Similar
recalls could take place again. Courts or regulators can also impose mandatory
recalls on us, even if we believe our products are safe and effective. Recalls
result in lost sales of the recalled products themselves, and can result in
further lost sales while replacement products are manufactured, especially if
the replacements must be redesigned. If recalled products have already been
implanted, we may bear some or all of the cost of corrective surgery. Recalls
may also damage our professional reputation and the reputation of our products.
The inconvenience caused by recalls and related interruptions in supply, and the
damage to our reputation, could cause some professionals to discontinue using
our products.
We compete with much larger companies.
Our competitors, including Bausch & Lomb, Inc., Advanced Medical Optics,
Inc. (AMO), Alcon, Inc., Pfizer, Inc. and the CIBA Vision division of Novartis
AG, have much greater financial resources than we do and some of them have large
international markets for a full suite of ophthalmic products. Their greater
resources for research, development and marketing, and their greater capacity to
offer comprehensive products and equipment to providers, make it difficult for
us to compete. We have lost significant market share to some of our competitors.
Most of our products have single-site manufacturing approvals, exposing
us to risks of business interruption.
We manufacture all of our products either at our facility in Monrovia,
California or our facility in Nidau, Switzerland. Most of our products are
approved for manufacturing only at one of these sites. Before we can use a
second manufacturing site for an implantable device we must obtain the approval
of regulatory authorities. Because this process is expensive we have generally
-6-
not sought approvals needed to manufacture at an additional site. If a natural
disaster, fire, or other serious business interruption struck one of our
manufacturing facilities, it could take a significant amount of time to validate
a second site and replace lost product. We could lose customers to competitors,
thereby reducing sales, profitability and market share.
Risks Related to the Ophthalmic Products Industry
If we fail to keep pace with advances in our industry or fail to
persuade physicians to adopt the new products we introduce, customers may not
buy our products and our revenue may decline.
Constant development of new technologies and techniques, frequent new
product introductions and strong price competition characterize the ophthalmic
industry. The first company to introduce a new product or technique to market
usually gains a significant competitive advantage. Our future growth depends, in
part, on our ability to develop products to treat diseases and disorders of the
eye that are more effective, safer, or incorporate emerging technologies better
than our competitors' products. Sales of our existing products may decline
rapidly if one of our competitors introduces a substantially superior product,
or if we announce a new product of our own. Similarly, if we fail to make
sufficient investments in research and development or if we focus on
technologies that do not lead to better products, our current and planned
products could be surpassed by more effective or advanced products.
In addition, we must manufacture these products economically and market
them successfully by persuading a sufficient number of eye care professionals to
use them. For example, glaucoma requires ongoing treatment over a long period of
time; thus, many doctors are reluctant to switch a patient to a new treatment if
the patient's current treatment for glaucoma remains effective. This has been a
challenge in selling our new Aquaflow Device.
Resources devoted to research and development may not yield new
products that achieve commercial success.
We spent 10.3% of our revenue on research and development during the first
nine months of 2003, and we expect to spend comparable amounts annually in the
future. Development of new implantable technology, from discovery through
testing and registration to initial product launch, is expensive and typically
takes from three to seven years. Because of the complexities and uncertainties
of ophthalmic research and development, products we are currently developing may
not complete the development process or obtain the regulatory approvals required
for us to market the products successfully. It is possible that few or none of
the products currently under development will become commercially successful.
Failure of users of our products to obtain adequate reimbursement from
third-party payors could limit market acceptance of our products, which could
affect our sales and profits.
Many of our products, in particular IOLs and products related to the
treatment of glaucoma, are used in procedures that are typically covered by
health insurance, HMO plans, Medicare or Medicaid. These third-party payors have
recently been trying to contain costs by restricting the types of procedures
they reimburse to those viewed as most cost-effective and capping or reducing
reimbursement rates. These polices could adversely affect sales and prices of
-7-
our products. Physicians, hospitals and other health care providers may be
reluctant to purchase our products if third-party payors do not adequately
reimburse them for the cost of our products and the use of our surgical
equipment. For example:
o Major third-party payors for hospital services, including government
insurance plans, Medicare, Medicaid and private health care insurers,
have substantially revised their payment methodologies during the last
few years, resulting in stricter standards for reimbursement of
hospital and outpatient charges for some medical procedures, including
cataract procedures and IOLs;
o Numerous legislative proposals have been considered that, if enacted,
would result in major reforms in the United States' health care system,
which could have an adverse effect on our business;
o Our competitors may reduce the prices of their products, which could
result in third-party payors favoring our competitors;
o There are proposed and existing laws and regulations governing maximum
product prices and the profitability of companies in the health care
industry; and
o There have been recent initiatives by third-party payors to challenge
the prices charged for medical products. Reductions in the prices for
our products in response to these trends could reduce our profits.
Moreover, our products may not be covered in the future by third-party
payors, which would also reduce our sales.
We are subject to extensive government regulation, which increases our
costs and could prevent us from selling our products.
Government regulations and agency oversight apply to every aspect of our
business, including testing, manufacturing, safety and environmental controls,
efficacy, labeling, advertising, promotion, record keeping, the sale and
distribution of products and samples. We are also subject to government
regulation over the prices we charge and the rebates we offer to customers.
Complying with government regulation substantially increases the cost of
developing, manufacturing and selling our products.
In the United States, we must obtain approval from the FDA for each
product that we market. Competing in the ophthalmic products industry requires
us to continuously introduce new or improved products and processes, and to
submit these to the FDA for approval. Obtaining FDA approval is a long and
expensive process, and approval is never certain.
Products distributed outside of the United States are also subject to
government regulation, which may be equally or more demanding. Our new products
could take a significantly longer time than we expect to gain regulatory
approval and may never gain approval. If a regulatory authority delays approval
of a potentially significant product, the potential sales of the product and its
value to us can be substantially reduced. Even if the FDA or another regulatory
-8-
agency approves a product, the approval may limit the indicated uses of the
product, or may otherwise limit our ability to promote, sell and distribute the
product, or may require post-marketing studies. If we cannot obtain regulatory
approval of our new products, or if the approval is too narrow, we will not be
able to market these products, which would eliminate or reduce our potential
sales and earnings.
The global nature of our business may result in fluctuations and
declines in our sales and profits.
Our products are sold in more than 39 countries. Revenues from
international operations make up a significant portion of our total revenue. For
the nine months ended October 3, 2003 revenues from international operations
were 53%. The results of operations and the financial position of our offshore
operations are reported in the relevant local currencies and then translated
into United States dollars at the applicable exchange rates for inclusion in our
consolidated financial statements, exposing us to translation risk. In addition,
we are exposed to transaction risk because some of our expenses are incurred in
a different currency from the currency in which our revenues are received. In
2003, our most significant currency exposures were to the Euro, the Swiss Franc,
and the Australian dollar. The exchange rates between these and other local
currencies and the United States dollar may fluctuate substantially. We have not
attempted to offset our exposure to these risks by investing in derivatives or
engaging in other hedging transactions. Fluctuations in the value of the United
States dollar against other currencies have had a material adverse effect on our
operating margins and profitability in the past, and may have similar effects in
the future.
Economic, social and political conditions, laws, practices and local
customs vary widely among the countries in which we sell our products. Our
operations outside of the United States are subject to a number of risks and
potential costs, including lower profit margins, less stringent protection of
intellectual property and economic, political and social uncertainty in some
countries, especially in emerging markets. Our continued success as a global
company depends, in part, on our ability to develop and implement policies and
strategies that are effective in anticipating and managing these and other risks
in the countries where we do business. These and other risks may have a material
adverse effect on our operations in any particular country and on our business
as a whole. We price some of our products in U.S. dollars, and as a result
changes in exchange rates can make our products more expensive in some offshore
markets and reduce our revenues. Inflation in emerging markets also makes our
products more expensive there and increases the credit risks to which we are
exposed. We have experienced currency fluctuations, inflation and volatile
economic conditions, which have affected our profitability in the past in
several markets, including Japan, Switzerland, the European Union and Australia,
and we may experience such effects in the future.
We depend on proprietary technologies, but may not be able to protect
our intellectual property rights adequately.
We have numerous patents and pending patent applications. We rely on a
combination of contractual provisions, confidentiality procedures and patent,
trademark, copyright and trade secrecy laws to protect the proprietary aspects
-9-
of our technology. These legal measures afford limited protection and may not
prevent our competitors from gaining access to our intellectual property and
proprietary information. Any of our patents may be challenged, invalidated,
circumvented or rendered unenforceable. Furthermore, we cannot be certain that
any pending patent application held by us will result in an issued patent or
that if patents are issued to us, the patents will provide meaningful protection
against competitors or competitive technologies. Litigation may be necessary to
enforce our intellectual property rights, to protect our trade secrets and to
determine the validity and scope of our proprietary rights. Any litigation could
result in substantial expense, may reduce our profits and may not adequately
protect our intellectual property rights. In addition, we may be exposed to
future litigation by third parties based on claims that our products infringe
their intellectual property rights. This risk is exacerbated by the fact that
the validity and breadth of claims covered by patents in our industry may
involve complex legal issues that are not fully resolved.
Any litigation or claims against us, whether or not successful, could
result in substantial costs and harm our reputation. In addition, intellectual
property litigation or claims could force us to do one or more of the following:
to cease selling or using any of our products that incorporate the challenged
intellectual property, which would adversely affect our revenue; to negotiate a
license from the holder of the intellectual property right alleged to have been
infringed, which license may not be available on reasonable terms, if at all; or
to redesign our products to avoid infringing the intellectual property rights of
a third party, which may be costly and time-consuming or impossible to
accomplish.
We obtain some of the components of our products from a single source,
and an interruption in the supply of those components could reduce our
revenue.
We obtain some of the components for our products from a single source.
For example, only one supplier produces the raw material for the STAARVISC II
viscoelastic product. Although we believe we could find alternate supplies for
any of these components, the loss or interruption of any of these suppliers
could increase costs, reducing our revenue and profitability, or harm our
customer relations by delaying product deliveries.
We may not successfully develop and launch replacements for our
products that lose patent protection.
Most of our products are covered by patents that give us a degree of
market exclusivity during the term of the patent. We have also earned revenue in
the past by licensing some of our patented technology to other ophthalmic
companies. The legal life of a patent is 20 years from application. Patents
covering our products will expire from this year through the next 20 years. Upon
patent expiration, our competitors may introduce products using the same
technology. As a result of this possible increase in competition, we may need to
charge a lower price in order to maintain sales of our products, which could
make these products less profitable. If we fail to develop and successfully
launch new products prior to the expiration of patents for our existing
products, our sales and profits with respect to those products could decline
significantly. We may not be able to develop and successfully launch more
advanced replacement products before these and other patents expire.
-10-
Our activities involve hazardous materials and emissions and may
subject us to environmental liability.
Our manufacturing, research and development practices involve the
controlled use of hazardous materials. We are subject to federal, state and
local laws and regulations in the various jurisdictions in which we have
operations governing the use, manufacturing, storage, handling and disposal of
these materials and certain waste products. Although we believe that our safety
and environmental procedures for handling and disposing of these materials
comply with legally prescribed standards, we cannot completely eliminate the
risk of accidental contamination or injury from these materials. Remedial
environmental actions could require us to incur substantial unexpected costs,
which would materially and adversely affect our results of operations. If we
were involved in a major environmental accident or found to be in substantial
non-compliance with applicable environmental laws, we could be held liable for
damages or penalized with fines.
We risk losses through litigation.
We are currently party to various claims and legal proceedings arising out
of the normal course of our business. These claims and legal proceedings relate
to contractual rights and obligations, employment matters, and claims of product
liability. While we do not believe that any of the claims known to us is likely
to have a material adverse effect on our financial condition or results of
operations, new claims or unexpected results of existing claims could lead to
significant financial harm.
We depend on key employees.
We depend on the continued service of our senior management and other key
employees. The loss of a key employee could hurt our business. We could be
particularly hurt if any key employee or employees went to work for competitors.
Our future success depends on our ability to identify, attract, train and
motivate other highly skilled personnel. Failure to do so may adversely affect
future results.
Risks Related to Ownership of Our Common Stock
Our Certificate of Incorporation could delay or prevent an acquisition
or sale of our company.
Our Certificate of Incorporation empowers the Board of Directors to
establish and issue a class of preferred stock, and to determine the rights,
preferences and privileges of the preferred stock. We also have a Stockholders'
Rights Plan, which could discourage a third party from making an offer to
acquire us. These provisions give the Board of Directors the ability to deter,
discourage or make more difficult a change in control of our company, even if
such a change in control would be in the interest of a significant number of our
stockholders or if such a change in control would provide our stockholders with
a substantial premium for their shares over the then-prevailing market price for
the common stock.
-11-
Our bylaws contain other provisions that could have an anti-takeover
effect, including the following:
o only one of the three classes of directors is elected each year;
o stockholders have limited ability to remove directors;
o stockholders cannot call a special meeting of stockholders; and
o stockholders must give advance notice to nominate directors.
Anti-takeover provisions of Delaware law could delay or prevent an
acquisition of our company.
We are subject to the anti-takeover provisions of Section 203 of the
Delaware General Corporation Law, which regulates corporate acquisitions. These
provisions could discourage potential acquisition proposals and could delay or
prevent a change in control transaction. They could also have the effect of
discouraging others from making tender offers for our common stock or preventing
changes in our management.
Future sales of our common stock may depress our stock price.
The market price of our common stock could be subject to downward price
pressure as a result of sales of our recent private placement of 1,000,000
shares of common stock, which have been registered for resale, or the perception
that these sales could occur. In addition, the perception that we might conduct
similar private placements followed by public offering of the privately placed
shares could make it more difficult for us to raise funds through future
offerings of common stock. As of December 11, 2003, there were 18,397,190 shares
of our common stock outstanding, with another 2,485,133 shares of common stock
issuable upon exercise of options granted under our stock option plans or under
certain agreements with our senior officers. Some of the stock underlying these
options has been registered for resale with the SEC.
The market price of our common stock is likely to be volatile.
Our stock price has fluctuated widely, ranging from $2.90 to $15.44 within
the past year, as of December 11, 2003. Our stock price could continue to
experience significant fluctuations in response to factors such as quarterly
variations in operating results, operating results that vary from the
expectations of securities analysts and investors, changes in financial
estimates, changes in market valuations of competitors, announcements by us or
our competitors of a material nature, additions or departures of key personnel,
future sales of common stock and stock volume fluctuations. Also, general
political and economic conditions such as recession or interest rate
fluctuations may adversely affect the market price of our stock.
USE OF PROCEEDS
All shares of common stock sold pursuant to this prospectus will be sold
by the selling stockholders for their own accounts. We will not receive any of
the proceeds from the sale of shares of our common stock by the selling
stockholders.
-12-
SELLING STOCKHOLDERS
The following table lists the number of shares of our common stock
registered for sale by the selling stockholders under this prospectus. It also
shows the total number of shares of common stock owned by each of them before
and after the offering, and the percentage of our total outstanding shares
represented by these amounts. The table assumes that the selling stockholders
will sell all of the common stock being offered by this prospectus for their
accounts. However, the selling stockholders have no obligation to sell any of
their shares, so we cannot determine the exact number of shares they actually
will sell.
The selling stockholders are our current or former directors, officers or
employees. They acquired the common stock pursuant to grants under our various
benefit plans, including individual employment agreements.
The table is based on information provided by the selling stockholders, and
does not necessarily indicate beneficial ownership for any other purpose. The
number of shares of common stock beneficially owned by the selling stockholders
is determined in accordance with the rules of the SEC. The term "selling
stockholders" includes the stockholders listed below and their transferees,
assignees, pledgees, donees or other successors. The percent of beneficial
ownership for each selling stockholder is based on 18,397,190 shares of common
stock outstanding as of December 11, 2003.
Percent of
Number of Outstanding
Shares Shares Number of
Beneficially Beneficially Shares
Name of Selling Stockholder and Owned Prior Owned Prior Covered by
Title or Relationship with to to this
STAAR Surgical Company Offering(1) Offering (1) Prospectus (2)
---------------------- ----------- ------------ --------------
David Bailey
Chairman and Chief Executive Officer........ 880,754 4.8% 990,000
John Bily
Chief Financial Officer.................... 66,666 * 150,000
John Santos
Senior Vice President
Planning and Corporate Development......... 108,000 * 103,000
Helene Lamielle
Vice President, Scientific Affairs......... 50,000 * 125,000
Nicholas Curtis
Senior Vice President
Sales and Marketing........................ 28,000 * 135,000
Volker Anhaeusser
Director................................... 119,425 * 105,000
John R. Gilbert
Director................................... 60,000 * 60,000
David Morrison
Director and Consultant.................... 68,000 * 68,000
Donald Duffy
Director................................... 20,000 * 60,000
-------------
* Represents less than 1% of the outstanding shares.
(1) The number and percentage of shares beneficially owned is determined in
accordance with Rule 13d-3 of the Securities Exchange Act of 1934, as
amended, and the information is not necessarily indicative of beneficial
ownership for any other purpose. Under Rule 13d-3, the number of shares
beneficially owned includes any shares as to which a person has sole or
shared voting power or investment power. Shares that a person has the right
to acquire within 60 days of the date of this prospectus are included in
the shares owned by that person and are treated as outstanding for purposes
of calculating the ownership percentage of that person, but not for any
other person. This beneficial shares listed for the Selling Stockholders
include the following number of options exercisable within 60 days of the
date of this prospectus: David Bailey, 830,000; John Bily 66,666; John
Santos, 103,000; Helene Lamielle, 50,000; Nicholas Curtis, 25,000, Volker
Anhaeusser, 105,000; John R. Gilbert, 60,000; David Morrison, 68,000; and
Donald Duffy, 20,000.
(2) The shares covered by this prospectus include shares beneficially owned by
the Selling Stockholder as of the date of this prospectus and the following
number of shares subject to options that are not exercisable within 60 days
of this prospectus: David Bailey, 160,000; John Bily, 83,334; Helen
Lamielle, 75,000; Nicholas Curtis, 110,000; Donald Duffy, 40,000.
-13-
PLAN OF DISTRIBUTION
The selling stockholders and their successors, including their
transferees, pledgees or donees, may sell the shares covered by this prospectus
from time to time for their own accounts. They will act independently of us in
making decisions regarding the timing, manner and size of each sale. They may
sell their shares on the Nasdaq National Market or other exchanges, in the
over-the-counter market or in privately negotiated transactions. They may sell
their shares directly or through underwriters, broker-dealers or agents, who may
receive compensation in the form of discounts, concessions, or commissions from
the selling stockholder or from the purchasers of the shares. The compensation
received by a particular underwriter, broker, dealer or agent might exceed
customary commissions.
The shares of common stock may be sold in one or more transactions at
fixed prices, at prevailing market prices at the time of sale, at prices related
to the prevailing market prices, at varying prices determined at the time of
sale, or at negotiated prices.
The selling stockholders may sell their shares through any of the
following methods or any combination of these methods:
o purchases by a broker or dealer as a principal and resale by that
broker or dealer for its own account under this prospectus;
o ordinary brokerage transactions and transactions in which the broker
solicits purchasers, which may include long or short sales made after
the effectiveness of the registration statement of which this
prospectus is a part;
o cross trades or block trades in which the broker or dealer engaged to
make the sale will attempt to sell the securities as an agent, but may
position and resell a portion of the block as a principal to facilitate
the transaction;
o through the writing of options;
o in other ways not involving market makers or established trading
markets, including direct sales to purchasers or sales made through
agents;
o any combination of the above transactions; or
o any other lawful method.
In addition, any securities covered by this prospectus which qualify for
sale in compliance with Rule 144 promulgated under the Securities Act of 1933
may be sold under Rule 144 rather than under this prospectus.
The selling stockholder may enter into hedging transactions with
broker-dealers in connection with distributions of the shares or otherwise. In
these transactions, broker-dealers may engage in short sales of common stock in
the course of hedging the positions they assume with the selling stockholder.
-14-
The selling stockholders also may sell shares short and redeliver the
shares to close out such short positions. They may enter into options or other
transactions with broker-dealers that require the delivery to the broker-dealer
of the shares. The broker-dealer may then resell or otherwise transfer the
shares covered by this prospectus (which may be amended or supplemented to
reflect the transaction). The selling stockholders also may loan or pledge the
shares to a broker-dealer or another financial institution. If the selling
stockholders default on the loan or the obligation secured by the pledge, the
broker-dealer or institution may sell the shares so loaned or pledged under this
prospectus (which may be amended or supplemented to reflect the transaction).
Broker-dealers or agents may receive compensation in the form of
commissions, discounts or concessions from the selling stockholders.
Broker-dealers or agents may also receive compensation from the purchasers for
whom they act as agents or to whom they sell as principals, or both.
Compensation received by a particular broker-dealer might be in excess of
customary commissions and will be in amounts to be negotiated in connection with
the sale.
Broker-dealers or agents and any other participating broker-dealers or the
selling stockholders may be deemed to be "underwriters" within the meaning of
Section 2(11) of the Securities Act in connection with sales of shares.
Accordingly, any such commission, discount or concession received by them and
any profit on the resale of the shares purchased by them may be deemed to be
underwriting discounts or commissions under the Securities Act.
The selling stockholders have advised us that they have not entered into
any agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of their securities and that there is no
underwriter or coordinating broker acting in connection with the proposed sale
of shares by the selling stockholders.
We are bearing all costs of registering the shares under the Securities
Act, including registration and filing fees, printing expenses, administrative
expenses and certain legal and accounting fees. The selling stockholders will
bear all selling expenses, including discounts, commissions or other amounts
payable to underwriters, dealers or agents as well as fees and disbursements for
legal counsel retained by any selling stockholder.
The selling stockholders may agree to indemnify any agent, dealer or
broker-dealer that participates in transactions involving sales of shares
against liabilities, including liabilities arising under the Securities Act.
Because the selling stockholders may be deemed to be "underwriters" within
the meaning of Section 2(11) of the Securities Act, they will be subject to the
prospectus delivery requirements of the Securities Act. If we are required to
supplement this prospectus or post-effectively amend the registration statement
to disclose a specific plan of distribution of the selling stockholder, the
supplement or amendment will describe the particulars of the plan of
distribution, including the shares of common stock, purchase price and names of
any agent, broker, dealer, or underwriter or arrangements relating to any such
an entity or applicable commissions.
-15-
Under applicable rules and regulations under the Securities Exchange Act
of 1934, as amended, no person engaged in the distribution of the shares may
simultaneously engage in market making activities with respect to our common
stock for a restricted period before the commencement of the distribution. In
addition, the selling stockholders will be subject to applicable provisions of
the Securities Exchange Act and the associated rules and regulations under the
Securities Exchange Act, including Regulation M, the provisions of which may
limit the timing of purchases and sales of the shares by the selling
stockholders.
We will make copies of this prospectus available to the selling
stockholders and have informed the selling stockholders of the need to deliver
copies of this prospectus to purchasers at or before the time of any sale of the
shares.
Our common stock is traded on the Nasdaq National Market under the symbol
"STAA." The transfer agent for our shares of common stock is American Stock
Transfer & Trust Co., 59 Maiden Lane, New York, NY 10038.
LEGAL MATTERS
The validity of the issuance of the shares of common stock in this
offering will be passed upon for us by Sheppard, Mullin, Richter & Hampton LLP,
Los Angeles, California.
EXPERTS
The consolidated financial statements and the related consolidated
financial statement schedule incorporated in this prospectus by reference from
our Annual Report on Form 10-K for the fiscal year ended January 3, 2003, as
amended, have been audited by BDO Seidman, LLP, independent certified public
accountants, as stated in their report dated February 21, 2003 (except for Note
18, as to which the report is dated March 26, 2003, and Notes 6 and 19, as to
which the report is dated November 17, 2003), which is incorporated herein by
reference, and have been so incorporated in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
Because we are subject to the informational requirements of the Securities
Exchange Act, we file reports, proxy statements and other information with the
SEC. You may read and copy these reports, proxy statements and other information
at the public reference room maintained by the SEC at the following address:
Public Reference Room
450 Fifth Street, N.W.
Washington, D.C. 20549
You may obtain information on the operation of the public reference room by
calling the SEC at (800) SEC-0330. In addition, we are required to file
electronic versions of those materials with the SEC through the SEC's EDGAR
system. The SEC maintains a web site at http://www.sec.gov, which contains
reports, proxy statements and other information regarding registrants that file
electronically with the SEC.
-16-
We have filed with the SEC a registration statement on Form S-3 under the
Securities Act with respect to the securities offered with this prospectus. This
prospectus does not contain all of the information in the registration
statement, parts of which we have omitted, as allowed under the rules and
regulations of the SEC. You should refer to the registration statement for
further information with respect to us and our securities. Statements contained
in this prospectus as to the contents of any contract or other document are not
necessarily complete and, in each instance, we refer you to the copy of each
contract or document filed as an exhibit to the registration statement. Copies
of the registration statement, including exhibits, may be inspected without
charge at the SEC's principal office in Washington, D.C., and you may obtain
copies from that office upon payment of the fees prescribed by the SEC.
We will furnish without charge to each person to whom a copy of this
prospectus is delivered, upon written or oral request, a copy of the information
that has been incorporated by reference into this prospectus (except exhibits,
unless they are specifically incorporated by reference into this prospectus).
You should direct any requests for copies to: Investor Relations, STAAR Surgical
Company, 1911 Walker Avenue, Monrovia, California 91016, telephone number (626)
303-7902.
INFORMATION INCORPORATED BY REFERENCE
The Securities and Exchange Commission, or SEC, allows us to "incorporate
by reference" in this prospectus the information that we file with the SEC. This
means that we can disclose important information by referring the reader to
those SEC filings. The information incorporated by reference is considered to be
part of this prospectus, and later information we file with the SEC will update
and supersede this information. We incorporate by reference the documents listed
below and any future filings made with the SEC under Section 13(a), 13(c), 14,
or 15(d) of the Securities Exchange Act prior to the termination of the
offering:
o our Annual Report on Form 10-K for our fiscal year ended January 3,
2003, as amended;
o our Quarterly Reports on Form 10-Q for our fiscal quarters ended April
4, 2003, as amended, July 4, 2003, as amended, and October 3, 2003;
o all other reports filed pursuant to Sections 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended, since the end of the
fiscal year covered by the annual report referred to in (a) above; and
o the description of our common stock contained in Amendment No. 1 to our
registration statement on Form 8-A/A filed with the SEC on April 18,
2003, including any amendment or report filed for the purpose of
updating this description.
You may obtain copies of those documents from us, free of cost, by
contacting us at the address or telephone number provided in "Where You Can Find
More Information" immediately above.
-17-
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents previously filed by the Company with the
Commission are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for its fiscal year ended January
3, 2003, filed with the Commission on April 3, 2003;
(b) All other reports filed pursuant to Sections 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended, since the end of the fiscal
year covered by the annual report referred to in (a) above;
(c) the description of our common stock contained in Amendment No. 1 to our
registration statement on Form 8-A/A filed with the SEC on April 18, 2003,
including any amendment or report filed for the purpose of updating this
description.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), prior to the filing of a post-effective amendment that
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 into this Registration Statement and to be a part hereof from the date
of filing of such documents. Any information that is furnished in any document
incorporated or deemed to be incorporated by reference herein, but that is not
deemed "filed" under the Securities Act or the Exchange Act, is not incorporated
by reference herein. Any statement contained herein or in a document, all or a
portion of which is incorporated or deemed to be incorporated by reference
herein, shall be deemed to be modified or superseded for purposes of this
Registration Statement to the extent that a statement contained herein or in any
other subsequently filed document which also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or amended, to
constitute a part of this Registration Statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify directors and officers as well as other employees and
individuals against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement in connection with specified actions, suits or
II-1
proceedings, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation or a derivative action), if
they acted in good faith and in a manner they reasonably believed to be in or
not opposed to the best interests of the corporation and, with respect to any
criminal action or proceedings, had no reasonable cause to believe their conduct
was unlawful.
A similar standard is applicable in the case of derivative actions,
except that indemnification only extends to expenses (including attorneys' fees)
actually and reasonably incurred in connection with the defense or settlement of
such action, and the statute requires court approval before there can be any
indemnification where the person seeking indemnification has been found liable
to the corporation. The statute provides that it is not exclusive of other
indemnification that may be granted by a corporation's certificate of
incorporation, bylaws, disinterested director vote, stockholder vote, agreement
or otherwise.
As permitted by Section 145 of the Delaware General Corporation Law,
Article VIII of the Company's certificate of incorporation, as amended,
provides:
"The corporation shall to the fullest extent permitted by Section
145 of the Delaware General Corporation Law indemnify all persons
whom it may indemnify pursuant thereto."
Also as permitted by Section 145 of the Delaware General Corporation
Law, Article VI of the Company's bylaws, as amended, provides:
"On the terms, to the extent, and subject to the condition
prescribed by statue and by such rules and regulations, not
inconsistent with statute, as the Board of Directors may in its
discretion impose in general or particular cases or classes of
cases, (a) the Corporation shall indemnify any person made, or
threatened to be made, a party to an action or proceeding, civil or
criminal, including an action by or in the rights of any other
corporation of any type or kind, domestic or foreign, or any
partnership, joint venture, trust, employee benefit plan or other
enterprise which any director or officer of the Corporation served
in any capacity at the request of the Corporation, by reason of the
fact that he, his testator or intestate, was a director or officer
of the Corporation, or served such other corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise in
any capacity, against judgments, fines, amounts paid in settlement
and reasonable expenses, including attorneys' fees, actually and
necessarily incurred as a result of such action or proceeding, or
any appeal therein, and (b) the Corporation may pay, in advance of
final disposition of any such action or proceeding, expense incurred
by such person in defining such action or proceeding.
On the terms, to the extent, and subject to the conditions
prescribed by statute and by such rules and regulations, not
inconsistent with statute, as the Board of Directors may in its
II-2
discretion impose in general or particular cases or classes of
cases, (a) the Corporation shall indemnify any person made a party
to an action by or in the right of the Corporation to procure a
judgment in its favor, by reason of the fact that he, his testator
or intestate, is or was a director or officer of the Corporation,
against the reasonable expenses, including attorneys' fees, actually
and necessarily incurred by him in connection with the defense of
such action, or in connection with an appeal therein, and (b) the
Corporation may pay, in advance of final disposition of any such
action, expenses incurred by such person in defending such action or
proceeding."
Our by-laws provide for indemnification of officers and directors to
the fullest extent permitted by Delaware law. In addition, the Registrant has,
and intends in the future to enter into, agreements to provide indemnification
for directors and officers in addition to that provided for in the by-laws.
We maintain an insurance policy pursuant to which our directors and
officers are insured, within the limits and subject to the limitations of the
policy, against certain expenses in connection with the defense of certain
claims, actions, suits or proceedings, and certain liabilities which might be
imposed as a result of such claims, actions, suits or proceedings, that may be
brought against them by reason of their being or having been directors or
officers.
We generally enter into agreements with our executive officers and
directors to indemnify them to the fullest extent permitted under the Delaware
General Corporation Law.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
Exhibit
Number Description of Exhibit
------ ----------------------
4.1 Form of Certificate for Common Stock, par value $0.01 per share
(incorporated by reference to Exhibit 4.1 to Amendment No. 1 to
the Company's Registration Statement on Form 8-A/A filed with
the Commission on April 18, 2003).
5.1 Opinion of Sheppard, Mullin , Richter & Hampton, LLP
23.1 Consent of Sheppard, Mullin , Richter & Hampton, LLP (included
in its opinion filed as Exhibit 5.1)
23.2 Consent of BDO Seidman, LLP
24.1 Power of Attorney (See p. II-6)
II-3
Item 9. Undertakings.
(a) 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:
i. To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
ii. To reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most
recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in this Registration Statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b)
if, in the aggregate, the changes in volume and price
represent no more than a 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement; and
iii. To include any material information with respect to the plan
of distribution not previously disclosed in this Registration
Statement or any material change to such information in this
Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the registration statement is on Form S-3, Form
S-8 or Form S-3, and the information required to be included
in a post-effective amendment by those paragraphs is contained
in periodic reports filed with or furnished to the Commission
by the registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act") that are incorporated by reference in this Registration
Statement.
2. That, for the purpose 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.
(b) 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 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Exchange Act)
that is incorporated by reference in this 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.
II-4
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, executive 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 the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question 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.
II-5
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
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 Monrovia, State of California, on December 12, 2003.
STAAR SURGICAL COMPANY
By: /s/ David Bailey
--------------------------------------------
David Bailey
President, Chief Executive Officer, Chairman
and Director (Principal Executive Officer)
POWER OF ATTORNEY
FILING OF REGISTRATION STATEMENT ON FORM S-8
KNOW ALL BY THESE PRESENTS, that each of the undersigned directors
and officers of STAAR Surgical Company, a Delaware corporation (the "Company"),
hereby nominate and appoint David Bailey and John Bily, and each of them acting
or signing singly, as his or her agents and attorneys-in-fact (the "Agents"), in
his or her respective name and in the capacity or capacities indicated below to
execute and/or file, with all exhibits thereto, and other documents in
connection therewith, (1) a registration statement on Form S-8 under the
Securities Act of 1933, as amended, (the "Act"), in connection with the
registration under the Act of shares of the Company's common stock issuable
under the STAAR Surgical Company 2003 Omnibus Equity Incentive Plan (including
the schedules and all exhibits and other documents filed therewith or
constituting a part thereof) and certain individual benefit plans; and (2) any
one or more amendments to any part of the foregoing registration statement,
including any post-effective amendments, or appendices or supplements that may
be required to be filed under the Act to keep such registration statement
effective or to terminate its effectiveness.
Further, the undersigned do hereby authorize and direct such agents
and attorneys-in-fact to take any and all actions and execute and file any and
all documents with the Securities and Exchange Commission (the "SEC"), or state
regulatory agencies, necessary, proper or convenient in their opinion to comply
with the Act and the rules and regulations or orders of the SEC, or state
regulatory agencies, adopted or issued pursuant thereto, including the making of
any requests for acceleration of the effective date of said registration
statement, to the end that the registration statement of the Company shall
become effective under the Act and any other applicable law.
Finally, each of the undersigned does hereby ratify, confirm and
approve each and every act and document which the said appointment agents and
attorneys-in-fact may take, execute or file pursuant thereto with the same force
and effect as though such action had been taken or such documents had been
executed or filed by the undersigned respectively.
II-6
This Power of Attorney shall remain in full force and effect until
revoked or superseded by written notice filed with the SEC.
Pursuant to the requirements of the Securities Act, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ David Bailey President, Chief Executive Officer, December 12, 2003
-------------------------------------------- Chairman and Director (Principal
David Bailey Executive Officer)
/s/ John Bily Chief Financial Officer and Chief December 12, 2003
-------------------------------------------- Accounting Officer (Principal
John Bily Financial and Accounting Officer)
/s/ Donald Duffy Director December 12, 2003
--------------------------------------------
Donald Duffy
/s/ Dr. Volker D. Anhaeusser Director December 12, 2003
--------------------------------------------
Dr. Volker D. Anhaeusser
/s/ John R. Gilbert Director December 12, 2003
--------------------------------------------
John R. Gilbert
/s/ David Morrison Director December 12, 2003
--------------------------------------------
David Morrison
II-7
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
------ ----------------------
4.1 Form of Certificate for Common Stock, par value $0.01 per share
(incorporated by reference to Exhibit 4.1 to Amendment No. 1 to
the Company's Registration Statement on Form 8-A/A filed with the
Commission on April 18, 2003).
5.1 Opinion of Sheppard, Mullin , Richter & Hampton, LLP
23.1 Consent of Sheppard, Mullin , Richter & Hampton, LLP (included
in its opinion filed as Exhibit 5.1)
23.2 Consent of BDO Seidman, LLP
24.1 Power of Attorney (See p. II-6)
II-8