U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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:
[X] Preliminary Proxy Statement [ ] Confidential For Use of the
[ ] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e) (2))
[ ] Soliciting Materials Pursuant to Rule 14a-11(c) or Rule 14a-12
ACCUIMAGE DIAGNOSTICS CORP.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Consent 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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[ ] 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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<PAGE>
ACCUIMAGE DIAGNOSTICS CORP.
400 OYSTER POINT BOULEVARD, SUITE 114
SOUTH SAN FRANCISCO, CALIFORNIA 94080
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
February 12, 2001
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
February 12, 2001, 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 Amended and Restated Articles of Incorporation.
3. To approve an amendment to Article XI of the Company's Bylaws.
4. 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 December 20, 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,
Douglas P. Boyd
Chairman of the Board
South San Francisco, California
January 16, 2001
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 February 12, 2001 at 10:00
a.m., local time, at which shareholders of record on December 20, 2000 will be
entitled to vote. On December 20, 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 Chairman
of the Board 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 January 16,
2001.
SHAREHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Proposals of shareholders that are intended to be presented at the
Company's 2002 Annual Meeting of shareholders must be received by the Company no
later than October 1, 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 four 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. The Board intends to appoint its new Chief Executive Officer to the open
Board seat when it completes its search for the CEO position. (see Compensation
Committee Report). 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
four nominees named below. Directors are elected by a plurality of the votes
cast, which means the four candidates receiving the greatest number of
affirmative votes of the shares entitled to vote at the Annual Meeting will be
elected directors of the Company.
<PAGE>
MANAGEMENT RECOMMENDS A VOTE FOR EACH
OF THE NOMINEES FOR DIRECTOR NAMED BELOW
NOMINEES
Four directors will be elected at the Annual Meeting to serve for one year
expiring on the date of the annual meeting in 2002. Proxies can be voted for no
more than four nominees. The following table sets forth certain information
regarding the Company's directors and nominees.
<TABLE>
Name Age Position Director Since
---- --- -------- --------------
<S> <C> <C> <C>
Douglas P. Boyd, Ph.D 58 Director and Chairman of the Board 1997
John Klock, M.D. 55 Director 2000
Alexander R. Margulis, M.D 78 Director 1998
Chris Shepherd 53 Director and Acting Chief Financial Officer 1997
</TABLE>
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. Dr. Klock is also a 50%
shareholder of Holistica Hawaii, LLC.
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.
TRANSACTIONS WITH MANAGEMENT AND OTHERS
Douglas P. Boyd, Ph.D., Chairman of the Board and a 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
principally engaged in the business of designing, manufacturing, and marketing a
high performance Electron Beam Tomography scanner. 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 AccuImage
products to certain new Imatron customers and to be its provider of on-site
corrective maintenance, warranty and customer support for such systems.
Approximately 69% of the Company's total revenue in fiscal year ended September
30, 2000 ($2,149,157) 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.
<PAGE>
Dr. Boyd is the Chairman of the Board and a majority shareholder of Imaging
Technology Group, Inc., ("ITG") a privately held diagnostic imaging services
company located in South San Francisco, of which his wife is also the President.
ITG has purchased a several workstations from the Company, and for the fiscal
year ended September 30, 2000, sales to ITG amounted to $70,000. The sales were
made on the same terms as those given to unaffiliated third parties, and the
Board determined the transactions were fair to the Company.
A family member of Dr. Boyd provided software consulting services to the
Company and received remuneration of $30,485 and options to purchase 30,000
shares of the Company's Common Stock. The Board determined that the fee was
reasonable compensation and consistent with the services performed.
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. The Board determined that the fee
was reasonable compensation for services performed and in the best interests of
the Company.
Dr. Klock, a director and greater-than-10% shareholder of the Company, is
also Chairman and 50% shareholder of Holistica Hawaii, LLC, which purchased a
workstation and eStation from the Company. Sales to Holistica Hawaii, LLC for
the fiscal year ended September 30, 2000 amounted to $30,000. The sales were
made on the same terms as those given to unaffiliated third parties, and the
Board determined the transactions were fair to the Company.
BOARD COMMITTEES AND MEETINGS
During fiscal 2000 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 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 reimbursed for expenses
relating to attendance at Board of Directors meetings 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. There are no standard arrangements pursuant to which the Company's
directors are compensated for any services provided as director, although in
fiscal year 2000, Dr. Margulis and Mr. Shepherd received $1,298 and $7,084,
respectively, in travel related reimbursements relating to their service as
directors.
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. Upon his election to the Board on March 23, 2000,
Dr. Klock was granted 75,000 options with an exercise price of $1.03.
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 December 20, 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.
<PAGE>
Security Ownership Of Certain Beneficial Owners
The following table sets forth information, to the best knowledge of the
Company as of December 20, 2000, with respect to each person known by the
Company to own beneficially more than 5% of any class of the Company's
outstanding common stock.
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of Percent
Title of Class Beneficial Owner Beneficial Ownership(a) of Class
-------------- ------------------ -------------------- ---------
<S> <C> <C> <C>
Common Stock Douglas P. Boyd, Ph.D. 1,760,732(b) 15.7%
c/o AccuImage Diagnostics Corp.
389 Oyster Point Blvd.,
So. San Francisco, CA 94080
Common Stock Chung Lew 1,069,000(c) 9.5%
361 Mulls Farm Rd.
Southport, CT 06490
Common Stock Geraldine R. Celestre 1,000,732 9.1%
1801 Murchison Dr., Ste. 288
Burlingame, CA 94010
Common Stock John C. Klock, M.D. 847,397(d) 7.4%
333 Willow Road, Box 511
Nicasio, CA 94946
Common Stock Chris Shepherd 605,166(e) 5.4%
2317 150B Street
White Rock, BC V4A 8B1
</TABLE>
------------------------
[FN]
(a) As of December 20, 2000, 10,981,534 shares of common stock were
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 250,000 vested stock options
as of December 20, 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 769,000 shares owned directly and 300,000 warrants exercisable
for common stock.
(d) Includes 416,667 shares owned directly, 416,667 warrants, and 14,063
vested stock options as of December 20, 2000 or within 60
days thereafter.
(e) Includes 366,666 shares owned directly and 137,500 vested stock options
as of December 20, 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.
</FN>
Security Ownership Of Directors And Executive Officers
The table below presents the security ownership of the Company's Directors
and Named Executive Officers.
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of Percent
Title of Class Beneficial Owner Beneficial Ownership(a) of Class
-------------- ---------------- -------------------- --------
<S> <C> <C> <C>
Common Stock Douglas P. Boyd, Ph.D. 1,760,732(b) 15.7%
Common Stock John Klock, Ph.D. 847,397(c) 7.4%
Common Stock Chris Shepherd 605,166(d) 5.4%
Common Stock Robert Taylor, Ph.D.(e) 211,575(f) 1.9%
Common Stock Alexander R. Margulis, M.D. 90,000(g) 0.8%
Common Stock All directors and executive officers as 3,514,870 29.1%
a group (5 persons)
</TABLE>
<PAGE>
-------------------------
[FN]
(a) As of December 20, 2000, 10,981,534 shares of common stock were
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 250,000 vested stock options
as of December 20, 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 14,063
vested stock options as of December 20, 2000 or within 60 days
thereafter.
(d) Includes 366,666 shares owned directly and 137,500 vested stock options
as of December 20, 2000 or within sixty days thereafter. Also includes
101,000 shares owned by Mr. Shepherd's wife to which Mr. Shepherd
disclaims any beneficial interest.
(e) Dr. Taylor resigned as a director on November 6, 2000 and as Chief
Executive Officer, effective December 6, 2000.
(f) Consists of vested stock options as of December 20, 2000 or within 60
days thereafter.
(g) Includes 75,000 vested stock options, as of December 20, 2000 or within
sixty days thereafter, and 15,000 shares owned by Dr. Margulis' wife to
which Dr. Margulis disclaims any beneficial interest.
</FN>
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
of Shares
Other Annual Underlying All Other
Name and Principal Position Year Salary Bonus Compensation(b) Options(c) Compensation
--------------------------- ---- ------ ----- ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C>
Robert Taylor, Chief Executive 2000 $157,039 $80,109 $1,272 $35,000 $-0-
Officer(a)
</TABLE>
-----------------------------------
[FN]
(a) Dr. Taylor was appointed the Company's Chief Technology Officer effective
December 6, 2000. He was the Company's Chief Executive Officer from
August 24, 1999 through December 6, 2000, and the Company's Chief
Technology Officer from July 1, 1999 to August 23, 1999. Prior to that
time, he was an independent contractor to the Company.
(b) Represents the Company's matching contributions to its 401(k) plan.
(c) Represents vested options granted by the Company at the value of the
exercise price.
</FN>
Stock Option Plan
During 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
December 23, 1999, the Board authorized another 500,000 available for grant. The
shareholders approved the plan on at the Company's annual meeting on June 29,
2000. Under this plan, no option may be exercised after the expiration date of
ten years from the date of grant and no option may be exercised as to less than
one hundred (100) shares at any one time. There are two categories of options:
Incentive Stock Options (ISO) and Non-Qualified Stock Options (NSO).
ISOs are granted to employees and the purchase price shall not be less than
the Fair Market Value of the common stock share at the date of grant and no ISO
shall be exercisable more than ten (10) years from date of grant except that in
the case of any person who owns more than 10% of the voting power of all classes
of stock, no ISO shall be exercisable more than five (5) years from date of
grant.
<PAGE>
NSOs may be granted to any eligible participant. The purchase price shall
not 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 shall be exercisable more than ten (10)
years from the date of grant.
In general, granted ISO's expire three months after the termination date.
If employment termination is due to cause, the options shall expire immediately;
and if employment termination is due to permanent and total disability, the
options may be exercised up to one year following termination. The vesting
period is usually related to the length of employment or consulting contract
period, but is at the Board's discretion.
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:
<TABLE>
<CAPTION>
Option/SAR Grants in Last Fiscal Year
================================================================================
Individual Grants
--------------------------------------------------------------------------------
Number of % of Total
Securities Options/SARs
Underlying Granted to
Options/SARs Employees in Fiscal Exercise or Base
Name Granted (#) Year (a) Price ($/Sh) Expiration Date
---- ----------- -------- ------------ ---------------
<S> <C> <C> <C> <C>
Robert Taylor 50,000 9.5% $0.70 1/28/2010
</TABLE>
[FN]
(a) Based on 526,199 options granted to all employees and contractors.
</FN>
Option Exercises In Last Fiscal Year And Year-End Option Values
The following table provides information with respect to option exercises
in fiscal 2000, by the Named Executive Officers and the value of such officers'
unexercised options at September 30, 2000.
<TABLE>
<CAPTION>
Aggregated Options Exercised and Option Values in Fiscal Year 2000
=====================================================================================================================
Number of Securities
Underlying Unexercised Value of Unexercised
Options at FY-End In-the-Money Options at FY-End
($)(a)
---------------------------- ---------------------------------
Shares Acquired
on Exercise (#) Value Realized
Name ($) Exercisable/Unexercisable Exercisable/Unexercisable
---- ---------------- --------------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Robert Taylor -0- -0- 158,450/381,250 $17,536/$37,125
</TABLE>
[FN]
(a) Based on a closing price of $0.63 of the Company's common stock on
September 30, 2000
</FN>
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.
<PAGE>
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. 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. During fiscal year
2000, the Board of Directors awarded 50,000 options to its Chief
Executive Officer as set forth on the above chart.
2000 CHIEF EXECUTIVE OFFICER COMPENSATION
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 was entitled to several incentive
bonuses based on the Company's quarterly and annual gross revenues and net
profit. 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. His
bonus for fiscal year 2000 totaled $80,109. The Committee believes that the base
salary and other terms and conditions of Dr. Taylor's employment were consistent
with the foregoing philosophy and objectives and reflected the scope and level
of his responsibilities.
Effective December 6, 2000, Dr. Taylor resigned as the Company's Chief
Executive Officer. The Company is currently operating under a Management
Committee comprised of Directors Boyd and Klock, while the Board searches for a
new Chief Executive Officer, whose compensation package will be structured in
accordance with the factors stated in this report.
MEMBERS OF THE COMPENSATION COMMITTEE
Douglas P. Boyd, Ph.D.
John C. Klock, M.D.
FILINGS BY DIRECTORS, EXECUTIVE OFFICERS AND TEN PERCENT HOLDERS
Section 16(a) of the Securities Exchange Act of 1934, as amended, 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 during fiscal year ended
September 30, 2000, Dr. Klock filed late one Form 4.
PROPOSAL TWO
TO APPROVE THE AMENDED AND RESTATED ARTICLES OF INCORPORATION
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.
<PAGE>
PROPOSAL
The Directors of the Company are recommending that the Company's Articles
of Incorporation be amended and restated in their entirety. The original
Articles of Incorporation date back to February 2, 1990 and were amended on June
27, 1996. The Company desires to amend certain provisions in the Articles of
Incorporation to reflect developments in the law and update the information
contained in the current Articles. The Company desires to restate the Articles
so that all amendments to date will be contained in one document and it will not
be necessary to piece various portions together. On December 5, 2000 the Board
of Directors unanimously approved the Amended and Restated Articles of
Incorporation, a copy of which is attached to this Proxy Statement as Exhibit A.
The substantive amendments are described as follows:
o Article IV, regarding Directors was amended to delete the name of the
initial director and grant authority to the Board to do any act on
behalf of the Company as may be allowed by law. Further, the amended
Article provides that the number of directors may be increased or
decreased as provided in the Bylaws instead of requiring the number of
directors to be changed by shareholder vote. This amendment corrects
any apparent inconsistency between the Bylaws and the Articles and
should allow for more efficient and flexible management by the Board.
o Article VI, limiting the personal liability of the directors, was
clarified and broadened to include officers. While the existing
Article limits the liability of directors, the amendment also protects
officers of the Company as permitted by Nevada law. The Directors
believe that it is in the best interests of the Company and its
shareholders to take advantage of the full protections afforded by the
law. The Company's ability to continue to attract and retain
experienced individuals to serve as directors and officers will be
enhanced by providing to directors and officers increased protectionf
rom the risk of litigation and personal liability. The Article
amendment does not eliminate the management's duty of care; it only
eliminates monetary damage awards occasioned by a breach of that duty.
Nevada law does not permit the Company to limit a director or
officer's liability for acts or omissions which involve intentional
misconduct, fraud, or a knowing violation of the law.
o The Restated Articles of Incorporation also deletes the original
Articles that set forth the Company's former principal office and its
incorporator as permitted by Nevada law.
The Board and management believe that it is in the best interests of the
Company and its shareholders for the Company's Articles to be amended and
restated. The affirmative vote of the holders of a majority of the shares of
Common Stock will be required to approve the Amended and Restated Articles of
Incorporation. If these amendments are approved by the shareholders, they will
become effective when the Company files a Certificate of Amendment and
Restatement of its Articles of Incorporation with the Secretary of State of the
State of Nevada.
MANAGEMENT RECOMMENDS A VOTE "FOR" PROPOSAL TWO
<PAGE>
PROPOSAL THREE
TO APPROVE AN AMENDMENT TO ARTICLE XI OF THE COMPANY'S BYLAWS
PROPOSAL
The shareholders are being requested to consider and act upon a proposal to
amend Article XI of the Company's Bylaws. Although the current Article permits
the Board of Directors to alter, amend or repeal bylaws, but it requires
shareholder approval to reduce the number of directors. The Board has
recommended that the Article be amended in its entirety as follows:
"ARTICLE XI
AMENDMENTS
These Bylaws may be altered, amended or repealed, and new Bylaws may
be made by the Board of Directors, but the shareholders may make
additional Bylaws and may alter, amend and repeal any Bylaws adopted
by them or otherwise."
Shareholder approval of this item will allow the Company to pursue the
efficient management of its operations. The Board of Directors believes that it
is desirable to maintain the Company's flexibility in reducing or appointing new
directors to provide the best service to the Company. The affirmative vote of
the holders of a majority of the shares of Common Stock will be required to
approve this amendment to the Bylaws. If this amendment is approved by the
shareholders, it will become effective immediately.
MANAGEMENT RECOMMENDS A VOTE "FOR" PROPOSAL THREE
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,
Douglas P. Boyd
Chairman of the Board
January 16, 2001
<PAGE>
EXHIBIT A
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
ACCUIMAGE DIAGNOSTICS CORP.
ARTICLE I.
The name of the corporation shall be AccuImage Diagnostics Corp.
ARTICLE II.
The purpose for which this corporation is organized is to engage in any
lawful activity, both within and outside of the State of Nevada.
ARTICLE III.
The corporation is authorized to issue two classes of shares which
shall be designated Common Stock and Preferred Stock, respectively. The total
number of shares of Common Stock the corporation is authorized to issue is Fifty
Million shares, whose par value shall be one-tenth cent each. The total number
of shares of Preferred Stock the corporation is authorized to issue is Ten
Million shares, whose par value shall also be one-tenth cent each. Preferred
Stock may be issued from time to time in one or more series, and the board of
directors of the corporation is hereby authorized to determine the designation
of any such series, to fix the number of shares of any such series, and to
determine and alter the rights, preferences, privileges and restrictions granted
to or imposed upon any wholly unissued series of Preferred Stock. The board of
directors is also authorized, within the limits and restrictions stated in any
resolution or resolutions of the board originally fixing the number of shares
constituting any series of Preferred Stock, to increase or decrease (but not
below the number of shares of such series then outstanding) the number of shares
of such series subsequent to the issuance of shares of that series.
The holders of the Common Stock shall always be entitled to one vote
per share of Common Stock in the election of directors and upon each other
matter coming before any vote of shareholders.
ARTICLE IV.
The members of the governing board of this corporation shall be styled
as directors. The directors are hereby granted the authority to do any act on
behalf of the corporation as may be allowed by law. The directors need not be
shareholders of the corporation nor residents of the State of Nevada. Each
director shall be elected annually. Each director shall serve until his
successor is duly elected and assumes the position as such director or until he
resigns or is lawfully removed. Provided that the corporation has at least one
director, the number of directors may at any time or times be increased or
decreased by the bylaws.
ARTICLE V.
This corporation shall have perpetual existence.
ARTICLE VI.
The personal liability of the directors or officers of the corporation
for monetary damages for any breach or alleged breach of fiduciary or
professional duty acting in such capacity shall be eliminated to the fullest
extent permissible under Nevada law.
ARTICLE VII.
The corporation is authorized to provide indemnification of its
directors, officers, employees and agents to the fullest extent permissible
under Nevada law.
ARTICLE VIII.
The provisions of Sections 78.378 to 78.3793 and Sections 78.441 to
78.444 Nevada Revised Statutes do not apply to this corporation.
<PAGE>
ACCUIMAGE DIAGNOSTICS CORP.
400 Oyster point Boulevard, Suite 114
South San Francisco, California 94080
PROXY
This Proxy is solicited on behalf of the Board of Directors. The undersigned
hereby appoints Douglas P. Boyd and John C. Klock, or either of them, with full
power of substitution, as Proxies of the undersigned to attend the Annual
Meeting of Shareholders of AccuImage Diagnostics Corp. to be held on Monday,
February 12, 2001, and any adjournment thereof, and to vote the number of shares
the undersigned would be entitled to vote if personally present as indicated
below.
1. Election of four directors to serve until the 2002 Annual Meeting of
Shareholders or until their respective successors are elected and
qualified.
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
(except as marked to the to vote for all
contrary below) nominees listed below
(Instructions: To withhold authority to vote for any individual nominee
strike a line through the nominee's name in the list below.)
Douglas P. Boyd, Ph.D.; John C. Klock, M.D.; Alexander R. Margulis, M.D.;
Chris Shepherd
2. To approve the Amended and Restated Articles of Incorporation.
[ ] FOR the proposal [ ] AGAINST the proposal
3. To approve an amendment to Article XI of the Company's Bylaws.
[ ] FOR the proposal [ ] AGAINST the proposal
4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
The undersigned hereby acknowledge receipt of (a) Notice of Annual Meeting of
Shareholders to be held February 12, 2001, (b) the accompanying Proxy Statement,
and (c) the Annual Report of the Company for the fiscal year ended September 30,
2000.
This Proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder. If no direction is made, the Proxy will be voted
FOR proposals one, two and three.
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: , 2001 --------------------------------
Signature
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Signature
