<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. __)
Filed by the Registrant /x/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/x/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
AFP IMAGING CORPORATION
------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/x/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
AFP Imaging Corporation
Notice of Annual Meeting of Shareholders
To Be Held On December 19, 1996
To the shareholders of AFP Imaging Corporation:
You are cordially invited to attend the Annual Meeting of Shareholders of AFP
Imaging Corporation, a New York corporation (the Company), which will be held
on December 19, 1996 at the Company's offices, 250 Clearbrook Road, Elmsford,
New York, at 9:30 a.m., New York time, to consider and act upon the following
matters:
1. To elect five directors of the Company to serve for the ensuing year
and until their successors are duly elected and qualified;
2. To ratify the appointment of Arthur Andersen LLP as the independent
public accountants of the Company's financial statements for the fiscal year
ending June 30, 1997; and
3. To transact such other business as may properly come before the
Annual Meeting or any adjournment thereof.
Only Shareholders of record at the close of business on November 11, 1996 are
entitled to notice of and to vote at the Annual Meeting or any adjournments
thereof.
By order of the Board of Directors
David Vozick,
Secretary
Elmsford, New York
November 21, 1996
Whether or not you plan to attend the Annual Meeting, please sign and date the
enclosed Proxy, which is being solicited by the Board of Directors of the
Company, and promptly return it to the Company in the enclosed postage pre-paid
envelope. The Proxy may be revoked at any time before it is voted and
Shareholders executing proxies may attend the Annual Meeting and vote there in
person should they so desire.
Note that the time and location of the Annual Meeting is: December 19, 1996 at
9:30 a.m.
AFP Imaging Corporation
250 Clearbrook Road
Elmsford, New York 10523
<PAGE>
PROXY STATEMENT
The Board of Directors presents this Proxy Statement to all Shareholders and
solicits their proxies for the Annual Meeting of Shareholders to be held on
December 19, 1996. All proxies duly executed and received will be voted on all
matters presented to the Annual Meeting in accordance with the instructions
given by such proxies. In the absence of specific instructions, proxies so
received will be voted for the named nominees for election to the Company's
Board of Directors, and for the ratification of Arthur Andersen LLP as the
Company's independent public accountants. Shares represented by proxies which
are marked "abstain" for Item 2 on the proxy card and proxies which are marked
to deny discretionary authority on all other matters will not be included in
the vote totals, and therefore will have no effect on the vote. In addition,
where brokers are prohibited from exercising discretionary authority for
beneficial owners who have not provided voting instructions (commonly referred
to as "broker non-votes"), those shares will not be included in the vote
totals. The Board of Directors does not anticipate that any of its nominees
will be unavailable for election and does not know of any other matters that
may be brought before the Annual Meeting. In the event that any other matter
should come before the Annual Meeting or any nominee is not available for
election, the persons named in the enclosed proxy have discretionary authority
to vote all proxies not marked to the contrary with respect to such matters in
accordance with their best judgment. The proxy may be revoked at any time
before being voted, by written notice of revocation delivered to the Company
prior to the Annual Meeting or by giving notice at the Annual Meeting. The
Company will pay the entire expense of soliciting these proxies, which
solicitation will be by use of the mails, such mailing to take place on or
about November 21, 1996.
The total number of shares of Common Stock of the Company outstanding as of
November 11, 1996, was 7,082,829. The number of shares of Series A Convertible
Preferred Stock of the Company outstanding as of November 11, 1996 was
1,724,908. The number of shares of Series B Convertible Preferred Stock
outstanding as of November 11, 1996 of the Company was 711,872. The Common
Stock and the Series A and Series B Preferred Stock are the only classes of
securities of the Company entitled to vote at the Annual Meeting or any
adjournment thereof. Each share has one vote and all classes vote together as a
single class. Only Shareholders of record as of the close of business on
November 11, 1996 will be entitled to vote.
A list of Shareholders entitled to vote at the Annual Meeting will be available
at the Company's office, 250 Clearbrook Road, Elmsford, New York, for a period
of ten (10) days prior to the Annual Meeting for examination by any
Shareholder.
ANNUAL REPORT
An Annual Report for the year ended June 30, 1996, containing financial and
other information about the Company and its subsidiary companies, is being
mailed at this time to all Shareholders of record entitled to vote at the
Annual Meeting on December 19, 1996.
ACTIONS TO BE TAKEN AT THE ANNUAL MEETING
PROPOSAL ONE - ELECTION OF DIRECTORS
The Company's Board of Directors has nominated David Vozick, Donald
Rabinovitch, Robert L. Rosen, Frank O'Bryan and Robert A. Blatt for election as
Directors at the Annual Meeting to hold office for a one-year term or until
their successors shall be elected and duly qualified. It is intended that the
accompanying form of Proxy will be voted for the election as Directors of the
five (5) nominees named above, unless the Proxy contains contrary instructions.
Proxies which direct the Proxy holders to abstain and do not direct the Proxy
holders to vote for or withhold authority in the matter of electing Directors
will be voted for the election of the five (5) nominees named below. Proxies
cannot be voted for a greater number of persons than the number of nominees
named in the Proxy Statement.
In the event any one or more of the following nominees is unable to serve, it
is the intention of the persons named in the Proxy to vote for the election of
substitutes proposed by the Board of Directors or, if no substitute is
proposed, for the remaining nominees. Management has no reason to believe that
any of the nominees will be unable to serve and each nominee has advised the
Company that he can and will serve as a Director of the Company in the event he
is so elected.
The following table sets forth as to each nominee for election: (1) such
person's name; (2) the year in which such person was first elected a Director
of the Company; (3) biographical information for the last five years; (4)
certain other directorships, if any, held by such person; (5) positions and
offices held with the Company; and (6) such person's age. The information
regarding the Company's executive officers is also set forth in the following
table.
1
<PAGE>
<TABLE>
<CAPTION>
Year First
Elected
Name & Age Director Position
<S> <C> <C>
David Vozick (56) 1978 Chairman of the Board of Directors, Secretary and Treasurer
Donald Rabinovitch (50) 1978 President and Director
Robert Rosen (49) 1995 Vice - Chairman of the Board of Directors
Frank O'Bryan (63) 1995 Director
Robert Blatt (55) 1995 Director
</TABLE>
David Vozick has been Chairman of the Board of Directors, Secretary and
Treasurer since the Company was founded in October 1978. He is a co-founder of
the Company.
Donald Rabinovitch has been President since the Company was founded in October
1978. He is a co-founder of the Company.
Robert L. Rosen is the Chief Executive Officer of RLR Partners, L.L.C. a
private investment fund. From 1987 to 1993, Mr. Rosen had been Chairman of the
Board and Chief Executive Officer of Damon Corporation and its predecessor
which operated one of the leading clinical laboratory testing networks in the
United States. Damon Corporation was acquired by Corning, Inc. in 1993. Mr.
Rosen has been a Director of the Municipal Advantage Fund, Inc., Municipal
Partners Fund Inc., Municipal Partners Fund II, Inc. and the Spring Mountain
Group, since 1993, a Director of the Samonsite Corporation and Dialysis Centers
of America, Inc. since 1994, a Director of Culligan Water Technologies, Inc.
since 1995 and a director of the Jewish Television Network since 1996.
Frank O'Bryan is Chairman of the Board of Directors of The Spring Mountain
Group and its subsidiary, The Pioneer Savings and Loan Association, F.S.L.A. He
was Vice-Chairman and Director of Shearson Lehman Brothers Inc., and Chairman
and Chief Executive Officer of Shearson Lehman Mortgage Corporation until 1985.
He is currently a member of the Board of Directors of First American Financial
Corporation, and a past member of the Board of Directors of Damon Corporation,
Grubb & Ellis, and Directors Mortgage.
Robert Blatt is Chairman and majority owner of CRC Group Inc., and an owner and
operator of commercial real estate and a member of the New York Stock Exchange
since 1985. Mr. Blatt has been a consultant to the Company since 1991. Mr.
Blatt is also the Chief Executive Officer of Championship Golf Enterprises LLC,
Larchmont, New York, Island Golf Resorts in St. John's, Antigua BWI, and is a
Director of the parent of Mountaineer Race Track and Resort of West Virginia.
Mr. Vozick and Mr. Rabinovitch are first cousins.
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
Set forth below is information concerning stock ownership of each class of
equity securities of the Company owned by each director and nominee of the
Company, individually, by all officers and directors of the Company as a group,
and all persons known by the Company to own beneficially 5% or more of the
Company's voting securities based upon the respective number of shares of
Common Stock and Series A and B Preferred Stock outstanding as of November 11,
1996. Beneficial ownership as reported in the following table has been
determined in accordance with Rule 13d-3 of the Securities Exchange Act of
1934. Accordingly, all shares over which the directors, nominees and officers
named in the group directly or indirectly have or share voting or investment
power have been deemed to be beneficially owned by such person.
2
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of Percent of Class
Beneficial Owner Beneficial Ownership (1),(4) Title of Class
- - ------------------- -------------------- ---------------- --------------
<S> <C> <C> <C>
David Vozick 1,856,387 (2)(4) 25.3% Common Stock
250 Clearbrook Road
Elmsford, NY 10523
Donald Rabinovitch 1,683,287 (3)(4) 22.9% Common Stock
250 Clearbrook Road
Elmsford, NY 10523
Robert Blatt 703,963 9.9% Common Stock
1890 Palmer Avenue
Larchmont, NY 10538
New Ballantrae Partners, LP 1,371,461 79.5% Preferred Stock Series A
825 Third Avenue 711,872 100 % Preferred Stock Series B
New York, NY 10022
Robert L. Rosen 1,371,461 (5) 79.5% Preferred Stock Series A
825 Third Avenue 711,872 (5) 100 % Preferred Stock Series B
New York, NY 10022
Frank O'Bryan 1,371,461 (5) 79.5% Preferred Stock Series A
825 Third Avenue 711,872 (5) 100 % Preferred Stock Series B
New York, NY 10020
Steven Roth 1,371,461 (5) 79.5% Preferred Stock Series A
825 Third Avenue 711,872 (5) 100 % Preferred Stock Series B
New York, NY 10020
Post-Venture Associates 182,841 10.6% Preferred Stock Series A
Royal Bank Building
George Town, Grand Cayman
British West Indies
Officers and Directors as a 4,243,637 (4) 59.9% Common Stock
Group (5 Persons) 1,371,461 79.5% Preferred Stock Series A
711,872 100 % Preferred Stock Series B
</TABLE>
(1) Based on 7,082,829 shares of Common Stock, 1,724,908 Shares of Series A
Preferred Stock and 711,872 shares of Series B Preferred Stock outstanding as
of November 11, 1996. Common Stock and Preferred Stock vote as a single class
on a share-for-share basis, but are considered as separate classes for purposes
of this table. Unless otherwise noted, the Company believes that all persons
named in the table have sole voting and investment power with respect to all
Common Stock beneficially owned by them. A person is deemed to be the
beneficial owner of securities that can be acquired by such person within 60
days from the date hereof upon the exercise of options. Each beneficial owner's
percentage ownership is determined by assuming that options that are held by
such person (but not those held by any other person) and which are exercisable
within 60 days from the date hereof have been exercised.
(2) Includes 246,000 shares held in trust for Mr. Vozick's three children.
(3) Includes 156,000 shares owned by Mr. Rabinovitch's three children.
(4) In the case of both Messrs. Vozick and Rabinovitch, the amount includes
275,060 stock options issued to each of them of which 254,484 options are
currently exercisable, and includes 100,000 shares of Common Stock owned of
record by their respective family foundations. Messrs. Vozick and Rabinovitch
disclaim beneficial ownership with respect to the shares owned by the family
foundations. (See "Executive Compensation")
(5) Such shares are held by New Ballantrae Partners, L.P., a limited
partnership of which RLR Partners, L.L.C. ("RLR") is sole general partner. Mr.
Rosen is the managing member and Chief Executive Officer of RLR. Messrs.
O'Bryan and Roth are the managing members of RLR. Messrs. Rosen, O'Bryan and
Roth disclaim beneficial ownership in these shares for purposes of Rule
16a-1(a) promulgated under the Securities Exchange Act of 1934, as amended,
except as to shares representing their indirect pro-rata interests in New
Ballantrae Partners, L.P.
3
<PAGE>
SUMMARY EXECUTIVE COMPENSATION TABLE
The following table sets forth for the fiscal years ended June 30, 1996, 1995,
and 1994, the cash and certain other compensation paid by the Company to the
executive officers of the Company, each whose annual salary and bonus earned
exceeded $100,000 during each year.
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
--------------------------------------- --------------------------------------------------
Other Annual Restricted LTIP All Other
Salary Bonus Compensation Stock Options/SARS Payouts Compensation
Name and Position Year ($) (1) ($) (2) ($) (3) Awards (#) (4) (#) (4) (#) (4)
- - ----------------- ---- -------- ------- ------- ------ ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
David Vozick 1996 $310,350 $0 $38,673 - 216,975 - -
Chairman of the Board 1995 $269,240 $0 $38,610 - 6,633 - -
Secretary, and Treasurer 1994 $225,661 $0 $33,870 - 24,940 - -
Donald Rabinovitch 1996 $310,350 $0 $29,081 - 216,975 - -
President and Director 1995 $269,240 $0 $30,530 - 6,633 - -
1994 $225,661 $0 $28,658 - 24,940 - -
</TABLE>
(1) Amounts shown include cash compensation earned and received by the
executive officers. 1996 includes an amount accrued in the prior fiscal
year, 1995, and paid in fiscal 1996.
(2) No cash bonuses were paid during the past three fiscal years.
(3) The total amounts for each fiscal year consist of premiums paid by the
Company for life and disability insurance policies for their personal
benefit and an automobile allowance.
(4) No restricted stock awards, stock appreciation rights ("SARS") or
long-term incentive payouts ("LTIP") were granted during the fiscal years
ended June 30, 1994, 1995 and 1996. Messrs. Vozick and Rabinovitch were
each granted 24,940 stock incentives options at $1.00 per share in July
1993, 12,060 incentive stock options at $.55 per share in October 1994 and
263,000 stock incentive options at $.825 per share in July 1995.
Stock Options held at end of Fiscal 1996
The following table indicates the total number and value of exercisable and
unexercisable stock options held by each of the executive officers as of June
30, 1996. No SARs were granted or exercised in the 1996 fiscal year.
<TABLE>
<CAPTION>
Option/SAR Grants in Last Fiscal Year
Potential Realizable Value at
Assumed Annual Rates of Stock Price
Individual Grants Appreciation for Option Term
---------------------------------------------------------------------------------- ----------------------------
Number of
Securities % of Total
Underlying Options/SARs
Options/ Granted to Exercise
SARs Employees of Base Expiration
Name Granted (#) in Fiscal Year Price ($/Sh) Date 5%($) 10%($)
---- ----------- -------------- ------------ ---- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C>
David Vozick 1996 263,000 42% $.825 July 2000 $263,734 $317,673
Donald Rabinovitch 1996 263,000 42% $.825 July 2000 $263,734 $317,673
</TABLE>
Aggregated Option/SAR Exercises in Last Fiscal Year
and Fiscal Year-End Option/SAR Values
The following table sets forth for the fiscal year ended June 30, 1996, the
options exercised and the value of unexercised options at fiscal year end for
the executive officers.
<TABLE>
<CAPTION>
Number of unexercised Value of unexercised
Options/SARS at In-the-money Options/SARS
Shares Acquired Value Fiscal Year-End (#) at Fiscal Year End ($) (2)
Name on exercise (#) Realized ($) (1) Exercisable/Unexercisable Exercisable/Unexercisable
---- --------------- ---------------- ------------------------- --------------------------
<S> <C> <C> <C> <C>
David Vozick 24,440 $9,165 254,484/ $111,337/
Chairman, Secretary 20,576 $9,002
and Treasurer
Donald Rabinovitch 24,440 $9,165 254,484/ $111,337/
President and Director 20,576 $9,002
</TABLE>
4
<PAGE>
(1) The closing bid price for the Company's Common Stock at on December 1,
1995, (transaction date) was quoted at $1.375 per share on NASDAQ.
(2) The closing bid price for the Company's Common Stock on June 28, 1996, was
quoted at $1.4375 per share on NASDAQ.
Compensation Committee Interlocks and Insider Participation
As the Board of Directors does not have a Compensation Committee, executive
compensation is determined according to Company philosophy by the Board of
Directors itself. None of the executive officers of the Company has served on
the Board of Directors or Compensation Committee, during the last fiscal year
of any other entity, any of whose officers served on the Board of Directors of
the Company.
Report of the Board of Directors on Executive Compensation
Executive Compensation
The Company's executive compensation philosophy is to provide competitive
levels of compensation, integrate management's pay with the achievement of the
Company's performance goals, recognize individual initiative and achievement,
and assist the Company in attracting and retaining management with the skills
critical to the long-term success of the Company. Management compensation is
intended to be set at levels that the Board of Directors believes is consistent
with that of other companies in the Company's industry. The Company's executive
compensation has three major components: base salaries, performance incentive,
and incentive stock options.
Executive Base Salaries
Base salaries are determined by evaluating the responsibilities of the position
held, the experience of the individual, and by reference to base salaries for
comparable positions at companies within similar industries. The Board of
Directors reviews base salaries and determines increases based upon an
officer's contribution to corporate performance, the rate of inflation, and
competitive market conditions.
Performance Incentive
The Board of Directors has a performance incentive program based upon corporate
performance criteria relating to revenues, income and operating goals to
augment the base salaries received by executive officers. No performance
incentives have been paid or granted to the executive officers for the past
three years.
Incentive Stock Options
The Company uses incentive stock options issued under its 1992 and 1995
Employee Stock Option Plans as a means to align management's and shareholders'
interests in the enhancement of shareholder value. Incentive stock options are
typically granted at the commencement of employment of key personnel and are
augmented by subsequent grants periodically. All incentive stock option grants
are reviewed and approved by the Board of Directors.
Benefits
The Company offers a life, health and disability benefit package to its
executive officers, which is similar to the package offered to all of its
employees.
Retirement and Post Retirement Benefits
The Company does not offer a post-retirement health plan to its executive
officers or employees. The Company does offer a 401(k) retirement savings plan
to its executive officers which is the identical plan offered to all of its
employees.
The Company maintains a profit sharing plan and trust pursuant to which
participants receive certain benefits upon retirement, death, disability and,
to a limited extent, upon termination of employment for other reasons.
Allocation among participants' interests, including officers and directors who
are employees, is in accordance with current Internal Revenue Service
regulations. The aggregate amount contributed by the Company each fiscal year
is determined by the Board of Directors following a review of the profits of
such fiscal year. The plan requires no minimum contribution by the Company. For
the year ended June 30, 1996, the Company contributed $40,000 to the plan.
Respectfully submitted,
David Vozick
Donald Rabinovitch
Robert Rosen
Frank O'Bryan
Robert Blatt
5
<PAGE>
Performance Graph
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG AFP IMAGING CORPORATION, THE NASDAQ STOCK MARKET-US INDEX,
THE S & P MEDICAL PRODUCTS & SUPPLIES INDEX AND A PEER GROUP
[LINE GRAPH]
6/91 6/92 6/93 6/94 6/95 6/96
---- ---- ---- ---- ---- ----
(Dollars)
AFP IMAGING CORPORATION 100 300 275 225 300 575
NASDAQ STOCK MARKET-US 100 120 151 153 204 261
PEER GROUP 100 114 119 118 139 183
S & P MEDICAL PRODUCTS & SUPPLIES 100 113 94 90 134 182
Assumes $100 invested on June 30, 1991 in the Company's Common Stock, the
NASDAQ Stock Index, the Peer Group Index, and Standard and Poor's Medical
Products and Supplies Index. Total return assumes reinvestment of dividends.
The peer group comprises companies nationwide which compete against the Company
in its industry segment of photographic imaging manufacturers and distributors.
None of the companies competing with the Company offers a fully comparable
range of products and services. Therefore, the Company has provided an
additional comparison to companies in the medical products and supplies field.
The Company believes that this is more representative of its present industry
base. The performances of each company have been weighted according to their
respective stock market capitalization for purposes of arriving at a peer group
average. Each member of the peer group has been publicly traded for at least
five years.
COMPLIANCE WITH SECTION 16 (a) OF THE EXCHANGE ACT
Section 16 (a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
Officers, directors and greater than ten percent shareholders are required by
regulation to furnish the Company with copies of all Section 16 (a) forms they
file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Form 5's were
required for those persons, the Company believes that, during the period from
July 1, 1995 through June 30, 1996, all filing requirements applicable to its
officers, directors, and greater than ten percent beneficial owners were
complied with.
6
<PAGE>
PROPOSAL TWO - RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP has been independent auditors of the Company's accounts
since October 1980. Such firm has no financial interest, either direct or
indirect, in the Company. Selection of the auditors for the fiscal year ending
June 30, 1997, will be made by the Board of Directors subject to Shareholder
approval. A representative of Arthur Andersen LLP is expected to attend the
meeting and have an opportunity to make a statement and/or respond to
appropriate questions from Shareholders. Management recommends voting "FOR" the
ratification of the appointment of the auditors.
OTHER TRANSACTIONS
During the fiscal year ended June 30, 1996, E-Ticket Partners, received a total
of $133,000 in principal payments and waived the balance of the principal
payment due in the amount of $67,000. In October 1995, E-Ticket Partners
converted the balance of its debentures, $517,000, at $1.20 per share into
430,833 shares of common stock. E-Ticket Partners was liquidated and the stock
distributed in equal amounts to its partners. David Vozick, Donald Rabinovitch,
and Robert Blatt were partners of E-Ticket Partners.
The Company maintains directors and officer's liability insurance with RLI
Insurance Company which insures the Company and the directors and officers of
the Company in accordance with the indemnification provisions of the New York
Business Corporation Law. This policy is renewed each year in May and
currently costs the Company $30,000 per annum.
MEETING OF THE BOARD OF DIRECTORS AND INFORMATION REGARDING COMMITTEES
The Board of Directors of the Company held four regular meetings and two
special meetings during the fiscal year ended June 30, 1996. All Directors
either attended or gave their written consent for all the Board meetings.
The Board of Directors has an Executive Committee but does not have any other
standing committees. The Executive Committee held one meeting during the fiscal
year ended June 30, 1996. The Company does not pay any fees to Directors for
attendance at meetings of the Board of Directors.
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS
Proposals of Shareholders of the Company which are intended to be presented at
the next Annual Meeting must be received by the Company no later than August 7,
1997 in order that they may be included in the proxy statement and form of
proxy relating to that meeting.
COSTS OF SOLICITATION
The costs of soliciting proxies will be borne by the Company. The Company will
also reimburse brokerage firms and other custodians, nominees and fiduciaries,
if any, for reasonable out-of-pocket expenses incurred by them in connection
with forwarding solicitation materials to beneficial owners of Common Stock and
Preferred Stock held of record by such persons. Solicitation by the Company
will be primarily by mail.
AVAILABILITY OF ANNUAL REPORT ON FORM 10-K
Upon the written request of a Shareholder of the Company, addressed to David
Vozick, Secretary of the Company, AFP Imaging, 250 Clearbrook Road, Elmsford,
New York, 10523, the Company will provide without charge to such Shareholder a
copy of the Company's Annual Report on Form 10-K for its fiscal year ended June
30, 1996, including all statements and schedules to be filed with the
Securities Exchange Commission pursuant to Rule 13a-1 under the Securities
Exchange Act of 1934.
By Order of the Board of Directors
David Vozick,
Elmsford, New York Secretary
November 21, 1996
7
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF
AFP IMAGING CORPORATION
The undersigned Shareholder of AFP Imaging Corporation, a New York corporation,
hereby acknowledges receipt of the Notice of Annual Meeting of Shareholders and
Proxy Statement, each dated November 21, 1996 and hereby appoints David Vozick
and Donald Rabinovitch, and each of them with full power of substitution,
proxies and attorneys-in-fact, on behalf and in the name of the undersigned at
the 1996 Annual Meeting of Shareholders of AFP Imaging Corporation, to be held
on December 19, 1996 at 9:30 a.m., local time, at the Company's offices, 250
Clearbrook Road, Elmsford, New York 10523, and at any adjournments thereof, and
to vote all shares of Common Stock and Preferred Stock which the undersigned
would be entitled to vote if then and there personally present, on the matters
set forth on the reverse:
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
<PAGE>
/X/ Please mark your votes as in this example.
1. ELECTION OF DIRECTORS:
NOMINEES:
FOR all nominees listed at right / / David Vozick
Withhold authority / / Donald Rabinovitch
Robert L. Rosen
(If you wish to withhold authority to vote Frank O'Bryan
for any individual nominee, strike a line Robert A. Blatt
through that nominee's name in list at right.)
2. Proposal to ratify the appointment of Arthur Andersen LLP as the independent
public accountants of the Company.
For / / Against / / Abstain / /
3. Upon such other matters which may properly come before the meeting or any
adjournment or adjournments thereof.
For / / Against / / Abstain / /
THIS PROXY WILL BE VOTED AS DIRECTED, OR, IF NO CONTRARY DIRECTION IS INDICATED,
WILL BE VOTED FOR THE ELECTION OF DIRECTOR NOMINATED AND RATIFICATION OF THE
APPOINTMENT OF ARTHUR ANDERSEN LLP AS INDEPENDENT PUBLIC ACCOUNTANTS, AND AS
SAID PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY COME BEFORE THE ANNUAL
MEETING.
A majority of such attorneys or substitutes as shall be present and shall act at
said Annual Meeting or any adjournment or adjournments thereof (or if only one
shall be present and act, then that one) shall have and may exercise all of the
powers of said attorneys-in-fact, hereunder.
SIGNATURE DATE
--------------------------- ---------- -------------------------
Please Print
Note: (This proxy should be marked, dated and signed by the shareholder(s)
exactly as the name appears hereon and returned promptly in the enclosed
envelope. Persons signing in a fiduciary capacity should so indicate.
If shares are held by joint tenants or as community property, both should
sign. If the signer is a corporation, please sign in the full corporate
name and give the title of the signing officer.)
