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 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Intelligent Medical Imaging, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
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):
- --------------------------------------------------------------------------------
Proposed maximum aggregate value of transaction:
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Total fee paid:
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Fee paid previously with preliminary materials.
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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:
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Form, Schedule or Registration Statement No.:
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Filing Party:
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Date Filed:
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(IMI LOGO)
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 22, 1997
To the Stockholders of Intelligent Medical Imaging, Inc.:
The Annual Meeting of Stockholders of Intelligent Medical Imaging, Inc.
("IMI" or the "Company") will be held at Embassy Suites, 4350 PGA Boulevard,
Palm Beach Gardens, Florida 33410 on May 22, 1997, at 2:00 p.m. (Florida time)
for the following purposes:
1. To elect seven (7) directors to serve for the ensuing year and until their
successors are elected and qualified.
2. To ratify the appointment of Ernst & Young LLP as independent auditors of
the Company for the fiscal year ending December 31, 1997.
3. To transact such other business as may properly come before the meeting or
any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only stockholders of record at the close of business on Monday, March 31,
1997 are entitled to notice of and to vote at the Annual Meeting or any
postponement or adjournment thereof. A list of such stockholders shall be open
to the examination of any stockholder during ordinary business hours, for a
period of ten days prior to the Annual Meeting, at the principal offices of the
Company at 4360 Northlake Boulevard, Suite 214, Palm Beach Gardens, Florida
33410.
STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING. TO INSURE YOUR
REPRESENTATION AT THE MEETING, PLEASE COMPLETE AND PROMPTLY MAIL YOUR PROXY IN
THE RETURN PREPAID ENVELOPE PROVIDED. THIS WILL NOT PREVENT YOU FROM VOTING IN
PERSON AT THE MEETING, SHOULD YOU SO DESIRE.
By Order of the Board of Directors,
Gene M. Cochran
CORPORATE SECRETARY
Palm Beach Gardens, Florida
April 21, 1997
IMPORTANT: WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO
COMPLETE AND PROMPTLY RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED.
<PAGE>
INTELLIGENT MEDICAL IMAGING, INC.
4360 Northlake Boulevard, Suite 214
Palm Beach Gardens, Florida 33410
PROXY STATEMENT
1997 ANNUAL MEETING OF STOCKHOLDERS
MAY 22, 1997
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed Proxy is solicited on behalf of the Board of Directors of
Intelligent Medical Imaging, Inc. ("IMI" or the "Company"), for use at the 1997
Annual Meeting of Stockholders to be held on May 22, 1997 at 2:00 p.m. (Florida
time), or at any adjournment or postponement thereof (the "Annual Meeting"). The
purposes of the Annual Meeting are set forth herein and in the accompanying
Notice of Annual Meeting of Stockholders. The Annual Meeting will be held at
Embassy Suites, 4350 PGA Boulevard, Palm Beach Gardens, Florida 33410. IMI's
telephone number is (561) 627-0344.
These proxy solicitation materials and the Company's Annual Report to
Stockholders for the year ended December 31, 1996, including financial
statements, were mailed on or about April 21, 1997 to each stockholder entitled
to vote at the Annual Meeting.
RECORD DATE
Stockholders of record at the close of business on March 31, 1997 (the
"Record Date") are entitled to vote at the Annual Meeting.
OUTSTANDING SHARES
Common Stock, par value $.01 per share, is the only class of Company stock
outstanding. On the Record Date, 10,908,054 shares of Common Stock were issued
and outstanding.
VOTING RIGHTS AND VOTING OF PROXIES
Under the Delaware General Corporation Law and the Company's Certificate of
Incorporation and Bylaws, each stockholder will be entitled to one vote for each
share of Common Stock held at the Record Date for all matters, including the
election of directors. Stockholders do not have the right to cumulate their
votes in the election of directors. When proxies are returned to the Board of
Directors properly signed and dated, the shares represented thereby will be
voted in accordance with that stockholder's directions. Stockholders are urged
to specify their choices by marking the appropriate boxes on the enclosed proxy
card.
The required quorum for the transaction of business at the Annual Meeting
is a majority of the votes eligible to be cast by holders of shares of Common
Stock issued and outstanding on the Record Date. Shares that are voted "FOR,"
"AGAINST," "WITHHELD" or "ABSTAIN" are treated as being present at the Annual
Meeting for purposes of establishing a quorum and are also treated as shares
entitled to vote at the Annual Meeting (the "Votes Cast") with respect to such
matter. Abstentions will have the same effect as voting against a proposal.
Broker non-votes will be counted for purposes of determining the presence or
absence of a quorum for the transaction of business, but such broker
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non-votes will not be counted for purposes of determining the number of Votes
Cast with respect to the particular proposal on which the broker has expressly
not voted. Therefore, a broker non-vote will not affect the outcome of the
voting on a proposal.
REVOCABILITY OF PROXY
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Company a written
notice of revocation or a duly executed proxy bearing a later date or by
attending the Annual Meeting and voting in person.
SOLICITATION
The cost of solicitation will be borne by the Company. In addition, the
Company may reimburse brokerage firms and other persons representing beneficial
owner of shares for their expenses in forwarding solicitation materials to such
beneficial owners. In addition, certain directors, officers, and other employees
of IMI, not specifically employed for that purpose, may solicit proxies, without
additional remuneration therefor, by personal interview, mail, telephone or
telecopy.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
Proposals of stockholders intended to be presented at the 1998 Annual
Meeting of Stockholders must be received by the Company at its executive offices
on or before December 22, 1997 and must otherwise be in compliance with the
Company's Certificate of Incorporation and Bylaws and applicable laws and
regulations in order to be eligible for consideration for inclusion in the 1998
Annual Meeting proxy or accompanying proxy statement. If you wish to submit a
proposal to be considered at the 1998 Annual Meeting, please send it registered
mail, return receipt requested, to Corporate Secretary, Intelligent Medical
Imaging, Inc., 4360 Northlake Boulevard, Suite 214, Palm Beach Gardens, Florida
33410.
PROPOSAL 1
ELECTION OF DIRECTORS
The number of directors authorized by the Company's Bylaws is a maximum of
nine, with the exact number currently fixed by the Board of Directors at seven.
Each director is elected to serve until the next annual meeting of the
stockholders and until his successor shall have been elected and qualified. Each
of the seven nominees below was nominated by Company management and is presently
a director of the Company. Each nominee has consented to be named in the Proxy
Statement and to serve as a director if elected. The Board of Directors has no
reason to believe that any of the nominees listed will not be available to
serve, but if any nominee should be or become unable or unwilling to serve, the
shares represented by the proxies received by the Company will be voted for the
election of some other person as director, as the Board of Directors shall
recommend.
Shares represented by proxies solicited by the Board of Directors will,
unless contrary instructions are given, be voted in favor of the election as
directors of the nominees named below. A plurality of votes cast at the meeting,
in person or by proxy, is required to elect each director.
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Set forth below is information regarding such nominees for directors,
including their respective ages and principal occupations or employment and
business experience during at least the last five years:
<TABLE>
<CAPTION>
HAS SERVED
AS DIRECTOR
NAME AGE POSITION WITH COMPANY SINCE
- ------------------------- ------ ------------------------------------------------ -------------
<S> <C> <C> <C>
Tyce M. Fitzmorris(1) 54 Chairman of the Board of Directors, President 1989
and Chief Executive Officer
Gene M. Cochran(1) 56 Chief Financial Officer, Treasurer, Secretary 1994
and Director
James E. Davis 63 Director 1996
R. Wayne Fritzsche(1) 48 Director 1994
George Masters(2)(3) 56 Director 1994
James Skinner(2)(3) 52 Director 1994
William Whittaker(2)(3) 63 Director 1991
</TABLE>
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(1) Member of Non-Employee Director Stock Option Plan Committee
(2) Member of Audit Committee
(3) Member of Compensation Committee
Mr. Fitzmorris is the Company's founder and has served as Chief Executive
Officer since June 1989. He served as its President from June 1989 until June
1991. Mr. Fitzmorris was re-appointed as President of the Company in July 1993.
In 1985, Mr. Fitzmorris founded Vistech Corporation ("Vistech") and served as
Chairman of the Board and President until Vistech was sold in 1988. Vistech
developed high speed computerized vision inspection systems for beverage
containers, which systems are being placed worldwide with Coca-Cola Enterprises,
Inc., PepsiCo, Inc. and other bottlers.
Mr. Cochran has served as Chief Financial Officer of the Company since
October 1994. Prior to joining the Company, Mr. Cochran served from 1970 to 1995
as the principal of Gene M. Cochran & Co., an accounting and consulting firm.
From 1987 to 1994, Mr. Cochran served as Chief Financial Officer and director
for WHW Holding Company, Krisam Group, Inc., CW Travel, Inc. and NuPhase
Technology, Inc. Prior to 1989, Mr. Cochran was a director of Vistech
Corporation ("Vistech"), and from 1978 until Vistech was sold in 1983, he served
as Chief Executive Officer and director of Mission Home Health, Inc., a home
healthcare company.
Mr. Davis is the founder of 3-D Machining, Inc., an industrial design and
machining company, and has served as its President since its inception in June
1994. He is also the founder, Vice President and a director of Cross Check
Corporation, a company engaged in the development of electro-optic devices to
photograph fingerprints for access control. From 1987 to 1991, Mr. Davis served
as Chief Executive Officer and a director of Tele-Optics, Inc. From 1991 to June
1994, Mr. Davis was employed by Ogden Corporation as Assistant to the President
following Ogden Corporation's acquisition of a division of Tele-Optics, Inc.
Mr. Fritzsche has since 1991 served as Chairman and Chief Executive Officer
of Fritzsche & Associates, Inc., a consulting firm. He was Vice
President-Corporate Development of the Company from October 1994 until his
resignation from such office in October 1995. Mr. Fritzsche served as founder of
several medical and/or pharmaceutical companies, including The Immune Response
Corporation, Cortex Pharmaceuticals, Inc. and Cytogen Corporation. From 1981 to
1991 he was Chairman of Fritzsche Pambianchi & Associates, Inc. He has served as
a corporate development and marketing executive in a number of health care
companies, including Johnson & Johnson Company, Hoechst-Celanese Corporation,
Warner-Lambert Company, and Carter-Wallace Inc. Mr. Fritzsche currently serves
as a member of the Board of Directors of Intelligent Decision Systems, Inc., a
publicly held medical computer company. He is also a director of Protein
Delivery, Inc., an oral drug delivery
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company, ARZCO Medical Systems, Inc., a cardiac device company, and Clarion
Pharmaceutical, Inc., a pharmaceutical company, each of which is privately held.
Mr. Masters served as Vice Chairman, President and Chief Executive Officer
of Seragen, Inc., a publicly held biotechnology company ("Seragen"), from April
1993 until November 1996. Prior to joining Seragen in 1993, Mr. Masters served
as President and Chief Executive Officer of Verax Corporation, a bioprocessing
company, from 1991 to 1993. He also served as President and Chief Executive
Officer of Hemosol, Inc., a biopharmaceutical company, from 1989 to 1991. Mr.
Masters is on the Governing Board of the Biotechnology Industry Organization in
Washington, D.C. and is Chairman of the Small Business Development Board for the
State of Maine. He is also on the Board of Visitors of Boston University School
of Medicine and the Board of Associates of the Whitehead Institute for
Biomedical Research at Massachusetts Institute of Technology. Mr. Masters serves
as Chairman of the Board of Directors of Immucell, Inc., a biopharmaceutical
company, Vice Chairman of the Board of Directors of Hemosol, Inc., a developer
of artificial red blood cells, and Vice Chairman of the Board of Directors of
CME Telemetrix, Inc., a medical instrumentation company, all of which companies
are publicly held. Mr. Masters also serves as a member of the Board of Directors
of the following privately held companies: BioCatalyst Yorkton, Inc. (Chairman),
PharmX, Inc., ProScript, Inc., CompuCyte, Inc. and Apollo BioPharmaceutics.
Mr. Skinner has served since October 1996 as the President and Chief
Executive Officer of Xanthon, Inc., a private biotechnology company. Since
October 1996, Mr. Skinner has also served as Chairman of the Board of Directors
of Diagnostix, Ltd., a Canadian distributor of medical laboratory products. From
1987 to July 1996, he served as the President, Chief Executive Officer and a
director of Editek, Inc., a biotechnology company. From 1983 to 1989, Mr.
Skinner was the founder and a director of Access Medical Systems, Inc. He has
also formerly served as a director of General Biometrics, Inc., a biotechnology
company, and BSD Medical Corporation, a medical products company.
Mr. Whittaker is currently retired. He served as the President and Chief
Operating Officer of the Company from June 1991 through July 1993. From 1982 to
1989, Mr. Whittaker was employed by National Medical Care, Inc. ("National
Medical Care"), a division of W.R. Grace & Company ("W.R. Grace"). From 1987 to
1989, Mr. Whittaker served in several senior management positions at W.R. Grace,
including Senior Vice President Corporate, President of the Medical Products
Division and President of the Home Care Division of National Medical Care. After
his departure from W.R. Grace in 1989, Mr. Whittaker worked as a private
management consultant. Mr. Whittaker serves as a director of Marcor, Inc., a
privately held water treatment company.
There are no family relationships between any directors or executive
officers of the Company.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING "FOR" EACH OF THE
NOMINEES LISTED ABOVE.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As of December 31, 1993, the Company issued a promissory note to each of
Tyce M. Fitzmorris (Chairman of the Board of Directors, President and Chief
Executive Officer), Eric Espenhahn (Vice President-Product Development) and
Jaime Pereira (Vice President-Engineering) evidencing accrued but unpaid
salaries and benefits, loans and interest with respect to all of the foregoing.
The principal amounts of the promissory notes issued to Messrs. Fitzmorris,
Espenhahn and Pereira were $331,884, $62,984 and $27,017, respectively. In April
1996, the Company paid the outstanding balances due under these notes in the
respective amounts of $369,514, $77,995 and $33,456 from the proceeds of the
Company's initial public offering.
In October 1994, Mr. Davis entered into a Service Agreement with the
Company, which Service Agreement provided for the payment to Mr. Davis of $45
per hour for engineering consulting services rendered by him. Mr. Davis became a
director of the Company in July 1996. The Service Agreement
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was terminated December 31, 1996. The Company paid Mr. Davis the aggregate
amount of $30,000 in 1996 for services rendered pursuant to the Service
Agreement. The Company leased its manufacturing facility in Riviera Beach,
Florida, from a partnership of which Mr. Davis is a general partner; the rent
expense paid under such lease in 1996 was approximately $50,000. The lease for
this manufacturing facility terminated on March 31, 1997. In addition, the
Company purchased approximately $250,000 of inventory in 1996 from 3-D
Machining, Inc., a company owned by Mr. Davis (76%) and his sons. Mr. Davis is
President of 3-D Machining, Inc.
Fritzsche & Associates, Inc. ("FAI"), which is owned by Mr. Fritzsche, a
director of the Company, entered into a Consulting Agreement with the Company
dated as of December 1, 1993 (the "FAI Consulting Agreement") pursuant to which
the Company engaged FAI to provide corporate finance, strategic planning and
marketing assistance and other consulting services. The FAI Consulting Agreement
originally provided for a monthly retainer of $4,000, which accrued without
interest until the earlier of December 1, 1994 or the receipt by the Company of
$500,000 in net revenues from transactions introduced by FAI, and success fees
tied to net revenues from such transactions. The amended FAI Consulting
Agreement currently provides for annual consulting fees (payable in monthly
installments) of $102,000 in 1995, $150,000 in 1996 and $102,000 in each of
1997, 1998 and 1999; provided, however, that the Company and FAI agreed to
renegotiate the schedule of payments for 1997, 1998 and 1999 in the event of a
material shortfall in anticipated revenues from international sales of the
Micro21 System in those years. The Company paid FAI $52,500 in 1994, $102,000 in
1995, and $127,339 in 1996.
In June 1994, Mr. Fritzsche made loans to the Company in the aggregate
amount of $300,000, evidenced by a 10% Secured Convertible Promissory Note (the
"Convertible Note") payable on July 1, 1996, which was converted as of that date
into 274,389 shares of Common Stock at a conversion rate of $1.09 per share. As
additional consideration for the loan, Mr. Fritzsche received warrants for the
purchase of 274,389 shares of Common Stock at an exercise price of $1.09 per
share. These warrants expire, if unexercised, in July 1999.
In September 1994, Mr. Fritzsche, through his IRA account ("Mr. Fritzsche's
IRA Account") purchased a $200,000 18% Convertible Note payable by the Company
in September 1995 (the "Fritzsche Note"), in connection with the sale to
investors in September 1994 of $930,000 aggregate principal amount of 18%
convertible notes due September 1995 (the "September Convertible Notes"). In
accordance with their terms, the September Convertible Notes automatically
converted into shares of Common Stock at the rate of $2.00 per share in January
1995 in connection with a private placement of shares of Common Stock except
that, as a condition to the investment by Mr. Fritzsche's IRA Account, the
Company agreed to extend the conversion privilege with respect to the Fritzsche
Note. The Fritzsche Note was voluntarily converted into 100,000 shares of Common
Stock in June 1995. Accrued interest under the Fritzsche Note, in the amount of
$80,605, was paid in March 1996 from the proceeds of the Company's initial
public offering.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists of Messrs. Skinner, Masters and
Whittaker, all of whom are outside directors. Mr. Whittaker was employed by the
Company pursuant to the terms of a Service Agreement dated June 20, 1991 and was
elected President and Chief Operating Officer and appointed to the Board of
Directors. In connection therewith, the Company granted Mr. Whittaker a warrant
(the "Whittaker Warrant") for the purchase of 690,000 shares of Common Stock at
an exercise price of $1.67 per share, and Mr. Whittaker invested $100,000 for
the purchase of 60,000 shares of Common Stock at $1.67 per share. The Whittaker
Warrant was to expire on September 30, 1997 and included a vesting schedule tied
to Mr. Whittaker's tenure of employment. The Company was unable to pay Mr.
Whittaker's salary in full. In June 1993, the Service Agreement was amended
changing Mr. Whittaker's relationship with the Company from employee to
consultant. In connection with this amendment, the Whittaker Warrant was
exchanged for a new, fully-vested warrant (the "New Whittaker Warrant") to
purchase 300,000 shares of Common Stock at an exercise price of $1.00 per
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share, which expires on October 2001, and Mr. Whittaker resigned as President.
In October 1994, Mr. Whittaker and the Company entered into an agreement
pursuant to which Mr. Whittaker agreed to forbear from collection of a total of
$275,000 due to him under the Service Agreement in exchange for the Company's
agreement to pay him $275,000 plus interest at the prime rate of a local bank on
the earlier of October 5, 2001 or ten days after the Company consummated its
initial public offering. On April 1, 1996, the Company repaid Mr. Whittaker the
full amount of $318,569 from the proceeds of its initial public offering.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, executive officers and persons who beneficially own more than ten
percent (10%) of the Common Stock of the Company to file reports of ownership
and changes of ownership with the Securities and Exchange Commission and the
National Association of Securities Dealers, Inc. Copies of all filed reports are
required to be furnished to the Company pursuant to Section 16(a). Based solely
on the reports received by the Company and on written representations from
reporting persons, the Company believes that the directors, executive officers
and greater than ten percent (10%) beneficial owners complied with all
applicable filing requirements during the fiscal year ended December 31, 1996,
with the exception that: (i) Jaime Pereira, an executive officer, inadvertently
failed to timely file a Form 4 to reflect the exercise of certain options held
by him, which options were previously reported on a Form 3 filed by Mr. Pereira,
and (ii) R. Wayne Fritzsche, a director, inadvertently failed to timely file a
Form 4 to reflect the conversion of his Convertible Note into shares of Common
Stock. Mr. Fritzsche's right to convert the Convertible Note into 274,389 shares
of Common Stock was previously reported on a Form 3 filed by Mr. Fritzsche.
COMPENSATION OF DIRECTORS
The Company's current policy is to pay each outside director who is neither
an employee, officer or directly or indirectly a paid consultant to the Company
an annual retainer of $10,000 per year, paid quarterly in arrears. Each such
director is also paid $500 for each regular or special Board of Directors
meeting ($250 with respect to meetings held by telephonic conference) and $500
for each meeting of any committee on which such director serves ($100 per hour
with respect to committee meetings held by telephonic conference). The directors
currently eligible to receive the foregoing compensation are Messrs. Davis,
Masters, Skinner and Whittaker. The Company reimburses all directors for their
authorized expenses. The Company granted to each of Messrs. Cochran, Masters and
Skinner, upon their election to the Board of Directors in 1994, non-statutory
stock options to purchase up to 19,800 shares of Common Stock. The options vest
over a three year period with respect to 1,650 shares for each regular quarterly
Board of Directors meeting attended by each such director. The options have a
ten-year term and are exercisable at an exercise price of $2.00 per share, the
fair market value of the Common Stock at the date of grant as determined by the
Board of Directors. All of the foregoing options were granted pursuant to the
Company's 1990 Stock Option Plan. With respect only to the options granted to
Mr. Cochran, the Chief Financial Officer, Treasurer, Secretary and an employee
of the Company, the stock option agreement evidencing the grant of such options
has been amended to provide that Mr. Cochran may only exercise those options
that had vested thereunder as of December 23, 1995 for the purchase of 8,250
shares.
In December 1995, the Board of Directors adopted the 1995 Non-Employee
Director Stock Option Plan (the "1995 Plan"). The 1995 Plan generally authorizes
the grant of options to members of the Board of Directors who are not employees,
officers or paid consultants of the Company, except that William Whittaker is
not eligible to receive options under the 1995 Plan. Options granted under the
1995 Plan are non-statutory stock options. A total of 268,650 shares are
reserved for issuance under the 1995 Plan. No stock options have been granted to
date under the 1995 Plan. As of this date, only Messrs. Skinner and Masters are
eligible to receive options under the 1995 Plan. Following the termination of
his Service Agreement with the Company in December 1996, Mr. Davis will be
eligible to participate in the 1995 Plan, assuming he is re-elected to the Board
of Directors at the Annual
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Meeting. The 1995 Plan is administered by the Non-Employee Director Stock Option
Committee (the "Committee"). The Committee has full authority to make all
determinations required or permitted under the 1995 Plan. Each director (other
than Messrs. Skinner and Masters) eligible to receive options under the 1995
Plan will receive options to purchase 19,800 shares of Common Stock on the date
that he or she is first elected to the Board of Directors with respect to any
election held on or after January 1, 1996. Provided that a director has served
on the Board of Directors for the preceding three-year period, he or she is
eligible to receive options to purchase another 19,800 shares upon his or her
re-election to the Board of Directors for his or her fourth, seventh, tenth,
thirteenth and sixteenth consecutive one-year term. The initial grants of
options under the 1995 Plan to Messrs. Masters and Skinner are subject to
certain adjustments in the number of options granted, the dates such options are
granted, and the dates such options become exercisable, because each of Mr.
Masters and Mr. Skinner previously received options upon his election to the
Board of Directors in December 1994 pursuant to the Company's 1990 Stock Option
Plan. After the first annual meeting of stockholders held on or after December
1, 1997, Messrs. Masters and Skinner may be granted options on the same basis as
other eligible directors. The exercise price of options, on a per share basis,
may not be less than 100% of the fair market value of the Common Stock on the
date of grant. No option may be granted having a term exceeding ten years. Each
option will terminate within three months of the date following the termination
of the optionee's status as a member of the Board of Directors for any reason.
Options granted under the 1995 Plan will generally become exercisable as to
one-twelfth of the shares subject to the option each quarter following the date
of grant, provided that the optionee continued to serve on the Board of
Directors through the end of such quarter. If an optionee fails to attend at
least 50% of the regular or special Board of Directors meetings held in any
year, options which become exercisable in such year but were not exercised as of
the end of such year shall, in the discretion of the Board of Directors,
terminate immediately.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of IMI met nine times during 1996. All directors
attended all of the Board of Directors meetings held in 1996, except for Eric
Espenhahn, Vice President-Product Development of the Company. Mr. Espenhahn was
a member of the Board of Directors from 1989 until his resignation from the
Board of Directors in July 1996. Mr. Espenhahn did not attend either of the two
Board of Directors meetings held in 1996 prior to the effective date of his
resignation.
The Board of Directors has the following standing committees: Audit,
Compensation, and Non-Employee Director Stock Option Plan.
The Audit Committee reviews the records and affairs of IMI to determine
their financial condition, oversees the adequacy of the systems of internal
control and monitors IMI's adherence in accounting and financial reporting to
generally accepted accounting principles. The Audit Committee met one time in
1996. The Audit Committee is currently comprised of Messrs. Masters, Skinner and
Whittaker.
The Compensation Committee determines compensation for officers and
administers the Company's 1990 Stock Option Plan. No officer serving on the
Board of Directors or the Compensation Committee has participated in decisions
awarding compensation or granting of stock options to himself. The Compensation
Committee met five times in 1996. The Compensation Committee is currently
comprised of Messrs. Masters, Skinner and Whittaker.
The Non-Employee Director Stock Option Plan Committee administers the
Company's 1995 Non- Employee Director Stock Option Plan. This Committee did not
meet in 1996. The Non-Employee Director Stock Option Plan Committee is currently
comprised of Messrs. Fitzmorris, Cochran and Fritzsche.
The Company's Bylaws authorize the establishment of a Nominating Committee,
which has the authority to nominate such persons as it may determine to stand
for election to the Board of Directors. To date, no directors have been named to
the Nominating Committee, and therefore no meetings of the
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Nominating Committee occurred in 1996. Stockholders may nominate persons to
stand for election to the Board of Directors by complying with the procedure for
such nominations set forth in the Company's Bylaws.
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Ernst & Young LLP has acted as the Company's independent auditors since
1991. Ernst & Young LLP has been recommended by the Audit Committee and approved
by the Board of Directors as the Company's independent auditors for the year
ending December 31, 1997, subject to ratification of such appointment by the
stockholders. Representatives from Ernst & Young LLP are expected to be present
at the Annual Meeting with the opportunity to make a statement if they so
desire, and will be available to respond to appropriate questions from
stockholders. Ratification of the Company's independent auditors is not required
by the Company's By-Laws or otherwise, but the Board of Directors has decided to
seek such ratification as a matter of good corporate practice.
Ratification of Ernst & Young LLP as the Company's independent auditors for
the fiscal year ending December 31, 1997 requires the affirmative vote of a
majority of the shares of the Company's Common Stock present and voting in
person or by proxy at the Annual Meeting. If the stockholders do not ratify this
appointment, other certified public accountants will be considered by the Board
of Directors upon recommendations of the Audit Committee.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE
"FOR" THE RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY'S
INDEPENDENT AUDITORS FOR THE YEAR ENDING DECEMBER 31, 1997.
8
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information known to the Company
regarding the beneficial ownership of the Company's Common Stock as of March 31,
1997 by (i) each person who is known by the Company to own beneficially more
than 5% of the outstanding shares of Common Stock, (ii) each of the Company's
directors, (iii) the Company's Chief Executive Officer and the Company's three
other executive officers who were serving as executive officers at the end of
fiscal 1996 (collectively, the "Named Officers"), and (iv) all Named Officers
and directors of the Company as a group.
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE
OF BENEFICIAL OWNER(1) OF BENEFICIAL OWNERSHIP(2) PERCENT OF CLASS
- -------------------------------- -------------------------- ----------------
<S> <C> <C>
The TCW Group, Inc. 588,500 5.4%
865 S. Figueroa Street
Los Angeles, CA 90017
Robert Day 588,500(3) 5.4%
200 Park Avenue, Suite 2200
New York, NY 10166
Gene M. Cochran 40,175(4) *
James E. Davis 1,969(5) *
Eric Espenhahn 822,623(6) 7.4%
Tyce M. Fitzmorris 2,199,878(7) 19.8%
R. Wayne Fritzsche 976,642(8) 8.8%
George Masters 14,850(9) *
Jaime Pereira 414,354(10) 3.7%
James Skinner 14,850(11) *
William Whittaker 360,000(12) 3.2%
All Named Officers and directors
as a group (9 persons) 4,845,341(13) 39.9%
</TABLE>
- ----------------
* Less than 1% of the outstanding Common Stock.
(1) Unless otherwise indicated, the address for each beneficial owner is c/o
Intelligent Medical Imaging, Inc., 4360 Northlake Boulevard, Suite 214,
Palm Beach Gardens, FL 33410.
(2) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and includes voting or investment power
with respect to securities. Shares of Common Stock issuable upon the
exercise of stock options or stock warrants currently exercisable or
convertible, or exercisable or convertible within sixty days, are deemed
outstanding for computing the percentage ownership of the person holding
such stock options or warrants, but are not deemed outstanding for
computing the percentage ownership of any other person. Except as otherwise
indicated, the Company believes that the beneficial owners of the Common
Stock listed in the table, based on information furnished by such owners,
have sole investment and voting power with respect to such shares.
(3) These shares are owned by The TCW Group, Inc., which, based on a Schedule
13G filed by The TCW Group, Inc. and Robert Day (an individual) on February
12, 1997, may be deemed controlled by Robert Day.
(4) Includes 37,125 shares issuable upon exercise of stock options exercisable
within 60 days.
(5) Represents 1,969 shares issuable upon exercise of stock options exercisable
within 60 days.
(6) Includes 100,000 shares held of record by Mr. Espenhahn's wife and 8,000
shares held of record by Mr. Espenhahn as custodian for his son. Mr.
Espenhahn disclaims beneficial ownership of such securities. Also includes
195,353 shares issuable upon exercise of stock options exercisable within
60 days.
(7) Includes 570,000 shares held of record by Mr. Fitzmorris' wife, children
and his wife as custodian for one child, who have granted to Mr. Fitzmorris
irrevocable voting proxies and a purchase option with respect to such
shares. Mr. Fitzmorris disclaims beneficial ownership of such shares. Also
includes 195,353 shares issuable upon exercise of stock options exercisable
within 60 days. Excludes 24,039 shares beneficially owned by Mr.
Fitzmorris' parents and 9,999 shares beneficially owned by Mr. Fitzmorris'
daughter and her spouse, as to which Mr. Fitzmorris disclaims beneficial
ownership.
(8) Includes 9,000 shares held of record by Mr. Fritzsche's wife, as to which
Mr. Fritzsche disclaims beneficial ownership. Also includes 213,489 shares
issuable upon the exercise of warrants and 100,000 shares held of record by
Mr. Fritzsche's IRA Account. Does not include 36,000 shares held of record
by an irrevocable trust for the benefit of Mr. Fritzsche's children.
(9) Includes 4,950 shares issuable upon exercise of stock options exercisable
within 60 days.
(10) Includes 253,652 shares issuable upon exercise of stock options exercisable
within 60 days. Does not include 6,000 shares held of record by irrevocable
trusts for the benefit of Mr. Pereira's nephews and nieces.
<PAGE>
(11) Represents 14,850 shares issuable upon exercise of stock options
exercisable within 60 days.
(12) Includes 300,000 shares issuable upon exercise of warrant exercisable
within 60 days.
(13) Includes shares described in footnotes (4) through (12).
9
<PAGE>
MANAGEMENT
EXECUTIVE OFFICERS
Officers are appointed by the Board of Directors and serve at the
discretion of the Board. Set forth below is the name and age of each Named
Officer of IMI, all positions and offices each holds with IMI and his business
experience for the past five years:
<TABLE>
<CAPTION>
NAME AGE POSITION(S)
- ----------------------- ------ ------------------------------------------------------------
<S> <C> <C>
Tyce M. Fitzmorris(1) 54 Chairman of the Board of Directors, President
and Chief Executive Officer
Gene M. Cochran(1) 56 Chief Financial Officer, Treasurer, Secretary and Director
Eric Espenhahn 31 Vice President-Product Development
Jaime Pereira 31 Vice President-Engineering
</TABLE>
- ----------------
(1) The prior business experience of this Named Officer is set forth above in
the section entitled "Proposal 1. Election of Directors".
Mr. Espenhahn has served as Vice President-Product Development since the
Company's inception in June 1989. Mr. Espenhahn also served as a director of the
Company from June 1989 until July 1996, when he resigned from the Board of
Directors. From 1985 until 1989, Mr. Espenhahn was employed by Vistech
Corporation ("Vistech") and for a short period by an affiliate of Inex Vision
Systems (Inex, Inc.), the company that purchased Vistech's assets, as a computer
vision software engineer.
Mr. Pereira has served as Vice President-Engineering since April 1992. Mr.
Pereira joined the Company as a senior engineer in September 1989. Prior to
September 1989, Mr. Pereira was employed by Vistech and then Inex, Inc.
COMPENSATION OF EXECUTIVE OFFICERS
The following table shows all compensation paid to the Company's Named
Officers for all services rendered to the Company for each of the last two
completed fiscal years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
-----------------------------
SALARY BONUS
NAME AND PRINCIPAL POSITION YEAR ($) ($)
- --------------------------------------- ------- ---------- ----------------
<S> <C> <C> <C>
Tyce M. Fitzmorris 1996 200,000 40,000(1)
Chairman of the Board of Directors, 1995 200,000 245,000(2)
President and Chief Executive Officer
Gene M. Cochran 1996 108,846 11,000(1)
Chief Financial Officer, Treasurer, 1995 44,845 -
Secretary and Director
Eric Espenhahn 1996 119,423 14,375(1)
Vice President-Product Development 1995 115,000 115,000(2)
Jaime Pereira 1996 119,423 14,375(1)
Vice President-Engineering 1995 115,000 90,000(2)
</TABLE>
- ----------------
(1) Bonus awarded by the Board of Directors in recognition of technological
development of the MICRO21 system and execution of strategic development and
license agreements.
(2) Bonus awarded by the Board of Directors in recognition of progress with
development of the MICRO21 system and closing of the Coulter Distribution
Agreement, and taking into account past services performed without
compensation.
10
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The Company did not grant any options for the purchase of Common Stock to
the Named Officers during the year ended December 31, 1996.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
The following table sets forth for each of the Named Officers certain
information concerning the number of options exercised by each of them in the
fiscal year ended December 31, 1996 and the value of such Named Officers'
unexercised options as of December 31, 1996.
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED OPTIONS A IN-THE-MONEY OPTIONS
SHARES DECEMBER 31, 1996(#) AT DECEMBER 31, 1996($)(1)
ACQUIRED VALUE --------------------------------- --------------------------------
NAME ON EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------- ----------------- ------------- -------------- ---------------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Tyce M. Fitzmorris - - 169,306 39,071 1,122,499 259,041
Gene M. Cochran 3,000 14,010(2) 29,625 35,625 138,349 166,369
Eric Espenhahn - - 169,306 39,071 1,122,499 259,041
Jaime Pereira 62,513 1,012,363 227,605 39,071 1,456,171 259,171
</TABLE>
- ----------------
(1) Calculated by determining the difference between the exercise price of the
options and $6.67, the average closing price of the Company's Common Stock
for the five business days preceding December 31, 1996.
(2) Calculated by determining the difference between the exercise price of the
options and $6.67, the fair market value of the Common Stock on December 31,
1995, as determined by the Board of Directors.
11
<PAGE>
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF THE COMPANY'S
PREVIOUS FILINGS UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED, THAT MIGHT INCORPORATE FUTURE FILINGS,
INCLUDING THIS PROXY STATEMENT, IN WHOLE OR IN PART, THE FOLLOWING REPORT AND
PERFORMANCE GRAPH SET FORTH HEREIN SHALL NOT BE INCORPORATED BY REFERENCE INTO
ANY SUCH FILINGS AND SHALL NOT OTHERWISE BE DEEMED FILED UNDER SUCH ACTS.
COMPENSATION COMMITTEE REPORT
OVERVIEW AND PHILOSOPHY
The Compensation Committee of the Board of Directors (the "Compensation
Committee") is composed of three members, all of whom are outside directors of
the Company. The Compensation Committee provides overall guidance on the
Company's compensation and benefits philosophy. In addition, the Compensation
Committee approves and monitors the Company's:
/bullet/ executive compensation and benefits programs
/bullet/ executive employment agreements, if any
/bullet/ 1990 Stock Option Plan
The primary objectives of the Compensation Committee are to assure that the
Company's executive compensation and benefits program:
/bullet/ reflects the Company's entrepreneurial orientation
/bullet/ is competitive with other growing technology-based companies
/bullet/ safeguards the interests of the Company and its stockholders
/bullet/ is effective in driving performance to achieve financial goals and
create stockholder value
/bullet/ fosters teamwork on the part of management
/bullet/ is cost-efficient and fair to employees, management, and stockholders
/bullet/ is well communicated and understood by program participants
The Company's executive compensation policies are designed to attract,
motivate, and retain highly qualified executive officers who can enhance
stockholder value, and to support a performance-oriented environment that
rewards achievement of the Company's financial goals. The Compensation Committee
meets periodically during each fiscal year to review the Company's existing
compensation and benefits programs and to consider modifications that seek to
provide a direct relationship between executive compensation and sustained
corporate performance.
The Company compensates its executive officers through three principal
types of compensation: annual base salary, annual incentive bonuses and
long-term incentive award through stock options. The Company, as a matter of
policy, places substantial emphasis on long-term stock options since this form
of compensation is viewed as very effective at correlating executive officer
compensation with corporate performance and increases in stockholder value.
BASE SALARY
The annual base salary of each executive officer is based on the scope of
his or her responsibility and accountability within the Company, as well as on
performance and experience criteria. In addition, the Compensation Committee
considers salary and other compensation arrangements of other technology-based
companies of similar size and similar growth to determine appropriate levels
required to attract, motivate, and retain the most qualified management
personnel.
The Compensation Committee determines and makes final decisions regarding
base salary of executives on an annual basis. The Compensation Committee
recognizes that, to some degree, the determination of an executive officer's
base salary involves subjective considerations.
12
<PAGE>
INCENTIVE BONUSES
A significant component of an executive officer's total cash compensation
may consist of an incentive bonus, which is intended to make the executive
officer's compensation dependent on the Company's performance and to provide
executive officers with incentives to achieve Company goals, increase
stockholder value, and work as a team.
In 1996, the calculation of incentive bonuses was made based on the
achievement of several marketing, engineering and product development
milestones. These milestones included:
/bullet/ commercial release and acceptance of the Company's
MICRO21 system, an intelligent automated microscope system for
diagnostic use in hospital, commercial reference and
physician-group laboratories. The Company implemented the most
commonly performed clinical laboratory procedure, the white blood
cell differential, including the white blood cell morphology, red
blood cell morphology and platelet estimate, as the first MICRO21
procedure.
/bullet/ obtaining U.S. Food and Drug Administration ("FDA")
510(k) clearance for two additional commonly performed microscopic
procedures (reticulocyte count and anti-nuclear bodies) and
achieving substantial progress with respect to a third procedure,
nDNA (an indirect enzyme antibody test). FDA 510(k) clearance for
the nDNA procedure was received in January 1997.
/bullet/ successful completion of the Company's initial public
offering in March 1996, which allowed the Company to pay its
indebtedness and to build substantial cash reserves to fund
operations until profitability is achieved.
/bullet/ improvements made to the MICRO21's software and hardware,
resulting in a less expensive and more efficient product
intended, in part, to expand the Company's customer base to
include lower volume laboratories.
/bullet/ entry into strategic alliances with licensors of
microscope slide preparation technology (consisting of DiaSys
Corporation and MonoGen, Inc.), furthering the Company's ability
to integrate into a single workstation system all parts of the
microscopy process: slide preparation, automatic slide loading,
slide review and data collection.
The foregoing achievements also played a role in determining executive
salaries for 1997. The Compensation Committee expects that the achievement of
additional performance targets and goals will have a direct impact on
eligibility for and the amount of executive incentive bonuses awarded in 1997
and the determination of 1998 executive salaries. These targets and goals may
include:
/bullet/ the Company's ability to place MICRO21 systems with end
users in the U.S. and abroad through its own sales and marketing
efforts, following the Company's termination of its exclusive
distribution arrangement with Coulter Corporation.
/bullet/ the Company's ability to increase its potential customer
base, including foreign end users and lower volume laboratories.
/bullet/ obtaining FDA clearance for five additional procedures
for use on the MICRO21 white blood cell estimate, body fluid
analysis, bone marrow analysis, urinalysis, and urine cytological
analysis.
/bullet/ significant progress in the development of the MICRO21
"workstation" system.
/bullet/ achieving profitability.
LONG-TERM STOCK OPTION COMPENSATION
The Compensation Committee believes that providing all employees, including
executive officers, with the opportunity to acquire stock ownership over time is
the most desirable way to align their interests with those of the Company's
stockholders. Stock options, awarded under the Company's 1990 Stock Option Plan,
provide an incentive that focuses the attention of executive officers on
managing the Company from the perspective of an owner with an equity interest in
the business. In addition, stock
13
<PAGE>
options are a key part of the Company's program for motivating and rewarding
managers and other employees and consultants over the long term. Through the
grant of stock options, the Company has encouraged its managers and other
employees and consultants to obtain and hold the Company's stock. Stock options
granted to employees are tied to future performance of the Company's stock and
will provide value only when the price of the Company's stock exceeds the option
grant price.
The Compensation Committee determines and makes final decisions regarding
stock option awards made under the Company's 1990 Stock Option Plan. Such
factors as performance and responsibilities of individual managers and the
management team as a whole, as well as general industry practices play an
integral role in the determination of the number of options awarded to a
particular executive officer or employee. In determining the size of the
individual award of options, the Compensation Committee also considers the
amounts of options outstanding and previously granted, the amount of options
remaining available for grant under the Company's 1990 Stock Option Plan, the
aggregate amount of current awards, and the amount necessary to retain qualified
personnel.
In accordance with its business strategy and compensation philosophy, the
Company has granted stock options to all employees to afford them an opportunity
to participate in the Company's future growth and to focus them on the
contributions which are necessary for the financial success and business growth
of the Company and, thereby, the creation of value for its stockholders.
Stock options are typically awarded based on an assessment of each
recipient's ongoing contribution to overall corporate performance. As a means to
encourage a stock option recipient to remain in service with the Company, stock
option awards vest over time, over a period of four years from the date of
grant. All incentive stock options have exercise prices at least equal to the
fair market value of the Company's stock on the date of grant.
1996 COMPENSATION FOR THE CHIEF EXECUTIVE OFFICER
The general policies described above for the compensation of the executive
officers also apply to the compensation approved by the Compensation Committee
with respect to the 1996 compensation for Mr. Fitzmorris, the Company's founder,
Chairman of the Board of Directors, President and Chief Executive Officer.
Mr. Fitzmorris' base salary was $200,000 in 1996, $200,000 in 1995 and
$140,000 in 1994. Mr. Fitzmorris' bonus in 1996 of $40,000 was paid to him in
recognition of the Company's achievement of the technological developments and
capital raising goals discussed above with respect to executive officers
generally.
At December 31, 1996, Mr. Fitzmorris had available for exercise options to
purchase 169,306 shares of Common Stock, with an additional 39,071 options due
to vest in increments during 1997. The options were granted to him in July 1993
at an exercise price equal to their then fair market value of $.03667 per share.
Due to the relatively large number of options granted to and held by Mr.
Fitzmorris, the Compensation Committee did not grant Mr. Fitzmorris any
additional stock options during 1996.
Mr. Fitzmorris has fulfilled an integral and critical role in the
development of the Company as a whole, including but not limited to the
achievement of the Company's 1996 milestones, and it is the Compensation
Committee's expectation that he will continue to have an important influence on
the Company's achievement of the targets and goals outlined above for 1997. The
Compensation Committee believes that Mr. Fitzmorris' compensation arrangement
reflects the above-described executive compensation philosophy of the Company
designed to align management compensation closely with financial performance and
increased stockholder value.
14
<PAGE>
IRS MATTERS
Under Section 162(m) of the Internal Revenue Code and the regulations
promulgated thereunder, deductions for employee remuneration in excess of $1
million which is not performance-based are disallowed for publicly traded
companies. Given that levels of compensation paid by the Company are expected to
be significantly below $1 million, the Compensation Committee has determined
that it is unnecessary at this time to seek to qualify the components of its
compensation program as performance-based compensation within the meaning of
Section 162(m).
COMPENSATION COMMITTEE:
George Masters
James Skinner
William Whittaker
15
<PAGE>
PERFORMANCE GRAPH
The following graph illustrates a nine (9) month comparison of cumulative
total returns for the Company's Common Stock, the S&P SmallCap 600 Index, and
the S&P Health Care (Medical Products & Supplies) Index from March 21, 1996
through December 31, 1996. Cumulative total return for the periods shown in the
Performance Graph is measured assuming an initial investment of $100 on March
21, 1996, the date of the Company's initial public offering, and the
reinvestment of dividends, if any.
NOTE: MANAGEMENT CAUTIONS THAT THE HISTORIC STOCK PRICE PERFORMANCE INFORMATION
SHOWN IN THE GRAPH PROVIDED MAY NOT BE INDICATIVE OF CURRENT STOCK PRICE LEVELS
OR FUTURE STOCK PRICE PERFORMANCE.
COMPARISON OF 9 MONTH CUMULATIVE TOTAL RETURN*
AMONG INTELLIGENT MEDICAL IMAGING, INC., THE S & P SMALLCAP 600 INDEX
AND THE S & P HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES) INDEX
<TABLE>
<CAPTION>
3/96 6/96 9/96 12/96
------- ------- ------- -------
<S> <C> <C> <C> <C>
Intelligent Medical Imaging, Inc. 95 119 115 51
S & P Smallcap 600 102 107 111 117
S & P Health Care (Medical Products & Supplies) 99 98 109 110
</TABLE>
* $100 INVESTED ON 3/21/96 IN STOCK OR ON 2/29/96 IN INDEX - INCLUDING
REINVESTMENT OF DIVIDENDS. FISCAL YEAR ENDING DECEMBER 31.
16
<PAGE>
ADDITIONAL INFORMATION
The Company's Annual Report for 1996, including financial statements, has
been mailed to all stockholders of record as of March 31, 1997. A copy of IMI's
Annual Report to Stockholders and/or Annual Report on Form 10-K will be sent
without charge to any stockholder who requests it in writing by mail or by
telecopy. Requests should be addressed to Gene M. Cochran, Chief Financial
Officer, Intelligent Medical Imaging, Inc., 4360 Northlake Boulevard, Suite 214,
Palm Beach Gardens, Florida 33410, FAX (561) 627-0409.
OTHER MATTERS
The Board does not intend to present any business at the Annual Meeting not
described in this Proxy Statement. If any other proposal should be presented at
the Annual Meeting, and it is a matter which can properly come before the Annual
Meeting, the representatives of the Board named in the enclosed proxy form
intend to vote your proxy in accordance with their best judgment.
By Order of the Board of Directors,
Gene M. Cochran
CORPORATE SECRETARY
Dated: April 21, 1997
17
<PAGE>
PROXY
INTELLIGENT MEDICAL IMAGING, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING TO BE HELD ON MAY 22, 1997
The undersigned hereby appoints Tyce M. Fitzmorris and Gene M. Cochran, and
each of them, with full power of substitution, as proxies to vote the shares of
Common Stock of Intelligent Medical Imaging, Inc. which the undersigned is
entitled to vote at the Annual Meeting of Stockholders to be held at Embassy
Suites, 4350 PGA Boulevard, Palm Beach Gardens, Florida 33410 on May 22, 1997,
at 2:00 p.m. (Florida time), or at any and all adjournments and postponements
thereof.
THE SHARES REPRESENTED BY THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED
IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION
IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2. IF ANY OTHER MATTERS
PROPERLY COME BEFORE THE MEETING, THE PERSONS NAMED IN THIS PROXY WILL VOTE, IN
THEIR DISCRETION, PROVIDED THAT THEY WILL NOT VOTE IN THE ELECTION OF DIRECTORS
FOR PERSONS FOR WHOM AUTHORITY TO VOTE HAS BEEN WITHHELD.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE SIDE
<PAGE>
<TABLE>
<CAPTION>
[X] Please mark votes as in example.
<S> <C> <C> <C> <C>
1. Election of Directors 2. To ratify the appointment of Ernst & FOR [ ] AGAINST [ ] ABSTAIN [ ]
NOMINEES: Gene M. Cochran, James E. Davis, Tyce M. Young LLP as independent auditors
Fitzmorris, R. Wayne Fritzsche, George Masters, for the ensuing year and until their
James Skinner, William Whittaker successors are elected and qualified.
FOR ALL [ ] WITHHOLD ALL [ ]
[ ] ______________________________________ 3. To transact such other business as may properly come before
For all nominees except as noted above the meeting or any adjournment thereof.
MARK HERE [ ] MARK HERE [ ]
FOR ADDRESS IF YOU PLAN
CHANGE AND TO ATTEND
NOTE AT LEFT THE MEETING
IMPORTANT: WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING,
YOU ARE REQUESTED TO COMPLETE AND PROMPTLY RETURN THE PROXY
IN THE ENVELOPE PROVIDED.
Signature: _____________________ Date: _______________ Signature: ________________________ Date: ________________
</TABLE>
