OccuLogix,
Inc.
|
(Name
of Registrant as Specified In Its Charter)
|
(Name
of Person(s) Filing Proxy Statement, if Other Than
Registrant)
|
|
1)
|
Title
of each class of securities to which transaction
applies:
|
|
2)
|
Aggregate
number of securities to which transaction
applies:
|
|
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):
|
|
4)
|
Proposed
maximum aggregate value of
transaction:
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5)
|
Total
fee paid:
|
|
1)
|
Amount
previously paid:
|
|
2)
|
Form,
Schedule or Registration Statement
No.:
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3)
|
Filing
Party:
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|
4)
|
Date
Filed:
|
By Order of the Board of
Directors
|
||
/s/ Elias Vamvakas
|
||
Elias Vamvakas
|
||
Chairman of the Board, Chief
Executive Officer and
Secretary
|
You
are cordially invited to attend the Annual and Special Meeting of
Stockholders of OccuLogix, Inc. (the “meeting”) in
person. Whether or not you expect to attend the meeting, please
complete, date and sign the enclosed proxy card and mail it promptly in
the enclosed envelope in order to assure that your shares are
represented. If you execute a proxy card, you may still attend
the meeting, revoke your proxy and vote your shares in
person. However, attending the meeting in person will not
revoke your proxy unless you follow the procedures explained under
“Information about this Proxy Material and Voting—Revocation of Proxy” in
the accompanying proxy statement. Please note that if your
shares are held of record by a broker, bank or other agent and you wish to
vote at the meeting, you must obtain a proxy issued in your name from that
recordholder.
|
|
·
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the
absence of any statute, rule, regulation, etc., making the merger
illegal;
|
|
·
|
the
absence of any proceeding by a governmental authority seeking to restrain
or prohibit the merger;
|
|
·
|
the
absence of any court order prohibiting the
merger;
|
|
·
|
the
receipt of all necessary consents and approvals from governmental
authorities;
|
|
·
|
the
receipt of the required approval of stockholders of both OccuLogix and
OcuSense; and
|
|
·
|
the
capitalization of OccuLogix with at least $1,000,000 of unrestricted cash
that is available to fund the working capital and general and
administrative expenses of OccuLogix and OcuSense,
post-merger.
|
|
·
|
the
truth and correctness of OcuSense’s representations and warranties in the
Merger Agreement, except where the failure of such representations and
warranties to be true or correct would not have, individually or in the
aggregate, a material adverse effect on
OcuSense;
|
|
·
|
the
performance by OcuSense, in all material respects, of all of its covenants
and obligations under the Merger
Agreement;
|
|
·
|
the
absence of a material adverse effect on
OcuSense;
|
|
·
|
the
absence of any litigation pending or threatened against OccuLogix or
OcuSense relating to the merger;
and
|
|
·
|
the
execution and delivery by OccuLogix of a contractual indemnity to each
individual who is a director or officer of OccuLogix immediately prior to
the merger.
|
|
·
|
the
truth and correctness of the representations and warranties of OccuLogix
and OcuSense Acquireco, Inc. in the Merger Agreement, except where the
failure of such representations and warranties to be true and correct
would not have, individually or in the aggregate, a material adverse
effect on OccuLogix;
|
|
·
|
the
performance by OccuLogix and OcuSense Acquireco, Inc., in all material
respects, of all of their respective covenants and obligations under the
Merger Agreement;
|
|
·
|
the
absence of a material adverse effect on OccuLogix and its subsidiaries,
taken as a whole;
|
|
·
|
the
absence of any litigation pending or threatened against OccuLogix or
OcuSense relating to the merger;
and
|
|
·
|
commercially
reasonable efforts on the part of OccuLogix having been made to take all
necessary corporate action to ensure that, post-merger, the Board consists
only of Elias Vamvakas, Thomas N. Davidson, Eric Donsky, Richard L.
Lindstrom, Adrienne L. Graves and Donald Rindell, being all of the
individuals who are nominated for election as a director of OccuLogix to
hold office until the next annual meeting of the stockholders of OccuLogix
or until his or her successor is elected or appointed. See
“Proposal I” (page 20).
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|
·
|
by
unanimous written agreement of OccuLogix and
OcuSense;
|
|
·
|
by
OccuLogix or OcuSense, if the closing of the merger does not occur by
October 31, 2008;
|
|
·
|
by
OccuLogix or OcuSense, if the required stockholder approvals are not
obtained;
|
|
·
|
by
OccuLogix or OcuSense, if a court or other governmental authority
permanently restrains, enjoins or otherwise prohibits the
merger;
|
|
·
|
by
OccuLogix or OcuSense, if any statute, rule, regulation, etc. is enacted,
promulgated or issued by any governmental authority that would make the
merger illegal;
|
|
·
|
by
OccuLogix, if there has been a breach by OcuSense of any of its
representations, warranties, covenants or agreements in the Merger
Agreement, subject to certain exceptions;
and
|
|
·
|
by
OcuSense, if there has been a breach by OccuLogix of any of its
representations, warranties, covenants or agreements in the Merger
Agreement, subject to certain
exceptions.
|
Name of Affected
Individual
|
Value of
Compromised
Severance
($)
|
Number of Stock
Options
to Be Granted (1)(2)(3)
|
|||||||
Elias Vamvakas
|
1,570,008 | 18,046,066 | |||||||
Thomas P. Reeves
|
482,569 | 5,546,766 | |||||||
William G. Dumencu
|
94,439 | 1,085,504 | |||||||
David C. Eldridge
|
77,500 | 890,804 | |||||||
Nozait Chaudry-Rao
|
80,213 | 921,982 | |||||||
John
Cornish
|
90,460 | 1,039,773 | |||||||
Julie A. Fotheringham
|
60,159 | 691,487 | |||||||
Suh Kim
|
112,750 | 1,295,977 | |||||||
Stephen B. Parks
|
77,500 | 890,804 | |||||||
Stephen H. Westing
|
60,159 | 691,487 | |||||||
TOTAL
|
2,705,757 | 31,100,650 |
(1)
|
We
have assumed that the per share exercise price of the stock options to be
granted to the affected individuals will be
$0.10.
|
(2)
|
The
stock options will be granted to the affected individuals prior to the
implementation of the proposed reverse stock split. See
“Proposal X” (page 57).
|
(3)
|
The
number of stock options to be granted to each of the affected individuals
will be affected by the income tax rate applicable to him or
her. For purposes of this illustrative table, we have assumed
that each affected individual will take all necessary action to ensure
that the exercise of his or her stock options will qualify for capital
gains treatment in his or her jurisdiction of
residence.
|
|
·
|
Proposal I: Election
of six directors;
|
|
·
|
Proposal II: Ratification
of the selection of Ernst & Young LLP as independent auditors of the
Company for its financial year ending December 31,
2008;
|
|
·
|
Proposal
III: Approval of an amendment to the Company’s Amended
and Restated Certificate of Incorporation in order to increase the number
of authorized shares of the Company’s common stock from 75,000,000 to
500,000,000;
|
|
·
|
Proposal IV: Approval
and adoption of the Agreement and Plan of Merger and Reorganization, dated
April 22, 2008, by and among OccuLogix, OcuSense Acquireco, Inc. and
OcuSense, as amended by the Amending Agreement, dated as of July 28, 2008,
by and among OccuLogix, OcuSense Acquireco, Inc. and OcuSense, and as such
Agreement and Plan of Merger and Reorganization may be amended further
from time to time, pursuant to which OccuLogix proposes to acquire all of
the issued and outstanding shares of capital stock of OcuSense that
OccuLogix does not already own in exchange for the issuance of an
aggregate of 79,248,175 shares of its common stock to the minority
stockholders of OcuSense (the “Merger
Agreement”);
|
·
|
Proposal V: Approval
and adoption of the Securities Purchase Agreement, dated as of May 19,
2008, by and among OccuLogix, Marchant Securities Inc. and the investors
listed on the Schedule of Investors attached thereto as Exhibit A, as
amended by the Amending Agreements, each dated as of August [20], 2008, by and among OccuLogix,
Marchant Securities Inc. and each of the investors listed on the Schedule
of Investors attached thereto as Exhibit A, and as such Securities
Purchase Agreement may be amended further from time to time, pursuant to
which OccuLogix proposes to sell an aggregate of a minimum of 21,730,000
shares of its common stock to the investors listed on the Schedule of
Investors attached thereto as Exhibit A for gross aggregate proceeds to
the Company of $2,173,000 (the “Securities Purchase
Agreement”);
|
|
·
|
Proposal
VI: Approval
of the pre-payment by the Company of the $6,703,500 aggregate principal
amount bridge loan, under the Loan Agreement, dated as of February 19,
2008, by and among OccuLogix, the lenders listed on the Schedule of
Lenders attached thereto as Exhibit A and Marchant Securities Inc., as
amended by the Amending Agreement, dated as of May 5, 2008, by and among
OccuLogix, the lenders listed on the Schedule of New Lenders attached
thereto as Exhibit A and Marchant Securities Inc., and as further amended
by the Second Amending Agreement, dated as of July 28, 2008, by and among
OccuLogix, the lenders listed on the Schedule of Second New Lenders
attached thereto as Exhibit A and Marchant Securities Inc. (the “Loan
Agreement”), by issuing, to the lenders of such bridge loan, shares of the
Company’s common stock in the aggregate number required pursuant to the
terms of the Loan Agreement, which number will be no less than
78,864,705;
|
·
|
Proposal
VII: Approval of the issuance to Marchant
Securities Inc. of a minimum of 4,812,000 shares of the Company’s
common stock in payment of part of the commission
remaining owing for services rendered by Marchant Securities Inc. in
connection with the Securities Purchase Agreement and the $6,703,500
aggregate principal amount bridge loan under the Loan
Agreement;
|
|
·
|
Proposal
VIII: Approval of the extension of the terms of certain
stock options of OccuLogix, issued under OccuLogix’s 2002 Stock Option
Plan, as amended (the “2002 Stock Option Plan”), and held by current and
former executives of OccuLogix and certain directors of OccuLogix, until
the tenth anniversaries of their respective dates of
grant;
|
|
·
|
Proposal
IX: Approval of an increase of the share reserve under
the 2002 Stock Option Plan by 53,544,000, from 6,456,000 to 60,000,000;
and
|
|
·
|
Proposal
X: Approval of a further amendment to the Company’s
Amended and Restated Certificate of Incorporation in order to (i) provide
for a recapitalization in which the issued and outstanding shares of the
Company’s common stock will be reverse split in a ratio of up to 1:25, if
at all, with the actual ratio and the timing of such reverse split to be
determined by the Board in its sole discretion, and (ii) decrease the
number of authorized shares of the Company’s common stock from 500,000,000
to a number equal to 500,000,000 multiplied by 50% of the reverse split
ratio, provided that such reverse split is
effected.
|
Name
of Holder
|
Stock
Options Subject to Proposed Term Extension
|
Current
Exercise Price of Stock Options Subject to Proposed Term
Extension
($)
|
Date
of Grant
|
Vesting
Schedule
|
Proposed
Expiration Date
|
Elias
Vamvakas(1)
|
4,583
|
1.30
|
08/01/02
|
Vested
|
08/01/12
|
500,000
|
0.99
|
07/01/03
|
Vested
|
07/01/13
|
|
300,000
|
1.90
|
08/03/06
|
Vested
|
08/03/16
|
|
100,000
|
1.11
|
07/03/07
|
1/3
vested; remaining 2/3 vesting as to 1/3 on each anniversary of grant
date
|
07/03/17
|
|
Thomas
P. Reeves
|
300,000
|
2.05
|
12/16/04
|
Vested
|
12/16/14
|
20,000
|
1.82
|
03/10/07
|
1/3
vested; remaining 2/3 vesting as to 1/3 on each anniversary of grant
date
|
03/10/17
|
|
100,000
|
1.11
|
07/03/07
|
1/3
vested; remaining 2/3 vesting as to 1/3 on each anniversary of grant
date
|
07/03/17
|
|
William
G. Dumencu
|
100,000
|
0.99
|
08/01/03
|
Vested
|
08/01/13
|
30,000
|
1.11
|
07/03/07
|
1/3
vested; remaining 2/3 vesting as to 1/3 on each anniversary of grant
date
|
07/03/17
|
|
David
C. Eldridge
|
36,924
|
1.30
|
10/01/02
|
Vested
|
10/01/12
|
59,798
|
0.99
|
07/01/03
|
Vested
|
07/01/13
|
|
30,000
|
1.11
|
07/03/07
|
1/3
vested; remaining 2/3 vesting as to 1/3 on each anniversary of grant
date
|
07/03/17
|
|
Nozait
Chaudry-Rao
|
80,000
|
2.05
|
02/10/06
|
2/3
vested; remaining 1/3 vesting on next anniversary of grant
date
|
02/10/16
|
30,000
|
1.11
|
07/03/07
|
1/3
vested; remaining 2/3 vesting as to 1/3 on each anniversary of grant
date
|
07/03/17
|
|
John
Cornish
|
25,000
|
1.30
|
08/01/02
|
Vested
|
08/01/12
|
80,000
|
0.99
|
07/01/03
|
Vested
|
07/01/13
|
|
30,000
|
1.11
|
07/03/07
|
1/3
vested; remaining 2/3 vesting as to 1/3 on each anniversary of grant
date
|
07/03/17
|
|
Julie
A. Fotheringham
|
80,000
|
2.05
|
12/16/04
|
Vested
|
12/16/14
|
30,000
|
1.11
|
07/03/07
|
1/3
vested; remaining 2/3 vesting as to 1/3 on each anniversary of grant
date
|
07/03/17
|
|
Stephen
J. Kilmer
|
80,000
|
2.05
|
12/16/04
|
Vested
|
12/16/14
|
30,000
|
1.11
|
07/03/07
|
1/3
vested; remaining 2/3 vesting as to 1/3 on each anniversary of grant
date
|
07/03/17
|
Name
of Holder
|
Stock
Options Subject to Proposed Term Extension
|
Current
Exercise Price of Stock Options Subject to Proposed Term
Extension
($)
|
Date
of Grant
|
Vesting
Schedule
|
Proposed
Expiration Date
|
Suh
Kim
|
100,000
|
1.82
|
03/10/07
|
1/3
vested; remaining 2/3 vesting as to 1/3 on each anniversary of grant
date
|
03/10/17
|
30,000
|
1.11
|
07/03/07
|
1/3
vested; remaining 2/3 vesting as to 1/3 on each anniversary of grant
date
|
07/03/17
|
|
Stephen
B. Parks
|
200,000
|
2.05
|
10/04/05
|
2/3
vested; remaining 1/3 vesting on next anniversary of grant
date
|
10/04/15
|
30,000
|
1.11
|
07/03/07
|
1/3
vested; remaining 2/3 vesting as to 1/3 on each anniversary of grant
date
|
07/03/17
|
|
Stephen
H. Westing
|
80,000
|
2.05
|
02/10/06
|
2/3
vested; remaining 1/3 vesting on next anniversary of grant
date
|
02/10/16
|
30,000
|
1.11
|
07/03/07
|
1/3
vested; remaining 2/3 vesting as to 1/3 on each anniversary of grant
date
|
07/03/17
|
|
Jay
T. Holmes(1)
|
25,000
|
2.05
|
12/16/04
|
Vested
|
12/16/14
|
25,000
|
1.11
|
07/03/07
|
1/3
vested; remaining 2/3 vesting as to 1/3 on each anniversary of grant
date
|
07/03/17
|
|
Georges
Noël(1)
|
25,000
|
0.99
|
07/01/03
|
Vested
|
07/01/13
|
25,000
|
1.11
|
07/03/07
|
1/3
vested; remaining 2/3 vesting as to 1/3 on each anniversary of grant
date
|
07/03/17
|
|
Gilbert
S. Omenn(1)
|
25,000
|
1.11
|
07/03/07
|
1/3
vested; remaining 2/3 vesting as to 1/3 on each anniversary of grant
date
|
07/03/17
|
TOTAL
|
2,641,305
|
N/A
|
N/A
|
N/A
|
N/A
|
(1)
|
Certain
stock options held by Messrs. Vamvakas, Holmes and Noël and Dr. Omenn
already have 10-year terms and, therefore, are not shown in this
table. See “Additional Information on Executive
Compensation—Outstanding Equity Awards at 2007 Fiscal
Year-End”.
|
Name of Affected
Individual
|
Value of
Compromised
Severance
($)
|
Number of Stock
Options
to Be Granted
(1)(2)(3)
|
|||||||
Elias Vamvakas
|
1,570,008 | 18,046,066 | |||||||
Thomas P. Reeves
|
482,569 | 5,546,766 | |||||||
William G. Dumencu
|
94,439 | 1,085,504 | |||||||
David C. Eldridge
|
77,500 | 890,804 | |||||||
Nozait Chaudry-Rao
|
80,213 | 921,982 | |||||||
John
Cornish
|
90,460 | 1,039,773 | |||||||
Julie A. Fotheringham
|
60,159 | 691,487 | |||||||
Suh Kim
|
112,750 | 1,295,977 | |||||||
Stephen B. Parks
|
77,500 | 890,804 | |||||||
Stephen H. Westing
|
60,159 | 691,487 | |||||||
TOTAL
|
2,705,757 | 31,100,650 |
(1)
|
We
have assumed that the per share exercise price of the stock options to be
granted to the affected individuals will be
$0.10.
|
(2)
|
The
stock options will be granted to the affected individuals prior to the
implementation of the proposed reverse stock split. See
“Proposal X”.
|
(3)
|
The
number of stock options to be granted to each of the affected individuals
will be affected by the income tax rate applicable to him or
her. For purposes of this illustrative table, we have assumed
that each affected individual will take all necessary action to ensure
that the exercise of his or her stock options will qualify for capital
gains treatment in his or her jurisdiction of
residence.
|
|
·
|
To
vote in person, come to the Stockholders Meeting and we will give you a
ballot when you arrive.
|
|
·
|
To
vote using the proxy card, simply complete, sign and date the enclosed
proxy card and return it promptly in the envelope provided. If
you return your signed proxy card to us before the Stockholders Meeting,
we will vote your shares as you
direct.
|
|
·
|
You
may submit another properly completed proxy card with a later
date;
|
|
·
|
You
may send a written notice that you are revoking your proxy to the
Secretary of the Company at 2600 Skymark Avenue, Unit 9,
Suite 201, Mississauga, Ontario, L4W 5B2;
or
|
|
·
|
If
you are a stockholder of record, you may attend the Stockholders Meeting
and vote in person. Simply attending the Stockholders Meeting
will not, by itself, revoke your
proxy.
|
|
·
|
Proposal
I: For the election of directors, the six nominees
receiving the most “For” votes (among votes properly cast in person or by
proxy) will be elected. Broker non-votes will have no
effect.
|
|
·
|
Proposal
II: To be approved, the proposal to ratify the selection
of Ernst & Young LLP as independent auditors of the Company for its
financial year ending December 31, 2008 must receive a “For” vote
from the majority of the votes cast. If you “Abstain” from
voting, it will have the same effect as an “Against”
vote. Broker non-votes will have no
effect.
|
|
·
|
Proposal
III: To be approved, the proposal to approve the
amendment to the Company’s Amended and Restated Certificate of
Incorporation in order to increase the number of authorized shares of the
Company’s common stock from 75,000,000 to 500,000,000 must receive a “For”
vote from the holders of a majority of the issued and outstanding shares
of the Company’s common stock. If you “Abstain” from voting, it
will have the same effect as an “Against” vote. A broker
non-vote also will have the same effect as an “Against”
vote.
|
|
·
|
Proposal
IV: To be approved, the proposal to approve and adopt
the Merger Agreement must receive a “For” vote from the majority of the
votes cast. If you “Abstain” from voting, it will have the same
effect as an “Against” vote. Broker non-votes will have no
effect.
|
|
·
|
Proposal
V: To be approved, the proposal to approve and adopt the
Securities Purchase Agreement must receive a “For” vote from the majority
of the votes cast. If you “Abstain” from voting, it will have
the same effect as an “Against” vote. Broker non-votes will
have no effect.
|
|
·
|
Proposal
VI: To be approved, the proposal to pre-pay the Bridge
Loan by issuing, to the Bridge Lenders, shares of the Company’s common
stock in the aggregate number required pursuant to the terms of the Loan
Agreement (which number will be no less than 78,864,705) must receive a
“For” vote from the majority of the votes cast. If you
“Abstain” from voting, it will have the same effect as an “Against”
vote. Broker non-votes will have no
effect.
|
·
|
Proposal
VII: To be approved, the proposal to approve the
issuance to Marchant of a minimum of 4,812,000 shares of the
Company’s common stock in payment of part of the commission
remaining owing for services rendered by Marchant in connection with
the Securities Purchase Agreement and the Bridge Loan must receive a “For”
vote from the majority of the votes cast. If you “Abstain” from
voting, it will have the same effect as an “Against”
vote. Broker non-votes will have no
effect.
|
|
·
|
Proposal
VIII: To be approved, the proposal to approve the
extension of the terms of certain stock options of OccuLogix, issued under
the 2002 Stock Option Plan and held by current and former executives of
OccuLogix and certain directors of OccuLogix, must receive a “For” vote
from the majority of the votes cast. For purposes of this
approval, the votes attached to shares of OccuLogix’s common stock
beneficially owned by holders of stock options, the terms of which are
subject to the proposed extension, and the votes attached to shares
beneficially owned by such holders’ spouses, partners and certain other
related persons, will not be counted in determining whether the necessary
level of stockholder approval has been obtained. In addition
(and without duplication), for purposes of this approval, the votes
attached to shares of OccuLogix’s common stock beneficially owned by
directors and officers of OccuLogix, and the votes attached to shares
beneficially owned by such holders’ spouses, partners and certain other
related persons, will not be counted in determining whether the necessary
level of stockholder approval has been obtained. If you
“Abstain” from voting, it will have the same effect as an “Against”
vote. Broker non-votes will have no
effect.
|
|
·
|
Proposal
IX: To be approved, the proposal to increase the share
reserve under the 2002 Stock Option Plan by 53,544,000, from 6,456,000 to
60,000,000, must receive a “For” vote from the majority of the votes
cast. For purposes of this approval, the votes attached to
shares of OccuLogix’s common stock beneficially owned by directors and
officers, and the votes attached to shares beneficially owned by such
holders’ spouses, partners and certain other related persons, will not be
counted in determining whether the necessary level of stockholder approval
has been obtained. If you “Abstain” from voting, it will have
the same effect as an “Against” vote. Broker non-votes will
have no effect.
|
|
·
|
Proposal
X: To be approved, the proposal to approve a further
amendment to the Company’s Amended and Restated Certificate of
Incorporation in order to (i) provide for a recapitalization in which the
issued and outstanding shares of the Company’s common stock will be
reverse split in a ratio of up to 1:25, if at all, and (ii) decrease the
number of authorized shares of the Company’s common stock from 500,000,000
to a number equal to 500,000,000 multiplied by 50% of the reverse split
ratio, provided that such reverse split is effected, must receive a “For”
vote from the holders of a majority of the issued and outstanding shares
of the Company’s common stock. If you “Abstain” from voting, it
will have the same effect as an “Against” vote. A broker
non-vote also will have the same effect as an “Against”
vote.
|
Beneficial
Owner
|
Number
of Shares Beneficially Owned
|
Percentage
of Shares Beneficially Owned
|
||||||
TLC
Vision Corporation
|
18,770,302 | 32.8 | % | |||||
Diamed Medizintechnik
GmbH
|
4,332,234 | 7.6 | % | |||||
Members
of the Company’s management
|
1,988,487 | 3.5 | % | |||||
Former
executives of the Company
|
257,501 | 0.4 | % | |||||
TOTAL
|
25,348,524 | 44.2 | % |
Name and Place of
Residence
|
Age
|
Position with the
Company
|
Principal
Occupation
|
Director of
the
Company
Since
|
|||
Elias Vamvakas
|
50
|
Chief Executive
Officer,
|
Officer of the
Company
|
June 2003
|
|||
Thornhill, Ontario,
Canada
|
Secretary and Chairman of the
Board
|
||||||
Thomas N.
Davidson
|
68
|
Director (1*)(2)
(3)
|
Corporate
Director
|
September
2004
|
|||
Key Largo, Florida,
U.S.A.
|
|||||||
Eric Donsky
|
43
|
Nominee for
Director
|
Chairman and
Chief
|
--
|
|||
San Diego, California,
U.S.A.
|
Executive Officer,
OcuSense
|
||||||
Richard L.
Lindstrom
|
60
|
Director
|
Ophthalmologist
|
September
2004
|
|||
Minneapolis, Minnesota,
U.S.A.
|
|||||||
Adrienne L.
Graves
|
54
|
Director(1)(2)(3)
|
President and
Chief
|
April 2005
|
|||
Napa, California,
U.S.A.
|
Executive Officer, Santen
Inc.
|
||||||
Donald Rindell
|
56
|
Nominee for
Director
|
Executive Director
of
|
--
|
|||
Rancho Santa Fe, California,
U.S.A.
|
Business Development, Amylin
Pharmaceuticals, Inc.
|
(1)
|
Member of the Compensation
Committee, * - Chairman
|
(2)
|
Member of the Corporate Governance
and Nominating Committee
|
(3)
|
Member of the Audit
Committee
|
Year
Ended December 31,
|
||||||
2007
(C$)
|
2006
(C$)
|
|||||
Fees
for Audit Services
|
$523,000
|
$360,000
|
||||
Fees
for Audit-Related Services
|
$23,400
|
$9,000
|
||||
Fees
for Tax Services
|
$5,600
|
$10,000
|
||||
All
Other Fees
|
--
|
--
|
Proposal
|
Number of Shares to Be
Issued
|
|||
Proposal
IV: Implementation of the transactions contemplated by the
Merger Agreement
|
79,248,175
|
|||
Proposal
V: Implementation of the transactions contemplated by the
Securities Purchase Agreement
|
21,730,000(1)
|
|||
Proposal
VI: Pre-payment of the Bridge Loan
|
78,864,705(2)
|
|||
Proposal
VII: Part payment of the commission remaining owing to
Marchant
|
4,812,000(3)
|
|||
TOTAL
|
184,654,800(1)(2)(3)
|
(1)
|
If
the per share purchase price of the Company’s common stock under the
Securities Purchase Agreement is $0.10, then an aggregate of 21,730,000
shares of the Company’s common stock will be issued to the
Investors. If the per share purchase price is lower than $0.10,
then a greater aggregate number of shares of the Company’s common stock
will be issued to the Investors. At the date of this proxy
statement, the per share purchase price is not
determinable.
|
(2)
|
We
are assuming that the per share purchase price of the Company’s common
stock under the Securities Purchase Agreement is $0.10 (which means that
the per share price of the Company’s common stock being issued to the
Bridge Lenders would be $0.085). At the date of this proxy
statement, the per share purchase price is not
determinable. The number shown in the table represents the
minimum number of shares of the Company’s common stock issuable to the
Bridge Lenders upon the Company’s exercise of the second pre-payment
option under the Loan Agreement and takes into account only the
pre-payment of the principal amount of the Bridge Loan and disregards
pre-payment of the accrued and unpaid interest thereon. At the
date of this proxy statement, it is not possible to determine the exact
number of shares of the Company’s common stock issuable to the Bridge
Lenders upon the Company’s exercise of the second pre-payment option under
the Loan Agreement.
|
(3)
|
If
the per share purchase price of the Company’s common stock under the
Securities Purchase Agreement is $0.10, then an aggregate
of 4,812,000 shares of the Company’s common stock will be issued to
Marchant in part payment of the commission remaining owing to
it. If the per share purchase price is lower than $0.10, then a
greater aggregate number of shares of the Company’s common stock will be
issued to Marchant. At the date of this proxy statement, the
per share purchase price is not
determinable.
|
|
·
|
the
absence of any statute, rule, regulation, executive order, decree,
injunction or other order making the merger illegal or otherwise
prohibiting it or any other transaction contemplated by the Merger
Agreement;
|
|
·
|
the
absence of any proceeding by a governmental authority seeking to restrain,
prohibit, condition, rescind or take any substantially similar action with
respect to the merger or any other transaction contemplated by the Merger
Agreement;
|
|
·
|
the
absence of any temporary restraining order, preliminary or permanent
injunction or other order issued by a court, or other similar legal
restraint, prohibiting the merger or any other transaction contemplated by
the Merger Agreement;
|
|
·
|
the
receipt of all consents and approvals from any governmental authority that
are necessary to consummate the merger and the other transactions
contemplated by the Merger
Agreement;
|
|
·
|
the
receipt of the required approval of stockholders of both OccuLogix and
OcuSense; and
|
|
·
|
the
capitalization of OccuLogix with at least $1,000,000 of unrestricted cash
that is available to fund the working capital and general and
administrative expenses of OccuLogix and OcuSense,
post-merger.
|
|
·
|
the
truth and correctness of OcuSense’s representations and warranties in the
Merger Agreement, except where the failure of such representations and
warranties to be true or correct would not have, individually or in the
aggregate, a material adverse effect on
OcuSense;
|
|
·
|
the
performance by OcuSense, in all material respects, of all of its covenants
and obligations under the Merger
Agreement;
|
|
·
|
the
absence of a material adverse effect on OcuSense’s business, assets,
liabilities, financial condition, results of operations, prospects or
capitalization;
|
|
·
|
the
absence of any action, suit, claim, order, injunction or proceeding of any
nature pending or threatened against OccuLogix or OcuSense, or its
respective properties or its respective officers or directors, relating to
the merger or the other transactions contemplated by the Merger Agreement;
and
|
|
·
|
the
execution and delivery by OccuLogix of a contractual indemnity to each
individual who is a director or officer of OccuLogix immediately prior to
the Effective Time.
|
|
·
|
the
truth and correctness of the representations and warranties of OccuLogix
and OcuSense Acquireco, Inc. in the Merger Agreement, except where the
failure of such representations and warranties to be true or correct would
not have, individually or in the aggregate, a material adverse effect on
OccuLogix;
|
|
·
|
the
performance by OccuLogix and OcuSense Acquireco, Inc., in all material
respects, of all of their respective covenants and obligations under the
Merger Agreement;
|
|
·
|
the
absence of a material adverse effect on the business, assets, liabilities,
financial condition or results of operations of OccuLogix and its
subsidiaries, taken as a whole;
|
|
·
|
the
absence of any action, suit, claim, order, injunction or proceeding of any
nature pending or threatened against OccuLogix or OcuSense, or its
respective properties or its respective officers or directors, relating to
the merger or the other transactions contemplated by the Merger Agreement;
and
|
|
·
|
commercially
reasonable efforts on the part of OccuLogix having been made to take all
necessary corporate action to ensure that, post-merger, the board of
directors of OccuLogix consists only of Elias Vamvakas, Thomas N.
Davidson, Eric Donsky, Richard L. Lindstrom, Adrienne L. Graves and Donald
Rindell, being all of the individuals who are nominated for election as a
director of OccuLogix to hold office until the next annual meeting of the
stockholders of OccuLogix or until his or her successor is elected or
appointed. See “Proposal I—Election of
Directors”.
|
|
·
|
cause
or permit any amendments to its certificate of incorporation, bylaws or
other organizational documents;
|
|
·
|
declare,
set aside or pay any dividends on, or make any other distributions in
respect of, any of its capital
stock;
|
|
·
|
split,
combine or reclassify any of its capital stock or issue, or authorize the
issuance of, any securities in respect of shares of its capital stock
(except upon conversion of OcuSense’s preferred stock) or repurchase,
redeem or otherwise acquire any of its
securities;
|
|
·
|
issue,
grant, deliver or sell any shares of its capital stock or any convertible
securities, except for issuances of its capital stock pursuant to the
exercise of outstanding options or warrants or other
rights;
|
|
·
|
incur
or guarantee or issue any indebtedness, other than trade payables in the
ordinary course of business, consistent with past
practices;
|
|
·
|
make
any expenditures exceeding $10,000 individually or $25,000 in the
aggregate, other than the payment of expenses incurred in connection with
the transactions contemplated by the Merger
Agreement;
|
|
·
|
sell,
lease, license or otherwise dispose of any of its properties or
assets;
|
|
·
|
revalue
any of its assets, other than in accordance with past practice or as
required by GAAP;
|
|
·
|
make
or change any election in respect of taxes, adopt or change any accounting
method or practices (other than as required by GAAP), enter into any
closing agreement, settle any claim or assessment with respect to taxes or
consent to any extension or waiver of the limitation period applicable to
any claim or assessment in respect of
taxes;
|
|
·
|
waive
or release any right or claim of
OcuSense;
|
|
·
|
commence,
threaten or settle any litigation;
|
|
·
|
(i)
sell, license or transfer any of OcuSense’s intellectual property, (ii)
buy or license any intellectual property or enter into any agreement with
respect to intellectual property or (iii) enter into any agreement with
respect to the development of intellectual
property;
|
|
·
|
enter
into, renew, fail to renew, renegotiate, amend, modify or breach any
material contract;
|
|
·
|
terminate,
amend or fail to renew any insurance policy;
or
|
|
·
|
terminate
or fail to renew any consent, license, permit, grant or other
authorization, with respect to which termination or failure to renew would
reasonably be expected to result in a material adverse
effect.
|
|
·
|
by
unanimous agreement of OccuLogix and
OcuSense;
|
|
·
|
by
OccuLogix or OcuSense, if the closing of the merger does not occur by
October 31, 2008;
|
|
·
|
by
OccuLogix or OcuSense, if the required stockholder approvals are not
obtained;
|
|
·
|
by
OccuLogix or OcuSense, if a court or other governmental authority issues a
non-appealable final order, decree or ruling or takes any action, in each
case, having the effect of permanently restraining, enjoining or otherwise
prohibiting the merger or any other material transaction contemplated by
the Merger Agreement;
|
|
·
|
by
OccuLogix or OcuSense, if any statute, rule, regulation or order is
enacted, promulgated or issued by any governmental authority that would
make the consummation of the merger
illegal;
|
|
·
|
by
OccuLogix, if it is not in material breach of its obligations under the
Merger Agreement and there has been a breach by OcuSense of any of its
representations, warranties, covenants or agreements in the Merger
Agreement and such breach has not been cured within 10 business days of
written notice thereof (provided that no cure period shall be required for
a breach that, by its nature, cannot be cured);
and
|
|
·
|
by
OcuSense, if it is not in material breach of its obligations under the
Merger Agreement and there has been a breach by OccuLogix of any of its
representations, warranties, covenants or agreements in the Merger
Agreement and such breach has not been cured within 10 business days of
written notice thereof (provided that no cure period shall be required for
a breach that, by its nature, cannot be
cured).
|
Year Ended December
31,
|
Six
Months Ended June 30,
|
|||||||||||||||||||||||||||
2003
|
2004
|
2005(ii)
|
2006(i)(ii)
|
2007
|
2007
|
2008
|
||||||||||||||||||||||
Restated
|
Restated
|
Restated
|
||||||||||||||||||||||||||
(in
thousands except per share amounts)
|
||||||||||||||||||||||||||||
Consolidated
Statements of Operations Data:
|
||||||||||||||||||||||||||||
Revenue
|
||||||||||||||||||||||||||||
Revenue
from related parties
|
$ | 390 | $ | 732 | $ | 81 | $ | — | $ | — | $ | — | $ | — | ||||||||||||||
Revenue
from unrelated parties
|
— | 238 | 1,759 | 174 | 92 | 90 | 134 | |||||||||||||||||||||
Total
revenue
|
390 | 970 | 1,840 | 174 | 92 | 90 | 134 | |||||||||||||||||||||
Cost
of goods sold
|
||||||||||||||||||||||||||||
Cost
of goods sold to related parties
|
373 | 689 | 43 | — | — | — | — | |||||||||||||||||||||
Cost
of goods sold to unrelated parties
|
— | 134 | 3,251 | 3,429 | 2,298 | 15 | (1 | ) | ||||||||||||||||||||
Royalty
costs
|
109 | 135 | 100 | 100 | 100 | 50 | 25 | |||||||||||||||||||||
Gross
margin (loss)
|
(92 | ) | 12 | (1,554 | ) | (3,355 | ) | (2,306 | ) | 25 | 110 | |||||||||||||||||
Operating
expenses
|
||||||||||||||||||||||||||||
General
and administrative
|
1,565 | 17,530 | 8,670 | 8,476 | 8,104 | 5,215 | 2,870 | |||||||||||||||||||||
Clinical
and regulatory
|
731 | 3,995 | 5,168 | 4,922 | 8,675 | 4,128 | 1,831 | |||||||||||||||||||||
Sales
and marketing
|
— | 220 | 2,165 | 1,625 | 1,413 | 998 | 410 | |||||||||||||||||||||
Impairment
of goodwill
|
— | — | 147,452 | 65,946 | — | — | — | |||||||||||||||||||||
Impairment
of intangible asset
|
— | — | — | — | 20,923 | — | — | |||||||||||||||||||||
Restructuring
charges
|
— | — | — | 820 | 1,313 | — | 956 | |||||||||||||||||||||
2,296 | 21,745 | 163,455 | 81,788 | 40,429 | 10,341 | 6,067 | ||||||||||||||||||||||
Other
income (expense)
|
(82 | ) | (110 | ) | 1,536 | 1,547 | 2,769 | 1,759 | (76 | ) | ||||||||||||||||||
Loss
from continuing operations before income taxes
|
(2,470 | ) | (21,843 | ) | (163,473 | ) | (83,595 | ) | (39,967 | ) | (8,557 | ) | (6,033 | ) | ||||||||||||||
Recovery
of income taxes
|
— | 24 | 643 | 2,916 | 5,566 | 3,166 | 1,219 | |||||||||||||||||||||
Loss
from continuing operations
|
(2,470 | ) | (21,819 | ) | (162,830 | ) | (80,680 | ) | (34,401 | ) | (5,391 | ) | (4,814 | ) | ||||||||||||||
Loss
from discontinued operations
|
— | — | — | (1,542 | ) | (35,429 | ) | (2,185 | ) | — | ||||||||||||||||||
Net
loss for the year
|
$ | (2,470 | ) | $ | (21,819 | ) | $ | (162,830 | ) | $ | (82,222 | ) | $ | (69,830 | ) | $ | (7,576 | ) | $ | (4,814 | ) | |||||||
Per
Share Data:
|
||||||||||||||||||||||||||||
Loss
from continuing operations per share — basic and
diluted
|
$ | (0.62 | ) | $ | (2.96 | ) | $ | (3.88 | ) | $ | (1.79 | ) | $ | (0.60 | ) | $ | (0.10 | ) | $ | (0.08 | ) | |||||||
Loss
from discontinued operations per share — basic and
diluted
|
— | — | — | (0.04 | ) | $ | (0.63 | ) | (0.04 | ) | — | |||||||||||||||||
Net
loss per share —basic and diluted
|
$ | (0.62 | ) | $ | (2.96 | ) | $ | (3.88 | ) | $ | (1.83 | ) | $ | (1.23 | ) | $ | (0.14 | ) | $ | (0.08 | ) | |||||||
Weighted
average number of shares used in per share calculations — basic and
diluted
|
3,977 | 7,370 | 41,931 | 44,980 | 56,628 | 55,931 | 57,306 |
(i)
|
The
comparative figures for the year ended December 31, 2006 have been
reclassified to reflect the effect of discontinued
operations.
|
(ii)
|
The
comparative figures for the years ended December 31, 2006 and 2005 have
been corrected to reflect the Company’s accounting for stock options
issued to non-employees that were subject to performance
conditions.
|
As at
December 31,
|
As
of
|
|||||||||||||||||||||||
June 30
|
||||||||||||||||||||||||
2003
|
2004
|
2005(ii)
|
2006(i)(ii)
|
2007
|
2008
|
|||||||||||||||||||
Restated
|
Restated
|
|||||||||||||||||||||||
(in
thousands)
|
||||||||||||||||||||||||
Consolidated
Balance Sheet
Data:
|
||||||||||||||||||||||||
Cash
and cash equivalents
|
$ | 1,237 | $ | 17,531 | $ | 9,600 | $ | 5,705 | $ | 2,236 | $ | 920 | ||||||||||||
Cash
and cash equivalents of discontinued operations
|
— | — | — | 36 | — | — | ||||||||||||||||||
Short-term
investments
|
— | 42,500 | 31,663 | 9,785 | — | — | ||||||||||||||||||
Working
capital (deficiency)
|
(2,538 | ) | 58,073 | 44,415 | 13,407 | (997 | ) | (6,442 | ) | |||||||||||||||
Working
capital (deficiency) of discontinued operations
|
— | — | — | 132 | — | — | ||||||||||||||||||
Total
assets of continuing operations
|
1,868 | 301,601 | 137,806 | 54,367 | 15,313 | 12,539 | ||||||||||||||||||
Total
assets of discontinued operations
|
— | — | — | 44,158 | — | — | ||||||||||||||||||
Long-term
debt (including current
portion due to stockholders)
|
3,694 | 517 | 158 | 152 | 33 | 90 | ||||||||||||||||||
Other
long-term obligations (including
amount classified as
current portion of other liability)
|
― | ― | ― | 6,421 | — | — | ||||||||||||||||||
Total
liabilities of continuing operations
|
4,134 | 13,502 | 11,765 | 19,673 | 6,358 | 8,801 | ||||||||||||||||||
Total
liabilities of discontinued operations
|
— | — | — | 11,574 | — | — | ||||||||||||||||||
Minority
interest
|
― | ― | ― | 6,111 | 4,954 | 4,474 | ||||||||||||||||||
Common
stock
|
5 | 42 | 42 | 51 | 57 | 57 | ||||||||||||||||||
Series
A Convertible Preferred Stock
|
2 | ― | ― | ― | ― | ― | ||||||||||||||||||
Series
B Convertible Preferred Stock
|
1 | ― | ― | ― | ― | ― | ||||||||||||||||||
Additional
paid-in capital
|
23,915 | 336,064 | 336,836 | 354,176 | 362,232 | 362,310 | ||||||||||||||||||
Accumulated
deficit
|
(26,188 | ) | (48,007 | ) | (210,837 | ) | (293,059 | ) | (358,289 | ) | (363,103 | ) | ||||||||||||
Total
stockholders’ equity (deficiency)
|
(2,266 | ) | 288,098 | 126,041 | 61,167 | 4,000 | (736 | ) |
(i)
|
The
balance sheet as at December 31, 2006 has been reclassified to reflect the
assets and liabilities of discontinued
operations.
|
(ii)
|
The
comparative figures as at December 31, 2006 and 2005 have been corrected
to reflect the Company’s accounting for stock options issued to
non-employees that were subject to performance
conditions.
|
|
·
|
the
truth and correctness of the representations and warranties in the
Securities Purchase Agreement, in all material
respects;
|
|
·
|
the
receipt of the approval of the majority of votes cast at the Stockholders
Meeting by the stockholders of the
Company;
|
|
·
|
the
receipt of all required regulatory approvals;
and
|
|
·
|
the
performance, in all material respects, of all covenants, agreements and
conditions in the Securities Purchase Agreement and the Merger Agreement
that are required to be performed at or prior to the closing of the
sale.
|
|
·
|
by
duly authorized mutual written consent of the Company and the
Investors;
|
|
·
|
automatically
if the required stockholder approval is not
obtained;
|
|
·
|
automatically
if any law makes the consummation of the transactions contemplated by the
Securities Purchase Agreement illegal or if a court, governmental
authority or NASDAQ issues an order, decree, ruling or takes any other
action restraining, enjoining or otherwise prohibiting such transaction;
and
|
|
·
|
automatically
on October 31, 2008.
|
Dollar Amount/Number of
Shares
|
|||||
(1) Total amount
paid, or to be paid in the future, for services rendered in connection
with the Securities Purchase Agreement and the Bridge Loan (collectively,
“Services”)
|
$ | 750,000 | |||
(2) Number of shares
issued, to date, in payment for Services
|
-- | ||||
(3) Cash amount paid
to date for Services
|
$ | 180,000 | |||
(4) Amount remaining
owing for Services
|
$ | 570,000 | |||
(5) Amount remaining
owing for Services that will be paid in cash
|
$ | 88,800 | |||
(6) Amount remaining
owing for Services that will be paid in shares
|
$ | 481,200 | |||
(7) Number
of shares that Marchant will own after all payments owing for Services are
made(1)
|
4,812,000 | (2) |
(1)
|
Marchant
currently does not own any shares of the Company’s common
stock.
|
(2)
|
This
number assumes that the per share purchase price under the Securities
Purchase Agreement will be $0.10. If it is lower than $0.10,
then a greater aggregate number of shares of the Company’s common stock
will be issued to Marchant. At the date of this proxy
statement, the per share purchase price is not
determinable.
|
Name
of Holder
|
Stock
Options Subject to Proposed Term Extension
|
Current
Exercise Price of Stock Options Subject to Proposed Term
Extension
($)
|
Date
of Grant
|
Vesting
Schedule
|
Proposed
Expiration Date
|
Elias
Vamvakas(1)
|
4,583
|
1.30
|
08/01/02
|
Vested
|
08/01/12
|
500,000
|
0.99
|
07/01/03
|
Vested
|
07/01/13
|
|
300,000
|
1.90
|
08/03/06
|
Vested
|
08/03/16
|
|
100,000
|
1.11
|
07/03/07
|
1/3
vested; remaining 2/3 vesting as to 1/3 on each anniversary of grant
date
|
07/03/17
|
|
Thomas
P. Reeves
|
300,000
|
2.05
|
12/16/04
|
Vested
|
12/16/14
|
20,000
|
1.82
|
03/10/07
|
1/3
vested; remaining 2/3 vesting as to 1/3 on each anniversary of grant
date
|
03/10/17
|
|
100,000
|
1.11
|
07/03/07
|
1/3
vested; remaining 2/3 vesting as to 1/3 on each anniversary of grant
date
|
07/03/17
|
|
William
G. Dumencu
|
100,000
|
0.99
|
08/01/03
|
Vested
|
08/01/13
|
30,000
|
1.11
|
07/03/07
|
1/3
vested; remaining 2/3 vesting as to 1/3 on each anniversary of grant
date
|
07/03/17
|
|
David
C. Eldridge
|
36,924
|
1.30
|
10/01/02
|
Vested
|
10/01/12
|
59,798
|
0.99
|
07/01/03
|
Vested
|
07/01/13
|
|
30,000
|
1.11
|
07/03/07
|
1/3
vested; remaining 2/3 vesting as to 1/3 on each anniversary of grant
date
|
07/03/17
|
|
Nozait
Chaudry-Rao
|
80,000
|
2.05
|
02/10/06
|
2/3
vested; remaining 1/3 vesting on next anniversary of grant
date
|
02/10/16
|
30,000
|
1.11
|
07/03/07
|
1/3
vested; remaining 2/3 vesting as to 1/3 on each anniversary of grant
date
|
07/03/17
|
|
John
Cornish
|
25,000
|
1.30
|
08/01/02
|
Vested
|
08/01/12
|
80,000
|
0.99
|
07/01/03
|
Vested
|
07/01/13
|
|
30,000
|
1.11
|
07/03/07
|
1/3
vested; remaining 2/3 vesting as to 1/3 on each anniversary of grant
date
|
07/03/17
|
Name
of Holder
|
Stock
Options Subject to Proposed Term Extension
|
Current
Exercise Price of Stock Options Subject to Proposed Term
Extension
($)
|
Date
of Grant
|
Vesting
Schedule
|
Proposed
Expiration Date
|
Julie
A. Fotheringham
|
80,000
|
2.05
|
12/16/04
|
Vested
|
12/16/14
|
30,000
|
1.11
|
07/03/07
|
1/3
vested; remaining 2/3 vesting as to 1/3 on each anniversary of grant
date
|
07/03/17
|
|
Stephen
J. Kilmer
|
80,000
|
2.05
|
12/16/04
|
Vested
|
12/16/14
|
30,000
|
1.11
|
07/03/07
|
1/3
vested; remaining 2/3 vesting as to 1/3 on each anniversary of grant
date
|
07/03/17
|
Suh
Kim
|
100,000
|
1.82
|
03/10/07
|
1/3
vested; remaining 2/3 vesting as to 1/3 on each anniversary of grant
date
|
03/10/17
|
30,000
|
1.11
|
07/03/07
|
1/3
vested; remaining 2/3 vesting as to 1/3 on each anniversary of grant
date
|
07/03/17
|
|
Stephen
B. Parks
|
200,000
|
2.05
|
10/04/05
|
2/3
vested; remaining 1/3 vesting on next anniversary of grant
date
|
10/04/15
|
30,000
|
1.11
|
07/03/07
|
1/3
vested; remaining 2/3 vesting as to 1/3 on each anniversary of grant
date
|
07/03/17
|
|
Stephen
H. Westing
|
80,000
|
2.05
|
02/10/06
|
2/3
vested; remaining 1/3 vesting on next anniversary of grant
date
|
02/10/16
|
30,000
|
1.11
|
07/03/07
|
1/3
vested; remaining 2/3 vesting as to 1/3 on each anniversary of grant
date
|
07/03/17
|
|
Jay
T. Holmes(1)
|
25,000
|
2.05
|
12/16/04
|
Vested
|
12/16/14
|
25,000
|
1.11
|
07/03/07
|
1/3
vested; remaining 2/3 vesting as to 1/3 on each anniversary of grant
date
|
07/03/17
|
|
Georges
Noël(1)
|
25,000
|
0.99
|
07/01/03
|
Vested
|
07/01/13
|
25,000
|
1.11
|
07/03/07
|
1/3
vested; remaining 2/3 vesting as to 1/3 on each anniversary of grant
date
|
07/03/17
|
|
Gilbert
S. Omenn(1)
|
25,000
|
1.11
|
07/03/07
|
1/3
vested; remaining 2/3 vesting as to 1/3 on each anniversary of grant
date
|
07/03/17
|
TOTAL
|
2,641,305
|
N/A
|
N/A
|
N/A
|
N/A
|
(1)
|
Certain
stock options held by Messrs. Vamvakas, Holmes and Noël and Dr. Omenn
already have 10-year terms and, therefore, are not shown in this
table. See “Additional Information on Executive
Compensation—Outstanding Equity Awards at 2007 Fiscal
Year-End”.
|
(Compromised Severance
X Ultimate Value)
|
||
(1
– Tax Rate)
|
||
(Terminal
Value – Market Price)
|
Name of Affected
Individual
|
Value of
Compromised
Severance
($)
|
Number of Stock
Options
to Be Granted (1)(2)(3)
|
|||||||
Elias Vamvakas
|
1,570,008 | 18,046,066 | |||||||
Thomas P. Reeves
|
482,569 | 5,546,766 | |||||||
William G. Dumencu
|
94,439 | 1,085,504 | |||||||
David C. Eldridge
|
77,500 | 890,804 | |||||||
Nozait Chaudry-Rao
|
80,213 | 921,982 | |||||||
John Cornish
|
90,460 | 1,039,773 | |||||||
Julie A. Fotheringham
|
60,159 | 691,487 | |||||||
Suh Kim
|
112,750 | 1,295,977 | |||||||
Stephen B. Parks
|
77,500 | 890,804 | |||||||
Stephen H. Westing
|
60,159 | 691,487 | |||||||
TOTAL
|
2,705,757 | 31,100,650 |
(1)
|
We
have assumed that the per share exercise price of the stock options to be
granted to the affected individuals will be
$0.10.
|
(2)
|
The
stock options will be granted to the affected individuals prior to the
implementation of the proposed reverse stock split. See
“Proposal X”.
|
(3)
|
The
number of stock options to be granted to each of the affected individuals
will be affected by the income tax rate applicable to him or
her. For purposes of this illustrative table, we have assumed
that each affected individual will take all necessary action to ensure
that the exercise of his or her stock options will qualify for capital
gains treatment in his or her jurisdiction of
residence.
|
|
·
|
The
number of shares of the Company’s common stock owned by a stockholder will
be reduced to the number obtained by dividing (i) the number of shares of
the Company’s common stock owned by such stockholder by (ii) the
denominator of the reverse split ratio. For example, if the
reverse split ratio is 1:25, then each 25 shares of the Company’s common
stock owned by a stockholder will be combined into one share of the
Company’s common stock.
|
|
·
|
Based
on the reverse split ratio selected by the Board in its sole discretion,
proportionate adjustments will be made to the per share exercise price and
the number of shares issuable upon the exercise of all outstanding stock
options and warrants to purchase shares of the Company’s common
stock.
|
|
·
|
The
share reserve under the 2002 Stock Option Plan will be reduced
proportionately, based on the reverse split ratio selected by the Board in
its sole discretion.
|
|
·
|
strategic
objectives of the Company such as acquisitions and
financings;
|
|
·
|
specific
operational goals for the Company such as, for example, the progress of
the Company’s clinical trials;
|
|
·
|
ability
to lead, mentor and motivate employees;
and
|
|
·
|
contribution
to the promotion of the Company’s corporate
values.
|
Thomas
N. Davidson
|
Jay
T. Holmes
|
Georges
Noël
|
||
Gilbert
S. Omenn
|
Adrienne
L. Graves
|
|
·
|
the
Chief Executive Officer;
|
|
·
|
the
Chief Financial Officer and Treasurer;
and
|
|
·
|
each
of the three most highly compensated executive officers (other than the
Chief Executive Officer and the Chief Financial Officer and Treasurer)
during the financial year ended December 31, 2007 and who was serving as
an executive officer at the end of such financial
year.
|
Name
and Principal Position
|
Year
|
Salary
|
Bonus
|
Option
Awards(1)(2)
|
All
Other Compensation(3)
|
Total
|
||||||||||||||||||
($)
|
($)
|
($)
|
($)
|
($)
|
||||||||||||||||||||
Elias
Vamvakas(4)
|
2007
|
491,983 | — | 78,000 | 35,610 | 605,592 | ||||||||||||||||||
Chairman
and Chief Executive Officer
|
2006
|
182,188 | (5) | — | 418,500 | 18,445 | 619,133 | |||||||||||||||||
William
G. Dumencu(4)
|
2007
|
184,474 | — | 23,400 | — | 207,874 | ||||||||||||||||||
Chief
Financial Officer and Treasurer (between September 2003 and May 2005; and
from April 2006 to the present)
|
2006
|
147,508 | 10,542 | 12,600 | — | 170,650 | ||||||||||||||||||
Vice
President, Finance (between June 2005 and April 2006)
|
||||||||||||||||||||||||
Thomas
P. Reeves(6)
|
2007
|
331,564 | — | 103,600 | 87,330 | 522,494 | ||||||||||||||||||
President
and Chief Operating Officer
|
2006
|
274,353 | 48,297 | 130,050 | 89,821 | 542,522 | ||||||||||||||||||
David
C. Eldridge
|
2007
|
197,500 | — | 23,400 | 217,705 | 438,605 | ||||||||||||||||||
Vice
President, Science and Technology (between November 2004 and January
2008)
|
2006
|
195,000 | 13,203 | 12,600 | — | 220,803 | ||||||||||||||||||
Nozait
Chaudry-Rao(4)
|
2007
|
207,227 | — | 23,400 | 216,062 | 446,689 | ||||||||||||||||||
Vice
President, Clinical Research
|
(1)
|
For
the financial year ended December 31, 2007, the values set forth in this
column are based on the full grant date fair value of stock option awards,
computed in accordance with the provisions of SFAS No.
123R. For the financial year ended December 31, 2006, the
values set forth in this column are based on the full grant date fair
value of stock option awards, computed in accordance with the provisions
of SFAS No. 123R. These stock options include time-based stock
options granted during the financial years ended December 31, 2007 and
December 31, 2006.
|
(2)
|
The
values in this column also include the incremental fair value of the then
out-of-the-money stock options which were re-priced by the Company during
2006. The incremental fair value of the re-priced stock
options, which were granted to the Named Executive Officers prior to the
financial year ended December 31, 2006, was computed in accordance with
the provisions of SFAS No. 123R. See “—Re-Pricing of Stock
Options”.
|
(3)
|
These
amounts do not include the value of perquisites received by Dr. Eldridge
as the aggregate value of such perquisites did not exceed
$10,000. Although Mr. Dumencu was entitled to reimbursement by
the Company of the costs of preparation of his annual income tax return
during the financial years ended December 31, 2007 and December 31, 2006,
he did not exercise such entitlement. The amounts set forth in
this column for Drs. Eldridge and Chaudry-Rao consist of the amounts
accrued by the Company in December 2007 in respect of their respective
severance entitlement.
|
(4)
|
All
cash compensation paid to Messrs. Vamvakas and Dumencu and Dr. Chaudry-Rao
was paid in Canadian dollars. Amounts paid during 2007 and 2006
have been converted to U.S. dollars at the year-end exchange rate of
C$0.98201 to $1.00 and C$1.16638 to $1.00,
respectively.
|
(5)
|
Reflects
salary earned by Mr. Vamvakas during the period from January 1, 2006 to
June 30, 2006 inclusive.
|
(6)
|
Cash
compensation paid to Mr. Reeves as an employee of OccuLogix was paid in
Canadian dollars, and that amount has been converted to U.S.
dollars. See note 4 for exchange rates. Compensation
paid to Mr. Reeves as a consultant of OccuLogix is included in the column
headed “All Other Compensation” and was paid in U.S.
dollars.
|
Name
|
Year
|
Severance(1)
|
Consulting
Fees
|
Car
Allowance
|
Club
Membership
|
Tax
Return Preparation
|
Total
|
|||||||||||||||||||||
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
|||||||||||||||||||||||
Elias
Vamvakas
|
2007
|
— | — | 12,220 | 23,390 | — | 35,610 | |||||||||||||||||||||
2006
|
— | — | 5,144 | 13,301 | — | 18,445 | ||||||||||||||||||||||
|
||||||||||||||||||||||||||||
Thomas
P. Reeves
|
2007
|
— | 50,875 | 12,220 | 18,298 | 5,937 | 87,330 | |||||||||||||||||||||
2006
|
— | 58,668 | 10,288 | 15,809 | 5,056 | 89,821 | ||||||||||||||||||||||
|
||||||||||||||||||||||||||||
David
C. Eldridge
|
2007
|
217,705 | — | — | — | — | 217,705 | |||||||||||||||||||||
Nozait
Chaudry-Rao
|
2007
|
216,062 | — | — | — | — | 216,062 |
(1)
|
The
amounts set forth in this column were accrued by the Company in December
2007 but were not paid during the financial year ended December 31,
2007. See “—Employment Contracts—David C. Eldridge” and
“—Employment Contracts—Nozait
Chaudry-Rao”.
|
Name
|
Grant
Date
|
All
Other Option Awards: Number of Securities Underlying
Options
|
Exercise
Price of Option Awards
|
||||||||
(#)
|
($/share)
|
||||||||||
Elias
Vamvakas
|
07/03/2007
|
100,000 |
1.11
|
||||||||
|
|||||||||||
William
G. Dumencu
|
07/03/2007
|
30,000 |
1.11
|
||||||||
Thomas
P. Reeves
|
03/11/2007
|
20,000 |
1.82
|
||||||||
07/03/2007
|
100,000 |
1.11
|
|||||||||
David
C. Eldridge
|
07/03/2007
|
30,000 |
|
1.11
|
|||||||
Nozait
Chaudry-Rao
|
07/03/2007
|
30,000 |
1.11
|
Option
Awards
|
|||||||||||||||||||||||
Name
|
Grant
Date
|
Number
of Securities Underlying Unexercised Options Exercisable
|
Number
of Securities Underlying Unexercised Options Unexercisable
|
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised
Unearned Options
|
Option
Exercise Price
|
Options
Expiration Date
|
|||||||||||||||||
(#)
|
(#)
|
(#)
|
($)
|
||||||||||||||||||||
Elias
Vamvakas
|
07/03/2007(1)
|
— | 100,000 | — | 1.11 |
07/03/2017
|
|||||||||||||||||
08/03/2006(2)
|
300,000 | — | — | 1.90 |
08/03/2016
|
||||||||||||||||||
03/30/2005(3)
|
— | 112,500 | — | 2.05 |
03/30/2015
|
||||||||||||||||||
07/01/2003(4)
|
500,000 | — | — | 0.99 |
07/01/2013
|
||||||||||||||||||
08/01/2002(5)
|
4,583 | — | — | 1.30 |
08/01/2012
|
||||||||||||||||||
William
G. Dumencu
|
07/03/2007(1)
|
— | 30,000 | — | 1.11 |
07/03/2017
|
|||||||||||||||||
03/30/2005(3)
|
— | 45,000 | — | 2.05 |
03/30/2015
|
||||||||||||||||||
08/01/2003(4)
|
100,000 | — | — | 0.99 |
08/01/2013
|
||||||||||||||||||
Thomas
P. Reeves
|
07/03/2007(1)
|
— | 100,000 | — | 1.11 |
07/03/2017
|
|||||||||||||||||
03/11/2007(6)
|
— | 20,000 | — | 1.82 |
03/11/2017
|
||||||||||||||||||
03/30/2005(3)
|
— | 78,750 | — | 2.05 |
03/30/2015
|
||||||||||||||||||
12/16/2004(7)
|
300,000 | — | — | 2.05 |
12/16/2014
|
||||||||||||||||||
David
C. Eldridge
|
07/03/2007(1)
|
— | 30,000 | — | 1.11 |
07/03/2017
|
|||||||||||||||||
03/30/2005(3)
|
— | 45,000 | — | 2.05 |
03/30/2015
|
||||||||||||||||||
07/01/2003(4)
|
59,798 | — | — | 0.99 |
07/01/2013
|
||||||||||||||||||
|
|||||||||||||||||||||||
Nozait
Chaudry-Rao
|
07/03/2007(1)
|
— | 30,000 | — | 1.11 |
07/03/2017
|
|||||||||||||||||
02/10/2006(8)
|
26,667 | 53,333 | 2.05 |
02/10/2016
|
(1)
|
Exercisable
as to (i) 33⅓% on July 3, 2008, (ii) 33⅓% on July 3, 2009 and (iii) 33⅓%
on July 3, 2010.
|
(2)
|
Exercisable
immediately upon grant and will remain exercisable until the expiration
date, notwithstanding any earlier disability or death of Mr. Vamvakas or
any earlier termination of his service to the
Company.
|
(3)
|
As
of the date of this proxy statement, exercisable when and if OccuLogix
receives the approval that it is seeking from the FDA for the RHEO™ System
for use in the Rheopheresis™ treatment of dry age-related macular
degeneration.
|
(4)
|
Fully
vested and exercisable upon the closing of OccuLogix’s initial public
offering of shares of its common stock on December 16,
2004.
|
(5)
|
Exercisable
immediately upon grant and will remain exercisable until the earlier of
(i) the expiration date and (ii) the last date for exercise following the
termination of Mr. Vamvakas’ service to the
Company.
|
(6)
|
Exercisable
as to (i) 33⅓% on March 11, 2008, (ii) 33⅓% on March 11, 2009 and (iii)
33⅓% on March 11, 2010.
|
(7)
|
On
December 11, 2005, the Board approved accelerating the vesting of unvested
stock options granted prior to December 31, 2004 to employees, officers
and directors.
|
(8)
|
Exercisable
as to (i) 33⅓% on February 10, 2007, (ii) 33⅓% on February 10, 2008 and
(iii) 33⅓% on February 10, 2009.
|
Name
|
Grant
Date
|
Number
of Securities Underlying Options Re-Priced
|
Incremental
Fair Value of Re-Priced Options(1)
|
|||||||||
(#)
|
($)
|
|||||||||||
Elias
Vamvakas
|
03/30/2005
|
150,000 | 31,500 | |||||||||
William
G. Dumencu
|
03/30/2005
|
60,000 | 12,600 | |||||||||
Thomas
P. Reeves
|
03/30/2005
|
105,000 | 22,050 | |||||||||
12/16/2004
|
300,000 | 108,000 | ||||||||||
David
C. Eldridge
|
03/30/2005
|
60,000 | 12,600 | |||||||||
Nozait
Chaudry-Rao
|
—
|
— | — |
(1)
|
The
incremental difference in value is measured as the excess, if any, of the
fair value of the modified award determined in accordance with the
provisions of SFAS No. 123R over the fair value of the original award
immediately before its terms are modified, measured based on the share
price and other pertinent factors at the date of the
modification. SFAS No. 123R provides that this incremental fair
value, plus the remaining unrecognized compensation cost from the original
measurement of the fair value of the old option, must be recognized over
the remaining vesting period.
|
Name(1)
|
Fees
Earned or Paid in Cash(2)
|
Option
Awards(3)(4)(5)(6)(7)
|
All
Other Compensation
|
Total
|
|||||||||||
($)
|
($)
|
($)
|
($)
|
||||||||||||
Thomas
N. Davidson
|
6,500 | 16,206 | (8) |
—
|
22,706 | ||||||||||
Jay
T. Holmes
|
15,250 | 16,206 | (8) |
—
|
31,456 | ||||||||||
Georges
Noël
|
9,000 | 16,206 |
—
|
25,206 | |||||||||||
Richard
L. Lindstrom
|
2,000 | 10,306 | (8) |
—
|
12,306 | ||||||||||
Gilbert
S. Omenn
|
7,000 | 15,340 |
—
|
22,340 | |||||||||||
Adrienne
L. Graves
|
11,000 | 17,929 |
—
|
28,929 |
(1)
|
Mr.
Vamvakas does not receive any compensation for his services as a director
of the Company. All compensation paid to Mr. Vamvakas by the
Company during 2007 for his services as the Chief Executive Officer is
disclosed in the Summary Compensation Table and the Grant of Plan-Based
Awards Table.
|
(2)
|
Reflects
cash remuneration that each director received from the Company, for the
financial year ended December 31, 2007, in respect of fees only for
attending Board and committee meetings held by telephone. In
addition to such cash remuneration, Mr. Holmes was also paid in cash for
serving as the chairman of a special committee of the Board, which special
committee was constituted after March 2007 when the directors had agreed
to forego cash remuneration, in respect of annual directors’ fees and fees
for attending Board and committee meetings during 2007, in exchange for
stock options. The other members of the special committee also
received cash remuneration for their attendance at
meetings.
|
(3)
|
In
exchange for stock options, each of the directors agreed to forego the
cash remuneration which he or she would have been entitled to receive from
the Company during 2007 in respect of (i) his or her annual director's
fee, (ii) in the case of those directors who chair a committee of the
Board, his or her fee for chairing such committee and (iii) his or her fee
for attending the quarterly in-person meetings of the
Board. The numbers of these stock options were determined to be
8% higher in value than the cash remuneration to which the directors would
have been entitled during the financial year ended December 31, 2007 and
were determined using the Black-Scholes valuation method, based on an
attributed value of $1.61 per share of the Company’s common stock
underlying these stock options. The number of stock options
granted to each director, calculated using this methodology, was then
rounded up to the nearest 1,000. These stock options were
exercisable immediately upon grant on March 11, 2007 and will remain
exercisable until March 11, 2017, notwithstanding any earlier disability
or death of the holder or any earlier termination of his or her service to
the Company. The per share exercise price of these stock
options is $1.82.
|
(4)
|
On
July 3, 2007, each of the directors (other than Mr. Vamvakas) was granted
25,000 time-based stock options. These stock options have a
10-year life and an exercise price of $1.11, and they will vest in
one-third increments during the three-year period following their date of
grant.
|
(5)
|
On
November 1, 2007, the Company announced the indefinite suspension of its
RHEO™ System clinical development program and is currently in the process
of winding down the RHEO-AMD study as there is no reasonable prospect that
the RHEO™ System clinical development program will be relaunched in the
foreseeable future. Management does not believe that certain
issued performance-based stock options, the vesting of which is contingent
upon successfully obtaining FDA approval of the RHEO™ System, will ever
vest. As a result, in the financial year ended December 31,
2007, the Company reversed option expenses previously reported for these
performance-based stock options. The portion of such expense
reversal applicable to these performance-based stock options held by
directors of the Company was
$208,670.
|
(6)
|
The
values set forth in this column are based on the aggregate grant date fair
value of stock option awards, computed in accordance with the provisions
of SFAS No. 123R, and reflect the expense recorded in 2007 in accordance
with the provisions of SFAS No. 123R. Information regarding the
assumptions used to estimate the fair value of these stock option awards
in accordance with the provisions of SFAS No. 123R appears in note 17(e)
to the restated audited consolidated financial statements of the Company
for the financial year ended December 31, 2007, which are included in the
Amended Report.
|
(7)
|
As
of December 31, 2007, non-executive members of the Board had the following
aggregate number of stock options outstanding: (i) Mr.
Davidson, 117,500; (ii) Mr. Holmes, 117,500; (iii) Mr. Noël, 117,500; (iv)
Dr. Lindstrom, 110,000; (v) Dr. Omenn, 85,000; and (vi) Dr. Graves,
85,000.
|
(8)
|
Includes
the incremental fair value, calculated in accordance with the provisions
of SFAS No. 123R, of stock options which were re-priced during the
financial year ended December 31, 2006. See “—Re-pricing of
Stock Options”.
|
·
|
incentive
stock options, as defined under the Internal Revenue Code, which may be
granted solely to the Company’s employees, including officers;
and
|
·
|
nonstatutory
stock options, which may be granted to the Company’s directors,
consultants or employees, including
officers.
|
·
|
the
option exercise price must be at least 110% of the fair market value of
the stock subject to the option on the date of grant;
and
|
·
|
the
term of any incentive stock option award must not exceed five years from
the date of grant.
|
Plan
Category
|
Number
of Shares to Be Issued Upon Exercise of Outstanding Options,
Warrants and Rights
|
Weighted-Average
Exercise Price
of
Outstanding
Options,
Warrants and
Rights
|
Number
of Shares Remaining Available for Future Issuance under Equity
Compensation Plans (excluding shares reflected in the first
column)
|
|||||||
As
of December 31, 2007
|
||||||||||
Equity compensation plans approved
by stockholders
|
4,215,387
|
$1.59
|
1,868,435 | |||||||
Equity
compensation plans not approved by stockholders
|
572,000
|
$2.01
|
-- | |||||||
Total
|
4,787,387
|
$1.64
|
1,868,435 |
Name of
Director
|
Number of the Three (3)
In-person Board Meetings Attended
|
Number of the Eight (8) Conference
Call Board Meetings Attended
|
Number of the Five (5) Conference
Call Audit Committee Meetings Attended
|
Number of the Three (3)
Compensation Committee Meetings Attended
|
Number of the Three (3)
Special Committee Meetings Attended
|
||||||||||
Elias Vamvakas(1)
|
3
|
8
|
--
|
--
|
--
|
||||||||||
Thomas N. Davidson
|
3
|
5
|
4
|
3
|
--
|
||||||||||
Adrienne L. Graves
|
3
|
7
|
5
|
3
|
3
|
||||||||||
Jay T. Holmes
|
3
|
8
|
5
|
3
|
3
|
||||||||||
Richard L. Lindstrom(1)
|
3
|
5
|
--
|
--
|
--
|
||||||||||
Georges Noël
|
3
|
4
|
5
|
3
|
3
|
||||||||||
Gilbert S. Omenn(2)
|
3
|
7
|
--
|
2
|
3
|
|
(1)
|
Is not a member of any of the
committees of the Board.
|
|
(2)
|
Is not a member of the Audit
Committee.
|
·
|
to monitor the
Company’s financial reporting process and internal control
system;
|
|
·
|
to
appoint and replace the Company’s independent outside auditors from time
to time, to determine their compensation and other terms of engagement and
to oversee their work;
|
|
·
|
to
oversee the performance of the Company’s internal audit function;
and
|
|
·
|
to
oversee the Company’s compliance with legal, ethical and regulatory
matters.
|
|
·
|
to
provide oversight of the development and implementation of the
compensation policies, strategies, plans and programs for the Company’s
key employees and directors, including policies, strategies, plans and
programs relating to long-term compensation for the Company’s senior
management, and the disclosure relating to these
matters;
|
|
·
|
to
make recommendations regarding the operation of and/or implementation of
employee bonus plans and incentive compensation
plans;
|
|
·
|
to
review and approve the compensation of the Chief Executive Officer and the
other executive officers of the Company and the remuneration of the
Company’s directors; and
|
|
·
|
to
provide oversight of the selection of officers, management succession
planning, the performance of individual executives and related
matters.
|
|
·
|
to
establish criteria for Board and committee membership and to recommend to
the Board proposed nominees for election to the Board and for membership
on committees of the Board;
|
|
·
|
to
ensure that appropriate processes are established by the Board to fulfill
its responsibility for (i) the oversight of strategic direction and
development and the review of ongoing results of operations of the Company
by the appropriate committee of the Board and (ii) the oversight of the
Company’s investor relations and public relations activities and ensuring
that procedures are in place for the effective monitoring of the
stockholder base, receipt of stockholder feedback and response to
stockholders concerns;
|
|
·
|
to
monitor the quality of the relationship between management and the Board
and to recommend improvements for ensuring an effective and appropriate
relationship; and
|
|
·
|
to
make recommendations to the Board regarding corporate governance matters
and practices.
|
Georges Noël
|
Thomas N. Davidson
|
Jay T. Holmes
|
||
Adrienne L. Graves
|
|
·
|
each
person who is known by OccuLogix to own beneficially more than 5% of the
Company’s common stock;
|
|
·
|
each
person who is a member of the
Board;
|
|
·
|
each
person who is a nominee to the Board but who is not currently a member of
the Board;
|
|
·
|
each
person who is one of the Company’s executive officers;
and
|
|
·
|
all
persons who are members of the Board, all persons who are nominees to the
Board but who are not currently members of the Board and the Company’s
executive officers, as a group.
|
Name
of Beneficial Owner
|
Shares
Beneficially Owned
|
Percentage
of Shares Beneficially Owned
|
TLC
Vision Corporation Common Shares Beneficially Owned
|
Percentage
of TLC Vision Common Shares Beneficially Owned
|
||||||||||||
TLC
Vision Corporation(1)
|
18,770,302 | 32.8 | % | -- |
|
*
|
||||||||||
Diamed
Medizintechnik GmbH(2)
|
4,332,234 | 7.6 | % | -- |
*
|
|||||||||||
Elias
Vamvakas
|
2,729,345 | 4.8 | % | 201,571 |
*
|
|||||||||||
William
G. Dumencu
|
100,000 | * | 1,500 |
*
|
||||||||||||
Suh
Kim
|
33,333 | * | -- |
*
|
||||||||||||
Thomas
N. Davidson
|
123,000 | * | 80,000 |
*
|
||||||||||||
Eric
Donsky
|
-- | * | -- |
*
|
||||||||||||
Jay
T. Holmes
|
94,000 | (3) | * | 7,500 |
*
|
|||||||||||
Adrienne
L. Graves
|
40,725 | * | -- |
*
|
||||||||||||
Richard
L. Lindstrom
|
70,000 | * | 124,000 |
*
|
||||||||||||
Georges
Noël
|
70,000 | * | -- |
*
|
||||||||||||
Gilbert
S. Omenn
|
40,000 | * | -- |
*
|
||||||||||||
Donald
Rindell
|
-- | * | -- |
*
|
||||||||||||
All
directors and executive officers as a group (9
persons)
|
3,300,403 | (4) | 5.8 | % | 414,571 | (5) |
*
|
(1)
|
Of
such shares, 981,926 are owned directly by TLC Vision and 17,788,376 are
owned by TLC Vision (USA) Corporation, a wholly-owned subsidiary of TLC
Vision. TLC Vision is a widely held public
company. TLC Vision’s address is 5280 Solar Drive, Suite 100,
Mississauga, Ontario, L4W 5M8.
|
(2)
|
Diamed
is controlled by Mr. Hans Stock. Diamed’s address is
Stadtwaldgürtel 77, 50935 Köln,
Germany.
|
(3)
|
12,000
shares are beneficially owned by Mr. Holmes’
wife.
|
(4)
|
This
does not include family members of directors or executive
officers. This includes 1,592,082 shares of common stock
related to stock options currently
outstanding.
|
(5)
|
This
does not include family members of directors or executive
officers. This includes 152,000 shares of common stock related
to stock options currently
outstanding.
|
|
·
|
each
person who OccuLogix knows will own beneficially more than 5% of the
Company’s common stock;
|
|
·
|
each
person who will be a member of the
Board;
|
|
·
|
each
person who will be an executive officer of the Company;
and
|
|
·
|
all
persons who will be members of the Board or executive officers of the
Company, as a group.
|
Name
of Beneficial Owner
|
Shares Beneficially
Owned(1)
|
Percentage
of Shares Beneficially Owned
|
|||||
Eric
Donsky
|
1,804,195 |
18.64%
|
|||||
TLC
Vision Corporation(2)
|
750,812 |
7.76%
|
|||||
Elias
Vamvakas
|
832,349 |
7.98%
|
|||||
William
G. Dumencu
|
47,820 |
*
|
|||||
Thomas
N. Davidson
|
325,253 |
3.36%
|
|||||
Adrienne
L. Graves
|
1,962 |
|
*
|
||||
Richard
L. Lindstrom
|
103,518 |
1.07%
|
|||||
Donald
Rindell
|
31,577 |
*
|
|||||
All
directors and executive officers as a group (7 persons)
|
3,146,676 | (3) |
|
29.87%
|
(1)
|
The
numbers set forth in this column assume that the Board implements a
reverse stock split in a ratio of
1:25.
|
(2)
|
Of
such shares, 39,278 will be owned directly by TLC Vision and 711,536 will
be owned by TLC Vision (USA) Corporation, a wholly-owned subsidiary of TLC
Vision. TLC Vision is a widely held public
company. TLC Vision’s address is 5280 Solar Drive, Suite 100,
Mississauga, Ontario, L4W 5M8.
|
(3)
|
This
does not include family members of directors or executive
officers. This includes 857,005 shares of common stock
underlying stock options of OccuLogix and stock options of OcuSense that
will be assumed by OccuLogix in accordance with the terms of the Merger
Agreement.
|
By Order of the
Board
|
||
/s/ Elias Vamvakas
|
||
Elias Vamvakas
|
||
Chairman of the Board, Chief
Executive Officer and Secretary
|
·
|
Accompanying
notes to the unaudited pro forma consolidated financial
statements;
|
·
|
Separate
restated historical consolidated financial statements of OccuLogix as of
and for the year ended December 31, 2007 included in its Annual Report on
Form 10-K/A, Amendment No.3; and
|
·
|
Separate
restated historical consolidated financial statements of OccuLogix as of
and for the six months ended June 30, 2008 included in its Quarterly
Report on Form 10-Q.
|
a)
|
OccuLogix
intends to complete a PIPE transaction of $2,173,000 of common
stock at a per share price that is the lower of (i) $0.10 and (ii) the
volume-weighted average closing price of the Company’s common stock on The
NASDAQ Global Market for the 15-trading day period immediately preceding
the closing date of the sale. If the per share purchase price is $0.10,
then an aggregate of 21,730,000 shares of the Company’s common stock will
be issued to the Investors. If the per share purchase price is
lower than $0.10, then a greater aggregate number of shares of the
Company’s common stock will need to be issued to the
Investors. At the date of this proxy statement, the per share
purchase price is not determinable.
|
b)
|
OccuLogix
intends to use the second of two pre-payment options available to it
regarding all outstanding Bridge Loans and related accrued interest on the
date of the reorganization transactions, in which the amounts outstanding
will be converted into common stock of OccuLogix. Under this second
pre-payment option, since OccuLogix has met the condition of having closed
a PIPE for aggregate gross proceeds of at least $1,000,000, the Company is
able to repay the Bridge Loans in full by issuing to the lenders shares of
its common stock, in an aggregate amount equal to the amount of
outstanding principal and accrued interest, at a 15% discount to the price
paid by the PIPE investors.
|
c)
|
Occulogix
will be acquiring, the remaining ownership interest (44.03% of remaining
outstanding shares after the cashless exercise of all outstanding OcuSense
warrants , 49.9% on a fully-diluted basis) in OcuSense that it does not
currently own, by way of a merger of OcuSense and a newly incorporated,
wholly-owned subsidiary of OccuLogix. As merger consideration,
the Company expects to issue an aggregate of 79,248,175 shares of its
common stock to the minority stockholders of OcuSense (“Minority
Shareholders”). Management of OccuLogix and non-OccuLogix
directors of OcuSense have agreed upon an entity value for OcuSense of
$18,000,000. The excess of the purchase price over the value of the
minority interest acquired will be treated as a capital item and will be
reported as a reduction to Additional Paid In Capital. These
estimates are subject to adjustment upon the finalization of the final
purchase price allocation.
|
d)
|
At
the completion of the reorganization transactions, OccuLogix will have
reached agreement with the majority of its senior management in which the
senior management will forego a fixed percentage of their cash severance
entitlement in exchange for stock options under the OccuLogix 2002 Stock
Option Plan (the “Stock Option Plan) exercisable into common shares of
OccuLogix. The number of options that each senior manager receives will be
based on the cash severance entitlement being foregone divided by a
Black-Scholes valuation of the options assuming the same price per share
of OccuLogix common stock applicable to the PIPE and Minority Shareholders
investors in the reorganization transactions. These options will vest
immediately and will have a 10 year life. The exercise price of these
options will be the fair market value of OccuLogix’s common stock on
NASDAQ on the day immediately preceding the completion of the
reorganization transactions. The calculation of the number of options
provided to senior managers will take into account the impact of the
exercise price of the options being greater than the price per share
applicable to the PIPE and Minority Shareholders investors in the
reorganization transactions. The estimated fair value of stock
options used in these pro forma financial statements is subject to
adjustment based on assumptions and estimates that will be available upon
the determination of the measurement
date.
|
e)
|
At the completion of
the reorganization transactions, Occulogix will make an amendment to the
Company’s Amended
and Restated Certificate of Incorporation in order to provide for a
recapitalization in which the issued and outstanding shares of the
Company’s common stock will undergo a reverse split in a ratio of up to
25:1, with the actual ratio and the timing of such reverse split to be
determined by the Board in its sole
discretion.
|
OccuLogix,
Inc.
(Historical)
|
Pro
Forma
Adjustments
|
Note
2
|
OccuLogix,
Inc.
(Pro
Forma)
|
|||||
$
|
$
|
$
|
||||||
ASSETS
|
(Restated)
|
|||||||
Current
|
||||||||
Cash
and cash equivalents
|
920,191
|
2,048,000
|
a
|
|||||
3,314,700
|
b
|
|||||||
(175,000
|
)
|
c
|
||||||
(1,202,505
|
)
|
d
|
4,905,386
|
|||||
Amounts
receivable, net
|
116,850
|
—
|
116,850
|
|||||
Prepaid
expenses
|
294,573
|
—
|
294,573
|
|||||
Prepaid
finance costs
|
48,000
|
(48,000)
|
b
|
—
|
||||
Deposits
|
16,993
|
—
|
16,993
|
|||||
Other
current assets
|
128,796
|
—
|
128,796
|
|||||
Total
current assets
|
1,525,403
|
3,937,195
|
5,462,598
|
|||||
Fixed
assets, net
|
106,224
|
—
|
106,224
|
|||||
Patents
and trademarks, net
|
201,340
|
—
|
201,340
|
|||||
Investments
|
413,678
|
—
|
413,678
|
|||||
Intangible
assets, net
|
10,292,363
|
—
|
10,292,363
|
|||||
Total
assets
|
12,539,008
|
3,937,195
|
16,476,203
|
|||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||
Current
|
||||||||
Accounts
payable
|
425,216
|
—
|
425,216
|
|||||
Accrued
liabilities
|
3,910,303
|
(1,923,877
|
)
|
d
|
1,986,426
|
|||
Due
to stockholders
|
89,526
|
—
|
89,526
|
|||||
Deferred
revenue
|
106,700
|
—
|
106,700
|
|||||
Short
term liabilities and accrued interest
|
3,435,715
|
(3,435,715
|
)
|
b
|
—
|
|||
Total
current liabilities
|
7,967,460
|
(5,359,592
|
)
|
2,607,868
|
||||
Deferred
tax liability
|
833,515
|
3,283,431
|
c
|
4,116,946
|
||||
Total
liabilities
|
8,800,975
|
(2,076,161
|
)
|
6,724,814
|
||||
Minority
interest
|
4,474,154
|
(4,474,154
|
)
|
c
|
—
|
|||
Stockholders’
equity
|
||||||||
Capital
Stock
|
||||||||
Common
stock
|
57,306
|
23,037
|
a
|
|||||
83,967
|
b
|
|||||||
79,248
|
c
|
243,558
|
||||||
Additional
paid-in capital
|
362,309,603
|
2,024,963
|
a
|
|||||
8,312,696
|
b
|
|||||||
(439,328
|
)
|
b
|
||||||
7,845,570
|
c
|
|||||||
(3,450,664
|
)
|
c
|
||||||
(175,000
|
)
|
c
|
||||||
2,705,757
|
d
|
379,133,597
|
||||||
Accumulated
deficit
|
(363,103,030
|
)
|
(1,206,920
|
)
|
b
|
|||
(48,000
|
)
|
b
|
||||||
(3,283,431
|
)
|
c
|
||||||
(1,984,385
|
)
|
d
|
(369,625,766
|
)
|
||||
Total
stockholders’ equity
|
(736,121
|
)
|
10,487,510
|
9,751,389
|
||||
Total
liabilities and stockholders’ equity
|
12,539,008
|
3,937,195
|
16,476,203
|
OccuLogix,
Inc.
(Historical)
|
Pro
Forma
Adjustments
|
Note
3
|
OccuLogix,
Inc.
(Pro
Forma)
|
||||||||
$
|
$
|
$
|
|||||||||
(Restated)
|
|||||||||||
Revenue
|
134,400
|
—
|
134,400
|
||||||||
Cost
of sales
|
|||||||||||
Cost
of goods sold
|
(444
|
)
|
—
|
(444
|
)
|
||||||
Royalty
costs
|
25,000
|
—
|
25,000
|
||||||||
24,556
|
—
|
24,556
|
|||||||||
109,844
|
—
|
109,844
|
|||||||||
Operating
expenses
|
|||||||||||
General
& administrative
|
2,870,055
|
2,870,055
|
|||||||||
Clinical
and regulatory
|
1,831,180
|
—
|
1,831,180
|
||||||||
Sales
and marketing
|
410,443
|
—
|
410,443
|
||||||||
Restructuring
charges
|
955,517
|
—
|
955,517
|
||||||||
6,067,195
|
—
|
6,067,195
|
|||||||||
Loss
from operations
|
(5,957,351
|
)
|
—
|
(5,957,351
|
)
|
||||||
Other
income (expense)
|
|||||||||||
Interest
income
|
57,143
|
—
|
57,143
|
||||||||
In-process
research and development
|
|||||||||||
Impairment
of investments
|
(450,072
|
)
|
—
|
(450.072
|
)
|
||||||
Interest
expense
|
(142,309
|
)
|
135,715
|
a
|
(6,594
|
)
|
|||||
Amortization
of finance costs
|
(132,000
|
)
|
132,000
|
a
|
—
|
||||||
Other
|
20,243
|
—
|
20,243
|
||||||||
Minority
interest
|
571,130
|
(571,130
|
)
|
b
|
—
|
||||||
(75,865
|
)
|
(303,415
|
)
|
(379,280
|
)
|
||||||
Loss
from continuing operations before income taxes
|
(6,033,216
|
)
|
(303,415
|
)
|
(6,336,631
|
)
|
|||||
Recovery
of income taxes
|
1,219,166
|
(1,219,166
|
)
|
c
|
—
|
||||||
Loss
from continuing operations
|
(4,814,050
|
)
|
(1,522,581
|
)
|
(6,336,631
|
)
|
|||||
Weighted average number of | |||||||||||
common
shares outstanding –
|
57,306,145
|
186,251,528 |
d
|
||||||||
basic
and diluted
|
(55,013,899
|
) |
(178,801,467)
|
d
|
9,742,307
|
||||||
Net
loss from continuing operations per share – basic and
diluted
|
$
|
(2.10
|
)
|
$
|
(0.65
|
)
|
OccuLogix,
Inc.
(Historical)
|
Pro
Forma
Adjustments
|
Note
3
|
OccuLogix,
Inc.
(Pro
Forma)
|
||||||||
$
|
$
|
$
|
|||||||||
(Restated)
|
|||||||||||
Revenue
|
91,500
|
—
|
91,500
|
||||||||
Cost
of sales
|
|||||||||||
Cost
of goods sold
|
2,298,103
|
—
|
2,298,103
|
||||||||
Royalty
costs
|
100,000
|
—
|
100,000
|
||||||||
2,398,103
|
—
|
2,398,103
|
|||||||||
(2,306,603
|
)
|
—
|
(2,306,603
|
)
|
|||||||
Operating
expenses
|
|||||||||||
General
& administrative
|
8,104,405
|
—
|
8,104,405
|
||||||||
Clinical
and regulatory
|
8,675,552
|
—
|
8,675,552
|
||||||||
Sales
and marketing
|
1,413,459
|
—
|
1,413,459
|
||||||||
Impairment
of intangible assets
|
20,923,028
|
—
|
20,923,028
|
||||||||
Restructuring
charges
|
1,312,721
|
—
|
1,312,721
|
||||||||
40,429,165
|
—
|
40,429,165
|
|||||||||
Loss
from operations
|
(42,735,768
|
)
|
—
|
(42,735,768
|
)
|
||||||
Other
income (expense)
|
|||||||||||
Interest
income
|
609,933
|
609,933
|
|||||||||
Changes
in fair value of warrant obligations
|
1,882,497
|
1,882,497
|
|||||||||
Impairment
of investments
|
(1,036,250
|
)
|
—
|
(1,036,250
|
)
|
||||||
Interest
expense
|
(17,228
|
)
|
—
|
(17,228
|
)
|
||||||
Other
|
18,011
|
—
|
18,011
|
||||||||
Minority
interest
|
1,312,178
|
(1,312,178
|
)
|
b
|
—
|
||||||
2,769,141
|
(1,312,178
|
)
|
1,456,963
|
||||||||
Loss
from continuing operations before income taxes
|
(39,966,627
|
)
|
(1,312,178
|
)
|
(41,278,805
|
)
|
|||||
Recovery
of income taxes
|
5,565,542
|
8,968,284
|
c
|
14,533,826
|
|||||||
Loss
from continuing operations
|
(34,401,085
|
)
|
7,656,106
|
(26,744,979
|
)
|
||||||
Weighted average number of | |||||||||||
common
shares outstanding –
|
56,628,186
|
186,251,528
|
d
|
||||||||
basic and
diluted
|
(54,363,059
|
) |
(178,801,466
|
) |
d
|
9,715,189
|
|||||
Net
loss from continuing operations per share – basic and
diluted
|
$
|
(15.19
|
)
|
$
|
(2.75
|
)
|
1.
|
Basis
of Pro Forma Presentation
|
2.
|
Pro
Forma Consolidated Balance Sheet of
OccuLogix
|
|
a)
|
OccuLogix
intends to complete a PIPE transaction of $2,173,000 of common
stock at a per share price that is the lower of (i) $0.10 and (ii) the
volume-weighted average closing price of the Company’s common stock on The
NASDAQ Global Market for the 15-trading day period immediately preceding
the closing date of the sale. If the per share purchase price is $0.10,
then an aggregate of 21,730,000 shares of the Company’s common stock will
be issued to the Investors. If the per share purchase price is
lower than $0.10, then a greater aggregate number of shares of the
Company’s common stock will need to be issued to the
Investors. At the date of this proxy statement, the per share
purchase price is not determinable.
|
$
|
Purchase
price
per
share for
the
PIPE
|
Shares
issued
#
|
||||||||||
Gross
Proceeds from PIPE
|
2,173,000 | $ | 0.10 | 21,730,000 | ||||||||
Share
issuance cost – in equity
|
(130,672 | ) | 1,306,715 | |||||||||
Share
issuance cost – in cash (estimated)
|
(125,000 | ) | ||||||||||
Total
shares issued
|
23,036,715 |
Summary
|
$
|
|||
Net
cash proceeds
|
2,048,000 | |||
Common
shares (par value $0.001)
|
(23,037 | ) | ||
Additional
Paid In Capital
|
(2,024,963 | ) |
|
b)
|
On
February 19, 2008, Occulogix secured a bridge loan in an aggregate
principal amount of $3,000,000 (less transaction costs of approximately
$180,000) from a number of private parties. The loan bears interest at a
rate of 12% per annum and has a 180-day term, which may be extended to 270
days under certain circumstances. The repayment of the loan is secured by
a pledge by OccuLogix of its shares of the capital stock of OcuSense.
Under the terms of the loan agreement, the Company has two pre-payment
options available to it, should it decide to not wait until the maturity
date to repay the loan.
|
$ |
Per
share
purchase price
|
Per
share
conversion
price
for Bridge Loans1
|
Shares
issued
#
|
|||||||||||||
Conversion
of:
|
||||||||||||||||
Bridge
Loans – February 19, 2008
|
3,000,000 | $ | 0.10 | $ | 0.085 | 35,294,118 | ||||||||||
Additional
Bridge Loan – May 5, 2008
|
300,000 | $ | 0.10 | $ | 0.085 | 3,529,412 | ||||||||||
Additional
Bridge Loan – July 28, 2008
|
3,403,500 | $ | 0.10 | $ | 0.085 | 40,041,176 | ||||||||||
Accrued
interest at June 30, 2008
|
135,715 | $ | 0.10 | $ | 0.085 | 1,596,647 | ||||||||||
Share
issuance cost – in shares
|
(350,528 | ) | $ | 0.10 | 3,505,285 | |||||||||||
Share
issuance cost – in cash ($88,800 to be paid on the completion
of the transactions)
|
(268,800 | ) | ||||||||||||||
Total
shares issued
|
83,966,638 |
Summary Dr.
/ (Cr.)
|
$
|
|||
Net
cash proceeds
|
3,314,700 | |||
Prepaid
finance costs
|
(48,000 | ) | ||
Short
term liabilities and accrued interest
|
3,435,715 | |||
Common
shares (par value $0.001)
|
(83,967 | ) | ||
Additional
Paid In Capital - re shares issued
|
(8,312,696 | ) | ||
Additional
Paid In Capital – re share costs
|
439,328 | |||
Retained
Earnings – to expense discount on shares issued to Bridge Loan
conversion
|
1,206,920 | |||
Retained
Earnings – to expense prepaid finance costs
|
48,000 |
|
c)
|
In
the reorganization transactions, Occulogix will be acquiring
the remaining ownership interest (approximately 44.03% of outstanding
shares after the cashless exercise of all outstanding OcuSense
warrants, 49.9% on a fully diluted basis) in OcuSense that it does not
currently own by way of a merger of OcuSense and a newly incorporated,
wholly-owned subsidiary of OccuLogix. Management of OccuLogix
and non-OccuLogix directors of OcuSense have agreed upon an entity value
for OcuSense of $18,000,000. In arriving at the agreed-upon value, the
parties calculated a range of indications of value based on income and
guideline public company valuation approaches. The income
valuation calculations considered the valuation assumptions used in
connection with the Company’s initial investment in OcuSense on November
30, 2006 and financial projections for OcuSense which had been revised
since the date of the Company’s initial investment in OcuSense, as well as published
venture capital rates of return for companies considered to be at a
similar stage of development as OcuSense. The guideline public
company valuation calculations considered the market value of investment
capital (“MVIC”) to revenue ratios of comparable point-of-care diagnostic
or ophthalmic diagnostic solution companies. Changes in the
MVIC to revenue ratios, over the period of approximately 12 months between
November 30, 2006 and the time at which these valuation calculations were
performed, were also calculated and taken into account in the
analysis. In addition, the parties also performed these same
guideline public company valuation calculations, using a subset of the
peer group comprised of companies with yearly revenues of less than
$2,000,000. These calculations indicated a range of values that
supported the parties’ attribution of a full-enterprise value of
$18,000,000 to OcuSense as being fair and reasonable. Using the agreed
upon valuation, the allocation of value to the Minority Shareholders
represents approximately 44.026766% of the entity value or $7,924,818. As
merger consideration, the Company expects to issue shares of its common
stock to the minority stockholders of OcuSense (“Minority Shareholders”)
at the per share price paid by the PIPE investors. At the date
of this proxy statement, the per share purchase price is not
determinable.
|
$
|
Per
share
purchase price
|
Shares
issued
#
|
||||||||||
Value
allocated to Minority Shareholders
|
7,924,818 | $ | 0.10 | 79,248,175 | ||||||||
Assignment
of values to Intangible Asset and Deferred Tax liability
|
||||||||||||
Value
of merger shares issued
|
7,924,818 |
Costs
$
|
||||||||||
Estimated
transaction costs
|
- | 175,000 | ||||||||||
Cost
to OccuLogix of merger
|
7,924,818 | 175,000 | ||||||||||
Book
value of Minority Shareholders’ interest acquired
|
4,474,154 | |||||||||||
Excess
of merger shares issued over book value of Minority Interest Shareholders’
interest acquired
|
3,450,664 |
Summary Dr.
/ (Cr.)
|
$ | |||
Cash
paid for transaction costs
|
(175,000 | ) | ||
Minority
Interest
|
4,474,154 | |||
Common
shares (par value $0.001)
|
(79,248 | ) | ||
Additional
Paid In Capital (share issued)
|
(7,845,570 | ) | ||
Additional
Paid In Capital (excess over Minority Interest)
|
3,450,664 | |||
Additional
Paid In Capital (share issuance cost)
|
175,000 |
Summary Dr.
/ (Cr.)
|
$ | |||
Deferred
tax liability
|
(3,283,431 | ) | ||
Retained
Earnings – deferred tax assets reversed
|
3,283,431 |
|
d)
|
As
a result of OccuLogix’s announcement on November 1, 2007, regarding the
indefinite suspension of its RHEO™ System clinical development program, a
decision which was made following a comprehensive review of the respective
costs and development timelines associated with the products in the
Company’s portfolio and in light of the Company’s financial position, it
was necessary to terminate a significant number of the Company’s
employees. Amongst those employees who were terminated, were members of
senior management who had employment contracts setting out contractual
cash severance entitlements. At the completion of the
reorganization transactions, OccuLogix will have reached agreement with
the majority of its senior management in which the senior management will
forego a fixed percentage of their cash severance entitlement in exchange
for stock options under the OccuLogix 2002 Stock Option Plan (the “Stock
Option Plan) exercisable into common shares of OccuLogix. The number of
options that each senior manager receives will be based on the cash
severance entitlement being foregone divided by a Black-Scholes valuation
of the options assuming the price per share of OccuLogix common stock
applicable to the PIPE and Minority Shareholders investors in the
reorganization transactions and an expected life of ten years. These
options will vest immediately and will have a ten year life. The exercise
price of these options will be the fair market value of OccuLogix’s common
stock on NASDAQ on the day immediately preceding the completion of the
reorganization transactions. The number of options provided to senior
management is subject to adjustment to account for the exercise price of
the options being greater than price per share applicable to the PIPE and
Minority Shareholders investors in the reorganization transactions. At the
date of this proxy statement, the per share purchase price is not
determinable.
|
$ | ||||
Accrued
severance costs (re senior management) at June 30, 2008
|
1,923,877 | |||
Value
of accrued severances to be converted
|
928,561 | |||
Additional
severance entitlements arising from the reorganization
transactions
|
1,984,385 | |||
Value
of that portion of the additional severance entitlement arising from the
reorganization transactions to be converted
|
1,777,196 | |||
Value
of severances to be converted arising from reorganization transaction
severances
|
2,705,757 | |||
Black-Scholes
value of options granted as a replacement of severance
entitlements
|
2,705,757 |
Summary Dr.
/ (Cr.)
|
$ | |||
Cash
severance re accrued severance
|
(995,316 | ) | ||
Cash
severance re new severance entitlement
|
(207,189 | ) | ||
Total
cash severance
|
(1,202,505 | ) | ||
Accrued
severance obligation extinguished
|
(1,923,877 | ) | ||
Additional
Paid In Capital - arising from options granted in lieu of
severance
|
(2,705,757 | ) | ||
Additional
severance entitlement expense
|
1,984,385 |
|
e)
|
At the completion of
the reorganization transactions, Occulogix will make an amendment to the
Company’s Amended and Restated Certificate of Incorporation in
order to provide for a recapitalization in which the issued and
outstanding shares of the Company’s common stock will be reverse split in
a ratio of up to 25:1, with the actual ratio and the timing of such
reverse split to be determined by the Board in its sole discretion. The
impact of this reverse split will be subject to the final purchase price
per share of the PIPE and Merger transactions. At the date of
this proxy statement, the per share purchase price is not
determinable.
|
#
|
||||
Outstanding
Shares at June 30, 2008
|
57,306,145 | |||
Shares
issued in PIPE (see example above)
|
23,036,715 | |||
Shares
issued re Bridge Loans (see example above)
|
83,966,638 | |||
Shares
issued to Minority Shareholders (see example above)
|
79,248,175 | |||
Outstanding
Shares immediately prior to reverse 25:1 split
|
243,557,673 | |||
Number
of shares outstanding post the reverse 25:1 split
|
9,742,307 |
3.
|
Pro
Forma Consolidated Statement of Operations of
OccuLogix
|
|
a)
|
Included
in the historic Statement of Operations for the six months ended June 30,
2008 was accrued interest expense of $135,715 re the February 19, 2008 and
May 5, 2008 bridge loans and $132,000 in amortized finance charges both of
which are eliminated in the pro forma
adjustments.
|
|
b)
|
The
pro forma adjustments reflect the elimination of $571,130 and $1,312,178
related to the Minority Shareholders’ share of losses reported in the six
months ended June 30, 2008 and the year ended December 31, 2007,
respectively.
|
|
c)
|
The
reorganization transactions will result in an increase in the number of
outstanding shares of OccuLogix from 57,306,145 to approximately
243,557,673. Original shareholders will only own approximately 24% of
OccuLogix after the reorganization transactions. This substantial change
to the capitalization of the Company is believed to result in a change of
control for purposes of Section 382 for US Income Taxes. This section of
the code restricts a company’s ability to utilize prior periods losses in
the current period to an annual amount equal to the product of the market
capitalization of the Company and the risk-free rate for 30 year treasury
bonds..
|
|
i)
|
In
2007, the Company adopted the provisions of Financial Accounting Standards
Board (“FASB”) Interpretation No. 48, "Accounting for Uncertainty in
Income Taxes – An Interpretation of FASB Statement No. 109" (“FIN No. 48”)
and reported through retained earnings a deferred tax asset related to
RHEO™ activities of $4,600,000. On the subsequent reversal of all RHEO™
deferred tax assets at September 30, 2007 at the time of the charge for
the impairment of RHEO™ System intangibles, the full amount of the
$4,600,000 benefit related to prior periods was reversed. As a result of
the reorganization transactions, this prior period benefit would not have
been set up as a FIN 48 adjustment to retained earnings for prior periods
due to the Section 382 restriction on tax losses and as such would not
have been available to be reversed in
2007.
|
|
ii)
|
During
the year ended December 31, 2007, all tax losses relating to RHEO™
activities were reversed at September 30 ,2007 at the time of the charge
for the impairment of RHEO™ System intangibles. As a result of the
reorganization transactions, and the ability to file consolidated tax
returns, losses arising from RHEO™ activities in 2007 can be benefited.
The amount arising from RHEO™ activities in 2007 that was benefited were
limited to $2,420,962 to ensure that deferred tax assets did not exceed
deferred tax liabilities. If the recovery of tax losses is not probable,
deferred tax assets may not be reflected as an asset on the balance
sheet.
|
|
iii)
|
At
the beginning of 2007, deferred tax assets related to OccuLogix tax losses
benefited prior to 2007 were $1,947,322 and historically had been reversed
in 2007 at the time of the charge for the impairment of RHEO™ System
intangibles. With the change in control as a result of the reorganization
transactions, this benefited amount would be reversed at December 31, 2006
and as such would not have been available to be reversed in
2007.
|
Summary
Dr. / (Cr.)
|
June 30, 2008
$
|
December 31, 2007
$
|
||||||
Deferred
tax asset – reverse taxes benefited in prior periods to ensure deferred
tax assets do not exceed deferred tax liabilities because deferred tax
benefits can not exceed deferred tax liabilities if the recovery of the
tax loss is not probable.
|
234,408 | — | ||||||
Deferred
tax asset - reverse tax benefits previously recorded for the six months
ended June 30, 2008 because deferred tax benefits can not exceed deferred
tax liabilities if the recovery of the tax loss is not
probable.
|
984,758 | — | ||||||
Deferred
tax asset – benefit 2007 RHEO related tax losses as the ability to file
consolidated tax returns allows RHEO related losses to be
utilized
|
— | (2,420,962 | ) | |||||
Deferred
tax asset – benefited tax losses arising as an adjustment to retained
earnings on the adoption of FIN 48 which were reversed in 2007 but would
not have been booked as a result of the pro forma change of control and
are no longer available to be reversed in 2007
|
— | (4,600,000 | ) | |||||
Deferred
tax asset – reflects tax losses benefited prior to 2007 which were
reversed in 2007 but as a result of the pro forma change of control must
be reversed at Dec.2006 and are no longer available to be reversed in
2007
|
— | (1,947,322 | ) | |||||
Impact
on Statement of Operations
|
1,219,166 | (8,968,284 | ) |
|
d)
|
At the completion of
the reorganization transactions, Occulogix will make an amendment to the
Company’s Amended and Restated Certificate of Incorporation in
order to provide for a recapitalization in which the issued and
outstanding shares of the Company’s common stock will be reverse split in
a ratio of up to 25:1, with the actual ratio and the timing of such
reverse split to be determined by the Board in its sole discretion. The
impact of this reverse split will be subject to the final purchase price
per share of the PIPE and Merger transactions. At the date of
this proxy statement, the per share purchase price is not
determinable.
|
June 30, 2008
#
|
December 31, 2007
#
|
|||||||
Weighted
average number of shares outstanding - basic and diluted
|
57,306,145 | 56,628,186 | ||||||
New
shares issued
|
||||||||
Shares
issued in PIPE (see example above)
|
23,036,715 | 23,036,715 | ||||||
Shares
issued re Bridge Loans (see example above)
|
83,966,638 | 83,966,638 | ||||||
Shares
issued to Minority Shareholders (see example above)
|
79,248,175 | 79,248,175 | ||||||
Total
new shares issued
|
186,251,528 | 186,251,528 | ||||||
Outstanding
Shares immediately prior to reverse 25:1 split
|
243,557,673 | 242,879,714 | ||||||
Number
of shares outstanding post the reverse 25:1 split
|
9,742,307 | 9,715,189 | ||||||
Decrease
in number of shares re reverse 25:1 split
|
(233,815,366 | ) | (233,164,525 | ) |
1.
|
TO VOTE FOR all nominees (except
as marked to the contrary) o
|
Elias
Vamvakas
|
Richard
Lindstrom
|
Thomas N.
Davidson
|
Adrienne L.
Graves
|
Eric Donsky
|
Donald
Rindell
|
2.
|
FOR o
AGAINST o
ABSTAIN o
|
3.
|
FOR o
AGAINST o
ABSTAIN o
|
4.
|
FOR o
AGAINST o
ABSTAIN o
|
5.
|
FOR o
AGAINST o
ABSTAIN o
|
6.
|
FOR o
AGAINST o
ABSTAIN o
|
7.
|
FOR o
AGAINST o
ABSTAIN o
|
8.
|
FOR o
AGAINST o
ABSTAIN o
|
9.
|
FOR o
AGAINST o
ABSTAIN o
|
10.
|
FOR o
AGAINST o
ABSTAIN o
|
11.
|
In the discretion of the proxy
holder, such other business as may properly come before the
meeting.
|
Number of Shares of Common
Stock
|
Signature of
Stockholder
|
|
Name of
Stockholder
|
||
(Please print
clearly)
|
*
|
Please see other side for notes on
how to use this proxy card.
|
1.
|
A
stockholder has the right to appoint a person to represent the stockholder
at the Annual and Special Meeting other than the management
representatives designated in this proxy card. Such right may
be exercised by inserting, in the space provided, the name of the other
person the stockholder wishes to appoint. Such other person
need not be a stockholder.
|
2.
|
To
be valid, this proxy card must be signed and deposited with the Secretary
of the Corporation, c/o Mellon Investor Services LLC,
P.O. Box 3862, S. Hackensack, New Jersey 07606-9371
or via fax at 201-680-4671, Attention: Proxy Services, in the
United States, or Equity Transfer & Trust Company, 200 University
Avenue, Suite 400, Toronto, Ontario, M5H 4H1 or via fax at
416-595-9593, in Canada, prior to the Annual and Special
Meeting.
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3.
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If
you are an individual, please sign exactly as your shares are
registered. If the stockholder is a corporation, this proxy
card must be executed by a duly authorized officer or attorney of the
stockholder, and, if the corporation has a corporate seal, its corporate
seal should be affixed. If the shares are registered in the
name of an executor, administrator or trustee, please sign exactly as the
shares are registered. If the shares are registered in the name
of the deceased or other stockholder, the stockholder’s name must be
printed in the space provided, the proxy card must be signed by the legal
representative with his name printed below his signature and evidence of
authority to sign on behalf of the stockholder must be attached to this
proxy card.
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4.
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Reference
is made to the accompanying proxy statement (which is also a management
information circular under Canadian law) for further information regarding
completion and use of this proxy card and other information pertaining to
the Annual and Special Meeting. Before completing this proxy
card, beneficial owners should carefully review the section in the
accompanying proxy statement entitled “Information about this Proxy
Material and Voting—Voting Rights and Outstanding Shares — Beneficial Owner: Shares
Registered in the Name of a Broker or Bank” and should carefully
follow the instructions of the securities dealer or other intermediary who
sent this proxy card.
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5.
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If
a share is held by two or more persons, any one of them present or
represented by proxy at the Annual and Special Meeting may, in the absence
of the other or others, vote in respect thereof, but if more than one of
them are present or represented by proxy, they shall vote together in
respect of each share so
held.
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