<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 |_| Confidential, for Use of the Commission
|X| Definitive Proxy Statement only (as permitted by Rule 14a-6(e)(2))
|_| 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)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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 (set forth the amount on which
the filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing party:
4) Date Filed:
<PAGE>
----------
Notice of Annual Meeting of Stockholders
to be held June 19, 2000
----------
New York, New York
April 28, 2000
To the Holders of Common Stock
of IMPATH Inc.:
The Annual Meeting of Stockholders of IMPATH Inc. will be held at
The Regency Hotel, 540 Park Avenue, New York, New York, on Monday, June 19, 2000
at 9:30 A.M. local time for the following purposes, as more fully described in
the accompanying Proxy Statement:
1. To elect seven members of the Board of Directors of the Company.
2. To consider and take action upon a proposal to approve the IMPATH
Inc. 2000 Long Term Incentive Plan.
3. To consider and take action upon a proposal to ratify the Board
of Directors' selection of KPMG LLP to serve as the Company's independent
accountants for the Company's fiscal year ending December 31, 2000.
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 20, 2000 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 the Company at
521 West 57th Street, New York, New York 10019, during the ten-day period
preceding the Meeting.
By Order of the Board of Directors,
Richard P. Adelson
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 28, 2000 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 19, 2000, and at any
adjournment or adjournments thereof, for the purposes set forth in such Notice.
The Company's executive offices are located at 521 West 57th Street, New York,
New York 10019.
At the close of business on April 20, 2000, the record date stated
in the accompanying Notice, the Company had issued and outstanding 7,677,607
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.
1
<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 (the "Exchange Act"))
who, to the knowledge of the Board of Directors of the Company beneficially
owned more than five percent of the Common Stock as of March 31, 2000, 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>
Shares of Common Stock Percent
Name and Address Owned Beneficially of Class
- ---------------- ---------------------- --------
<S> <C> <C>
Massachusetts Financial Services Company (1)
500 Boylston Street
15th Floor
Boston, Massachusetts 02116 631,193 8.2%
Dresdner RCM Global Investors L.L.C. (2)
Dresdner RCM Global Investors U.S. Holdings L.L.C.
Four Embarcadero Center
San Francisco, California 94111
Dresdner Bank AG (2)
Jurgen - Proto - Platz
60301 Frankfurt, Germany 532,500 6.9%
</TABLE>
- -------------
(1) Information as to Massachusetts Financial Services Company is based upon
reports on Schedule 13G filed with the Securities and Exchange Commission
(the "Commission") by such stockholder. Such reports indicate that such
stockholder beneficially owns an aggregate of 631,193 shares.
(2) Information as to Dresdner RCM Global Investors L.L.C., Dresdner RCM
Global Investors U.S. Holdings L.L.C. and Dresdner Bank AG is based upon
reports on Schedule 13G filed with the Commission by such stockholders.
Such reports indicate that such stockholders beneficially own an aggregate
of 532,500 shares.
2
<PAGE>
-3-
Security Ownership of Directors and Executive Officers
The following table sets forth, as of March 31, 2000, the number of
shares of Common Stock of the Company beneficially owned by each of the
Company's directors and nominees for directors, each of the Company's four most
highly compensated executive officers, and all directors and executive officers
as a group, based upon information provided 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)............................................ 163,382 2.1%
Richard P. Adelson (3)............................................ 37,235 *
David Cammarata (4)............................................... 16,191 *
James B. Douglass, Ph.D. (5) ..................................... 3,646 *
John L. Cassis (6)................................................ 8,359 *
Richard J. Cote, M.D. (7)......................................... 99,760 1.3%
George S. Frazza (8).............................................. 13,406 *
David J. Galas, Ph.D. (9)......................................... 2,436
Joseph A. Mollica, Ph.D. (10)..................................... 12,090 *
Marcel Rozencweig, M.D. (11)...................................... 10,871 *
All directors and executive officers as a group (10 persons)
(2), (3), (4), (5), (6), (7), (8), (9), (10), (11)................ 367,376 4.7%
</TABLE>
- -------------
* Less than one percent.
(1) Amounts and percentages include outstanding warrants or options which are
exercisable within 60 days of March 31, 2000.
(2) Includes 61,579 shares issuable pursuant to currently exercisable stock
options and 532 shares issuable pursuant to currently exercisable
warrants.
(3) Includes 34,727 shares issuable pursuant to currently exercisable stock
options.
(4) Consists of 16,191 shares issuable pursuant to currently exercisable stock
options.
(5) Consists of 3,646 shares issuable pursuant to currently exercisable stock
options.
(6) Includes 1,458 shares issuable pursuant to currently exercisable stock
options and 2,500 shares held by Tower Hall Profit Sharing Trust for the
benefit of Mr. Cassis.
(7) Includes 32,037 shares issuable pursuant to currently exercisable stock
options.
(8) Includes 5,906 shares issuable pursuant to currently exercisable stock
options.
(9) Consists of 2,436 shares issuable pursuant to currently exercisable stock
options.
(10) Consists of 12,090 shares issuable pursuant to currently exercisable stock
options.
(11) Includes 9,746 shares issuable pursuant to currently exercisable stock
options.
3
<PAGE>
-4-
I. ELECTION OF DIRECTORS
Seven directors of the Company are to be elected at the Meeting,
each to serve until the next Annual Meeting of Stockholders or 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 seven 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 43. Dr. Saad has been President and Chief
Executive Officer of the Company since October 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 in Biology 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.
JOHN L. CASSIS, age 51. Mr. Cassis has been Chairman of the Board of
Directors of the Company since 1993. Mr. Cassis has been a partner in Cross
Atlantic Partners since 1994. 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 1981 to 1986, he headed and ran Tower Hall
Inc., an independent merchant bank. 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 The Codman Group, Nomos, NMN Inc. and
Ilex Oncology Inc., and is Chairman of the Board of Directors of
4
<PAGE>
-5-
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 45. Dr. Cote was one of the founders of
IMPATH and is the Company's principal scientific and strategic consultant. Dr.
Cote is Attending Pathologist at the Kenneth J. Norris Cancer Center and a
Professor of Pathology and Urology 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, Neoprobe Corporation and
Chromavision Medical Systems Inc., 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 Bachelor's
Degree in Biology and 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.
GEORGE S. FRAZZA, age 66. Mr. Frazza has been Of Counsel to
Patterson, Belknap Webb & Tyler LLP since February 1997. Prior to that, Mr.
Frazza spent more than 30 years with Johnson & Johnson, where he was most
recently Vice President and General Counsel. Mr. Frazza received his Bachelor's
Degree from Marietta College and his law degree from Columbia University. Mr.
Frazza has been a director of the Company since September 1998.
DAVID J. GALAS, PH.D., age 56. Dr. Galas is Dean of the Keck
Graduate Institute of Applied Life Sciences, a new institution which focuses on
the application of biological science and engineering, including informatics and
computational methods, to problems in medicine and applied biology. Dr. Galas
was co-founder, President and Chief Executive Officer of Darwin Molecular
Corporation, and President of its successor corporation, Chiroscience R&D.
Previously, Dr. Galas had been Professor of Molecular Biology, University of
Southern California, and Deputy Assistant Secretary, Director of Biological and
Environmental Research, in the Department of Energy with responsibility for the
Human Genome Project. Dr. Galas is currently on the Board of Biology of the
National Academy of Science, the Board of Governors of the National Center for
Genome Resources, and the Editorial Board of the Journal of Computational
Biology among other affiliations. From 1990 through 1993, he served on the
National Cancer Advisory Board. Dr. Galas has been a director of the Company
since June 1999.
JOSEPH A. MOLLICA, PH.D., age 59. Dr. Mollica is 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
5
<PAGE>
-6-
DuPont, and Senior Vice President of Ciba-Geigy Corp. Dr. Mollica is currently
on the Board of Directors of Pharmacopeia, Inc., Neurocrine Biosciences, Inc.,
USP, Inc. and the Biotechnology Council of New Jersey. He received his
Bachelor's Degree in Pharmaceutical Chemistry from the University of Rhode
Island and his Master's Degree and Ph.D. in Pharmaceutical and Physical
Chemistry from the University of Wisconsin. Dr. Mollica has been a director of
the Company since 1995.
MARCEL ROZENCWEIG, M.D., age 54. Dr. Rozencweig is Vice President,
Strategic Planning and Portfolio Management of the Pharmaceutical Research
Institute of Bristol-Myers Squibb Company. From 1996 to 1998, Dr. Rozencweig was
Vice President, Strategic and Scientific Evaluation of the Pharmaceutical Group
of Bristol-Myers. From 1983 to 1996, Dr. Rozencweig was Vice President,
Infectious Diseases and Oncology at the Pharmaceutical Research Institute of
Bristol-Myers. Dr. Rozencweig is well known for his work in medical oncology,
new drug development and clinical trial methodology. At Bristol-Myers, he played
a prominent role in the clinical development and registration strategies of many
new anticancer agents and pioneered the regulatory approach to accelerated
approval of new drugs for the treatment of life-threatening diseases. Dr.
Rozencweig has also worked at the National Cancer Institute in Bethesda,
Maryland and the Jules Bordet Institute in Brussels, Belgium. He has been a
consultant to the German government for the appropriation of federal resources
for cancer research in Germany. Dr. Rozencweig received his M.D. from the Free
University of Brussels. Dr. Rozencweig has been a director of the Company since
August 1997.
Committees of the Board of Directors
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, David J. Galas and George S. Frazza. Dr. Galas became a
member of the Compensation Committee on June 11, 1999, succeeding Richard
Kessler who was a member of the Compensation Committee until his term as a
Director expired on that date. The Compensation Committee makes recommendations
to the full Board as to the compensation of senior management, administers the
Company's 1989 Stock Option Plan, 1997 Long Term Incentive Plan and 1999 Long
Term Incentive Plan and determines the persons who are to receive options under
such plans and the number of shares subject to each option.
The members of the Audit Committee are John L. Cassis, George S.
Frazza and Joseph A. Mollica, Ph.D. Mr. Frazza became a member of the Audit
Committee on June 11, 1999, succeeding Richard Kessler who was a member of the
Audit Committee until his term as a Director expired on that date. 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.
6
<PAGE>
-7-
The members of the Nominating Committee are John L. Cassis, Richard
J. Cote, M.D. and Anu D. Saad, Ph.D. The Nominating Committee recommends to the
Board nominees for election as directors of the Company.
The Board of Directors met eleven times during the fiscal year ended
December 31, 1999. Each of the Audit Committee and the Compensation Committee
met twice during the fiscal year ended December 31, 1999. The Nominating
Committee met three times during the fiscal year ended December 31, 1999. Each
of the persons named above attended at least 75% of the aggregate of the total
number of meetings of the Board of Directors and of the 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 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, or (iv) for any transaction from which
the director derived any improper personal benefit. If the Delaware corporation
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 such law, as so amended. Any
repeal or modification of such provision of the certificate of incorporation 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 Directors and
Officers." All information was furnished by them to the Company.
Anu D. Saad, Ph.D. Information concerning Dr. Saad is set forth
above under "Nominees for Election."
Richard P. Adelson, age 34. Richard Adelson has been Executive Vice
President and Chief Operating Officer of the Company since November 1999. From
June 1999 to November 1999, Mr. Adelson was Executive Vice President and Senior
Vice President of Operations, Sales and Marketing of the Company. From February
1998 to June 1999, he was Senior Vice President, Sales and Marketing of the
Company. From August 1996 through January 1998 he was Vice President, Sales of
the Company. He was Director of Sales of the Company from August 1994 to August
1996. From January 1992 to August 1994, Mr. Adelson served the Company as
District and Regional Sales Manager for the New York Metro Region. Prior to
joining IMPATH, Mr. Adelson was a
7
<PAGE>
-8-
Sales Representative for Surgipath Medical Industries, Inc., a medical equipment
company. Mr. Adelson received his Bachelor's Degree in Biology from the State
University of New York at Albany and studied at the Harvard School of Dental
Medicine.
David J. Cammarata, age 36. Mr. Cammarata has been Chief Financial
Officer of the Company since November 1999. From October 1998 through November
1999, Mr. Cammarata was Vice President, Corporate Controller, of the Company.
>From June 1994 through October 1998, Mr. Cammarata was Corporate Controller of
the Company. Prior to joining IMPATH, Mr. Cammarata spent four years with
Corning-Metpath, serving two years as a Senior Auditor and later as Assistant
Controller for the Company's Northwest California division. Mr. Cammarata, a
Certified Public Accountant, received his B.S. in Accounting from Seton Hall
University.
James B. Douglass, Ph.D., age 50. Dr. Douglass has been Chief
Information Officer of the Company since October 1999. Prior to joining IMPATH,
Dr. Douglass served as Vice President and General Manager of the Research and
Consulting Division of NDC Health Information Services. Earlier in his career,
Dr. Douglass spent six years in various roles including Senior Vice President
and General Manager, Market Research Division of IMS America.. Dr. Douglass also
launched and managed Douglass Associates and served as Chief Statistician with
Opinion Research Corporation, and Research Statistician with Educational Testing
Service. Dr. Douglass received his B.A. in Mathematics, and M.A. and Ph.D. in
Applied Statistics and Research Design, from Michigan State University.
8
<PAGE>
-9-
Executive Compensation
The following table sets forth information for the fiscal years
ended December 31, 1999, 1998 and 1997 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, 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
------------------- -----------------
Shares Underlying All Other
Name and Principal Position Fiscal Year Salary Bonus Options Compensation (1)
--------------------------- ----------- -------- -------- ----------------- ----------------
<S> <C> <C> <C> <C> <C>
Anu D. Saad, Ph.D.......................................... 1999 $250,000 $180,000 30,000 $3,600
President and Chief Executive Officer 1998 235,000 123,000 -0- 3,472
1997 210,000 103,500 50,000 1,931
Richard P. Adelson......................................... 1999 $171,000 $132,300 20,000 $3,600
Executive Vice President and Chief Operating Officer 1998 150,000 76,000 -0- 3,111
1997 125,000 67,500 30,000 1,618
David J. Cammarata......................................... 1999 $132,250 $36,000 10,000 $3,229
Chief Financial Officer 1998 105,000 22,500 -0- 1,906
1997 95,000 27,000 10,000 1,100
James B. Douglass, Ph.D. (2)............................... 1999 $52,675 $10,000 25,000 $ -0-
Chief Information Officer
John P. Gandolfo(3)........................................ 1999 $211,994 $ -0- -0- $3,600
1998 210,000 74,000 -0- 3,042
1997 190,000 54,000 42,500 2,248
</TABLE>
- -------------------
(1) Consists of contributions made by the Company to the IMPATH Inc. 401(k)
Retirement Savings Plan on behalf of such executive officer.
(2) Dr. Douglass was appointed Chief Information Officer of the Company
effective October 4, 1999.
(3) Mr. Gandolfo resigned as Chief Financial Officer and Chief Operating
Officer of the Company effective November 15, 1999.
9
<PAGE>
-10-
The following table sets forth the grants of stock options to the
executive officers named in the Summary Compensation Table who were granted
stock options during the fiscal year ended December 31, 1999. The amounts shown
for the named executive officers as potential realizable values are based on
arbitrarily assumed annualized rates of stock price appreciation of five percent
and ten percent over the exercise price of the options during the full terms of
the options. No gain to the optionees is possible without an increase in stock
price which will benefit all stockholders proportionately. These potential
realizable values are based solely on arbitrarily assumed rates of appreciation
required by applicable Securities and Exchange Commission regulations. Actual
gains, if any, on option exercises and holdings of Common Stock are dependent on
the future performance of the Common Stock and overall stock market conditions.
There can be no assurance that the potential realizable values shown in this
table will be achieved.
OPTION GRANTS IN THE FISCAL YEAR ENDED
DECEMBER 31, 1999
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of
Stock Price
Appreciation for
Individual Grants Option Term
------------------------------------------------------------------- ----------------------
Options % of Total Options Exercise
Granted Granted to Employees Price Expiration
Name (#) in Fiscal Year ($/Sh) Date 5% 10%
- ---------------------------- ------- -------------------- -------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Anu D. Saad, Ph.D. 30,000 15.7% $22.375 10/28/09 $422,239 $1,070,039
Richard P. Adelson 20,000 10.4% 22.375 10/28/09 281,493 713,359
David J. Cammarata 10,000 5.2% 22.375 10/28/09 140,747 356,680
James B. Douglass, Ph.D. (1) 25,000 13.1% 22.375 10/28/09 351,867 891,699
</TABLE>
- -------------------
(1) Dr. Douglass was appointed Chief Information Officer of the Company
effective October 4, 1999.
10
<PAGE>
-11-
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 1999, 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, 1999.
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 1999 Fiscal Year End (#) at 1999 Fiscal Year End (1)
------------------------------ ----------------------------
Shares Acquired
Name on Exercise (#) Value Realized Exercisable Unexercisable Exercisable Unexercisable
- --------------------------- --------------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Anu D. Saad, Ph.D. 47,522 $983,787.68 50,778 56,083 $361,466 $255,609
Richard P. Adelson 2,008 44,111.40 28,384 35,650 202,183 140,425
David J. Cammarata -0- -0- 12,523 17,450 115,512 57,506
James B. Douglass, Ph.D.(2) -0- -0- 3,646 21,354 11,148 65,290
John P. Gandolfo(3) 37,391 272,991.49 -0- -0- -0- -0-
</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.
(2) Dr. Douglass was appointed Chief Information Officer of the Company
effective October 4, 1999.
(3) Mr. Gandolfo resigned as Chief Financial Officer and Chief Operating
Officer of the Company effective November 15, 1999.
Employment-Related Agreements with Executive Officers
The Company has entered into employment-related agreements with Dr.
Saad and Mr. Adelson. Each agreement provides that in the event that the
employment of the executive officer is terminated by the Company without cause
or the executive officer terminates his or her employment for good reason, the
Company will continue to pay his or her base salary for one year after
termination, subject to setoff for any cash compensation paid to the executive
officer by any subsequent employer during such one-year period. Each agreement
also provides that the stock options granted to each executive officer prior to
September 12, 1997 will fully vest upon a merger, consolidation or tender or
exchange offer that results or would result in a change in control of the
Company, or the sale of all or substantially all of the assets of the Company.
Each executive officer is prohibited under his or her agreement from engaging in
any business in competition with the Company during the period of his or her
employment with the Company and for one year thereafter.
11
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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. In June 1999, the Company
granted to David J. Galas stock options to purchase 10,632 shares of Common
Stock at a purchase price of $26.00 per share in connection with Dr. Galas's
appointment to the Board of Directors of the Company. In October 1999, the
Company granted to each of John L. Cassis, Richard J. Cote and Joseph A. Mollica
stock options to purchase 10,000 shares of Common Stock at a purchase price of
$22.375 per share. The options granted to each of Dr. Galas, Mr. Cassis, Dr.
Cote and Dr. Mollica vest over a four-year period following the date of grant.
During 1999, the Company paid Dr. Cote $111,000 for consulting services provided
by him to the Company.
Compensation Committee
Interlocks and Insider Participation
All executive officer compensation decisions have been made by the
Compensation Committee of the Board of Directors. The members of the
Compensation Committee are John L. Cassis, David J. Galas and George S. Frazza.
Dr. Galas became a member of the Compensation Committee on June 11, 1999,
succeeding Richard Kessler who was a member of the Compensation Committee until
his term as a Director expired on that date. 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 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, 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, 1999, except as provided
below, its directors, officers and greater than ten percent stockholders
complied with all Section 16(a) filing requirements. David J. Galas reported his
initial beneficial ownership of Common Stock on Form 5 in February 1999. Anu D.
Saad reported exercises of options to purchase Common Stock occurring in March
1999 and July 1999 on Form 5 in February 2000. George S. Frazza reported the
purchase of Common Stock occurring in November 1999 on Form 5 in February 2000.
12
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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 24 public companies with the same Standard Industrial Classification
Code as the Company. 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 21, 1996 and that all dividends were reinvested.
CUMULATIVE TOTAL RETURN
COMPARISON GRAPH
[BAR CHART OMITTED]
----------------------------------------------------------
02/21/96 12/31/96 12/31/97 12/31/98 12/31/99
- --------------------------------------------------------------------------------
IMPATH Inc. 100.00 125.00 218.33 176.67 169.58
- --------------------------------------------------------------------------------
SIC Code Index 100.00 83.27 70.11 59.16 104.98
- --------------------------------------------------------------------------------
S&P 500 Index 100.00 117.82 157.13 202.03 244.55
- --------------------------------------------------------------------------------
13
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Report of the Compensation Committee
The Compensation Committee of the Board of Directors (the
"Committee") determines the compensation arrangements for executive officers and
senior management 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 key employees including the
chief executive officer, the chief financial officer. the chief information
officer and the chief operating officer, 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 1999 salary of
$250,000 for Anu D. Saad, Ph.D., President and Chief Executive Officer of the
Company.
Awards under the annual incentive bonus plan are based upon 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 Company's performance and the
executive's role in achieving that performance. 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
1999, payments under the annual incentive bonus plan were $180,000 to Dr. Saad,
$132,300 to Richard P. Adelson, Executive Vice President and Chief Operating
Officer of the Company, $36,000 to David J. Cammarata, Chief Financial Officer
of the Company, and $10,000 to James B. Douglass, Ph.D., Chief Information
Officer of the Company.
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
14
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-15-
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 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 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.
Richard Kessler was a member of the Compensation Committee during
1999 until his term as a Director of the Company expired on June 11, 1999.
THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
John L. Cassis
George S. Frazza
David J. Galas
15
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-16-
II. APPROVAL OF THE IMPATH INC.
2000 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 (the "1989 Plan"), its 1997 Long Term Incentive Plan ("1997 Plan") and
its 1999 Long Term Incentive Plan ("1999 Plan"). There are no shares available
for stock option grants under the 1989 Plan or under the 1997 Plan and only a
limited number of shares remain available for stock option grants under the 1999
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 25, 2000, the Board of Directors adopted,
subject to stockholder approval at the Meeting, the IMPATH Inc. 2000 Long Term
Incentive Plan (the "Incentive Plan"). In authorizing grants of stock options
and restricted stock, the Incentive Plan is intended to give the Company
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, 800,000 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 an award
otherwise terminates without a distribution of shares, the shares subject to
such award will again be available for awards under the Incentive Plan. The
number of shares of Common Stock subject to all awards
16
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-17-
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 of the Board of Directors (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. 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. As provided in the Incentive Plan, 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 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
Committee. 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. 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. The
exercise price per share of Common Stock subject to an option 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, the times at which each such option 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 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.
17
<PAGE>
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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.
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.
Awards may be settled in 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 Board may amend, modify or terminate the Incentive Plan at any
time provided that (i) the number of shares of Common Stock available under the
Incentive Plan may not be increased without stockholder 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 or (iii) extend the period during which awards may
be granted under the Incentive Plan.
No awards may be granted under the Incentive Plan after December 31,
2009. 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.
18
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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 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, 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. 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 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 awards involving stock 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 received at the first time the shares 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 rather than upon lapse of restrictions
on transferability or the substantial risk of forfeiture, but if the participant
subsequently forfeits such shares he would not be entitled to any tax deduction,
including as a capital loss, for the value of the shares 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.
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 to be
distributed will be withheld (or previously acquired stock surrendered by the
participant) to satisfy withholding and other tax obligations.
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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.
No stock options or other awards have been granted or committed to
under the Incentive Plan. The number of stock options or other awards that may
be granted to any executive officer of the Company or other employee or
participant pursuant to the Incentive Plan is not currently determinable and is
in the discretion of the Committee. On April 24, 2000, the closing price of the
Common Stock on The Nasdaq National Market was $45.25 per share.
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.
III. RATIFICATION OF SELECTION
OF INDEPENDENT ACCOUNTANTS
The Board of Directors of the Company has selected KPMG LLP to serve
as independent accountants for the Company for the fiscal year ending December
31, 2000. The Board of Directors considers KPMG LLP to be eminently qualified.
Although it is not required to do so, the Board of Directors is
submitting its selection of KPMG 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 LLP to examine the financial statements of
the Company for the Company's fiscal year ending December 31, 2000. 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 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.
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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. 2000 Long Term Incentive Plan and FOR 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 2001 Annual
Meeting of Stockholders of the Company must be received by the Company by
December 30, 2000 in order to be considered for inclusion in the Company's Proxy
Statement relating to such Meeting.
New York, New York Richard P. Adelson, Secretary
April 28, 2000
21
<PAGE>
EXHIBIT A
IMPATH INC.
2000 LONG TERM INCENTIVE PLAN
SECTION 1. Purpose. The purposes of this IMPATH Inc. 2000 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 stockholders, 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 or Restricted Security 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, $.005 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 two 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.
"Participant" shall mean any individual granted an Award under 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.
"Restricted Securities" shall mean any Common Shares granted under
Section 6(b) of the Plan, any right granted under Section 6(b) 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.
<PAGE>
A-3
"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.
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
of Common Shares to be covered by 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, 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 Common Shares
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
stockholder 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, 2009.
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 800,000, 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 800,000 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 Common Shares, 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 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.
<PAGE>
A-4
(ii) 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 involving the Company
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 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
<PAGE>
A-5
Value of a Common Share on the date of grant of such Option, or such
higher price as required under Subsection 6(a)(iv) or (v) 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) 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) Upon termination of a Participant's employment with the
Company (x) as a result of retirement pursuant to a retirement plan
of 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) 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 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; and
(E) For purposes of paragraphs (A) through (C) 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.
<PAGE>
A-6
(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 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; and
(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.
<PAGE>
A-7
(b) 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.
(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.
(c) General.
(i) 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.
(ii) 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.
(iii) 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
<PAGE>
A-8
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 16a-1 and Rule 16b-3.
(iv) 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 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.
(v) 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. Except to the extent prohibited by applicable
law:
(a) Amendments to the Plan. The Board may amend, alter, suspend,
discontinue, or terminate the Plan without the consent of any stockholder,
Participant, other holder or beneficiary of an Award, or other Person; provided,
however, that 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 stockholders 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(b) 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 amend any terms of, or
alter, suspend, discontinue, cancel or terminate, any Award theretofore granted,
prospectively or retroactively; provided, however, that any amendment,
alteration, suspension, discontinuation, cancellation or termination that would
impair the rights of any Participant or holder or beneficiary of
<PAGE>
A-9
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.
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) 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.
(c) 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.
(d) 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.
(e) 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.
(f) 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
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.
(g) 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.
(h) 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.
<PAGE>
A-10
(i) 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 was adopted by the Board on April 25, 2000 subject to stockholder approval.
The Plan shall be void if the stockholders of the Company shall not have
approved the adoption of the Plan within twelve (12) months after April 25,
2000, by vote of a majority of shares present or represented and voting thereon
at a meeting of stockholders duly called and held for such purpose.
<PAGE>
[IMPATH LOGO]
PROXY - ANNUAL MEETING OF STOCKHOLDERS - JUNE 19, 2000
COMMON STOCK
The undersigned, a stockholder of IMPATH Inc., does hereby appoint
Anu D. Saad, Ph.D. and Richard P. Adelson, 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 19, 2000, at 9:30
A.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., George S.
Frazza, Esq., David J. Galas, Ph.D., Joseph A. Mollica, Ph.D., and Marcel
Rozencweig, M.D.
2. Approval of the IMPATH Inc. 2000 Long Term Incentive Plan.
FOR |_| AGAINST |_| ABSTAIN |_|
3. Ratification of appointment of KPMG LLP as independent accountants for
fiscal 2000.
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.
Stockholder(s) Sign Here (L.S.) (L.S.)
Dated , 2000
IMPORTANT: Before returning this Proxy, please sign your name or names on the
line(s) above 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.
