<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
ELECTROSCOPE, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
ELECTROSCOPE, INC.
4828 Sterling Drive
Boulder, CO 80301
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held August 21, 1998
To Our Shareholders:
The Annual Meeting of Shareholders of Electroscope, Inc., a Colorado
corporation (the "Company"), will be held at 10:00 a.m., Mountain Time, on
August 21, 1998, in the Navajo and Pawnee rooms of the Raintree Plaza Conference
Hall, 1900 Ken Pratt Boulevard, Longmont, Colorado, 80501, for the following
purposes, all of which are more completely set forth in the accompanying Proxy
Statement.
1. To elect five (5) Directors;
2. To ratify the appointment of Arthur Andersen LLP as the
Independent Public Accountants for the Company;
3. To transact such other business as may properly come before the
meeting, or any adjournment thereof.
All shareholders are cordially invited to attend the meeting, although
only shareholders of record at the close of business on July 2, 1998, will be
entitled to notice of, and to vote at, the meeting or any and all
adjournments thereof.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Patrick F. Crane
-----------------------------------
Patrick F. Crane, President, CEO
July 10, 1998
PLEASE COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE
ENCLOSED POSTAGE PREPAID ENVELOPE, WHETHER OR NOT YOU PLAN TO ATTEND
THE MEETING. YOUR PROMPT RETURN OF THE PROXY WILL HELP TO ASSURE A
QUORUM AT THE MEETING AND AVOID ADDITIONAL COMPANY EXPENSE FOR FURTHER
SOLICITATION. YOUR PROXY MAY BE REVOKED AT ANY TIME BEFORE IT IS
VOTED.
<PAGE>
ELECTROSCOPE, INC.
4828 Sterling Drive
Boulder, CO 80301
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 21, 1998
SOLICITATION OF PROXIES
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Electroscope, Inc., a Colorado corporation
(the "Company"), for use at the Annual Meeting of Shareholders of the Company to
be held at 10:00 a.m. Mountain Standard Time, on August 21, 1998, in the Navajo
and Pawnee Rooms of the Raintree Plaza Conference Center, 1900 Ken Pratt
Boulevard, Longmont, CO 80501 and at any and all adjournments of such meeting.
If the enclosed Proxy Card is properly executed and returned in time to be
voted at the meeting, the shares of Common Stock represented will be voted in
accordance with the instructions contained therein. Executed proxies that
contain no instructions will be voted for each of the nominees for director
indicated herein. It is anticipated that this Proxy Statement and the
accompanying Proxy Card and Proxy Notice will be mailed to the Company's
shareholders on or about July 10, 1998.
SHAREHOLDERS WHO EXECUTE PROXIES FOR THE ANNUAL MEETING MAY REVOKE THEIR
PROXIES AT ANY TIME PRIOR TO THEIR EXERCISE BY DELIVERING WRITTEN NOTICE OF
REVOCATION TO THE COMPANY, BY DELIVERING A DULY EXECUTED PROXY CARD BEARING A
LATER DATE, OR BY ATTENDING THE MEETING AND VOTING IN PERSON.
The costs of the meeting, including the costs of preparing and mailing the
Proxy Statement, Proxy Notice and Proxy Card, will be borne by the Company. The
Company may, in addition, use the services of its directors, officers and
employees to solicit proxies, personally or by telephone, but at no additional
salary or compensation. The Company will also request banks, brokers, and
others who hold shares of Common Stock of the Company in nominee names to
distribute annual reports and proxy soliciting materials to beneficial owners,
and will reimburse such banks and brokers for reasonable out-of-pocket expenses
which they may incur in so doing.
1
<PAGE>
OUTSTANDING CAPITAL STOCK
The record date for shareholders entitled to vote at the Annual Meeting is
July 2, 1998. At the close of business on that day, there were 5,383,507 shares
of no par value Common Stock (the "Common Stock") of the Company outstanding and
entitled to vote at the meeting.
QUORUM AND VOTING
The presence in person or by proxy of the holders of a majority of the
total issued and outstanding shares of Common Stock of the Company which are
entitled to be voted at the Annual Meeting is necessary in order to constitute a
quorum for the meeting. If a quorum is present, directors will be elected by a
plurality of the votes present in person or by proxy. The aggregate number of
votes cast by all shareholders present in person or by proxy will be used to
determine whether a proposal will carry. Thus, in the case of the election of
directors, an abstention from voting has no effect on the item on which the
shareholder abstained from voting. In addition, broker "non-votes" will be
counted for purposes of attaining a quorum.
ACTION TO BE TAKEN AT THE MEETING
The accompanying proxy, unless the shareholder otherwise specifies in the
proxy, will be voted (i) FOR the election of each of the five nominees named
herein for the office of director, (ii) FOR approval of the appointment of
Arthur Andersen LLP as the Company's independent public accountants and (iii) at
the discretion of the proxy holders, on any other matter that may properly come
before the meeting or any adjournment thereof.
Where shareholders have appropriately specified how their proxies are to be
voted, they will be voted accordingly. If any other matter of business is
brought before the meeting, the proxy holders may vote the proxies at their
discretion. The directors do not know of any such other matter of business.
2
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of June 26, 1998, the number of shares of
the Company's Common Stock owned by any person who is known by the Company to be
the beneficial owner of more than 5% of the Company's voting securities, by all
individual Directors, by all Named Executive Officers and by all Officers and
Directors as a group:
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY PERCENT OF
BENEFICIAL OWNER(2) OWNED(1) CLASS
- ------------------- ------------ ----------
<S> <C> <C>
Patrick F. Crane (3) 211,110 3.8%
Vern Kornelsen(6) 1,944,321 36.1%
David W. Newton(5) 306,944 5.7%
Roger C. Odell(4) 144,119 2.7%
C. Randle Voyles, M.D.(7) 233,230 4.3%
Donald Temple, M.D.(8) 37,600 0.7%
Joe W. Tippett, M.D.(9) 123,592 2.7%
Robert Tucker, Ph.D., M.D.(10) 183,748 3.4%
All executive officers and directors as a
group (10 Persons)(11) 3,239,269 56.4%
OTHER SHAREHOLDERS HOLDING
5% OR MORE:
CMED Partners, LLLP(12) 1,806,100 33.5%
</TABLE>
(1) Shares not outstanding but deemed beneficially owned by virtue of the
individual's right to acquire them as of June 30, 1998, or within 60 days
of such date, are treated as outstanding when determining the percent of
the class owned by such individual and when determining the percent owned
by the group. Unless otherwise indicated, each person named or included in
the group has sole voting and investment power with respect to the shares
of Common Stock set forth opposite the shareholder's name.
(2) The address of each director and officer of the Company is 4828 Sterling
Drive, Boulder, CO 80301.
(3) Includes 22,222 shares issued pursuant to the Employment Agreement between
the Company and Mr. Crane and 188,888 shares issuable pursuant to currently
exercisable options.
(4) Includes 2,200 shares issuable pursuant to currently exercisable options
and 32,853 shares owned by Mr. Odell's children, for which he disclaims
beneficial ownership.
(5) Includes 2,000 shares issuable pursuant to currently exercisable options.
(6) Includes 100,005 shares owned directly, 38,216 shares owned by Tienet,
Inc., of which Mr. Kornelsen is President and 1,806,100 shares owned by
CMED Partners, LLLP, of which Mr. Kornelsen is the General Partner.
(7) Includes 33,600 shares issuable pursuant to currently exercisable options.
(8) Includes 33,600 shares issuable pursuant to currently exercisable options.
(9) Includes 33,600 shares issuable pursuant to currently exercisable options.
(10) Includes 33,600 shares issuable pursuant to currently exercisable options.
(11) Includes 357,488 shares issuable pursuant to currently exercisable options.
(12) The address of CMED Partners, LLLP is 4605 Denice Drive, Englewood, Co
80111.
3
<PAGE>
CHANGE OF CONTROL
Since the beginning of the fiscal year ended March 31, 1998, Mr. Vern D.
Kornelsen, as the General Partner of CMED Partners, LLLP, has acquired control
over 1,806,100 shares of the Company's outstanding common stock. This position,
along with 100,005 shares owned by Mr. Kornelsen individually, and 38,216 shares
owned by Tienet, Inc., a Colorado corporation of which Mr. Kornelsen is the
President, gives Mr. Kornelsen sole voting and dispositive power over a total of
1,944,321 shares of the Company's outstanding common stock, or 36.1% of the
total outstanding shares. CMED Partners acquired 779,000 shares of such stock
from two funds managed by Invesco Trust Company of Denver, Colorado, for the
price of $1.00 per share. CMED Partners acquired 779,000 shares of such stock
from Mr. Roger C. Odell, a Director and Co-Founder of the Company in exchange
for limited partnership interests in CMED Partners, at a value of $1.375 per
share of the Company's common stock. The other shares acquired by CMED partners
were either purchased on the open market at $1.375 per share or exchanged for
limited partnership interests in CMED Partners, LLLP.
ELECTION OF DIRECTORS
(Proxy Item #1)
The Company's Board of Directors has nominated the five persons listed
below for election as directors for the ensuing year, each to hold office until
the 1999 Annual Meeting of Shareholders and until their successors are duly
elected and qualified, or until their death, resignation or removal. EACH OF
THE NOMINEES IS A MEMBER OF THE PRESENT BOARD OF DIRECTORS of the Company. A
shareholder using the enclosed proxy form can vote for all or any of the
nominees of the Board of Directors or such shareholder may withhold his or her
vote from all or any of such nominees. If the proxy card is properly executed
but not marked, it will be voted for all of the nominees. Each of the nominees
has agreed to serve as a director if elected; however, should any nominee become
unable or unwilling to accept nomination or election, the persons named in the
proxy will exercise their voting power in favor of such other person or persons
as the Board of Directors of the Company may recommend. There are no family
relationships among these nominees.
THE BOARD OF DIRECTORS RECOMMEND A VOTE FOR EACH NOMINEE FOR THE BOARD OF
DIRECTORS.
4
<PAGE>
The following table sets forth the directors of the Company, their ages as
of March 31, 1998, all positions and offices held with the Company and the
period from which served:
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Patrick F. Crane 51 Chief Executive Officer, President and
Director
Vern D. Kornelsen (1,2) 65 Director
David W. Newton 51 Vice President, Research and Development
and Director
Roger C. Odell 47 Director
C. Randle Voyles, M.D. (1,2) 48 Director
</TABLE>
(1) Member of the Audit Committee
(2) Member of the Compensation Committee
All directors hold office until the next annual meeting of shareholders or
until their successors have been duly elected and qualified. Executive officers
of the Company are appointed by, and serve at the discretion of, the Board of
Directors and are elected annually. The Board of Directors has an Audit
Committee and a Compensation Committee. There is no family relationship between
any director of the Company and any other director or officer of the Company.
PATRICK F. CRANE has over 20 years of diversified experience in the medical
device business with specific executive responsibility for research and
development, marketing, strategic planning, and the office of the Chief
Executive. From 1992 to 1997 he was with Ohmeda Medical Systems, a division of
British Oxygen Corporation (London and NY Stock Exchanges), as the Vice
President of Research and Development and Project Director for Mergers and
Acquisitions. From 1987 to 1991 he was the Chairman, President and Chief
Executive Officer of Cybermedic, Inc. In addition, Mr. Crane has held executive
positions with Valleylab, the electrosurgical division of US Surgical
Corporation. (NYSE), and Physio Control Corporation. Mr. Crane has earned an
MSE from the University of Michigan and an MBA from the University of Puget
Sound. He completed the Stanford Executive Program in March 1997.
VERN D. KORNELSEN, a co-founder of the Company, served on the Board of Directors
of the Company and as the Chief Financial Officer from 1991 through February of
1997. He was re-elected to the Board in April 1998. Mr. Kornelsen is the
General Partner of CMED Partners, LLLP, a major shareholder of the Company, and
is the President of Tienet, Inc., a Colorado corporation which is a minor
shareholder of the Company. For the past five years Mr. Kornelsen has been a
CPA in the state of Colorado. Mr. Kornelsen holds a bachelors degree in
business from the University of Kansas.
5
<PAGE>
DAVID W. NEWTON, a co-founder of the Company, has been Vice President and a
Director of the Company since its inception in 1991. From 1989 until 1991, Mr.
Newton was President of Newton Associates, Inc., a contract engineering firm.
From 1985 to 1989, Mr. Newton was President of Tienet, Inc., a developer of
integrated computer systems. Mr. Newton has an additional 14 years of
experience as an electrical engineer designing electrosurgical generators and
related accessories. Mr. Newton holds nine patents in the field of medical
electronic equipment and holds a bachelors degree in electrical engineering from
the University of Colorado.
ROGER C. ODELL, a co-founder of the Company, has been a Director of the Company
since its inception in 1991. From 1976 until 1991, Mr. Odell was employed at
Valleylab in a variety of increasingly responsible engineering capacities,
primarily involving electrosurgical products. Mr. Odell holds an associate of
applied science degree in electrical engineering from Alfred State University.
DR. C. RANDLE VOYLES has been a Director of the Company since July 1995. Dr.
Voyles has practiced surgery in Jackson, Mississippi, since 1981 where he is
also Associate Clinical Professor of Surgery at the University of Mississippi
School of Medicine. His numerous academic publications include works on the
practical aspects of laparoscopic surgery, electrosurgery, and management of
complications. Dr. Voyles received a masters degree from the University of
Louisville and a medical degree from the University of Mississippi.
During the fiscal year ended March 31, 1998, there were seven meetings of
the Board of Directors. All directors nominated for re-election to the Board,
who were members of the Board of Directors in fiscal 1998 attended at least 75%
of the meetings of the Board and committees of the Board on which they were
members during fiscal year 1998. There was one meeting of the Audit Committee
and one meeting of the Compensation Committee, both attended by all Directors
who were members of the committees at the time of the meetings.
CURRENT DIRECTORS NOT STANDING FOR RE-ELECTION TO THE BOARD OF DIRECTORS:
DONALD R. TEMPLE, M.D. has been a Director of the Company since April 1993. Dr.
Temple has been on the faculty of the University of Colorado School of Medicine
since 1975. He currently has a joint appointment in the Department of Cellular
and Structural Biology and in the Department of Transplant Surgery. Dr. Temple
has received numerous teaching awards, and has been elected to the Society of
Clinical Anatomists. Dr. Temple received his medical degree from Wayne State
University.
JOE W. TIPPETT, M.D. has been a Director of the Company since July 1991. Dr.
Tippett has been the President of Southeast Orthopedic Clinic, P.A. in San
Antonio, Texas since 1972. Dr. Tippett is the President of the Arthroscopy
Association of North America. Dr. Tippett is also the President of Dale Energy
Corporation and is the Chairman of D.O.C. Tunisia, both oil companies. Dr.
Tippett received both a bachelors degree in zoology and a medical degree from
the University of North Carolina at Chapel Hill.
6
<PAGE>
ROBERT D. TUCKER, M.D., PH.D. has been a Director of the Company since February
1991. From 1993 to the present, Dr. Tucker has been an Associate Professor of
Clinical Pathology at the University of Iowa Hospitals and Clinics, Iowa City,
Iowa. Dr. Tucker received a bachelors degree in mathematics and physics from
the University of Nebraska, a doctorate degree in biophysics from the University
of Minnesota and a medical degree from the University of Nebraska.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors, executive officers and holders of more than 10% of the
Company's Common Stock to file with the Securities and Exchange Commission
initial reports of ownership and reports of changes in ownership of Common Stock
of the Company. Based solely upon a review of Forms 3 and 4 and amendments
thereto furnished to the Company during the fiscal year ended March 31, 1998 and
Forms 5 and amendments thereto furnished to the Company with respect to the
fiscal year ended March 31, 1998, to the best of the Company's knowledge, the
Company's directors, officers and holders of more than 10% of its Common Stock
complied with all Section 16(a) filing requirements.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION
The following table sets forth certain information regarding compensation
earned or awarded the President and Chief Executive Officer of the Company (the
"Named Executive Officer") during the Company's last three fiscal years ended
March 31, 1996, 1997 and 1998. No other executive officer of the Company
received total salary and bonus compensation in excess of $100,000 for the
fiscal year ended March 31, 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation
------------------- Long Term
Compensation
Awards
Other Annual Securities Underlying
Name and Principal Position Year Salary ($) Bonus($)(2) Compensation ($) Options/# of Shares(3)
- --------------------------- ---- ---------- ----------- ---------------- ----------------------
<S> <C> <C> <C> <C> <C>
Patrick F. Crane 1998 126,923 40,000 1,001 530,000(1)
President/CEO 1997 N/A N/A N/A N/A
1996 N/A N/A N/A N/A
</TABLE>
(1) Mr. Crane became employed by the Company on May 5, 1997 as President and
Chief Executive Officer at an annual salary of $150,000.
(2) Bonus elected to be paid in shares of Common Stock upon commencement of
employment pursuant to the Employment Agreement between the Company and
Mr. Crane.
(3) Number of shares of Common Stock subject to options granted during the
year indicated.
7
<PAGE>
COMPENSATION OF DIRECTORS
Outside directors are currently paid 4,000 shares of the Company's Common
Stock per year for attending meetings. Directors are also reimbursed for their
out-of-pocket expenses for attending Board meetings.
STOCK OPTIONS
On February 14, 1991, the Board of Directors and the shareholders of the
Company adopted a stock option plan (the "Plan") providing for grants of stock
options, stock appreciation rights and/or supplemental bonuses to employees and
directors of the Company who are also employees. The Plan permits the granting
of incentive stock options meeting the requirements of Section 422A of the
Internal Revenue Code of 1986, as amended, and also nonqualified stock options
which do not meet the requirements of Section 422A. As amended by the Board of
Directors and approved by the shareholders, the Company has reserved 1,150,000
shares of its Common Stock for issuance upon exercise of options granted under
the Plan. The Plan is administered by the Compensation Committee of the Board
of Directors.
On August 15, 1997 the shareholders of the Company approved the adoption of
the 1997 Stock Option Plan (the "1997 Plan") providing for grants of stock
options and/or supplemental bonuses to employees and directors of the Company.
The Plan permits the granting of incentive stock options meeting the
requirements of Section 422A of the Internal Revenue Code of 1986, as amended,
and also nonqualified stock options which do not meet the requirements of
Section 422A. As approved by the shareholders, the Company has reserved 800,000
shares of its Common Stock for issuance upon exercise of options granted under
the Plan. The Plan is administered by the Compensation Committee of the Board
of Directors.
As of June 26, 1998, options to purchase an aggregate of 1,105,000 shares
of Common Stock (net of options canceled) had been granted pursuant to the Plan
and 180,562 options had been exercised. As of June 26, 1998, options to
purchase an aggregate of 288,162 shares of Common Stock (net of options
canceled) had been granted pursuant to the 1997 Plan and no options had been
exercised. As of June 26, 1998, the market value of all shares of Common Stock
subject to outstanding options was $1,212,600 (based upon the closing bid price
as reported on the NASDAQ System on such date).
OPTIONS GRANTED
There were 530,000 options granted to the Named Executive Officer during
the Company's last fiscal year ended March 31, 1998.
8
<PAGE>
The following table sets forth certain information regarding the number and
value of exercisable and unexercisable options to purchase shares of Common
Stock held as of the end of the Company's 1998 fiscal year by the Named
Executive Officer:
AGGREGATED 1998
FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
Number of Shares Value of Unexercised
Underlying Unexercised in-the-Money Options
Shares Options at March 31, 1998 at March 31, 1998
Acquired Value (#) ($)
on Exercise Realized -------------------------- --------------------------
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Patrick F. Crane 188,888 341,112 N/A N/A
</TABLE>
Note-The exercise price of the options exceeds their fair market value.
APPROVAL OF THE APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
(Proxy Item # 2)
The Board of Directors has appointed the firm of Arthur Andersen LLP to act
as independent accountants for the Company for the fiscal year ending March 31,
1999. This appointment will be submitted to the Company's shareholders for
ratification. This firm has audited the financial statements of the company for
the fiscal year ended March 31, 1998 and for prior years, and has advised the
Company that neither the firm nor any of its partners has any direct or indirect
material financial interests in the Company, nor have they had any connections
during the past three years with the Company, in any capacity other than that of
independent accountants and auditors. Arthur Andersen LLP will have
representatives at the 1998 Annual Meeting who will have an opportunity to make
a statement and will be available to respond to appropriate questions.
In the event the shareholders do not ratify the appointment of Arthur
Andersen LLP, the selection of other independent auditors will be considered by
the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF ARTHUR
ANDERSEN LLP AS INDEPENDENT PUBLIC ACCOUNTANTS.
OTHER MATTERS
Management of the Company knows of no other matter which may come before
the meeting. However, if any additional matters are properly presented at the
meeting, it is intended that the persons named in the enclosed Proxy, or their
substitutes, will vote such Proxy in accordance with their judgment on such
matters.
Shareholder proposals intended for presentation at the Company's 1999
Annual Meeting of Shareholders must be received by the Company at its principal
offices in Boulder, Colorado, not later than March 10, 1999.
9
<PAGE>
ANNUAL REPORT TO SHAREHOLDERS
The Annual Report of the Company for the fiscal year ended March 31, 1998,
including audited Financial Statements for the year then ended, is being mailed
to Shareholders on July 10, 1998 with these proxy materials.
IN ORDER THAT YOUR SHARES MAY BE REPRESENTED IF YOU DO NOT PLAN TO ATTEND
THE MEETING, PLEASE SIGN, DATE AND RETURN YOUR PROXY PROMPTLY. IN THE
EVENT YOU ARE ABLE TO ATTEND, WE WILL, IF YOU REQUEST, CANCEL THE PROXY.
SIGNATURE
By Order of the Board of Directors
/s/ Patrick F. Crane
- -----------------------------
Patrick F. Crane, President
Boulder, Colorado
July 10, 1998
10
<PAGE>
ELECTROSCOPE, INC.
SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL
MEETING OF SHAREHOLDERS TO BE HELD AUGUST 21, 1998
The undersigned hereby constitutes, appoints and authorizes Patrick F.
Crane and Karl D. Hawkins and each of them, the true and lawful attorneys and
Proxies of the undersigned with full power of substitution and appointment, for
and in the name, place and stead of the undersigned, to act for and vote as
designated below, all of the undersigned's shares of the no par value common
stock of Electroscope, Inc., a Colorado corporation, at the Annual Meeting of
Shareholders to be held in the Navajo and Pawnee Rooms of the Raintree Plaza
Conference Hall, 1900 Ken Pratt Boulevard, Longmont, Colorado 80501 at 10:00
a.m. Mountain Time, on August 21, 1998, and at any and all adjournments thereof,
for the following purposes:
1. To elect five (5) Directors:
/ / For all nominees listed below (except as marked to the contrary):
/ / Withhold authority to vote for the nominees listed below:
Patrick F. Crane
Vern D. Kornelsen
David W. Newton
Roger C. Odell
C. Randle Voyles
(INSTRUCTION: To withhold authority to vote for any individual nominee,
draw a line through or otherwise strike out his name. If authority to vote for
the election of any nominee is not withheld, the execution of this Proxy shall
be deemed to grant such authority.)
2. To ratify the appointment of Arthur Andersen LLP as Independent Pubic
Accountants for the Company.
/ / FOR AGAINST ABSTAIN
3. To transact such other business as may properly come before the
meeting, or any adjournment thereof.
/ / FOR AGAINST ABSTAIN
The undersigned hereby revokes any Proxies as to said shares heretofore
given by the undersigned, and ratifies and confirms all that said attorneys and
Proxies may lawfully do by virtue hereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR ALL PROPOSALS. THIS PROXY CONFERS DISCRETIONARY
AUTHORITY IN RESPECT TO MATTERS NOT KNOWN OR DETERMINED AT THE TIME OF
THE MAILING OF THE NOTICE OF THE ANNUAL MEETING OF SHAREHOLDERS TO THE
UNDERSIGNED.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting
of Shareholders and Proxy Statement furnished herewith.
DATED: _____________, 1998.
------------------------------------
------------------------------------
<PAGE>
Signature(s) should agree with the name(s) shown hereon. Executors,
administrators, trustees, guardians and attorneys should indicate their capacity
when signing. Attorneys should submit powers of attorney.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
ELECTROSCOPE, INC. PLEASE SIGN AND RETURN THIS PROXY TO AMERICAN
SECURITIES TRANSFER, INCORPORATED, 938 QUAIL STREET, SUITE 101,
LAKEWOOD, CO 80215. THE GIVING OF A PROXY WILL NOT AFFECT YOUR RIGHT
TO VOTE IN PERSON IF YOU ATTEND THE MEETING.
-2-
