<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / 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 Section 240.14a-12
CompuMed, 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/ 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>
COMPUMED, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 23, 2000
Notice is hereby given that the Annual Meeting of Stockholders (the "Meeting")
of CompuMed, Inc., a Delaware corporation (the "Company"), will be held at the
Four Points-Sheraton Hotel located at 9750 Airport Boulevard, Los Angeles,
California, on Friday, June 23, 2000, at 10:00 a.m., local time, for the
following purposes:
1. To elect six directors to serve for the following year and until
successors have been elected and qualified.
2. To approve an amendment to the 1992 Stock Option Plan increasing the
number of shares subject to the Plan from 1,800,000 to 2,400,000.
3. To ratify the appointment of Ernst & Young LLP as the Company's
independent auditors for the 2000 fiscal year.
4. To act upon such other matters as may properly come before the Meeting
or any adjournments thereof.
Only stockholders of record at the close of business on May 15, 2000 shall be
entitled to notice of and to vote at the Meeting or any adjournments thereof.
Information concerning the matters to be acted upon at the Meeting is set forth
in the accompanying Proxy Statement. All stockholders are cordially invited to
attend the Meeting in person.
By order of the Board of Directors
/s/ PHUONG DANG
-------------------------------------------
Phuong Dang
Secretary
May 23, 2000
Los Angeles, California
IF YOU DO NOT EXPECT TO BE PRESENT AT THE MEETING AND WISH YOUR SHARES OF COMMON
STOCK OR PREFERRED STOCK, AS THE CASE MAY BE, TO BE VOTED, YOU ARE REQUESTED TO
SIGN AND PROMPTLY MAIL THE ENCLOSED PROXY WHICH IS BEING SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS. A RETURN ENVELOPE THAT REQUIRES NO POSTAGE IF MAILED IN
THE UNITED STATES IS ENCLOSED FOR THAT PURPOSE.
<PAGE>
COMPUMED, INC.
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
JUNE 23, 2000
GENERAL
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors and management of CompuMed, Inc., a Delaware corporation (the
"Company"), of proxies for use at the 2000 Annual Meeting of Stockholders of the
Company (the "Meeting") to be held at the Four Points- Sheraton Hotel located at
9750 Airport Boulevard, Los Angeles, California, on Friday, June 23, 2000, at
10:00 a.m., local time, and at any and all adjournments thereof, for the
purposes set forth in the accompanying Notice of Annual Meeting of Stockholders
("Notice of Meeting").
This Proxy Statement, Notice of Meeting and accompanying Proxy are first being
mailed to stockholders on May 23, 2000.
VOTING SECURITIES AND VOTE REQUIRED
Only stockholders of record at the close of business on May 15, 2000 are
entitled to notice of and to vote the shares of common stock, $.01 par value
("Common Stock"), Class A $3.50 Cumulative Convertible Preferred Stock, $.10 par
value ("Class A Preferred Stock") and Class B $3.50 Convertible Preferred Stock,
$.10 par value ("Class B Preferred Stock" and collectively with the Common Stock
and the Class A Preferred Stock the "Voting Stock"), of the Company held by them
on such date at the Meeting or any and all adjournments thereof. As of May 15,
2000, 17,443,494 shares of Common Stock, 8,400 shares of Class A Preferred Stock
and 300 shares of Class B Preferred Stock were outstanding. There was no other
class of voting securities outstanding at that date.
Each share of Voting Stock held by a stockholder entitles such stockholder to
one vote on each matter that is voted upon at the Meeting or any adjournments
thereof.
The presence, in person or by proxy, of the holders of majority of the
outstanding shares of Voting Stock is necessary to constitute a quorum at the
Meeting. Assuming that a quorum is present, the affirmative vote of the holders
of a majority of the shares of Voting Stock voting at the Meeting will be
required to approve Proposal No.2, regarding amending the 1992 Stock Option Plan
and proposal No. 3, regarding the ratification of the appointment of auditors. A
plurality of votes cast will be required for the election of directors.
With regard to the election of directors, votes may be cast in favor or
withheld; votes that are withheld will be excluded entirely from the vote and
will have no effect except that votes withheld will be counted toward
determining the presence of a quorum for the transaction of business.
Abstentions and broker "non-votes" will be counted toward determining the
presence of a quorum for the transaction of business. Abstentions may be
specified on all proposals except the election of directors. With respect to
proposals other than the election of directors, abstentions will have the effect
of a negative vote. A broker "non-vote" will have no effect on the outcome of
any of the proposals.
If the accompanying Proxy is properly signed and returned to the Company and not
revoked, it will be voted in accordance with the instructions contained therein.
Unless contrary instructions are given, the persons designated as proxy holders
in the accompanying Proxy will vote "FOR" the Board of Directors' slate of
nominees," and "FOR" approval of the amendment to the 1992 Stock Option Plan,
and "FOR"
1
<PAGE>
ratification of the appointment of Ernst & Young LLP as the Company's
independent auditors for the 2000 fiscal year, and as recommended by the Board
of Directors with regard to any other matters or if no such recommendation is
given, in their own discretion. Each such Proxy granted by a stockholder may be
revoked by such stockholder at any time before it is exercised by filing with
the Secretary of the Company a revoking instrument in the form of a duly
executed Proxy bearing a later date. The powers of the Proxy holders will be
suspended if the person executing the Proxy attends the Meeting in person and so
requests. Attendance at the Meeting will not, in itself, constitute revocation
of the Proxy.
The cost of soliciting these Proxies, consisting of the printing, handling, and
mailing of the Proxy and related material, and the actual expense incurred by
brokerage houses, custodians, nominees and fiduciaries in forwarding proxy
material to the beneficial owners of stock, will be paid by the Company.
In order to assure that there is a quorum, it may be necessary for certain
officers, directors, regular employees and other representatives of the Company
to solicit Proxies by telephone or telegraph or in person. These persons will
receive no extra compensation for their services.
PROPOSAL 1
ELECTION OF DIRECTORS
At the Meeting, six directors will be elected to serve until the next Meeting
and until their successors are elected and qualified. The Board of Directors
will vote all Proxies received by them, in the accompanying form, for the
nominees listed below. The current size of the Board of Directors of the Company
is six . All of the nominees are presently serving as directors. In the event
any nominee is unable to or declines to serve at the time of the Meeting, the
Proxies will be voted for an alternative nominee who shall be designated by the
present Board of Directors to fill the vacancy. As of the date of this Proxy
Statement, the Board of Directors is not aware of any nominee who is unable or
will decline to serve as a director.
THE FOLLOWING ARE THE NOMINEES FOR ELECTION AS DIRECTORS:
<TABLE>
<CAPTION>
NAME POSITION WITH COMPANY YEAR BECAME DIRECTOR AGE
- ---- --------------------- -------------------- ---
<S> <C> <C> <C>
Robert B. Goldberg Chairman of the Board and CEO 1994 66
Herbert S. Lightstone Director 1997 66
John Minnick Director 1985 51
John Romm, M.D. Director 1997 69
Stuart Silverman, M.D. Director 1999 52
Robert Stuckelman Director 1973 68
</TABLE>
The terms of the Board of Directors will expire at the next annual
meeting of stockholders. The Company's officers are elected by the Board of
Directors and hold office at the will of the Board.
BACKGROUND EXPERIENCE OF DIRECTORS
MR. GOLDBERG is a senior partner in the firm of Francis, Goldberg & Powers, a
certified Public Accounting Firm, and has been associated with such firm since
January 1995. Prior thereto, he was a senior partner in the Los Angeles office
of Bernstein, Fox, Goldberg & Licker Certified Public Accountants. He is
certified in both California and New York and has been a member of the New York
State Bar. Mr. Goldberg attended Lehigh University, Brooklyn Law School and New
York University School of Law and has lectured for the Practicing Law Institute
and The American College of Life Underwriters. He is a member of the Estate
Planning Council, Professional Planners Forum and various accounting societies.
2
<PAGE>
MR. LIGHTSTONE is Vice President, Corporate Development, with ICN
Pharmaceuticals. (NYSE:ICN) where he is also responsible for ICN's global public
and investor relations activities. He rejoined ICN in 1994 and also served with
ICN from 1968 until 1981. Prior to ICN, Mr. Lightstone served as a Director, and
subsequently as Chairman & CEO of Immunetech Pharmaceuticals from 1983 through
1986. In 1981 and 1982 he served as President of Revlon Ophthalmic
International. He has been a consultant to numerous emerging companies.
MR. MINNICK is President of Minnick Capital Management, an investment management
firm that he founded in 1972. Mr. Minnick is a member of the Kansas and Federal
Bar. He has served as a director on other corporate and non-profit boards and is
a member of the Association for Investment Management and Research (AIMR). Mr.
Minnick is a graduate of Washburn University (BA) and the Washburn University
School of Law (JD).
DR. ROMM has practiced internal medicine and gastroenterology in private
practice since 1962. He earned his MD at Wayne State College of Medicine and
also holds a BS in biology. He is an associate professor of medicine at the
University of California, Los Angeles and is an attending physician at
Cedars-Sinai Medical Center.
DR. SILVERMAN is a Clinical Professor of Medicine And Rheumatology at UCLA and
Cedars Sinai. He is Medical Director of the OMC, a non-profit clinical research
center, and maintain a private practice in rheumatology. Dr. Silverman is a
member of the National Osteoporosis Foundation Scientific Advisory Board. He has
published over 40 originial articles. He speaks nationally and internationally
on Osteopororis. Dr. Silverman is a graduate of Princeton University (AB) and
Jonh Hopkins (MD).
MR. STUCKELMAN founded the Company in 1973 and served as its President until
1982. From 1982 through 1989, Mr. Stuckelman was a business consultant for small
and medium size companies. In 1989, he rejoined the Company as President and
Chief Executive Officer in which capacities he served until October 1994. Mr.
Stuckelman has been a director of the Company since its incorporation. Since
1994, he has been President of Technical Management Consultants, which provides
business consulting services to many companies. He is also on the Board of
Directors of Medical Resources Management, Inc., a public company that rents
laser surgery equipment to doctors and hospitals. He holds an MSEE from the
University of Southern California and a BEE from Cornell University.
There is no family relationship among the directors or executive
officers of the Company.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held a total of four meetings during the
fiscal year ended September 30, 1999. No director attended fewer than 75% of the
aggregate of all meetings of the Board of Directors.
The Audit Committee is primarily responsible for approving the services
performed by the Company's independent auditors and reviewing reports of the
Company's internal and external auditors regarding the Company's accounting
practices and systems of internal accounting controls. This Committee currently
consists of Mr. Stuckelman and Mr. Goldberg. The Audit Committee met once during
the fiscal year ended September 30, 1999.
The Compensation Committee reviews and approves the Company's compensation
policy and has assumed responsibility for administration of the Company's 1992
Stock Option Plan. This Committee currently consists of Mr. Minnick and Dr.
Romm. The Compensation Committee met once during the fiscal year ended September
30, 1999.
The Executive Committee is comprised of Mr. Goldberg, Mr. Minnick, and Mr.
Lightstone. The Executive Committee meets on an as needed basis.
3
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth the compensation for the fiscal year ended
September 30, 1999 for the Company's chief executive officer and all executive
officers whose compensation exceeded $100,000 for such fiscal year.
<TABLE>
<CAPTION>
- ------------------------------------- ------------------ ------------------ ------------------- ------------------
NAME AND PRINCIPAL POSITION FISCAL YEAR ANNUAL SALARY COMPENSATION BONUS LONG-TERM
COMPENSATION
STOCK OPTIONS
- ------------------------------------- ------------------ ------------------ ------------------- ------------------
<S> <C> <C> <C> <C>
James Linesch 1999 $129,160 $5,000 50,000
President and CEO* 1998 $117,000 0 0
1997 $98,077 $5,000 25,000
- ------------------------------------- ------------------ ------------------ ------------------- ------------------
</TABLE>
* Mr Linesch terminated employment on September 8, 1999
EMPLOYMENT AGREEMENTS
NONE
EMPLOYEE STOCK OPTION PLANS
Under the 1992 Stock Option Plan (the "1992 Plan"), the Company may grant
qualified or non-qualified options for the purchase of up to 1,800,000 shares of
Common Stock. At the year ended September 30, 1999, there were 850,549 shares
reserved for exercise of options granted, of which 295,135 were exercisable, and
949,451 were available for grant. The average exercise price of options granted
under the Plan is $0.79 per share. As of March 01, 2000 , the Board of Directors
granted 754,500 options to employees, officer and directors at an average
exercise price of $0.74 per share. One proposal at the Meeting is an amendment
to the 1992 Plan to increase to 2,400,000 the number of underlying shares.
For a fuller description of the 1992 Plan, and the proposed amendment, see
PROPOSAL 2, below.
STOCK OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-----------------
NUMBER OF SECURITIES
(SHARES OF COMMON STOCK) % OF TOTAL OPTIONS EXERCISE
UNDERLYING OPTIONS GRANTED TO EMPLOYEES PRICE EXPIRATION
NAME GRANTED (1) IN FISCAL YEAR ($/SHARE) DATE
- ---- ----------- -------------- --------- ----
<S> <C> <C> <C> <C>
J. Linesch 50,000 12% $0.67 2009
</TABLE>
4
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
The following table sets forth certain information regarding the exercise of
stock options during the fiscal year ended September 30, 1999 and the fiscal
year-end value of unexercised options for the Company's named executive
officers.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
(SHARES OF COMMON STOCK) VALUE OF UNEXERCISED
SHARES ACQUIRED UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
ON EXERCISE VALUE OPTIONS AT FISCAL YEAR END FISCAL YEAR END (1)
NAME REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---- --------------- -------- -------------------------- -------------------------
<S> <C> <C> <C> <C>
J. Linesch - - 74,042 / 58,333 $13,845 / $11,292
</TABLE>
(1) Based upon the closing market price of the Company's Common Stock as
reported on the Nasdaq Small Cap market on September 30, 1999 minus the
respective option exercise prices.
NON PLAN STOCK OPTIONS
Between February 1992 and July 1999, a total of 1,152,890 stock options were
granted to directors, officers and consultants outside either the 1992 Plan and
the prior 1982 Stock Option Plan. The exercise prices of these non-plan stock
options are at an average price of $0.92 per share which were equal to the fair
market value of the Common Stock on the respective dates of grant and repricing,
and they expire between 2000 and 2001. As of September 30, 1999, 400,740 of
these non-qualified stock options had been exercised, 137,384 were canceled, and
614,766 were still outstanding.
SAVINGS AND RETIREMENT PLANS
In July 1987 the Company instituted a Savings and Retirement Plan (the "S&R
Plan"). Under the S&R Plan, every full-time salaried employee who is 18 years of
age or older may contribute up to 15% of his or her annual salary to the S&R
Plan. The Company will make a matching contribution of $.25 for every $1.00 of
the employee's contribution for an employee contribution of up to but not
exceeding 6 percent of the employee's annual salary. Company contributions are
100% vested after 36 months of contributions to the S&R Plan. Benefits are
payable under the S&R Plan upon termination of a participant's employment with
the Company or at retirement. The S&R Plan meets the requirements of Section
401(k) of the Internal Revenue Code. Internal Revenue Service regulations limit
the percentage of tax-deferred contributions that can be made by
higher-compensated participants. There are restrictions upon withdrawal of tax
deferred contributions, but participants are permitted to borrow against the
value of their tax deferred accounts.
5
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth information concerning beneficial ownership
of the Company's Common Stock as of May 15, 2000 by: (a) each person known
by the Company to own beneficially more than 5% of the outstanding common
stock, (b) each director of the Company; and (c) all executive officers and
directors of the Company as a group.
<TABLE>
<CAPTION>
NAME AND ADDRESS* OF BENEFICIAL OWNER AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP (1)
------------------------------------- ---------------------------------------------
<S> <C> <C>
Robert Stuckelman 280,797 (2) 2%
John Minnick 254,423 (3) 1%
Robert Goldberg 198,099 (4) 1%
Herbert S. Lightstone 91,667 (5) 1%
John Romm, M.D. 45,000 (6) **
Stuart Silverman, M.D. 6,250 (7) **
All officers and directors as a group (6 persons) 876,236 (8) 5%
</TABLE>
- -----------------------------------
(1) Includes options exercisable within sixty days of May 15, 2000.
(2) Includes 126,282 shares subject to non-qualified and qualified stock
options.
(3) Includes 185,138 shares subject to non-qualified stock options.
(4) Includes 172,500 shares subject to non-qualified stock options.
(5) Includes 91,667 shares subject to non-qualified stock options.
(6) Includes 45,000 shares subject to non-qualified stock options.
(7) Includes 6,250 shares subject to non-qualified stock options.
(8) See notes (2) through (7)
(*) c/o CompuMed, Inc, 5777 West Century Boulevard Suite 1285, Los Angeles,
CA 90045
(**) Less than 1%.
6
<PAGE>
PROPOSAL 2
PROPOSAL TO APPROVE AN AMENDMENT TO THE 1992 STOCK
OPTION PLAN INCREASING THE NUMBER OF SHARES
ISSUABLE UNDER THE PLAN TO 2,400,000 SHARES
In March 1992, the Board of Directors of the Company and its stockholders
approved the 1992 Stock Option Plan (the "1992 Plan") to issue 120,000 options
to purchase shares of Common Stock. In March 1993, March 1994 and March 1995 the
Board of Directors of the Company and its stockholders amended the 1992 Plan to
add 120,000 options in each of the three years, and in March of 1996 and 1997 to
add an additional 400,000 options in each year. As of May 15, 2000, 1,605,049
shares of Common Stock were reserved for issuance upon exercise of outstanding
options granted under the 1992 Plan and 194,951 shares were reserved for the
grant of future options.
On December 15, 1999, the Board of Directors approved an amendment to the 1992
Plan, subject to stockholder approval, to increase the number of shares reserved
for issuance by an additional 600,000 shares, thereby increasing the number of
shares of Common Stock available for future option grants to 794,951 shares. The
Board adopted this amendment to ensure that the Company will continue to be able
to grant stock options to employees and officers and directors of the Company.
Management has found the 1992 Plan to be useful in the hiring and retention of
qualified officers and key personnel.
At the Meeting, the stockholders are being requested to consider and approve the
amendment to the 1992 Plan. The affirmative vote of the holders of a majority of
the shares of the Common Stock voting at the Meeting will be required to approve
the amendment.
The essential features of the 1992 Plan are outlined below:
SHARES SUBJECT TO OPTION. Up to 1,800,000 shares of Common Stock may be issued
under the 1992 Plan, as amended to date. If Proposal 2 is approved, then up to
2,400,000 shares will be available for issuance under the 1992 Plan. The number
of shares available for options and subject to option, and the option exercise
price, is to be adjusted upward or downward, as the case may be, in the event of
any stock dividend, recapitalization, merger, consolidation, split up or similar
transaction affecting shares of the Company's Common Stock. If any option
granted under the 1992 Plan terminates or expires without having been exercised
in full, the shares not purchased under such options will again be available for
grant for purposes of the 1992 Plan.
ADMINISTRATION. The 1992 Plan is administered by the Company's Compensation
Committee (the "Committee") consisting of not less than two members of the Board
of Directors. The Committee is presently composed of Mr. Minnick and Dr. Romm.
The Committee has sole authority to determine which eligible employees of the
Company and its subsidiaries shall receive options under the 1992 Plan, the
times when they are to receive them, the number of shares to be optioned in each
case, the provisions of the option agreements and the terms and conditions of
exercise. However, options granted to any member of the Committee require the
approval of an independent majority of the Board of Directors.
EXERCISE PRICE. The exercise price in each incentive stock option granted under
the 1992 Plan may be not less than 100 percent of the fair market value of the
shares of the optioned stock on the date the option is granted and 110 percent
of such fair market value if the optionee owns more than ten percent of the
voting rights of the Company's outstanding capital stock. The exercise price of
"non-qualified options" granted under the 1992 Plan may be established at any
price determined by the Committee. The exercise price must be paid to the
Company in cash or, in the sole discretion of the Committee, with Common Stock
on the date of exercise.
7
<PAGE>
ELIGIBLE EMPLOYEES. Subject to selection by the Committee, any full-time or
part-time employee of, or consultant to, the Company is eligible to be granted
one or more options pursuant to the 1992 Plan. All officers, directors, and
nominees for election as directors are eligible to participate in the 1992 Plan.
MAXIMUM OPTION TERM. No option under the 1992 Plan may be made exercisable after
the expiration of ten years from the date it is granted, subject to earlier
termination as provided in the option agreements.
NON-TRANSFERABILITY. No option is transferable by the optionee except by will or
the laws of descent or distribution.
EXERCISE OF OPTIONS. Options are exercisable in whole or in part at such times
after the date of grant as are set forth in an option agreement as determined by
the Committee. An option is exercisable by the optionee only during his or her
lifetime and only while he or she is an employee of the Company, or within three
months after termination of employment. In the event of an optionee's death or
disability, the option, to the extent exercisable at the date of termination of
employment and unexercised, may be exercised by the optionee or his or her
estate within one year from date of death or disability, but in no event may the
option be exercised after its expiration.
TERMINATION OF OPTIONS. An option, to the extent not validly exercised, will
terminate automatically upon the termination of employment with the Company,
except by death or disability. All options that are exercisable on the date of
such termination of employment may be exercised during a three-month period
beginning on the date of termination except when the employment is terminated
for cause.
RESTRICTIONS ON OPTIONS. Each option granted under the 1992 Plan will be for a
term, and exercisable only in accordance with, option agreements approved by the
Committee. The term of stock options granted under the 1992 Plan is limited to a
period of ten years from the date of grant. Although the Committee reserves the
right to establish other terms and conditions as to any option granted under the
1992 Plan, it is currently anticipated that the Committee will continue to
follow this policy as to options granted under the 1992 Plan. The exercisability
of an option under the 1992 Plan may be determined upon an individual basis by
the Committee at the time of grant.
The 1992 Plan contains provisions which authorize the Committee, in the event of
a sale or merger of all or substantially all of the Company's assets, or a
merger or consolidation in which the Company is not the surviving corporation,
to take certain action in its discretion. In the event of such a transaction the
Committee may accelerate the exercisability of any option to permit its exercise
in full during such period as the Committee may prescribe following the public
announcement of a sale of assets, merger or consolidation. The Committee may
also require an optionee in the event of such a transaction to surrender his
option in return for a substitute option issued by a surviving corporation that
is determined by the Committee to have a value substantially equal to the value
of the surrendered option.
Under the terms of the 1992 Plan, the aggregate fair market value (determined at
the time an option is granted, which will normally be equal to the option
exercise price per share) of Common Stock exercisable under an incentive stock
option for the first time in any calendar year may not exceed $100,000.
The 1992 Plan provides that shares of Common Stock acquired upon exercise of
options will be paid for in cash or, in the sole discretion of the Committee,
through the delivery of shares of Common Stock with a market value equal to the
option exercise price. The ability to pay the exercise price in shares of Common
Stock would, if permitted by the Committee, enable an optionee to engage in a
series of successive stock for stock exercises of an option (sometimes referred
to as "pyramiding") and thereby fully exercise an option with little or no cash
investment by the optionee.
AMENDMENT. The Board of Directors may amend the 1992 Plan without the approval
of stockholders, except that stockholder approval will be required for any
amendment which would (i) increase the total number of shares obtainable under
the 1992 Plan, or (ii) change the class of persons eligible to participate in
the 1992 Plan, or (iii) extend the period during which options may be granted or
exercised. Adjustments in the total number of shares optionable under the 1992
Plan and adjustments of the exercise price may be
8
<PAGE>
made, however, without stockholder approval pursuant to the adjustment
provisions mentioned under the subcaption "Shares Subject to Option" above.
DURATION. No option may be granted under the 1992 Plan after March 22, 2002 but
options granted on or before that date will remain valid in accordance with
respective terms.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" APPROVAL OF THE
AMENDMENT TO THE 1992 STOCK OPTION PLAN.
PROPOSAL 3
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Company has appointed Ernst & Young LLP as the Company's independent
auditors for the fiscal year ending September 30, 2000 . Ernst & Young LLP has
served as the Company's independent auditors since 1981.
Services provided to the Company and its subsidiaries by Ernst & Young LLP with
respect to Fiscal 2000 included the examination of the Company's consolidated
financial statements, limited reviews of quarterly reports, services related to
filings with the Securities and Exchange Commission and consultations on various
tax and information services matters.
Representatives of Ernst & Young LLP will be present at the Meeting to respond
to appropriate questions and to make such statements as they may desire.
THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" RATIFICATION OF THE
APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE
2000 FISCAL YEAR.
ANNUAL REPORT
All stockholders of record as of May 15, 2000 have or are currently being sent a
copy of the Company's Annual Report for the fiscal year ended September 30, 1999
(the "Annual Report") which contains audited financial statements of the
Company. The Annual Report is deemed to be part of the material for the
solicitation of proxies.
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH BENEFICIAL HOLDER OF ITS COMMON
STOCK ON MARCH 15, 2000, ON THE WRITTEN REQUEST OF ANY SUCH PERSON, A COPY OF
THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE FISCAL YEAR ENDED SEPTEMBER
30, 1999 AS FILED WITH THE SEC. ANY SUCH REQUEST SHOULD BE MADE IN WRITING TO
THE SECRETARY, COMPUMED, INC., 5777 WEST CENTURY BOULEVARD, SUITE 1285, LOS
ANGELES, CALIFORNIA 90045.
STOCKHOLDER PROPOSALS FOR THE 2001 ANNUAL MEETING
Stockholder proposals for inclusion in the Company's proxy materials relating to
the 2001 Annual Meeting of Stockholders, must be received by the Secretary of
the Company by December 1, 2000. Nothing in this paragraph shall require the
Company to include in the Proxy material, for the 2001 Annual Meeting, any
stockholder proposal that does not meet the requirements for including proposals
in effect at such time.
9
<PAGE>
OTHER MATTERS
As of the date of this Proxy Statement, the Company knows of no business that
will be presented for consideration at the Meeting other than that which has
been referred to above. As to other business, if any, that may come before the
Meeting, it is intended that proxies in the enclosed form will be voted in
respect thereof in accordance with the judgment of the person or persons voting
the proxies.
By order of the Board of Directors
/s/ PHUONG DANG
--------------
Phuong Dang
Secretary
May 15, 2000
STOCKHOLDERS ARE ASKED TO SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT IN THE
ENVELOPE PROVIDED AS SOON AS POSSIBLE. YOUR PROMPT RESPONSE WILL BE GREATLY
APPRECIATED.
10
<PAGE>
COMPUMED, INC.
ANNUAL MEETING OF STOCKHOLDERS JUNE 23, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of COMPUMED, INC., a Delaware corporation (the
"Company"), acknowledges receipt of the Notice of Annual Meeting of Stockholders
and Proxy Statement, dated May 23, 2000, and hereby constitutes and appoints
ROBERT B. GOLDBERG or PHUONG DANG, or either of them acting singly in the
absence of the other, with the power of substitution in either of them, the
proxies of the undersigned to vote all shares of Voting Stock of the Company
which the undersigned would be entitled to vote at the Annual Meeting of
Stockholders, and at any adjournment or adjournments thereof, hereby revoking
any proxy or proxies heretofore given and ratifying and confirming all that said
proxies may do or cause to be done by virtue thereof with respect to the
following matters:
<TABLE>
<S> <C> <C>
1. The election of six directors nominated by the Board of Directors:
/ / FOR all nominees listed below / / WITHHOLD AUTHORITY
(EXCEPT AS INDICATED) to vote for all nominees listed below
</TABLE>
Robert Goldberg, Herbert S. Lightstone, John Minnick,
John Romm, M.D., Stuart Silverman, M.D. and Robert Stuckelman
(INSTRUCTION: To withhold authority to vote for any individual nominee or
nominees write such nominee's or nominees'
name in the space provided below)
________________________________________
<TABLE>
<S> <C> <C>
2. The amendment to the 1992 Stock Option Plan increasing the number of shares subject to the Plan to
2,400,000:
</TABLE>
/ / FOR / / AGAINST / / ABSTAIN
(CONTINUED ON REVERSE SIDE)
<PAGE>
<TABLE>
<S> <C> <C>
3. The ratification of the appointment of Ernst & Young LLP as the Company's independent auditors for
the 2000 fiscal year.
</TABLE>
/ / FOR / / AGAINST / / ABSTAIN
<TABLE>
<S> <C> <C>
4. Other matters as may properly come before the meeting or any adjournment of adjournments thereof.
</TABLE>
This Proxy, when properly executed, will be voted as directed. If no
direction is indicated, the Proxy will be voted FOR each of the above proposals.
Dated: _____________________, 2000
____________________________(L.S.)
____________________________(L.S.)
Please sign your name exactly as
it appears hereon. When signing as
attorney, executor, administrator,
trustee or guardian, please give
your full title as it appears
hereon. When signing as joint
tenants, all parties in the joint
tenancy must sign. When a proxy is
given by a corporation, it should
be signed by an authorized officer
and the corporate seal affixed. No
postage is required if returned in
the enclosed envelope and mailed
in the United States.
PLEASE SIGN, DATE AND MAIL THIS
PROXY IMMEDIATELY IN THE ENCLOSED
ENVELOPE.
