<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
[X] Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
</TABLE>
VOXEL
- --------------------------------------------------------------------------------
(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] Fee not required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
VOXEL
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
FRIDAY, MAY 29, 1998
TO THE SHAREHOLDERS OF VOXEL:
You are cordially invited to attend the Annual Meeting of Shareholders
of Voxel (the "Company"), which will be held at the Company's offices, 26081
Merit Circle, Suite 117, Laguna Hills, California 92653, on Friday, May 29, 1998
at 9:00 a.m. Pacific time, to consider and act upon the following matters:
(1) Election of Directors. To elect a Board of four (4) Directors. The
persons nominated, Dr. Wolfe and Messrs. Dishlip, Dreyfous, and Holliman, are
described in the attached Proxy Statement.
(2) Ratification of Auditors. To ratify the appointment of Ernst & Young
LLP as independent public accountants for the Company for the year ended
December 31, 1998.
(3) Amendment of Stock Option Plan. To amend the Company's 1992 Stock
Plan to increase the number of shares of common stock available for grant from a
total of 563,616 to 1,063,616 shares.
(4) Other Business. To consider and act upon any other business matters
as may properly come before the meeting or any postponements or adjournments
thereof.
Only shareholders of record at the close of business on April 3, 1998
will be entitled to vote at the Annual Meeting or any adjournments thereof.
This Proxy Statement and the accompanying Proxy were mailed to
shareholders by American Stock Transfer and Trust Company, commencing on or
about April 24, 1998. The executive offices of the Company are located at 26081
Merit Circle, Suite 117, Laguna Hills, California 92653.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, PLEASE SIGN,
DATE, AND RETURN THE ACCOMPANYING PROXY WITHOUT DELAY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE. YOU ARE CORDIALLY INVITED TO ATTEND AND YOUR PROXY WILL
NOT BE USED IF YOU ARE PRESENT AND PREFER TO VOTE IN PERSON.
By Order of the Board of Directors,
STEPHEN J. HART
------------------------------------
Stephen J. Hart, Secretary
Laguna Hills, California
April 3, 1998
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<S> <C>
Proxies....................................................................1
Voting Securities..........................................................1
Security Ownership of Certain Beneficial Owners and Management.............1
Election of Directors......................................................3
Directors and Executive Officers...........................................5
Executive Compensation.....................................................6
Amendment of Stock Option Plan............................................10
Additional Information....................................................10
Appendix A - Voxel 1992 Stock Plan.......................................A-1
</TABLE>
<PAGE> 4
VOXEL
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 29, 1998
PROXIES
The enclosed Proxy is solicited by and on behalf of the management and
Board of Directors of Voxel, a California corporation (the "Company"), for use
at the Company's Annual Meeting of Shareholders and at any adjournments thereof
(the "Annual Meeting") to be held at the Company's offices, 26081 Merit Circle,
Suite 117, Laguna Hills, California 92653, on May 29, 1998 at 9:00 a.m. Pacific
time. A Proxy for the Annual Meeting is enclosed, by means of which you may
direct your vote as to each of the proposals described in this Proxy Statement.
This Proxy Statement, the accompanying Proxy, and the Company's 1997 Annual
Report to Shareholders were first mailed to shareholders on or about April 24,
1998.
All Proxies which are properly completed, signed, and returned prior to
the Annual Meeting, and which have not been revoked, will be voted. A
shareholder may revoke his or her Proxy at any time before it is exercised by
filing with the Secretary of the Company at the Company's executive offices in
Laguna Hills, California, a written notice of revocation or a duly executed
Proxy bearing a later date, or by appearing in person at the Annual Meeting and
expressing a desire to vote his or her shares in person.
VOTING SECURITIES
April 3, 1998 has been fixed as the record date (the "Record Date") for
the determination of shareholders entitled to notice of and to vote at the
Annual Meeting. As of that date, the Company had outstanding 8,447,015 shares of
common stock, no par value per share (the "Common Stock"), the only outstanding
voting securities of the Company. The record holders of validly issued and
outstanding shares of Common Stock are entitled to one vote per share on all
matters to be voted on at the Annual Meeting, except that in the election of
directors all shareholders shall be entitled to cumulate votes for a candidate
or candidates whose names have been placed in nomination, if one or more
shareholders have given notice at the Annual Meeting, prior to voting, of the
intention to vote cumulatively. Cumulative voting is not available to
shareholders voting by proxy. If the shareholders are entitled to cumulate their
votes, they may give one candidate a number of votes equal to the number of
directors to be elected multiplied by the number of votes to which his or her
shares are entitled or may distribute his or her votes on the same principle
among as many candidates as the shareholder sees fit.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information concerning Common
Stock ownership of (i) all persons known by the Company to own beneficially 5%
or more of the outstanding shares of Common Stock, (ii) each current director
and nominee for director of the Company, (iii) each of the Company's executive
officers named in the Summary Compensation Table under the caption "Executive
Compensation" below, and (iv) all executive officers, directors and nominees for
director of the Company as a group, as of April 3, 1998. Except as otherwise
indicated, based on information furnished by the beneficial owners of the Common
Stock listed below, the Company
1
<PAGE> 5
believes that such owners have sole investment and voting power with respect to
such shares, subject to community property laws where applicable.
<TABLE>
<CAPTION>
Amount and
Beneficial Percentage
Name and Address Ownership of Class
---------------- ----------- ----------
<S> <C> <C>
Travelers Group Inc.(1) 1,132,740 13.4%
338 Greenwich Street
New York, NY 10013
Shaw Venture Partners IV, L.P. 565,438 6.7%
400 Southwest Sixth Avenue, Suite 1100
Portland, OR 97204
Allan M. Wolfe, M.D.(2) 657,363 7.8%
Voxel
26081 Merit Circle, Suite 117
Laguna Hills, CA 92653
John M. Holliman, III(3) 355,737 4.2%
Valley Ventures, L.P.
6617 N. Scottsdale Rd., Suite 104
Scottsdale, AZ 85250
James C. Dreyfous(4) 340,092 4.0%
Utah Ventures
419 Wakara Way
Salt Lake City, UT 84108
Alan S. Dishlip(5) 12,001 *
First Portland Corporation
7145 Southwest Varns Street
Portland, OR 97223
All executive officers, directors and
nominees for director
as a group (9 persons)(6) 1,343,266 15.9%
</TABLE>
- ------------------
* Less than one percent.
(1) Represents 430,326 shares of Common Stock held by The Travelers
Insurance Company and 702,414 shares of Common Stock held by The
Travelers Indemnity Company, which together comprise a group within the
meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act").
(2) Includes (i) 83,917 shares of Common Stock, (ii) 253,355 shares of
Common Stock subject to options exercisable as of April 3, 1998 or
within 60 days thereafter, and (iii) 320,091 shares of Common Stock held
of record by Utah Ventures. Dr. Wolfe is a general partner of the
general partner of Utah Ventures. Dr. Wolfe disclaims beneficial
ownership of the shares of Common Stock held of record by Utah Ventures.
(3) Includes 343,736 shares of Common Stock held of record by Valley
Ventures, L.P. and 12,001 shares of Common Stock subject to options
exercisable as of April 3, 1998 or within 60 days thereafter. Mr.
Holliman is a general partner of the general partner of Valley Ventures,
L.P. Mr. Holliman disclaims beneficial ownership of the shares of Common
Stock held of record by Valley Ventures, L.P.
2
<PAGE> 6
(4) Includes (i) 320,091 shares of Common Stock held of record by Utah
Ventures, (ii) 3,000 shares of Common Stock held of record by trusts for
the benefit of Mr. Dreyfous' children, of which he is a co-trustee,
(iii) 12,001 shares of Common Stock subject to options exercisable as of
April 3, 1998 or within 60 days thereafter, and (iv) 5,000 shares held
by Mr. Dreyfous. Mr. Dreyfous is a general partner of the general
partner of Utah Ventures. Mr. Dreyfous disclaims beneficial ownership of
the shares of Common Stock held of record by Utah Ventures and by the
trusts for the benefit of his children.
(5) Includes 12,001 shares of Common Stock subject to options exercisable as
of April 3, 1998 or within 60 days thereafter.
(6) Includes (i) with respect to Dr. Wolfe and Messrs. Holliman, Dreyfous,
and Dishlip, the shares of Common Stock identified in footnotes (2),
(3), (4), and (5) as held by such person or subject to options
exercisable by such person as of April 3, 1998 or within 60 days
thereafter, (ii) with respect to the executive officers other than Dr.
Wolfe, a total of 298,164 shares of Common Stock held by such persons or
subject to options exercisable by such persons as of April 3, 1998 or
within 60 days thereafter, and (iii) the shares of Common Stock held of
record by Valley Ventures, L.P., Utah Ventures, and the trusts for the
benefit of Mr. Dreyfous' children.
ELECTION OF DIRECTORS
The four (4) persons named below have been nominated by management for
election as directors to serve until the Annual Meeting to be held in 1999 and
until their respective successors are elected and qualified. Each of the
nominees has previously served as a director of the Company. The authorized
number of directors is five (5). The current directors are continuing to use
their best efforts to identify an individual to serve as the fifth director to
fill the vacancy on the Company's Board of Directors.
Unless otherwise instructed, the enclosed Proxy will be voted for
election of the nominees listed below, except that the persons designated as
proxies reserve full discretion to cast their votes for another person
recommended by management in the unanticipated event that any nominee is unable
or declines to serve.
<TABLE>
<CAPTION>
NAME OF NOMINEE AGE DIRECTOR SINCE
--------------- --- --------------
<S> <C> <C>
Allan M. Wolfe, M.D. (1) 60 1988
Alan S. Dishlip (1) (2) 46 1990
James C. Dreyfous (1) (2) 43 1991
John M. Holliman, III (2) 44 1993
</TABLE>
(1) Member of the Compensation Committee
(2) Member of the Audit Committee
Allan M. Wolfe, M.D. has been President, Chief Executive Officer, and a
director of the Company since he co-founded the Company in April 1988. Since
March 1995, Dr. Wolfe has also been Chairman of the Company. From 1983 to 1988,
Dr. Wolfe was a general partner (and co-founder) of the Life Science Ventures
division of Hambrecht & Quist Venture Partners. From 1980 to 1983, Dr. Wolfe was
a consultant offering management, strategic, and technical expertise to several
companies in the life science industry, including American Hospital Supply
Corporation,
3
<PAGE> 7
Alza Corporation, and W.R. Grace & Co. From 1975 to 1980, Dr. Wolfe was a Vice
President at McGaw Laboratories, a division of American Hospital Supply
Corporation, with responsibility for research and development and strategic and
operational planning. Dr. Wolfe holds an M.D. from N.Y.U. School of Medicine and
was Chief Resident in Medicine at State University of New York, Downstate
Medical Center. Dr. Wolfe has also been a general partner of the general partner
of Utah Ventures (since 1988) and Utah Ventures II (since 1997), and a Special
Limited Partner of Crosspoint Venture Partners (since 1989), all of which
entities are venture capital funds.
Alan S. Dishlip has served as a director of the Company since 1990. Mr.
Dishlip is a general partner of the general partner of Utah Ventures II, a
venture capital firm. From February 1995 to August 1997, Mr. Dishlip was Senior
Vice President of First Portland Corporation, an equipment leasing enterprise.
Prior to joining First Portland in February 1995, Mr. Dishlip was a limited
partner of Shaw Venture Partners since 1983 and a general partner of Shaw
Venture Partners II since 1987. Both Shaw entities are venture capital funds.
James C. Dreyfous has served as a director of the Company since 1991.
For the past 13 years, Mr. Dreyfous has served in various capacities for Utah
Ventures. Currently, he serves as Managing General Partner of the general
partner of Utah Ventures and Utah Ventures II, both of which are venture capital
funds.
John M. Holliman, III has served as a director of the Company since
1993, and previously from April 1990 through July 1991. Mr. Holliman has been a
general partner of the general partner of Valley Ventures, L.P. (and its
predecessor, Arizona Growth Partners, L.P.), a Phoenix-based venture capital
investment partnership, since February 1993. From 1985 to February 1993, Mr.
Holliman served in various capacities, lastly as Senior Managing Director, of
Valley National Investors, Inc., the venture capital subsidiary of Valley
National Bank of Arizona. Mr. Holliman is also a director of Pilgrim America
Capital Corporation, a financial services company, OrthoLogic Corporation, a
medical device company, and DenAmerica Corporation, a restaurant management
company.
BOARD OF DIRECTORS' MEETINGS AND COMMITTEES
During 1997, the Company's Board of Directors met a total of seven
times. Standing committees of the Board currently include a Compensation
Committee and an Audit Committee. The Company does not have a Nominating
Committee or a committee performing a similar function. Attendance at board and
committee meetings was 100%.
Dr. Wolfe and Messrs. Dishlip and Dreyfous are presently members of the
Compensation Committee. The Compensation Committee did not meet during fiscal
year 1997. The purpose of the Compensation Committee is to review and set the
compensation, including salary and bonuses, for the Company's Chief Executive
Officer and, at its discretion, certain other officers of the Company.
Messrs. Dishlip, Dreyfous, and Holliman are members of the Audit
Committee. The Audit Committee met once during fiscal year 1997. The Audit
Committee reviews auditing issues of the Company, including the Company's choice
of independent public accounting firms and the scope of the annual audit, and
makes recommendations to the Board of Directors. This committee also has the
responsibility to review proposed changes in major accounting policies and to
report to the Board on issues affecting the integrity of published financial
reports and other financial related matters.
4
<PAGE> 8
DIRECTORS AND EXECUTIVE OFFICERS
The directors and executive officers of the Company are:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Allan M. Wolfe, M.D. 60 Chief Executive Officer, President, Chairman of
the Board and Director
Robert W. Littlewood 63 Senior Vice President--Sales and Marketing
Murray E. Rudin 35 Chief Financial Officer and Director of
Business Development
Cynthia B. Perz 41 Vice President of Engineering
Stephen J. Hart 37 Director of Research and Development and
Secretary
Michael N. Dalton 38 Director of Technical Business Development
Alan S. Dishlip 46 Director
James C. Dreyfous 43 Director
John M. Holliman, III 44 Director
</TABLE>
Each of the Company's directors has been elected or appointed to serve
until the next annual meeting of shareholders. There are no arrangements or
understandings between any director and any other person pursuant to which any
person was elected or nominated as a director. The Company's executive officers
serve at the discretion of the Board of Directors. See "Executive
Compensation--Employment Agreements."
Set forth below are brief descriptions of the business experience of
Messrs. Littlewood and Rudin, Ms. Perz, and Messrs. Hart and Dalton, who do not
serve as directors of the Company. For information concerning the business
experience of Dr. Wolfe and Messrs. Dishlip, Dreyfous, and Holliman, see
"Election of Directors" above.
Robert W. Littlewood has been Senior Vice President--Sales and Marketing
of the Company since October 1996. From 1983 to September 1996, Mr. Littlewood
was a principal of The Strategy Resource Group, where he developed business and
marketing plans, organized and trained sales forces, and instituted management
systems for a variety of clients. From 1982 to 1983, Mr. Littlewood served as an
Executive Vice President for Caremark Inc., where he was responsible for sales,
operations, marketing and strategic planning. Mr. Littlewood has held key
management positions with both Arthur Young & Co. and General Electric. Mr.
Littlewood holds a B.S. degree in mechanical engineering from the University of
Massachusetts.
Murray E. Rudin has been Chief Financial Officer and Director of
Business Development of the Company since June 1994, and Director of Finance and
Business Development of the Company from January 1993 to June 1994. From 1990 to
December 1992, Mr. Rudin was a principal of Valley National Investors, Inc., the
venture capital subsidiary of Valley National Bank of Arizona, where he was
engaged in investment origination, evaluation, structuring, and monitoring. From
1986 to 1990, Mr. Rudin was a corporate attorney with the firm of Riordan &
McKinzie in Los Angeles and Costa Mesa, California, with a practice emphasizing
private and public securities transactions. Mr. Rudin holds a J.D. degree from
Harvard Law School and a B.S. degree in electrical engineering from the
University of Rochester.
5
<PAGE> 9
Cynthia B. Perz has been Vice President of Engineering of the Company
since October, 1996, Director of Software Engineering from August 1995 to
September 1996, and Software Manager from May 1993 to July 1995. From 1991 to
April 1993, Ms. Perz was a Senior Systems Engineer at CR Technology, a designer
and manufacturer of systems for machine vision and computer-aided inspection.
Ms. Perz also has over a decade of experience in the aerospace industry,
focusing on systems engineering and project management. Her aerospace experience
includes work with Hughes Corporation, Rockwell Corporation, and Aerojet
ElectroSystems. Ms. Perz holds a M.S. degree in electrical engineering from the
University of Southern California with a specialization in signal processing and
a B.S. degree in electrical engineering from California Polytechnic Institute,
Pomona.
Stephen J. Hart has been Director of Research and Development of the
Company since he co-founded the Company in April 1988 and Secretary of the
Company since June 1992. From 1985 to 1988, Mr. Hart performed research in
astrophysics and applied optics at Imperial College of Science and Technology,
University of London. In 1984 and 1985, Mr. Hart was (i) a project leader at
Icon Holographics Limited in London and (ii) a co-founder of Holoplex Systems, a
United Kingdom company which acquired the intellectual property of Icon
Holographics and is now an inactive subsidiary of Voxel. From 1981 to 1984, Mr.
Hart performed graduate work in astrophysics at Imperial College of Science and
Technology. Mr. Hart received a B.Sc. degree in Physics and Astronomy from Queen
Mary College, University of London.
Michael N. Dalton has been Director of Technical Business Development of
the Company since July 1995 and, prior to that date, was Director of Computing
since co-founding the Company in April 1988. From 1986 to 1988, Mr. Dalton was a
research associate in the Department of Photogrammetry at University College,
London developing software for analysis and synthesis of terrain imagery from
satellite data. From 1985 to 1986, Mr. Dalton was a software designer for Virgin
Computer Graphics in London. In 1984 and 1985, Mr. Dalton was (i) computer
systems manager at Icon Holographics Limited where he was involved in developing
certain of the technology on which the Voxbox was based and (ii) a co-founder of
Holoplex Systems. From 1981 to 1984, Mr. Dalton performed graduate work in
interplanetary atmospheric physics at Imperial College of Science and
Technology, University of London. Mr. Dalton received a B.Sc. degree in Physics
from Queen Mary College, University of London.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The table below sets forth information regarding compensation paid by
the Company during each of the Company's last three fiscal years to each
executive officer of the Company (the "Named Officers") who received salary and
bonus payments in excess of $100,000 during the year ended December 31, 1997.
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
----------------------
AWARDS(1)
ANNUAL COMPENSATION ---------------------
------------------ SECURITIES UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY($) OPTIONS(#)
- --------------------------- ---- --------- ---------------------
<S> <C> <C> <C>
Allan M. Wolfe, M.D. 1997 $175,000 --
President and Chief Executive Officer 1996 175,000 --
1995 175,000 --
Robert W. Littlewood 1997 $149,500 --
Senior Vice President - Sales & Marketing 1996 24,000 --
1995 -- --
</TABLE>
6
<PAGE> 10
(1) The Company has no stock appreciation rights plan, restricted stock awards
or long-term incentive plan.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FY-END OPTION/SAR VALUES
The table below sets forth information regarding (i) the exercise of
Common Stock options by the Named Officers during the fiscal year ended December
31, 1997, (ii) the number of unexercised options held by the Named Officers as
of December 31, 1997, and (iii) the value as of December 31, 1997 of unexercised
in-the-money options held by the Named Officers.
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS OPTIONS
AT FISCAL AT FISCAL
YEAR-END (#) YEAR-END ($)
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE(1)
---- ----------- ----------- ------------- ----------------
<S> <C> <C> <C> <C>
Allan M. Wolfe, M.D. 0 $0 253,355/0 1,149,335/0
Robert W. Littlewood 0 $0 23,228/19,048 21,102/27,239
</TABLE>
(1) Value per share is determined based on the spread between the option
exercise price per share and the closing bid price for Common Stock as
of December 31, 1997.
Director Compensation
Pursuant to separate option agreements, the Company has granted to each
of the non-employee directors (Messrs. Dishlip, Dreyfous, and Holliman) an
option to acquire 3,239 shares of Common Stock. With respect to Messrs. Dishlip
and Dreyfous, the option agreements are dated as of October 29, 1992 and provide
for an exercise price of $0.51 per share. Mr. Holliman's agreement is dated as
of March 17, 1994 and provides for an exercise price of $1.03 per share.
As of January 12, 1995, the Company granted to each of the non-employee
directors an option to acquire 5,000 shares of Common Stock. Each of such option
grants was made pursuant to a separate option agreement as of that date and each
grant provided for an exercise price of $5.31 per share. As of January 25, 1996,
the Company granted to each of the non-employee directors an option to acquire
3,761 shares of Common Stock. Each of such option grants was made pursuant to a
separate option agreement as of that date and each grant provided for an
exercise price of $2.625 per share.
All of the option agreements with directors referenced above in this
section provide that one-half of the options awarded thereby vest as of the date
of the respective agreement and the remaining options vest as of the one year
anniversary thereof.
Except as described above, the Company's directors do not receive fees
for their services as directors but are reimbursed for expenses incurred by them
in connection with attendance at Board meetings.
7
<PAGE> 11
EMPLOYMENT AGREEMENTS
In June 1994, the Company and Dr. Wolfe entered into an employment
agreement which expired in 1997. During the term of the employment agreement and
for three years after its termination, Dr. Wolfe has agreed not to participate
in any business engaged in the development, manufacturing, or marketing of
volumetric image display systems for radiologic applications or holographic
imaging systems. Although not a party to an employment agreement with the
Company, Mr. Hart has agreed to a similar non-competition provision for the
duration of his employment by Voxel and three years thereafter.
The Company enters into confidentiality agreements with its full-time
employees (including its executive officers) that prohibit disclosure of
confidential information to anyone outside of the Company both during and
subsequent to employment. Such agreements also require disclosure to the Company
of ideas, discoveries, and inventions relating to or resulting from the
employee's work for the Company and assignment to the Company of all proprietary
rights to such ideas, discoveries, or inventions.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Prior to February 1994, the Company did not have any compensation
committee or other committee of its Board of Directors performing equivalent
functions. In February 1994, the Board of Directors created a Compensation
Committee consisting of Dr. Wolfe (the Company's President and CEO) and Messrs.
Dishlip and Dreyfous. Dr. Wolfe's 1994 employment agreement was considered and
approved by the Board of Directors, in which consideration and approval process
neither Dr. Wolfe nor Mr. Dreyfous participated or voted.
Dr. Wolfe and Mr. Dreyfous are general partners of the general partner
of both Utah Ventures, a shareholder of the Company, and Utah Ventures II. Mr.
Dishlip is a general partner of the general partner of Utah Ventures II. Dr.
Wolfe and Mr. Dreyfous each participate in the determination of the other's
compensation for services to Utah Ventures in the following manner. Dr. Wolfe,
Mr. Dreyfous, and a third individual not affiliated with Voxel comprise the
Management Committee of Utah Ventures. Compensation of Management Committee
members is determined by a unanimous vote of the Management Committee, with the
member whose compensation is being determined not voting. Dr. Wolfe and Messrs.
Dreyfous and Dishlip participate in the determination of each other's
compensation for services to Utah Ventures II through deliberation and mutual
agreement, without participation by the person whose compensation is being
determined.
STOCK OPTION PLANS
The Company's 1992 Stock Plan (the "1992 Plan") was adopted by the Board
of Directors in 1992 and approved by the Company's shareholders in 1993 to
attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to employees, directors, and
consultants of the Company, and to promote the success of the Company's
business. Options granted under the 1992 Plan may be either incentive stock
options as defined in Section 422A of the Internal Revenue Code of 1986, as
amended, or non-qualified stock options, at the discretion of the Board. The
Company has reserved 563,616 shares of Common Stock for issuance under the 1992
Plan. As of December 31, 1997, options to purchase an aggregate of 541,921
shares were outstanding under the 1992 Plan at a weighted average exercise price
of $2.10, of which options to purchase an aggregate of 441,416 shares were
immediately exercisable at a weighted average exercise price of $1.64.
8
<PAGE> 12
The Company's 1994 Executive Stock Option Plan (the "1994 Plan") was
adopted by the Board of Directors and approved by the Company's shareholders in
1994 for the same purposes as the 1992 Plan. Option recipients under the 1994
Plan are limited to executive officers of the Company. Options granted under the
1994 Plan may be either incentive stock options as defined in Section 422A of
the Internal Revenue Code of 1986, as amended, or non-qualified stock options,
at the discretion of the Board, and in either case may contain performance-based
vesting criteria. The Company has reserved 310,961 shares of Common Stock for
issuance under the 1994 Plan. As of December 31, 1997, options to purchase an
aggregate of 117,500 shares were outstanding at a weighted average exercise
price of $3.04, 62,931 of which were immediately exercisable at a weighted
average exercise price of $2.77.
Both plans may be administered by the Board of Directors or a committee
of the Board, which committee is required to be constituted to comply with
Section 16(b) of the Exchange Act and applicable laws. Both plans are currently
administered by the Board. The entity administering each plan has the power to
determine the terms of any options granted thereunder, including the exercise
price, the number of shares subject to the option, and the exercisability
thereof. Options granted under either plan are generally not transferable, and
each option is exercisable during the lifetime of the optionee only by such
optionee. The exercise price of all incentive stock options granted under either
plan must be at least equal to the fair market value of the shares of Common
Stock on the date of grant, and non-qualified stock options granted under the
1992 Plan must have an exercise price of at least 85% of the fair market value
of the shares of Common Stock on the date of grant. With respect to any
participant who owns stock possessing more than 10% of the voting power of all
classes of stock of the Company, the exercise price of any stock option granted
under the 1992 Plan and any incentive stock option granted under the 1994 Plan
must equal at least 110% of the fair market value on the grant date and the
maximum term of any option granted under either plan must not exceed five years.
The term of all other options granted under either plan may not exceed ten
years. The specific terms of each option grant are approved by the Board of
Directors and are reflected in a written stock option agreement.
LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS
The Company's Articles of Incorporation (i) eliminate the liability of
the directors of the Company for monetary damages to the fullest extent
permitted by California law and (ii) authorize the Company to indemnify its
officers and directors to the fullest extent permitted by California law. The
Company has entered into indemnification agreements with its directors and
executive officers. Such agreements provide broad indemnification against
expenses (including legal fees, judgments, and Company-approved settlements)
incurred in connection with any civil or criminal action which arises from the
performance of duties for the Company. The agreements also provide that the
Company will indemnify such persons to the fullest extent permitted by law,
notwithstanding that such indemnification is not specifically authorized by the
agreement, the Company's Articles of Incorporation, the Company's Bylaws or
statute. The indemnification agreements apply to any action taken by the
indemnitee while serving as an officer or director of the Company, whether
occurring before or after the date of the agreement. The agreements do not
provide indemnification for any acts or omissions from which a director may not
be relieved of liability under the California Corporations Code.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Securities Act") may be permitted to directors, officers, or
persons controlling the Company pursuant to the foregoing provisions, the
Company has been informed that in the opinion of the Securities and Exchange
Commission (the "SEC") such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable.
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<PAGE> 13
KEY MAN INSURANCE
The Company is the sole beneficiary of a $1 million term life insurance
policy covering Mr. Hart.
AMENDMENT OF STOCK OPTION PLAN
PROPOSAL TO APPROVE AMENDMENT TO THE COMPANY'S 1992 STOCK PLAN
TO INCREASE THE NUMBER OF SHARES OF COMMON STOCK AVAILABLE UNDER THE PLAN
On August 26, 1997, the Board of Directors of the Company unanimously
adopted a resolution recommending that the number of shares of Common Stock
available for grant under the Company's 1992 Plan be increased from a total of
563,616 to 1,063,616.
The 1992 Plan was adopted to attract and retain the best available
personnel for positions of substantial responsibility, to provide additional
incentive to employees, directors, and consultants of the Company, and to
promote the success of the Company's business. Current information regarding the
terms of the 1992 Plan and grants made thereunder is provided under the caption
"Executive Compensation - Stock Option Plans" above. A complete copy of the 1992
Plan, as proposed to be amended, is contained in Appendix A below.
The number of shares underlying options outstanding under the 1992 Plan
is approaching the maximum number of shares available for grant under that plan.
In order for the Company to continue to be able to use the 1992 Plan for its
intended purposes, by granting additional options, the number of shares
available under the plan must be increased. The Board has carefully considered
the Company's long term staffing needs, as well as the importance of equity
incentives in recruiting and retaining talented personnel, in determining the
magnitude of the proposed increase in available shares under the 1992 Plan.
Accordingly, the Board of Directors recommends a vote for Proposal No. 3.
ADDITIONAL INFORMATION
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's executive
officers, directors, and persons who own more than 10% of the Company's Common
Stock (collectively, "Reporting Persons") to file reports of ownership of
Company securities and changes in such ownership with the SEC and the National
Association of Securities Dealers, Inc. Reporting Persons are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms they
file.
Based solely on its review of the copies of such forms received or
written representations from Reporting Persons, the Company believes that with
respect to the fiscal year ended December 31, 1997 all Reporting Persons
complied with all applicable filing requirements except that Mr. Rudin and Ms.
Perz, executive officers, each filed a report of a single transaction late.
PROXY EXPENSES
The entire cost of preparing, assembling, printing, and mailing this
Proxy Statement and the enclosed form of Proxy, and the cost of soliciting
Proxies with respect to the Annual Meeting, will be borne by the Company. The
Company will request banks and brokers to solicit their customers who
beneficially own shares listed of record in names of nominees, and will
reimburse those banks and brokers for their reasonable out-of-pocket expenses of
such solicitations. The
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<PAGE> 14
original solicitation of Proxies by mail may be supplemented by telephone,
telegram, and personal solicitation by officers and other regular employees of
the Company, but no additional compensation will be paid to such individuals.
1997 ANNUAL REPORT TO SHAREHOLDERS
The 1997 Annual Report to Shareholders of the Company, which report
includes financial statements for the fiscal years ended December 31, 1996 and
1997, is being sent to shareholders concurrently with the mailing of this Proxy
Statement. The Annual Report to Shareholders is not to be considered as part of
the proxy solicitation material.
SHAREHOLDER PROPOSALS
It is presently anticipated that the 1999 Annual Meeting of Shareholders
will be held in May 1999. Shareholders desiring to exercise their rights under
the proxy rules of the SEC to submit proposals for consideration by the
shareholders at the 1999 Annual Meeting are advised that their proposals must be
received by the Company no later than 120 days prior to the 1999 Annual Meeting
in order to be eligible for inclusion in the Company's proxy statement and form
of proxy relating to that meeting.
INDEPENDENT PUBLIC ACCOUNTANTS
For the past three years, the Company has engaged Ernst & Young LLP as
its independent public accountants to perform the annual audit of the Company's
financial statements. Subject to ratification by the shareholders, the Board of
Directors has reappointed Ernst & Young LLP as the Company's independent
accountants for the fiscal year ending December 31, 1998. The Board of Directors
recommends that shareholders vote for Proposal 2. A representative of Ernst &
Young LLP is expected to be present at the Annual Meeting to respond to
appropriate questions and, if he or she so desires, to comment on the Company's
financial statements.
OTHER MATTERS
The Board of Directors is not aware of any business which may be
properly presented for action at the Annual Meeting and which is required to be
disclosed in this Proxy Statement except the matters set forth in the Notice and
described in this Proxy Statement. Unless otherwise directed, all shares
represented by the persons named in the accompanying Proxy will be voted in
favor of the proposals described in this Proxy Statement. If any other matters
come before the Annual Meeting, including such matters incident to the conduct
of the meeting and any shareholder proposal omitted from the Proxy Statement and
Proxy pursuant to the Proxy rules of the SEC, the persons named in the
accompanying Proxy will vote on those matters according to their best judgment.
By Order of the Board of Directors,
STEPHEN J. HART
-------------------------------------
Laguna Hills, California Stephen J. Hart, Secretary
April 3, 1998
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<PAGE> 15
APPENDIX A: VOXEL 1992 STOCK PLAN
1. Purposes of the Plan. The purposes of this Stock Plan are to attract
and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees and Consultants of
the Company and its Subsidiaries and to promote the success of the Company's
business. Options granted under the Plan may be incentive stock options (as
defined under Section 422 of the Code) or non-statutory stock options, as
determined by the Administrator at the time of grant of an option and subject to
the applicable provisions of Section 422 of the Code, as amended, and the
regulations promulgated thereunder. Stock purchase rights may also be granted
under the Plan.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or any of its Committees
appointed pursuant to Section 4 of the Plan.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Committee" means the Committee appointed by the Board of
Directors in accordance with paragraph (a) of Section 4 of the Plan.
(e) "Common Stock" means the Common Stock of the Company.
(f) "Company" means Voxel, a California corporation.
(g) "Consultant" means any person, including an advisor, who is
engaged by the Company or any Parent or Subsidiary to render services and is
compensated for such services, and any director of the Company whether
compensated for such services or not.
(h) "Continuous Status as an Employee" means the absence of any
interruption or termination of the employment relationship by the Company or any
Subsidiary. Continuous Status as an Employee shall not be considered interrupted
in the case of: (i) sick leave; (ii) military leave; (iii) any other leave of
absence approved by the Board, provided that such leave is for a period of not
more than ninety (90) days, unless reemployment upon the expiration of such
leave is guaranteed by contract or statute, or unless provided otherwise
pursuant to Company policy adopted from time to time; or (iv) in the case of
transfers between locations of the Company or between the Company, its
Subsidiaries or its successor.
(i) "Employee" means any person, including officers and directors,
employed by the Company or any Parent or Subsidiary of the Company. The payment
of a director's fee by the Company shall not be sufficient to constitute
"employment" by the Company.
(j) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(k) "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or a national market system including without limitation the National
Market System of the National Association of Securities Dealers, Inc. Automated
Quotation ("NASDAQ") System, its Fair Market
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Value shall be the closing sales price for such stock (or the closing bid, if no
sales were reported, as quoted on such system or exchange or the exchange with
the greatest volume of trading in Common Stock for the last market trading day
prior to the time of determination) as reported in the Wall Street Journal or
such other source as the Administrator deems reliable;
(ii) If the Common Stock is quoted on the NASDAQ System (but not
on the National Market System thereof) or regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean between the high and low asked prices for the Common Stock; or
(iii) In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith by the
Administrator.
(l) "Incentive Stock Option" means an Option intended to qualify as
an incentive stock option within the meaning of Section 422 of the Code.
(m) "Nonstatutory Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.
(n) "Option" means a stock option granted pursuant to the Plan.
(o) "Optioned Stock" means the Common Stock subject to an Option.
(p) "Optionee" means an Employee or Consultant who receives an
Option.
(q) "Parent" means a "parent corporation", whether now or hereafter
existing, as defined in Section 425(e) of the Code.
(r) "Plan" means this 1992 Stock Plan.
(s) "Restricted Stock" means shares of Common Stock acquired pursuant
to a grant of Stock Purchase Rights under Section 11 below.
(t) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 13 of the Plan.
(u) "Stock Purchase Right" means a right to purchase Common Stock
pursuant to the Plan or the right to receive a bonus of Common Stock for past
services.
(v) "Subsidiary" means a "subsidiary corporation", whether now or
hereafter existing, as defined in Section 425(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 13 of
the Plan, the maximum aggregate number of shares which may be optioned and sold
under the Plan is 1,063,616 shares of Common Stock. The shares may be
authorized, but unissued, or reacquired Common Stock.
If an Option should expire or become unexercisable for any reason
without having been exercised in full, the unpurchased Shares which were subject
thereto shall, unless the Plan shall have been terminated, become available for
future grant under the Plan.
4. Administration of the Plan.
(a) Procedure.
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<PAGE> 17
(i) Administration With Respect to Directors and Officers. With
respect to grants of Options or Stock Purchase Rights to Employees who are also
officers or directors of the Company, the Plan shall be administered by (A) the
Board if the Board may administer the Plan in compliance with Rule 16b-3
promulgated under the Exchange Act or any successor thereto ("Rule 16b-3") with
respect to a plan intended to qualify thereunder as a discretionary plan, or (B)
a Committee designated by the Board to administer the Plan, which Committee
shall be constituted in such a manner as to permit the Plan to comply with Rule
16b-3 with respect to a plan intended to qualify thereunder as a discretionary
plan. Once appointed, such Committee shall continue to serve in its designated
capacity until otherwise directed by the Board. From time to time the Board may
increase the size of the Committee and appoint additional members thereof,
remove members (with or without cause) and appoint new members in substitution
therefor, fill vacancies, however caused, and remove all members of the
Committee and thereafter directly administer the Plan, all to the extent
permitted by Rule 16b-3 with respect to a plan intended to qualify thereunder as
a discretionary plan.
(ii) Multiple Administrative Bodies. If permitted by Rule 16b-3,
the Plan may be administered by different bodies with respect to directors,
non-director officers and Employees who are neither directors nor officers.
(iii) Administration With Respect to Consultants and Other
Employees. With respect to grants of Options or Stock Purchase Rights to
Employees or Consultants who are neither directors nor officers of the Company,
the Plan shall be administered by (A) the Board or (B) a Committee designated by
the Board, which Committee shall be constituted in such a manner as to satisfy
the legal requirements relating to the administration of incentive stock option
plans, if any, of California corporate and securities laws and of the Code (the
"Applicable Laws"). Once appointed, such Committee shall continue to serve in
its designated capacity until otherwise directed by the Board. From time to time
the Board may increase the size of the Committee and appoint additional members
thereof, remove members (with or without cause) and appoint new members in
substitution therefor, fill vacancies, however caused, and remove all members of
the Committee and thereafter directly administer the Plan, all to the extent
permitted by the Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of the
Plan and in the case of a Committee, the specific duties delegated by the Board
to such Committee, the Administrator shall have the authority, in its
discretion:
(i) to determine the Fair Market Value of the Common Stock, in
accordance with Section 2(k) of the Plan;
(ii) to select the officers, Consultants and Employees to whom
Options and Stock Purchase Rights may from time to time be granted hereunder;
(iii) to determine whether and to what extent Options and Stock
Purchase Rights or any combination thereof, are granted hereunder;
(iv) to determine the number of shares of Common Stock to be
covered by each such award granted hereunder;
(v) to approve forms of agreement for use under the Plan;
(vi) to determine the terms and conditions, not inconsistent with
the terms of the Plan, of any award granted hereunder (including, but not
limited to, the share price and any restriction or limitation of any Option or
other award and/or the shares of Common Stock relating
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<PAGE> 18
thereto, based in each case on such factors as the Administrator shall
determine, in its sole discretion);
(vii) to determine whether and under what circumstances an Option
may be settled in cash under subsection 9(f) instead of Common Stock;
(viii) to reduce the exercise price of any Option to the then
current Fair Market Value if the Fair Market Value of the Common Stock covered
by such Option shall have declined since the date the Option was granted; and
(ix) to determine the terms and restrictions applicable to Stock
Purchase Rights and the Restricted Stock purchased by exercising such Stock
Purchase Rights.
(c) Effect of Committee's Decision. All decisions, determinations and
interpretations of the Administrator shall be final and binding on all Optionees
and any other holders of any Options.
5. Eligibility.
(a) Nonstatutory Stock Options may be granted to Employees and
Consultants. Incentive Stock Options may be granted only to Employees. An
Employee or Consultant who has been granted an Option may, if he is otherwise
eligible, be granted an additional Option or Options.
(b) Each Option shall be designated in the written option agreement
as either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designations, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Options designated as Incentive Stock
Options are exercisable for the first time by any Optionee during any calendar
year (under all plans of the Company or any Parent or Subsidiary) exceeds
$100,000, such excess Options shall be treated as Nonstatutory Stock Options.
(c) For purposes of Section 5(b), Incentive Stock Options shall be
taken into account in the order in which they were granted, and the Fair Market
Value of the Shares shall be determined as of the time the Option with respect
to such Shares is granted.
(d) The Plan shall not confer upon any Optionee any right with
respect to continuation of employment or consulting relationship with the
Company, nor shall it interfere in any way with his right or the Company's right
to terminate his employment or consulting relationship at any time, with or
without cause.
6. Term of Plan. The Plan shall become effective upon the earlier to
occur of its adoption by the Board of Directors or its approval by the
shareholders of the Company as described in Section 19 of the Plan. It shall
continue in effect for a term of ten (10) years unless sooner terminated under
Section 15 of the Plan.
7. Term of Option. The term of each Option shall be the term stated in
the Option Agreement; provided, however, that in the case of an Incentive Stock
Option or a Nonstatutory Stock Option, the term shall be no more than ten (10)
years from the date of grant thereof or such shorter term as may be provided in
the Option Agreement. However, in the case of an Option granted to an Optionee
who, at the time the Option is granted, owns stock representing more than ten
percent (10%) of the voting power of all classes of stock of the Company or any
Parent or Subsidiary, the term of the Option shall be five (5) years from the
date of grant thereof or such shorter term as may be provided in the Option
Agreement.
8. Option Exercise Price and Consideration.
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(a) The per share exercise price for the Shares to be issued pursuant
to exercise of an Option shall be such price as is determined by the Board, but
shall be subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time of the
grant of such Incentive Stock Option, owns stock representing more than ten
percent (10%) of the voting power of all classes of stock of the Company or any
Parent or Subsidiary, the per Share exercise price shall be no less than 110% of
the Fair Market Value per Share on the date of grant.
(B) granted to any Employee, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on
the date of grant.
(ii) In the case of a Nonstatutory Stock Option
(A) granted to a person who, at the time of the
grant of such Option, owns stock representing more than ten percent (10%) of the
voting power of all classes of stock of the Company or any Parent or Subsidiary,
the per Share exercise price shall be no less than 110% of the Fair Market Value
per Share on the date of the grant.
(B) granted to any person, the per Share exercise
price shall be no less than 85% of the Fair Market Value per Share on the date
of grant.
(b) The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, shall be determined by
the Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant) and may consist entirely of (1) cash, (2)
check, (3) promissory note, (4) other Shares which (x) in the case of Shares
acquired upon exercise of an Option either have been owned by the Optionee for
more than six months on the date of surrender or were not acquired, directly or
indirectly, from the Company, and (y) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised, (5) authorization from the Company to retain from the
total number of Shares as to which the Option is exercised that number of Shares
having a Fair Market Value on the date of exercise equal to the exercise price
for the total number of Shares as to which the Option is exercised, (6) delivery
of a properly executed exercise notice together with irrevocable instructions to
a broker to promptly deliver to the Company the amount of sale or loan proceeds
required to pay the exercise price, (7) delivery of an irrevocable subscription
agreement for the Shares which irrevocably obligates the option holder to take
and pay for the Shares not more than twelve months after the date of delivery of
the subscription agreement, (8) any combination of the foregoing methods of
payment, or (9) such other consideration and method of payment for the issuance
of Shares to the extent permitted under Applicable Laws. In making its
determination as to the type of consideration to accept, the Board shall
consider if acceptance of such consideration may be reasonably expected to
benefit the Company (Section 315(b) of the California General Corporation law).
9. Exercise of Option.
(a) Procedure for Exercise; Rights as a Shareholder. Any Option
granted hereunder shall be exercisable at such times and under such conditions
as determined by the Board, including performance criteria with respect to the
Company and/or the Optionee, and as shall be permissible under the terms of the
Plan.
An Option may not be exercised for a fraction of a Share.
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An Option shall be deemed to be exercised when written notice of
such exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company. Full payment may, as authorized by the Board, consist of any
consideration and method of payment allowable under Section 8(b) of the Plan.
Until the issuance (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any
other rights as a shareholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Company shall issue (or cause to
be issued) such stock certificate promptly upon exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 13 of the Plan.
Exercise of an Option in any manner shall result in a decrease in
the number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.
(b) Termination of Employment. In the event of termination of an
Optionee's consulting relationship or Continuous Status as an Employee with the
Company (as the case may be), such Optionee may, but only within ninety (90)
days (or such other period of time of not less than thirty (30) days as is
determined by the Board, with such determination in the case of an Incentive
Stock Option being made at the time of grant of the Option and not exceeding
ninety (90) days) after the date of such termination (but in no event later than
the expiration date of the term of such Option as set forth in the Option
Agreement), exercise his Option to the extent that Optionee was entitled to
exercise it at the date of such termination. To the extent that Optionee was not
entitled to exercise the Option at the date of such termination, or if Optionee
does not exercise such Option to the extent so entitled within the time
specified herein, the Option shall terminate.
(c) Disability of Optionee. Notwithstanding the provisions of Section
9(b) above, in the event of termination of an Optionee's consulting relationship
or Continuous Status as an Employee as a result of his total and permanent
disability (as defined in Section 22(e)(3) of the Code), Optionee may, but only
within twelve (12) months from the date of such termination (but in no event
later than the expiration date of the term of such Option as set forth in the
Option Agreement), exercise the Option to the extent otherwise entitled to
exercise it at the date of such termination. To the extent that Optionee was not
entitled to exercise the Option at the date of termination, or if Optionee does
not exercise such Option to the extent so entitled within the time specified
herein, the Option shall terminate.
(d) Death of Optionee. In the event of the death of an Optionee, the
Option may be exercised, at any time within twelve (12) months following the
date of death (but in no event later than the expiration date of the term of
such Option as set forth in the Option Agreement), by the Optionee's estate or
by a person who acquired the right to exercise the Option by bequest or
inheritance, but only to the extent the Optionee was entitled to exercise the
Option at the date of death. To the extent that Optionee was not entitled to
exercise the Option at the date of termination, or if Optionee does not exercise
such Option to the extent so entitled within the time specified herein, the
Option shall terminate.
(e) Rule 16b-3. Options granted to persons subject to Section 16(b)
of the Exchange Act must comply with Rule 16b-3 and shall contain such
additional conditions or restrictions as may be required thereunder to qualify
for the maximum exemption from Section 16 of the Exchange Act with respect to
Plan transactions.
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(f) Buyout Provisions. The Administrator may at any time offer to
buy out for a payment in cash or Shares, an Option previously granted, based on
such terms and conditions as the Administrator shall establish and communicate
to the Optionee at the time that such offer is made.
10. Non-Transferability of Options. The Option may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee.
11. Stock Purchase Rights.
(a) Rights to Purchase. Stock Purchase Rights may be issued either
alone, in addition to, or in tandem with other awards granted under the Plan
and/or cash awards made outside of the Plan. After the Administrator determines
that it will offer Stock Purchase Rights under the Plan, it shall advise the
offeree in writing of the terms, conditions and restrictions related to the
offer, including the number of Shares that such person shall be entitled to
purchase, the price to be paid (which price shall not be less than 85% of the
Fair Market Value of the Shares as of the date of the offer), and the time
within which such person must accept such offer, which shall in no event exceed
thirty (30) days from the date upon which the Administrator made the
determination to grant the Stock Purchase Right. The offer shall be accepted by
execution of a stock purchase agreement or stock bonus agreement in the form
determined by the Administrator. Shares purchased pursuant to the grant of a
Stock Purchase Right shall be referred to herein as "Restricted Stock."
(b) Repurchase Option. Unless the Administrator determines
otherwise, the stock purchase agreement or stock bonus agreement shall grant the
Company a repurchase option exercisable upon the voluntary or involuntary
termination of the purchaser's employment with the Company for any reason
(including death or disability). The purchase price for Shares repurchased
pursuant to the stock purchase agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the purchaser
to the Company. The repurchase option shall lapse at such rate as the
Administrator may determine.
(c) Other Provisions. The stock purchase agreement or stock bonus
agreement shall contain such other terms, provisions and conditions not
inconsistent with the Plan as may be determined by the Administrator in its sole
discretion. In addition, the provisions of stock purchase agreements or stock
bonus agreements need not be the same with respect to each purchaser.
(d) Rights as a Shareholder. Once the Stock Purchase Right is
exercised, the purchaser shall have the rights equivalent to those of a
shareholder, and shall be a shareholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised, except as provided in Section 13
of the Plan.
12. Stock Withholding to Satisfy Withholding Tax Obligations. At the
discretion of the Administrator, Optionees may satisfy withholding obligations
as provided in this paragraph. When an Optionee incurs tax liability in
connection with an Option or Stock Purchase Right, which tax liability is
subject to tax withholding under applicable tax laws, and the Optionee is
obligated to pay the Company an amount required to be withheld under applicable
tax laws, the Optionee may satisfy the withholding tax obligation by electing to
have the Company withhold from the Shares to be issued upon exercise of the
Option, or the Shares to be issued in connection with the Stock Purchase Right,
if any, that number of Shares having a Fair Market Value equal to the amount
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required to be withheld. The Fair Market Value of the Shares to be withheld
shall be determined on the date that the amount of tax to be withheld is to be
determined (the "Tax Date").
All elections by an Optionee to have Shares withheld for this purpose
shall be made in writing in a form acceptable to the Administrator and shall be
subject to the following restrictions:
(a) the election must be made on or prior to the applicable Tax
Date;
(b) once made, the election shall be irrevocable as to the
particular Shares of the Option or Stock Purchase Right as to which the election
is made;
(c) all elections shall be subject to the consent or disapproval of
the Administrator; and
(d) if the Optionee is subject to Rule 16b-3, the election must
comply with the applicable provisions of Rule 16b-3 and shall be subject to such
additional conditions or restrictions as may be required thereunder to qualify
for the maximum exemption from Section 16 of the Exchange Act with respect to
Plan transactions.
In the event the election to have Shares withheld is made by an Optionee
and the Tax Date is deferred under Section 83 of the Code because no election is
filed under Section 83(b) of the Code, the Optionee shall receive the full
number of Shares with respect to which the Option or Stock Purchase Right is
exercised but such Optionee shall be unconditionally obligated to tender back to
the Company the proper number of Shares on the Tax Date.
13. Adjustments Upon Changes in Capitalization or Merger. Subject to any
required action by the shareholders of the Company, the number of shares of
Common Stock covered by each outstanding Option, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options have yet been granted or which have been returned to the Plan
upon cancellation or expiration of an Option, as well as the price per share of
Common Stock covered by each such outstanding Option, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option.
In the event of the proposed dissolution or liquidation of the
Company, the Board shall notify the Optionee at least fifteen (15) days prior to
such proposed action. To the extent it has not been previously exercised, the
Option will terminate immediately prior to the consummation of such proposed
action. In the event of a merger of the Company with or into another
corporation, the Option shall be assumed or an equivalent option shall be
substituted by such successor corporation or a parent or subsidiary of such
successor corporation. In the event that such successor corporation does not
agree to assume such Option or to substitute an equivalent option, the Board
shall notify the Optionee that the Option shall be exercisable for a period of
fifteen (15) days from the date of such notice to the extent that Optionee was
entitled to exercise it upon the expiration of such period, and, to the extent
that Optionee was not entitled to exercise such Option upon the expiration of
such period, or if Optionee does not exercise such Option to the extent so
entitled within such period, the Option shall terminate.
A-8
<PAGE> 23
14. Time of Granting Options. The date of grant of an Option shall, for
all purposes, be the date on which the Administrator makes the determination
granting such Option, or such other date as is determined by the Board. Notice
of the determination shall be given to each Employee or Consultant to whom an
Option is so granted within a reasonable time after the date of such grant.
15. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend,
alter, suspend or discontinue the Plan, but no amendment, alteration, suspension
or discontinuation shall be made which would impair the rights of any Optionee
under any grant theretofore made, without his or her consent. In addition, to
the extent necessary and desirable to comply with Rule 16b-3 under the Exchange
Act or with Section 422 of the Code (or any other applicable law or regulation,
including the requirements of the NASD or an established stock exchange), the
Company shall obtain shareholder approval of any Plan amendment in such a manner
and to such a degree as required.
(b) Effect of Amendment or Termination. Any such amendment or
termination of the Plan shall not affect Options already granted and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated, unless mutually agreed otherwise between the Optionee and
the Board, which agreement must be in writing and signed by the Optionee and the
Company.
16. Conditions Upon Issuance of Shares. Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, and the requirements of any stock exchange upon which the Shares may
then be listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance.
As a condition to the exercise of an Option, the Company may require
the person exercising such Option to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned relevant provisions of law.
17. Reservation of Shares. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
The inability of the Company to obtain authority from any regulatory
body having jurisdiction, which authority is deemed by the Company's counsel to
be necessary to the lawful issuance and sale of any Shares hereunder, shall
relieve the Company of any liability in respect of the failure to issue or sell
such Shares as to which such requisite authority shall not have been obtained.
18. Agreements. Options and Stock Purchase Rights shall be evidenced by
written agreements in such form as the Board shall approve from time to time.
19. Shareholder Approval. Continuance of the Plan shall be subject to
approval by the shareholders of the Company within twelve (12) months before or
after the date the Plan is
A-9
<PAGE> 24
adopted. Such shareholder approval shall be obtained in the degree and manner
required under applicable state and federal law.
20. Information to Optionees and Purchasers. The Company shall provide
to each Optionee and to each individual who acquired Shares pursuant to the
Plan, during the period such Optionee or purchaser has one or more Options or
Stock Purchase Rights outstanding, and, in the case of an individual who
acquired Shares pursuant to the Plan, during the period such individual owns
such Shares, copies of all annual reports and other information which are
provided to all shareholders of the Company. The Company shall not be required
to provide such information if the issuance of Options or Stock Purchase Rights
is limited to key employees whose duties in connection with the Company assure
their access to equivalent information.
A-10
<PAGE> 25
VOXEL
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS MAY 29, 1998
The undersigned hereby appoints Allan M. Wolfe and Murray E. Rudin as
Proxies, each with the power to appoint his substitute, and hereby authorizes
them, to represent and vote, as designated on the reverse, all shares of Common
Stock of VOXEL (the "Company") held of record by the undersigned on April 3,
1998, at the Annual Meeting of Stockholders to be held on May 29, 1998 or any
adjournment thereof.
(PLEASE SIGN ON THE REVERSE SIDE)
<PAGE> 26
A [X] Please mark your
votes as in this
example.
WITHHOLD AUTHORITY
to vote for all nominees
listed at right.
1. ELECTION FOR Nominees: Allan M. Wolfe
OF [ ] [ ] Alan S. Dishlip
DIRECTORS James C. Dreyfous
John M. Holliman
FOR all nominees listed (except as
marked to the contrary below)
----------------------------------
FOR AGAINST ABSTAIN
2. Proposal to ratify the selection of Ernst & [ ] [ ] [ ]
Young LLP to serve as the Company's
independent accountants for fiscal 1998.
3. Proposal to amend the Company's 1992 Stock [ ] [ ] [ ]
Option Plan to increase the number of
shares of common stock available for grant
from a total of 563,616 to 1,063,616 shares.
4. In their discretion, upon such other business as may properly come before
the Annual Meeting or any postponement or adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS. THIS PROXY WILL BE VOTED AS DIRECTED.
IN THE ABSENCE OF DIRECTION, THIS PROXY WILL BE
VOTED FOR THE FOUR NOMINEES FOR ELECTION AND FOR
PROPOSALS 2 AND 3.
SIGNATURES: DATE:
---------------------------------- -----------------
NOTE: Please sign as name or names appear on stock certificates (as indicated
hereon).
