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OPHTHALMIC IMAGING SYSTEMS - DEF 14A - 20021101 - SECURITY_OWNERS
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth as of September 26, 2002 certain information
regarding the ownership of voting securities of the Company by each shareholder
known to the management of the Company to be (i) the beneficial owner of more
than 5% of the Company's outstanding Common Stock, (ii) the directors during the
last fiscal year and nominees for director of the Company, and (iii) all
executive officers and directors as a group. Unless otherwise noted, the Company
believes that the beneficial owners of the Common Stock listed below, based on
information furnished by such owners, have sole investment and voting power with
respect to such shares. Unless otherwise noted, the address of each beneficial
owner named below is the Company's corporate address.
Amount and Nature of Beneficial
Name and Principal Position Owner Percent of Class
------------------------------------------ ------------------------------------ -------------------------
MediVision Medical Imaging Ltd.
P.O. Box 45, Industrial Park
Yokneam Elit
20692 Israel 5,964,635 (1) 73.3%
Gil Allon, Director and Chief Executive
Officer 166,667 (2) 2.0%
Noam Allon, Director 100,000 (2) 1.2%
Ariel Shenhar, Director, Chief Financial
Officer and Secretary 100,000 (2) 1.2%
Jonathan Adereth, Chairman of the
Board 100,000 (2) 1.2%
Alon Harris, Ph.D., Director 6,667 (2) 0.1%
Directors and Officers as a group
(total of 5 persons) 473,334 (2) 5.5%
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(1) As indicated in a Schedule 13D filed by MediVision Medical Imaging Ltd.
("MediVision") on September 12, 2000.
(2) Represents shares subject to stock options exercisable within 60 days from
September 26, 2002.
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ACTION TO BE TAKEN AT THE MEETING
Proposal 1
ELECTION OF DIRECTORS
At the Meeting, five (5) directors are to be elected to serve until the
next Annual Meeting of Shareholders and until their successors shall be duly
elected and qualified. The number of nominees was determined by the Board of
Directors pursuant to the Company's By-Laws. Unless otherwise specified, all
proxies will be voted in favor of the five (5) nominees listed below as
directors of the Company.
All of the nominees, except Alon Harris, were elected as directors in
August 2000 pursuant to the closing of the transactions with MediVision (see
discussion below under the heading "Certain Relationships and Related
Transactions). Alon Harris was elected as a director by the Board of Directors
in November 2001. The term of the current directors expires at the Meeting.
The Board of Directors has no reason to expect that any of the nominees
will be unable to stand for election at the date of the Meeting. In the event
that a vacancy among the original nominees occurs prior to the Meeting, the
proxies will be voted for a substitute nominee or nominees named by the Board of
Directors and for the remaining nominees.
Our directors and executive officers are as set forth in the table below:
Name Age Position
--------------------------------- --------------------------------- ---------------------------------
Noam Allon 43 Director
Gil Allon 41 Director, Chief Executive Officer
Ariel Shenhar 37 Director, Chief Financial Officer
and Secretary
Jonathan Adereth 55 Director, Chairman of the Board
Alon Harris, Ph.D. 43 Director
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Noam Allon has served as a member of the Company's Board of Directors since
August 2000. Mr. Allon has also served as the President, Chief Executive Officer
and a member of the Board of Directors of MediVision since MediVision's
inception in June 1993. Mr. Allon also currently serves as the President, Chief
Executive Officer and a member of the Board of Directors of MediVision's
subsidiaries: Camvision, Laservision and MediVision France. Mr. Allon received
his B.Sc. in Computer Science with distinction from the Technion Israel
Institute of Technology in Haifa, Israel in May 1986.
Gil Allon has served as a member of the Company's Board of Directors since
August 2000 and has served as the Company's Chief Executive Officer since
January 2002. Mr. Allon has acted in the capacity of the Company's Chief
Executive Officer since August 2000. Mr. Allon is also a member of the
Compensation and Nomination Committees of the Company's Board of Directors. Mr.
Allon has also served as the Vice President, Chief Operating Officer and a
member of the Board of Directors of MediVision since MediVision's inception in
June 1993. Mr. Allon also currently serves as the Vice President, Chief
Operating Officer and a member of the Board of Directors of MediVision's
subsidiaries: Camvision and Laservision. Mr. Allon received his B.A. and M.Sc.
in Computer Science, both with
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distinction, from the Technion Israel Institute of Technology in Haifa, Israel
in May 1987 and December 1989, respectively, and his M.B.A. with distinction in
Business Management from the University of Haifa in September 1999.
Ariel Shenhar has served as a member of the Company's Board of Directors
since August 2000, has served as the Company's Chief Financial Officer since
July 2002 and has served as the Company's Secretary since August 2002. Mr.
Shenhar is also a member of the Audit Committee of the Company's Board of
Directors. Mr. Shenhar has also served as a member of the Board of Directors of
MediVision since August 1994 and as its Vice President and Chief Financial
Officer since January 1997. Mr. Shenhar served as a member of the Board of
Directors of Fidelity Gold Real Estate Markets Ltd., an Israeli company engaged
in real estate, from 1994 to 1998, as an accountant at Nissan Caspi & Co.
Certified Public Accountants in Jerusalem, Israel in 1996, and at Witkowski &Co.
Certified Public Accountants in Tel Aviv, Israel from 1994 to 1995. Mr. Shenhar
received his B.A. in Economics and Accounting and his M.B.A. in Finance from the
Hebrew University in Jerusalem, Israel and June 1992 and June 1999,
respectively, and has been a Certified Public Accountant since January 1997.
Jonathan Adereth has served as Chairman of the Company's Board of Directors
since August 2000. Mr. Adereth is also Chairman of each of the Audit,
Compensation and Nomination Committees of the Company's Board of Directors. Mr.
Adereth has also served as a member of the Board of Directors of MediVision
since July 1, 1999. Mr. Adereth currently serves also as a member of the Board
of Directors of Carmel Biosensors Ltd., an Israeli corporation engaged in the
business of medical devices. In addition, Mr. Adereth is a director of Barnev
Ltd., an Israeli corporation engaged in labor monitoring systems. From 1994 to
1998, Mr. Adereth served as President and CEO and as a member of the Board of
Directors of Elscint Ltd., a medical equipment company engaged in the
development, manufacturing and marketing of medical imaging products such as CT
scanners, MRI systems and gamma cameras. Prior thereto Mr. Adereth served as a
senior officer of Elscint Ltd. in various positions and capacities, including as
Senior Vice President of Sales and Marketing in 1994 and as Vice President of
Sales, from 1986 to 1993. Mr. Adereth received his B.Sc. in Physics from the
Technion Israel Institute of Technology in Haifa, Israel in May 1973.
Alon Harris has served as a member of the Company's Board of Directors
since November 2001. Professor Harris has been Director of the Glaucoma Research
and Diagnostic Center (the "Center") in the Department of Ophthalmology at the
Indiana University School of Medicine ("Indiana") since 1993. The Center,
founded by Professor Harris, specializes in investigation of ocular blood flow
and its relationship to eye diseases such as glaucoma, age-related macular
degeneration and diabetic retinopathy. He has been the Letzter Professor of
Ophthalmology at Indiana since 2000 and has been a Professor of Ophthalmology
and Physiology and Biophysics at Indiana since 1999. Professor Harris is the
1995 recipient of the Research to Prevent Blindness International Scholar Award
and holds the Letzter Endowed Chair of Ophthalmology.
There are no family relationships among any of the persons listed above
except that Noam Allon and Gil Allon are brothers.
Certain Information About the Board of Directors and Committees of the Board
The Board of Directors is responsible for the management of the Company.
During the fiscal year ended December 31, 2001, the Board of Directors held one
(1) meeting and acted by written consent
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on four (4) occasions. All of the directors attended the meeting of the Board.
The Board has established audit, nominating and compensation committees.
The functions of the audit committee (the "Committee") include the
nomination of independent auditors for appointment by the Board; meeting with
the independent auditors to review and approve the scope of their audit
engagement; meeting with our financial management and the independent auditors
to review matters relating to internal accounting controls, our accounting
practices and procedures and other matters relating to our financial condition;
and to report to the Board periodically with respect to such matters. The
Committee currently consists of Ariel Shenhar and Jonathan Adereth. The
Committee held no meetings during 2001. However, the members of the Committee
met on occasion to discuss matters in an informal manner. The specific functions
and responsibilities of the Committee are set forth in a written charter of the
Committee, adopted by the Board of Directors, which is attached hereto as
Appendix A.
The function of the nominating committee is to nominate directors to the
Board of Directors. The nominating committee currently consists of Gil Allon and
Jonathan Adereth. The nominating committee held no meetings during 2001.
However, the members of the nominating committee met on occasion to discuss
matters in an informal manner.
The function of the compensation committee is to review and recommend to
the Board of Directors the appropriate compensation of our executive officers.
The compensation committee currently consists of Gil Allon and Jonathan Adereth.
The compensation committee held no meetings during 2001. However, the members of
the compensation committee met on occasion to discuss matters in an informal
manner.
Audit Committee Report
Our Committee has reviewed and discussed with management of the Company and
Perry-Smith & Co., the independent auditing firm of the Company, the audited
financial statements of the Company as of December 31, 2001 (the "Audited
Financial Statements"). In addition, we have discussed with Perry-Smith & Co.
the matters required by Codification of Statements on Auditing Standards No. 61,
as amended by Statement on Auditing Standards No. 90.
The Committee also has received and reviewed the written disclosures and
the letters from Perry-Smith & Co. required by Independence Standards Board
Standard No. 1, and we have discussed with such firm its independence from the
Company. We also have discussed with management of the Company and Perry-Smith &
Co. such other matters and received such assurances from them as we deemed
appropriate.
Management is responsible for the Company's internal controls and the
financial reporting process. Perry-Smith & Co. is responsible for performing an
independent audit of the Company's financial statements in accordance with
United States generally accepted auditing standards and issuing a report
thereon. The Committee's responsibility is to monitor and oversee these
processes.
Based on the foregoing review and discussions and a review of the reports
of Perry-Smith & Co. with respect to the Audited Financial Statements, and
relying thereon, we have recommended to the Company's Board of Directors the
inclusion of the Audited Financial Statements in the Company's Annual Report on
Form 10-KSB for the fiscal year ended December 31, 2001.
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Audit Committee
Ariel Shenhar
Jonathan Adereth
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers, and persons who own more than
10% of the Company's Common Stock, to file with the Securities and Exchange
Commission (the "SEC") initial reports of ownership and reports of changes in
ownership of Common Stock and other equity securities of the Company. Officers,
directors and greater than 10% shareholders are required by SEC regulation to
furnish the Company with copies of all Section 16(a) reports they file. To the
Company's knowledge, based solely on review of the copies of such reports
furnished to the Company during the one-year period ended December 31, 2001, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than 10% beneficial owners were complied with, except that Noam Allon,
Gil Allon, Ariel Shenhar, Jonathan Adereth and Alon Harris were late in filing
reports concerning the grant to them of options to purchase 150,000, 250,000,
150,000, 150,000 and 20,000 shares of the Company's Common Stock, respectively.
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EXECUTIVE COMPENSATION
The following table sets forth information concerning the annual and long
term compensation of the Company's acting Chief Executive Officer for services
in such capacity to the Company during the Company's 2001 and 2000 fiscal years.
Summary Compensation Table
Name and Principal Fiscal Other Annual
Position Year Salary($)(1) Bonus($) Compensation($)
------------------------------------- ----------- ------------- ----------- ------------------
Gil Allon............................ 2001 120,000 42,269(2) 40,639(3)
Acting Chief Executive Officer 2000 40,000 -- 21,710(4)
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(1) Payments to and on behalf of Mr. Allon for his services to the Company were
generally made directly by MediVision and charged to the Company (see
discussion below under the heading "Certain Relationships and Related
Transactions").
(2) Paid by the Company to Mr. Allon in June 2002.
(3) Represents $21,925 in housing expenses and $5,514 in medical insurance
premiums paid by MediVision and charged to the Company (see discussion
below under the heading "Certain Relationships and Related Transactions")
and approximately $13,200 in automobile expenses for Mr. Allon paid by the
Company.
(4) Represents $15,778 in relocation expenses and $1,532 in medical insurance
premiums paid by MediVision and charged to the Company (see discussion
below under the heading "Certain Relationships and Related Transactions")
and approximately $4,400 in automobile expenses for Mr. Allon paid by the
Company.
Option Grants in Last Fiscal Year
As of December 31, 2001, the Company did not have any long term incentive
plans nor had it awarded any restricted stock. The following table sets forth
options that were granted in the fiscal year ended December 31, 2001 to the
acting chief executive officer listed on the summary compensation table.
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Number
of Percent of total
securities options granted to Per share
underlying employees exercise
Name options granted in fiscal year price Expiration date
----------------------------------------------------------------------------------------------------
Gil Allon 250,000 23.8% $0.41 9/6/11
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Option Exercises in Last Fiscal Year and Fiscal Year-End Option Value
No stock options were exercised during the fiscal year ended December 31,
2001 by the acting Chief Executive Officer listed on the summary compensation
table. The following table contains information concerning the number and value,
at December 31, 2001, of options held by Gil Allon. The Company does not use
SARs as compensation.
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Number of Unexercised Options Value of Unexercised In-the-Money
at Fiscal Year End Options at Fiscal Year End(1)
Name Exercisable Unexercisable Exercisable Unexercisable
------------------------------------------------------------------------------------------------------
Gil Allon 83,333 166,667 $0 $0
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(1) Fair market value of the underlying securities (the closing price of the
Company's Common Stock on the Over the Counter Bulletin Board) at fiscal
year end (December 31, 2001) minus the exercise price.
Employment Agreements
Throughout the fiscal year ended December 31 2001, Gil Allon provided
executive management services to the Company, including acting in the capacity
of its Chief Executive Officer. These services were performed pursuant to an
arrangement between the Company and MediVision, of which Mr. Allon was an
executive officer. Payments to and on behalf of Mr. Allon for his services to
the Company were generally made directly by MediVision (see discussion below
under the heading "Certain Relationships and Related Transactions") and charged
to the Company. In consideration for the executive management services rendered
by Mr. Allon to the Company during the year ended December 31, 2001, the Company
incurred charges in the amount of approximately $182,000. In January 2002, Mr.
Allon terminated his employment with MediVision and became an employee of the
Company, currently serving as its Chief Executive Officer. The Company has
entered into an employment agreement with Mr. Allon for his services as Chief
Executive Officer, for a term of approximately one year, commencing on January
1, 2002 and expiring on December 15, 2002, which agreement may be renewed for
successive one year intervals upon mutual agreement of the parties. The
agreement provides for an annual salary of $120,000 and for a bonus of up to
$60,000 based on the Company meeting certain performance goals and as determined
by the Board of Directors. Mr. Allon will also be eligible to participate in the
Company's health and welfare insurance plans and is provided an automobile for
business use. This agreement may be terminated by either party with six months
prior notice.
The Company has also entered into an employment agreement with Ariel
Shenhar for his services as Chief Financial Officer, for a term of approximately
one year, commencing on July 22, 2002 and expiring on June 30, 2003, which
agreement may be renewed for successive one year intervals upon mutual agreement
of the parties. The agreement provides for an annual salary of $114,000 and a
bonus of up to $38,000 based on the Company meeting certain performance goals
and as determined by the Board of Directors. Mr. Shenhar will also be eligible
to participate in the Company's health and welfare insurance plans and is
provided an automobile for business use. This agreement may be terminated by
either party with six months prior notice.
In addition, Jonathan Adereth provides certain consulting services to the
Company. For services rendered during the year ended December 31, 2001, Mr.
Adereth earned consulting fees of approximately $23,000, plus expenses.
Furthermore, in September 2001, the directors were granted options to
purchase an aggregate of 700,000 shares of the Company's Common Stock pursuant
to the Company's 2000 Stock Option Plan at a per share exercise price of $0.41,
which price was the closing price of the Company's Common Stock on the date that
the 2000 Stock Option Plan was approved by the Company's Board of Directors and
which price exceeded the closing price of the Company's stock on the date of
grant.
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Pursuant to a letter agreement executed on October 24, 2001 between Alon
Harris and the Company, and as subsequently modified by the parties, the Company
has agreed to the following in connection with his service as a director: (i) to
grant to Professor Harris options to purchase up to 20,000 shares of the
Company's Common Stock, at a per share exercise price not less that fair market
value on the date of the grant, (ii) to pay to Professor Harris, in four equal
quarterly installments, an annual retainer in the aggregate amount of $6,000,
and (iii) to reimburse Professor Harris for reasonable expenses incurred in
connection with his services as a director. No payments were made pursuant to
the foregoing during the year ended December 31, 2001 and the referenced options
were granted in January 2002 at a per share exercise price of $0.10, which price
exceeded the closing price of the Company's stock on the date of grant.
No standard arrangement regarding compensation of the directors has been
adopted by the Board, and, except as noted above, no director has been paid any
compensation by the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In February 1998, the Company and Premier Laser Systems, Inc., a California
corporation ("Premier"), entered into a Stock Purchase Agreement (the "Stock
Purchase Agreement"), whereby Premier offered to buy those shares of the
Company's Common Stock not already owned by the Company. In August 1998,
however, Premier notified that Company that, due to a variety of factors,
Premier would not be able to close the transactions contemplated under the Stock
Purchase Agreement and the Company thereupon terminated the Stock Purchase
Agreement. As a result of such termination, the Company demanded Premier pay
$500,000 as a termination fee (the "Termination Fee"), as provided for in the
Stock Purchase Agreement. The demand was not pursued at the time because of
subsequent further discussions as to a merger of the companies.
In October 1999, the Company and Premier entered into an Agreement and Plan
of Reorganization (the "Merger Agreement") whereby, upon requisite shareholder
approval, the Company would have become a wholly-owned subsidiary of Premier.
Also in October 1999, the Company and Premier entered into two stock
purchase agreements with respect to the Company's Series B Preferred Stock
whereby, among other things, Premier purchased 150 shares of the Company's
Series B Preferred Stock with each share carrying the voting power of 1,000
shares of the Company's Common Stock, at a per share price of $25 in exchange
for Premier's cancellation of certain of the Company's debt in the aggregate
amount of $3,750.
In February 2000, Premier notified the Company that it was considering
seeking protection under the U.S. Bankruptcy Code (the "Code") and the Company
thereupon terminated the Merger Agreement. In March 2000, Premier filed a
voluntary petition for protection and reorganization under Chapter 11 of the
Code.
As a result of the foregoing transactions, at the time of its bankruptcy
filing, Premier owned 49.5% of the Company's outstanding Common Stock and all
150 outstanding shares of the Company's Series B Preferred Stock, thereby giving
Premier majority voting control.
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In July 2000, the Company, Premier and MediVision Medical Imaging Ltd., an
Israeli company, entered into a series of definitive agreements relating to the
transfer of Premier's ownership interests in the Company to MediVision, in
exchange for cash and stock (the "MediVision Investments"). In separate but
related transactions, MediVision loaned the Company $260,000 as short-term
funding for continued operations and, upon the closing of the transactions
contemplated under the agreements in August 2000 (the "Closing"), MediVision
committed to loan up to $1,500,000 to the Company, which is convertible at
MediVision's option into shares of the Company's Common Stock. Pursuant to the
agreements relating to the MediVision Investments, among other things: (i) the
Company's entire debt owed to Premier, calculated at an approximate book value
of $2,100,000, was converted per the agreements in favor of Premier into shares
of the Company's Common Stock at a conversion price of $0.55 per share; and (ii)
MediVision purchased all of the stock of the Company then held by Premier,
including 150 shares of the Company's Series B Preferred Stock which were
converted by their terms into shares of Common Stock and 3,832,727 shares of
Common Stock were issued pursuant to the conversion of the Premier debt.
In addition, at the Closing, Premier and the Company executed a mutual
waiver and release of claims, thereby releasing each other from any and all
claims, whether known or unknown between them, including the $500,000
Termination Fee asserted by the Company against Premier.
In July 2001, MediVision increased the amount of its loan commitment by
$1,000,000 to $2,500,000.
As a result of the foregoing transactions, MediVision currently owns
approximately 73% of the Company's outstanding Common Stock.
Proposal 2
RATIFICATION OF SELECTION OF PERRY-SMITH & CO.
AS THE COMPANY'S INDEPENDENT AUDITORS
The Board of Directors has selected Perry-Smith & Co. as the independent
auditors of the Company for the year ending December 31, 2002, subject to
ratification by the Company's shareholders at the Meeting. Perry-Smith & Co. has
acted for the Company in such capacity since October 23, 1998. A resolution for
such ratification will be submitted for consideration.
Perry-Smith & Co. has indicated to the Company that it intends to have a
representative present at the Meeting who will be available to respond to
appropriate questions. Such representative will have the opportunity to make a
statement if he so desires. If the resolution selecting Perry-Smith & Co. as
independent public accountants is adopted by the shareholders, the Board of
Directors nevertheless retains the discretion to select different auditors
should it then deem it in the Company's best interests. Any such future
selection need not be submitted to a vote of shareholders.
Required Vote
The affirmative vote of a majority of the shares of Common Stock present,
in person or by proxy, at the Meeting and entitled to vote on this proposal,
will be required to adopt this proposal. The Board of Directors recommends that
shareholders vote FOR this proposal.
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Audit Fees
Fees billed to the Company by Perry-Smith & Co. for its audit of the
Company's financial statements for the fiscal year ended December 31, 2001 and
its reviews of the Company's financial statements included in the Company's
Forms 10-QSB for the fiscal year ended December 31, 2001 totaled approximately
$40,000.
Financial Information Systems Design and Implementation Fees
The Company did not engage Perry-Smith & Co. to provide advice to the
Company regarding financial information systems design and implementation during
the fiscal year ended December 31, 2001.
All Other Fees
Fees billed to the Company by Perry-Smith & Co. for preparation of the
Company's federal, state and certain local income tax returns during the fiscal
year ended December 31, 2001 totaled approximately $8,000.
SHAREHOLDER PROPOSALS
Any shareholder proposal intended to be presented at the 2003 Annual
Meeting of Shareholders must be received by the Company not later than July 4,
2003 for inclusion in the Company's Proxy Statement and form of proxy card for
that meeting. Notices of shareholder proposals relating to proposals to be
presented at the Meeting but not included in the Company's Proxy Statement and
form of proxy, will be considered untimely, and thus the Company's proxy may
confer discretionary authority on the persons named in the proxy with regard to
such proposals, if received after September 17, 2003.
FINANCIAL STATEMENTS
The financial statements of the Company have been included as part of the
Annual Report of the Company enclosed with this Proxy Statement.
OTHER MATTERS
Management does not intend to bring before the Meeting any matters other
than those specifically described above, and no other matters were proposed to
be presented by September 30, 2002. If any other matters or motions properly
come before the Meeting, it is the intention of the persons named in the
accompanying Proxy to vote such Proxy in accordance with their discretion on
such matters or motions, including any matters dealing with the conduct of the
Meeting.
By Order of the Board of Directors
Ariel Shenhar
Secretary
November 1, 2002
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APPENDIX A
AUDIT COMMITTEE CHARTER
OF
OPHTHALMIC IMAGING SYSTEMS
I. PURPOSE
The primary function of the Audit Committee is to assist the Board of
Directors (the "Board") of Ophthalmic Imaging Systems (the "Corporation") in
fulfilling its oversight responsibilities by reviewing the financial reports and
other financial information provided by the Corporation to any governmental body
or the public; the Corporation's systems of internal controls regarding finance,
accounting, legal compliance and ethics that management and the Board have
established or may establish; and the Corporation's auditing, accounting and
financial reporting processes generally. Consistent with this function, the
Audit Committee should encourage continuous improvement of, and should foster
adherence to, the Corporation's policies, procedures and practices at all
levels. The Audit Committee's primary duties and responsibilities are to:
o Serve as an independent and objective party to monitor the
Corporation's financial reporting process and internal control system.
o Review and appraise the audit efforts of the Corporation's independent
auditors.
o Provide an open avenue of communication among the independent
auditors, financial and senior management and the Board.
The Audit Committee will fulfill these responsibilities by carrying out the
activities enumerated in Section IV of this Charter and such other activities
consistent with this Charter as may from time to time be necessary or
appropriate.
II. COMPOSITION OF THE AUDIT COMMITTEE
The Audit Committee shall be comprised of two or more members of the Board
as determined by the Board, each of whom shall be independent directors, and
free from any relationship that, in the opinion of the Board, would interfere
with the exercise of his or her independent judgment as a member of the Audit
Committee. All members of the Audit Committee must be able to read and
understand fundamental financial statements, including a balance sheet, income
statement and cash flow statement or will become able to do so within a
reasonable period of time after his or her appointment to the Audit Committee.
Additionally, at least one member of the Committee must have past employment
experience in finance or accounting, requisite professional certification in
accounting, or other comparable experience or background which results in such
member's financial sophistication, including being or having
A-1
been a chief executive officer, chief financial officer or other senior officer
with financial oversight responsibilities.
The members of the Audit Committee shall be elected by the Board at the
annual organizational meeting of the Board and shall serve at the pleasure of
the Board or until their successors shall be duly elected and qualified. Unless
a chairman of the Audit Committee (the "Chairman") is elected by the Board, the
members of the Committee may designate a Chairman by majority vote of the full
Audit Committee membership.
III. MEETINGS
The Audit Committee shall meet from time to time as called by the Chairman
or as requested by the independent auditors. The Audit Committee may ask members
of management or others to attend meetings of the Audit Committee and provide
pertinent information as necessary. As part of its responsibility to foster open
communication, the Audit Committee shall meet at least annually with management
and the independent auditors in separate executive sessions to discuss any
matters that the Audit Committee or any of these groups believe should be
discussed privately. In addition, the Audit Committee or its Chairman shall
discuss with management the Corporation's quarterly financial statements
consistent with Section IV.4. below. The Audit Committee shall maintain minutes
or other records of meetings and activities of the Audit Committee.
IV. RESPONSIBILITIES AND DUTIES
The duties of the Audit Committee shall include the following:
Documents/Reports Review
1. Review this Charter periodically, but at least annually, and update
this Charter as conditions dictate.
2. Review, prior to its filing or prior to its release, as the case may
be, the Corporation's Form 10-KSB, as applicable and annual report to
shareholders.
3. Review the Corporation's Form 10-QSB, as applicable, prior to its
filing. The Chairman may represent the entire Audit Committee for
purposes of this review.
4. Review such other reports or other financial information submitted to
the Securities and Exchange Commission or the public as the Audit
Committee shall deem appropriate. The Chairman may represent the
entire Audit Committee for purposes of this review.
A-2
Independent Auditors
5. Recommend to the Board the selection of the independent auditors for
each fiscal year, confirm and assure their independence and approve
the fees and other compensation to be paid to the independent
auditors. On an annual basis, the Audit Committee should review and
discuss with the auditors all significant relationships which effect
the auditors' independence and should receive the written statement
from the independent auditors required by Independence Standards Board
Standard No. 1, as amended, modified or supplemented from time to
time.
6. Recommend to the Board the advisability of having the independent
auditors make specified studies and reports as to auditing matters,
accounting procedures, tax or other matters.
7. Review the performance of the independent auditors and approve any
proposed d discharge of the independent auditors when circumstances
warrant.
8. Periodically consult with the independent auditors out of the presence
of management about internal controls and the completeness and
accuracy of the Corporation's financial statements.
Financial Reporting Processes
9. Consider the independent auditors' judgments about the quality and
appropriateness of the Corporation's accounting principles as applied
in its financial reporting.
10. Consider and approve, if appropriate, major changes to the
Corporation's auditing and accounting principles and practices as
suggested by the independent auditors or management.
Process Improvement
11. Establish regular and separate systems of reporting to the Audit
Committee by each of management and the independent auditors regarding
any significant judgments made in management's preparation of the
financial statements and the view of each as to appropriateness of
such judgments.
12. Following completion of the annual audit, review separately with each
of management and the independent auditors any significant
difficulties encountered during the course of the audit, including any
restrictions on the scope of work or access to required information.
A-3
13. Review any significant disagreement among management and the
independent auditors in connection with the preparation of any of the
Corporation's financial statements.
14. Review with the independent auditors and management the extent to
which changes or improvements in financial or accounting practices, as
approved by the Audit Committee, have been implemented.
Legal Compliance
15. Review with the Corporation's corporate counsel any legal matter that
could have a significant impact on the Corporation's financial
statements.
16. Review with the Corporation's corporate counsel legal compliance
matters including corporate securities trading policies.
Other Responsibilities
Perform any other activities consistent with this Charter, and the
Corporation's Articles of Incorporation, By-laws and governing law, as the Audit
Committee or the Board deems necessary or appropriate.
A-4
OPHTHALMIC IMAGING SYSTEMS
PROXY
ANNUAL MEETING OF SHAREHOLDERS - NOVEMBER 22, 2002
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints, as proxies for the undersigned, Gil Allon and
Ariel Shenhar and each of them individually, with full power of substitution, to
vote all shares of Common Stock of the undersigned in Ophthalmic Imaging Systems
(the "Company") at the Annual Meeting of Shareholders of the Company to be held
at the principal executive offices of the Company, 221 Lathrop Way, Suite I,
Sacramento, California, 95815 on Friday, November 22, 2002, at 10:30 a.m., local
time (the receipt of Notice of which meeting and the Proxy Statement
accompanying the same being hereby acknowledged by the undersigned), or at any
adjournments thereof, upon the matters described in the Notice of Meeting and
Proxy Statement and upon such other business as may properly come before such
meeting or any adjournments thereof, hereby revoking any proxies heretofore
given.
Each properly executed proxy will be voted in accordance with the
specifications made on the reverse side hereof. If no specifications are made,
the shares represented by this proxy will be voted "FOR" the listed nominees and
"FOR" the listed proposals.
Please mark boxes |X| in blue or black ink.
1. Election of Directors:
(INSTRUCTION: To withhold authority for any individual nominee, strike a line
through the nominee's name in the list below)
FOR ALL NOMINEES |_| WITHHOLD AUTHORITY |_|
(except as marked to To vote for all nominees
the contrary below)
(Noam Allon, Gil Allon, Ariel Shenhar,
Jonathan Adereth, Alon Harris)
|
2. Ratify the selection of Perry-Smith & Co. as the Company's independent
auditors for the fiscal year ending December 31, 2002.
FOR |_| AGAINST |_| ABSTAIN |_|
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the Meeting.
NOTE: Please sign your name or names exactly
as set forth hereon. If signed as attorney,
executor, administrator, trustee or
guardian, please indicate the capacity in
which you are acting. Proxies by
corporations should be signed by a duly
authorized officer and should bear the
corporate seal.
Dated _________________________, 2002
Signature of Shareholder
Print Name(s)
Please sign and return the proxy promptly in the enclosed envelope.
|
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