<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:
/ / Preliminary Proxy Statement / / Soliciting Material Pursuant to
sec.240.14a-11(c) or
sec.240.14a-12
/X/ Definitive Proxy Statement / / Confidential, for Use of the
Commission Only (as permitted
by Rule14a-6(e)(2))
/ / Definitive Additional Materials
ADAC Laboratories
- - --------------------------------------------------------------------------------
(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.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
ADAC LABORATORIES
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MARCH 1, 1995
------------------------
TO THE SHAREHOLDERS OF ADAC LABORATORIES:
The Annual Meeting of Shareholders of ADAC Laboratories, a California
corporation, will be held at the offices of the Company, located at 540 Alder
Drive, Milpitas, California 95035, on Wednesday, March 1, 1995, at 1:00 p.m.,
local time, for the following purposes:
(1) To elect members of the Board of Directors;
(2) To approve amendments to the 1992 Stock Option Plan, including an
increase of the number of shares authorized thereunder by 780,000
shares; and
(3) To transact such other business as may properly come before the meeting
or any adjournment thereof.
The Board of Directors has fixed the close of business on January 25, 1995
as the record date for the determination of shareholders entitled to vote at the
Annual Meeting. A copy of the Company's Annual Report to Shareholders, including
financial statements for the fiscal year ended October 2, 1994, is being sent to
all shareholders as of the record date concurrently with this Proxy Statement.
Whether or not you expect to attend the Annual Meeting in person, please
date, sign and mail the enclosed Proxy in the envelope provided as promptly as
possible. The Proxy is revocable and will not affect your right to vote in
person in the event you attend the Meeting.
By Order of the Board of Directors
Dennis R. Mahoney,
Secretary
Milpitas, California
February 1, 1995
<PAGE> 3
ADAC LABORATORIES
540 ALDER DRIVE
MILPITAS, CALIFORNIA 95035
-------------------------------
PROXY STATEMENT
-------------------------------
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed Proxy is solicited on behalf of ADAC Laboratories, a
California corporation (the "Company"), for use at the Annual Meeting of
Shareholders to be held on March 1, 1995, at 1:00 p.m., local time, or at any
adjournment thereof, for the purposes set forth herein and in the accompanying
Notice of Annual Meeting of Shareholders. The Annual Meeting will be held at the
offices of the Company, located at 540 Alder Drive, Milpitas, California 95035.
This Proxy Statement and the accompanying proxy card are being mailed to all
shareholders on or about February 6, 1995.
Whether or not you plan to attend the Annual Meeting in person, please
date, sign and return the enclosed Proxy as promptly as possible, in the postage
prepaid envelope provided, to insure that your shares will be voted at the
Annual Meeting. Any shareholder who returns a proxy in such form has the power
to revoke it at any time prior to its effective use by filing an instrument
revoking it or a duly executed proxy bearing a later date with the Secretary of
the Company or by attending the Annual Meeting and voting in person. Any such
proxy, if not revoked, will be voted at the Annual Meeting in accordance with
the instructions specified therein.
RECORD DATE AND SHARE OWNERSHIP
Shareholders of record at the close of business on January 25, 1995 are
entitled to notice of and to vote at the meeting. At the record date, there were
issued and outstanding 16,241,660 shares of Common Stock, each entitled to one
vote.
The following table sets forth, as of December 9, 1994, the number and
percentage of shares of Common Stock beneficially owned (as defined in Rule
13d-3 adopted under the Securities Exchange Act of 1934) by (a) each nominee for
director, each existing director, all executive officers listed in the
compensation disclosure table and all directors and current executive officers
of the Company as a group, and (b) all persons known to the Company to own
beneficially more than five percent (5%) of any class of voting securities of
the Company. All such persons have sole voting and investment power with respect
to all shares shown as beneficially owned by them, except as otherwise stated in
the following footnotes.
<TABLE>
<CAPTION>
BENEFICIAL
(A) DIRECTORS, NOMINEES AND CERTAIN EXECUTIVE OWNERSHIP PERCENT OF
OFFICERS OF COMMON STOCK(1) VOTING SHARES(1)
- - ---------------------------------------------------- ------------------ ----------------
<S> <C> <C>
Stanley D. Czerwinski 237,931(2) 1.5%
David L. Lowe 63,280(3) *
Thomas A. McPherson 0 *
Robert L. Miller 26,667(4) *
F. David Rollo 16,668(5) *
Edmund H. Shea, Jr. 481,192(6) 3.0%
</TABLE>
1
<PAGE> 4
(Continued)
<TABLE>
<CAPTION>
BENEFICIAL
(A) DIRECTORS, NOMINEES AND OWNERSHIP PERCENT OF
CERTAIN EXECUTIVE OFFICERS OF COMMON STOCK(1) VOTING SHARES(1)
- - --------------------------- ------------------ ----------------
<S> <C> <C>
R. Andrew Eckert 54,755(7) *
Mark L. Lamp 52,750(8) *
James R. Haisler 73,899(9) *
All Directors and All Current 1,069,825(10) 6.5%
Executive Officers as a group
(11 persons)
</TABLE>
<TABLE>
<CAPTION>
BENEFICIAL
OWNERSHIP PERCENT OF
(B) OTHER PRINCIPAL SHAREHOLDERS OF COMMON STOCK VOTING SHARES
- - -------------------------------- --------------- -------------
<S> <C> <C>
Michael O. Preletz 872,332(11) 5.4%
1334 Parkview Avenue, Suite 200
Manhattan Beach, CA 90266
</TABLE>
- - ------------
* Less than one percent (1%).
(1) Based on information furnished by the persons named and 16,178,895 shares
of Common Stock outstanding as of December 9, 1994. All references to
options include options which are presently exercisable or exercisable
within sixty (60) days.
(2) Includes 83,333 shares issuable upon exercise of options held by Mr.
Czerwinski.
(3) Includes 62,880 shares issuable upon exercise of options held by Mr. Lowe.
(4) Includes 6,667 shares issuable upon exercise of options held by Mr. Miller.
(5) Includes 16,668 shares issuable upon exercise of options held by Dr. Rollo.
(6) Includes 36,669 shares issuable upon exercise of options held by Mr. Shea.
Also includes 88,913 shares held by J. F. Shea, Co., Inc. and 11,506 shares
held by Mrs. Shea. Mr. Shea disclaims beneficial ownership of the shares
held by Mrs. Shea and J. F. Shea Co., Inc.
(7) Includes 54,168 shares issuable upon exercise of options held by Mr.
Eckert.
(8) Includes 12,500 shares issuable upon exercise of options held by Mr. Lamp.
(9) Includes 61,251 shares issuable upon exercise of options held by Mr.
Haisler, 566 shares held by Mr. Haisler's spouse and 12,082 shares issuable
upon exercise of options held by Mr. Haisler's spouse. Mr. Haisler ceased
being an employee of the Company, effective December 31, 1994.
(10) Includes options to purchase 739,440 shares of Common Stock held by all
directors and current executive officers as a group.
(11) Includes 61,666 shares held by a corporation affiliated with Mr. Preletz
and 20,000 shares of Common Stock held by a daughter of Mr. Preletz.
VOTING AND SOLICITATION
A simple majority of the outstanding shares of Common Stock eligible to be
voted on matters to be considered at the meeting constitutes a quorum. If a
share is represented for any purpose at the meeting, it is deemed to be present
for all other matters. Abstentions and shares held of record by a broker or its
nominee ("Broker Shares") that are voted on any matter are included in
determining the number of votes present. Broker Shares that are not voted on any
matter will not be included in determining whether a quorum is present.
Unless cumulative voting is timely elected, the election of each nominee
for director requires a plurality of the votes cast. In order to be approved,
the votes cast for the amendment of the 1992 Stock Option Plan must exceed the
votes cast against. In all cases, shares with respect to which authority is
withheld, abstentions and Broker Shares that are not voted will not be included
in determining the number of votes cast.
2
<PAGE> 5
Alternatively, every shareholder voting for the election of directors may
cumulate such shareholder's votes and give one candidate the number of votes
equal to the number of directors to be elected multiplied by the number of
shares of Common Stock such shareholder is entitled to vote or distribute the
shareholder's votes on the same principle among as many candidates as the
shareholder chooses, provided that these votes cannot be cast for more than the
authorized number of directors. However, no shareholder shall be entitled to
cumulate votes unless the candidate's name has been placed in nomination prior
to the voting and the shareholder, or any other shareholder, has given notice at
the meeting prior to the voting of the intention to cumulate the shareholder's
votes. On all other matters, as explained above, each share of Common Stock has
one vote.
The cost of soliciting proxies will be borne by the Company. The Company
may reimburse brokerage firms and other persons representing beneficial owners
of shares for their expenses in forwarding solicitation material to such
beneficial owners, estimated at $20,000. The Company has retained Skinner & Co.,
a professional proxy solicitor, to assist in the solicitation of proxies and to
arrange for dissemination of proxy materials. The agreement with Skinner & Co.
provides that the fee payable for such services will amount to $3,500; such fee
does not include expenses. Proxies may be solicited by the Company's directors,
officers and regular employees, without additional compensation, personally or
by telephone, telegram or facsimile.
(1) ELECTION OF DIRECTORS
GENERAL
All six persons presently serving as directors (Messrs. Czerwinski, Lowe,
Miller and Shea and Drs. McPherson and Rollo) are proposed for election as
directors. The proxy holders will be voting for all six nominees.
In the event that any nominee is unable or declines to serve as a director
at the time of the Annual Meeting, the proxies may be voted for a nominee
designated by the present Board of Directors to fill the vacancy. In the event
that additional persons are nominated for election as directors, the proxy
holders intend to vote all proxies received by them in such a manner in
accordance with cumulative voting as will assure the election of as many of the
nominees listed below as possible, and, in such event, the specific nominees to
be voted for will be determined by the proxy holders. The Company is not aware
of any nominee who will be unable or will decline to serve as a director.
Directors are elected annually by the shareholders, and the term of office of
each person elected as a director will continue until the next Annual Meeting of
Shareholders or until his successor has been elected and qualified.
NOMINEES
The names of the nominees, and certain information about them, are set
forth below:
<TABLE>
<CAPTION>
DIRECTOR
NOMINEE AND AGE PRINCIPAL OCCUPATION SINCE
--------------- -------------------- --------
<S> <C> <C>
Stanley D. Czerwinski (59) Chairman of the Board of the Company 1991
David L. Lowe (34) Chief Executive Officer of the Company 1992
Thomas A. McPherson (55) President and Chief Executive Officer of 1994
Biomira Inc.
Robert L. Miller (42) Attorney at Law; general counsel to the 1990
Company
F. David Rollo (55) President and Chief Executive Officer of 1991
MetriCor, Inc.
Edmund H. Shea, Jr. (65) Executive Vice-President and a director of 1987
J.F. Shea Co., Inc.
</TABLE>
Except as set forth below, each of the nominees has been engaged in his
principal occupation set forth above during the past five years. There is no
family relationship between any director or executive officer of the Company.
3
<PAGE> 6
Mr. Czerwinski was elected a director in November, 1991 and Chairman of the
Board in February, 1992. Mr. Czerwinski previously served as Chief Executive
Officer, President and Chief Operating Officer at various times since January,
1991. He originally joined the Company in May 1986. Prior to joining the
Company, Mr. Czerwinski served for seventeen years in various management
capacities at TRW, including Director of Sales and Marketing for the Electronics
Components Group, and General Manager of the Semiconductor Division. He also
presently serves as a director of Rexon Incorporated, a manufacturer of software
and data storage products, and Zymed, Inc., a medical instrumentation company.
Mr. Lowe was elected a director of the Company in August, 1992 and has
served as Chief Executive Officer of the Company since November 1994. From March
1994 until November 1994, Mr. Lowe served as Co-Chief Executive Officer and from
February, 1992 until November 1994 as President. He originally joined the
Company in 1988 and has previously served in a variety of senior management
positions, including Chief Operating Officer. Prior to joining the Company, Mr.
Lowe held management and consulting positions with several firms or companies
providing services to or engaged in high-technology industries, including Bain &
Company and Cygnet Systems, Inc.
Dr. McPherson is currently the President and Chief Executive Officer and a
director of Biomira Inc., a biotechnology firm specializing in the development
of products for the diagnosis and treatment of cancer. Dr. McPherson, a
practicing cancer specialist and full Professor in the Faculty of Medicine at
the University of Alberta, was the Director of Medicine at the Cross Cancer
Institute from 1972 to 1985. He served as Deputy Minister of the Alberta
Department of Hospitals and Medical Care until 1988 when he was appointed the
Deputy Commissioner and Executive Director of the Premier's Commission on Future
Health Care for Albertans, serving in such capacity through 1990.
Mr. Miller is general counsel to the Company and serves as general counsel
to other corporations; he is also Chairman of the Board and Chief Executive
Officer of Ironstone Group, Inc.
Dr. Rollo is currently the President and Chief Executive Officer of
MetriCor, Inc., a corporation engaged in medical technology, quality assurance
and health information management consulting services. From 1984 until October,
1992, Dr. Rollo served as Senior Vice President-Medical Affairs for Humana Inc.
Prior to that, he served as Vice President for Humana from 1980 until 1984. He
has held various academic and administrative positions with Vanderbilt
University Medical Center since 1977, currently serving as Adjunct Professor of
Radiology.
Mr. Shea is a co-founder and has been, since 1968, Executive Vice-President
and a director of J.F. Shea Co., Inc., a diversified construction, land
development and venture investments company. He was elected a director of
Hambrecht & Quist Group in November, 1986 and serves as a director of Rexon
Incorporated, Zymed, Inc. and Ironstone Group, Inc.
BOARD MEETINGS, COMMITTEES AND DIRECTORS' COMPENSATION
The Board of Directors of the Company held a total of four regular meetings
and one special meeting during the fiscal year ended October 2, 1994. All of the
directors attended at least 75% of the aggregate number of meetings of the Board
of Directors and meetings of the committees of the Board on which he serves. The
Board of Directors presently has an Audit Committee, a Compensation Committee, a
Stock Option Committee and an Executive Committee. The Audit Committee, the
Compensation Committee and the Stock Option Committee each held one meeting
during the 1994 fiscal year. The Executive Committee did not meet during the
last year.
The Stock Option Committee presently consists of Messrs. McPherson, Miller
and Shea. The Compensation Committee presently consists of Messrs. Czerwinski,
Miller, Rollo and Shea. Messrs. Czerwinski, Lowe, Miller and Shea are members of
the Executive Committee. The Audit Committee presently consists of Messrs.
McPherson, Miller, Rollo and Shea.
During fiscal 1994 non-employee directors received stock options to
purchase 6,666 shares of the Company's Common Stock under the Company's
Directors' Stock Option Plan, subject to specified vesting installments. In
addition, during fiscal year 1994, non-employee directors received $1,000 for
each Board
4
<PAGE> 7
meeting attended. Dr. Rollo also received a $1,000 honorarium for serving as the
Chairman of the Company's Clinical Research Committee. Commencing in fiscal
1995, each non-employee director will receive an annual retainer of $10,000,
payable in quarterly installments and $2,500 for each Board meeting attended.
REPORT OF THE COMPENSATION COMMITTEE ON
ANNUAL COMPENSATION OF EXECUTIVE OFFICERS
Executive Compensation Components. The Compensation Committee of the Board
of Directors is responsible for evaluating and establishing the level of
executive compensation. It is the present philosophy of the Compensation
Committee and the Company that to achieve continual growth and financial
success, the Company must be able to attract and retain qualified executives and
must structure incentive-based compensation which is closely tied to the
Company's financial performance and operations.
In fiscal 1994 and in prior years, most executive officers and other
executive-level employees participated in a management incentive program, which
makes overall executive compensation dependent upon both the accomplishment of
individual tasks and objectives, as well as Company-wide performance. The
Company's Chairman and Chief Executive Officer participated in a similar but not
identical program, as described below. Under the management incentive program,
the objectives assigned to individual executives are intended to further the
Company's financial and operating performance, implement its strategic business
plan, develop new products and maintain and increase market share. The
objectives may also include subjective criteria such as leadership ability,
innovation, insuring compliance with Company policies, enhancing customer
satisfaction and furthering the Company's mission. Company-wide objectives,
which include the accomplishment of targeted levels of revenues and net
earnings, are also a component of the management incentive program. In order for
an executive to achieve his or her maximum bonus under such Program, he or she
must accomplish most or all of the individual objectives and the Company must
achieve its targeted level of revenue and earnings for a particular fiscal year.
The Compensation Committee monitors the effectiveness and appropriateness
of all of the Company's executive Compensation programs, approves the base
salaries of the executive officers and, in its discretion, awards bonuses under
the Company's management incentive program and makes recommendations concerning
the grant of stock options under the Company's stock option plans.
Base Salary. In determining the compensation of an executive officer, a
base salary is determined which relates to the level of responsibility, the
qualifications and experience required and the need to provide, together with
incentive bonuses and stock options, competitive compensation. Salary increases
are based upon periodic reevaluations of these factors and the performance of
the executive in meeting individually-assigned objectives.
Bonus Compensation. Under the management incentive program in effect in
fiscal 1994, the Compensation Committee sets objectives for each participant and
establishes the bonuses that may be earned, based upon the achievement of those
individual objectives and the Company's overall financial performance. In order
for any portion of the bonus to be earned, the executive must achieve at least
some of these objectives. Objectives are sometimes related to the participant's
operating unit. The Compensation Committee may grant bonuses of between 0% and
100% of base salary, based upon the performance of each participant's
individually-assigned objectives for the year, the Company's financial
performance and the executive's level of responsibility.
Stock Options. Stock option grants are intended to provide long-term
incentives for the achievement of the Company's strategic business plan and
financial and operational goals and to align management's interests with those
of the Company's shareholders. The size of any stock option grant is related to
the individual's level of responsibility within the Company.
CEO Compensation. Mr. Stanley C. Czerwinski served as the Company's
Chairman of the Board and Chief Executive Officer until March, 1994, whereupon
he and Mr. David L. Lowe, then President and Chief Operating Officer, each
became Co-Chief Executive Officer of the Company. In their respective positions
they were responsible for the entire scope of the Company's business during
fiscal 1994.
5
<PAGE> 8
Mr. Czerwinski's and Mr. Lowe's general compensation programs were
established during fiscal 1993 as a result of a compensation study of peer
organizations conducted in that year by an independent compensation consulting
firm. Mr. Czerwinski's fiscal 1993 base salary of $500,000 and his eligibility
to receive bonuses of up to 50% of his base salary were approved by the
Compensation Committee to be also applicable in fiscal 1994.
In the first half of fiscal 1994, Mr. Lowe participated in an incentive
program similar to the management incentive program for executive-level
employees; in the second half of the fiscal year, his incentive program was
similar to that of Mr. Czerwinski's. Before he was elected Co-Chief Executive
Officer, Mr. Lowe's annual base salary was $250,000 and he was eligible to
receive a bonus of between 0% and 100% of his base salary based upon quarterly
and annual operating results. After such election, Mr. Lowe's base salary was
increased to $325,000 and his bonus program was revised to provide for a bonus
of up to $125,000 based upon the satisfaction of certain short-term, operational
objectives and up to $100,000 based upon achieving certain long-term strategic
goals.
The amount of bonus, if any, payable to the Chief Executive Officer, or to
either Co-Chief Executive Officer, depended upon the achievement of certain
Company-wide performance criteria relating to net income, pre-tax profit
margins, return on shareholders' equity and enhancement of the shareholders'
investment in the Company through an increase in the price-earnings ratio of the
Company's stock price. Subjective factors such as leadership, successful
long-term planning, quality of products, innovativeness and the Company's
reputation with customers are also taken into account. After becoming Co-Chief
Executive Officer, Mr. Lowe's tasks were modified to include additional emphasis
on strategic goals.
During fiscal 1994 the Company made significant progress in the expansion
of foreign sales, including Europe, Asia and Latin America. The Company's
GENESYS VERTEX product continued its wide market acceptance and represented the
Company's largest component of product revenues. Additionally, the Company
developed and took the first steps in a strategic plan to diversify its business
by growing its Information Systems business. The Company improved its market
share and revenues in its Radiology Information Systems business. The Company
also continued to expand its "Total Quality Management Program" and was honored
by receiving a site visit for the Malcolm Baldrige National Quality Award -- the
final round of evaluation.
Despite the achievements noted above, the Compensation Committee awarded no
fiscal 1994 bonus to Mr. Czerwinski due to the decline in the Company's
financial results for such year, compared to that of fiscal 1993, and the
decline in the market value of the Company's shares during fiscal 1994. Mr. Lowe
received a bonus for the year of $148,180, of which $103,180 was awarded in the
first half based upon operational results and $45,000 was awarded during the
second half of fiscal 1994 based upon goals relating to the Company's long-term
strategic plan.
This Report on Executive Compensation has been furnished by the following
members of the Compensation Committee of the Company's Board of Directors:
Edmund H. Shea, Jr.
Robert L. Miller
F. David Rollo
Stanley D. Czerwinski
Mr. Czerwinski did not participate in any decisions with respect to his own base
compensation.
Compensation Committee Interlocks and Insider Participation. As noted
above, the members of the Company's Compensation Committee are Messrs. Shea,
Miller, Rollo and Czerwinski. Mr. Czerwinski presently is the Chairman of the
Board of Directors and during fiscal 1994 was the Co-Chief Executive Officer of
the Company. See "Certain Transactions" below concerning Mr. Czerwinski's
exercise of stock options and payment of the exercise price by delivery of a
promissory note.
6
<PAGE> 9
Executive Compensation. The following table sets forth all compensation
earned by or paid or awarded to the Chief Executive Officer and to the next four
most highly compensated executive officers of the Company for all services
rendered in all capacities for the periods shown.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION -----------------------
--------------------------------------------- STOCK LONG-TERM
NAME, AGE AND FISCAL OPTION INCENTIVE ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS OTHER(1) AWARDS(2) PAYOUTS COMPENSATION
------------------ ------ -------- -------- -------- --------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Stanley D. Czerwinski (59), 1994 $500,000 $ -0- -- 50,000 -- --
Chairman and Former 1993 500,000 250,000 -- -0- -- --
Co-Chief Executive 1992 350,000 245,833 -- 166,667 -- --
Officer (2)
David L. Lowe (34), 1994 $294,231 $148,180 -- 150,000 -- --
Chief Executive Officer (3) 1993 250,000 250,000 -- -0- -- --
1992 175,000 212,500 -- 83,333 -- --
R. Andrew Eckert (33), 1994 $148,086 $102,380 -- 165,000 -- --
President and General 1993 125,000 125,000 -- -0- -- --
Manager, Medical Systems 1992 125,000 125,000 -- 33,333 -- --
Mark L. Lamp (33), 1994 $177,316 $ 86,700 -- 165,000 -- --
President and General 1993 120,000 60,00 -- -0- -- --
Manager, Healthcare 1992 160,000 46,666 -- -0- -- --
Information Systems
James R. Haisler (40), 1994 $129,808 $ 81,810 -- 20,000 -- --
Vice President and General 1993 125,000 125,000 -- -0- -- --
Manager, International (4) 1992 125,000 125,000 -- 30,000 -- --
</TABLE>
- - ---------------
(1) Not included in the compensation table are certain expenses incurred or
reimbursements paid by the Company such as the use of Company-owned or
-leased automobiles, entertainment expenses and other benefits (such as
meals and parking) and other miscellaneous items. The aggregate amount of
such compensation did not exceed the lesser of either $50,000 or 10% of the
total annual salary and bonus reported for each named officer. A small
portion of such expenses may relate to personal expenses or use but are
believed to constitute ordinary and incidental business costs and expenses
which are paid or reimbursed by the Company in order to attract or retain
qualified personnel, facilitate job performance and minimize the
work-related expenses incurred by such persons.
(2) Mr. Czerwinski resigned as Chief Executive Officer after the end of the 1994
fiscal year on November 2, 1994.
(3) Mr. Lowe was the President of the Company during fiscal year 1994 and
Co-Chief Executive Officer from March 1994 until he became the Chief
Executive Officer of the Company on November 2, 1994.
(4) Mr. Haisler ceased his employment with the Company on December 31, 1994.
Executive Officers of the Company. A description of Mr. Czerwinski's and
Mr. Lowe's positions with the Company and related information is set forth above
under "(1) ELECTION OF DIRECTORS -- Nominees". A description of the Company's
current executive officers are set forth below.
Mr. Eckert was named President and General Manager, ADAC Medical Systems,
on November 2, 1994. He previously served as Executive Vice-President and
General Manager since February, 1992. Mr. Eckert joined the Company in 1990 and
has held several other senior management positions. Prior to joining the Company
Mr. Eckert worked in the venture capital and banking industries with Summit
Partners and Goldman Sachs Company, respectively.
Mr. Lamp was named President and General Manager of ADAC Healthcare
Information Systems in August, 1994. He previously served as Executive
Vice-President of Business Development since March, 1994 and earlier held a
variety of other management and engineering-related positions.
7
<PAGE> 10
Mr. William Chappell, age 33, has held the positions of Director of Finance
and Corporate Controller since joining the Company in March, 1993. Prior to
joining ADAC, Mr. Chappell was employed by Coopers & Lybrand, most recently in
the position of Audit Manager.
Mr. Steven Dennis, age 49, has held the position of President, ADAC/SD&G
Healthcare Systems, Inc. since SD&G became a wholly-owned subsidiary of the
Company in November 1993. Prior to joining the Company, Mr. Dennis was President
of SD&G Healthcare Systems.
Mr. Dennis Mahoney, age 41, was elected Vice-President, Finance and Chief
Financial Officer on October 3, 1993, and was elected Secretary of the Company
on November 3, 1993. From 1991 to September 1993, Mr. Mahoney was
Vice-President, Finance and Administration, Chief Financial Officer and
Assistant Secretary of Pharmetrix Corporation, a developer and manufacturer of
delivery systems and devices for pharmaceutical and biotechnology drugs. Mr.
Mahoney also served as Vice-President, Internal Operations and Control with
Triton Container International Limited, an international container leasing
company, and from 1981 to 1989 with Syntex Corporation, most recently serving as
the Controller of Syntex Laboratories, the U.S. Pharmaceutical Division.
The term of office of each of the above-named executive officers is at the
pleasure of the Board of Directors. To the knowledge of the Company, there are
no arrangements or understanding between these officers and any other person
pursuant to which any of these officers was selected as an officer.
STOCK OPTIONS GRANTED IN FISCAL 1994
The following table sets forth certain information concerning stock option
grants made by the Company to certain executive officers pursuant to the
Company's stock option plans during fiscal year 1994.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- - --------------------------------------------------------------------------------- POTENTIAL REALIZABLE
NUMBER VALUE AT ASSUMED
OF % OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS PRICE APPRECIATION
UNDERLYING GRANTED PER SHARE FOR OPTION TERM(1)
OPTIONS TO EMPLOYEES EXERCISE EXPIRATION ---------------------
NAME GRANTED IN 1994 PRICE($) DATE 5% 10%
---- ---------- ------------ --------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Stanley D. Czerwinski.. 50,000 4.4% $ 6.375 8-10-99 $ 88,065 $194,600
David L. Lowe.......... 150,000 13.1 6.375 8-10-99 264,194 583,800
R. Andrew Eckert....... 30,000 2.6 11.50 2-7-99 95,317 210,626
45,000 3.9 12.125 3-2-99 150,746 333,110
90,000 7.8 6.375 8-10-99 158,516 350,280
Mark L. Lamp........... 30,000 2.6 11.50 2-7-99 95,317 210,626
45,000 3.9 12.125 3-2-99 150,746 333,110
90,000 7.8 6.375 8-10-99 158,516 350,280
James R. Haisler....... 20,000 1.7 6.375 8-10-99 35,226 77,839
</TABLE>
- - ---------------
(1) The 5% and 10% assumed rates of appreciation are mandated by the rules of
the Securities and Exchange Commission and are not an estimate or projection
of future prices or appreciation of the Company's Common Stock or the actual
future value of these options.
Stock options generally vest and become partially exercisable one year from
the date of grant, and vest fully over the next two years. At the time of grant,
options may be designated as incentive stock options ("ISO's"), a type of option
authorized under the 1981 amendments to the Internal Revenue Code. Options not
so designated are granted as "non-qualified options." Options generally remain
outstanding for either five years or ten years from the date of grant, provided
the recipient remains employed throughout that period. The post-termination
exercise period is generally three months.
8
<PAGE> 11
AGGREGATED STOCK OPTION EXERCISES DURING FISCAL 1994 AND
YEAR-END STOCK OPTION VALUES
The following table sets forth certain information concerning the exercise
of stock options by the Company's executive officers during fiscal year 1994,
the "value realized", and the number and value of unexpired stock options at
October 2, 1994 which such executive officers can exercise or in the future
could exercise.
<TABLE>
<CAPTION>
TOTAL VALUE
OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY STOCK
STOCK OPTIONS HELD OPTIONS HELD AT
AT OCTOBER 2, 1994 OCTOBER 2, 1994(2)
SHARES ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Stanley D. Czerwinski.... 166,666 $ 1,755,200 -0- 133,333 $ -- $ 454,165
David L. Lowe............ 103,788 1,271,403 62,880 191,666 129,929 300,000
R. Andrew Eckert......... 20,000 184,375 46,668 181,666 116,253 180,000
Mark L. Lamp............. 32,250 322,500 45,250 181,666 114,446 180,000
James R. Haisler......... -0- -- 61,251 28,333 240,054 40,000
</TABLE>
- - ---------------
(1) The "value realized" is calculated by determining the difference between the
fair market value of ADAC Common Stock on the date of exercise of the
options and the exercise price of such options.
(2) The value of unexercised stock options is calculated by determining the
difference between the closing price of ADAC Common Stock on Friday,
September 30, 1994 of $8.375, being the last trading date of fiscal 1994, as
reported in the Wall Street Journal and the exercise price of such options.
Employment Contracts, Termination of Employment and Change-in-Control
Agreements. In November, 1994 Mr. Stanley Czerwinski and the Company entered
into an agreement which provides for a term of ten years. The agreement provides
that so long as Mr. Czerwinski continues to devote substantially all of his time
as Chairman of the Board, he shall be paid a salary of $30,000 per month. For
the first 36 months of such term, the Company has agreed to pay Mr. Czerwinski
$20,833 per month in consideration of, among other things, not competing with
the Company during the term of the agreement and not selling any of his shares
of common stock to the extent that doing so would disqualify the Company from
obtaining "pooling of interests" treatment for financial accounting purposes
with regard to any transaction for which negotiations commenced on or before
March 31, 1995, and which is completed on or before June 30, 1995, pursuant to
which the Company acquires another business entity. At such time as Mr.
Czerwinski is no longer serving as Chairman of the Board or devotes less than
his full time as Chairman, his salary shall cease and he shall make himself
available to provide consulting services to the Company for a consulting fee.
9
<PAGE> 12
PERFORMANCE GRAPH
The following graph sets forth the Company's total cumulative stockholder
return as compared to the Standard and Poor's Medical Index and the Medical
Technology Index (OTC) for the period October 2, 1989 through October 2, 1994.
Total stockholder return assumes $100 invested at the beginning of the period in
the Company's Common Stock, the stocks represented in the Standard and Poor's
Medical Index and the stocks represented in the Medical Technology Index (OTC),
in each case on a "total return" basis assuming reinvestment of dividends.
<TABLE>
<CAPTION>
Measurement Period Med. Tech,
(Fiscal Year Covered) ADAC Stock S&P Medical (OTC)
--------------------- ---------- ----------- ----------
<S> <C> <C> <C>
10/2/89 100 100 100
10/2/90 17 87 118
10/2/91 28 163 198
10/2/92 75 155 188
10/2/93 81 100 138
10/2/94 55 69 113
</TABLE>
CERTAIN TRANSACTIONS
On September 29, 1993, William J. Chappell, Corporate Controller of the
Company, borrowed $7,000 from the Company and an additional $63,000 on October
4, 1993 in connection with his relocation from the United Kingdom to the United
States. Mr. Chappell repaid $53,000 during fiscal 1994 and a balance of $17,000
is presently outstanding upon which interest accrues. Mr. David L. Lowe,
President and Chief Operating Officer of the Company, borrowed $140,625 from the
Company in connection with the exercise of certain stock options on November 20,
1992, all pursuant to a promissory note which bore interest at a variable rate
equal to the Company's cost of funds from its principal lender. During fiscal
1994, Mr. Lowe repaid the note by delivering to the Company $20,735 and 9,600
shares of Company Common Stock having a market value on such date of $129,600.
On November 16, 1992, Mr. Stanley D. Czerwinski, Chairman of the Board of
Directors and Chief Executive Officer of the Company, also exercised stock
options and delivered to the Company a promissory note for the exercise price of
$312,500; this note also bore interest at a variable rate equal to the Company's
cost of funds. On November 15, 1993, the outstanding principal of $312,500 and
accrued interest of $18,451 under the note was paid in full by Mr. Czerwinski's
delivery to the Company of $103,355.75 and 17,177 shares of the Company's Common
Stock having a market value on such date of $227,595.25.
Mr. Robert L. Miller, a director and general counsel of the Company,
received approximately $297,122 during fiscal 1994 as payment for a variety of
legal services rendered to the Company in his capacity as general counsel and
$5,000 for attending Board of Directors' meetings as a director of the Company.
10
<PAGE> 13
(2) APPROVAL OF AMENDMENT OF 1992 STOCK OPTION PLAN
GENERAL
The Company currently has two stock option plans for employees and
consultants pursuant to which new options may be granted for the purchase of
Common Stock -- the 1992 Stock Option Plan (the "1992 Plan") and the 1985 Option
Plan. Inasmuch as there remained approximately only 209,000 shares available for
grant under the 1985 Option Plan and the 1992 Plan on November 2, 1994, the
Board of Directors has approved amendments of the 1992 Plan to (i) increase the
available option shares by 780,000, (ii) establish 300,000 shares as the maximum
number of shares that may be granted to any employee during any calendar year
and (iii) require that the grant of an option be approved by a committee
comprised of at least two (2) "disinterested directors" (as defined by Section
162(m) of the Internal Revenue Code, discussed below) before it may become
exercisable by the optionee. The following description of the 1992 Plan is
necessarily brief and general. A copy of the 1992 Plan, as amended, is available
upon request from the Company.
DESCRIPTION OF THE 1992 PLAN, AS AMENDED
The purposes of the 1992 Plan are to attract and retain the best available
personnel for positions of substantial responsibility and to provide additional
incentives to key employees, officers, consultants or other persons whose
efforts are deemed worthy of encouragement to promote the growth and success of
the Company's business. Non-employee directors may not participate under the
1992 Plan.
The Omnibus Budget Reconciliation Act of 1993 added Section 162(m) to the
Internal Revenue Code, as amended (the "Code"). Effective January 1, 1994, this
provision disallows a public company's deductions for employee remuneration
exceeding $1,000,000 per year for the CEO and the other four officers named in
the "Summary Compensation Table", but contains an exception for qualified
"performance-based compensation." The Internal Revenue Service issued proposed
regulations interpreting this provision. The new law requires that certain
actions must be taken by a compensation committee of two or more outside
directors and that the material terms of such remuneration must be approved by
the shareholders in order for certain types of remuneration to qualify as
"performance-based compensation." The Company has been advised that, under
Section 162(m) and the proposed regulations, grants of stock options awards made
under the 1992 Plan as it presently exists may not be qualified
"performance-based compensation" unless certain actions are taken, including
establishing the maximum number of options which may be granted to any employee
during any year and requiring the approval of two or more outside directors.
Prior to the proposed plan amendment, there have been no minimum or maximum
numbers of option shares which may be granted to any one optionee. Options
granted under the 1992 Plan may be incentive stock options, which are intended
to meet the requirements of Section 422 of the Internal Revenue Code ("incentive
options"), or nonqualified options, which are not intended to meet such
requirements ("nonqualified options"). Incentive options have terms of not to
exceed ten years from the date of grant; however, the term of any such option
granted to a person who owns shares possessing more than 10% of the total
combined voting power or value of all classes of stock of the Company or any
subsidiary shall not exceed five years. A nonqualified option may have a
specific term or an infinite term. The Board of Directors determines when
options granted under the 1992 Plan may be exercisable; options granted will
normally be exercisable to the extent of 25%, 25% and 50% of the number of
option shares subject to an option grant after 12, 24 and 36 months,
respectively, after the date of grant.
The option exercise prices are determined by the Board of Directors or the
Committee and may not be less than 100% of the fair market value of the
Company's Common Stock on the date of grant. The option price may be paid by
cash, check, promissory note or surrender of other shares of Common Stock of the
Company that have been held for at least six months, or a combination thereof,
at the discretion of the Board or as set forth in the applicable stock option
agreement. The 1992 Plan also provides that whenever an optionee exercises an
option by surrendering already-owned shares to pay all or a portion of the
exercise price, if the option agreement so provides or if then approved by the
Board, the optionee may receive a new option
11
<PAGE> 14
for the purchase of a number of shares equal to the amount tendered for payment,
with an exercise price equal to the then fair market value of a share of Common
Stock.
The 1992 Plan permits an optionee, if set forth in his or her option
agreement, to have any required Federal and state withholding taxes satisfied by
either (i) delivering outstanding shares of Common Stock of the Company
previously owned for six (6) months by the Optionee or (ii) withholding of a
sufficient number of exercised option shares to satisfy such withholding
obligations, based upon fair market value of such shares on the date of
exercise.
The 1992 Plan provides that if an optionee is terminated as an employee or
ceases to serve as a consultant, he may, within 90 days (or such other period as
may be determined by the Board) after such termination or cessation, exercise
his option but only to the extent he was entitled to do so at the date of his
termination or cessation of services. Special exercise rules are applicable to
optionees who become totally and permanently disabled or who die during, or
within 90 days after termination of, their period of employment with the
Company. No option may be exercisable after the expiration of its term. Options
are not transferable by the optionee, other than by will, the laws of descent
and distribution or pursuant to a divorce decree.
The 1992 Plan provides that in the event any change, such as a stock split,
reverse stock split or stock dividend, is made in the Company's capitalization
which results in an increase or decrease in the number of outstanding shares of
Common Stock without receipt of consideration by the Company, appropriate
adjustment shall be made in the option price and the number of shares subject to
the option. In the event of a proposed dissolution or liquidation of the
Company, or the merger of the Company with or into another corporation, each
outstanding option shall be assumed or an equivalent option shall be substituted
by the successor corporation, unless the Board of Directors determines, in its
discretion, to accelerate the exercisability of outstanding options. In
addition, upon a "change in control" of the Company occurring without the
approval of a majority of the Board of Directors then in office, all options
will accelerate and be immediately exercisable. A "change in control" includes
any person purchasing twenty-five percent (25%) or more of the shares of Common
Stock or certain changes in the composition of the Board of Directors.
The Board of Directors may amend the 1992 Plan at any time or may terminate
it without approval of the shareholders; provided, however, that shareholder
approval is required for any amendment which increases the number of shares for
which options may be granted or is deemed a "material" amendment pursuant to
Rule 16b-3 promulgated under the Securities Exchange Act of 1934. However, no
action by the Board of Directors or shareholders may alter or impair any option
previously granted without the consent of the optionee.
ADMINISTRATION
The 1992 Plan is administered by a committee of the Board consisting of not
less than two (2) persons who are "disinterested persons" under Rule 16b-3 under
the Securities Exchange Act of 1934. The 1992 Plan, as amended, provides that
stock options granted after February 17, 1993 to executive officers will not be
exercisable until the 1992 Plan and such grants are approved by a committee of
the Board consisting of not less than two persons who are "outside directors"
under Section 162(m) of the Code.
OUTSTANDING OPTIONS
At October 2, 1994, there were outstanding options to purchase 2,553,686
shares of Common Stock. Of these options, 92,727 were previously granted under
the Company's 1981 Stock Option Plan (no further options may be granted under
such Plan), 784,928 were granted under the 1985 Option Plan, 113,336 were
granted under the Directors' Stock Option Plan, and 1,546,729 were granted under
the 1992 Stock Option Plan. On October 2, 1994, these outstanding options had an
aggregate exercise price of $17,936,453 or $7.02 per share, and based upon a
closing price of $8.375 on September 30, 1994 (being the last trading day of the
Company's 1994 fiscal year), the shares underlying these outstanding options had
an aggregate market value of approximately $21,387,120.
12
<PAGE> 15
SUMMARY OF FEDERAL TAX CONSEQUENCES
Nonqualified Stock Options. There will be no Federal income tax
consequences to an optionee at the time an option under the 1992 Plan is
granted. Upon exercise of a nonqualified option, the optionee will recognize
taxable ordinary income in an amount equal to the fair market value of the stock
on the date of exercise less the exercise price paid, and the Company will be
allowed a corresponding tax deduction for compensation expense in an amount
equal to the taxable income recognized by the optionee. If the optionee is an
employee of the Company, the Company is required to withhold Federal income
taxes with respect to such ordinary income amount. Upon the subsequent sale of
shares acquired upon the exercise of a nonqualified option, the optionee
generally will recognize additional gain or loss in an amount equal to the
difference between the proceeds received upon sale and the fair market value of
such shares on the date of exercise.
Incentive Stock Options. There will be no Federal income tax consequences
to an optionee at the time of the initial grant or at the time of an exercise of
an incentive option, although the exercise may be an item of tax preference and
may subject the optionee to the alternative minimum tax. The Company will not be
entitled to a tax deduction for compensation expense at the time of exercise of
an incentive option. If an optionee holds stock acquired through exercise of an
incentive option for (a) more than two years from the date on which the option
is granted and (b) more than one year from the date on which the shares are
transferred to the optionee upon exercise of the option, then income recognized
at the time of the subsequent disposition of the stock will be treated as a
capital gain or loss. Generally, if the optionee disposes of the stock before
the expiration of either of these holding periods (a "Disqualifying
Disposition"), at the time of the Disqualifying Disposition the optionee will
realize taxable income equal to the lesser of (i) the excess of the stock's fair
market value on the date of exercise over the exercise price or (ii) the
optionee's actual gain, if any, resulting from the purchase and sale. To the
extent the optionee recognizes income by reason of a Disqualifying Disposition,
the Company will be entitled to a corresponding business expense deduction in
the tax year in which the disposition occurs.
Under Section 162(m) of the Code, enacted in August 1993, the Company may
be precluded from claiming a federal income tax deduction for total remuneration
in excess of $1,000,000 paid to the CEO or the other four executive officers
named in the "Summary Compensation Table" in any one year beginning in 1994.
Total remuneration would include amounts received upon the exercise of stock
options granted after February 17, 1993. An exception does exist, however, for
"performance-based compensation," including amounts received upon the exercise
of stock options pursuant to a plan approved by shareholders that meets certain
requirements. The amendments to the 1992 Plan, when approved by shareholders,
are intended to have all stock options meet the requirements of
"performance-based compensation."
The foregoing discussion is merely a summary of the more significant
effects of current Federal income taxation upon optionees and the Company with
respect to shares issued under the 1992 Plan and it does not purport to be a
complete analysis of the tax laws dealing with this subject. Reference should be
made to the applicable provisions of the Internal Revenue Code and the
Regulations promulgated thereunder. In addition, this summary does not discuss
the provisions of the income tax laws of any state or foreign country in which
an employee may reside. Each employee should consult his or her own tax advisor
concerning the Federal (and state and local) income tax consequences of
participation in the 1992 Plan.
VOTE REQUIRED
Approval of the amendments to the 1992 Plan requires the affirmative vote
of the holders of a majority of the voting shares present or represented at the
Annual Meeting. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Coopers & Lybrand, L.L.P. has examined the financial statements
of the Company for the fiscal year ended October 2, 1994, and has been selected
to perform such service for the current fiscal year. A representative of Coopers
& Lybrand, L.L.P. is expected to be present at the Annual Meeting with the
13
<PAGE> 16
opportunity to make a statement if he or she desires to do so and is expected to
be available to respond to appropriate questions. The Company has been advised
that neither that firm, nor any of its partners or associates, has any direct or
indirect financial interest in or any connection with the Company other than as
accountants and auditors.
OTHER MATTERS
CERTAIN SECURITIES LAW DISCLOSURES
Effective May 1, 1991, the Securities and Exchange Commission (the "SEC")
promulgated new rules under Section 16 of the Securities Exchange Act of 1934,
amended. These rules require the Company's officers and directors, and persons
who own more than ten percent (10%) of a registered class of the Company's
equity securities, to file reports showing their initial stock ownership and
subsequent change in such ownership with the SEC by specific dates.
Based solely on its review of the copies of such forms received by it or
written representations from the Company's appropriate officers and directors,
the Company believes that, during the 1994 fiscal year, all filing requirements
applicable to its officers and directors were complied with, except that Messrs.
Czerwinski, Lowe, Lamp, Dennis, Eckert, Mahoney and Chappel reported late the
stock option grants each of them received on August 10, 1994 and Messrs.
McPherson, Miller, Rollo and Shea reported late the directors stock option
grants automatically granted to them on March 15, 1994.
SHAREHOLDER PROPOSALS
Individual shareholders of the Company may be entitled to submit proposals
which they believe should be voted upon by the shareholders. The Securities and
Exchange Commission has adopted regulations which govern the inclusion of such
proposals in annual proxy materials. All such proposals must be submitted to the
Secretary of the Company no later than September 30, 1995 in order to be
considered for inclusion in the Company's 1996 proxy materials.
OTHER BUSINESS
Management does not know of any business to be presented other than the
matters set forth above, but if other matters properly come before the meeting,
it is the intention of the persons named in the Proxy to vote in accordance with
their best judgment on such matters.
AVAILABILITY OF FORM 10-K
THE COMPANY WILL FURNISH WITHOUT CHARGE A COPY OF ITS ANNUAL REPORT ON FORM
10-K FOR THE FISCAL YEAR ENDED OCTOBER 2, 1994, AS FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION, TO ANY SHAREHOLDER DESIRING A COPY. Shareholders may write
to ADAC Laboratories, 540 Alder Drive, Milpitas, California 95035, attention of
Robert Starr.
By Order of the Board of Directors,
Dennis R. Mahoney,
Secretary
Dated: February 1, 1995
14
<PAGE> 17
PROXY ADAC LABORATORIES
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
The undersigned shareholder of ADAC Laboratories, a California corporation,
acting under the California General Corporation Law, hereby constitutes and
appoints Stanley D. Czerwinski and Robert L. Miller, and each of them, the
attorneys and proxies of the undersigned, each with the power of substitution,
to attend and act for the undersigned at the Annual Meeting of Shareholders of
said corporation to be held on March 1, 1995, at 1:00 p.m., local time, at the
offices of the Company, located at 540 Alder Drive, Milpitas, California 95035,
and at any adjournments thereof, and in connection therewith to vote and
represent all of the shares of Stock of said corporation which the undersigned
would be entitled to vote, as follows:
<TABLE>
<S> <C> <C>
(1) ELECTION OF DIRECTORS: FOR ALL NOMINEES LISTED / / WITHHOLD AUTHORITY / /
(except as listed below) to vote for all nominees listed
</TABLE>
(mark one: the Board of Directors recommends a "FOR" vote for the election of
the following nominees to the Board of Directors: Stanley D.
Czerwinski, David L. Lowe, Thomas A. McPherson, Robert L. Miller,
F. David Rollo and Edmund H. Shea, Jr.).
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THE NAME(S) OF SUCH NOMINEE(S) BELOW.)
<TABLE>
<S> <C> <C> <C>
(2) Approval of Amendments of 1992 Stock Option Plan, including an
increase of the number of authorized shares by 780,000:
(mark one; the Board recommends a "FOR" vote). FOR / / AGAINST / / ABSTAIN / /
</TABLE>
- - --------------------------------------------------------------------------------
Said attorneys and proxies, and each of them, shall have all the powers which
the undersigned would have if acting in person. The undersigned hereby revokes
any other proxy to vote at such meeting and hereby ratifies and confirms all
that said attorneys and proxies, and each of them, may lawfully do by virtue
hereof. Said proxies, without hereby limiting their general authority, are
specifically authorized to vote in accordance with their best judgment with
respect to all matters incident to the conduct of the meeting; all matters
presented at the meeting but which are not known to the Board of Directors at
the time of the solicitation of this proxy; and, with respect to the election of
any person as a Director, if a bona fide nominee for the office is named in the
Proxy Statement and such nominee is unable to serve or will not serve, to vote
for any other person.
THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF ADAC LABORATORIES
Each of the above-named proxies present at said meeting, either in person or
by substitute, shall have and exercise all the powers of said proxies hereunder.
This proxy will be voted in accordance with the choices specified by the
undersigned on the other side of this proxy. IF NO INSTRUCTIONS TO THE CONTRARY
ARE INDICATED HEREON, THIS PROXY WILL BE TREATED AS A GRANT OF AUTHORITY TO VOTE
FOR THE ELECTION OF THE NOMINEES FOR THE BOARD OF DIRECTORS NAMED ON THE OTHER
SIDE HEREOF AND AS A GRANT OF AUTHORITY TO VOTE FOR THE OTHER PROPOSALS STATED
ON THE OTHER SIDE HEREOF AND ON ANY OTHER MATTERS TO BE VOTED UPON.
The undersigned acknowledges receipt of a copy of the Notice of Annual
Meeting and Proxy Statement relating to the meeting.
<TABLE>
<S> <C>
- - ------------------------------------- -------------------------------------
Signature Signature
</TABLE>
Date: , 1995
-----------
IMPORTANT: In signing
this proxy, please sign
your name or names on
the signature lines in
the same manner as it
appears on your stock
certificate. When
signing as an attorney,
executor, administrator,
trustee or quardian,
please give your full
title as such. EACH JOINT
TENANT SHOULD SIGN.
PLEASE SIGN, DATE AND RETURN PROXY PROMPTLY IN THE
POSTAGE PREPAID ENVELOPE PROVIDED.
