<PAGE>
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
IMPATH Inc.
(Name of Registrant as Specified In Its Charter)
IMPATH Inc.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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./1/
4) Proposed maximum aggregate value of transaction:
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing party:
4) Date Filed:
/1/ Set forth the amount on which the filing fee is calculated and state
how it was determined.
<PAGE>
[IMPATH Inc.'s Logo Appears Here]
--------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 2, 1997
--------------------
New York, New York
April 25, 1997
To the Holders of Common Stock
of IMPATH Inc.:
The Annual Meeting of Stockholders of IMPATH Inc. will be held
at The New York Hilton, 1335 Avenue of the Americas, New York, New York,
on Monday, June 2, 1997 at 5:00 P.M. local time for the following
purposes, as more fully described in the accompanying Proxy Statement:
1. To elect all six members of the Board of Directors of the
Company.
2. To consider and take action upon a proposal to approve the
IMPATH Inc. 1997 Long Term Incentive Plan.
3. To consider and take action upon a proposal to ratify the
Board of Directors' selection of KPMG Peat Marwick LLP to serve as the
Company's independent accountants for the Company's fiscal year ending
December 31, 1997.
4. To transact such other business as may properly come before
the Meeting or any adjournment or adjournments thereof.
The close of business on April 11, 1997 has been fixed by the
Board of Directors as the record date for the determination of the
stockholders entitled to notice of, and to vote at, the Meeting. A list
of the stockholders entitled to vote at the Meeting may be examined at
the offices of IMPATH Inc. at 1010 Third Avenue, New York, New York,
during the ten day period preceding the Meeting.
By Order of the Board of Directors,
John P. Gandolfo
Secretary
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. IF
YOU DO NOT EXPECT TO BE PRESENT, PLEASE MARK, SIGN AND DATE THE ENCLOSED
FORM OF PROXY AND MAIL IT IN THE ENCLOSED RETURN ENVELOPE, WHICH REQUIRES
NO POSTAGE IF MAILED IN THE UNITED STATES, SO THAT YOUR VOTE CAN BE
RECORDED.
<PAGE>
IMPATH Inc.
--------------------
PROXY STATEMENT
--------------------
This Proxy Statement, which will be mailed commencing on or
about April 25, 1997 to the persons entitled to receive the accompanying
Notice of Annual Meeting of Stockholders, is provided in connection with
the solicitation of Proxies on behalf of the Board of Directors of IMPATH
Inc. for use at the Annual Meeting of Stockholders to be held on June 2,
1997, and at any adjournment or adjournments thereof, for the purposes
set forth in such Notice. The Company's executive offices are located at
1010 Third Avenue, New York, New York 10021.
At the close of business on April 11, 1997, the record date
stated in the accompanying Notice, the Company had issued and outstanding
5,315,198 shares of common stock, $.005 par value ("Common Stock"), each
of which is entitled to one vote with respect to each matter to be voted
on at the Meeting. The Company has no class or series of stock
outstanding other than the Common Stock.
A majority of the issued and outstanding shares of Common Stock
present in person or by proxy will constitute a quorum for the
transaction of business at the Meeting. Abstentions and broker non-votes
(as hereinafter defined) will be counted as present for the purpose of
determining the presence of a quorum.
Directors are elected by plurality vote. Adoption of proposals
2 and 3 will require the affirmative vote of a majority of the shares of
Common Stock present and entitled to vote thereon at the meeting. Shares
held by stockholders who abstain from voting on a matter will be treated
as "present" and "entitled to vote" on the matter and, thus, an
abstention has the same legal effect as a vote against the matter.
However, in the case of a broker non-vote or where a stockholder
withholds authority from his proxy to vote the proxy as to a particular
matter, such shares will not be treated as "present" and "entitled to
vote" on the matter and, thus, a broker non-vote or the withholding of a
proxy's authority will have no effect on the outcome of the vote on the
matter. A "broker non-vote" refers to shares of Common Stock represented
at the Meeting in person or by proxy by a broker or nominee where (i)
such broker or nominee has not received voting instructions on a
particular matter from the beneficial owners or persons entitled to vote
and (ii) such broker or nominee does not have discretionary voting power
on such matter.
<PAGE>
-2-
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The stockholders (including any "group," as that term is used in
Section 13(d)(3) of the Securities Exchange Act of 1934) who, to the
knowledge of the Board of Directors of the Company, owned beneficially
more than five percent of any class of the outstanding voting securities
of the Company as of April 1, 1997, and their respective shareholdings as
of such date (according to information furnished by them to the Company),
are set forth in the following table. Except as indicated in the
footnotes to the table, all of such shares are owned with sole voting and
investment power.
<TABLE>
<CAPTION>
NAME AND ADDRESS SHARES OF COMMON STOCK PERCENT
OWNED BENEFICIALLY (1) OF CLASS (1)
- ------------------------------------------- ---------------------- ------------
<S> <C> <C>
Salomon Inc (2)............................ 650,017 12.2%
Salomon Brothers Inc
Salomon Brothers Holding Company Inc.
PB-SB Ventures, Inc.
7 World Trade Center
New York, New York 10048
Pilgrim Baxter & Associates Ltd. (3)....... 399,000 7.5%
Harold J. Baxter
Gary L. Pilgrim
1255 Drummers Lane, Suite 300
Wayne, Pennsylvania 19087
Cross Atlantic Partners K/S (4)............ 315,875 5.9%
CAP/Hambro, L.P.
CAP/Hambro, Inc.
Hambro America, Inc.
c/o Hambro Health International, Inc.
650 Madison Avenue
New York, New York 10022
Wellington Management Company, LLP (5)..... 303,900 5.7%
75 State Street
Boston, Massachusetts 02109
</TABLE>
- ----------------
(1) Amounts and percentages include outstanding warrants or options
which are exercisable within 60 days of April 1, 1997.
(2) This information is based upon a Report on Schedule 13G filed by
these stockholders with the Securities and Exchange Commission.
Includes 4,916 shares issuable pursuant to currently exercisable
warrants.
(3) This information is based upon a Report on Schedule 13G filed by
these stockholders with the Securities and Exchange Commission.
(4) This information is based upon a Report on Schedule 13G filed by
these stockholders with the Securities and Exchange Commission.
Includes 28,799 shares issuable pursuant to currently exercisable
warrants.
(5) This information is based upon a Report on Schedule 13G filed by
this stockholder with the Securities and Exchange Commission.
<PAGE>
-3-
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of April 1, 1997, the number of
shares of Common Stock of the Company beneficially owned by each of the
Company's directors and nominees for directors, each executive officer
named in the Summary Compensation Table, and all directors and executive
officers as a group, based upon information furnished by such persons to
the Company.
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK PERCENT
NAME OWNED BENEFICIALLY(1) OF CLASS(1)
- ------------------------------------------- ---------------------- -----------
<S> <C> <C>
Anu D. Saad, Ph.D. (2)..................... 147,163 2.7%
John P. Gandolfo (3)....................... 30,887 *
Rogelio R. Rojas-Corona, M.D. (4).......... 83,430 1.6%
Bruce C. Horten, M.D. (5).................. 7,592 *
Richard P. Adelson (6)..................... 9,431 *
John L. Cassis (7)......................... 10,708 *
Richard J. Cote, M.D. (8).................. 109,203 2.1%
Richard Kessler (9)........................ 135,564 2.5%
Joseph A. Mollica, Ph.D. (10).............. 5,610 *
David B. Snow, Jr. (11).................... 5,610 *
All directors and officers as a group (13 568,298 10.2%
persons) (2), (3), (4), (5), (6), (7), ------- ----
(8), (9), (10), (11), (12)...............
</TABLE>
- ---------------
* Less than one percent.
(1) Amounts and percentages include outstanding warrants or options which
are exercisable within 60 days of April 1, 1997.
(2) Includes 121,768 shares issuable pursuant to currently exercisable
stock options and 532 shares issuable pursuant to currently
exercisable warrants.
(3) Includes 13,558 shares issuable pursuant to currently exercisable
stock options and 213 shares issuable pursuant to currently
exercisable warrants.
(4) Includes 1,853 shares issuable pursuant to currently exercisable
stock options and 160 shares issuable pursuant to currently
exercisable warrants.
(5) Includes 7,092 shares issuable pursuant to currently exercisable
stock options.
(6) Includes 5,868 shares issuable pursuant to currently exercisable
stock options.
(7) Includes 5,906 shares issuable pursuant to currently exercisable
stock options and 4,000 shares held by Tower Hall Profit Sharing
Trust for the benefit of Mr. Cassis. Does not include shares
beneficially owned by Salomon Brothers Holding Company Inc., PB-SB
Ventures, Inc., Cross Atlantic Partners K/S, CAP/Hambro, L.P. or
CAP/Hambro, Inc., which shares may be deemed to be beneficially owned
by Mr. Cassis. Mr. Cassis disclaims any such beneficial ownership.
<PAGE>
-4-
(8) Includes 39,112 shares issuable pursuant to currently exercisable
stock options.
(9) Includes 6,201 shares issuable pursuant to currently exercisable
stock options.
(10) Consists of 5,610 shares issuable pursuant to currently exercisable
stock options.
(11) Consists of 5,610 shares issuable pursuant to currently exercisable
stock options.
(12) Includes 11,231 shares issuable pursuant to currently exercisable
stock options held by another officer of the Company.
To the Company's knowledge, there have been no significant
changes in stock ownership or control of the Company since April 1, 1997.
I. ELECTION OF DIRECTORS
Six directors of the Company are to be elected at the Meeting,
each to serve until a successor shall have been chosen and qualified.
It is the intention of each of the persons named in the
accompanying form of Proxy to vote the shares of Common Stock represented
thereby in favor of the six nominees listed below, unless otherwise
instructed in such Proxy. Each such nominee is presently serving as a
director. In case any of the nominees is unable or declines to serve,
such persons reserve the right to vote the shares of Common Stock
represented by such Proxy for another person duly nominated by the Board
of Directors in such nominee's stead or, if no other person is so
nominated, to vote such shares only for the remaining nominees. The
Board of Directors has no reason to believe that any person named will be
unable or will decline to serve.
Certain information concerning the nominees for election as
directors of the Company is set forth below. Information concerning
ownership of the Common Stock by such nominees and other directors is set
forth in the preceding table. All of such information was furnished by
them to the Company.
NOMINEES FOR ELECTION
ANU D. SAAD, PH.D., age 40. Dr. Saad has been the President
and Chief Executive Officer of the Company since late 1993. Prior to
that, she was the Company's Scientific Director and Director of Business
Development. Before joining the Company in 1990, Dr. Saad was Assistant
Professor of Cell Biology and Anatomy at Cornell University Medical
College/New York Hospital. Dr. Saad has published extensively and is the
recipient of many awards, including from the National Institute of
Health, Muscular Dystrophy Association, Andrew W. Mellon Foundation,
Charles H. Revson Foundation, Inc. and the American Cancer Society. Dr.
Saad received her Bachelor's Degree from the University of Pennsylvania
and her Ph.D. in Developmental Biology from the University of Chicago.
Dr. Saad has been a director of the Company since 1993.
<PAGE>
-5-
JOHN L. CASSIS, age 48. Mr. Cassis has been the Chairman of
the Board of Directors of the Company since 1993. Mr. Cassis joined
Hambro America Biosciences, Inc. in 1994 as a partner. Prior to that, he
was a director of Salomon Brothers Inc, where he co-founded Salomon
Brothers Venture Capital in 1986 and headed it from 1990 to 1994. From
1976 to 1981, he was a Managing Director of Ardshiel Associates Inc., a
merchant bank. In 1972, Mr. Cassis was employed by Johnson & Johnson
where he founded the J&J Development Corp., that firm's venture capital
arm, and was J&J's Manager of Acquisitions. Mr. Cassis is currently on
the Board of Directors of Healthtech Services Inc., and Ilex Oncology
Inc., and is Chairman of the Board of Directors of Dome Imaging Systems,
Inc. Mr. Cassis received his Bachelor's Degree and M.B.A. from Harvard
University. Mr. Cassis has been a director of the Company since 1991.
RICHARD J. COTE, M.D., age 42. Dr. Cote was one of the
founders of IMPATH and continues to act as the Company's principal
Consulting Immunopathologist. Dr. Cote is Attending Pathologist at the
Kenneth J. Norris Cancer Center and an Associate Professor of Pathology
at the University of Southern California. He was trained at the
University of Michigan, Cornell University Medical College/New York
Hospital and Memorial Sloan-Kettering Cancer Center. Dr. Cote holds
patents on monoclonal antibody technology and is a leader in the
developmental use of monoclonal antibodies in cancer diagnosis and
prognosis. Dr. Cote is also known for his work in breast, prostate and
bladder cancers and in the immunopathological analysis of cancer. Dr.
Cote has been or is on the Scientific Advisory Boards of Johnson &
Johnson and Neoprobe Corporation, and is a consultant to various national
and international organizations, such as the National Cancer Institute.
Dr. Cote graduated Phi Beta Kappa from the University of California with
a B.S. in Biology and a B.A. in Chemistry. He received his M.D. from the
University of Chicago Pritzker School of Medicine. Dr. Cote has been a
director of the Company since 1988.
RICHARD KESSLER, age 66. Mr. Kessler is a private investor and
is President of Empire City Capital Corporation and President and
Managing Partner of various closely held corporations and partnerships
with a broad base of investments. Mr. Kessler received his Bachelor's
Degree in Economics from Colgate University. Mr. Kessler has been a
director of the Company since 1991.
JOSEPH A. MOLLICA, PH.D., age 56. Dr. Mollica is the Chairman
and Chief Executive Officer of Pharmacopeia, Inc., a Princeton, New
Jersey-based company engaged in the field of research to discover low
molecular weight drug compounds using combinatorial chemistry and
automated high throughput screening. Prior to joining Pharmacopeia, Dr.
Mollica was President and Chief Executive Officer of DuPont Merck
Pharmaceutical Company. He also served as Vice President, Medical
Products for DuPont, and Senior Vice President of Ciba-Geigy Corp. Dr.
Mollica is currently on the Boards of USP, Inc. and Biotechnology Council
of New Jersey. He received his Bachelor's Degree from the University of
Rhode Island and his M.S. and Ph.D. from the University of Wisconsin.
Dr. Mollica has been a director of the Company since 1995.
<PAGE>
-6-
DAVID B. SNOW, JR., age 42. Mr. Snow has been the Executive
Vice President of Oxford Health Plans, Inc. since 1993. He is
responsible for the Marketing, Medical Delivery/Health Services and
Government Programs for the 850,000 member managed health care company,
and is President of several Oxford subsidiaries. From 1988 to 1992, Mr.
Snow was co-founder and President of Managed Healthcare Systems, Inc.
("MHS"), a managed health care company committed to the development and
operation of Medicaid managed care programs. Prior to MHS, Mr. Snow
worked for U.S. Healthcare Inc., as Chief Operating Officer and
subsequently President of its 300,000 member HMO subsidiary, Health
Maintenance Organization of New Jersey, Inc. Mr. Snow received his
Bachelor's Degree in Economics from Bates College and his Masters Degree
in Health Care Administration from Duke University. Mr. Snow has been a
director of the Company since 1995.
The current directors of the Company were elected to the Board
pursuant to the terms of a shareholders' agreement which terminated upon
the completion of the Company's initial public offering on February 26,
1996. Marcy H. Shockey resigned as a director of the Company on March
27, 1997.
The Board of Directors has a Compensation Committee, an Audit
Committee and a Nominating Committee. The members of the Compensation
Committee are John L. Cassis, Richard Kessler and David B. Snow, Jr.
Until her resignation on March 27, 1997, Marcy H. Shockey was a member of
the Compensation Committee. The Compensation Committee makes
recommendations to the full Board as to the compensation of senior
management, administers the Company's 1989 Stock Option Plan and
determines the persons who are to receive options and the number of
shares subject to each option.
The members of the Audit Committee are John L. Cassis and
Joseph A. Mollica, Ph.D. Until her resignation on March 27, 1997, Marcy
H. Shockey was a member of the Audit Committee. The Audit Committee acts
as a liaison between the Board and the independent accountants and
annually recommends to the Board the appointment of the independent
accountants. The Audit Committee reviews with the independent
accountants the planning and scope of the audits of the financial
statements, the results of those audits and the adequacy of internal
accounting controls and monitors other corporate and financial policies.
The members of the Nominating Committee are John L. Cassis,
Richard J. Cote, M.D. and Anu D. Saad, Ph.D. Until her resignation on
March 27, 1997, Marcy H. Shockey was a member of the Nominating
Committee. The Nominating Committee recommends to the Board of Directors
nominees for election as directors of the Company.
The Board of Directors met nine times during the fiscal year
ended December 31, 1996. Each of the Audit Committee and the Nominating
Committee met one time during the fiscal year ended December 31, 1996.
The Compensation Committee met two times during the fiscal year ended
December 31, 1996. Each of the persons named above attended at least 75%
of the meetings of the Board of Directors and meetings of any
<PAGE>
-7-
Committees of the Board on which such person served which were held
during the time that such person served.
The certificate of incorporation of the Company (the
"Certificate") provides that a director of the Company shall not be
personally liable to the Company or its stockholders for monetary damages
for breach of fiduciary duty as a director, except for liability (i) for
any breach of the director's duty of loyalty to the Company or its
stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii) for
the unlawful payment of dividends or unlawful stock purchases under
Section 174 of the Delaware General Corporation Law (the "Delaware Law"),
or (iv) for any transaction from which the director derived any improper
personal benefit. If the Delaware Law is amended to eliminate further or
limit the personal liability of directors, then the liability of a
director of the Company shall be eliminated or limited to the fullest
extent permitted by the Delaware Law, as so amended. Any repeal or
modification of such provision of the Certificate by the stockholders of
the Company shall be prospective only and shall not adversely affect any
right or protection of a director of the Company existing at the time of
such repeal or modification.
EXECUTIVE OFFICERS
Certain information concerning the executive officers of the
Company is set forth below. Information concerning ownership of Common
Stock by such executive officers is set forth under "Security Ownership
of Management." All information was furnished by them to the Company.
ANU D. SAAD, PH.D. Information concerning Dr. Saad is set
forth under "Nominees for Election."
JOHN P. GANDOLFO, age 36. Mr. Gandolfo has been Executive Vice
President and Chief Financial Officer of the Company since April 1994 and
Chief Operating Officer of the Company since November 1995. From 1987
through March 1994, Mr. Gandolfo served as Controller, Senior Vice
President and Chief Financial Officer of Medical Resources Inc., a
publicly held medical diagnostic imaging management company. Mr.
Gandolfo was employed at the accounting firm of Price Waterhouse from
1982 to 1986, and with Dow Jones Telerate, Inc. in 1987. Mr. Gandolfo is
a Certified Public Accountant and received his B.A. in Economics and
Business Administration from Rutgers University.
ROGELIO R. ROJAS-CORONA, M.D., age 56. Dr. Rojas-Corona has
been Vice President, Medical Affairs since 1990 and Medical Director,
Western Division of the Company since December 1995. Prior to joining
IMPATH, Dr. Rojas-Corona was Division Head of Immunopathology and Chief
of the Immunology Laboratory at Montefiore Medical Center. Dr. Rojas-
Corona was trained at Harvard University, Indiana University Medical
Center, the University of Pittsburgh, Albert Einstein College of Medicine
and Montefiore Medical Center. He was also Assistant Professor of
Pathology at Albert Einstein College of Medicine. He earned his M.D.
from the National University of Mexico.
<PAGE>
-8-
BRUCE C. HORTEN, M.D., age 53. Dr. Horten has been Medical
Director, Eastern Division of the Company since December 1993. Dr.
Horten received his anatomic pathology training at New York Hospital-
Cornell University Medical College, and clinical pathology training at
the University of California, San Francisco and completed a
neuropathology fellowship with Lucien Rubinstein at Stanford University.
Dr. Horten earned his M.D. from Duke University. Dr. Horten has been a
member of the pathology staffs at the University of California-San
Francisco, Memorial Sloan-Kettering Cancer Center and most recently at
Lenox Hill Hospital. He continues to serve as a consultant at Lenox Hill
Hospital and an instructor in pathology at Cornell University Medical
College.
RICHARD P. ADELSON, age 31. Mr. Adelson has been Vice
President of Sales since August 1996. He was Director of Sales from
August 1994 to August 1996. From January 1992 to August 1994, Mr. Adelson
served as District and Regional Sales Manager for the New York Metro
Region. Mr. Adelson received his Bachelor's Degree in Biology from the
State University of New York at Albany and did graduate studies at the
Harvard School of Dental Medicine. Prior to joining IMPATH, Mr. Adelson
was a Sales Representative for Surgipath Medical Industries, Inc., a
medical equipment company.
YIATIN CHU, age 29. Ms. Chu has been Director of Corporate
Marketing since July 1994. In addition to managing new product
introductions, Ms. Chu is responsible for overseeing research studies.
Since August 1991, she has also served as Project Manager and Director
for IMPATH's biotechnology services. Ms. Chu received her Bachelor's
Degree in Economics from the State University of New York at Binghamton
and her M.B.A. from Boston University.
<PAGE>
-9-
EXECUTIVE COMPENSATION
The following table sets forth information for the fiscal years
ended December 31, 1996 and 1995 concerning the compensation of the Chief
Executive Officer of the Company, and the four other most highly
compensated executive officers of the Company whose total annual salary
and bonus exceeded $100,000 during the fiscal year ended December 31,
1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPEN-
ANNUAL COMPENSATION SATION
------------------- ---------
SHARES ALL OTHER
FISCAL UNDERLYING COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS SATION (1)
- ----------------------------------------------- ------ ------- -------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Anu D. Saad, Ph.D.............................. 1996 $190,000 $90,000 30,000 $1,766
President and Chief Executive Officer 1995 165,000 50,000 -- --
John P. Gandolfo............................... 1996 175,000 50,000 25,000 2,041
Executive Vice President, Chief Operating 1995 140,000 30,000 -- 758
Officer and Chief Financial Officer
Rogelio R. Rojas-Corona, M.D................... 1996 230,000 -- 10,000 2,300
Vice President, Medical Affairs and Medical 1995 210,000 -- -- 1,143
Director, Western Division
Bruce C. Horten, M.D........................... 1996 210,000 -- 7,500 2,150
Medical Director, Eastern Division 1995 200,000 -- -- 1,083
Richard P. Adelson............................. 1996 115,000 65,000 13,000 1,225
Vice President of Sales 1995 90,000 45,000 -- 617
</TABLE>
-----------
(1) Consists of contributions made by the Company to the IMPATH Inc.
401(k) Retirement Savings Plan on behalf of such executive officer.
The following table sets forth the grants of stock options to
the executive officers named in the Summary Compensation Table during the
fiscal year ended December 31, 1996. The amounts shown for each of the
named executive officers as potential realizable values are based on
arbitrarily assumed annualized rates of stock price appreciation of five
percent and ten percent over the exercise price of the options during the
full terms of the options. No gain to the optionees is possible without
an increase in stock price which will benefit all stockholders
proportionately. These potential realizable values are based solely on
arbitrarily assumed rates of appreciation required by applicable
Securities and Exchange Commission regulations. Actual gains, if any, on
option exercises and holdings of Common Stock are dependent on the future
performance of the Common Stock and overall stock market conditions.
There can be no assurance that the potential realizable values shown in
this table will be achieved.
<PAGE>
-10-
OPTION GRANTS IN THE FISCAL YEAR ENDED
DECEMBER 31, 1996
<TABLE>
<CAPTION>
Potential Realizable Value
at Assumed Annual Rates
of Stock Price
Appreciation for Option
Individual Grants Term
-------------------------------------------------- -----------------------------
<S> <C> <C> <C> <C> <C> <C>
% of Total
Options
Granted
Options Employees Exercise or
Granted in Base Price Expiration
Name (#) Fiscal Year ($/Sh) Date 5% 10%
- ------------------------------------------------------------------------------------------------------------------
Anu D. Saad, Ph.D. 30,000 12.3% 13.00 1/1/06 $245,269 $621,560
John P. Gandolfo 25,000 10.2% 13.00 1/1/06 204,391 517,966
Rogelio R. Rojas- 5,000 2.0% 13.00 1/1/06 40,878 103,593
Corona, M.D. 5,000 2.0% 16.75 12/16/06 52,670 133,476
Bruce C. Horten, M.D. 2,500 1.0% 13.00 1/1/06 20,439 51,797
5,000 2.0% 16.75 12/16/06 52,670 133,476
Richard P. Adelson 3,000 1.2% 13.00 1/1/06 24,527 62,156
10,000 4.1% 13.75 8/15/06 74,256 199,687
</TABLE>
The following table sets forth the number of shares of Common
Stock acquired upon the exercise of options by the executive officers of
the Company named in the Summary Compensation Table during 1996, the
aggregate market value, net of exercise price of such shares on the date
of such exercise for each such executive officer and the number and value
of options held by such officers at December 31, 1996.
AGGREGATED OPTION EXERCISES IN LAST FISCAL
YEAR AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Options In-the-Money Options
at 1996 Fiscal Year End (#) at 1996 Fiscal Year End (1)
--------------------------- ---------------------------
Shares Acquired Value
Name on Exercise (#) Realized Exercisable Unexercisable Exercisable Unexercisable
---- --------------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Anu D. Saad, Ph.D. 17,720 $269,494 106,203 67,320 $1,653,814 $819,678
John P. Gandolfo 11,567 125,036 7,015 34,779 64,923 343,936
Rogelio R. Rojas- -- -- 22,890 4,083 401,152 33,477
Corona, M.D.
Bruce C. Horten, M.D. -- -- 5,626 5,734 86,407 81,589
Richard P. Adelson -- -- 6,888 16,744 97,772 139,129
</TABLE>
----------------
(1) In-the-money options are those where the fair market value of the
underlying Common Stock exceeds the exercise price of the option. The
value of in-the-money options is determined in accordance with
regulations of the Securities and Exchange Commission by subtracting the
aggregate exercise price of the option from the aggregate year-end value
of the underlying Common Stock.
<PAGE>
-11-
1989 STOCK OPTION PLAN
The Company sponsors the 1989 Stock Option Plan (the "1989
Plan"). Under the 1989 Plan, options to purchase up to an aggregate of
884,688 shares of Common Stock may be granted to key employees, directors
and consultants of the Company.
The following discussion of the material features of the 1989
Plan is qualified by reference to the text of the Plan filed with the
Securities and Exchange Commission.
The 1989 Plan is administered by the Compensation Committee
(the "Committee") of the Board of Directors which determines the persons
who are to receive options and the number of shares to be subject to each
option. In selecting individuals for options and determining the terms
thereof, the Committee may take into consideration any factors it deems
relevant including present and potential contributions to the success of
the Company. Options granted under the 1989 Plan must be exercised
within a period fixed by the Committee, which may not exceed ten years
from the date of the grant of the option or, in the case of incentive
stock options granted to any holder on the date of grant of more than ten
percent of the total combined voting power of all classes of stock of the
Company, five years from the date of grant of the option. Options may be
made exercisable in whole or in installments, as determined by the
Committee.
Options may not be transferred other than by will or the laws
of descent and distribution and during the lifetime of an optionee may be
exercised only by the optionee. The exercise price may not be less than
the par value of the Common Stock or, in the case of incentive stock
options, not less than the fair market value of the Common Stock on the
date of grant of the option. In the case of incentive stock options
granted to any holder on the date of grant of more than ten percent of
the total combined voting power of all classes of stock of the Company
and its subsidiaries, the exercise price may not be less than 110% of the
market value per share of the Common Stock on the date of grant. Unless
designated as "incentive stock options" intended to qualify under Section
422 of the Internal Revenue Code of 1986 (the "Code"), options which are
granted under the 1989 Plan are intended to be "nonstatutory stock
options". The exercise price may be paid in cash, shares of Common Stock
owned by the optionee, or in a combination of cash and shares.
The 1989 Plan provides that, in the event of changes in the
corporate structure of the Company or certain events affecting the Common
Stock, the Board of Directors may, in its discretion, make adjustments
with respect to the number of shares which may be issued under the Plan
or which are covered by outstanding options, in the exercise price per
share, or both. The Board of Directors may in its discretion provide
that in connection with any merger or consolidation involving the Company
or any sale or transfer by the Company of all or substantially all its
assets, all outstanding options under the 1989 Plan will become
exercisable in full on or prior to the effective date of the merger,
consolidation, sale or transfer.
<PAGE>
-12-
As of December 31, 1996, options to purchase 853,656 shares of
Common Stock were outstanding under the Plan and 28,730 shares of Common
Stock remained available for future grants of stock options.
COMPENSATION OF DIRECTORS
The Company pays its directors who are not employees of the
Company a fee of $1,000 for each directors' meeting attended. On January
1, 1996, the Company granted Richard J. Cote, M.D. stock options to
purchase 12,000 shares of Common Stock at a purchase price of $13.00 per
share. The options vest over a four-year period following the date of
grant.
COMPENSATION COMMITTEE
INTERLOCKS AND INSIDER PARTICIPATION
All executive officer compensation decisions have been made by
the Compensation Committee of the Board of Directors. The current
members of the Compensation Committee are John L. Cassis, Richard Kessler
and David B. Snow, Jr. Marcy H. Shockey was a member of the Compensation
Committee until her resignation from the Board of Directors on March 27,
1997. All of the current and former members of the Compensation
Committee are and have been independent directors of the Company.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under Section 16(a) of the Securities Exchange Act of 1934,
directors and executive officers of the Company, and persons who own more
than ten percent of the Common Stock, are required to file reports
concerning their beneficial ownership of securities of the Company with
the Securities and Exchange Commission. Directors, executive officers
and greater than ten percent stockholders are required by SEC regulations
to furnish the Company with copies of all Section 16(a) reports they
file.
To the Company's knowledge, based solely on a review of copies
of such reports furnished to the Company and confirmations that no other
reports were required during the fiscal year ended December 31, 1996, its
directors, executive officers and greater than ten percent stockholders
complied with all Section 16(a) filing requirements.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On August 20, 1996, the Company filed a registration statement
with the Securities and Exchange Commission covering the sale of shares
of Common Stock issued prior to its initial public offering to certain
directors, executive officers and other stockholders. To date, the
Company has incurred an aggregate of $68,600 in expenses in connection
with the registration of such sales.
<PAGE>
-13-
PERFORMANCE GRAPH
The following performance graph compares the cumulative total
shareholder return on the Common Stock to the S&P 500 Index and to the
SIC Code Index for the Company since its initial public offering. The
SIC Code Index is composed of 32 public companies with the same Standard
Industrial Classification Code as IMPATH. The graph assumes that $100
was invested in the Common Stock at the Company's initial public offering
price of $13.00 and in each Index on February 20, 1996 and that all
dividends were reinvested.
CUMULATIVE TOTAL RETURN
COMPARISON GRAPH
[Graph of the data set forth in the table below appears here.]
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
02/21/96 03/31/96 06/30/96 09/30/96 12/31/96
IMPATH Inc. 100.00 98.33 120.00 81.67 125.00
SIC Code Index 100.00 105.53 104.81 88.74 83.27
S&P 500 Index 100.00 100.96 105.49 108.75 117.82
- ------------------------------------------------------------------
</TABLE>
<PAGE>
-14-
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors (the
"Committee") determines the compensation arrangements for executive
officers of the Company. In formulating the Company's executive
compensation program, the Committee seeks to provide competitive levels
of compensation which will assist the Company in attracting and retaining
qualified executives, reward individual initiative and achievement and
integrate executive pay with the interests of the Company's stockholders
in achieving the Company's annual and long-term performance goals.
The compensation program for the Company's executives consists of
base salary, an annual incentive bonus plan for the chief executive
officer and the chief financial officer, a quarterly bonus plan for the
company's other executives and stock options. The Company's salary
levels are intended to be consistent with competitive requirements and
levels of responsibility. Salary levels are largely determined through
comparisons with companies of similar size and complexity. Salary
adjustments, which are normally made annually, are determined by
monitoring the competitive market place, the overall financial
performance of the Company, the performance of the individual executive
and any increased responsibilities assumed by the executive. On the
basis of the foregoing factors, the Committee established a 1996 salary
of $190,000 for Dr. Saad, the President and Chief Executive Officer of
the Company.
Awards under the annual incentive bonus plan are based upon of
the level of achievement by the Company of its annual financial plan as
approved by the Board of Directors. The financial plan focuses on
achievement of certain levels of revenues and pre-tax income, which the
Committee believes are primary determinants of share price over time.
The financial plan is established at the beginning of each fiscal year by
the Board of Directors after consultation with management. A target
bonus opportunity is established for each executive based on his or her
level of responsibility, potential contribution to the success of the
Company and competitive considerations. To determine the actual award to
an executive, a year-end assessment is made of the executive's individual
performance including contributions in specific areas such as leadership,
sound decision making, financial and general management, creativity and
achievement of assigned projects. This individual assessment, combined
with the Company's financial results, insures that individual awards
reflect an executive's specific contribution to the success of the
Company. For 1996, payments under the annual incentive bonus plan were
$90,000 to Dr. Saad and $50,000 to Mr. Gandolfo.
The Company periodically grants stock options to its executive
officers and other key employees. Stock option grants are intended to
provide the Company's executives and other key employees with a
significant incentive to work to maximize stockholder value. The
Committee strongly believes that by providing its executives and key
employees who have substantial responsibility for the management and
growth of the Company with an opportunity to profit from increases in the
value of the Company's stock, the interests of the
<PAGE>
-15-
Company's stockholders and executives will be most closely aligned. The
number of options granted to executive officers is based on individual
performance and level of responsibility and must be sufficient in size to
provide a strong incentive for executives to work for the long term
business interests of the Company.
Section 162(m) of the Code, which became effective January 1,
1994, limits the deductibility of compensation exceeding $1 million to
each of the Company's Chief Executive Officer and four other most highly
compensated executive officers. Qualifying performance-based
compensation meeting the requirements promulgated by the Internal Revenue
Service under Section 162(m) will not be subject to the deduction limit.
The Company intends to qualify its executive compensation arrangements to
comply with such requirements.
The Committee believes that the compensation program for
executives of the Company is competitive with the compensation programs
provided by other companies with which the Company competes for executive
talent and by other companies of similar size in similar industries. The
Committee believes that amounts paid under the incentive bonus plan are
appropriately related to Company and individual performance, yielding
awards which are directly linked to the annual and longer term financial
results of the Company. The Committee also believes that the stock
option program provides opportunities to executives that are consistent
with the returns that are generated on behalf of the Company's
stockholders.
Marcy H. Shockey was a member of the Compensation Committee
during 1996 and until her resignation from the Board of Directors on
March 27, 1997. David B. Snow, Jr. became a member of the Compensation
Committee on March 27, 1997.
THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
John L. Cassis
Richard Kessler
David B. Snow, Jr.
<PAGE>
-16-
II. APPROVAL OF THE IMPATH INC.
1997 LONG TERM INCENTIVE PLAN
The Board of Directors of the Company believes that attracting
and retaining highly qualified key employees and directors is essential
to the Company's growth and success. The Board of Directors also believes
that important advantages to the Company are gained by a comprehensive
compensation program which includes different types of incentives for
motivating such individuals and rewards for outstanding service. In this
regard, stock options and other stock-related awards have been and will
continue to be an important element of the Company's compensation program
because such awards enable employees and directors to acquire or increase
their proprietary interest in the Company, thereby promoting a close
identity of interests between such individuals and the Company's
stockholders. Such awards also provide to employees and directors an
increased incentive to expend their maximum efforts for the success of
the Company's business.
Stock options have been granted by the Company under its 1989
Stock Option Plan. Only a limited number of shares remain available for
stock option grants under the 1989 Plan. Stock option grants have been
an important aspect of the Company's compensation program in attracting
and retaining senior executives, directors and other key personnel. The
Board of Directors believes that it is in the interests of the Company
and its stockholders that the ability of the Company to grant stock
options and other stock-based awards be continued.
Accordingly, on April 11, 1997 the Board of Directors adopted,
subject to stockholder approval at the Meeting, the IMPATH Inc. 1997 Long
Term Incentive Plan (the "Incentive Plan"). In authorizing grants of a
range of awards, including options, stock appreciation rights ("SARs"),
restricted stock, performance awards and other stock-based awards, the
Incentive Plan is intended to give the Company greater flexibility to
respond to rapidly changing business, economic and regulatory
requirements and conditions. In addition, such flexibility will enhance
the ability of the Company to closely link compensation to performance.
The Incentive Plan will not become effective unless approved by the
holders of a majority of the shares of Common Stock present or
represented and voting thereon at the Meeting. The text of the Incentive
Plan is set forth in Exhibit A hereto.
The following discussion of the material features of the
Incentive Plan is qualified by reference to the text of the Incentive
Plan set forth in Exhibit A hereto.
Shares Subject to the Plan. Under the Incentive Plan, 300,000
shares of Common Stock will be available for issuance of awards. Shares
distributed under the Incentive Plan may be either newly issued shares or
treasury shares. If any shares subject to an Incentive Plan award are
forfeited or the award is settled in cash or otherwise terminates without
a distribution of shares, the shares subject to such award will again be
available for awards under the Incentive Plan. Thus, for example, if an
award is voluntarily surrendered in exchange for a new award, the shares
that were subject to the surrendered award would
<PAGE>
-17-
be available for the new award (or other awards) under the Incentive
Plan. The maximum number of shares of Common Stock which may be granted
to any individual under the Incentive Plan in any one-year period shall
not exceed 100,000 shares, subject to the adjustments described in the
next paragraph.
The Incentive Plan provides that, in the event of changes in
the corporate structure of the Company affecting the Common Stock, the
Compensation Committee (the "Committee") may adjust (i) the number and
kind of shares which may be issued in connection with awards, (ii) the
number and kind of shares issued or issuable in respect of outstanding
awards, and (iii) the exercise price, grant price, or purchase price
relating to any award, and the Committee may also provide for cash
payments relating to awards. The Committee may also adjust performance
conditions and other terms of awards in response to these kinds of events
or to changes in applicable laws, regulations or accounting principles.
The Incentive Plan provides that, in connection with any merger or
consolidation in which the Company is not the surviving corporation or
any sale or transfer by the Company of all or substantially all its
assets or any tender offer or exchange offer for or the acquisition,
directly or indirectly, by any person or group of all or a majority of
the then outstanding voting securities of the Company, all outstanding
options under the Incentive Plan will become exercisable in full on and
after (i) 15 days prior to the effective date of such merger,
consolidation, sale, transfer or acquisition or (ii) the date of
commencement of such tender offer or exchange offer, as the case may be.
Eligibility. Any employee, including any officer or employee-
director, of the Company and its subsidiaries or affiliated companies is
eligible to receive awards under the Incentive Plan. Directors of the
Company who are not employees are eligible for grants of stock options
under the Incentive Plan.
Administration. The Incentive Plan will be administered by the
Compensation Committee of the Board of Directors. Subject to the terms
and conditions of the Incentive Plan, the Committee is authorized to
designate participants who are employees, directors or consultants of the
Company and its subsidiaries and affiliated companies, determine the type
and number of awards to be granted, set terms and conditions of such
awards, prescribe forms of award agreements, interpret the Incentive
Plan, specify rules and regulations relating to the Incentive Plan, and
make all other determinations which may be necessary or advisable for the
administration of the Incentive Plan.
Stock Options and SARs. The Committee is authorized to grant
stock options, including both incentive stock options ("ISOs"), which can
result in potentially favorable tax treatment to the participant, and
nonqualified stock options, and also to grant SARs entitling the
participant to receive the excess of the fair market value of a share on
the date of exercise or other specified date over the grant price of the
SAR. The exercise price per share of Common Stock subject to an option
and the grant price of an SAR is determined by the Committee, provided
that the exercise price may not be less than the fair market value of the
Common Stock on the date of grant. The term of each such option or SAR,
the times at
<PAGE>
-18-
which each such option or SAR shall be exercisable, and provisions
requiring forfeiture of unexercised options at or following termination
of employment, generally will be fixed by the Committee, except no ISO or
SAR relating thereto will have a term exceeding ten years. Options may
be exercised by payment of the exercise price in cash, or in stock,
outstanding awards or other property (including notes or obligations to
make payment on a deferred basis, such as through "cashless exercises")
having a fair market value equal to the exercise price, as the Committee
may determine from time to time. Methods of exercise and settlement and
other terms of the SARs will be determined by the Committee.
Restricted Stock. The Incentive Plan also authorizes the
Committee to grant restricted stock. Restricted stock is an award of
shares which may not be disposed of by participants and which may be
forfeited in the event of certain terminations of employment prior to the
end of a restriction period established by the Committee. Such an award
would entitle the participant to all of the rights of a stockholder of
the Company, including the right to vote the shares and the right to
receive any dividends thereon, unless otherwise determined by the
Committee.
Performance Awards. The Incentive Plan also authorizes the
Committee to grant to eligible employees performance awards. A
performance award is an award which consists of a right (i) denominated
or payable in cash, Common Stock, other securities or other property
(including, without limitation, restricted securities), and (ii) which
shall confer on the holder thereof rights valued as determined by the
Committee and payable to, or exercisable by, the holder of the
performance award upon the achievement of such performance goals during
such performance periods as the Committee shall establish. Subject to
the terms of the Incentive Plan and any applicable award agreement,
performance goals to be achieved during any performance period, the
length of any performance period, the amount of any performance award
granted and the amount of any payment or transfer to be made pursuant to
any performance award will be determined by the Committee and by the
other terms and conditions of any performance award.
Other Stock-Based Awards. In order to enable the Company to
respond to business, economic and regulatory developments, and to trends
in executive compensation practices, the Incentive Plan authorizes the
Committee to grant awards that are denominated or payable in, valued in
whole or in part by reference to, or otherwise based on or related to
Common Stock. The Committee determines the terms and conditions of such
awards, including consideration to be paid to exercise awards in the
nature of purchase rights, the period during which awards will be
outstanding, and forfeiture conditions and restrictions on awards.
Other Terms of Awards. The flexible terms of the Incentive
Plan will permit the Committee to impose performance conditions with
respect to any award. Such conditions may require that an award be
forfeited, in whole or in part, if performance objectives are not met, or
require that the time of exercisability or settlement of an award be
linked to achievement of performance conditions.
<PAGE>
-19-
No awards may be granted under the Incentive Plan after
December 31, 2006.
Awards may be settled in cash, stock, other awards or other
property, in the discretion of the Committee. The Committee may
condition the payment of an award on the withholding of taxes and may
provide that a portion of the Common Stock or other property to be
distributed will be withheld (or previously acquired Common Stock or
other property surrendered by the participant) to satisfy withholding and
other tax obligations. Awards granted under the Incentive Plan may not
be pledged or otherwise encumbered and are not transferable except by
will or by the laws of descent and distribution to a guardian or legal
representative designated to exercise such person's rights and receive
distributions under the Incentive Plan upon such person's death, or
otherwise if permitted under Rule 16b-3 and by the Committee.
The Committee may, however, grant awards alone or in addition
to, in tandem with or in substitution for any other award under the
Incentive Plan, other awards under other Company plans, or other rights
to payment from the Company. Awards granted in addition to or in tandem
with other awards may be granted either at the same time or at different
times. If an award is granted in substitution for another award, the
participant must surrender such other award in consideration for the
grant of the new award.
The Board may amend, modify or terminate the Incentive Plan at
any time provided that, unless required by law, (i) the number of shares
of Common Stock available under the Incentive Plan may not be amended
without shareholder approval (subject to certain provisions relating to
adjustment as discussed above) and (ii) no amendment or termination of
the Incentive Plan may, without a participant's consent, adversely affect
any rights already accrued under the Incentive Plan by the participant.
In addition, no amendment or modification shall, unless previously
approved by the stockholders (where such approval is necessary to satisfy
then applicable requirements of federal securities laws, the Internal
Revenue Code of 1986, as amended (the "Code"), or rules of any stock
exchange on which the Common Stock is listed) (i) in any manner affect
the eligibility requirements of the Incentive Plan, (ii) increase the
number of shares of Common Stock subject to any option, (iii) change the
purchase price of the shares of Common Stock subject to any option, (iv)
extend the period during which awards may be granted under the Incentive
Plan, or (v) materially increase the benefits to participants under the
Incentive Plan.
Unless earlier terminated by the Board of Directors, the
Incentive Plan will terminate when no shares remain available for
issuance and the Company has no further obligation with respect to any
outstanding award.
<PAGE>
-20-
Federal Income Tax Implications of the Plan. The following
description summarizes the material federal income tax consequences
arising with respect to the issuance and exercise of awards granted under
the Incentive Plan. The grant of an option or SAR (including a stock-
based award in the nature of a purchase right) will create no tax
consequences for the participant or the Company. A participant will not
have taxable income upon exercising an ISO (except that the alternative
minimum tax may apply) and the Company will receive no deduction at that
time. Upon exercising an option other than an ISO (including a stock-
based award in the nature of a purchase right), the participant must
generally recognize ordinary income equal to the difference between the
exercise price and fair market value of the freely transferable and
nonforfeitable Common Stock acquired on the date of exercise, and upon
exercising an SAR, the participant must generally recognize ordinary
income equal to the cash or the fair market value of the freely
transferable and nonforfeitable Common Stock received. In each case, the
Company will be entitled to a deduction equal to the amount recognized as
ordinary income by the participant.
A participant's disposition of shares acquired upon the
exercise of an option, SAR or other stock-based award in the nature of a
purchase right generally will result in short-term or long-term capital
gain or loss measured by the difference between the sale price and the
participant's tax basis in such shares (or the exercise price of the
option in the case of shares acquired by exercise of an ISO and held for
the applicable ISO holding periods). Generally, there will be no tax
consequences to the Company in connection with a disposition of shares
acquired under an option or other award, except that the Company will be
entitled to a deduction (and the participant will recognize ordinary
taxable income) if shares acquired upon exercise of an ISO are disposed
of before the applicable ISO holding periods have been satisfied.
With respect to other awards granted under the Incentive Plan
that may be settled either in cash or in Common Stock or other property
that is either not restricted as to transferability or not subject to a
substantial risk of forfeiture, the participant must generally recognize
ordinary income equal to the cash or the fair market value of Common
Stock or other property received. The Company will be entitled to a
deduction for the same amount. With respect to awards involving stock or
other property that is restricted as to transferability and subject to a
substantial risk of forfeiture, the participant must generally recognize
ordinary income equal to the fair market value of the shares or other
property received at the first time the shares or other property become
transferable or not subject to a substantial risk of forfeiture,
whichever occurs earlier. The Company will be entitled to a deduction in
an amount equal to the ordinary income recognized by the participant. A
participant may elect under Section 83(b) of the Code to be taxed at the
time of receipt of shares or other property rather than upon lapse of
restrictions on transferability or the substantial risk of forfeiture,
but if the participant subsequently forfeits such shares or property he
would not be entitled to any tax deduction, including as a capital loss,
for the value of the shares or property on which he previously paid tax.
Such election must be made and filed with the Internal Revenue Service
within thirty days of the receipt of the shares or other property.
<PAGE>
-21-
Section 162(m) of the Code limits deductibility of certain
compensation for each of the Chief Executive Officer of the Company and
the additional four executive officers who are highest paid and employed
at year end to $1 million per year. The Company anticipates that action
will be taken with respect to awards under the Incentive Plan to ensure
deductibility.
The Committee may condition the payment of an award on the
withholding of taxes and may provide that a portion of the stock or other
property to be distributed will be withheld (or previously acquired stock
or other property surrendered by the participant) to satisfy withholding
and other tax obligations.
The foregoing summarizes the material federal income tax
consequences arising with respect to the issuance and exercise of awards
granted under the Incentive Plan. Different tax rules may apply with
respect to participants who are subject to Section 16 of the Exchange
Act, when they acquire stock in a transaction deemed to be a nonexempt
purchase under that statute or within six months of an exempt grant of a
derivative security under the Incentive Plan. This summary does not
address the effects of other federal taxes or taxes imposed under state,
local or foreign tax laws.
The Board of Directors recommends that the Company's
stockholders vote FOR approval of the Incentive Plan. It is the
intention of the persons named in the accompanying form of Proxy to vote
the shares represented thereby in favor of such approval unless otherwise
instructed in such Proxy.
<PAGE>
-22-
III. RATIFICATION OF SELECTION
OF INDEPENDENT ACCOUNTANTS
The Board of Directors of the Company has selected KPMG Peat
Marwick LLP to serve as independent accountants for the Company for the
fiscal year ending December 31, 1997. The Board of Directors considers
KPMG Peat Marwick LLP to be eminently qualified.
Although it is not required to do so, the Board of Directors is
submitting its selection of KPMG Peat Marwick LLP for ratification at the
Meeting, in order to ascertain the views of stockholders regarding such
selection. If the selection is not ratified, the Board of Directors will
reconsider its selection.
The Board of Directors recommends that stockholders vote FOR
ratification of the selection of KPMG Peat Marwick LLP to examine the
financial statements of the Company for the Company's fiscal year ending
December 31, 1997. It is the intention of the persons named in the
accompanying form of Proxy to vote the shares of Common Stock represented
thereby in favor of such ratification unless otherwise instructed in such
Proxy.
A representative of KPMG Peat Marwick LLP will be present at
the Meeting, with the opportunity to make a statement if such
representative desires to do so, and will be available to respond to
appropriate questions.
<PAGE>
-23-
IV. OTHER MATTERS
The Board of Directors of the Company does not know of any
other matters which may be brought before the Meeting. However, if any
such other matters are properly presented for action, it is the intention
of the persons named in the accompanying form of Proxy to vote the shares
represented thereby in accordance with their judgment on such matters.
MISCELLANEOUS
If the accompanying form of Proxy is executed and returned, the
shares of Common Stock represented thereby will be voted in accordance
with the terms of the Proxy, unless the Proxy is revoked. If no
directions are indicated in such Proxy, the shares represented thereby
will be voted FOR the nominees proposed by the Board of Directors in the
election of directors, FOR approval of the IMPATH Inc. 1997 Long Term
Incentive Plan and FOR the ratification of the Board of Directors'
selection of independent accountants for the Company. Any Proxy may be
revoked at any time before it is exercised. The casting of a ballot at
the Meeting by a stockholder who may theretofore have given a Proxy or
the subsequent delivery of a Proxy will have the effect of revoking the
initial Proxy.
All costs relating to the solicitation of Proxies will be borne
by the Company. Proxies may be solicited by officers, directors and
regular employees of the Company and its subsidiaries personally, by mail
or by telephone, telecopier or telegram, and the Company may pay brokers
and other persons holding shares of stock in their names or those of
their nominees for their reasonable expenses in sending soliciting
material to their principals.
It is important that Proxies be returned promptly.
Stockholders who do not expect to attend the Meeting in person are urged
to mark, sign and date the accompanying form of Proxy and mail it in the
enclosed return envelope, which requires no postage if mailed in the
United States, so that their votes can be recorded.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the 1998
Annual Meeting of Stockholders of the Company must be received by the
Company by December 26, 1997 in order to be considered for inclusion in
the Company's Proxy Statement relating to such Meeting.
NEW YORK, NEW YORK JOHN P. GANDOLFO, SECRETARY
APRIL 25, 1997
<PAGE>
EXHIBIT A
IMPATH INC.
1997 LONG TERM INCENTIVE PLAN
SECTION 1. Purpose. The purposes of this IMPATH Inc. 1997
Long Term Incentive Plan (the "Plan") are to encourage selected
employees, officers, directors and consultants of, and other individuals
providing services to, IMPATH Inc. (together with any successor thereto,
the "Company") and its Affiliates (as defined below) to acquire a
proprietary interest in the growth and performance of the Company, to
generate an increased incentive to contribute to the Company's future
success and prosperity thus enhancing the value of the Company for the
benefit of its shareholders, and to enhance the ability of the Company
and its Affiliates to attract and retain exceptionally qualified
individuals upon whom, in large measure, the sustained progress, growth
and profitability of the Company depend.
SECTION 2. Definitions. As used in the Plan, the following
terms shall have the meanings set forth below:
"Affiliate" shall mean (i) any entity that, directly or through
one or more intermediaries, is controlled by the Company and (ii) any
entity in which the Company has a significant equity interest, as
determined by the Committee.
"Award" shall mean any Option, Stock Appreciation Right,
Restricted Security, Performance Award, or Other Stock-Based Award
granted under the Plan.
"Award Agreement" shall mean any written agreement, contract or
other instrument or document evidencing any Award granted under the Plan.
"Board" shall mean the Board of Directors of the Company.
"Cause", as used in connection with the termination of a
Participant's employment, shall mean (i) with respect to any Participant
employed under a written employment agreement with the Company or an
Affiliate of the Company which agreement includes a definition of
"cause," "cause" as defined in such agreement or, if such agreement
contains no such definition, a material breach by the Participant of such
agreement, or (ii) with respect to any other Participant, the failure to
perform adequately in carrying out such Participant's employment
responsibilities, including any directives from the Board, or engaging in
such behavior in his personal or business life as to lead the Committee
in its reasonable judgment to determine that it is in the best interests
of the Company to terminate his employment.
"Common Stock" shall mean the common stock of the Company,
$.01 par value.
"Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time, and the regulations promulgated thereunder.
"Committee" shall mean the Compensation Committee or any other
committee of the Board designated by the Board to administer the Plan and
composed of not less than three nonemployee directors.
"Common Shares" shall mean any or all, as applicable, of the
Common Stock and such other securities or property as may become the
subject of Awards, or become subject to Awards, pursuant to an adjustment
made under Section 4(b) of the Plan and any other securities of the
Company or any Affiliate or any successor that may be so designated by
the Committee.
<PAGE>
A-2
"Employee" shall mean any employee of the Company or of any
Affiliate.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Fair Market Value" shall mean (A) with respect to any property
other than the Common Shares, the fair market value of such property
determined by such methods or procedures as shall be established from
time to time by the Committee; and (B) with respect to the Common Shares,
the last sale price regular way on the date of reference, or, in case no
sale takes place on such date, the average of the high bid and low asked
prices, in either case on the principal national securities exchange on
which the Common Shares are listed or admitted to trading, or if the
Common Shares are not listed or admitted to trading on any national
securities exchange, the last sale price reported on the National Market
System of the National Association of Securities Dealers Automated
Quotation System ("NASDAQ") on such date, or the average of the closing
high bid and low asked prices in the over-the-counter market reported on
NASDAQ on such date, whichever is applicable, or if there are no such
prices reported on NASDAQ on such date, as furnished to the Committee by
any New York Stock Exchange member selected from time to time by the
Committee for such purpose. If there is no bid or asked price reported
on any such date, the Fair Market Value shall be determined by the
Committee in accordance with the regulations promulgated under Section
2031 of the Code, or by any other appropriate method selected by the
Committee.
"Good Reason", as used in connection with the termination of a
Participant's employment, shall mean (i) with respect to any Participant
employed under a written employment agreement with the Company or an
Affiliate of the Company, "good reason" as defined in such written
agreement or, if such agreement contains no such definition, a material
breach by the Company of such agreement, or (ii) with respect to any
other Participant, a failure by the Company to pay such Participant any
amount otherwise vested and due and a continuation of such failure for 30
business days following notice to the Company thereof.
"Incentive Stock Option" shall mean an option granted under
Section 6(a) of the Plan that is intended to meet the requirements of
Section 422 of the Code or any successor provision thereto.
"Non-Qualified Stock Option" shall mean an option granted under
Section 6(a) of the Plan that is not intended to be an Incentive Stock
Option. Any stock option granted by the Committee which is not
designated an Incentive Stock Option shall be deemed a Non-Qualified
Stock Option.
"Option" shall mean an Incentive Stock Option or a Non-
Qualified Stock Option.
"Other Stock-Based Award" shall mean any right granted under
Section 6(e) of the Plan.
"Participant" shall mean any individual granted an Award under
the Plan.
"Performance Award" shall mean any right granted under Section
6(d) of the Plan.
"Person" shall mean any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated organization, or
government or political subdivision thereof.
"Released Securities" shall mean securities that were
Restricted Securities but with respect to which all applicable
restrictions have expired, lapsed or been waived in accordance with the
terms of the Plan or the applicable Award Agreement.
<PAGE>
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"Restricted Securities" shall mean any Common Shares granted
under Section 6(c) of the Plan, any right granted under Section 6(c) of
the Plan that is denominated in Common Shares or any other Award under
which issued and outstanding Common Shares are held subject to certain
restrictions.
"Rule 16a-1" and "Rule 16b-3" shall mean, respectively, Rule
16a-1 and Rule 16b-3 promulgated by the Securities and Exchange
Commission under the Exchange Act, or any successor rule or regulation
thereto as in effect from time to time.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Stock Appreciation Right" shall mean any right granted under
Section 6(b) of the Plan.
SECTION 3. Administration. The Plan shall be administered by
the Committee. Subject to the terms of the Plan and applicable law, and
in addition to other express powers and authorizations conferred on the
Committee by the Plan, the Committee shall have full power and authority
to: (i) designate Participants; (ii) determine the type or types of
Awards to be granted to an eligible Employee or other individual under
the Plan; (iii) determine the number and classification of Common Shares
to be covered by (or with respect to which payments, rights or other
matters are to be calculated in connection with) Awards; (iv) determine
the terms and conditions of any Award; (v) determine whether, to what
extent, and under what circumstances Awards may be settled or exercised
in cash, Common Shares, other securities, other Awards or other property,
or canceled, forfeited or suspended, and the method or methods by which
Awards may be settled, exercised, canceled, forfeited or suspended; (vi)
determine requirements for the vesting of Awards or performance criteria
to be achieved in order for Awards to vest; (vii) determine whether, to
what extent and under what circumstances cash, Common Shares, other
securities, other Awards, other property and other amounts payable with
respect to an Award under the Plan shall be deferred either automatically
or at the election of the holder thereof or of the Committee; (viii)
interpret and administer the Plan and any instrument or agreement
relating to, or Award made under, the Plan; (ix) establish, amend,
suspend or waive such rules and regulations and appoint such agents as it
shall deem appropriate for the proper administration of the Plan; and (x)
make any other determination and take any other action that the Committee
deems necessary or desirable for the administration of the Plan. Unless
otherwise expressly provided in the Plan, all designations,
determinations, interpretations and other decisions under or with respect
to the Plan or any Award shall be within the sole discretion of the
Committee, may be made at any time and shall be final, conclusive and
binding upon all Persons, including the Company, any Affiliate, any
Participant, any holder or beneficiary of any Award, any shareholder and
any Employee. Notwithstanding the foregoing, the maximum number of
Awards which may be granted to any one Participant under this Plan in any
one-year period shall not exceed 100,000 Common Shares, subject to the
adjustments provided in Section 4(b) hereof and no Awards under this Plan
shall be granted after December 31, 2006.
SECTION 4. Common Shares Available for Awards.
(a) Common Shares Available. Subject to adjustment as provided
in Section 4(b):
(i) Calculation of Number of Common Shares Available. The
number of Common Shares available for granting Awards under the Plan
shall be 300,000, any or all of which may be or may be based on
Common Stock, any other security which becomes the subject of
Awards, or any combination thereof. Initially 300,000 shares of
Common Stock shall be reserved for Awards hereunder. Further, if,
after the effective date of the Plan, any Common Shares covered by
an Award granted under the Plan or to which such an Award relates,
are forfeited, or if an Award otherwise terminates or is canceled
without the delivery of Shares or of other consideration, then the
Common Shares covered by such Award or to which such Award relates,
or the number of Common Shares otherwise counted against the
aggregate number of Common Shares available under the Plan with
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A-4
respect to such Award, to the extent of any such forfeiture,
termination or cancellation, shall again be, or shall become,
available for granting Awards under the Plan.
(ii) Accounting for Awards. For purposes of this Section
4,
(A) if an Award is denominated in or based upon Common
Shares, the number of Common Shares covered by such Award or to
which such Award relates shall be counted on the date of grant
of such Award against the aggregate number of Common Shares
available for granting Awards under the Plan and against the
maximum number of Awards available to any Participant; and
(B) Awards not denominated in Common Shares may be
counted against the aggregate number of Common Shares available
for granting Awards under the Plan and against the maximum
number of Awards available to any participant in such amount
and at such time as the Committee shall determine under
procedures adopted by the Committee consistent with the
purposes of the Plan;
provided, however, that Awards that operate in tandem with (whether
granted simultaneously with or at a different time from), or that
are substituted for, other Awards may be counted or not counted
under procedures adopted by the Committee in order to avoid double
counting. Any Common Shares that are delivered by the Company, and
any Awards that are granted by, or become obligations of, the
Company, through the assumption by the Company or an Affiliate of,
or in substitution for, outstanding awards previously granted by an
acquired company shall, in the case of Awards granted to
Participants who are officers or directors of the Company for
purposes of Section 16 of the Exchange Act, be counted against the
Common Shares available for granting Awards under the Plan.
(iii) Sources of Common Shares Deliverable Under Awards.
Any Common Shares delivered pursuant to an Award may consist, in
whole or in part, of authorized and unissued Common Shares or of
treasury Common Shares.
(b) Adjustments. In the event that the Committee shall
determine that any dividend or other distribution (whether in the form of
cash, Common Shares, other securities or other property),
recapitalization, stock split, reverse stock split, reorganization,
merger, consolidation, split-up, spin-off, combination, repurchase or
exchange of Common Shares or other securities of the Company, issuance of
warrants or other rights to purchase Common Shares or other securities of
the Company, or other similar corporate transaction or event affects the
Common Shares such that an adjustment is determined by the Committee to
be appropriate in order to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the
Plan, then the Committee shall, in such manner as it may deem equitable,
adjust any or all of (i) the number and kind of Common Shares (or other
securities or property) which thereafter may be made the subject of
Awards, (ii) the number and kind of Common Shares (or other securities or
property) subject to outstanding Awards, and (iii) the grant or exercise
price with respect to any Award or, if deemed appropriate, make provision
for a cash payment to the holder of an outstanding Award; provided,
however, that the number of Common Shares subject to any Award
denominated in Common Shares shall always be a whole number.
In connection with any merger or consolidation in which the
Company is not the surviving corporation and which results in the holders
of the outstanding voting securities of the Company (determined
immediately prior to such merger or consolidation) owning less than a
majority of the outstanding voting securities of the surviving
corporation (determined immediately following such merger or
consolidation), or any sale or transfer by the Company of all or
substantially all its assets or any tender offer or exchange offer for or
the acquisition, directly or indirectly, by any person or group of all or
a majority of the then outstanding voting
<PAGE>
A-5
securities of the Company, all outstanding Options under the Plan shall
become exercisable in full, notwithstanding any other provision of the
Plan or of any outstanding Options granted thereunder, on and after (i)
the fifteenth day prior to the effective date of such merger,
consolidation, sale, transfer or acquisition or (ii) the date of
commencement of such tender offer or exchange offer, as the case may be.
The provisions of the foregoing sentence shall apply to any outstanding
Options which are Incentive Stock Options to the extent permitted by
Section 422(d) of the Code and such outstanding Options in excess thereof
shall, immediately upon the occurrence of the event described in clause
(i) or (ii) of the foregoing sentence, be treated for all purposes of the
Plan as Non-Qualified Stock Options and shall be immediately exercisable
as such as provided in the foregoing sentence.
SECTION 5. Eligibility. Any Employee, including any officer
or employee-director of the Company or of any Affiliate, and any
consultant of, or other individual providing services to, the Company or
any Affiliate shall be eligible to be designated a Participant. A non-
employee director shall be eligible to receive Non-Qualified Stock
Options under the Plan.
SECTION 6. Awards.
(a) Options. The Committee is hereby authorized to grant to
eligible individuals options to purchase Common Shares (each, an
"Option") which shall contain the following terms and conditions and with
such additional terms and conditions, in either case not inconsistent
with the provisions of the Plan, as the Committee shall determine:
(i) Exercise Price. The purchase price per Common Share
purchasable under an Option shall be determined by the Committee;
provided, however, that such purchase price shall not be less than
one hundred percent (100%) of the Fair Market Value of a Common
Share on the date of grant of such Option, or such other price as
required under Subsection 6(a)(iv) hereof.
(ii) Time and Method of Exercise. Subject to the terms of
Section 6(a)(iii), the Committee shall determine the time or times
at which an Option may be exercised in whole or in part, and the
method or methods by which, and the form or forms (including,
without limitation, cash, Common Shares, outstanding Awards, or
other property, or any combination thereof, having a Fair Market
Value on the exercise date equal to the relevant exercise price) in
which, payment of the exercise price with respect thereto may be
made or deemed to have been made.
(iii) Exercisability Upon Death, Retirement and
Termination of Employment. Subject to the condition that no Option
may be exercised in whole or in part after the expiration of the
Option period specified in the applicable Award Agreement:
(A) Subject to the terms of paragraph (D) below, upon the
death of a Participant while employed or within 3 months of
retirement or disability as defined in paragraph (B) below, the
Person or Persons to whom such Participant's rights with
respect to any Option held by such Participant are transferred
by will or the laws of descent and distribution may, prior to
the expiration of the earlier of: (1) the outside exercise date
determined by the Committee at the time of granting the Option,
or (2) nine months after such Participant's death, purchase any
or all of the Common Shares with respect to which such
Participant was entitled to exercise such Option immediately
prior to such Participant's death, and any Options not so
exercisable will lapse on the date of such Participant's death;
(B) Subject to the terms of paragraph (D) below, upon
termination of a Participant's employment with the Company (x)
as a result of retirement pursuant to a retirement plan of
<PAGE>
A-6
the Company or an Affiliate or disability (as determined by the
Committee) of such Participant, (y) by the Company other than
for Cause, or (z) by the Participant with Good Reason, such
Participant may, prior to the expiration of the earlier of: (1)
the outside exercise date determined by the Committee at the
time of granting the Option, or (2) three months after the date
of such termination, purchase any or all of the Common Shares
with respect to which such Participant was entitled to exercise
any Options immediately prior to such termination, and any
Options not so exercisable will lapse on such date of
termination;
(C) Subject to the terms of paragraph (D) below, upon
termination of a Participant's employment with the Company
under any circumstances not described in paragraphs (A) or (B)
above, such Participant's Options shall be canceled to the
extent not theretofore exercised;
(D) Upon (i) the death of the Participant, or (ii)
termination of the Participant's employment with the Company
(x) by the Company other than for Cause (y) by the Participant
with Good Reason or (z) as a result of retirement or disability
as defined in paragraph (B) above, the Company shall have the
right to cancel all of the Options such Participant was
entitled to exercise at the time of such death or termination
(subject to the terms of paragraphs (A) or (B) above) for a
payment in cash equal to the excess, if any, of the Fair Market
Value of one Common Share on the date of death or termination
over the exercise price of such Option for one Common Share
times the number of Common Shares subject to the Option and
exercisable at the time of such death or termination; and
(E) Upon expiration of the respective periods set forth
in each of paragraphs (A) through (C) above, the Options of a
Participant who has died or whose employment has been
terminated shall be canceled to the extent not theretofore
canceled or exercised.
(F) For purposes of paragraphs (A) through (D) above, the
period of service of an individual as a director or consultant
of the Company or an Affiliate shall be deemed the period of
employment.
(iv) Incentive Stock Options. The following provisions
shall apply only to Incentive Stock Options granted under the Plan:
(A) No Incentive Stock Option shall be granted to any
eligible Employee who, at the time such Option is granted, owns
securities possessing more than ten percent (10%) of the total
combined voting power of all classes of securities of the
Company or of any Affiliate, except that such an Option may be
granted to such an Employee if at the time the Option is
granted the option price is at least one hundred ten percent
(110%) of the Fair Market Value of the Common Shares
(determined in accordance with Section 2) subject to the
Option, and the Option by its terms is not exercisable after
the expiration of five (5) years from the date the Option is
granted; and
(B) To the extent that the aggregate Fair Market Value of
the Common Shares with respect to which Incentive Stock Options
(without regard to this subsection) are exercisable for the
first time by any individual during any calendar year (under
all plans of the Company and its Affiliates) exceeds $100,000,
such Options shall be treated as Non-Qualified Stock Options.
This subsection shall be applied by taking Options into account
in the order in which they were granted. If some but not all
Options granted on any one day are subject to this subsection,
then such Options shall be apportioned between Incentive Stock
Option and Non-Qualified Stock Option treatment in such manner
as the Committee shall determine. For purposes of
<PAGE>
A-7
this subsection, the Fair Market Value of any Common Shares
shall be determined, in accordance with Section 2, as of the
date the Option with respect to such Common Shares is granted.
(v) Other Terms and Conditions of Options.
Notwithstanding any provision contained in the Plan to the contrary,
during any period when any member of the Committee shall not be a
"nonemployee director" as defined in Rule 16b-3, then, the terms and
conditions of Options granted under the Plan to any director or
officer, as defined in Rule 16a-1, of the Company during such
period, unless other terms and conditions are approved in advance by
the Board, shall be as follows:
(A) The price at which each Common Share subject to an
option may be purchased shall, subject to any adjustments which
may be made pursuant to Section 4, in no event be less than the
Fair Market Value of a Common Share on the date of grant, and
provided further that in the event the option is intended to be
an Incentive Stock Option and the optionee owns on the date of
grant securities possessing more than ten percent (10%) of the
total combined voting power of all classes of securities of the
Company or of any Affiliate, the price per share shall not be
less than one hundred ten percent (110%) of the Fair Market
Value per Common Share on the date of grant.
(B) The Option may be exercised to purchase Common Shares
covered by the Option not sooner than six (6) months following
the date of grant. The Option shall terminate and no Common
Shares may be purchased thereunder more than ten (10) years
after the date of grant, provided that if the Option is
intended to be an Incentive Stock Option and the Optionee owns
on the date of grant securities possessing more than ten
percent (10%) of the total combined voting power of all classes
of securities of the Company or of any Affiliate, the Option
shall terminate and no Common Shares may be purchased
thereunder more than five (5) years after the date of grant.
(b) Stock Appreciation Rights. The Committee is hereby
authorized to grant to eligible Employees "Stock Appreciation Rights."
Each Stock Appreciation Right shall consist of a right to receive the
excess of (i) the Fair Market Value of one Common Share on the date of
exercise or, if the Committee shall so determine in the case of any such
right other than one related to any Incentive Stock Option, at any time
during a specified period before or after the date of exercise over (ii)
the grant price of the right as specified by the Committee, which shall
not be less than one hundred percent (100%) of the Fair Market Value of
one Common Share on the date of grant of the Stock Appreciation Right
(or, if the Committee so determines, in the case of any Stock
Appreciation Right retroactively granted in tandem with or in
substitution for another Award, on the date of grant of such other
Award). Subject to the terms of the Plan and any applicable Award
Agreement, the grant price, term, methods of exercise, methods of
settlement, and any other terms and conditions of any Stock Appreciation
Right granted under the Plan shall be as determined by the Committee.
The Committee may impose such conditions or restrictions on the exercise
of any Stock Appreciation Right as it may deem appropriate.
(c) Restricted Securities.
(i) Issuance. The Committee is hereby authorized to grant
to eligible Employees "Restricted Securities" which shall consist of
the right to receive, by purchase or otherwise, Common Shares which
are subject to such restrictions as the Committee may impose
(including, without limitation, any limitation on the right to vote
such Common Shares or the right to receive any dividend or other
right or property), which restrictions may lapse separately or in
combination at such time or times, in such installments or
otherwise, as the Committee may deem appropriate.
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A-8
(ii) Registration. Restricted Securities granted under
the Plan may be evidenced in such manner as the Committee may deem
appropriate, including, without limitation, book-entry registration
or issuance of a stock certificates or certificates. In the event
any stock certificate is issued in respect of Restricted Securities
granted under the Plan, such certificate shall be registered in the
name of the Participant and shall bear an appropriate legend
referring to the terms, conditions and restrictions applicable to
such Restricted Securities.
(iii) Forfeiture. Except as otherwise determined by the
Committee, upon termination of a Participant's employment for any
reason during the applicable restriction period, all of such
Participant's Restricted Securities which had not become Released
Securities by the date of termination of employment shall be
forfeited and reacquired by the Company; provided, however, that the
Committee may, when it finds that a waiver would be in the best
interests of the Company, waive in whole or in part any or all
remaining restrictions with respect to such Participant's Restricted
Securities. Unrestricted Common Shares, evidenced in such manner as
the Committee shall deem appropriate, shall be issued to the holder
of Restricted Securities promptly after such Restricted Securities
become Released Securities.
(d) Performance Awards. The Committee is hereby authorized to
grant to eligible Employees "Performance Awards." Each Performance Award
shall consist of a right, (i) denominated or payable in cash, Common
Shares, other securities or other property (including, without
limitation, Restricted Securities), and (ii) which shall confer on the
holder thereof rights valued as determined by the Committee and payable
to, or exercisable by, the holder of the Performance Award, in whole or
in part, upon the achievement of such performance goals during such
performance periods as the Committee shall establish. Subject to the
terms of the Plan and any applicable Award Agreement, the performance
goals to be achieved during any performance period, the length of any
performance period, the amount of any Performance Award granted, the
termination of a Participant's employment and the amount of any payment
or transfer to be made pursuant to any Performance Award shall be
determined by the Committee and by the other terms and conditions of any
Performance Award. The Committee shall issue performance goals prior to
the commencement of the performance period to which such performance
goals pertain.
(e) Other Stock-Based Awards. The Committee is hereby
authorized to grant to eligible Employees "Other Stock-Based Awards."
Each Other Stock-Based Award shall consist of a right (i) which is other
than an Award or right described in Section 6(a), (b), (c) or (d) above
and (ii) which is denominated or payable in, valued in whole or in part
by reference to, or otherwise based on or related to, Common Shares
(including, without limitation, securities convertible into Common
Shares) as are deemed by the Committee to be consistent with the purposes
of the Plan; provided, however, that such right shall comply, to the
extent deemed desirable by the Committee, with Rule 16b-3 and applicable
law. Subject to the terms of the Plan and any applicable Award
Agreement, the Committee shall determine the terms and conditions of
Other Stock-Based Awards. Common Shares or other securities delivered
pursuant to a purchase right granted under this Section 6(e) shall be
purchased for such consideration, which may be paid by such method or
methods and in such form or forms, including, without limitation, cash,
Common Shares, other securities, other Awards, other property, or any
combination thereof, as the Committee shall determine.
(f) General.
(i) No Cash Consideration for Awards. Awards may be
granted for no cash consideration or for such minimal cash
consideration as may be required by applicable law.
(ii) Awards May Be Granted Separately or Together. Awards
may, in the discretion of the Committee, be granted either alone or
in addition to, in tandem with, or in substitution
<PAGE>
A-9
for any other Award, except that in no event shall an Incentive
Stock Option be granted together with a Non-Qualified Stock Option
in such a manner that the exercise of one Option affects the right
to exercise the other. Awards granted in addition to or in tandem
with other Awards may be granted either at the same time as or at a
different time from the grant of such other awards.
(iii) Forms of Payment Under Awards. Subject to the
terms of the Plan and of any applicable Award Agreement, payments or
transfers to be made by the Company or an Affiliate upon the grant,
exercise or payment of an Award may be made in such form or forms as
the Committee shall determine, including, without limitation, cash,
Common Shares, other securities, other Awards, or other property, or
any combination thereof, and may be made in a single payment or
transfer, in installments, or on a deferred basis, in each case in
accordance with rules and procedures established by the Committee.
Such rules and procedures may include, without limitation,
provisions for the payment or crediting of reasonable interest on
installment or deferred payments. In accordance with the above, the
Committee may elect (i) to pay a Participant (or such Participant's
permitted transferee) upon the exercise of an Option in whole or in
part, in lieu of the exercise thereof and the delivery of Common
Shares thereunder, an amount of cash equal to the excess, if any, of
the Fair Market Value of one Common Share on the date of such
exercise over the exercise price of such Option for one Common Share
times the number of Common Shares subject to the Option or portion
thereof so exercised or (ii) to settle other stock denominated
Awards in cash.
(iv) Limits on Transfer of Awards.
(A) No award (other than Released Securities), and no
right under any such Award, may be assigned, alienated,
pledged, attached, sold or otherwise transferred or
encumbered by a Participant otherwise than by will or by the
laws of descent and distribution (or, in the case of Restricted
Securities, to the Company) and any such purported assignment,
alienation, pledge, attachment, sale or other transfer or
encumbrance shall be void and unenforceable against the Company
or any Affiliate.
(B) Each award, and each right under any Award, shall
be exercisable, during the Participant's lifetime only by the
Participant or if permissible under applicable law, by the
Participant's guardian or legal representative.
(v) Terms of Awards. The term of each Award shall be for
such period as may be determined by the Committee; provided,
however, that in no event shall the term of any Option exceed a
period of ten years from the date of its grant.
(vi) Rule 16b-3 Six-Month Limitations. To the extent
required in order to maintain the exemption provided under Rule 16b-
3 only, any equity security offered pursuant to the Plan must be
held for at least six months after the date of grant, and with
respect to any derivative security issued pursuant to the Plan, at
least six months must elapse from the date of acquisition of such
derivative security to the date of disposition of the derivative
security (other than upon exercise or conversion) or its underlying
equity security. Terms used in the preceding sentence shall, for
the purposes of such sentence only, have the meanings, if any,
assigned or attributed to them under Rule 16b-3.
(vii) Common Share Certificates. All certificates for
Common Shares delivered under the Plan pursuant to any Award or the
exercise thereof shall be subject to such stop transfer orders and
other restrictions as the Committee may deem advisable under the
Plan or the rules, regulations, and other requirements of the
Securities and Exchange Commission, any stock exchange
<PAGE>
A-10
upon which such Common Shares are then listed, and any applicable
Federal or state securities laws, and the Committee may cause a
legend or legends to be put on any such certificates to make
appropriate reference to such restrictions.
(viii) Delivery of Common Shares or Other Securities and
Payment by Participant of Consideration. No Common Shares or other
securities shall be delivered pursuant to any Award until payment in
full of any amount required to be paid pursuant to the Plan or the
applicable Award Agreement is received by the Company. Such payment
may be made by such method or methods and in such form or forms as
the Committee shall determine, including, without limitation, cash,
Common Shares, other securities, other Awards or other property, or
any combination thereof; provided that the combined value, as
determined by the Committee, of all cash and cash equivalents and
the Fair Market Value of any such Common Shares or other property so
tendered to the Company, as of the date of such tender, is at least
equal to the full amount required to be paid pursuant to the Plan or
the applicable Award Agreement to the Company.
SECTION 7. Amendments; Adjustments and Termination. Except to
the extent prohibited by applicable law and unless otherwise expressly
provided in an Award Agreement or in the Plan:
(a) Amendments to the Plan. The Board may amend, alter,
suspend, discontinue, or terminate the Plan without the consent of any
shareholder, Participant, other holder or beneficiary of an Award, or
other Person; provided, however, that, subject to the Company's rights to
adjust Awards under Sections 7(c) and (d), any amendment, alteration,
suspension, discontinuation, or termination that would impair the rights
of any Participant, or any other holder or beneficiary of any Award
theretofore granted, shall not to that extent be effective without the
consent of such Participant, other holder or beneficiary of an Award, as
the case may be; and provided further, however, that notwithstanding any
other provision of the Plan or any Award Agreement, without the approval
of the shareholders of the Company no such amendment, alteration,
suspension, discontinuation, or termination shall be made that would:
(i) increase the total number of Common Shares available
for Awards under the Plan, except as provided in Section 4 hereof;
or
(ii) otherwise cause the Plan to cease to comply with any
tax or regulatory requirement, including for these purposes any
approval or other requirement which is or would be a prerequisite
for exemptive relief from Section 16(b) of the Exchange Act.
(b) Amendments to Awards. The Committee may waive any
conditions or rights under, amend any terms of, or alter, suspend,
discontinue, cancel or terminate, any Award theretofore granted,
prospectively or retroactively; provided, however, that, subject to the
Company's rights to adjust Awards under Sections 7(c) and (d), any
amendment, alteration, suspension, discontinuation, cancellation or
termination that would impair the rights of any Participant or holder or
beneficiary of any Award theretofore granted, shall not to that extent be
effective without the consent of such Participant or holder or
beneficiary of an Award, as the case may be.
(c) Adjustment of Awards Upon Certain Acquisitions. In the
event the Company or any Affiliate shall assume outstanding employee
awards or the right or obligation to make future such awards in
connection with the acquisition of another business or another
corporation or business entity, the Committee may make such adjustments,
not inconsistent with the terms of the Plan, in the terms of Awards as it
shall deem appropriate in order to achieve reasonable comparability or
other equitable relationship between the assumed awards and the Awards
granted under the Plan as so adjusted.
<PAGE>
A-11
(d) Adjustments of Awards Upon the Occurrence of Certain
Unusual or Non- recurring Events. The Committee is hereby authorized to
make adjustments in the terms and conditions of, and the criteria
included in, Awards in recognition of unusual or non-recurring events
(including, without limitation, the events described in Section 4(b)
hereof) affecting the Company, any Affiliate, or the financial statements
of the Company or any Affiliate, or of changes in applicable laws,
regulations, or accounting principles, whenever the Committee determines
that such adjustments are appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made
available under the Plan.
SECTION 8. General Provisions.
(a) No Right to Awards. No Employee or other Person shall have
any claim to be granted any Award under the Plan, and there is no
obligation for uniformity of treatment of Employees, or holders or
beneficiaries of Awards under the Plan. The terms and conditions of
Awards need not be the same with respect to each recipient.
(b) Delegation. Subject to the terms of the Plan and
applicable law, the Committee may delegate to one or more officers or
managers of the Company or any Affiliate, or to a committee of such
officers or managers, the authority, subject to such terms and
limitations as the Committee shall determine, to grant Awards to, or to
cancel, modify, waive rights with respect to, alter, discontinue,
suspend, or terminate Awards; provided, however, that, no such delegation
shall be permitted with respect to Awards held by Employees who are
officers or directors of the Company for purposes of Section 16 of the
Exchange Act, or any successor section thereto or who are otherwise
subject to such Section.
(c) Correction of Defects, Omissions, and Inconsistencies. The
Committee may correct any defect, supply any omission, or reconcile any
inconsistency in the Plan or any Award in the manner and to the extent it
shall deem desirable to carry the Plan into effect.
(d) Withholding. The Company or any Affiliate shall be
authorized to withhold from any Award granted, from any payment due or
transfer made under any Award or under the Plan or from any compensation
or other amount owing to a Participant the amount (in cash, Common
Shares, other securities, other Awards, or other property) of withholding
taxes due in respect of an Award, its exercise, or any payment or
transfer under such Award or under the Plan and to take such other action
as may be necessary in the opinion of the Company or Affiliate to satisfy
all obligations for the payment of such taxes.
(e) No Limit on Other Compensation Arrangements. Nothing
contained in the Plan shall prevent the Company or any Affiliate from
adopting or continuing in effect other or additional compensation
arrangements, and such arrangements may be either generally applicable or
applicable only in specific cases.
(f) No Right to Employment. The grant of an Award shall not be
construed as giving a Participant the right to be retained in the employ
of the Company or any Affiliate. Further, the Company or an Affiliate
may at any time dismiss a Participant from employment, free from any
liability, or any claim under the Plan, unless otherwise expressly
provided in the Plan or in any Award Agreement.
(g) Governing Law. The validity, construction, and effect of
the Plan and any rules and regulations relating to the Plan shall be
determined in accordance with the laws of the State of Delaware and
applicable Federal law.
(h) Severability. If any provision of the Plan or any Award is
or becomes or is deemed to be invalid, illegal or unenforceable in any
jurisdiction or as to any Person or Award under any law deemed applicable
by the Committee, such provision shall be construed or deemed amended to
conform to applicable
<PAGE>
A-12
laws, or if it cannot be construed or deemed amended without, in the
determination of the Committee, materially altering the intent of the
Plan or the Award, such provision shall be stricken as to such
jurisdiction, Person or Award and the remainder of the Plan and any such
Award shall remain in full force and effect.
(i) No Trust or Fund Created. Neither the Plan nor any Award
shall create or be construed to create a trust or separate fund of any
kind or a fiduciary relationship between the Company or any Affiliate and
a Participant or any other Person. To the extent that any Person
acquires a right to receive payments from the Company or any Affiliate
pursuant to an Award, such right shall be no greater than the right of
any unsecured general creditor of the Company or any Affiliate.
(j) No Fractional Common Shares. No fractional Common Shares
shall be issued or delivered pursuant to the Plan or any Award, and the
Committee shall determine whether cash, other securities, or other
property shall be paid or transferred in lieu of any fractional Common
Shares or whether such fractional Common Shares or any rights thereto
shall be canceled, terminated, or otherwise eliminated.
(k) Headings. Headings are given to the Sections and
subsections of the Plan solely as a convenience to facilitate reference.
Such headings shall not be deemed in any way material or relevant to the
construction or interpretation of the Plan or any provision thereof.
SECTION 9. Adoption, Approval and Effective Date of the Plan.
The Plan shall be considered adopted and shall become effective on the
date the Plan is approved by the Board; provided, however, that the Plan
and any Awards granted under the Plan shall be void, if the shareholders
of the Company shall not have approved the adoption of the Plan within
twelve (12) months after the effective date, by a majority of votes cast
thereon at a meeting of shareholders duly called and held for such
purpose.
<PAGE>
IMPATH INC.
PROXY - ANNUAL MEETING OF STOCKHOLDERS - JUNE 2, 1997
COMMON STOCK
The undersigned, a stockholder of IMPATH Inc., does hereby
appoint Anu D. Saad, Ph.D. and John P. Gandolfo, or either of them, each
with full power of substitution, the undersigned's proxies, to appear and
vote at the Annual Meeting of Stockholders to be held on Monday, June 2,
1997 at 5:00 P.M., local time, or at any adjournments thereof, upon such
matters as may come before the Meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby instructs said proxies or their
substitutes to vote as specified on the reverse side on each of the
following matters and in accordance with their judgment on other matters
which may properly come before the Meeting.
(Continued and to be Completed on Reverse Side)
<PAGE>
A [X] Please mark your votes as in this example.
1. Election of Directors.
FOR all nominees listed at right [ ] WITHHOLD AUTHORITY [ ]
(except as marked to the contrary below) to vote for all nominees listed at
right
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE, WRITE THAT NOMINEE'S
NAME IN THE SPACE PROVIDED BELOW.)
- --------------------------------------------------------------------------------
Nominees: Anu D. Saad, Ph.D., John L. Cassis, Richard J. Cote, M.D.,
Richard Kessler, Joseph A. Mollica, Ph.D. and David B. Snow, Jr.
2. Approval of the IMPATH Inc. 1997 Long Term Incentive Plan.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. Ratification of appointment of KPMG Peat Marwick LLP as independent
accountants for fiscal 1997.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
The Board of Directors favors a vote "FOR" each item.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED. IF NO
DIRECTION IS INDICATED AS TO ANY OF ITEMS 1, 2 OR 3 THEY WILL BE VOTED
"FOR" THE ITEM(S) AS TO WHICH NO DIRECTION IS INDICATED.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
Dated
________________________, 1997
________________________(L.S.)
________________________(L.S.)
Stockholder(s) Sign Here
IMPORTANT: Before returning this Proxy, please sign your name or names
on the line(s) below exactly as shown hereon. Executors, administrators,
trustees, guardians or corporate officers should indicate their full
titles when signing. Where shares are registered in the names of joint
tenants or trustees, each joint tenant or trustee should sign.
