<PAGE> 1
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:
<TABLE>
<S> <C>
/ / 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 sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
SYSTEMED INC.
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
--------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
--------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
--------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
--------------------------------------------------------------------
(5) Total fee paid:
--------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
--------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
--------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
[LOGO]
970 WEST 190TH STREET, SUITE 400
TORRANCE, CALIFORNIA 90502
--------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON FRIDAY, MAY 26, 1995
--------------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Systemed
Inc. (the "Company") will be held at the Doubletree Hotel, 5400 West Century
Boulevard, Los Angeles, California, on Friday, May 26, 1995 at 9:00 a.m. for the
following purposes:
(1) To elect members of the Board of Directors to serve until the next
annual meeting of stockholders;
(2) To increase the number of shares available for grants under the
Company's 1993 Employee Stock Option Plan to 3,000,000 shares; and
(3) To transact such other business as may be properly brought before
the meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on March 30, 1995 as
the record date for the determination of stockholders entitled to notice of and
to vote at the meeting. Only holders of the Company's Common Stock and 8%
Convertible Preferred Stock at the close of business on the record date are
entitled to vote at the meeting.
Accompanying this Notice are a Proxy and Proxy Statement. IF YOU WILL NOT
BE ABLE TO ATTEND THE MEETING TO VOTE IN PERSON, PLEASE SIGN AND DATE THE
ACCOMPANYING PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED POSTAGE PAID ENVELOPE.
The Proxy may be revoked at any time prior to its exercise at the meeting.
By Order of the Board of
Directors,
Sam Westover
President and Chief Executive
Officer
Torrance, California
April 10, 1995
<PAGE> 3
SYSTEMED INC.
970 WEST 190TH STREET, SUITE 400
TORRANCE, CALIFORNIA 90502
------------------------
ANNUAL MEETING OF STOCKHOLDERS
FRIDAY, MAY 26, 1995
------------------------
PROXY STATEMENT
INTRODUCTION
This Proxy Statement is furnished to the stockholders of Systemed Inc., a
Delaware corporation, in connection with the solicitation of proxies by and on
behalf of the Board of Directors of the Company. The proxies solicited hereby
are to be voted at the Annual Meeting of Stockholders of the Company to be held
on May 26, 1995, and at any and all adjournments thereof (the "Annual Meeting").
This Proxy Statement and form of Proxy are being mailed to the Company's
stockholders on or about April 10, 1995.
A form of proxy is enclosed for your use. The shares represented by each
properly executed unrevoked proxy will be voted as directed by the stockholder
for the nominees to the Board of Directors, for the amendment to the 1993
Employee Stock Option Plan (the "Stock Option Plan") and for any other matter
properly brought before the stockholders. If no direction is made, the shares
represented by each properly executed proxy will be voted for management's
nominees for the Board of Directors and for the amendment to the Stock Option
Plan. As to any other business which may properly be brought before the
stockholders and be submitted to a vote of stockholders, proxies received by the
Board of Directors will be voted in accordance with the best judgment of the
designated proxy holders.
Any proxy given may be revoked at any time prior to the exercise thereof by
filing with the Secretary of the Company an instrument revoking such proxy or by
the filing of a duly executed proxy bearing a later date. Any stockholder
present at the meeting who has given a proxy may withdraw it and vote their
shares in person if such stockholder so desires.
It is contemplated that the solicitation of proxies will be made primarily
by mail. The Company will make arrangements with brokerage houses and other
custodians, nominees and fiduciaries to send proxies and proxy material to the
beneficial owners of the shares and will reimburse them for their expenses in so
doing. Should it appear desirable to do so in order to ensure adequate
representation of shares at the meeting, officers, agents and employees of the
Company may communicate with stockholders, banks, brokerage houses and others by
telephone, telegraph, or in person to request that proxies be furnished. All
expenses incurred in connection with this solicitation will be borne by the
Company. The Company has no present plans to hire special employees or paid
solicitors to assist in obtaining proxies, but reserves the option of doing so
if it should appear that a quorum otherwise might not be obtained.
The Bylaws of the Company provide that the holders of a majority of the
shares of stock of the Company issued and outstanding and entitled to vote at
the Annual Meeting, present in person or represented by proxy, shall constitute
a quorum. Except as otherwise provided by statute, the Certificate of
Incorporation of the Company or the Bylaws, all matters coming before the Annual
Meeting shall be decided by the vote of the holders of a majority of the stock
present in person or represented by proxy at the Annual Meeting and entitled to
vote thereat. Votes cast at the Annual Meeting will be tabulated by the persons
appointed by the Company to act as inspectors of election for the Annual
Meeting. The inspectors of election will treat shares of voting
<PAGE> 4
stock represented by a properly signed and returned proxy as present at the
Annual Meeting for purposes of determining a quorum, without regard to whether
the proxy is marked as casting a vote or abstaining. Likewise, the inspectors of
election will treat shares of voting stock represented by "broker non-votes"
(i.e., shares of voting stock held in record name by brokers or nominees as to
which (i) instructions have not been received from the beneficial owners or
persons entitled to vote; (ii) the broker or nominee does not have discretionary
voting power under applicable rules or the instrument under which it serves in
such capacity; or (iii) the record holder has indicated on the proxy card or has
executed a proxy and otherwise notified the Company that it does not have
authority to vote such shares on that matter) as present for purposes of
determining a quorum. Directors will be elected by a favorable vote of a
plurality of the shares of voting stock present and entitled to vote, in person
or by proxy, at the Annual Meeting. Accordingly, abstentions or broker non-votes
as to the election of Directors will not affect the election of the candidates
receiving the plurality of votes. All other matters to come before the Annual
Meeting require the approval of a majority of the shares of voting stock present
and entitled to vote thereat. Therefore, abstentions as to a particular proposal
will have the same effect as votes against such proposal. Broker non-votes as to
a particular proposal, however, will be deemed shares not entitled to vote on
such proposal, and will not be counted as votes for or against such proposal,
and will not be included in calculating the number of votes necessary for
approval of such proposal.
VOTING SECURITIES
Only holders of record of the Company's Common Stock, $.001 par value, (the
"Common Stock") and 8% Convertible Preferred Stock, $.001 par value, (the
"Preferred Stock") at the close of business on March 30, 1995 are entitled to
notice of and to vote at the Annual Meeting. As of March 30, 1995, the Company
had issued and outstanding 161,325 shares of Preferred Stock and 21,828,322
shares of Common Stock. Each share of Preferred Stock and Common Stock issued
and outstanding on March 30, 1995 is entitled to one vote on each matter to come
before the meeting.
At the Annual Meeting, stockholders will have cumulative voting rights with
respect to the election of Directors, pursuant to which each share will have the
number of votes for Directors which equals the number of Directors which may be
elected (seven). Such votes may be cast for one nominee or allocated among two
or more nominees. Stockholders may exercise such rights either in person or by
proxy with or without advance notice to the Company. There are no conditions
precedent to the exercise of the right to cumulate votes. In the event that the
Board of Directors deems it appropriate, proxies may be cumulated and
distributed unequally among the seven nominees identified herein in order to
ensure the election of the maximum number of such nominees. The seven nominees
receiving the highest number of votes at the Annual Meeting will be elected.
ELECTION OF DIRECTORS
NOMINEES
Directors are elected at each Annual Meeting of Stockholders and hold
office until the next Annual Meeting of Stockholders or until their respective
successors are elected and qualified. THE BOARD OF DIRECTORS IS OF THE OPINION
THAT THE ELECTION TO THE BOARD OF DIRECTORS OF THE PERSONS IDENTIFIED BELOW, ALL
OF WHOM ARE CURRENTLY SERVING AS DIRECTORS OF THE COMPANY AND HAVE CONSENTED TO
CONTINUE TO SERVE IF ELECTED, WOULD BE IN THE BEST INTERESTS OF THE COMPANY. The
names of such nominees are as follows: Ronald P. Arrington, James F. Doherty,
John E. Flood, Jr., J. Roberts Fosberg, Frederick M. Myers, Jon C. Thorson, M.D.
and Sam Westover.
Shares represented by proxies will be voted FOR the election of the above
named nominees unless a stockholder indicates that the proxy shall not be voted
for all or any one of the nominees. If for any reason a nominee should, prior to
the Annual Meeting, become unavailable for election as a Director, an event not
now anticipated, the shares represented by proxies voted in favor of the nominee
will be voted for such substitute nominee if any, as may be recommended by the
Board of Directors. In no event, however, shall the proxies be voted for a
greater number of persons than the number of nominees named.
2
<PAGE> 5
Set forth below is certain information with respect to the nominees to the
Board of Directors of the Company.
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Ronald P. Arrington 52 Director
James F. Doherty 65 Director
John E. Flood, Jr. 65 Director and Vice Chairman of the Board
J. Roberts Fosberg 58 Director and Chairman of the Board
Frederick M. Myers 72 Director
Jon C. Thorson, M.D. 63 Director
Sam Westover 39 President, Chief Executive Officer and Director
</TABLE>
RONALD P. ARRINGTON, ESQ., is Chairman of the Compensation Committee and a
member of the Executive Committee of the Board of Directors. He has been a
Director of the Company since 1981. Mr. Arrington has been engaged in the
practice of law since 1968 and is a member of the law firm of Rutan & Tucker,
Costa Mesa, California. Mr. Arrington is currently also a member of the Board of
Directors of Proxima Corporation.
JAMES F. DOHERTY, ESQ., has been a Director of the Company since July 1994.
Mr. Doherty is a member of the Compensation Committee of the Board of Directors.
He is the former chief administrative officer of Group Health Association of
America, Inc. ("GHAA"), the largest national trade association for organized
prepaid healthcare systems in the United States. He served as Executive Director
of GHAA from July 1979 to March 1986, at which time he was named President of
GHAA, a position in which he served until his retirement in September 1993. Mr.
Doherty also served as founding president of the National Health Lawyers
Association.
JOHN E. FLOOD, JR., has served as a Director of the Company since 1984.
From April 1986 through August 1993 he served as Chairman of the Board of
Directors of the Company. He was named Vice Chairman of the Board in August
1993. He is a member of the Audit, Compensation and Executive Committees of the
Board of Directors. Mr. Flood is currently a management consultant.
J. ROBERTS FOSBERG, has served as the Company's Chairman of the Board since
August 1993. From July 1986 through August 1993 he served as the Company's
President and Chief Executive Officer. Mr. Fosberg was elected to the Company's
Board of Directors in September 1986. Mr. Fosberg also serves on the
Compensation and Executive Committees of the Board of Directors.
FREDERICK M. MYERS, ESQ., has served as a Director of the Company since
1983. Mr. Myers is also Chairman of the Audit Committee and a member of the
Compensation Committee of the Board. He is a member of the law firm of Cain,
Hibbard, Myers, & Cook, Pittsfield, Massachusetts. Mr. Myers has been engaged in
the practice of law since 1948 and has been a Director of Patten Corporation
since 1990.
JON C. THORSON, M.D., has served as a Director of the Company since
September 1986 and is a member of the Compensation Committee of the Board. He is
President of Alpha Group, a consulting and development firm.
SAM WESTOVER, has served as President and Chief Executive Officer of the
Company since August 1993 and as a Director of the Company since July 1992. Mr.
Westover is Chairman of the Executive Committee of the Company's Board of
Directors. From January 1993 until August 1993, Mr. Westover served as Senior
Vice President, Chief Financial Officer and Treasurer of Wellpoint Health
Networks, the largest publicly traded managed healthcare company in the U.S.
Prior to joining Wellpoint, Mr. Westover served as Chief Financial Officer and
Senior Vice President, Corporate Financial Services of Blue Cross of California,
a position to which he was named in May 1990.
3
<PAGE> 6
MEETINGS OF BOARD AND COMMITTEES
The Board of Directors held thirteen meetings during the fiscal year ended
December 31, 1994. No director attended fewer than 75% of the aggregate of the
meetings of the Board and the Committees upon which he served.
The Board of Directors has standing Executive, Audit and Compensation
Committees, but does not have a Nominating Committee. In practice, the entire
Board performs the function of a Nominating Committee. The Executive Committee
of the Board held no meetings during the fiscal year ended December 31, 1994.
The Executive Committee has many of the powers of the full Board of Directors
and meets as necessary between Board meetings to transact certain matters which
require Board action. The Executive Committee is composed of Mr. Westover, who
serves as Chairman, Mr. Arrington, Mr. Flood and Mr. Fosberg.
The Audit Committee of the Board of Directors held one meeting during the
fiscal year ended December 31, 1994. The Committee's responsibility is to review
and act or report to the Board of Directors with respect to various audit and
accounting matters, including the selection of independent auditors, the
determination of the scope of audit procedures, the nature of the services to be
performed by and the fees to be paid to the Company's independent auditors, the
establishment of the accounting practices of the Company, and the monitoring of
all phases of the Company's operations. The Audit Committee is composed of Mr.
Myers, who acts as Chairman, and Mr. Flood.
The Compensation Committee of the Board of Directors held one meeting
during the fiscal year ended December 31, 1994. The Committee is responsible for
making recommendations to the Board concerning such executive compensation
arrangements and plans as it deems appropriate. The Compensation Committee is
presently composed of Messrs. Doherty, Flood, Fosberg, Myers and Thorson and Mr.
Arrington, who serves as Chairman.
BOARD COMPENSATION
Members of the Board of Directors who are not officers of the Company
receive annual fees in the amount of $6,000 in their capacity as Directors.
Directors do not receive a per diem fee for their attendance at meetings of the
Board or its Committees. In May 1994, each of the Directors who was not then an
officer of the Company also received a five year compensatory option which
vested at date of grant for the purchase of 10,000 shares of Common Stock under
the 1993 Non-Employee Director Plan at the exercise price of $5.875 for his
service on the Board for the twelve month period ended April 30, 1995. Directors
also received cash reimbursement for travel expenses incurred in attending
meetings of the Board of Directors. Members of the Board of Directors who are
not employees of the Company and who are elected at the 1995 Stockholders
Meeting will receive options for the purchase of 10,000 shares of the Company's
Common Stock at the closing price for such shares on the date of such meeting.
By agreement with the Company's Board of Directors effective February 3,
1995, Mr. J. Roberts Fosberg, Chairman of the Board of the Company, is entitled
to receive a cash payment upon the occurrence of any "terminating transaction"
entered into by the Company on or before November 26, 1996 in an amount equal to
the amount by which the value of the Company's Common Stock for purposes of the
"terminating transaction" exceeds the exercise prices of Mr. Fosberg's options
for an aggregate of 95,000 shares (i) which were outstanding on February 3,
1995, and (ii) which remain unvested as of the date of the "terminating
transaction." The options have an average exercise price of $4.49.
The term "terminating transaction" means any of the following events: (i)
the dissolution or liquidation of the Company; (ii) a reorganization, merger or
consolidation of the Company with one or more other corporations (except with
respect to a transaction, the sole purpose of which is to change the domicile or
name of the Company), as a result of which the Company goes out of existence or
becomes a subsidiary of another corporation (which shall be deemed to have
occurred if another corporation shall own, directly or indirectly, more than
fifty percent (50%) of the aggregate voting power of all outstanding equity
securities of the Company); or (iii) a sale of all or substantially all of the
Company's assets.
4
<PAGE> 7
Also by agreement with the Company's Board of Directors effective January
1, 1995, Mr. Fosberg's compensation was reduced from $175,000 per year to $6,630
per annum and retention of his health care benefits coverage under the Company's
plans.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Directors Arrington, Myers and Thorson comprised the Compensation Committee
of the Board of Directors as of December 31, 1994. No member of such Committee
is or has been an officer or employee of the Company.
The law firm of Rutan & Tucker, one of the members of which is Mr.
Arrington, received compensation for legal services to the Company during fiscal
1994. The Company intends to retain the services of such firm in fiscal 1995.
Mr. Westover served as Senior Vice President, Chief Financial Officer and
Treasurer of Wellpoint Health Networks until he became President and Chief
Executive Officer of the Company in August 1993. Wellpoint previously entered
into a significant contract with the Company's INSURx, Inc. (renamed effective
March 1, 1995 to Systemed Pharmacy Inc.) subsidiary to manage and administer a
prescription drug plan.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information for the last three fiscal years
as to (i) the Company's Chief Executive Officer, and (ii) each individual
serving as an executive officer of the Company at December 31, 1994 who received
more than $100,000 in salary and bonuses for services rendered to the Company
during the last fiscal year.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION AWARDS
-------------------
ANNUAL COMPENSATION SECURITIES ALL
NAME AND PRINCIPAL ---------------------------------- UNDERLYING OTHER
POSITION YEAR SALARY BONUS OTHER OPTIONS(#) COMPENSATION
- - ----------------------- ----- -------- -------- ------- ------------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Sam Westover........... 1994 $212,500 $218,000 -- 100,000 $ --
President and Chief 1993 $109,067(A) -- -- 295,000(B) $ 6,000(C)
Executive Officer
Perry I. Cohen......... 1994 $168,784(D) $211,000(E) -- 250,000 --
Senior Vice President
Mark P. Hanrahan....... 1994 $123,750(D) $ 99,000(F) -- 150,000 --
Senior Vice President
Kenneth J. Kay......... 1994 $ 72,788(D) $ 51,000 -- 150,000 --
Senior Vice President,
Finance and
Administration
and Chief Financial
Officer
Stephen J. Konsin...... 1994 $123,747 $ 78,543 -- 100,000 --
Senior Vice President, 1993 $ 33,047 $ 5,000 $57,420(G) 50,000 --
Mail Service Operations
</TABLE>
- - ---------------
(A) Represents compensation received by Mr. Westover for the period after August
12, 1993, at which time he became President and Chief Executive Officer of
the Company.
(B) Includes options for the purchase of 10,000 shares of Common Stock received
by Mr. Westover for his service as an outside member of the Board of
Directors during fiscal 1993.
(C) Represents compensation received by Mr. Westover for his service as an
outside member of the Board of Directors during fiscal 1993.
5
<PAGE> 8
(D) Represents salary from the commencement of Messrs. Cohen's, Hanrahan's and
Kay's employment in January 1994, February 1994 and July 1994, respectively.
(E) Includes the payment of an $80,000 one-time bonus to Mr. Cohen upon his
employment with the Company.
(F) Includes the payment of a $10,000 one-time bonus to Mr. Hanrahan upon his
employment with the Company.
(G) Represents relocation expenses for Mr. Konsin.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information concerning Common Stock
options granted to the named executive officers during the fiscal year ended
December 31, 1994.
INDIVIDUAL OPTION GRANTS IN FISCAL YEAR 1994
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT
ASSUMED ANNUAL RATES
NUMBER OF OF STOCK PRICE
SECURITIES PERCENT OF TOTAL EXERCISE OR APPRECIATION
UNDERLYING OPTIONS GRANTED BASE FOR OPTION TERM(C)
OPTIONS TO EMPLOYEES IN PRICE EXPIRATION ---------------------
NAME GRANTED(A) FISCAL YEAR 1994 ($/SH)(B) DATE 5% 10%
---- ----------- ---------------- ----------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Sam Westover............... 100,000 8.9% $5.875 7/25/04 $369,476 $ 936,324
Perry I. Cohen............. 250,000 22.3% $4.125 1/19/04 $648,548 $1,643,547
Mark P. Hanrahan........... 150,000 13.4% $4.875 2/14/04 $459,879 $1,165,424
Kenneth J. Kay............. 150,000 13.4% $5.625 7/07/04 $530,630 $1,344,720
Stephen J. Konsin.......... 100,000 8.9% $4.125 2/01/04 $259,419 $ 657,419
</TABLE>
- - ---------------
(A) Unless otherwise indicated, all options are exercisable for a term of ten
years, subject to earlier termination upon the occurrence of certain events
related to termination of employment, and subject to adjustment upon certain
corporate events. Options are exercisable 25% upon grant and 25% on each
anniversary of grant.
(B) The options were granted at fair market value on the date of grant. The
exercise price may be paid by delivery of cash or already owned shares,
subject to certain conditions.
(C) The amounts shown under these columns are the result of calculations at the
5% and 10% rates required by the Securities and Exchange Commission and are
not intended to forecast future appreciation of the Company's stock price.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table sets forth certain information regarding stock options
exercised by the named executive officers during the fiscal year ended December
31, 1994, as well as the number of exercisable and unexercisable stock options
and their values at December 31, 1994.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1994 AND FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
SECURITIES UNDERLYING UNEXERCISED IN-THE-
UNEXERCISED OPTIONS MONEY OPTIONS AT
AT FISCAL YEAR-END (#) FISCAL YEAR-END ($)(B)
SHARES ACQUIRED VALUE -------------------------- --------------------------
NAME ON EXERCISE (#) REALIZED ($)(A) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ---------------- ---------------- -------------------------- --------------------------
<S> <C> <C> <C> <C>
Sam Westover........ -- -- 236,250/170,000 $505,625/$310,000
Perry I. Cohen...... -- -- 62,500/187,500 $180,000/$540,000
Mark P. Hanrahan.... -- -- 37,500/112,500 $ 79,688/$239,063
Kenneth J. Kay...... -- -- 37,500/112,500 $ 51,563/$154,690
Stephen J. Konsin... -- -- 50,000/100,000 $156,250/$300,000
</TABLE>
6
<PAGE> 9
- - ---------------
(A) Represents market value of underlying securities at exercise date, minus the
exercise price of the option.
(B) Represents the NASDAQ closing price of underlying securities at fiscal
year-end, minus the exercise price of the options. An option is in-the-money
if the fair market value for the underlying securities exceeds the exercise
price of the option.
EXECUTIVE COMPENSATION ARRANGEMENTS
By agreement between the Company and Sam Westover upon his appointment as
President and Chief Executive Officer of the Company, Mr. Westover received
salary at the monthly rate of $23,750 through December 31, 1993, at which time
his salary was adjusted to $212,500 annually. Beginning in 1994 he was also
entitled to receive a performance bonus in an amount equal to 75% of his base
salary upon the achievement of sales and profitability goals as determined by
the Board of Directors. Upon the commencement of his employment, Mr. Westover
also received an option for the purchase of 285,000 shares of Common Stock of
the Company, exercisable for a period of ten years, 33% of which vested upon the
date of grant, with 33% vesting upon each successive anniversary of the date of
grant. Under the terms of his agreement with the Company, in the event that the
Company is acquired during the first two years of Mr. Westover's employment, the
Company will, upon the effective date of such acquisition, make an additional
cash payment to Mr. Westover in an amount equal to the difference between the
aggregate value (which is the difference between the acquisition price and his
exercise price) of such stock options and $1,000,000.
Under the terms of the Employment Agreement (the "Agreement") dated January
19, 1994 between the Company and Perry I. Cohen, Senior Vice President of the
Company, Mr. Cohen will be employed by the Company for a period of 3 years
unless earlier terminated upon material breach by Mr. Cohen. Under the terms of
the Agreement, Mr. Cohen will be paid an annual salary of $185,000 subject to
performance review increases. Mr. Cohen also received a one-time bonus of
$80,000 upon his employment by the Company and was granted an option for the
purchase of 250,000 shares of common stock, as discussed above in the section
entitled "Option Grants in Last Fiscal Year." The bonus is subject to
reimbursement to the Company by Mr. Cohen in an amount equal to (i) 50%
($40,000) in the event he terminates the Agreement before January 19, 1995, (ii)
31% ($25,000) in the event he terminates the Agreement on or between January 20,
1995 and January 18, 1996, and (iii) 12 1/2% ($10,000) in the event he
terminates the Agreement on or between January 19, 1996 and January 19, 1997.
By agreement with the Company entered into upon his employment in January
1994, in the event that the Company is acquired during the first 3 years of his
employment, Mark P. Hanrahan, Senior Vice President of the Company, will receive
a cash payment in an amount equal to the difference between the aggregate value
(which is the difference between the acquisition price and his exercise price)
of his initial stock option grant and $525,000.
By agreement between the Company and Kenneth J. Kay, Senior Vice President
Finance and Administration, and Chief Financial Officer, entered into upon Mr.
Kay's employment by the Company in July 1994, in the event that the Company is
acquired during Mr. Kay's employment, the Company will, upon the effective date
of such acquisition, make an additional cash payment to Mr. Kay in an amount
equal to the difference between the aggregate value (which is the difference
between the acquisition price and his exercise price) of his initial stock
option grant and $356,250.
Pursuant to the Company's termination policy, all employees of the Company,
including officers, are entitled to termination benefits in the event of any
involuntary termination of their employment by the Company other than for cause.
7
<PAGE> 10
REPORT OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS*
The Compensation Committee of the Board of Directors hereby presents to the
stockholders of the Company this report concerning the compensation of the
Company's executive officers, including the executive officers named in the
Summary Compensation Table elsewhere herein. The Compensation Committee is
responsible for setting and administering the compensation policies of the
Company with respect to its executive officers and, on an annual basis,
determining the compensation of each executive officer.
The Company's executive compensation program is designed to align executive
compensation with the Company's performance. The goals of the executive
compensation program are: (i) to attract and retain key executives critical to
the success of the Company; (ii) to provide levels of compensation which are
competitive with those offered by the Company's competitors and by other
companies of similar size; and (iii) to motivate executives to enhance long-term
stockholder value by building appropriate ownership in the Company. The Company
retained the services of an independent executive compensation consulting firm
for the last fiscal year to assist the Committee in connection with its duties
in executive compensation matters.
The annual compensation for the executive officers, including Sam Westover,
the Company's President and Chief Executive Officer, includes base salary,
coupled with cash bonuses and stock options. Base salaries are the fixed
component of the executive officers' compensation package. Salaries are set and
adjusted based primarily upon competitive standards and length of service, and
once adjusted, fall within the median of the range of increases implemented by
other companies, of similar size, geographic location and industry, which were
surveyed for comparability.
The award of cash bonuses was made pursuant to the Company's Bonus Plan
based upon the performance of the Company and its two principal subsidiaries
during 1994 against established Bonus Plan targets for revenues and earnings.
The earnings and revenue performance targets were weighted 60% and 40%,
respectively, in calculating bonuses.
A substantial portion of the compensation of executive officers is based
upon the award of stock options which rely on increases in the value of the
Company's Common Stock. The award of options is intended to encourage such
employees to establish a meaningful, long-term ownership interest in the Company
consistent with the interests of the Company's stockholders. Under the Company's
stock option plans, options are granted from time to time to certain officers
and key employees of the Company at the fair market value of the shares of
Common Stock at the time of grant. Because the compensation element of options
is dependent on increases over time in the market value of such shares, stock
options represent compensation that is tied to the Company's long-term
performance. The award of stock options to executive officers is determined
based upon individual performance, position within the Company, inducement to
join and remain with the Company, the amount of options already held, and
contribution towards enhancement of stockholder value.
The Committee has reviewed the 1994 base salaries of each of the executive
officers and is of the opinion that such salaries were reasonable in view of
those paid by the Company's competitors and by other companies of similar size.
The Committee has also reviewed the cash bonuses paid to executive officers
pursuant to the Company's Bonus Plan and has determined that such amounts and
the previously established revenue and earnings targets upon which such amounts
were awarded were reasonable. The Committee also reviewed the stock options
awarded to the executive officers for their services in 1994 and is of the
opinion that the option awards were reasonable in view of the officers'
individual performance and positions with the Company.
The Committee has also reviewed Mr. Westover's base salary for 1994 and is
of the opinion that such salary was reasonable in view of those paid to CEO's of
the Company's competitors and by other companies of similar size. Mr. Westover
received options for the purchase of 100,000 shares of the Company's Common
Stock during 1994 which the Committee believes to be appropriate in light of
compensation paid by the Company's competitors and by other companies of a
similar size. Mr. Westover received a cash bonus of $218,000 for 1994, pursuant
to the terms of the Company's Bonus Plan and the achievement of the established
performance factors discussed above. Mr. Westover was paid an annual salary of
$212,500 during 1994. His agreement with the Company also requires that in the
event of any acquisition of the Company during the first
8
<PAGE> 11
two years of his employment, Mr. Westover will, upon the effective date of such
acquisition, be paid an additional cash payment in the amount, if any, by which
the value of his options (as valued at the difference between the acquisition
and his exercise price) is less than $1,000,000. The Company has not adopted any
policy with respect to limiting executive compensation to the one million dollar
deductible maximum permitted under Internal Revenue Code Section 162(m).
COMPENSATION COMMITTEE:
Ronald P. Arrington, Chairman
James F. Doherty
John E. Flood, Jr.
J. Roberts Fosberg
Frederick M. Myers
Jon C. Thorson, M.D.
- - ---------------
* The preceding report of the Compensation Committee shall not be deemed to be
incorporated by reference into any filing by the Company under either the
Securities Act of 1933 or the Securities Exchange Act of 1934 (the "Exchange
Act"), including without limitation, all Registration Statements on Form S-3
and Form S-8 filed by the Company which incorporate future Exchange Act
filings by reference.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of January 31, 1995 by the Company's
Directors, by the nominees, by the named executive officers, by all Directors
and executive officers as a group and by the only persons or entities known to
the Company to own beneficially more than 5% of the outstanding shares of the
Company's voting securities. Unless otherwise indicated, the persons named in
the table possess sole voting and investment power with respect to the shares
listed (except to the extent such authority is shared with spouses under
applicable law).
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK
OWNED BENEFICIALLY
AS OF JANUARY 31, 1995
--------------------------
NO. OF PERCENT
SHARES OF CLASS
--------- --------
<S> <C> <C>
Foxmeyer Health Corporation
1220 Senlac Drive
Carrollton, Texas 78006........................... 1,676,300(1) 7.3%(1)
Dimensional Fund Advisors, Inc.
1299 Ocean Avenue, Eleventh Floor
Santa Monica, CA 90401............................ 1,057,761(2) 4.9%(2)
Ronald P. Arrington................................. 120,700(3) *
James F. Doherty.................................... 8,192(4) *
John E. Flood, Jr................................... 221,577(5) 1.0%
J. Roberts Fosberg.................................. 936,488(6) 4.2%
Frederick M. Myers.................................. 221,623(7) 1.0%
Jon C. Thorson, M.D................................. 180,178(8) *
Sam Westover........................................ 236,250(4) 1.1%
All Directors and Executive Officers as a Group (11
Persons).......................................... 2,237,508(9) 9.6%
</TABLE>
- - ---------------
* Represents less than 1% of the outstanding shares.
(1) Information set forth in the table is based on Foxmeyer Health Corporation's
Schedule 13D (formerly NII Health Care Corporation), as amended, filed
August 11, 1994.
9
<PAGE> 12
(2) Information set forth in the table is based on Dimensional's Schedule 13G
dated January 31, 1995.
(3) Includes 65,000 shares subject to presently exercisable options.
(4) Represents shares subject to presently exercisable options.
(5) Includes 160,000 shares subject to presently exercisable options and 30,000
shares held in a family trust.
(6) Consists of 730,000 shares subject to presently exercisable options and
206,488 shares held in a family trust.
(7) Mr. Myers holds 2,500 shares of Convertible Preferred Stock (representing
1.5% of that class). The table includes 3,375 shares issuable upon
conversion of the Convertible Preferred Stock and 110,000 shares subject to
presently exercisable options. Also includes 50,556 Common Stock shares
owned by Mr. Myer's wife, as to which Mr. Myers disclaims beneficial
ownership.
(8) Includes 20,000 shares subject to presently exercisable options, and 20,613
shares of Common Stock issuable upon conversion of the Company's 10% Senior
Secured Convertible Notes.
(9) Includes 1,641,942 shares subject to presently exercisable options, 20,613
shares of Common Stock issuable upon conversion of the Notes described above
and 3,375 shares issuable upon conversion of 8% Convertible Preferred Stock.
COMPLIANCE WITH SECTION 16(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
Directors, executive officers and persons who own more than 10% of a registered
class of the Company's equity securities to file with the Securities and
Exchange Commission initial reports of ownership and reports of changes in
ownership of Common Stock and other equity securities of the Company. Officers,
Directors and greater than 10% stockholders are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms they file. To the
Company's knowledge, based solely on review of the copies of such reports
furnished to the Company and written representations by Directors and executive
officers of the Company that no other reports were required, during the fiscal
year ended December 31, 1994, all Section 16(a) filing requirements applicable
to the Company's officers, Directors and greater than 10% beneficial owners were
complied with.
AMENDMENT OF 1993 EMPLOYEE STOCK OPTION PLAN
The Company's Board of Directors approved the amendment of the Company's
1993 Employee Stock Option Plan (the "Stock Option Plan") on February 3, 1995 to
provide for an additional 1,000,000 shares available for grant under the Stock
Option Plan, bringing the total number of shares available under the Plan to
3,000,000 shares. The Board of Directors recommends that the stockholders
approve the amendment in order to encourage employees to establish a meaningful,
long-term ownership interest in the Company consistent with the interests of the
Company's stockholders.
The following is a brief summary of the material features of the Stock
Option Plan and is qualified in its entirety by express reference to the Stock
Option Plan, a copy of which will be sent without charge prior to the Annual
Meeting to any stockholder requesting it from the Secretary of the Company.
As recently amended by the Board of Directors, the Stock Option Plan calls
for the granting of options to purchase up to 3,000,000 shares of the Company's
Common Stock. Shares covered by options which terminate without exercise are
available for issuance upon the grant of additional options. The number and kind
of shares subject to the Stock Option Plan and any outstanding options under the
Stock Option Plan will be appropriately adjusted in the event of a stock split,
stock dividend, reorganization or other specified changes in the capitalization
of the Company. The Stock Option Plan allows for the grant of either incentive
stock options or nonstatutory stock options.
The Stock Option Plan will be administered by the Company's Board of
Directors, which has the sole authority to determine which eligible persons
shall receive options and the terms and provisions of the options.
10
<PAGE> 13
The Board also has the full power and authority to interpret the provisions of
the Stock Option Plan and any option granted under the Stock Option Plan. The
Board may delegate administration of the Stock Option Plan to a committee of not
less than two members of the Board. The Board has delegated administration of
the Plan to the Compensation Committee of the Board.
Employees and consultants of the Company and any subsidiary of the Company
are eligible to receive options under the Stock Option Plan, with only employees
eligible to receive incentive stock options. At January 31, 1995, approximately
40 persons were eligible to participate in the Stock Option Plan. The Board has
the discretion to set the exercise price for options granted under the Stock
Option Plan, provided that the exercise price per share for each incentive stock
option cannot be less than the fair market value on the date of grant. The Board
also has broad discretion as to the other terms and conditions upon which
options granted shall be exercisable, but under no circumstances will an option
have a term exceeding ten years from the date of grant.
The purchase price for shares issued under the Stock Option Plan must be
paid by cash or such other means deemed acceptable by the Board, including the
payment of all or part of the exercise price with shares previously acquired by
the optionee, provided the shares have been held at least six months. The
Company will also facilitate the cashless exercise of options through customary
brokerage arrangements.
Each option will expire on the date established by the Board for that
option, except that no option may be exercised later than ten years after the
date of grant and no incentive stock option granted to a person owning greater
than 10% of the total combined voting power of all classes of stock of the
Company may be exercised later than five years after the date of grant. Options
generally terminate upon the termination of the optionee's employment, except
that the Board may provide in the option agreement that the vested portion of
the option at the time of termination may be exercisable for up to three months
after termination for any reason other than death or disability, and for up to
one year after termination in the event of death or disability. The Board also
has the authority to extend the post-termination exercise period, although not
beyond the original option expiration date, and to accelerate unvested portions
of an option upon the termination of employment. Options are not transferable by
the optionee other than by will or the laws of descent and distribution.
The Stock Option Plan provides that in the case of certain reorganizations,
mergers or consolidations of the Company with one or more corporations, or the
sale of substantially all of the Company's assets, all outstanding options shall
be assumed in some manner as part of the transaction or new options or
securities shall be substituted for them. In addition, the Stock Option Plan
provides that all outstanding options, including unvested installments, shall be
accelerated in the event of such transaction and be exercisable in full
beginning immediately prior to the consummation of the transaction and
continuing for the original term of the option.
The Stock Option Plan provides that the Board may at any time amend or
terminate the Stock Option Plan, although no amendment or termination may
adversely affect any previously granted option without the consent of the holder
of the option. Unless sooner terminated by the Board, the Stock Option Plan will
terminate in March 2003. Options for the purchase of 1,472,000 shares had been
granted under the Stock Option Plan as of December 31, 1994.
Under currently applicable provisions of the Internal Revenue Code of 1986,
as amended (the "Code"), an optionee will not be deemed to receive any income
for federal tax purposes upon the grant of an option under the Stock Option
Plan, nor will the Company be entitled to a tax deduction at that time. However,
upon the exercise of an option the tax consequences are as follows:
1. Upon the exercise of a nonstatutory option, the optionee will be
deemed to have received ordinary income in an amount equal to the
difference between the option price and the market price of the shares on
the exercise date. The Company will be allowed an income tax deduction
equal to the excess of the market value of the shares on the date of
exercise over the cost of such shares to the optionee; and
2. Upon the exercise of an incentive stock option, there is no income
recognized by the optionee at the time of exercise. If the stock is held at
least one year following the exercise date and at least two years
11
<PAGE> 14
from the date of grant of the option, the optionee will realize a long-term
capital gain or loss upon sale, measured as the difference between the
option exercise price and the sale price. If both of these holding period
requirements are not satisfied, ordinary income tax treatment will apply to
the amount of gain at sale or exercise, whichever is less. If the actual
gain exceeds the amount of ordinary income, the excess will be considered
short-term or long-term capital gain depending on how long the shares are
actually held. No income tax deduction will be allowed the Company with
respect to shares purchased by an optionee upon the exercise of an
incentive stock option, provided such shares are held for the required
periods as described above.
There is no charge against income required by the Company in connection
with the grant of an option or the exercise of an option for cash.
Under the Code, an option will generally be disqualified from receiving
incentive stock option treatment if it is exercised more than three months
following termination of employment. However, if the optionee is disabled, such
statutory treatment is available for one year following termination. If the
optionee dies while employed by the Company or within three months thereafter,
the statutory time limit is waived altogether. In no event do these statutory
provisions extend the optionee's right to exercise an option beyond its term.
At the Annual Meeting, stockholders will be asked to approve the amendment
of the Stock Option Plan to increase the number of shares available for grants
under the Plan by 1,000,000 to a total of 3,000,000 shares. Such approval will
require the affirmative vote of a majority of the voting power of all
outstanding shares of the Company's Common and Preferred Stock present or
represented and entitled to vote at the Annual Meeting. The Board of Directors
recommends a vote "FOR" the proposal.
12
<PAGE> 15
STOCK PERFORMANCE GRAPH*
Set forth below is a line graph comparing the cumulative total stockholder
return on the Company's Common Stock, based on its market price, with the
cumulative total return of companies on the Total Return Index for the NASDAQ
Stock Market and Value Line's Index for the Medical Supplies Industry for the
period beginning December 31, 1989 through December 31, 1994.
<TABLE>
<CAPTION>
Measurement Period Medical Sup-
(Fiscal Year Covered) NASDAQ plies Systemed
<S> <C> <C> <C>
1989 100 100 100
1990 84.92 124.05 91.49
1991 136.28 202.36 208.51
1992 158.57 179.18 238.30
1993 180.92 159.73 153.19
1994 176.91 193.71 238.30
</TABLE>
Note: Assumes $100 invested on 12/31/89 in Systemed, the Total Return Index for
the NASDAQ Stock Market and the Value Line Index for the Medical Supplies
Industry. The dollar amounts shown at each year-end are as of the last trading
day prior to the end of the Company's fiscal year.
Assumes reinvestment of dividends.
- - ---------------
* The information set forth in the preceding graph shall not be deemed to be
incorporated by reference into any filing by the Company under either the
Securities Act of 1933 or the Securities Exchange Act of 1934 ("Exchange Act")
including without limitation, all Registration Statements on Form S-3 and Form
S-8 filed by the Company which incorporate future Exchange Act filings by
reference.
INDEPENDENT AUDITORS
The Board of Directors of the Company has selected Arthur Andersen LLP,
certified public accountants, to audit the accounts of the Company for the year
ending December 31, 1995, and to perform other accounting services for the
Company as needed. Ernst & Young was the certified public accountants for the
year ended December 31, 1994. A representative of Ernst & Young LLP will be at
the Annual Meeting of Stockholders to be held on May 26, 1995 and will be
available to respond to appropriate questions.
On March 30, 1995, the Company with the approval of the Board of Directors,
advised Ernst & Young LLP that the Company was ending its relationship with such
accounting firm, and was retaining the
13
<PAGE> 16
accounting firm of Arthur Andersen LLP, as auditors for the fiscal year ended
December 31, 1995. The decision to retain Arthur Andersen LLP was based upon a
cost/benefit analysis performed by the Company of its overall relationship and
level of services provided and was not motivated by any disagreements between
the Company and Ernst & Young LLP concerning any accounting matters. Ernst &
Young LLP was originally retained in 1984. In connection with the audits of the
Company's financial statements for each of the two fiscal years ended December
31, 1994, and in the subsequent interim period, there have been no disagreements
with Ernst & Young LLP relative to accounting principles or practices, financial
statement disclosure, auditing scope or procedures, which if not resolved to
Ernst & Young LLP's satisfaction, would have resulted in a reference to the
subject matters of the disagreement, in connection with its report. For the past
two fiscal years, Ernst & Young LLP's reports on the Company's financial
statements did not contain an adverse opinion or a disclaimer of opinion, nor
were the opinions qualified or modified as to uncertainty, audit scope, or
accounting principles, nor were there any events of the type requiring
disclosure under Item 304(a)(l)(v) of Regulation S-K.
SUBMISSION OF STOCKHOLDER PROPOSALS
Stockholders are advised that any stockholder proposal intended for
consideration at the 1996 Annual Meeting must be received by the Company at the
address set forth on the first page of this Proxy Statement no later than
December 13, 1995 to be included in the proxy material for the 1996 Annual
Meeting. It is recommended that stockholders submitting proposals direct them to
the Secretary of the Company and utilize certified mail, return-receipt
requested in order to ensure timely delivery.
ANNUAL REPORT
A copy of the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1994, as filed with the Securities and Exchange Commission,
is available without charge by writing to: Corporate Secretary, Systemed Inc.,
970 West 190th Street, Suite 400, Torrance, California 90502.
OTHER MATTERS
The Board of Directors knows of no matter to come before the stockholders'
meeting other than as specified herein. If other business should, however, be
properly brought before such meeting the persons voting the proxies will vote
them in accordance with their best judgment.
STOCKHOLDERS ARE URGED TO COMPLETE, SIGN AND RETURN PROMPTLY THE
ACCOMPANYING PROXY CARD IN THE ENCLOSED ENVELOPE.
By Order of the Board of Directors
Sam Westover
President and Chief Executive Officer
Torrance, California
April 10, 1995
14
<PAGE> 17
SYSTEMED INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
MAY 26, 1995
The undersigned, revoking any proxy heretofore given, hereby appoints
Sam Westover and Kenneth J. Kay or either of them, proxies of the
P undersigned, each with full power of substitution, to vote and act on and
R consent with respect to all of the securities which the undersigned is
O entitled to vote at the Annual Meeting of Stockholders of Systemed Inc.
X to be held at the Doubletree Hotel, Los Angeles Airport, 5400 West Century
Y Boulevard, Los Angeles, California on Friday, May 26, 1995 at 9:00 a.m.
and at any continuation or adjournment thereof, with all power the
undersigned would possess if personally present at the meeting.
The undersigned hereby directs and authorizes said proxies, and each of
them, or their substitutes, to vote as specified below with respect to the
proposals noted in paragraphs 1 and 2 on the reverse side, or if no
specification is made, to vote in favor thereof.
The undersigned hereby further confers upon said proxies, and each of
them, or their substitutes, discretionary authority to vote in respect to
all other matters which may properly come before the meeting or any
continuation or adjournment thereof.
The undersigned acknowledges receipt of: (1) Notice of Annual Meeting
of Stockholders of the Company, (2) accompanying Proxy Statement, and (3)
Annual Report of the Company for the fiscal year ended December 31, 1994.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
SEE REVERSE
CONTINUED, AND TO BE SIGNED, ON REVERSE SIDE SIDE
Please mark
/X/ votes as in |
this example. |____
PLEASE COMPLETE, DATE, SIGN AND RETURN THIS PROXY IN THE ENCLOSED POST-PAID
ENVELOPE.
1. Election of the following Directors:
Nominees: Ronald P. Arrington, James F. Doherty, John E. Flood, Jr., J. Roberts
Fosberg, Frederick M. Myers, Jon C. Thorson, M.D. and Sam Westover.
FOR WITHHELD
/ / / /
For, except vote withheld from the following nominees. MARK HERE ____
FOR ADDRESS | |
CHANGE AND |____|
_____________________________________________________ NOTE BELOW
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, YOU ARE URGED TO SIGN
AND PROMPTLY MAIL THIS PROXY IN THE RETURN ENVELOPE SO THAT YOUR STOCK MAY BE
REPRESENTED AT THE MEETING.
2. To approve and adopt an amendment to the Company's 1993 Employee Stock
Option Plan to increase the number of shares available for grants under that
Plan to 3,000,000, as set forth in the Proxy Statement.
FOR AGAINST ABSTAIN
/ / / / / /
WHEN THIS PROXY IS PROPERLY EXECUTED AND RETURNED, THE SHARES IT REPRESENTS
WILL BE VOTED AT THE MEETING IN ACCORDANCE WITH THE CHOICES SPECIFIED,
IF NO CHOICES ARE SPECIFIED, THIS PROXY WILL BE VOTED BY THE DESIGNATED
PROXIES FOR THE ELECTION OF THE DIRECTOR NOMINEES LISTED HEREIN, FOR
THE APPROVAL OF THE SPECIFIED AMENDMENT TO THE COMPANY'S 1993 EMPLOYEE
STOCK OPTION PLAN, AND IN ACCORDANCE WITH THEIR BEST JUDGMENT WITH RESPECT
TO ANY OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE ANNUAL MEETING, IF
CUMULATIVE VOTING PROCEDURES ARE INVOKED AT THE ANNUAL MEETING, AND THIS
PROXY CARD INDICATES "FOR" OR NO CHOICE ON PROPOSAL 1, THE DESIGNATED
PROXIES ARE AUTHORIZED TO DISTRIBUTE VOTES REPRESENTED BY THIS PROXY IN
THEIR DISCRETION, SO AS TO ELECT THE MAXIMUM NUMBER OF MANAGEMENT NOMINEES
WHICH MAY BE ELECTED BY CUMULATIVE VOTING.
Please date and sign exactly as name appears on your stock certificate. If the
stock is registered in the names of two or more persons, each should sign.
Executors, administrators, trustees, guardians, attorneys and corporate officers
should indicate their full titles.
Signature: ______________________________________________ Date _________________
Signature: ______________________________________________ Date _________________
