<PAGE> 1
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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
[x ] Definitive Proxy Statement (by Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12)
AccuMed International, Inc.
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
Not applicable
- -------------------------------------------------------------------------------
(Name of Person 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:
Not applicable
(2) Aggregate number of securities to which transactions applies:
Not applicable
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:
Not applicable
(4) Proposed maximum aggregate value of transaction:
Not applicable
(5) Total Fee paid: Not applicable.
[ ] Fee paid previously with preliminary material:
Not applicable.
[ ] 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: Not applicable.
(2) Form, Schedule or Registration Statement No.:
Not applicable
(3) Filing party: Not applicable
(4) Date filed: Not applicable
<PAGE> 2
ACCUMED INTERNATIONAL, INC.
900 North Franklin Street, Suite 401
Chicago, Illinois 60610
Dear Stockholder:
On behalf of the Board of Directors, you are cordially invited to
attend the combined Annual and Special Meeting of Stockholders (the "Meeting")
of AccuMed International, Inc. (the "Company") to be held at 3:30 p.m.
(Chicago time) on May 23, 1997 at the offices of the Company located at 900
North Franklin Street, Suite 401, Chicago, Illinois.
At the Meeting, you will be asked to consider and vote upon the
following proposals:
1. To approve an amendment to the Company's Certificate of
Incorporation to increase the total number of authorized shares of the
Company's common stock, par value $0.01 per share (the "Common Stock"), from
30,000,000 to 50,000,000 shares.
2. To elect seven directors to serve on the Board of Directors until
the next annual meeting of stockholders.
3. To transact such other business and to consider and take action
upon any and all other matters that may properly come before the Meeting or any
adjournment or adjournments thereof.
You are urged to carefully consider all the material in the Proxy
Statement and mark, sign, date and return the enclosed proxy as soon as
possible, regardless of whether you expect to attend the Meeting. Giving a
proxy will not prevent you from voting in person at the Meeting.
Very truly yours,
PETER P. GOMBRICH
Chairman of the Board and
Chief Executive Officer
Dated: April 28, 1997
<PAGE> 3
ACCUMED INTERNATIONAL, INC
900 North Franklin Street, Suite 401
Chicago, Illinois 60610
---------------
NOTICE OF COMBINED ANNUAL AND SPECIAL MEETING OF STOCKHOLDERS
To be Held on May 23, 1997
---------------
Dear Stockholders:
NOTICE IS HEREBY GIVEN THAT THE COMBINED ANNUAL AND SPECIAL MEETING
(the "Meeting") OF STOCKHOLDERS OF ACCUMED INTERNATIONAL, INC., a Delaware
corporation (the "Company"), will be held at the Company's offices located at
900 North Franklin Street, Suite 401, Chicago, Illinois, on Friday, May 23, 1997
at 3:30 p.m. (Chicago time), to consider and act upon the following matters.
1. A proposal to approve an amendment to the Company's Certificate of
Incorporation to increase the total number of authorized shares of the
Company's common stock, par value $0.01 per share (the "Common Stock"), from
30,000,000 to 50,000,000 shares.
2. To elect seven directors to serve on the Board of Directors until
the next annual meeting of stockholders.
3. To transact such other business and to consider and take action
upon any and all other matters that may properly come before the Meeting or any
adjournment or adjournments thereof.
The Board of Directors knows of no matters, other than those set forth
in paragraphs (1) and (2) above (discussed in greater detail in the
accompanying Proxy Statement), that will be presented for consideration at the
Meeting.
The Board of Directors has fixed the close of business on April 23,
1997 as the record date for the determination of stockholders entitled to vote
at the Meeting.
WHETHER OR NOT YOU EXPECT TO ATTEND THE 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 IF YOU ATTEND THE MEETING.
By Order of the Board of Directors
Chicago, Illinois JOYCE L. WALLACH
April 28, 1997 Secretary
<PAGE> 4
PROXY STATEMENT
OF
ACCUMED INTERNATIONAL, INC.
900 NORTH FRANKLIN STREET, SUITE 401
CHICAGO, ILLINOIS 60610
---------------
COMBINED ANNUAL AND SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 23, 1997
---------------
INTRODUCTION
GENERAL
This Proxy Statement is being furnished to holders of common stock,
par value $0.01 per share (the "Common Stock"), of AccuMed International, Inc.,
a Delaware corporation (the "Company"), in connection with the solicitation of
proxies by the Company's Board of Directors for use at the Combined Annual and
Special Meeting of Stockholders scheduled to be held at the Company's principal
offices located at 900 North Franklin Street, Suite 401, Chicago, Illinois on
May 23, 1997 and at any and all adjournments or postponements thereof (the
"Meeting").
It is anticipated that this Proxy Statement and the accompanying form
of proxy will first be sent to stockholders on or about April 28, 1997. Only
stockholders of record at the close of business on April 23, 1997 are entitled
to vote at the Meeting.
At the Meeting, stockholders will consider and vote upon proposals (i)
to approve an amendment to the Company's Certificate of Incorporation to
increase the authorized shares of Common Stock from 30,000,000 to 50,000,000
shares (the "Charter Amendment"), (ii) to elect seven directors to serve on the
Board of Directors until the 1998 Annual Meeting of Stockholders, and (iii) to
consider such other business as may properly come before the Meeting.
REVOCABILITY OF PROXIES
A proxy for use at the Meeting is enclosed. Any stockholder who
executes and delivers such proxy may revoke it at any time prior to its use by:
(i) filing with the Secretary of the Company a notice of revocation of proxy or
a valid proxy bearing a later date, or (ii) by attending the Meeting and voting
in person.
SOLICITATION OF PROXIES
This proxy solicitation is being made by the Board of Directors of the
Company. The expense of the solicitation will be paid by the Company. To the
extent necessary to assure sufficient representation at the Meeting, proxies
may be solicited by any appropriate means by directors, officers, regular
employees of the Company and the stock transfer agent for the
<PAGE> 5
Common Stock, who will not receive any additional compensation therefor. The
Company will request that banks, brokers and other fiduciaries solicit their
customers who own beneficially the Common Stock listed of record in names of
nominees and, although there is no formal arrangement to do so, the Company
will reimburse such persons the reasonable expenses of such solicitation.
OUTSTANDING SECURITIES
The Board of Directors has fixed April 23, 1997, as the record date
(the "Record Date") for the determination of stockholders entitled to notice
of, and to vote at, the Meeting. At the close of business on the Record Date,
there were outstanding and entitled to vote 22,143,232 shares of Common Stock.
VOTE REQUIRED AND VOTING PROCEDURES
Each holder of Common Stock will be entitled to one vote, in person or
by proxy, for each share standing in its name on the books of the Company as of
the Record Date on each of the matters duly presented for a vote at the
Meeting.
In connection with the solicitation by the Board of Directors of
proxies for use at the Meeting, the Board of Directors has designated Peter P.
Gombrich, Chairman of the Board, Chief Executive Officer and President, and
Leonard R. Prange, Chief Operating Officer and Chief Financial Officer, as
proxies. Shares represented by all properly executed proxies will be voted at
the Meeting in accordance with the instructions specified thereon. If no
instructions are specified, the shares represented by any properly executed
proxy will be voted FOR the proposals: (i) to approve the Charter Amendment,
and (ii) to elect each of the seven nominees named below under the caption
"Proposal No. 2 Election of Directors."
The Board of Directors is not aware of any matters that will come
before the Meeting other than as described above. However, if such matters are
presented, the named proxies will, in the absence of instructions to the
contrary, vote such proxies in accordance with the judgment of such named
proxies with respect to any such other matter properly coming before the
Meeting.
A majority of the outstanding shares of Common Stock must be
represented in person or by proxy at the Meeting in order to constitute a
quorum for the transaction of business. The affirmative vote of holders of a
majority of the outstanding shares of Common Stock is required for the approval
of the Charter Amendment. The validly-nominated nominees for election as
directors who rank first through seventh in the number of votes received from
holders of Common Stock represented (in person or by proxy) and voting at the
Meeting will be elected as directors, even if some or all of such nominees
receive less than a majority of the total votes cast (assuming presence of a
quorum).
With regard to the election of directors, votes may be cast in favor
or withheld; votes that are withheld will be excluded from the vote and will
have no effect. With regard to other
2
<PAGE> 6
proposals, votes cast against a proposal will be counted for purposes of
determining (i) the presence or absence of a quorum and (ii) the total number
of votes cast with respect to such proposal.
With regard to proposals other than the election of directors,
abstentions will be counted for purposes of determining both (i) the presence
or absence of a quorum for the transaction of business and (ii) the total
number of votes cast with respect to such proposal. Accordingly, abstentions
as to the approval of the Charter Amendment will have the same effect as a vote
against such proposal.
A proxy submitted by a stockholder may indicate that all or a portion
of the shares of Common Stock represented by such proxy are not being voted by
such stockholder with respect to a particular matter. This could occur, for
example, when a broker is not permitted to vote stock held in street name on
certain matters in the absence of instructions from the beneficial owner of the
stock. The shares subject to any such proxy which are not being voted with
respect to a particular matter will be counted for purposes of determining both
(i) the presence or absence of a quorum for the transaction of business and
(ii) the total number of votes cast with respect to such proposal.
Accordingly, such non-votes as to the approval of the Charter Amendment will
have the same effect as a vote against such proposal.
INSPECTOR OF ELECTIONS
The Board of Directors has appointed Joyce L. Wallach, General Counsel
and Secretary, of the Company as the Inspector of Elections for the Meeting.
The Inspector of Elections will determine the number of shares of Common Stock
represented in person or by proxy at the Meeting, whether a quorum exists, the
authenticity, and validity and effect of proxies, and will receive and count
the votes.
3
<PAGE> 7
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The table below sets forth certain information as of April 22, 1997
(the "Reference Date") with respect to the beneficial ownership of Common Stock
by (i) each person known by the Company to be the beneficial owner of more than
5% of the outstanding shares of Common Stock; (ii) each director and nominee;
(iii) the Named Executive Officers (as hereinafter defined) and (iv) executive
officers and directors as a group. On the Reference Date, there were 22,143,232
shares of Common Stock outstanding of which (i) 69,308 shares are subject to
forfeiture if the Company is unable through August 1997 to perfect and maintain
rights free of liens in certain recently acquired patents; and (ii) 116,000
shares are subject to forfeiture if certain milestones pursuant to a
microbiology product development agreement are not achieved.
<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF SHARES PERCENT OF SHARES
OF BENEFICIAL OWNER (1) BENEFICIALLY OWNED (2) BENEFICIALLY OWNED (2)
----------------------- ---------------------- ----------------------
<S> <C> <C>
Peter P. Gombrich . . . . . . . . . . . . . . . . . . . . 3,552,884(3) 16.0%
Michael Falk . . . . . . . . . . . . . . . . . . . . . . 2,796,931(4) 11.7
c/o Commonwealth Associates
733 Third Avenue
New York, NY 10017
Commonwealth Associates . . . . . . . . . . . . . . . . . 1,889,300(5) 8.0
733 Third Avenue
New York, NY 10017
Kingdon Capital Management Corporation . . . . . . . . . 1,143,000(6) 5.2
152 West 57th Street
New York, NY 10019
Robert L. Priddy . . . . . . . . . . . . . . . . . . . . 1,032,345(7) 4.6
John H. Abeles . . . . . . . . . . . . . . . . . . . . . 326,657(8) 1.5
Leonard M. Schiller . . . . . . . . . . . . . . . . . . . 172,159(9) *
Michael D. Burke . . . . . . . . . . . . . . . . . . . . 113,130(10) *
Jack H. Halperin . . . . . . . . . . . . . . . . . . . . 80,388(11) *
Norman J. Pressman . . . . . . . . . . . . . . . . . . . 25,000 *
Paul F. Lavallee . . . . . . . . . . . . . . . . . . . . 25,000(12) *
Joseph W. Plandowski . . . . . . . . . . . . . . . . . . 25,000(13) *
Harold S. Blue . . . . . . . . . . . . . . . . . . . . . 20,000(14) *
Leonard R. Prange . . . . . . . . . . . . . . . . . . . . 13,815 *
J. Donald Gaines . . . . . . . . . . . . . . . . . . . . -- --
All directors and executive officers as a group
(11 persons) . . . . . . . . . . . . . . . . . . . . . 4,355,543(15) 19.3%
</TABLE>
- ---------------------
* Represents less than 1%.
(1) Except as otherwise noted, the address for each person is c/o AccuMed
International, Inc., 900 North Franklin Street, Suite 401, Chicago,
Illinois 60610.
4
<PAGE> 8
(2) Unless otherwise noted, the Company believes that all persons named in the
table have sole voting and investment power with respect to all shares of
Common Stock listed as beneficially owned by them. A person is deemed to
be the beneficial holder of securities that can be acquired by such person
within 60 days from the Reference Date upon the exercise of warrants or
options. Each beneficial owner's percentage ownership is determined by
including shares, underlying options or warrants which are exercisable by
such person currently, or within 60 days following the Reference Date, and
excluding shares underlying options and warrants held by any other person.
(3) Includes 133,333 shares underlying stock options held by Mr. Gombrich that
are exercisable currently or within 60 days following the Reference Date.
Includes 453,085 shares held of record by Gwenda Gombrich, Mr. Gombrich's
wife, directly or as custodian for minor children, as to which Mr.
Gombrich disclaims beneficial ownership.
(4) Mr. Falk directly owns 302,222 shares of Common Stock and warrants to
purchase up to 505,409 shares of Common Stock. The number shown includes
an additional 222,222 shares, and 1,667,078 shares underlying warrants
that are exercisable currently or within 60 days following the Reference
Date, held by Commonwealth Associates (excluding securities held in
Commonwealth Associates' trading account). Mr. Falk is a control person of
the corporate general partner of Commonwealth Associates and may be deemed
to be beneficial owner of securities held by Commonwealth Associates. The
number of shares also includes an additional 100,000 shares underlying
warrants that are exercisable currently or within 60 days following the
Reference Date held by Anne Falk, Mr. Falk's spouse. Mr. Falk disclaims
beneficial ownership of the securities held by Commonwealth Associates
except to the extent of his percentage ownership interests in Commonwealth
Associates. Shares and warrants held directly by Mr. Falk were
transferred to him by Commonwealth Associates. Information in regard to
the holdings of Mr. Falk and Commonwealth Associates has been derived
solely from a Schedule 13D as filed with the Securities and Exchange
Commission and from a warrant exercise notice received by the Company.
(5) Includes 1,667,078 shares underlying warrants held by Commonwealth
Associates that are exercisable currently or within 60 days following the
Reference Date. Excludes securities held in Commonwealth Associates'
trading account. Information in regard to the holdings of Commonwealth
Associates has been derived solely from a Schedule 13D as filed with the
Securities and Exchange Commission.
(6) Information in regard to the holdings of Kingdon Capital Management
Corporation has been derived solely from a Schedule 13D as filed with the
Securities and Exchange Commission.
(7) Includes 232,345 shares underlying warrants held by Mr. Priddy that are
exercisable currently or within 60 days following the Reference Date.
(8) Includes 34,895 shares underlying stock options held by Dr. Abeles that
are exercisable currently or within 60 days following the Reference Date.
Includes 253,713 shares of Common Stock held of record, and 38,049 shares
underlying warrants exercisable currently or within 60 days following the
Reference Date, by Northlea Partners Limited, as to which Dr. Abeles
disclaims beneficial ownership except with respect to his 1% general
partner ownership.
(9) Includes 100,000 shares underlying stock options and warrants held by Mr.
Schiller that are exercisable currently or within 60 days following the
Reference Date.
(10) Includes 52,333 shares underlying stock options held by Mr. Burke that are
exercisable currently or within 60 days following the Reference Date.
(11) Includes 34,550 shares underlying stock options held by Mr. Halperin that
are exercisable currently or within 60 days following the Reference Date.
(12) Consists of shares underlying stock options held by Mr. Lavallee that are
exercisable currently or within 60 days following the Reference Date.
5
<PAGE> 9
(13) Consists of shares underlying stock options or warrants held by Mr.
Plandowski that are exercisable currently or within 60 days following the
Reference Date.
(14) Includes 20,000 shares underlying stock options held by Mr. Blue that are
exercisable currently or within 60 days following the Reference Date.
(15) Includes 463,160 shares underlying warrants or options held by officers
and directors that are exercisable currently or within 60 days of the
Reference Date.
6
<PAGE> 10
PROPOSAL NO. 1
TO AMEND THE CERTIFICATE OF INCORPORATION
TO INCREASE THE AUTHORIZED COMMON STOCK
On January 16, 1997, the Board of Directors unanimously approved a
resolution to amend the Company's Certificate of Incorporation, subject to
stockholder approval at the Meeting, to increase the authorized shares of
Common Stock from 30,000,000 to 50,000,000 shares (the "Charter Amendment").
The Company's Certificate of Incorporation currently authorizes the Company to
issue up to 30,000,000 shares of Common Stock and 5,000,000 shares of Preferred
Stock. As of April 22, 1997, the Company had issued and outstanding 22,143,232
shares of Common Stock and has reserved for issuance an additional 7,809,115
shares of Common Stock upon exercise of outstanding options and warrants.
There are no shares of Preferred Stock outstanding or reserved for issuance.
Since the Company has almost no remaining authorized, non-reserved
shares of Common Stock available for issuance in the future, much of the
Company's flexibility with respect to possible future equity financings, stock
splits, stock-for-stock acquisitions, stock dividends, grants of stock options
to employees and directors, or other transactions that involve the issuance of
Common Stock (collectively, "Future Actions") has been lost. In addition,
since there were not enough authorized, non-reserved shares of Common Stock
available to be reserved for issuance upon exercise of certain warrants and
upon conversion of certain convertible notes pursuant to the terms of a
recently completed private placement of securities of the Company, the Company
issued such warrants and notes (i) pursuant to an agreement between the Company
and the placement agent for such private placement pursuant to which the
Company agreed to submit this proposal to approve the Charter Amendment at the
Meeting, and (ii) subject to certain penalties if the Charter Amendment is not
so approved, all as more fully described below.
COMMITMENTS TO RESERVE SHARES FOR CERTAIN PURPOSES IF THE CHARTER AMENDMENT IS
APPROVED
RECENT PRIVATE PLACEMENT
On March 14, 1997, the Company consummated a private placement (the
"Private Placement") of 85 Units each consisting of $100,000 in principal
amount of 12% Convertible Promissory Notes (the "Notes") and Warrants (the
"Warrants") to purchase 10,000 shares of Common Stock. The Company received
net proceeds of approximately $7,800,000 from the Private Placement after
deducting commissions and related expenses. Of the net proceeds, $6,130,000
was used to repay bridge financing, the proceeds of which were used to fund the
acquisition on March 3, 1997 of certain assets and liabilities relating to the
ESP Culture System II product line (the "ESP Product Line") from Difco
Microbiology Systems, Inc. The Board of Directors determined that it was in
the best interest of the Company and the stockholders for the Company to
acquire the ESP Product Line. Due to the confidential nature of the
negotiations to acquire the ESP Product Line and the limited period of time
available to
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<PAGE> 11
consummate such acquisition, it was not possible to seek stockholder approval
of the Charter Amendment prior to consummating the Private Placement which
enabled the Company to acquire the ESP Product Line.
Commonwealth Associates, Inc. acted as placement agent in the Private
Placement for which it received from the Company (i) cash commissions equal to
7% of the gross proceeds, (ii) five-year warrants to purchase 200,000 shares of
Common Stock at an exercise price of $3.125 per share, subject to stockholder
approval of the Charter Amendment (the "Agent's Warrants"), and (iii) an
accountable expense reimbursement of $56,500 in cash.
The Notes bear interest at the rate of 12% per annum, payable
semi-annually in arrears on August 15 and February 15 of each year during the
term of the Notes. Principal under the Notes is due March 14, 2000.
Commencing three months following the date of issuance, subject to stockholder
approval of the Charter Amendment, the Notes will become convertible at the
option of the holder into shares of Common Stock at a conversion price equal to
$3.125 (the "Conversion Price"). If the Company does not have sufficient
authorized shares (2,720,000 shares) to accommodate conversion of the Notes by
May 31, 1997, (i) the Notes will become due and payable 30 days thereafter at
an amount equal to 150% of the outstanding principal amount, and (ii) the
Conversion Price will be reduced by 20%. If the Company defaults on its
obligations to pay interest or principal under the Notes, (i) the interest rate
thereunder will increase to 16% per annum during the continuance of such
default, (ii) the Conversion Price will be reduced by 20%, and (iii) the
holders will have the right to accelerate the Notes. During the three months
beginning March 14, 1997, the Company may redeem the Notes at an amount equal
to 110% of the outstanding principal amount; if the Company so redeems the
Notes, the term of the Warrants will be extended from six months to five years
following March 14, 1997. Thereafter, the Company may redeem the Notes at the
amount of outstanding principal if the Common Stock has traded for a minimum of
20 consecutive days trading days at a minimum price of 175% of the Conversion
Price, if the Notes are then convertible (which requires stockholder approval
of the Charter Amendment).
The Warrants are exercisable to purchase Common Stock at an exercise
price of $3.125 per share. Of the 10,000 Warrants included in each Unit, 8,823
are immediately exercisable for a period of six months following March 14,
1997, and 1,177 Warrants will become immediately exercisable upon effectiveness
of the Charter Amendment, if approved by stockholders, and will remain
exercisable for six months thereafter. If the Notes are redeemed by the
Company within three months following March 14, 1997, the term of the Warrants
will be reset to March 14, 2002.
The Company has agreed to register the resale of the Common Stock
underlying the Notes and the Warrants under the Securities Act of 1933, as
amended. If the Company fails to file with the Securities and Exchange
Commission a registration statement covering such underlying Common Stock on or
prior to May 31, 1997 (which, with respect to the (a) 2,720,000 shares into
which the Notes are to become convertible, (b) 100,000 shares into which the
Warrants are to become exercisable, and (3) 200,000 shares into which the
Agent's Warrants are to become convertible, requires stockholder approval of
the Charter Amendment), (i) the interest rate on the Notes will increase to 16%
per annum until such registration statement is filed, and (ii) the Conversion
Price will be reduced by 20%.
8
<PAGE> 12
GRANT OF REPLACEMENT OPTIONS
Because the Company would not otherwise have had sufficient
authorized, non-reserved shares available to reserve for issuance upon exercise
of the 750,000 Warrants issued in the Private Placement which are currently
exercisable, Norman J. Pressman, Senior Vice President of the Company and
President of the Cytopathology Division, and Leonard R. Prange, Chief Operating
Officer, Chief Financial Officer and Corporate Vice President, surrendered
options to purchase 250,000 shares and 150,000 shares, respectively, of Common
Stock (the "Surrendered Options") pursuant to letter agreements with the
Company (the "Option Replacement Agreements"). The 400,000 shares that had
been reserved for issuance upon exercise of the Surrendered Options were
reserved for issuance upon exercise of Warrants issued in the Private
Placement. The Option Replacement Agreements provide that, if stockholders
approve the Charter Amendment, the Company will grant 250,000 replacement
options to Dr. Pressman and 150,000 replacement options to Mr. Prange
(collectively, the "Replacement Options") at the fair market value at the grant
date; provided however, that if such fair market value exceeds the exercise
price of a Surrendered Option ($6.25 per share and $5.38 per share,
respectively, with respect to Dr. Pressman's Surrendered Options and Mr.
Prange's Surrendered Options), the holder thereof will be granted additional
options to purchase a number of shares equal to the quotient of (x) the
aggregate dollar amount by which the Replacement Options exercise price exceeds
the Surrendered Options exercise price, divided by (y) exercise price of the
Replacement Options.
At present, there are no specific understandings, arrangements or
agreements with respect to any future issuances of the additional shares of
Common Stock to be authorized by the Charter Amendment, except as described
above in connection with the Private Placement and Replacement Options.
The Company continues to evaluate ways to increase value for its
stockholders, and the Board of Directors believes that it is prudent to have
additional shares of Common Stock available for Future Actions. The Board of
Directors will determine whether, when and on what terms to issue shares of
Common Stock in connection with any Future Actions. The Board of Directors
believes that the proposed increase in the number of authorized shares of
Common Stock will give the Company greater flexibility in responding to
business needs and opportunities by allowing shares of Common Stock to be
issued.
If the Charter Amendment is approved by the stockholders, such
Amendment will become effective on the date on which a Certificate of Amendment
to the Company's Certificate of Incorporation, in the form of Appendix A to this
Proxy Statement, is filed with the Secretary of State of Delaware.
Each of Peter P. Gombrich, the Chairman of the Board and Chief
Executive Officer of the Company, Commonwealth Associates, Inc., and Michael
Falk (the Chief Executive Officer of Commonwealth Associates, Inc.) has agreed
to vote his or its respective shares in favor of the Charter Amendment (which
shares in the aggregate represent approximately 15% of the outstanding voting
power of the Company).
9
<PAGE> 13
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS THAT
STOCKHOLDERS VOTE FOR THE APPROVAL AND ADOPTION OF THE CHARTER AMENDMENT.
APPROVAL OF THE CHARTER AMENDMENT REQUIRES THE AFFIRMATIVE VOTE OF A MAJORITY
OF THE OUTSTANDING SHARES OF COMMON STOCK ENTITLED TO VOTE AT THE MEETING.
PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE VOTED "FOR" THE CHARTER
AMENDMENT, UNLESS OTHERWISE INSTRUCTED.
10
<PAGE> 14
PROPOSAL NO. 2
ELECTION OF DIRECTORS
The Company's Bylaws provide that the Board of Directors shall be
comprised of seven members to serve until the next annual meeting of
stockholders and until their successors are duly elected and qualified.
Each of the seven nominees named below has consented to be named in
this Proxy Statement and has consented to serve as a director, if so elected.
The Company has no reason to believe that any of the nominees will not be
available to serve; if, however, any nominee should for any reason become unable
or unwilling to serve, the shares represented by proxies received by the Company
will (unless otherwise directed) be voted for the election of such other person
as the Board of Directors may recommend, in place of the unavailable nominee.
In the election of directors, the seven candidates receiving the
highest number of votes will be elected directors of the Company. Votes cast
against directors and votes withheld shall have no effect. Elections for
directors shall not be made by ballot, unless a stockholder shall demand
election by ballot at the Meeting before the voting begins.
EXECUTIVE OFFICERS, KEY EMPLOYEE AND DIRECTOR NOMINEES
The executive officers, key employee and director nominees of the
Company and their ages are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Peter P. Gombrich . . . . . . . . . . . 59 Chairman of the Board, Chief Executive Officer and
President
Norman J. Pressman, Ph.D. . . . . . . . 48 Senior Vice President of AccuMed and President,
Cytopathology Division
Michael D. Burke . . . . . . . . . . . 46 Senior Vice President of AccuMed and President,
Microbiology Division
Leonard R. Prange . . . . . . . . . . . 51 Chief Operating Officer, Chief Financial Officer,
Corporate Vice President
Joyce L. Wallach, Esq. . . . . . . . . 36 General Counsel and Secretary
Richard A. Domanik, Ph.D. . . . . . . . 49 Senior Vice President
J. Donald Gaines . . . . . . . . . . . 61 Director nominee
Jack H. Halperin, Esq. (1) . . . . . . 50 Director
Paul F. Lavallee . . . . . . . . . . . 57 Director
Joseph W. Plandowski (1) . . . . . . . 56 Director
Robert L. Priddy . . . . . . . . . . . 50 Director nominee
Leonard M. Schiller, Esq. (1) . . . . . 55 Director
</TABLE>
- -----------
(1) Member of the Audit Committee and Compensation Committee.
11
<PAGE> 15
Set forth below is certain information regarding the business
experience of the director nominees, executive officers and a key employee of
the Company.
DIRECTOR NOMINEES
PETER P. GOMBRICH. Mr. Gombrich served as Acting Chief Executive
Officer and a director of the Company from April 21, 1995 until December 29,
1995 (the "Merger Date"), at which time he became Chairman of the Board of
Directors, Chief Executive Officer and President. Mr. Gombrich founded
AccuMed, Inc. in February 1994, and, from then until the Merger Date (as of
which AccuMed, Inc. was merged into the Company (the "Merger")), Mr. Gombrich
served as Chairman, President and Chief Executive Officer of AccuMed, Inc. Mr.
Gombrich was a consultant in the cytology and microbiology industries from
August 1990 until forming AccuMed, Inc., serving companies including Accuron
Corporation, a designer of automated Pap smear screening systems. From July
1985 until September 1989, Mr. Gombrich was the President and Chief Executive
Officer, and from July 1985 until November 1990 was Chairman of the Board, of
CliniCom Incorporated, a bedside clinical information systems company which he
founded. From 1982 until 1985, Mr. Gombrich was Executive Vice President of
the ventures group of ADC Telecommunications. From January 1980 until February
1982, Mr. Gombrich was President of the pacemaker division of St. Jude Medical,
Inc., a company that he co-founded in 1976 and of which he served as Executive
Vice President from July 1976 to January 1980. Mr. Gombrich has more than 27
years of experience in the healthcare industry. Mr. Gombrich has a B.S. degree
in electrical engineering and a M.B.A. degree from the University of Denver.
J. DONALD GAINES. Mr. Gaines has not served previously on the
Company's Board of Directors. Since February 1991, Mr. Gaines has been the
President of the Storz Division of American Cyanamid Company. From June 1977
until February 1991, Mr. Gaines served as President and Chief Executive Officer
of Storz Instrument Company. Mr. Gaines has a B.A. degree in Business
Administration from Memphis State University.
JACK H. HALPERIN, ESQ. Mr. Halperin has been a director of the
Company since June 1991 and served as Chairman of the Board of Directors from
April until the Merger Date, December 29, 1995. He also served as Secretary of
the Company from August until December 1996. Mr. Halperin is a corporate
attorney with expertise in venture capital financing and has been practicing
law independently since 1987. Mr. Halperin has a B.A. degree in english from
Columbia University and a law degree from New York University School of Law.
Mr. Halperin is also a member of the boards of directors of Xytronyx, Inc.,
I-Flow Corporation and Memry Corporation.
PAUL F. LAVALLEE. Mr. Lavallee has been a director of the Company
since December 1995. Since January 1996, Mr. Lavallee has served as a
consultant to Sigmedics, Inc., a biomedical company. From 1989 until December
1995, Mr. Lavallee served as Chairman, President and Chief Executive Officer of
Sigmedics, Inc. Mr. Lavallee has a B.S. degree in biology from Bates College
and a M.B.A. degree from the University of Chicago.
12
<PAGE> 16
JOSEPH W. PLANDOWSKI. Mr. Plandowski has been a director of the
Company since December 1995. He has been President of The Lakewood Group, a
healthcare consulting firm, since February 1995. From May 1993 until February
1995, Mr. Plandowski was Vice President - Acquisitions of National Health
Laboratories Inc., which owns clinical and anatomic laboratories nationwide.
From October 1992 through May 1993, he was Chief Operating Officer of Nichols
Institute, a clinical reference laboratory. From February 1991 through October
1992, Mr. Plandowski was President, Chief Executive Officer and a director of
Genetrix, Inc. Mr. Plandowski has a B.S. degree in mechanical engineering and a
M.B.A. degree from the State University of New York.
ROBERT L. PRIDDY. Mr. Priddy has not served previously on the
Company's Board of Directors. Mr. Priddy has been Chairman of the Board and
Chief Executive Officer of ValuJet, Inc., since its inception in October 1995.
He was one of the founding partners of ValuJet Airlines, a wholly-owned
subsidiary of ValuJet, Inc., and served as Chairman of its Board and its Chief
Executive Officer from July 1992 until November 1996. From July 1991 until
January 1993, Mr Priddy served as President of Florida Gulf Airlines. From
January 1988 to November 1991, he served as President and Chief Executive
Officer of Air Midwest, Inc., for which he also served as a director from
November 1987 to November 1991. From 1979 to 1987, Mr. Priddy served as Vice
President and Chief Financial Officer of Atlantic Southeast Airlines, Inc.,
which he also served as a director from 1981 to 1987. Mr. Priddy has a B.A.
degree in economics from Tulane University. Mr. Priddy is also a member of the
Board of Directors of Lukens Medical Corporation.
LEONARD M. SCHILLER, ESQ. Mr. Schiller has been a director of the
Company since April 1995. Since 1970, Mr. Schiller has been practicing real
estate law, specializing in contesting real estate taxes in the State of
Illinois. Since 1972, Mr. Schiller has been a partner in the law firm
Schiller, Klein & McElroy, P.C. Since 1980, he has also been President of The
Dearborn Group, a residential property management and real estate acquisition
company. Mr. Schiller has a B.A. degree in liberal arts from the University of
Iowa and a law degree from the ITT Kent College Law School.
EXECUTIVE OFFICERS
NORMAN J. PRESSMAN, PH.D. Dr. Pressman has been a Senior Vice
President of the Company and President of the Company's Cytopathology Division
since July 1996. From July 1993 until joining the Company, Dr. Pressman was
Manager for Biotechnology Development, Strategic Business Development Group of
Olympus America, the exclusive distributor of certain of the Company's
cytopathology products in the Western Hemisphere. Between July and September
1989, Dr. Pressman was engaged in the formation of Cell Systems International,
Inc., a consulting firm in biomedical specimen collection, processing and
analysis, of which he served as President from September 1989 until July 1993.
Dr. Pressman was the lead research scientist in the Cytometry and Histometry
program of the Central Research and Development Department at E.I. du Pont de
Nemours & Company from December 1986 until July 1989. From September 1976
until December 1986, he was an Assistant Professor (Pathology and Engineering)
at The Johns Hopkins University School of Medicine and Head of the Quantitative
Cytopathology Laboratories at The Johns Hopkins Medical Institutions. Dr.
Pressman has a B.S. degree in electrical engineering from Columbia University,
a M.S.
13
<PAGE> 17
degree in systems engineering and a Ph.D. in biomedical engineering from the
University of Pennsylvania.
MICHAEL D. BURKE. Mr. Burke has been a Senior Vice President of the
Company and President of the Company's Microbiology Division since the Merger
Date. From May 1995 until the Merger Date, Mr. Burke was a Senior Vice
President and President of the Microbiology Division of AccuMed, Inc. From
April 1992 until joining AccuMed, Inc., Mr. Burke was Vice President - Sales
and Distribution, and from November 1982 until April 1992 was Vice President -
Operations, for Picker International, Inc., a diagnostic imaging manufacturer
and supplier. Mr. Burke has a B.A. degree in political science from Knox
College.
LEONARD R. PRANGE. Mr. Prange has been Chief Financial Officer and
Corporate Vice President of the Company since September 1996, and has been
Chief Operating Officer since March 1997. Mr. Prange also serves as a
consultant to Richardson Electronics, Ltd., a global distributor and
manufacturer of electronic components. From July 1995 until September 1996,
Mr. Prange served as a managing director of Lovett International, Inc., an
international trading and consulting firm. Mr. Prange served Richardson
Electronics, Ltd. as Group Vice President from June 1994 until July 1995, as
Chief Financial Officer and Vice President from December 1984 until July 1995
and as Treasurer from December 1981 to December 1984. From March 1976 until
December 1981, Mr. Prange served as Treasurer of Cetron Electronic Corporation,
a manufacturer of electronic components, and as Controller from March 1972
until March 1976. Mr. Prange has a B.S. degree in accounting from DePaul
University and is a Certified Public Accountant.
JOYCE L. WALLACH, ESQ. Ms. Wallach has been General Counsel and
Secretary of the Company since December 1996. From February 1994 until joining
the Company, she was an associate in the Corporate Group of the Sacramento,
California office of Graham & James LLP. From December 1989 until January
1994, Ms. Wallach was an associate in the Corporate Securities Group in the Los
Angeles office of Sidley & Austin. Ms. Wallach has an A.B. degree in history
from the University of California, Berkeley and a law degree from Boalt Hall
School of Law, University of California, Berkeley.
KEY EMPLOYEE
RICHARD A. DOMANIK, PH.D. Dr. Domanik has been Senior Vice President
of Technology of the Company since May 1996 and was Vice President of
Technology from December 1995 until May 1996. From August 1994 until the
Merger Date, Dr. Domanik was Vice President of Engineering of AccuMed, Inc.
From June 1979 until joining AccuMed, Inc., Dr. Domanik served Abbott
Laboratories in several positions relating to research and development of
healthcare products, including Laboratory Manager and Research and Development
Manager. Dr. Domanik has a B.S. degree in chemistry from Ripon College and a
Ph.D. in biochemistry from Northwestern University.
14
<PAGE> 18
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Company's Board of Directors held ten meetings during the 1996
fiscal year. Each director attended a minimum of 75% of the aggregate of (x)
such meetings and (y) the meetings held by each committee, if any, of the Board
of Directors on which such director served during the last fiscal year, except
that each of Dr. Abeles and Mr. Plandowski attended seven (70%) of the ten
meetings.
The Company has established an Executive Committee, an Audit Committee
and a Compensation Committee. Each of these committees is responsible to the
full Board of Directors, and its activities are therefore subject to approval
of the Board of Directors. The Board of Directors does not have an nominating
or similar committee. The functions performed by the Audit Committee and the
Compensation Committee are summarized below.
The Audit Committee is responsible for reviewing the Company's
internal accounting controls, meeting and conferring with the Company's
certified public accountants, and reviewing the results of the accountants'
auditing engagement. During fiscal year 1996, the Audit Committee did not
meet.
The Compensation Committee of the Board of Directors is comprised
entirely of "disinterested" directors (within the meaning of Rule 16b-3 under
the Securities Exchange Act of 1934, as amended (the "Exchange Act")). The
Compensation Committee determines base compensation and discretionary cash
bonuses for the Company's senior executives, if not determined by the full
Board of Directors. These determinations are subject to the approval or
ratification of the full Board of Directors. The Compensation Committee also
determines the number and terms of stock options to be granted to employees,
directors (other than pursuant to the Board of Directors Compensation Plan
described below), and consultants of the Company under the Company' stock
option plans, unless previously determined by the full Board of Directors.
During fiscal year 1996, the Compensation Committee did not meet.
DIRECTOR COMPENSATION
Pursuant to the Board of Directors Compensation Plan adopted by the
Board of Directors on January 18, 1996, each non-employee director is entitled
to the following compensation for services as a director: (i) an immediately
exercisable, nonqualified stock option to purchase 20,000 shares of Common
Stock to be granted upon election to the Board of Directors, and (ii) an
immediately exercisable, nonqualified stock option to purchase 20,000 shares of
Common Stock to be granted on the first trading day of each January thereafter
during which such non-employee director continues to serve on the Board of
Directors. Such options are to be granted under the Company's 1995 Stock
Option Plan or subsequent option plans. The exercise price per share shall be
the fair market value of a share of Common Stock on the date of grant.
Directors are reimbursed for reasonable expenses incurred in attending meetings
of the Board of Directors and committees thereof.
15
<PAGE> 19
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION INFORMATION. The following tables set forth
information concerning compensation paid or accrued for the fiscal year ended
December 31, 1996, the twelve months ended December 31, 1995 and the fiscal
year ended September 30, 1995 by the Company to or on behalf of the Chief
Executive Officer and other executive officers of the Company whose total
salary and bonus exceeded $100,000 for the 1996 fiscal year (collectively, the
"Named Executives"). None of the Named Executives was an employee of the
Company during the fiscal year ended September 30, 1994; thus, no information
is provided with respect to such fiscal year.
SUMMARY COMPENSATION TABLE
Annual Compensation
<TABLE>
<CAPTION>
Securities
Restricted Underlying All Other
Name and Principal Position Year Salary Bonus Stock Options Compensation
--------------------------- ---- ------ ----- ----- ------- ------------
<S> <C> <C> <C> <C> <C> <C>
Peter P. Gombrich(1)(2) 1996 $175,000 $87,154 -- -- --
Chairman and Chief 1995(3) 103,125 -- -- -- --
Executive 1995 65,625 -- -- -- --
Officer
Michael D. Burke(4) 1996 125,734 24,000 -- 10,000 --
Senior Vice President,
President Microbiology
Division
Norman J. Pressman, Ph.D.(5) 1996 74,289 18,000 $156,250 250,000 $51,593
Senior Vice President,
President Cytopathology
Division
</TABLE>
--------------------
(1) Mr. Gombrich became Acting Chief Executive Officer of the Company on
April 21, 1995 and became Chairman of the Board of Directors, Chief
Executive Officer and President on December 29, 1995.
(2) Amounts shown as bonus represent $52,600 paid or accrued for 1996 in
accordance with Mr. Gombrich's Employment Agreement. The balance of
$34,654 represents amount paid in 1995 for prior periods.
(3) On December 29, 1995, the Company changed its fiscal year end from
September 30 to December 31. The amount shown as salary represents
the twelve calendar months ended December 31, 1995.
(4) Mr. Burke joined the Company on December 29, 1995 as a result of the
Merger. He had previously been employed in a similar capacity with
AccuMed, Inc.
(5) Dr. Pressman joined the Company in July 1996. Amounts shown as Other
Compensation represent relocation costs and related taxes reimbursed
to Dr. Pressman under the terms of his Employment Agreement.
16
<PAGE> 20
OPTION GRANTS DURING THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
% of Total
Number of Shares Under-
Shares lying Options
Underlying Granted to
Options Employees in Exercise Price Expiration
Name Granted Year(1) ($/Share) Date
-------------------------------- ------------ -------------- ------------- ----------
<S> <C> <C> <C> <C>
Peter P. Gombrich -- -- -- --
Michael D. Burke 10,000 1.4% $8.38 05/23/01
Norman J. Pressman, Ph.D. 250,000 35.5 6.25 07/08/06
</TABLE>
-----------------
(1) During the 1996 fiscal year, the Company granted to employees options
to purchase an aggregate of 704,000 shares of Common Stock. Each such
option was granted under the Company's 1995 Stock Option Plan at an
exercise price equal to the last reported sale price of the Common
Stock on the Nasdaq National Market on the date of the grant.
AGGREGATE OPTION EXERCISES DURING THE YEAR ENDED DECEMBER 31, 1996
AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
Number of Shares Underlying
Unexercised Options Value of Unexercised in-the-Money
at December 31, 1996 Options at December 31, 1996
---------------------------- ---------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
-------------------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Peter P. Gombrich 133,333 66,667 $182,666 $91,334
Michael D. Burke 53,333 31,667 68,500 34,250
Norman J. Pressman, Ph.D.(1) 50,000 200,000 -- --
</TABLE>
-----------------
(1) The exercise price of Dr. Pressman's options ($6.25 per share)
exceeded the fair market value of the Common Stock at December 31,
1996 ($2.50 per share); thus, none of such options were "in-the-money."
GOMBRICH EMPLOYMENT AND SEVERANCE AGREEMENT. Pursuant to an
Employment Agreement dated August 1, 1994 between Peter P. Gombrich and
AccuMed, Inc. which was assumed by the Company as a result of the merger of
AccuMed, Inc. into the Company (the "Gombrich Employment Agreement"), Mr.
Gombrich serves as Chairman of the Board of Directors, Chief Executive Officer
and President of the Company. Pursuant to the Gombrich Employment Agreement,
Mr. Gombrich is entitled to receive (i) initial annual compensation of $175,000
(in March 1997, the Compensation Committee increased Mr. Gombrich's annual base
salary to $225,000) and (ii) a minimum annual cash bonus equal to 30% of base
salary for the relevant year, and additional bonuses as determined by the Board
of Directors, at its discretion. If the Company terminates Mr. Gombrich's
employment without cause or Mr. Gombrich terminates his employment for good
reason or at any time after 180 days following the date on which a Change of
Control (as defined below) occurs, Mr. Gombrich would be entitled to a lump-sum
severance payment equal to three times his annual salary. In addition, upon
the occurrence of a Change of Control, any stock options held by Mr. Gombrich
would immediately vest and be fully exercisable. For purposes of the Gombrich
Employment Agreement, a Change of Control shall be deemed to occur if: (i) any
third party directly or indirectly acquires 20% or more of the outstanding
Common Stock, (ii) the Company engages in a merger, consolidation
17
<PAGE> 21
or reorganization that results in holders of Common Stock immediately prior to
such transaction holding less than a majority of the voting power of the
resulting entity, (iii) the Company sells all or substantially all of its
assets or (iv) Mr. Gombrich's employment is terminated by the Company on a date
within 90 days prior to the date on which a Change of Control occurs.
The employment term continues until August 1, 1999. Thereafter, the
term will be automatically extended for additional one-year periods unless
either party delivers notice of election not to extend the employment at least
60 days prior to the end of the then current term.
PRESSMAN EMPLOYMENT AGREEMENT. Pursuant to the Employment Agreement
dated June 13, 1996 as amended July 16, 1996, between the Company and Dr.
Pressman (the "Pressman Employment Agreement"), Dr. Pressman will serve as
President of the Cytopathology Division and Senior Vice President of the
Company for five years beginning July 5, 1996. Dr. Pressman's annual salary is
$157,500 and he is eligible to receive annually (i) cash bonuses of up to 30%
of such annual salary, and (ii) incentive stock options to purchase up to
50,000 shares of Common Stock based on the achievement of mutually agreed upon
goals and objectives. On July 8, 1996, Dr. Pressman was granted an option to
purchase an aggregate of 250,000 shares of Common Stock at an exercise price
of $6.25 per share (the last reported sale price of the Common Stock on the
Nasdaq Market on the date on which Dr. Pressman's employment commenced) which
is immediately exercisable with respect to 50,000 shares and will become
exercisable with respect to 50,000 additional shares on each of the first
through fourth anniversaries of the grant date. Dr. Pressman was granted 25,000
shares of Common Stock on the date on which Dr. Pressman's employment
commenced. Such shares may not be transferred during the 18-month period
following the date of issuance and would be forfeited to the Company if Dr.
Pressman terminates the Pressman Employment Agreement during such period, other
than due to a breach by the Company. Dr. Pressman is entitled to borrow up to
$85,200 from the Company for the purpose of paying taxes due in connection with
the grant of such shares. Such loan shall be repaid without interest in
installments to be mutually agreed upon by Dr. Pressman and the Company. The
Company may terminate Dr. Pressman's employment for cause at any time upon
written notice. The Company may terminate his employment without cause upon
six months' written notice, in which case Dr. Pressman would be entitled to an
amount equal to 12 months' salary as severance, paid over 12 months. Dr.
Pressman may terminate the Pressman Employment Agreement for any reason upon
six months' written notice.
BURKE EMPLOYMENT TERMS. Pursuant to the Employment Letter dated as of
April 21, 1995 between Mr. Burke and the Company, Mr. Burke serves as Senior
Vice President of the Company and President of the Microbiology Division. His
initial annual base salary was $120,000, and he was initially eligible to
receive (i) quarterly bonuses of $7,500 based on achievement of mutually agreed
goals and (ii) certain sales incentive bonuses. Upon consummation of the
Merger, Mr. Burke received 25,000 shares of Common Stock and nonqualified stock
options to purchase an aggregate of 75,000 shares at an exercise price of $1.13
per share (the exercise price established in the agreement providing for the
Merger). In January 1997, the Compensation Committee modified the terms of Mr.
Burke's employment to (i) increase his annual base salary to $140,000, (ii)
provide that Mr. Burke is eligible to receive annual cash bonuses of up to 25%
of his annual base salary based upon achievement of mutually agreed goals (in
lieu of the fixed bonus and sales incentives), and (iii) provide that, if his
18
<PAGE> 22
employment is terminated without cause, he shall be entitled to receive
severance pay equal to 12 months' salary.
PRANGE EMPLOYMENT AGREEMENT. Pursuant to the Employment Agreement
dated as of September 9, 1996 between the Company and Mr. Prange (the "Prange
Employment Agreement"), Mr. Prange serves as Chief Financial Officer and
Corporate Vice President of the Company at an initial annual salary of
$125,000. In March 1997, Mr. Prange was appointed Chief Operating Officer and
the Compensation Committee increased his annual base salary to $160,000. He is
eligible to receive annual cash bonuses of up to 25% of such annual salary.
Upon joining the Company, Mr. Prange was granted options to purchase an
aggregate of 150,000 shares of Common Stock at an exercise price of $5.38 per
share (the fair market value of the Common Stock on the grant date), which is
immediately exercisable with respect to 25,000, shares and will become
exercisable with respect to 25,000 additional shares on each of the first
through fifth anniversaries of the grant date. In the event of a change of
control of the Company or if Peter P. Gombrich ceases to be Chairman of the
Board and Chief Executive Officer, the options shall become fully vested and
immediately exercisable. The Company may terminate Mr. Prange's employment for
Cause (as defined in the Prange Employment Agreement) at any time upon written
notice. The Company may terminate his employment without Cause upon written
notice, in which case Mr. Prange would be entitled to an amount of cash equal
to 12 months' salary as severance, paid semi-monthly over 12 months, and his
options shall become fully vested and immediately exercisable. Mr. Prange's
employment shall be extended for additional one year terms unless either party
delivers written notice of termination at least 60 days prior to the end of the
then current period.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based upon a review of the Company's records, the Company is aware
that the following officers or directors of the Company failed to timely file
one or more reports disclosing beneficial ownership of securities of the
Company as required under Section 16(a) of the Securities Exchange Act of 1934,
as amended, during the fiscal year ended December 31, 1996: John H. Abeles
failed to timely file Forms 4 reporting the following transactions which were
subsequently reported on a timely filed Form 5 (i) the acquisition of options
to purchase 20,000 shares of Common Stock granted on January 18, 1996, (ii) the
acquisition of 250 shares of Common Stock upon exercise of a stock option on
June 5, 1996, and (iii) the acquisition of 5,624 shares of Common Stock upon
exercise of a stock option on June 5, 1996; Jack H. Halperin failed to timely
file Forms 4 reporting the following transactions which were subsequently
reported on a timely filed Form 5 (i) acquisition of options to purchase 20,000
shares of Common Stock granted on January 18, 1996, and (ii) acquisition of
1,000 shares of Common Stock upon exercise of a stock option on May 30, 1996;
Paul F. Lavallee failed to timely file Forms 4 reporting the following
transactions which were subsequently reported on a timely filed Form 5 (i)
acquisition of options to purchase 20,000 shares of Common Stock granted on
January 18, 1996, and (ii) acquisition of 1,000 shares of Common Stock upon
exercise of a stock option on May 30, 1996; Joseph W. Plandowski failed to
timely file a Form 4 reporting the following transaction which was subsequently
reported on a timely filed Form 5, acquisition of options to purchase 20,000
shares of Common Stock granted on January 18, 1996; Leonard M. Schiller failed
to timely file a Form 4 reporting the following transaction which was
subsequently reported on a timely filed Form 5, acquisition of options to
purchase
19
<PAGE> 23
20,000 shares of Common Stock granted on January 18, 1996; and Mark L. Santor
(who is no longer an officer of the Company) failed to timely file a Form 4
reporting the acquisition of 16,179 shares of Common Stock upon exercise of a
stock option.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Commonwealth Associates, Inc.("Commonwealth Associates") is a
principal stockholder. On March 14, 1997, the Company consummated the Private
Placement of 85 Units each consisting of $100,000 in principal amount of 12%
Convertible Promissory Notes (the "Notes") and Warrants (the "Warrants") to
purchase 10,000 shares of Common Stock, for which Commonwealth Associates acted
as placement agent and received from the Company (i) cash commissions equal to
7% of the gross proceeds, (ii) five-year warrants to purchase 200,000 shares of
Common Stock at an exercise price of $3.125 per share, subject to stockholder
approval of the Charter Amendment, and (iii) an accountable expense
reimbursement of $56,500 in cash.
Pursuant to a letter agreement dated as of February 14, 1995 among the
Company, AccuMed, Inc. and Commonwealth Associates, Commonwealth Associates was
paid a fee for acting as a "finder" in connection with the merger of AccuMed,
Inc. into the Company. The fee was paid in the form of $50,000 in cash,
444,444 shares of Common Stock, and a five-year warrant to purchase up to
750,000 shares of Common Stock at an exercise price of $1.25 per share. During
1995, Commonwealth Associates acted as placement agent for the Company in
certain private placements of Common Stock for which Commonwealth Associates
received an aggregate of (i) $353,000 in cash commissions, (ii) a
non-accountable expense allowance of $106,000, (iii) approximately $10,600 in
reimbursement for the fees and expenses of counsel, and (iv) a warrant to
purchase an aggregate of 564,840 shares of the Common Stock at an exercise
price of $0.625 per share. During 1995, the Company paid Commonwealth
Associates an aggregate of $59,000 in cash pursuant to a Consulting Agreement
in effect from January 1, 1995 through December 31, 1995. As reimbursement for
certain expenses incurred by Commonwealth Associates in connection with a
terminated private placement of securities for which Commonwealth Associates
was to act as placement agent, the Company (i) issued to Commonwealth
Associates on December 31, 1994 a five-year warrant to purchase an aggregate of
420,000 shares of Common Stock at an exercise price of $0.25 per share and (ii)
issued to designees of Commonwealth Associates on December 29, 1995 five-year
warrants to purchase an aggregate of 104,000 shares of Common Stock at an
exercise price of $2.125 per share, which warrants expire on October 31, 1997.
The Company has agreed, with respect to the exercise of warrants to
purchase an aggregate of 2,702,905 shares of Common Stock (the "Redeemable
Warrants") issued in connection with the Company's initial public offering and
certain private placements, to pay to Commonwealth Associates a fee of 5% of
the exercise price of each Redeemable Warrant exercised; provided, however,
that Commonwealth Associates will not be entitled to receive such compensation
for Redeemable Warrant exercise transactions in which: (i) the market price of
the Common Stock at the time of the exercise is lower than the exercise price
of the Redeemable Warrants; (ii) the Redeemable Warrants are held in any
discretionary account; (iii) disclosure of compensation arrangements is not
made in documents provided to holders of Redeemable Warrants at the time of
exercise; (iv) the exercise of the Redeemable Warrants is
20
<PAGE> 24
unsolicited; and (v) the transaction was in violation of Rule 10b-6 promulgated
under the Exchange Act. As of April 1, 1997, Redeemable Warrants had been
exercised to purchase 200 shares of Common Stock. If the closing price per
share of Common Stock exceeds $7.50 per share (subject to adjustment) for a
minimum of 20 consecutive trading days, the Company would have the right to
redeem the Redeemable Warrants, upon notice of not less than 60 days given to
holders within three days following any such 20 day period, at a redemption
price of $0.25 per underlying share. The exercise price of the Redeemable
Warrants, which expire October 1, 1997, is $5.00 per share. The Company has
agreed with the underwriters of the Company's underwritten public offering
consummated in October 1996, not to redeem the Redeemable Warrants, without the
consent of the representatives of the several underwriters, prior to October 3,
1997.
Robert L. Priddy, a director nominee, is the beneficial owner of 9.9%
of the common stock of Commonwealth Associates. Mr. Priddy loaned the Company
$3,000,000 pursuant to a loan (the "Bridge Loan") in the aggregate principal
amount of $6,000,000 made pursuant to a Loan Agreement dated as of February 19,
1997 among the Company and Mr. Priddy and Edmund H. Shea, Jr. (collectively,
the "Lender"), evidenced by a Convertible Promissory Note dated as of February
19, 1997 made by the Company in favor of the Lender. Interest on the
indebtedness under the Bridge Loan accrued at a rate of 12% per annum payable
at maturity. All amounts owed to the Lender by the Company pursuant to the
Bridge Loan, including an aggregate of $130,000 representing the loan
origination fee, interest and the prepayment premium were paid in full as of
March 14, 1997 with a portion of the proceeds of the Private Placement. Mr.
Priddy purchased 15 Units for an aggregate purchase price of $1,500,000 in the
Private Placement. See "Proposal No. 1 to Amend the Certificate of
Incorporation to Increase the Authorized Common Stock -- Recent Private
Placement."
The Company loaned to Peter P. Gombrich, Chairman of the Board of
Directors, Chief Executive Officer and President of the Company, $61,000
evidenced by a promissory note made May 22, 1996, initially bearing interest at
a rate of 10% per annum, payable monthly in arrears, with principal and accrued
interest due within ten days following the date of such promissory note. In
August 1996, Mr. Gombrich paid the loan balance in full.
The Company loaned to Norman J. Pressman, Senior Vice President of the
Company and President of the Cytopathology Division, an aggregate of
$164,409.20 pursuant to a Promissory Note in the original principal amount of
$100,000 dated as of October 25, 1996, and a Promissory Note in the original
principal amount of $64,409.20 dated as of December 30, 1996, respectively
(collectively, the "Pressman Notes"). Such loan was made in accordance with
the provisions of the Pressman Employment Agreement to cover relocation
expenses and taxes in connection with shares of Common Stock issued to Dr.
Pressman upon commencement of employment. The Pressman Notes bear no interest.
Repayment of principal under the Pressman Notes shall be made by withholding
50% of any bonus payments due to Dr. Pressman under the terms of the Pressman
Employment Agreement. Payments shall continue until the principal is repaid in
full, but in no event shall the term of the Pressman Notes extend beyond five
years from the respective dates on which they were made, at which dates any
amounts outstanding shall become immediately due and payable. Dr. Pressman has
pledged to the Company 25,000 shares of Common Stock to secure $100,000 of such
indebtedness, pursuant to a Stock Pledge
21
<PAGE> 25
Agreement dated as of October 27, 1996. See "Proposal No. 2 Election of
Directors -- Executive Compensation -- Pressman Employment Agreement."
On December 29, 1995, the Company issued a warrant to purchase 75,000
shares of Common Stock to Leonard M. Schiller, a director of the Company, in
consideration for services provided by Mr. Schiller to AccuMed, Inc. in
connection with the Merger. Such warrant is currently exercisable at $1.13 per
share (the closing sale price of the Common Stock on the Nasdaq Market on the
date of issuance of such warrant) and expires on December 29, 2000.
Gwenda Jay Gombrich, the wife of Peter P. Gombrich, the Company's
Chairman of the Board of Directors, Chief Executive Officer and President,
loaned to AccuMed, Inc. an aggregate of $65,000 pursuant to a letter agreement
between AccuMed, Inc. and Ms. Gombrich dated October 28, 1994, which was
assumed by the Company in connection with the Merger. Interest was payable at
the rate of 1% per month on the outstanding balance, with a minimum interest
payment of $750. In June 1996, the loan balance was paid in full.
Ms. Gombrich contributed an aggregate of $75,000 to AccuMed, Inc.
prior to the Merger, evidenced by Promissory Notes dated May 18, 1994 and
August 31, 1994 (the "Gombrich Promissory Notes") and the Interim Financing
Agreements dated May 18, 1994 and December 1994 (the "Interim Financing
Agreements"), each among AccuMed, Inc. and Ms. Gombrich as custodian for her
minor children. Pursuant to the Interim Financing Agreements, the principal
amount and the accrued and unpaid interest on the Gombrich Promissory Notes
were required to be converted into shares of common stock of AccuMed, Inc.
prior to the Merger. Such conversion did not take place. Upon consummation of
the Merger, the obligations of AccuMed, Inc. to Ms. Gombrich pursuant to the
Interim Financing Agreements and the Gombrich Promissory Notes were assumed by
the Company. In June 1996, the Company issued to Ms. Gombrich as custodian for
certain minor children an aggregate of 166,586 shares of the Company's Common
Stock in full satisfaction of the Company's obligations pursuant to the Interim
Financing Agreements and the Gombrich Promissory Notes.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE
ELECTION OF THE NOMINEES NAMED TO SERVE UNTIL THE NEXT ANNUAL MEETING OF
STOCKHOLDERS. PROXIES RETURNED TO THE COMPANY WILL BE VOTED "FOR" THE NOMINEES
NAMED UNLESS OTHERWISE INSTRUCTED.
INDEPENDENT ACCOUNTS FOR 1997;
CHANGE IN INDEPENDENT ACCOUNTANTS
KPMG Peat Marwick LLP ("KPMG") have been the Company's principal
accounts for the fiscal year ended December 31, 1996 and have been selected by
the Board of Directors to serve as the principal accountants for the 1997
fiscal year. Representatives of KPMG are expected to be present at the
Meeting, will have the opportunity to make a statement if they so desire, and
are expected to be available to respond to appropriate questions.
22
<PAGE> 26
Prior to January 15, 1996, Coopers & Lybrand LLP ("C&L") were the
principal accountants for the Company. On such date, C&L's appointment as
principal accountants was terminated and the Company engaged KPMG as the
Company's principal accountants. The Company's Board of Directors approved the
decision to change accountants. The opinions of C&L on the balance sheet of
AccuMed, Inc. as of December 31, 1994, and the statement of operations,
stockholders' deficit, and cash flows for the period from February 7, 1994
(inception) through December 31, 1994, the balance sheets of Alamar
Biosciences, Inc. as of September 30, 1995 and 1994, and the statements of
operations, stockholders' equity, and cash flows for each of the three years in
the period ended September 30, 1995, and the balance sheet of
Sensititre/Alamar, the Microbiology Division of AccuMed, Inc., as of December
31, 1994 and the statements of net sales, cost of sales, and selling expenses
for the eight months ended December 31, 1994 and for each of the two years in
the period ended April 30, 1994 did not contain any adverse opinions or
disclaimers of opinions, or modifications as to uncertainty, audit scope or
accounting principles, except that for the opinions related to AccuMed, Inc.
and Alamar Biosciences, Inc., C&L modified its reports to include an
uncertainty explanatory paragraph which expressed substantial doubt as to
AccuMed, Inc.'s and Alamar Biosciences, Inc.'s ability to continue as a going
concern. There were no disagreements between the Company and C&L on any matter
of accounting principles or practices, financial statement disclosure, or
auditing scope or procedures, which disagreements, if not resolved to the
satisfaction of C&L, would have caused it to make reference to the subject
matter of the disagreements in connection with its report.
OTHER MATTERS
The Company does not know of any matter other than those discussed in
the foregoing materials contemplated for action at the Meeting. Should any
other matter be properly brought before the Meeting, the holders of the proxies
herein solicited will vote thereon in their discretion.
ANNUAL REPORT
An Annual Report to Stockholders including audited financial
statements for the fiscal year ended December 31, 1996 is enclosed with this
Proxy Statement.
SUBMISSION OF STOCKHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
In accordance with Rule 14a-8 of the proxy rules of the Securities and
Exchange Commission, stockholders are advised that any proposal which a
stockholder wishes to have presented at the 1998 Annual Meeting of Stockholders
and included in the Company's proxy statement and form of proxy for such
meeting must be received by the Company, at its principal executive office, 900
North Franklin Street, Suite 401, Chicago, Illinois 60610, Attn: General
Counsel and Secretary, no later than January 1, 1998.
By Order of the Board of Directors
JOYCE L. WALLACH,
Secretary
23
<PAGE> 27
APPENDIX A
TO PROXY STATEMENT
CERTIFICATE OF AMENDMENT
TO
CERTIFICATE OF INCORPORATION
OF
ACCUMED INTERNATIONAL, INC.
The undersigned, the President and Secretary of AccuMed International,
Inc., a Delaware corporation (the "Corporation"), do hereby certify as follows:
1. The Board of Directors of AccuMed International, Inc. duly adopted a
resolution, in accordance with Section 242 of the General Corporation Law of the
State of Delaware, to amend the Certificate of Incorporation of AccuMed
International, Inc. to increase the authorized shares of Common Stock from
30,000,000 shares to 50,000,000 shares, and declaring the advisability thereof.
2. At the Combined Annual and Special Meeting of Stockholders held on
May 23, 1997, duly called and held in accordance with the provisions of Section
222 of the General Corporation Law of the State of Delaware, a majority of the
shares of the outstanding stock entitled to vote thereon, and a majority of the
outstanding stock of each class entitled to vote thereon as a class, were voted
in favor of such amendment in accordance with Section 242 of the General
Corporation Law of the State of Delaware.
3. Article FOURTH of the Certificate of Incorporation of the
Corporation is hereby amended to read in its entirety as follows:
FOURTH. The total number of shares of all classes of capital
stock which the Corporation shall have authority to issue is 55,000,000
shares, divided into two classes as follows:
5,000,000 shares of Preferred Stock of the par value
of $0.01 per share ("Preferred Stock"); and
A - 1
<PAGE> 28
50,000,000 shares of Common Stock of the par value of
$0.01 per share ("Common Stock").
The designations, powers, preferences and rights, and the
qualifications, limitations or restrictions of the above classes of
stock are as follows:
DIVISION I
PREFERRED STOCK
1. The board of directors is expressly authorized at any time, and from
time to time, to issue shares of Preferred Stock in one or more series, and for
such consideration as the board of directors may determine, with such voting
powers, full or limited but not to exceed one vote per share, or without voting
powers, and with such designations, preferences and relative, participating,
optional or other special rights, and qualifications, limitations or
restrictions thereof, as shall be stated in the resolution or resolutions
providing for the issue thereof, and as are not stated in this Certificate of
Incorporation, or any amendment thereto. All shares of any one series shall be
of equal rank and identical in all respects.
2. No dividend shall be paid or declared on any particular series of
Preferred Stock unless dividends shall be paid or declared pro rata on all
shares of Preferred Stock at the time outstanding of each other series which
ranks equally as to dividends with such particular series.
3. Unless and except to the extent otherwise required by law or
provided in the resolution or resolutions of the board of directors creating any
series of Preferred Stock pursuant to this Division I, the holders of the
Preferred Stock shall have no voting power with respect to any matter
whatsoever. In no event shall the Preferred Stock be entitled to more than one
vote in respect of each share of stock. Subject to the protective conditions or
restrictions of any outstanding series of Preferred Stock, any amendment to this
Certificate of Incorporation which shall increase or decrease the authorized
capital stock of any class or classes may be adopted by the affirmative vote of
the holders of a majority of the outstanding shares of the voting stock of the
Corporation.
4. Shares of Preferred Stock redeemed, converted, exchanged, purchased,
retired or surrendered to the Corporation, or which have been issued and
reacquired in any manner, shall, upon compliance with any applicable provisions
of the GCL, have the status of authorized and unissued shares of Preferred Stock
and may be reissued by the board of directors as part of the series
A - 2
<PAGE> 29
of which they were originally a part or may be reclassified into and reissued as
part of a new series or as a part of any other series, all subject to the
protective conditions or restrictions of any outstanding series of Preferred
Stock.
DIVISION II
COMMON STOCK
1. DIVIDENDS. Subject to the preferential dividend rights, if any,
applicable to shares of the Preferred Stock and subject to applicable
requirements, if any, with respect to the setting aside of sums for purchase,
retirement or sinking funds for the Preferred Stock, the holders of the Common
Stock shall be entitled to receive to the extent permitted by law, such
dividends as may be declared from time to time by the board of directors.
2. LIQUIDATION. In the event of the voluntary or involuntary
liquidation, dissolution, distribution of assets or winding up of the
Corporation, after distribution in full of the preferential amounts, if
any, to be distributed to the holders of shares of the Preferred Stock,
holders of the Common Stock shall be entitled to receive all the
remaining assets of the Corporation of whatever kind available for
distribution to stockholders ratably in proportion to the number of
shares of Common Stock held by them respectively.
3. VOTING RIGHTS. Except as may be otherwise required by law or this
Certificate of Incorporation, each holder of the Common Stock shall
have one vote in respect of each share of stock held by him or her of
record on the books of the Corporation on all matters voted upon by the
stockholders.
DIVISION III
ELIMINATION OF PREEMPTIVE
RIGHTS
No holder of stock of any class of the Corporation shall be entitled as
a matter of right to purchase or subscribe for any part of any unissued stock of
any class, or of any additional stock of any class or capital stock of the
Corporation, or of any bonds, certificates of indebtedness, debentures, or other
securities convertible into stock of the Corporation, now or hereafter
authorized, but any such stock or other securities convertible into stock may be
issued and disposed of pursuant to resolution by the board of directors to such
persons, firms,
A - 3
<PAGE> 30
corporations or associations and upon such terms and for such consideration (not
less than the par value or stated value thereof) as the board of directors in
the exercise of its discretion may determine and as may be permitted by law
without action by the stockholders.
IN WITNESS WHEREOF, we have signed this Certificate this ______ day of
May 1997.
ACCUMED INTERNATIONAL, INC.
By: ____________________________
Peter P. Gombrich, President
ATTEST:
____________________________
Joyce L. Wallach
Secretary
A - 4
<PAGE> 31
AccuMed International, Inc.
900 North Franklin Street, Suite 401
Chicago, Illinois 60610
For the Combined Annual and Special Meeting
of Stockholder to be held May 23, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Peter P. Gombrich and Leonard R. Prange and each
of them, Proxies, each with full power of substitution to vote all of the stock
of the undersigned at the Combined Annual and Special Meeting of Stockholders of
AccuMed International, Inc. (the "Company") to be held on Friday, May 23, 1997
at 3:30 p.m. (Chicago time) at the Company's offices located at 900 North
Franklin Street, Suite 401, Chicago, Illinois, and at any adjournment thereof,
in the manner indicated and in their discretion on any other business which may
properly come before said meeting, all in accordance with and as more fully
described in the Notice and accompanying Proxy Statement for said meeting,
receipt of which is hereby acknowledged. THE SHARES REPRESENTED BY THIS PROXY
SHALL BE VOTED AS SPECIFIED BELOW. IF NO SPECIFICATION IS MADE, THIS PROXY WILL
BE VOTED FOR APPROVAL EACH OF THE PROPOSALS LISTED ON THE REVERSE SIDE,
INCLUDING FOR THE ELECTION OF DIRECTOR NOMINEES.
<PAGE> 32
1. Approval and adoption of an amendment to the Company's
Certificate of Incorporation to increase the number of
authorized shares of Common Stock from 30,000,000 shares to
50,000,000 shares.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
2. Election of J. Donald Gaines, Peter P. Gombrich, Jack H.
Halperin, Paul F. Lavallee, Joseph W. Plandowski, Robert L.
Priddy and Leonard M. Schiller as directors to serve until the
next annual meeting of stockholders and until their successors
are duly elected and qualified.
[ ] FOR THE ELECTION AS DIRECTORS OF ALL NOMINEES LISTED
ABOVE (EXCEPT AS TO NOMINEE(S), IF ANY, LISTED IN THE
SPACE PROVIDED BELOW OR WHOSE NAME IS LINED THROUGH
ABOVE). INSTRUCTION: TO WITHHOLD AUTHORITY FOR ANY
INDIVIDUAL NOMINEE(S), WRITE THE NOMINEE'S NAME IN
THE SPACES PROVIDED BELOW OR LINE THROUGH THE
NOMINEE'S NAME ABOVE. _____________________________
[ ] WITHHOLD AUTHORITY (as to all nominees).
3. In their discretion, the proxy holders are authorized to vote
upon such other business as may properly come before the
meeting or any adjournments thereof, if such business was not
known to the Board of Directors prior to the solicitation of
this Proxy.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED IN FAVOR OF THE PROPOSALS
SET FORTH ON THE REVERSE SIDE.
Dated: __________________________, 1997
_______________________________________
Signature of Stockholder
_______________________________________
Signature of Stockholder
Please sign exactly as your name
appears hereon. Please date, sign and
return the Proxy promptly in the
enclosed envelope or by facsimile
(telecopy number 312-642-3101). When
signing as attorney, executor,
administrator, trustee or guardian,
please give full title. If the
signature is for a corporation, please
sign full corporate name by authorized
officer. If the shares are registered
in more than one name, all holders
must sign.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND MAY BE REVOKED
PRIOR TO ITS EXERCISE.
