SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No.__)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [__]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
ACCUIMAGE DIAGNOSTICS CORP.
(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:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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|__| Fee paid previously with preliminary materials.
|__| Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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ACCUIMAGE DIAGNOSTICS CORP.
400 OYSTER POINT BOULEVARD, SUITE 114
SOUTH SAN FRANCISCO, CALIFORNIA 94080
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
JUNE 29, 2000
TO THE SHAREHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of AccuImage
Diagnostics Corp., a Nevada corporation (the "Company"), will be held on June
29, 2000, at 10:00 a.m., local time, at 400 Oyster Point Blvd., Suite 114, South
San Francisco, California 94080 for the following purposes:
1. To elect directors to serve for the ensuing year and until their successors
are elected and qualified.
2. To approve the AccuImage Stock Option Plan.
3. To transact such other business as may properly come before the meeting or
any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only shareholders of record at the close of business on May 10, 2000 are
entitled to notice of and to vote at the meeting and at any continuation or
adjournment thereof.
By order of the Board of Directors,
Robert Taylor
CHIEF EXECUTIVE OFFICER
South San Francisco, California
June 1, 2000
ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. HOWEVER,
TO ENSURE YOUR REPRESENTATION AT THE MEETING, YOU ARE URGED TO VOTE, SIGN, AND
RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN THE POSTAGE-PREPAID
ENVELOPE ENCLOSED FOR THAT PURPOSE.
<PAGE>
ACCUIMAGE DIAGNOSTICS CORP.
400 OYSTER POINT BOULEVARD, SUITE 114
SOUTH SAN FRANCISCO, CALIFORNIA 94080
PROXY STATEMENT
GENERAL
The enclosed proxy is solicited on behalf of the Board of Directors of
AccuImage Diagnostics Corp., a Nevada corporation (the "Company"), for use at
the Annual Meeting of shareholders to be held on June 29, 2000 at 10:00 a.m.,
local time, at which shareholders of record on May 10, 2000 will be entitled to
vote. On May 10, 2000, the Company had outstanding 10,981,534 shares of Common
Stock. The Annual Meeting will be held at 400 Oyster Point Blvd., Suite 114,
South San Francisco, California 94080 .
VOTING AND REVOCABILITY OF PROXIES
All properly executed proxies that are not revoked will be voted at the
meeting in accordance with the instructions contained therein. Proxies
containing no instructions regarding the proposals specified in the form of
proxy will be voted FOR approval of all proposals in accordance with the
recommendation of the Company's Board of Directors. Any person giving a proxy in
the form accompanying this statement has the power to revoke such proxy at any
time before its exercise. The proxy may be revoked by filing with the Chief
Executive Officer of the Company at the Company's principal executive office an
instrument of revocation or a duly executed proxy bearing a later date, or by
filing written notice of revocation with the secretary of the meeting prior to
the voting of the proxy or by voting the shares subject to the proxy by written
ballot.
Holders of Common Stock are entitled to vote for each share of Common Stock
held. Broker non-votes and shares held by stockholders present in person or by
proxy at the meeting but abstaining on a vote will be counted in determining
whether a quorum is present at the Annual Meeting.
SOLICITATION
The Company will bear the entire cost of solicitation, including
preparation, assembly, printing, and mailing of this proxy statement, the proxy,
and any additional material furnished to shareholders. Original solicitation of
proxies by mail may be supplemented by telephone, telegram, or personal
solicitation by directors, officers, or employees of the Company; no additional
compensation will be paid for any such services. Except as described above, the
Company does not intend to solicit proxies other than by mail.
Arrangements will also be made with brokerage firms and other custodians,
nominees and fiduciaries to forward proxy material to certain beneficial owners
of the Company's Common Stock, and the Company will reimburse such brokerage
firms, custodians, nominees and fiduciaries for reasonable out-of-pocket
expenses incurred by them in connection therewith.
The Company intends to mail this proxy statement on or about June 2, 2000.
<PAGE>
SHAREHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Proposals of shareholders that are intended to be presented at the
Company's 2001 Annual Meeting of shareholders must be received by the Company no
later than February 20, 2001 in order to be included in the proxy statement and
proxy relating to that meeting.
PROPOSAL ONE
ELECTION OF DIRECTORS
Each director to be elected will hold office until the next annual meeting
of shareholders and until his successor is elected and has qualified, or until
his death, resignation, or removal.
There are five nominees for the five Board positions currently established
pursuant to the Company's Bylaws. All nominees are currently directors of the
Company. Each person nominated for election has agreed to serve if elected, and
management has no reason to believe that any nominee will be unavailable to
serve. If any director is unable to stand for re-election, the Board may reduce
the Board's size or designate a substitute. Unless otherwise instructed, the
proxy holders will vote the proxies received by them for the five nominees named
below. The five candidates receiving the highest number of affirmative votes of
the shares entitled to vote at the Annual Meeting will be elected directors of
the Company.
MANAGEMENT RECOMMENDS A VOTE FOR EACH
OF THE NOMINEES FOR DIRECTOR NAMED BELOW
NOMINEES
Five directors will be elected at the Annual Meeting to serve for one year
expiring on the date of the annual meeting in 2001. Proxies can be voted for no
more than five nominees. The following table sets forth certain information
regarding the Company's directors and nominees.
NAME AGE POSITION DIRECTOR SINCE
Douglas P. Boyd, Ph.D. 58 Director and Chairman 1997
of the Board
John Klock, M.D. 55 Director 2000
Alexander R. Margulis, M.D. 78 Director 1998
Chris Shepherd 53 Director and Acting Chief 1997
Financial Officer
Robert Taylor, Ph.D. 31 Chief Executive Officer
and Director 1999
DOUGLAS P. BOYD, PH.D., DIRECTOR. Dr. Boyd received a Bachelor of Science
degree from the University of Rochester in 1963 and Doctor of Philosophy in
Physics from Rutgers University in 1969. From 1981 to present, he has been
employed by Imatron Inc., a public company based in South San Francisco that
manufactures and distributes electron scanners, and is currently its Chairman of
the Board and Chief Technology Officer. He is also a Director of InVision
Technologies, Inc., a public company that manufactures and sells an advanced
scanner system for explosives detection in airport baggage.
JOHN C. KLOCK, M.D., DIRECTOR. Dr. Klock was appointed to the Board on
March 23, 2000. He is a board-certified Internist and Hematologist-Oncologist
and was formerly an academic physician at the University of California, San
Francisco. He has been a founder of several biotechnical companies including
Glycomed, Inc., Glyko Biomedical, Ltd. and BioMarin Pharmaceutical, Inc., and
since 1996
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has served as President and Director of BioMarin Pharmaceutical Inc. and since
1990 has served as Chief Executive and Director of Glyko Biomedical Ltd.
ALEXANDER R. MARGULIS, M.D., DIRECTOR. Dr. Margulis graduated from Harvard
Medical School in 1950. He was Professor and Chairman of the Department of
Radiology at University of California, San Francisco for twenty-six years
(1963-1989) and served as the school's Associate Chancellor for four years
(1989-1993). Dr. Margulis was also a founder and director of the Magnetic
Resonance Science Center at UCSF (1989-1993). From 1993 to 2000, Dr. Margulis
has been a Special Consultant to the Vice Chancellor for University Advancement
& Planning at UCSF. He is currently a Clinical Professor of Radiology at Cornell
University in New York City. He is also a member of the Institute of Medicine of
the National Academy of Sciences. Dr. Margulis has written over 250 articles
concerned with intestinal radiology, magnetic resonance imaging in magnetic
resonance spectroscopy and radiologic and health policy issues.
CHRIS R. SHEPHERD, DIRECTOR AND ACTING CHIEF FINANCIAL OFFICER. Mr.
Shepherd received a Bachelor of Arts in Economics from the University of Regina.
From 1971 to 1981, he was an employee or independent distributor for a Toronto
based international engineered building manufacturing Company. His current
positions in private companies include President, Arco Structures Inc., an
Alberta Company; President, Seacrest Development Corp., Surrey, B.C.; President,
Olympic Silver Resources Inc., a Nevada Company; Director, Vanasia International
Educational Consultancy Ltd., Vancouver, B.C.
ROBERT TAYLOR, PH.D., CHIEF EXECUTIVE OFFICER AND DIRECTOR. Dr. Taylor
received both his B.S. (1990) and his Ph.D. (1996) in Physics from Imperial
College of Science, Technology and Medicine, London, England. From October 1994
to August 1997, Dr. Taylor was a research associate at Imperial College. From
August 1997 to August 1998, he was a free lance software developer. In August
1998, Dr. Taylor became an independent contractor with the Company. On July 1,
1999, the Board of Directors appointed him Chief Technology Officer, and was
subsequently appointed Chief Executive Officer and Director on August 24, 1999.
TRANSACTIONS WITH MANAGEMENT AND OTHERS
Douglas P. Boyd, Ph.D., a director and greater-than-10% shareholder of the
Company, is also Chairman of the Board of Imatron Inc., a New Jersey
corporation, based in South San Francisco, California. Imatron is engaged in the
business of providing imaging technology and services for its products and for
the products of others. On April 14, 1999, Imatron and the Company entered into
a Product Development, Distribution, and Warranty Support Agreement which
provides for Imatron to be the distributor of Imatron products to certain new
Imatron customers and to be its provider of on-site corrective maintenance,
warranty and customer support for such systems. Approximately seventy-five
percent of the Company's revenue in the fiscal year ended September 30, 1999
came from its development and distribution arrangement with Imatron. Dr. Boyd is
not a party to the agreement nor was he involved in the negotiations between the
Company and Imatron.
The Company paid a finder's fee of $33,000 to Inyoung Boyd, wife of Dr.
Boyd, for services rendered in connection with the Company's private placement
offering which commenced on January 25, 2000.
BOARD COMMITTEES AND MEETINGS
During 1999 the Board of Directors held three meetings. On March 23, 2000,
the Board of Directors formed a standing Audit Committee, consisting of Dr.
Margulis and Mr. Shepherd, whose function is to recommend the engagement of the
Company's independent accountants, approve services
3
<PAGE>
performed by such accountants, and review and evaluate the Company's accounting
system and system of internal controls.
On March 23, 2000, the Board of Directors formed a standing Compensation
Committee, consisting of Drs. Klock and Boyd, which makes recommendations to the
Board of Directors concerning salaries and incentive compensation paid to
officers; administers the Company's Stock Option Plan, including the grant of
options, and performs such other functions regarding compensation as the Board
may delegate.
COMPENSATION OF DIRECTORS
EMPLOYEE DIRECTOR COMPENSATION. Directors who are also employees of the
Company receive no fees for services provided in that capacity, but are
reimbursed for out-of-pocket expenses incurred in connection with attendance at
meetings of the Board of Directors and its committees. See "EXECUTIVE
COMPENSATION."
NON-EMPLOYEE DIRECTOR COMPENSATION. Directors who are not employees of the
Company are also reimbursed for out-of-pocket expenses incurred in connection
with their attendance at meetings of the Board of Directors and its committees.
In connection with their services to the Company, non-employee directors are
also entitled to receive non-qualified options pursuant to Company's Stock
Option Plan.
Initial options granted to non-employee directors have terms of ten years
and typically the shares underlying the option vest over four years at the rate
of 25% annually from the anniversary date. The exercise price of each option
granted typically equals at least 85% of the fair market value of the Common
Stock on the date of grant.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tables, based in part upon information supplied by officers,
directors and principal shareholders, set forth certain information regarding
the ownership of the Company's voting securities as of May 10, 2000 by (i) all
those known by the Company to be beneficial owners of more than five percent of
any class of the Company's voting securities; (ii) each director; (iii) each
named executive officer; and (iv) all executive officers and directors of the
Company as a group. Unless otherwise indicated, each of the shareholders has
sole voting and investment power with respect to the shares beneficially owned,
subject to community property laws where applicable.
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<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AMOUNT AND NATURE
NAME AND ADDRESS OF OF BENEFICIAL PERCENT
TITLE OF CLASS BENEFICIAL OWNER OWNERSHIP(a) OF CLASS
-------------- ------------------ ----------------- --------
Common Stock Douglas P. Boyd 1,698,232(b) 15.2%
c/o Imatron Inc.
389 Oyster Point Blvd.,
So. San Francisco, CA 94080
Common Stock Geraldine Celestre 1,135,732 10.3%
254 Loyola Drive
Millbrae, CA 94030
Common Stock John C. Klock, M.D. 838,022(c) 7.3%
371 Bel Marin Keys Blvd.,
Suite 210
Novato, CA 94949
Common Stock Chung Lew 644,000 5.9%
c/o US Trust
114 West 47th Street
New York, NY 10036
Common Stock Chris Shepherd 548,916(d) 5.0%
2317 150B Street
White Rock, BC V4A 8B1
----------
(a) As of May 10, 2000, 10,981,534 shares of common stock were issued and
outstanding. Unless otherwise noted, the security ownership disclosed in
the table is of record and beneficial. The term beneficial ownership with
respect to a security is defined by Rule 13d-3 under the Securities
Exchange Act of 1934 as consisting of sole or shared voting power
(including the power to vote or direct the vote) and/or sole or shared
investment power (including the power to dispose or direct the disposition)
with respect to the security through any contact, arrangement,
understanding, relationship, or otherwise.
(b) Includes 1,485,732 shares owned directly and 187,500 vested stock options
as of May 10, 2000 or within sixty days thereafter. Also includes 25,000
shares owned by Dr. Boyd's wife to which Dr. Boyd disclaims any beneficial
interest.
(c) Includes 416,667 shares owned directly, 416,667 warrants, and 4,688 vested
stock options as of May 10, 2000 or within 60 days thereafter.
(d) Includes 366,666 shares owned directly and 81,250 vested stock options as
of February 8, 2000 or within 60 days thereafter. Also includes 101,000
shares owned by Mr. Shepherd's wife to which Mr. Shepherd disclaims any
beneficial interest.
5
<PAGE>
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The table below presents the security ownership of the Company's Directors
and Named Executive Officers.
AMOUNT AND NATURE
NAME AND ADDRESS OF OF BENEFICIAL PERCENT
TITLE OF CLASS BENEFICIAL OWNER OWNERSHIP(a) OF CLASS
-------------- ------------------ ----------------- --------
Common Stock Douglas P. Boyd, Ph.D. 1,698,232(b) 15.2%
Common Stock John C. Klock, M.D. 838,022(c) 7.3%
Common Stock Chris Shepherd 548,916(d) 5.0%
Common Stock Robert Taylor, Ph.D. 142,825(e) 1.3%
Common Stock Alexander R. Margulis, M.D. 71,250(f) 0.6%
Common Stock All directors and executive 3,299,245 27.8%
officers as a group (5 persons)
----------
(a) As of May 10, 2000, 10,981,534 shares of common stock were issued and
outstanding. Unless otherwise noted, the security ownership disclosed in
this table is of record and beneficial. The term beneficial ownership with
respect to a security is defined by Rule 13d-3 under the Securities
Exchange Act of 1934 as consisting of sole or shared voting power
(including the power to vote or direct the vote) and/or sole or shared
investment power (including the power to dispose or direct the disposition)
with respect to the security through any contact, arrangement,
understanding, relationship, or otherwise.
(b) Includes 1,485,732 shares owned directly and 187,500 vested stock options
as of May 10, 2000 or within 60 days thereafter. Also includes 25,000
shares owned by Dr. Boyd's wife to which Dr. Boyd disclaims any beneficial
interest.
(c) Includes 416,667 shares owned directly, 416,667 warrants, and 4,688 vested
stock options as of May 10, 2000 or within 60 days thereafter.
(d) Includes 366,666 shares owned directly and 81,250 vested stock options as
of May 10, 2000 or within 60 days thereafter. Also includes 101,000 shares
owned by Mr. Shepherd's wife to which Mr. Shepherd disclaims any beneficial
interest.
(e) Consists of vested stock options as of May 10, 2000 or within 60 days
thereafter.
(f) Includes 56,250 vested stock options, as of May 10, 2000 or within 60 days
thereafter, and 15,000 shares owned by Dr. Margulis' wife to which Dr.
Margulis disclaims any beneficial interest.
6
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE.
The following Summary Compensation Table shows certain compensation
information for the Chief Executive Officer and the Company's most highly paid
executive officers (collectively referred to as the "Named Executive Officers").
Compensation data for other executive officers is not presented in the graphs
because aggregate compensation for such executive officers does not exceed
$100,000 for services rendered in all capacities during the fiscal year. This
information includes the dollar value of base salaries, bonus awards, the number
of SARs/options granted, and certain other compensation, if any, whether paid or
deferred.
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
------------------- -----------------------
NUMBER
RESTRICTED OF SHARES
NAME AND PRINCIPAL POSITION STOCK UNDERLYING ALL OTHER
--------------------------- YEAR SALARY BONUS AWARDS OPTIONS COMPENSATION
---- ------ ----- ------ ------- ------------
<S> <C> <C> <C> <C> <C> <C>
Allen B. Poirson, former President 1999 $93,333 -0- -0- 50,000 $1,000(c)
and Chief Executive Officer(a) 1998 $70,000 -0- -0- -0-
Robert Taylor, Chief Executive 1999 $52,000 -0- -0- 485,500 -0-
Officer(b)
</TABLE>
----------
(a) Dr. Poirson was appointed President and Chief Executive Officer on June 15,
1998 and resigned effective August 23, 1999.
(b) Dr. Taylor was appointed Chief Executive Officer effective August 24, 1999.
He was the Company's Chief Technology Officer from July 1, 1999 to August
23, 1999. Prior to that time, he was an independent contractor with the
Company.
(c) Represents the Company's matching contributions to its 401(k) plan.
STOCK OPTION PLAN
In 1998, the Company started a stock option plan that authorized the
issuance of options for up to 1,600,000 shares of the Company's common stock. On
July 1, 1999, the Board amended and re-approved the Plan. On December 22, 1999,
the Board authorized another 500,000 shares available for issuance under the
Plan. The Board has submitted the Stock Option Plan for shareholder approval at
the Annual Meeting. See PROPOSAL TWO
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OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth the options granted during the last
fiscal year to each of the Named Executive Officers of the Company:
OPTION/SAR GRANTS IN LAST FISCAL YEAR
================================================================================
INDIVIDUAL GRANTS
--------------------------------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS/SARS EMPLOYEES IN FISCAL BASE PRICE EXPIRATION
NAME GRANTED (#) YEAR (A) ($/SH) DATE
---- ----------- -------- ------ ----
Allen Poirson 50,000 6.7% $0.47 08/23/2009
Robert Taylor 8,600 1.1% $0.50 11/06/2008
3,000 0.4% $0.50 11/26/2008
8,500 1.1% $0.50 01/08/2009
6,000 0.8% $0.50 04/06/2009
6,400 0.9% $0.50 04/20/2009
3,000 0.4% $0.50 05/28/2009
300,000 40.4% $0.50 07/01/2009
150,000 20.2% $0.56 08/24/2009
(a) Based on 742,080 options granted to all employees and contractors.
OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR-END OPTION VALUES
The following table provides information with respect to option exercises
in fiscal 1999, by the Named Executive Officers and the value of such officers'
unexercised options at September 30, 1999
<TABLE>
<CAPTION>
AGGREGATED OPTIONS EXERCISED AND OPTION VALUES IN FISCAL YEAR 1999
==================================================================================================================
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
OPTIONS AT FY-END FY-END ($)
--------------------------------------------------------
SHARES
ACQUIRED ON VALUE
NAME EXERCISE (#) REALIZED ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ------------ ------------ ------------------------- -------------------------
<S> <C> <C> <C> <C>
Allen Poirson -0- -0- 175,000/0 -0-
Robert Taylor -0- -0- 49,075/440,625 -0-
</TABLE>
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COMPENSATION COMMITTEE REPORT
This report is provided by the Compensation Committee of the Board of
Directors (the "Committee") to assist stockholders in understanding the
Committee's objectives and procedures in establishing the compensation of the
Company's Chief Executive Officer and other executive officers. The Committee,
made up of non-employee Directors, is responsible for establishing and
administering the Company's executive compensation program. None of the members
of the Committee are eligible to receive awards under the Company's incentive
compensation programs.
The Company's executive compensation program is designed to motivate,
reward, and retain the management talent needed to achieve its business
objectives and maintain its competitiveness in the medical imaging industry. It
does this by utilizing competitive base salaries that recognize a philosophy of
career continuity and by rewarding exceptional performance and accomplishments
that contribute to the Company's success.
KEY ELEMENTS OF EXECUTIVE COMPENSATION
The Company's executive compensation program consists of three elements:
Base Salary, Bonus, and Equity Based Compensation.
BASE SALARY
A competitive base salary is crucial to support the philosophy of
management development and career orientation of executives. Salaries are
targeted to pay levels of the Company's competitors and companies having similar
capitalization and revenues, among other attributes. Executive salaries are
reviewed annually.
BONUS
Bonus awards are made in cash and in stock to recognize contributions to
the Company's business during the past year. The bonus an executive receives is
dependent on individual performance and level of responsibility. Assessment of
an individual's relative performance is made annually based on a number of
factors which include initiative, business judgment, technical expertise, and
management skills. Quarterly and annual revenue targets with associated bonuses
are an effective way to motivate executives to develop the Company's revenues
consistently, while annual profit bonuses incentivize executives to maintain the
Company in a profitable state.
EQUITY BASED COMPENSATION
Long-term incentive awards are designed to develop and maintain strong
management through share ownership. During fiscal year 1999, the Board of
Directors awarded 50,000 and 485,500 options to Allen Poirson and Robert Taylor,
respectively, as set forth on the above chart.
STOCK OPTION PLAN. In 1998, the Directors adopted the stock option plan,
which was amended and re-adopted in July 1999. At the discretion of the Board,
eligible officers, employees and other non-employee consultants periodically
receive options to purchase shares of the Company's Common Stock pursuant to the
Plan. The value of the options depends entirely on appreciation of AccuImage
stock. Grant of options depends upon quarterly and annual Company performance,
as determined by review of qualitative and quantitative factors. The Board is
presenting the Stock Option Plan to the Shareholders for approval. See PROPOSAL
TWO.
9
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1999 CHIEF EXECUTIVE OFFICER COMPENSATION
Effective August 23, 1999, Dr. Poirson resigned as a director and as
President and Chief Executive Officer of the Company. The Company and Dr.
Poirson entered into a Separation Agreement and General Release, whereby the
Company agreed to pay Dr. Poirson a separation payment of $23,333.33 and awarded
him 50,000 fully vested options in recognition of his services to the Company.
Effective August 24, 1999, the Board appointed Robert Taylor, its Chief
Technology Officer, as the Chief Executive Officer and a director. Pursuant to
his Employment Agreement, Dr. Taylor was entitled to a base salary equivalent to
$126,500, and he was granted an option to purchase 150,000 shares of the
Company's Common Stock. Additionally, he is entitled to several incentive
bonuses based on the Company's quarterly and annual gross revenues and net
profit. Pursuant to the agreement, in the event of Dr. Taylor's termination by
the Company without cause, Dr. Taylor is entitled to receive two months of
compensation at the annual salary rate then in effect. In February 2000, the
Board raised Dr. Taylor's salary to $151,800 per year and granted him an
additional 50,000 options to purchase Common Stock.
The Committee believes that the base salary and other terms and conditions
of Dr. Taylor's employment are consistent with the foregoing philosophy and
objectives and reflect the scope and level of his responsibilities.
MEMBERS OF THE COMPENSATION COMMITTEE
John C. Klock, M.D.
Douglas P. Boyd, Ph.D.
FILINGS BY DIRECTORS, EXECUTIVE OFFICERS AND TEN PERCENT HOLDERS
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, executive officers, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
Executive officers, directors, and greater than ten percent shareholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that five reports were not
timely filed. Mr. Shepherd, Mrs. Celestre, and Drs. Taylor, Boyd and Margulis
were late filing their Form 3 initial ownership reports.
10
<PAGE>
PROPOSAL TWO
TO APPROVE THE EMPLOYEE STOCK OPTION PLAN
The following is a summary of the material features of the Company's Stock
Option Plan, as amended, including amendments for which shareholder approval is
being requested.
PROPOSAL
In January 1998, the Company started a stock option plan to enable the
Company to award stock options to select employees, directors and non-employee
consultants as an incentive to continue to render services and to encourage them
to remain with the Company. The Board initially authorized the issuance of
options for up to 1,600,000 shares of the Company's Common Stock. On July 1,
1999, the Board amended and re-adopted the Company's Stock Option Plan (the
"Plan"). On December 22, 1999, the Board increased the number of shares
available for issuance to 2,100,000. At the Annual Meeting, the shareholders are
being requested to consider and approve this Plan. The affirmative vote of the
holders of a majority of the shares represented and voting at the meeting is
required for approval. The Plan is attached to this Proxy Statement as Exhibit
1.
PURPOSES OF THE STOCK OPTION PLAN
The purposes of the Plan are to induce persons of outstanding ability and
potential to join and remain with the Company; to provide an incentive for such
employees, as well as for non-employee consultants, to expand and improve the
profits and prosperity of the Company by enabling such persons to acquire
proprietary interests in the Company; and to attract and retain key personnel
through the grant of options to purchase shares of the Company's Common Stock.
ADMINISTRATION
The Plan is currently administered by the Compensation Committee of the
Board of Directors of the Company (the "Committee"). As used herein with respect
to the Plan, the "Board" refers to the Compensation Committee as well as the
Board itself.
The Board has the full authority in its discretion, subject to and not
inconsistent with the express provisions of the Plan, to grant options; to
determine the exercise price and term of each option; the persons to whom, and
the time or times at which, options shall be granted; the number of shares of
Common Stock to be covered by each option; to interpret the Plan; to prescribe,
amend, and rescind rules and regulations relating to the Plan; to determine the
terms and provisions of the option agreements (which need not be identical)
entered into in connection with the grant of options under the Plan; and to make
all other determinations deemed necessary or advisable for the administration of
the Plan.
ELIGIBILITY
Options may be granted to any regular full-time employee, director, or
non-employee consultant of either the Company or any affiliate of the Company.
STOCK SUBJECT TO THE OPTION PLAN
Subject to adjustments, the maximum number of shares of Common Stock that
may be optioned or sold under the Plan is Two Million One Hundred Thousand
(2,100,000). Such shares may be authorized but unissued shares of stock of the
Company, or issued shares of Stock reacquired by the Company, or shares
purchased in the open market expressly for use under the Plan. If for any reason
any
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shares of stock as to which an option has been granted cease to be subject to
purchase thereunder, then (unless the Plan shall have been terminated) such
shares shall become available for subsequent awards under the Plan in the
discretion of the Board.
TERMS OF STOCK OPTIONS
The following is a description of the terms and conditions of stock options
permitted by the Plan. Options granted pursuant to the Plan are authorized by
the Board and evidenced by a stock option agreement. Such terms and conditions
evidenced by the agreement may change from time to time, and the terms and
conditions of separate options need not be identical.
TYPE OF OPTIONS
The Plan sets forth two categories of options: Incentive Stock Options
("ISOs") and Non-Qualified Stock Options ("NSOs"). Any options granted after
Board adopted the Plan but within twelve months of shareholder approval may
qualify as incentive stock options, provided that all statutory and Plan
requirements are met. Any options granted prior to Board adoption pursuant to
the stock option plan adopted in January 1998 or that do not qualify as
incentive stock options shall be deemed nonqualified stock options, provided
that they meet the requirements of the Plan.
ISOs, which meet the requirements of Section 422 of the Internal Revenue
Code of 1986, as amended, may be granted to employees of the Company. The
purchase price shall not be less than the fair market value of the Common Stock
at the date of grant, except that the purchase price shall be 110% of the fair
market value in the case of any person who owns stock possessing more than 10%
of the total voting power of all classes of stock. The term of an incentive
stock option granted under the Plan will not exceed ten years; provided that the
term of any incentive stock option granted to a 10% stockholder will not exceed
five years.
NSOs may be granted to any employee or non-employee consultant to the
Company. The purchase price is determined by the Board, but cannot be less than
85% of the fair market value of the shares at the time except that when the
grantee owns more than 10% of the voting power of all classes of stock at the
time of grant, the price is be 110% of the fair market value of the shares at
the time of the grant. No NSO can be exercisable more than ten (10) years from
the date of grant.
CONSIDERATION
The exercise price of options granted under the Plan must be paid either
(i) in cash or by check, bank draft or money order at the time of the option is
exercised, (ii) by delivery of shares of Common Stock valued at fair market
value owned by optionee or with shares of Common Stock (valued at fair market
value) withheld from the shares otherwise delivered to optionee upon exercising
the option, (iii) by an approved deferred payment schedule or other arrangement,
which arrangement shall be contained in writing in the option agreement, in
which event an interest rate will be stated which is not less than the rate then
specified which will prevent any imputation of higher interest under Section 483
of the Code, (iv) by delivery of a promissory note with such terms as the
Committee requires, or by retention by the Company of some of the stock as to
which the option is then being exercised, in which case the optionee's notice of
exercise shall include a statement (1) directing the Company to retain so many
shares that would otherwise have been delivered by the Company upon exercise of
this option as equals the number of shares that would have been surrendered to
the Company if the purchase price had been paid with previously outstanding
stock of the Company, and (2) confirming the aggregate number of shares as to
which this option is being thus exercised and therefore surrendered, or (v) in
any other form of legal consideration acceptable to the Committee at the time of
grant or exercise.
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OPTION EXERCISE
Options granted under the Plan may be immediately exercisable or allotted
in periodic installments as determined by the Board of at least 25% per year
over four years. If the total number of shares subject to an option is allotted
in periodic installments, then during each installment period, the option may
become exercisable with respect to some or all of the shares allotted to that
period and may be exercised with respect to some or all of the shares allotted
to that period and any prior period for which the option was not fully
exercised. No option may be exercised after the expiration of ten years from the
date of grant.
CHANGE OF CONTROL
In the event the Company dissolves or liquidates or another entity succeeds
to its assets, or in the event of an acquisition or merger or consolidation in
which the Company is not the surviving entity, or in the event of a reverse
merger in which the Company survives but its common stock immediately preceding
the merger is converted into other property by virtue of the merger, then the
exercise dates of all options granted pursuant to the Plan automatically
accelerate and all options granted pursuant to this Plan become exercisable in
full, notwithstanding any other provision of this Plan or of any outstanding
options granted hereunder.
TERMINATION OF OPTION
Options held by employees, directors and non-employee consultants generally
terminate three months after termination of employment or service with the
Company or affiliate, unless: (a) if employment is terminated for cause, as such
term is defined by California law, the employer's contract of employment or the
option agreement, the option shall immediately terminate; or (b) if termination
is due to the employee's permanent and total disability within the meaning of
Section 22(e)(3) of the Code, the option may be exercised at any time within one
year following termination; or (c) the option agreement by its terms specifies
whether it shall terminate later than three (3) months after termination of
employment or service. If the option may be exercised later than three months
following termination, any portion exercised beyond three months will be a
non-qualified stock option.
NONTRANSFERABILITY
An option may not be transferred by the holder other than by will or by the
laws of descent and distribution. Options granted to an optionee under the Plan
shall be exercisable only by such optionee.
FEDERAL INCOME TAX CONSEQUENCES RELATING TO STOCK AWARDS GRANTED UNDER THE PLAN
INCENTIVE STOCK OPTIONS. Incentive stock options under the Plan are
intended to be eligible for the favorable federal income tax treatment accorded
"incentive stock options" under Section 422 of the Code. Incentive stock options
generally have the following tax consequences:
There are generally no federal income tax consequences to the optionee or
the Company by reason of the grant or exercise of an incentive stock option.
However, the exercise of an incentive stock option may increase the optionee's
alternative minimum tax liability, if any.
If an optionee holds stock for more than two years from the date on which
the option is granted and more than one year from the date on which the shares
are transferred to the optionee upon exercise of the option, any gain or loss on
a disposition of such stock will be long-term capital gain or loss. In this
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event, the Company will not be allowed a business expense deduction with respect
to the disposition of shares. However, if the optionee disposes of the stock
before the expiration of either of the above-stated holding periods (a
"disqualifying disposition"), at the time of disposition the optionee will
realize taxable ordinary income equal to the lesser of (i) the excess of the
fair market value on the date of exercise over the exercise price, or (ii) the
optionee's actual gain, if any, on the purchase and sale. The optionee's
additional gain or any loss upon the disqualifying disposition will be a capital
gain or loss which will be long-term or short-term depending on whether the
stock was held for more than one year. Slightly different rules may apply to
optionees who acquire stock subject to certain repurchase options or who are
subject to Section 16(b) of the Exchange Act.
To the extent the optionee recognizes ordinary income by reason of a
disqualifying disposition, the Company will be entitled (subject to the
requirement of reasonableness and perhaps, in the future, the satisfaction of a
withholding obligation) to a corresponding business expense deduction in the tax
year in which the disposition occurs.
NON-QUALIFIED STOCK OPTIONS. Non-qualified Stock Options under the Plan
generally have the following federal income tax consequences:
There generally are not tax consequences to the optionee or the Company by
reason of the grant of a nonqualified stock option. Upon exercise of a
nonqualified stock option, the optionee will recognize taxable ordinary income
equal to the excess of the stock's fair market value on the date of exercise
over the exercise price. Generally, with respect to employees, the Company is
required to withhold from regular wages or supplemental wage payments an amount
based on the ordinary income recognized. Subject to the requirement of
reasonableness and the satisfaction of any withholding obligation, the Company
will be entitled to a business expense deduction equal to the taxable ordinary
income realized by the optionee. Upon disposition of stock, the optionee will
recognize a capital gain or loss equal to the difference between the selling
price and the sum of the amount paid for such stock plus any amount recognized
as ordinary income upon exercise of the option. Such gain or loss will be long
or short term depending on whether the stock was held for more than one year.
Slightly different rules may apply to optionees who acquire stock subject to
certain repurchase options or who are subject to Section 16(b) of the Exchange
Act.
MANAGEMENT RECOMMENDS A VOTE "FOR" PROPOSAL TWO
OTHER BUSINESS
The Board of Directors knows of no other business that will be presented
for consideration at the Annual Meeting. If other matters are properly brought
before the meeting, however, it is the intention of the persons named in the
accompanying proxy to vote the shares represented thereby on such matters in
accordance with their best judgment.
By Order of the Board of Directors,
Robert Taylor
CHIEF EXECUTIVE OFFICER
June 1, 2000
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EXHIBIT 1
ACCUIMAGE DIAGNOSTICS CORP.
STOCK OPTION PLAN
1. PURPOSE AND SCOPE. The purposes of this Plan are to induce persons of
outstanding ability and potential to join and remain with AccuImage Diagnostics
Corp. (the "Company"), to provide an incentive for such employees as well as for
non-employee consultants to expand and improve the profits and prosperity of the
Company by enabling such persons to acquire proprietary interests in the
Company, and to attract and retain key personnel through the grant of Options to
purchase shares of the Company's common stock. As used herein, the term "Option"
includes both Incentive Stock Options and Non-Qualified Stock Options
2. DEFINITIONS. Each term set forth in this Section 2 shall have the
meaning set forth opposite such term for purposes of this Plan unless the
context otherwise requires, and for the purposes of such definitions, the
singular shall include the plural and the plural shall include the singular:
(a) "Affiliate" shall mean any parent corporation or subsidiary
corporation of the Company as those terms are defined in Sections
424(e) and (f) respectively of the Internal Revenue Code of 1986,
as amended.
(b) "Board" shall mean the Board of Directors of the Company.
(c) "Committee" shall have the meaning set forth in Section 3 hereof.
(d) "Company" shall mean AccuImage Diagnostics Corp., a Nevada
corporation.
(e) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(f) "Fair Market Value" for a share of Stock means the price that the
Board or the Committee acting in good faith determines, through
any reasonable valuation method (including but not limited to
reference to prices existing in any established market in which
the Stock is traded), to be the price at which a share of Stock
might change hands between a willing buyer and a willing seller,
neither being under any compulsion to buy or to sell and both
having reasonable knowledge of the relevant facts.
(g) "Option" shall mean a right to purchase Stock granted pursuant to
the Plan.
(h) "Exercise Price" shall mean the purchase price for Stock under an
Option, as determined in Sections 7 - "Incentive Stock Options" -
and 8 - "Non-Incentive Stock Options" - below.
(i) "Participant" shall mean an employee or non-employee consultant
to the Company to whom an Option is granted under the Plan.
(j) "Plan" shall mean this AccuImage Stock Option Plan.
(k) "Stock" shall mean the $0.001 par value common stock of the
Company.
(l) "1934 Act" means the Securities Exchange Act of 1934, as amended.
<PAGE>
3. ADMINISTRATION.
(a) The Plan shall be administered (i) with respect to individuals
who receive options under the Plan and who are or become subject to the
reporting requirements and short-swing liability provisions of Section 16 of the
Securities Exchange Act of 1934, as amended (the "1934 Act") ("Reporting
Persons") by a committee consisting of at least two members of the Board of
Directors of the Company (the "Board"), each of whom is a non-employee director
(as such term is defined under Rule 16b-3 of the 1934 Act) (the "Reporting
Persons Committee") and (ii) with respect to all individuals who receive Options
under the Plan and who are not Reporting Persons, by a committee which consists
of at least two members of the Board (the "Stock Option Committee"). For
purposes of this Plan, references to the "Committee" shall mean the Reporting
Persons Committee, the Stock Option Committee, or both, as the context may
require.
(b) The Committee shall have full authority in its discretion,
subject to and not inconsistent with the express provisions of the Plan, to
grant Options, to determine the Exercise Price and term of each Option, the
persons to whom, and the time or times at which, Options shall be granted and
the number of shares of Stock to be covered by each Option; to interpret the
Plan; to prescribe, amend, and rescind rules and regulations relating to the
Plan; to determine the terms and provisions of the option agreements (which need
not be identical) entered into in connection with the grant of Options under the
Plan; and to make all other determinations deemed necessary or advisable for the
administration of the Plan. The Board may delegate to one or more of their
members, or to one or more agents, such administrative duties as it may deem
advisable, and the Board or any person to whom it has delegated duties as
aforesaid may employ one or more persons to render advice with respect to any
responsibility the Board or such person may have under the Plan. The Board may
employ attorneys, consultants, accountants, or other persons, and the Board
shall be entitled to rely upon the advice, opinions, or valuations of such
persons. All actions taken and all interpretations and determinations made by
the Board in good faith shall be final and binding upon all Participants, the
Company, and all other interested persons. No member of the Board shall be
personally liable for any action, determination, or interpretation made in good
faith with respect to the Plan; and all members of the Board shall be fully
protected by the Company in respect of any such action, determination, or
interpretation.
4. SHARES SUBJECT TO THE PLAN. Subject to adjustment under the provisions
of Section 13 - "Effect of Change in Stock Subject to Plan" - of the Plan, the
maximum number of shares of Stock that may be optioned or sold under the Plan is
Two Million One Hundred Thousand (2,100,000). Such shares may be authorized but
unissued shares of Stock of the Company, or issued shares of Stock reacquired by
the Company, or shares purchased in the open market expressly for use under the
Plan. If for any reason any shares of Stock as to which an Option has been
granted cease to be subject to purchase thereunder, then (unless the Plan shall
have been terminated) such shares shall become available for subsequent awards
under this Plan in the discretion of the Board. The Company shall, at all times
while the Plan is in force, reserve such number of common shares as will be
sufficient to satisfy the requirements of all outstanding Options granted under
the Plan.
5. ELIGIBILITY; FACTORS TO BE CONSIDERED IN GRANTING OPTIONS.
(a) Options may be granted to: (i) any regular full-time employee
(including officers and directors) of either the Company or any affiliate of the
Company; and (ii) any non-employee consultant of the Company.
(b) In determining to whom options shall be granted and the number of
shares of Stock to be covered by each Option, the Board shall take into account
the nature the participants' duties, their present and potential contributions
to the success of the Company, and such other factors as it shall
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deem relevant in connection with accomplishing the purposes of the Plan. The
Board shall also determine the time(s) of grant, the type and term of Option
granted, and the time(s) of exercise, in whole or part. A Participant who has
been granted an Option under the Plan may be granted new Options, which may be
in addition to prior Options granted under the Plan or may be in exchange for
the surrender and cancellation of prior Options having a higher or lower
Exercise Price and containing such other terms as the Board may deem
appropriate.
6. TERMS AND CONDITIONS OF OPTIONS.
(a) GENERAL. Options granted pursuant to the Plan shall be authorized
by the Board and shall be evidenced by agreements ("Option Agreements") in such
form as the Board from time to time shall approve. Such Option Agreements shall
comply with and be subject to the following general terms and conditions, and
shall also comply with and be subject to the provisions of Section 7 relating to
Incentive Stock Options or Section 8 relating to Non-Qualified Stock Options, as
applicable, as well as such other terms and conditions as set forth in this Plan
and as the Board may deem desirable, not inconsistent with the Plan.
(b) EMPLOYMENT AGREEMENT. The Committee may, in its discretion,
include in any Option granted under the Plan a condition that the Participant
shall agree to remain in the employ of, and/or to render services to, the
Company for a period of time (specified in the Option Agreement) following the
date the Option is granted. No such Option Agreement shall impose upon the
Company any obligation to employ and/or retain the Participant for any period of
time.
(c) MANNER OF EXERCISE. A Participant may exercise an Option by
giving written notice of such exercise to the Company at its principal office,
attention to the Chief Executive Officer, and paying the Exercise Price either
(i) in cash in full at the time of exercise, or (ii) in the discretion of the
Board:
(A) by delivery of other previously outstanding common stock of
the Company,
(B) by an approved deferred payment schedule or other
arrangement, which arrangement shall be contained in writing in the Option
Agreement, in which event an interest rate will be stated which is not less
than the rate then specified which will prevent any imputation of higher
interest under Section 483 of the Code,
(C) by retention by the Company of some of the Stock as to which
the Option is then being exercised, in which case the Optionee's notice of
exercise shall include a statement (i) directing the Company to retain so
many shares that would otherwise have been delivered by the Company upon
exercise of this Option as equals the number of shares that would have been
surrendered to the Company if the purchase price had been paid with
previously outstanding stock of the Company, and (ii) confirming the
aggregate number of shares as to which this Option is being thus exercised
and therefore surrendered, or
(D) in any other form of legal consideration acceptable to the
Committee at the time of grant or exercise.
(d) TIME OF EXERCISE. Promptly after the exercise of an Option and
the payment of the Exercise Price, either in full or pursuant to the approved
payment schedule, the Participant shall be entitled to the issuance of a stock
certificate evidencing ownership of the appropriate number of shares of Stock. A
Participant shall have none of the rights of a shareholder until shares are
issued to him/her, and
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no adjustment will be made for dividends or other rights for which the record
date has occurred prior to the date such stock certificate is issued.
(e) NUMBER OF SHARES. Each Option shall state the total number of
shares of Stock to which it pertains.
(f) OPTION PERIOD AND LIMITATIONS ON EXERCISE. The Board may, in its
discretion, provide that an Option may not be exercised in whole or part for any
period(s) of time specified in the Option Agreement, except that the right to
exercise must be at the rate of at least 25% per year over four years from the
date the Option is granted, subject to the further conditions of the Plan and
the Option Agreement such as continued employment. However, in the case of an
Option granted to officers, directors, or non-employee consultants of the
Company or any of its affiliates, the Option may become fully exercisable,
subject to the further conditions of the Plan and the Option Agreement, at any
time or during any period established by the Company or its affiliates. The
exercise period shall be stated in the Option Agreement. No Option may be
exercised after the expiration of ten years from the Grant Date. No Option may
be exercised as to less than one hundred (100) shares at any one time, or the
remaining shares covered by the Option if less than one hundred (100).
7. INCENTIVE STOCK OPTIONS. The Board may grant Incentive Stock Options
("ISOs") which meet the requirements of Section 422 of the Code, as amended from
time to time.
(a) ISOs may be granted only to employees of the Company or its
affiliates.
(b) Each ISO granted under the Plan must be granted within 10 years
from the date the Plan is adopted or is approved by the shareholders of the
Company, whichever is earlier.
(c) The purchase price shall not be less than the Fair Market Value
of the common shares at the time of grant, except that the purchase price shall
be 110% of the Fair Market Value in the case of any person who owns stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company or its affiliates at the time of grant.
(d) No ISO granted under the Plan shall be exercisable more than 10
years from the date of grant, except that in the case of any person who owns
stock possessing more than 10% of the total combined voting power of all classes
of stock of the Company or its affiliates at the time of grant, no ISO shall be
exercisable more than five years from the date of grant.
(e) To the extent that the aggregate Fair Market Value of stock
(determined at the time of grant) with respect to which ISOs are exercisable for
the first time by any individual during any calendar year under all plans of the
Company and its subsidiaries exceeds $100,000, such options shall be treated as
Non-Qualified stock options, but only to the extent of such excess. Should it be
determined that an entire option or any portion thereof does not qualify for
treatment as an ISO by reason of exceeding such maximum, or for any other
reason, such option or portion shall be considered a Non-Qualified stock option.
8. NON-QUALIFIED STOCK OPTIONS. The Board may grant Non-Qualified Stock
Options ("NSOs") under the Plan in addition to or in lieu of Incentive Stock
Options. NSOs are not intended to meet the requirements of Section 422 of the
Code, and shall be subject to the following terms and conditions:
(a) NSOs may be granted to any eligible Participant.
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(b) The purchase price of the shares shall be determined by the Board
in its absolute discretion, but in no event shall such purchase price be less
than 85% of the Fair Market Value of the shares at the time of grant. In the
case of any person who owns stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or its affiliates at the
time of grant, the price shall be 110% of the Fair Market Value.
(c) NSOs shall not be exercisable more than ten years from the date
of grant.
9. TRANSFERABILITY. Options granted under this Plan shall not be
transferable other than by will or by the laws of descent and distribution, and
during a Participant's life shall be exercisable only by such Participant.
Options granted under this Plan shall not be subject to execution, attachment or
other process.
10. TERMINATION OF EMPLOYMENT. Options held by employees, directors and
non-employee consultants shall terminate three months after termination of
employment or service with the Company or affiliate, unless:
(a) If employment is terminated for cause, as such term is defined by
California law, the employer's contract of employment or the Option Agreement,
the Option shall immediately terminate.
(b) If termination is due to the employee's permanent and total
disability within the meaning of Section 22(e)(3) of the Code, the Option may be
exercised at any time within one year following termination.
(c) The Option Agreement by its terms specifies whether it shall
terminate later than three (3) months after termination of employment. If the
Option may be exercised later than three months following termination, any
portion exercised beyond three months shall be a non-qualified stock option.
This paragraph shall not be construed to extend the term of any Option nor to
permit anyone to exercise the Option after expiration of its term.
(d) Options granted under this Plan shall not be affected by any
change of duties or position of the Participant so long as Participant continues
to be a regular, full-time employee of the Company. Any Option, or any rules and
regulations relating to the Plan, may contain such provisions as the Board shall
approve with reference to the determination of the date employment terminates.
Nothing in the Plan or in any Option granted pursuant to the Plan shall confer
upon any Participant any right to continue in the employ of the Company or shall
interfere in any way with the right of the Company to terminate such employment
at its will at any time.
11. RIGHTS IN THE EVENT OF DEATH. If an employee dies during the term of
this Option, his/her legal representative or representatives, or the person or
persons entitled to do so under the employee's last will and testament or under
applicable intestate laws, shall have the right to exercise this Option, but
only for the number of shares as to which the employee was entitled to exercise
this Option on the date of his death, and such right shall expire and this
Option shall terminate six (6) months after the date of Grantee's death or on
the expiration date of this Option, whichever date is sooner. In all other
respects, this option shall terminate upon such death.
12. LEAVES OF ABSENCE. For purposes of the Plan, an employee on approved
leave of absence from the Company shall be considered as currently employed for
90 days following beginning the leave or for so long as his/her right to
reemployment is guaranteed by statute or contract, whichever is longer.
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13. EFFECT OF CHANGE IN STOCK SUBJECT TO PLAN.
(a) In the event that outstanding common shares are hereafter changed
by reason of reorganization, merger, consolidation, recapitalization,
reclassification, stock split, combination of shares, stock dividends and the
like, the Board shall make adjustments as it deems appropriate in the aggregate
number of shares advisable under the Plan and the number and price subject to
outstanding option. Any adjustment shall apply proportionately and only to the
unexercised portion of options granted.
(b) In the event the Company dissolves or liquidates or another
entity succeeds to its assets, or in the event of an acquisition or merger or
consolidation in which the Company is not the surviving entity, or in the event
of a reverse merger in which the Company survives but its common stock
immediately preceding the merger is converted into other property by virtue of
the merger, then the exercise dates of all options granted pursuant to this Plan
shall automatically accelerate and all options granted pursuant to this Plan
shall become exercisable in full, notwithstanding any other provision of this
Plan or of any outstanding options granted hereunder. Notwithstanding the
foregoing, in no event shall any Option be exercisable after the date of
termination of the exercise period of such Option specified in Sections 7(d) and
8(c) of this Plan.
14. AGREEMENT AND REPRESENTATION OF EMPLOYEES.
(a) ACQUIRING STOCK FOR INVESTMENT PURPOSES. As a condition to the
exercise of any Option, the Company may require the person exercising such
Option to represent and warrant at the time of such exercise that any shares of
Stock acquired at exercise are being acquired only for investment and without
any present intention to sell or distribute such shares if, in the opinion of
Company's counsel, such representation is required or desirable under the
Securities Act of 1933 or any other applicable law, regulation, or rule of any
governmental agency.
(b) WITHHOLDING. With respect to the exercise of any Option granted
under this Plan, each Participant shall fully and completely consent to whatever
the Board directs to satisfy the federal and state tax withholding requirements,
if any, which the Board in its discretion deems applicable to such exercise.
(c) DELIVERY. The Company is not obligated to deliver any common
shares until there has been qualification under or compliance with all state or
federal laws, rules and regulations deemed appropriate by the Company. The
Company will use all reasonable efforts to obtain such qualification and
compliance.
15. AMENDMENT AND TERMINATION OF PLAN. The Board, by resolution, may
terminate, amend, or revise the Plan with respect to any shares as to which
Options have not been granted; provided however, that any amendment that would:
(i) increase the aggregate number of shares of common stock that may be issued
under the Plan, (ii) materially increase the benefits accruing to Participants,
or (iii) materially modify the requirements as to eligibility for participation
in the Plan, shall be subject to shareholder approval within 12 months before or
after adoption. It is expressly contemplated that the Board may amend the Plan
in any respect necessary to provide employees with the maximum benefits
available under and/or to satisfy the requirements of or amendments to Section
422 of the Code.
(a) No termination, modification or amendment of the Plan may
however, alter or impair the rights conferred by an Option previously granted
without the consent of the individual to whom the Option was previously granted.
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(b) Unless sooner terminated, the Plan shall remain in effect for a
period of ten years from the date of the Plan's adoption by the Board.
Termination or amendment of the Plan shall not affect any Option previously
granted.
16. USE OF PROCEEDS. The proceeds from the sale of shares pursuant to
Options granted under the Plan shall constitute general funds of the Company.
17. EFFECTIVE DATE OF PLAN. The Effective Date of this Plan is July 1,
1999, the effective date it was adopted by the Board, provided the shareholders
of the Company approve this Plan within twelve (12) months after such effective
date. Any Options granted after Board adoption but within twelve months of
shareholder approval may qualify as incentive stock options, provided that all
statutory and Plan requirements are met. Any Options granted prior to Board
adoption pursuant to the stock option plan adopted in January 1998 or that do
not qualify as incentive stock options shall be deemed nonqualified stock
options, provided that they meet the requirements of this Plan. Upon Optionee
approval, all Options granted under the prior plan shall be governed by the
terms of this Plan.
18. INDEMNIFICATION OF COMMITTEE. In addition to such other rights of
indemnification as they may have and subject to limitations of applicable law,
the members of the Committee shall be indemnified by the Company against all
costs and expenses reasonably incurred by them in connection with any action,
suit or proceeding to which they or any of them may be a party by reason of any
action taken or failure to act under or in connection with the Plan or any
rights granted thereunder and against all amounts paid by them in settlement
thereof or paid by them in satisfaction of a judgment of any such action, suit
or proceeding, the Board or Committee member or members shall notify the Company
in writing, giving the Company an opportunity at its own cost to defend the same
before such Committee member or members undertake to defend the same on their
own behalf.
19. INFORMATION REQUIREMENTS. The Company shall provide each participant
with annual financialstatements.
20. GOVERNING LAW. The Plan shall be governed by, and all questions
arising hereunder, shall be determined in accordance with the laws of State of
California as such laws are applied to agreements between California residents
entered into and to be performed entirely within California.
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PROXY
ACCUIMAGE DIAGNOSTICS CORP.
PROXY SOLICITED BY BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS JUNE 29, 2000
Douglas P. Boyd and Robert Taylor, or either of them, each with the power
of substitution and revocation, are hereby authorized to represent the
undersigned with all powers which the undersigned would possess if personally
present, to vote the securities of the undersigned at the annual meeting of
shareholders of ACCUIMAGE DIAGNOSTICS CORP. to be held at 400 Oyster Point
Blvd., Suite 114, South San Francisco, California 94080 at 10:00 a.m. local time
on Thursday, June 29, 2000, and at any postponements or adjournments of that
meeting as set forth below, and in their discretion upon any other business that
may properly come before the meeting.
1. To elect directors to hold office until the 2001 Annual Meeting of
shareholders or until their successors are elected.
[_] FOR all nominees listed below [_] WITHHOLD AUTHORITY
(except as marked below) to vote for all nominees listed below
Douglas P. Boyd, John C. Klock, Chris Shepherd,
Robert Taylor, Alexander R. Margulis
TO WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE, STRIKE THAT NOMINEE'S NAME
FROM THE LIST ABOVE
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2. To approve the AccuImage Stock Option Plan.
[_] FOR [_] AGAINST [_] ABSTAIN
THE BOARD OF DIRECTORS RECOMMENDS
AN AFFIRMATIVE VOTE FOR PROPOSALS ONE AND TWO
TO BE VALID, THIS PROXY MUST BE SIGNED AND DATED ON THE REVERSE SIDE
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The undersigned hereby acknowledges
receipt of (a) Notice of Annual
Meeting of Shareholders to be held
June 29, 2000, (b) the accompanying
Proxy Statement, and (c) the annual
report of the Company for the year
ended September 30, 1999. If no
specification is made, this proxy
will be voted FOR proposals one and
two.
Please sign exactly as signature
appears on this proxy card.
Executors, administrators, traders,
guardians, attorneys-in-fact, etc.
should give their full titles. If
signer is a corporation, please give
full corporate name and have a duly
authorized officer sign, stating
title. If a partnership, please sign
in partnership name by authorized
person. If stock is registered in two
names, both should sign.
Dated:
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Signature
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Signature
