SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement. [ ] Confidential, for use of the
[X] Definitive proxy statement. Commission only (as permitted
[ ] Definitive additional materials. by Rule 14a-6(e)(2)).
[ ] Soliciting material pursuant to
Rule 14a-11(c) or 14a-12.
ORTHOLOGIC CORP.
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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 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:
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2) Aggregate number of securities to which transaction applies:
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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):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] 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:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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[LOGO]
1275 West Washington
Tempe, Arizona 85281
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 17, 2002
TO THE STOCKHOLDERS:
The Annual Meeting of Stockholders of OrthoLogic Corp., a Delaware
corporation (the "Company"), will be held on Friday, May 17, 2002 at 8:30 a.m.
local time, at the offices of the Company at 1275 West Washington, Tempe,
Arizona 85281, for the following purposes:
(1) To elect two directors as Class II directors to serve until the Annual
Meeting of Stockholders to be held in the year 2005 or until their respective
successors are elected;
(2) To consider and act upon a proposal to ratify the appointment of
Deloitte & Touche LLP as independent auditors of the Company for the fiscal year
ending December 31, 2002; and
(3) To transact such other business as may properly come before the Annual
Meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Stockholders of record at the close of business on April 3, 2002 are
entitled to vote at the meeting and at any adjournment or postponement thereof.
Shares can be voted at the meeting only if the holder is present or represented
by proxy. A list of stockholders entitled to vote at the meeting will be open
for inspection at the Company's corporate headquarters for any purpose germane
to the meeting during ordinary business hours for 10 days prior to the meeting.
A copy of the Company's 2001 Annual Report to Stockholders, which includes
certified financial statements, is enclosed. All stockholders are cordially
invited to attend the Annual Meeting in person.
By order of the Board of Directors,
Thomas R. Trotter
Chief Executive Officer
Tempe, Arizona
April 15, 2002
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IMPORTANT: IT IS IMPORTANT THAT YOUR STOCKHOLDINGS BE REPRESENTED AT THIS
MEETING. WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE
AND SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE TO
ASSURE REPRESENTATION OF YOUR SHARES. NO POSTAGE NEED BE AFFIXED IF MAILED IN
THE UNITED STATES.
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ORTHOLOGIC CORP.
PROXY STATEMENT FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 17, 2002
TABLE OF CONTENTS
SOLICITATION, EXECUTION AND REVOCATION OF PROXIES..............................1
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF................................2
Security Ownership of Certain Beneficial Owners and Management...............2
PROPOSAL 1: ELECTION OF DIRECTORS.............................................3
Board Meetings and Committees................................................6
Compensation of Directors....................................................6
COMMITTEE REPORTS..............................................................7
Report of the Compensation Committee of the Board of Directors...............7
Compensation Committee Interlocks and Insider Participation..................9
Certain Transactions........................................................11
Summary Compensation Table..................................................11
Option/SAR Grants in Last Fiscal Year.......................................12
Aggregated Option/SAR Exercises in Last Fiscal Year
and FY-End Option/SAR Values...............................................13
Employment Contracts, Termination of Employment, and
Change-in-Control Arrangements.............................................13
Performance Graph...........................................................14
Section 16(a) Beneficial Ownership Reporting Compliance.....................14
PROPOSAL 2: APPOINTMENT OF INDEPENDENT AUDITORS...............................15
OTHER MATTERS.................................................................15
STOCKHOLDER PROPOSALS.........................................................15
[LOGO]
1275 West Washington
Tempe, Arizona 85281
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 17, 2002
SOLICITATION, EXECUTION AND REVOCATION OF PROXIES
Proxies in the accompanying form are solicited on behalf, and at the
direction, of the Board of Directors of OrthoLogic Corp. (the "Company") for use
at the Annual Meeting of Stockholders to be held on May 17, 2002 or any
adjournment thereof (the "Annual Meeting") at the offices of the Company at 1275
West Washington, Tempe, Arizona 85281. All shares represented by properly
executed proxies, unless such proxies have previously been revoked, will be
voted in accordance with the direction on the proxies. If no direction is
indicated, the shares will be voted in favor of the proposals to be acted upon
at the Annual Meeting. The Board of Directors is not aware of any other matter
which may come before the meeting. If any other matters are properly presented
at the meeting for action, including a question of adjourning the meeting from
time to time, the persons named in the proxies and acting thereunder will have
discretion to vote on such matters in accordance with their best judgment.
When stock is in the name of more than one person, the proxy is valid if
signed by any of such persons unless the Company receives written notice to the
contrary. If the stockholder is a corporation, the proxy should be signed in the
name of such corporation by an executive or other authorized officer. If signed
as attorney, executor, administrator, trustee, guardian or in any other
representative capacity, the signer's full title should be given and, if not
previously furnished, a certificate or other evidence of appointment should be
furnished.
This Proxy Statement and the form of proxy which is enclosed are being
mailed to the Company's stockholders commencing on or about April 15, 2002.
A stockholder executing and returning a proxy has the power to revoke it at
any time before it is voted. A stockholder who wishes to revoke a proxy can do
so by executing a later-dated proxy relating to the same shares and delivering
it to the Secretary of the Company prior to the vote at the Annual Meeting, by
written notice of revocation received by the Secretary prior to the vote at the
Annual Meeting or by appearing in person at the Annual Meeting, filing a written
notice of revocation and voting in person the shares to which the proxy relates.
In addition to the use of the mails, proxies may be solicited by personal
conversations or by telephone, telex, facsimile or telegram by the directors,
officers and regular employees of the Company. Such persons will receive no
additional compensation for such services. The Company has also retained
Georgeson Shareholder, 111 Commerce Road, Carlstadt, New Jersey 07072-2586, to
aid in solicitation of proxies. For these services, the Company will pay
Georgeson Shareholder a fee of $5,000 and reimburse it for certain out-of-pocket
disbursements and expenses. Arrangements will also be made with certain
brokerage firms and certain other custodians, nominees and fiduciaries for the
forwarding of solicitation materials to the beneficial owners of Common Stock
held of record by such persons, and such brokers, custodians, nominees and
fiduciaries will be reimbursed for their reasonable out-of-pocket expenses
incurred in connection therewith. All expenses incurred in connection with this
solicitation will be borne by the Company.
The mailing address of the principal corporate office of the Company is
1275 West Washington, Tempe, Arizona 85281.
1
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Only stockholders of record at the close of business on April 3, 2002 (the
"Record Date") will be entitled to vote at the Annual Meeting. On the Record
Date, there were issued and outstanding 31,818,006 shares of Common Stock. Each
holder of Common Stock is entitled to one vote, exercisable in person or by
proxy, for each share of the Company's Common Stock held of record on the Record
Date. The presence of a majority of the shares of Common Stock entitled to vote,
in person or by proxy, is required to constitute a quorum for the conduct of
business at the Annual Meeting. Abstentions and broker non-votes are each
included in the determination of the number of shares present for quorum
purposes. The Inspector of Election appointed by the Chairman of the Board of
Directors shall determine the shares represented at the meeting and the validity
of proxies and ballots and shall count all proxies and ballots. The two nominees
for director receiving the highest number of affirmative votes (whether or not a
majority) cast by the shares represented at the Annual Meeting and entitled to
vote thereon, a quorum being present, shall be elected as directors. The
affirmative vote of a majority of the shares present in person or by proxy and
entitled to vote is required with respect to the approval of the other proposals
set forth herein.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding the beneficial
ownership of the Company's Common Stock at March 13, 2002 with respect to (i)
each person known to the Company to own beneficially more than five percent of
the outstanding shares of the Company's Common Stock, (ii) each director of the
Company and each director nominee, (iii) each of the named executive officers
and (iv) all directors and executive officers of the Company as a group.
SHARES BENEFICIALLY
OWNED (1)
----------------------------
IDENTITY OF STOCKHOLDER OR GROUP NUMBER PERCENT
------------------------------------ ------------- -----------
Thomas R. Trotter (2) 867,392 2.7
Sherry A. Sturman (3) 45,690 *
Shane P. Kelly (4) 53,485 *
Donna L. Lucchesi (5) 55,975 *
Ruben Chairez (6) 115,803 *
James T. Ryaby (7) 152,087 *
Stuart H. Altman (8) 107,791 *
Fredric J. Feldman (9) 234,000 *
John M. Holliman III (10) 257,000 *
Elwood D. Howse (11) 225,644 *
Augustus A. White III (12) 225,161 *
Heartland Advisors, Inc. 3,740,100 11.7
790 North Milwaukee Street
Milwaukee, Wisconsin 53202 (13)
Bricoleur Capital Management LLC 2,094,750 6.6
12230 El Camino Real, Suite 100
San Diego, CA 92130 (14)
Dimensional Fund Advisors Inc. 1,923,200 6.0
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401 (15)
All directors and executive officers 2,419,591 7.6
as a group (12 persons) (16)
----------
* Less than one percent
2
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission ("SEC") and generally includes voting or
investment power with respect to securities. In accordance with SEC rules,
shares which may be acquired upon exercise of stock options which are
currently exercisable or which become exercisable within 60 days of the
date of the table are deemed beneficially owned by the optionee. Except as
indicated by footnote, and subject to community property laws where
applicable, the persons or entities named in the table above have sole
voting and investment power with respect to all shares of Common Stock
shown as beneficially owned by them.
(2) Includes 782,392 shares Mr. Trotter has a right to acquire upon exercise of
stock options.
(3) Includes 44,690 shares Ms. Sturman has a right to acquire upon exercise of
stock options.
(4) Includes 52,158 shares Mr. Kelly has a right to acquire upon exercise of
stock options.
(5) Includes 50,975 shares Ms. Lucchesi has a right to acquire upon exercise of
stock options.
(6) Includes 110,153 shares Mr. Chairez has a right to acquire upon exercise of
stock options.
(7) Includes 125,087 shares Mr. Ryaby has a right to acquire upon exercise of
stock options.
(8) Includes 106,791 shares Dr. Altman has a right to acquire upon exercise of
stock options and 1,000 indirectly owned shares.
(9) Includes 153,000 shares Dr. Feldman has a right to acquire upon exercise of
stock options and 10,000 indirectly owned shares. Voting and investment
power shared with spouse.
(10) Includes 197,000 shares Mr. Holliman has a right to acquire upon exercise
of stock options.
(11) Includes 177,000 shares Mr. Howse has a right to acquire upon exercise of
stock options.
(12) Includes 121,500 shares Dr. White has a right to acquire upon exercise of
stock options and 6,878 indirectly owned shares.
(13) Derived from a Schedule 13G, Amendment No. 8, dated January 15, 2002 filed
by the stockholder pursuant to the Securities Exchange Act of 1934, as
amended (the "1934 Act"). The Schedule 13G states that the securities "may
be deemed beneficially owned within the meaning of Rule 13d-3 of the
Securities Exchange Act of 1934 by Heartland Advisors, Inc and William J.
Nasgovitz, as a result of his position with and ownership in Heartland."
The Schedule 13G, as amended, also states that the Common Stock is held in
investment advisory accounts of Heartland Advisors, Inc., so various people
have ownership rights to the Common Stock. Mr. Nasgovitz, as a result of
his position as an officer and director of Heartland Group, Inc., is deemed
the beneficial owner of 2,200,000 shares of common stock or 6.9% of the
outstanding.
(14) Derived from a Schedule 13G dated February 13, 2002 filed by Bricoleur
Capital Management LLC ("Bricoleur") pursuant to the 1934 Act. The Schedule
13G states that Bricoleur is an investment advisor under the Investment
Advisors Act of 1940, that it services an investment manager for certain
accounts that hold the securities reported on the Schedule 13G, and that
Bricoleur "has been granted the authority to dispose of and vote those
securities" but that "[e]ach entity trust [that] owns an account has the
right to receive or power to direct the receipt of, dividends from, or the
proceeds from the sale of, the securities held in the account."
(15) Derived from a Schedule 13G, Amendment No. 1 dated January 30, 2002 filed
by Dimensional Fund Advisers, Inc ("Dimensional") pursuant to the 1934 Act.
The Schedule 13G states that Dimensional is an investment advisor under the
Investment Advisors Act of 1940, that it serves as investment manager to
certain investment vehicles and that "[i]n its role as investment advisor
and investment manager, Dimensional possesses voting and/or investment
power over the securities of the Issuer" described in the Schedule 13G.
Dimensional disclaims beneficial ownership of the securities.
(16) Includes 1,917,514 shares directors and executive officers have a right to
acquire upon exercise of stock options.
PROPOSAL 1: ELECTION OF DIRECTORS
Two directors are to be elected at the Annual Meeting to serve as Class II
directors until the Annual Meeting of Stockholders to be held in the year 2005
and until their respective successors are elected. UNLESS OTHERWISE INSTRUCTED,
THE PROXY HOLDERS WILL VOTE THE PROXIES RECEIVED BY THEM FOR THE COMPANY'S
NOMINEES JOHN M. HOLLIMAN III AND AUGUSTUS A. WHITE III, M.D., PH.D. Mr.
Holliman and Dr. White are currently directors of the Company. The two nominees
for director receiving the highest number of affirmative votes (whether or not a
majority) cast by the shares represented at the Annual Meeting and entitled to
vote thereon, a quorum being present, shall be elected as directors. Only
affirmative votes are relevant in the election of directors.
3
Any stockholder entitled to vote for the election of directors at a meeting
may nominate persons for election as directors only if written notice of such
stockholder's intent to make such nomination is given, either by personal
delivery at 1275 West Washington, Tempe, Arizona or by United States mail,
postage prepaid to Secretary, OrthoLogic Corp., 1275 West Washington, Tempe,
Arizona 85281, not later than: (i) with respect to the election to be held at an
annual meeting of stockholders, 20 days in advance of such meeting; and (ii)
with respect to any election to be held at a special meeting of stockholders for
the election of directors, the close of business on the fifteenth (15th) day
following the date on which notice of such meeting is first given to
stockholders. Each such notice must set forth: (a) the name and address of the
stockholder who intends to make the nomination and of the person or persons to
be nominated; (b) a representation that such stockholder is a holder of record
of stock of the corporation entitled to vote at such meeting and intends to
appear in person or by proxy at the meeting to nominate the person or persons
specified in the notice; (c) a description of all arrangements or understandings
between such stockholder and each nominee and any other person or persons
(naming such person or persons) pursuant to which the nomination or nominations
are to be made by such stockholder; (d) such other information regarding each
nominee proposed by such stockholder as would have been required to be included
in a proxy statement filed pursuant to the proxy rules of the SEC if such
nominee had been nominated, or intended to be nominated, by the Board of
Directors; and (e) the consent of each nominee to serve as a director of the
corporation if elected. The chairman of a stockholder meeting may refuse to
acknowledge the nomination of any person not made in compliance with the
foregoing procedure. The nomination and other features of directorships may be
affected by the resolutions establishing series of preferred stock.
Pursuant to the Company's Certificate of Incorporation, as amended, the
Board of Directors is classified into three classes, with each class holding
office for a three-year period. The Certificate of Incorporation restricts the
removal of directors under certain circumstances. The number of directors may be
increased to a maximum of nine. Directors are elected by a plurality of the
votes present in person or represented by proxy and entitled to vote at the
Annual Meeting. Stockholders do not have the right to cumulate their votes in
the election of directors. If any nominee of the Company is unable or declines
to serve as a director at the time of the Annual Meeting, the proxies will be
voted for any nominee who shall be designated by the present Board of Directors
to fill the vacancy. It is not expected that any nominee will be unable or will
decline to serve as a director.
The names of the nominees for director and of the directors whose terms
continue beyond the Annual Meeting, and certain information about them, are set
forth below.
NOMINEES FOR CLASS II DIRECTORS WHOSE TERMS WILL EXPIRE AT THE ANNUAL
MEETING HELD IN THE YEAR 2005:
JOHN M. HOLLIMAN III(1)(2)(4) Director since 1987
John M. Holliman III, 48, has served as a director of the Company since
September 1987 and as a Chairman of the Board of Directors since August 1997.
Since February 1993, he has been a general partner of entities which are the
general partners of Valley Ventures, L.P. (formerly known as Arizona Growth
Partners, L.P.), and Valley Ventures II, L.P., both venture capital funds. From
1985 to 1993, he was the Managing Director and Senior Managing Director of
Valley Ventures' predecessor, Valley National Investors, Inc., a venture capital
subsidiary of The Valley National Bank of Arizona.
AUGUSTUS A. WHITE III, M.D., PH.D. (4) Director since 1993
Dr. Augustus A. White III, 65, became a director of the Company in July 1993. He
was a Professor of Orthopaedic Surgery at Yale Medical School, and has been a
Professor of Orthopaedic Surgery at Harvard Medical School since 1978. Dr. White
is also Orthopaedic Surgeon in Chief Emeritus at Beth Israel Deaconess Medical
Center. He is a former director of American Shared Hospital Services, a publicly
held imaging equipment leasing company.
(1) Member of the Executive Committee
(2) Member of the Audit Committee
(3) Member of the Compensation Committee
(4) Member of the Nominating Committee
4
THE BOARD RECOMMENDS A VOTE IN FAVOR OF EACH NAMED NOMINEE
DIRECTORS CONTINUING IN OFFICE:
CLASS III DIRECTORS WHOSE TERMS WILL EXPIRE AT THE 2003 ANNUAL MEETING:
STUART H. ALTMAN, PH.D. (2) Director since 1998
Stuart H. Altman, 64, has been a Professor of National Health Policy at the
Florence Heller Graduate School for Social Policy, Brandeis University since
1977. He was Dean of the Florence Heller Graduate School from 1977 to 1993. For
twelve years (1984 to 1996), he was Chairman of the Congressional Prospective
Payment Assessment Commission responsible for advising Congress and the
Administration on Medicare Payment Policies for Hospitals, Nursing Homes, Home
Health Agencies and other health care providers. Dr. Altman has served as the
Chair of the Advisory Board to the Institute of Medicine of the National Academy
of Sciences and serves as a member of the Board of Trustees of Beth Israel
Hospital in Boston, Massachusetts. From 1971 to 1976, Dr. Altman was Deputy
Assistant Secretary for Planning and Evaluation/Health at Health, Education and
Welfare under President Nixon. Dr. Altman is a director of IDX Systems
Corporation, a publicly held provider of healthcare information systems.
ELWOOD D. HOWSE, JR.(1)(2)(3) Director since 1987
Elwood D. Howse, Jr., 62, has served as a director of the Company since
September 1987. He is a general partner of CH Partners IV, a venture capital
fund, and was a co-founder of Cable & Howse Ventures, a venture capital
management firm. Mr. Howse has served as the President of Cable & Howse
Ventures, Inc. since 1981. He is a member of the boards of directors of Applied
Microsystems Corporation, a publicly held provider of software development tools
and technologies, ImageX.com, Inc., a public business to business Internet
market maker for printed business materials, as well as several private
companies and not-for-profit organizations.
CLASS I DIRECTORS WHOSE TERMS WILL EXPIRE AT THE 2004 ANNUAL MEETING:
FREDRIC J. FELDMAN, PH.D.(1)(3) Director since 1991
Fredric J. Feldman, Ph.D., 62, has been the President of FJF Associates, a
consultant to health care venture capital and emerging companies, since February
1992. From September 1995 to June 1996, he was the Chief Executive Officer of
Biex, Inc. a women's healthcare company. Dr. Feldman returned to his position as
Chief Executive Officer of Biex again in 1999. He served as Chief Executive
Officer of Oncogenetics, Inc., a cancer genetics reference laboratory from 1992
to 1995. Between 1988 and 1992, Dr. Feldman was the President and Chief
Executive Officer of Microgenics Corporation, a medical diagnostics company. He
is a director of Sangstat Medical Corp., a publicly held biotech transplant drug
company, and of Ostex International, Inc., a publicly held developer of
diagnostics and therapeutics for skeletal and connective tissue diseases.
THOMAS R. TROTTER Director since 1997
Thomas R. Trotter, 54, joined the Company as President and Chief Executive
Officer and a Director in October 1997. From 1988 to October 1997, Mr. Trotter
held various positions at Mallinckrodt, Inc. in St. Louis, Missouri, most
recently as President of the Critical Care Division and a member of the
Corporate Management Committee. From 1984 to 1988, he was President and Chief
Executive Officer of Diamond Sensor Systems, a medical device company in Ann
Arbor, Michigan. From 1976 to 1984, he held various senior management positions
at Shiley, Inc. (a division of Pfizer, Inc.) in Irvine, California.
(1) Member of the Executive Committee.
(2) Member of the Audit Committee.
(3) Member of the Compensation Committee.
(4) Member of the Nominating Committee.
5
BOARD MEETINGS AND COMMITTEES
The Board of Directors held a total of four meetings during the fiscal year
ended December 31, 2001. No director attended fewer than 75% of the aggregate of
all meetings of the Board of Directors and any committee on which such director
served during the period of such service.
The Board presently has an Executive Committee, an Audit Committee, a
Compensation Committee and a newly constituted Nominating Committee. The
Executive Committee, which acts on Board matters that arise between meetings of
the full Board of Directors, consists of Dr. Feldman, Mr. Holliman and Mr. Howse
and met four times during 2001.
The Audit Committee consists of Mr. Howse, Mr. Altman and Mr. Holliman and
met four times in 2001. The Audit Committee meets independently with
representatives of the Company's independent auditors and with representatives
of senior management. The Committee reviews the general scope of the Company's
annual audit, the fee charged by the independent auditors and other matters
relating to internal control systems. In addition, the Audit Committee is
responsible for reviewing and monitoring the performance of non-audit services
by the Company's auditors. The Committee is also responsible for recommending
the engagement or discharge of the Company's independent auditors.
The Compensation Committee, which consists of Dr. Feldman and Mr. Howse,
met once during 2001. The Compensation Committee reviews salaries and benefit
programs designed for senior management, officers and directors and administers
certain grants under the Company's stock option plans with a view to ensure that
the Company is attracting and retaining highly qualified managers through
competitive salary and benefit programs and encouraging extraordinary effort
through incentive rewards.
The Nominating Committee was constituted in March 2002 to examine and
recommend nominations for the Board of Directors and officers of the Company.
The Nominating Committee was not involved in the nominations for the Class II
directors for this year's Annual Meeting of Shareholders. The Nominating
Committee consists of Mr. Holliman and Dr. White. The Nominating Committee did
not meet in 2001, but met once in 2002 for its organizational meeting. The
Nominating Committee at this time has not established a procedure for accepting
shareholder nominations.
COMPENSATION OF DIRECTORS
The Company pays non-employee directors an annual retainer of $12,000. All
directors are eligible for the grant of nonqualified stock options pursuant to
the Company's 1997 Stock Option Plan. The Company issued options to acquire
30,000, 25,000 and 5,000 shares to each non-employee director on January 19,
October 26 and December 31, 2001, respectively. All such options vested
immediately and were granted at the market price of $3.188, $3.93 and $4.89,
respectively, on the date of grant. On August 24, 2001, Jock Holliman was
granted options for an additional 20,000 shares at the market price of $3.58
that vested immediately. The options have been granted with ten-year terms.
For information regarding options granted to the Company's only
employee-director (Mr. Trotter) during 2001, see the table captioned "Option/SAR
Grant in Last Fiscal Year" below.
6
The following table summarizes options granted to non-employee directors
during the year ended December 31, 2001:
NAME DATE OF OPTION NUMBER OF SHARES OPTION PRICE
--------------------- -------------- ---------------- ------------
Stuart H. Altman 01/19/01 30,000 $3.188
10/26/01 25,000 $3.930
12/31/01 5,000 $4.890
Fredric J. Feldman 01/19/01 30,000 $3.188
10/26/01 25,000 $3.930
12/31/01 5,000 $4.890
John M. Holliman III 01/19/01 30,000 $3.188
08/24/01 20,000 $3.580
10/26/01 25,000 $3.930
12/31/01 5,000 $4.890
Elwood D. Howse, Jr. 01/19/01 30,000 $3.188
10/26/01 25,000 $3.930
12/31/01 5,000 $4.890
Augustus A. White III 01/19/01 30,000 $3.188
10/26/01 25,000 $3.930
12/31/01 5,000 $4.890
COMMITTEE REPORTS
THE FOLLOWING REPORT OF THE COMPENSATION COMMITTEE AND AUDIT COMMITTEE OF
THE COMPANY'S BOARD OF DIRECTORS (THE "COMMITTEE") AND THE PERFORMANCE GRAPH
INCLUDED ELSEWHERE IN THIS PROXY STATEMENT SHALL NOT BE DEEMED SOLICITING
MATERIAL OR OTHERWISE DEEMED FILED AND SHALL NOT BE DEEMED TO BE INCORPORATED BY
REFERENCE BY ANY GENERAL STATEMENT INCORPORATING BY REFERENCE THIS PROXY
STATEMENT INTO ANY OTHER FILING UNDER THE SECURITIES ACT OF 1933 OR THE
SECURITIES EXCHANGE ACT OF 1934, EXCEPT TO THE EXTENT THE COMPANY SPECIFICALLY
INCORPORATES THIS REPORT OR THE PERFORMANCE GRAPH BY REFERENCE THEREIN.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
The Committee recommends the compensation of the Chief Executive Officer to
the Board and reviews and approves the design, administration and effectiveness
of compensation programs for other key executive officers, including salary,
cash bonus levels, other perquisites and certain option grants under the
Company's stock option plans (the "Plans").
COMPENSATION PHILOSOPHY
The objectives of the Company's executive compensation policies are to
attract, retain and reward executive officers who contribute to the Company's
success, to align the financial interests of executive officers with the
performance of the Company, to strengthen the relationship between executive pay
and shareholder value, to motivate executive officers to achieve the Company's
business objectives and to reward individual performance. During 2001, the
Company used base salary, executive officer cash bonuses and stock options to
achieve these objectives. In carrying out these objectives, the Committee
considers the following:
(1) THE LEVEL OF COMPENSATION PAID TO EXECUTIVE OFFICERS IN POSITIONS OF
COMPANIES SIMILARLY SITUATED IN SIZE AND PRODUCTS. To ensure that pay
is competitive, the Committee, from time to time, compares the
Company's executive compensation packages with those offered by other
companies in the same or similar industries or with other similar
attributes. The Company typically surveys publicly available
7
information regarding companies listed on the Nasdaq National Market
which are comparable in size, products or industry with the Company.
(2) THE INDIVIDUAL PERFORMANCE OF EACH EXECUTIVE OFFICER. Individual
performance includes any specific accomplishments of such executive
officer, demonstration of job knowledge and skills and teamwork.
(3) CORPORATE PERFORMANCE. Corporate performance is evaluated both
subjectively and objectively. Subjectively, the Compensation Committee
discusses and makes its own determination of how the Company performed
relative to the opportunities and difficulties encountered during the
year and relative to the performance of competitors and business
conditions. Objectively, corporate performance is measured by
predetermined operating and financial goals.
(4) THE RESPONSIBILITY AND AUTHORITY OF EACH POSITION RELATIVE TO THE
OTHER POSITIONS WITHIN THE COMPANY.
The Committee does not quantitatively weigh these factors but considers all
factors as a whole, using its discretion, best judgment and the experiences of
its members, in establishing executive compensation. The application given each
of these factors in establishing the components of executive compensation are as
follows:
BASE SALARY. In establishing base salaries, the Committee believes that it
tends to give greater weight to factors 1, 2 and 4 above. The Company seeks to
pay salaries to executive officers that are commensurate with their
qualifications, duties and responsibilities and that are competitive in the
market. In conducting annual salary reviews, the Committee considers each
individual executive officer's achievements during the prior fiscal year in
meeting the Company's financial and business objectives, as well as the
executive officer's performance of individual responsibilities and the Company's
financial position and overall performance. The Committee considers the low,
midpoint and upper ranges of base salaries publicly disclosed by companies that
OrthoLogic believes are comparable to it and generally targets base salary to
the mid-point of the ranges.
PERFORMANCE BONUSES. In establishing performance bonuses, the Committee
believes that it tends to give greater weight to factors 2 and 4 above and
further believes that such performance bonuses are a key link between executive
pay and stockholder value. The Company has adopted a Management Bonus Plan that
is based upon the financial performance of the Company and other specific
company-wide objectives established by the Committee and approved by the full
Board of Directors. For 2001, executive bonuses were targeted at between 40% and
56% of the executive officers' base salaries if the goals were achieved, with
the more senior executive officers having a higher percentage of total
compensation from annual cash bonuses. The measures chosen by the Committee to
evaluate the Company's performance may vary from year to year depending on the
particular facts and circumstances at the time.
OPTION GRANTS. In establishing option grants or recommendations to the
entire Board, the Committee believes it tends to give greater weight to factors
2 and 3 above. The Committee believes that equity ownership by executive
officers provides incentives to build stockholder value and aligns the interests
of officers with the stockholders. The Committee typically recommends or awards
a grant under a Plan upon hiring executive officers, subject to a four-year
vesting schedule. After the initial stock option grant, the Committee considers
additional grants, usually on an annual basis, under the Plan. Options are
granted at the current market price for the Company's Common Stock and,
consequently, have value only if the price of the Common Stock increases over
the exercise price for the period during which the option is exercisable. The
size of the initial grant is usually determined with reference to the seniority
of the officer, the contribution the officer is expected to make to the Company
and comparable equity compensation offered by others in the industry. In
determining the size of the periodic grants, the Committee considers prior
option grants to the officer, independent of whether the options have been
exercised, the executive's performance during the year and his or her expected
contributions in the succeeding year. The Committee believes that periodic
option grants provide incentives for executive officers to remain with the
Company.
The Omnibus Budget Reconciliation Act of 1993 includes potential
limitations on tax deductions for compensation in excess of $1,000,000 paid to
the Company's Chief Executive Office and four highest-paid executive officers.
The Compensation Committee has analyzed the impact of this change in the tax law
on the compensation policies of the Company, has determined that historically
the effect of this provision on the taxes paid by the Company has and would not
have been significant and has decided for the present to not modify the
compensation policies of the Company based on such changes in the tax law. In
the event that the Committee determines that a material amount of compensation
8
might potentially not be deductible, it will consider what actions, if any,
should be taken to seek to make such compensation deductible without
compromising its ability to motivate and reward excellent performance.
CHIEF EXECUTIVE OFFICER COMPENSATION
The Committee reviews the performance of the Chief Executive Officer at
least annually. When Mr. Trotter was hired in October 1997, the Compensation
Committee reviewed data from a survey of salaries for companies comparable in
size, products and industry and considered the Company's earnings and financial
position. Based on this criteria, the Compensation Committee set Mr. Trotter's
salary at $260,000 with a bonus percentage within the range previously approved
for all executive officers. Mr. Trotter's compensation package was structured in
the same manner for 2001, with an increase in salary to $315,000.
In January 2002, the Compensation Committee met to determine bonuses based
on performance during 2001 and awarded $483,885 to its Chief Executive Officer
and its top five executive officers. At the same meeting, the Compensation
Committee set performance goals for 2002 and structured the 2002 Management
Bonus Plan.
Compensation Committee During 2001:
Fredric J. Feldman Elwood D. Howse, Jr.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 2001, Fredric J. Feldman and Elwood D. Howse, Jr., independent
directors, served on the Compensation Committee of the Board of Directors.
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The role of the Audit Committee (the "Committee") is to assist the Board of
Directors in its oversight of the Company's financial reporting process. The
Board of Directors, in its business judgment, has determined that all members of
the Committee are "independent," as required by applicable listing standards of
the Nasdaq National Market. As set forth in the Charter, management of the
Company is responsible for the preparation, presentation and integrity of the
Company's financial statements, the Company's accounting and financial reporting
principles and internal controls and procedures designed to assure compliance
with accounting standards and applicable laws and regulations. The independent
auditors are responsible for auditing the Company's financial statements and
expressing an opinion as to their conformity with generally accepted accounting
principles.
Among other matters, the Committee monitors the activities and performance
of the external auditors, including the audit scope, external audit fees,
auditor independence matters and the extent to which the independent auditor may
be retained to perform non-audit services. The Committee and the Board have
ultimate authority and responsibility to select, evaluate and, when appropriate,
replace the company's independent auditor. Management and independent auditor
presentations to and discussions with the Committee also cover various topics
and events that may have significant financial impact or are the subject of
discussions between management and the independent auditor.
In the performance of its oversight function, the Committee has considered
and discussed the audited financial statements with management and the
independent auditors. The Committee has also discussed with the independent
auditors the matters required to be discussed by statement on Auditing Standards
No. 61, COMMUNICATION WITH AUDIT COMMITTEES, as currently in effect. Finally,
the Committee has received the written disclosures and the letter from the
independent auditors required by Independence Standards Board Standard No. 1,
INDEPENDENCE DISCUSSIONS WITH AUDIT COMMITTEES, as currently in effect, and
written confirmations from management with respect to services provided by the
auditors, has considered whether the provision of non-audit services by the
independent auditors to the Company is compatible with maintaining the auditor's
independence and has discussed with the auditors the auditors' independence. The
Audit Committee met four times in 2001, once separately with the auditors
without the presence of management.
9
The members of the Audit Committee are not professionally engaged in the
practice of auditing or accounting and are not experts in the fields of
accounting or auditing, including in respect of auditor independence. Members of
the Committee rely without independent verification on the information provided
to them and on the representations made by management and the independent
accountants. Accordingly, the Audit Committee's oversight does not provide an
independent basis to determine that management has maintained appropriate
accounting and financial reporting principles or appropriate internal control
and procedures designed to assure compliance with accounting standards and
applicable laws and regulations. Furthermore, the Audit Committee's
considerations and discussions referred to above do not assure that the audit of
the Company's financial statements has been carried out in accordance with
generally accepted auditing standards, that the financial statements are
presented in accordance with generally accepted accounting principles or that
the Company's auditors are in fact "independent."
Based upon the reports and discussions described in this report, and
subject to the limitations on the role and responsibilities of the Committee
referred to above and in the Charter, the Committee recommended to the Board
that the audited financial statements be included in the Company's Annual Report
on Form 10-K for the year ended December 31, 2001 to be filed with the
Securities and Exchange Commission.
Audit Committee During 2001
John M. Holliman, III Stuart H. Altman Elwood D. Howse, Jr.
10
CERTAIN TRANSACTIONS
The Company has entered into indemnity agreements with all of its directors
and officers for the indemnification of and advancing of expenses to such
persons to the full extent permitted by law.
SUMMARY COMPENSATION TABLE
The following table sets forth, with respect to the years ended December
31, 2001, 2000 and 1999 compensation awarded to, earned by or paid to the
Company's Chief Executive Officer and the five other most highly compensated
executive officers who were serving as executive officers at December 31, 2001.
(1)
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
-------------------------------------------- ------------
SECURITIES
OTHER ANNUAL UNDERLYING
COMPENSATION OPTIONS/SARS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) ($)(2) (#)(3) COMPENSATION ($)
--------------------------- ---- ---------- --------- ------------ ------------ ----------------
Thomas R. Trotter 2001 312,115 175,000 5,400 300 --
President and Chief 2000 297,307 120,000 5,400 300,100 --
Executive Officer 1999 281,500 114,000 5,400 50,000 --
Sherry A. Sturman
Vice President of 2001 155,983 72,000 -- 135,350 --
Administration, Chief 2000 113,139 17,100 -- 3,850 --
Financial Officer 1999 100,643 10,971 -- 3,750 --
Shane P. Kelly 2001 155,000 70,425 -- 65,300 --
Vice President of Sales 2000 114,346 85,987 -- 73,100 --
1999 89,090 55,130 -- -- --
Donna L. Lucchesi 2001 144,477 56,840 -- 125,350 --
Vice President of Marketing 2000 116,112 21,750 -- 2,100 --
1999 106,959 4,050 -- 2,000 --
Ruben Chairez, Ph.D 2001 143,461 56,260 -- 55,300 --
Vice President of 2000 135,654 33,000 -- 100 --
Regulatory and Compliance 1999 129,134 38,500 -- 17,500 --
James T. Ryaby, Ph.D 2001 143,654 53,360 -- 300 --
Vice President Research 2000 136,835 20,700 -- 88,850 --
and Clinical Affairs 1999 130,446 23,100 -- 3,750 --
----------
(1) The Company's five most highly compensated executive officers have been
included for 2001 due to the comparable compensations of Dr. Chairez and
Dr. Ryaby.
(2) Other Annual Compensation includes an automobile allowance for Mr. Trotter.
(3) Consist entirely of stock options.
11
OPTION/SAR GRANTS IN LAST FISCAL YEAR (1)
The following table sets forth information about stock option grants during
the last fiscal year to the named executive officers named in the Summary
Compensation Table.
INDIVIDUAL GRANTS POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION
FOR OPTION TERM (2)
-----------------------------------------------------------------------------------------------------------------------
NAME NUMBER OF % OF TOTAL EXPIRATION 5% ($) 10% ($)
SECURITIES OPTION/SARS EXERCISE DATE
UNDERLYING GRANTED TO OR BASE
OPTIONS/SARS EMPLOYEES IN PRICE
GRANTED (#)(1) FISCAL YEAR ($/SH)
-----------------------------------------------------------------------------------------------------------------------
Thomas R. Trotter 300 (3) $3.930 10/26/11 742 1,879
Sherry A. Sturman 70,000 10.40 $2.844 01/02/11 274,690 696,144
10,000 $3.080 06/05/11
30,000 $3.580 08/24/11
25,300 $3.930 10/26/11
Shane P. Kelly 10,000 5.02 $3.080 06/05/11 149,469 378,781
30,000 $3.580 08/24/11
25,300 $3.930 10/26/11
Donna L. Lucchesi 60,000 9.64 $2.844 01/02/11 256,801 650,781
10,000 $3.080 06/05/11
30,000 $3.580 08/24/11
25,300 $3.930 10/26/11
Ruben Chairez 30,000 4.25 $3.580 08/24/11 130,095 329,685
25,300 $3.930 10/26/11
James T. Ryaby 300 (3) $3.930 10/26/11 742 1,879
(1) Consist entirely of stock options.
(2) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. These gains
are based on assumed rates of stock appreciation of 5% or 10% compounded
annually from the date the respective options were granted to their
expiration date and are not presented to forecast possible future
appreciation, if any, in the price of the Common Stock. The potential
realizable value of the foregoing options is calculated by assuming that
the market price of the underlying security appreciates at the indicated
rate for the entire term of the option and that the option is exercised at
the exercise price and sold on the last day of its term at the appreciated
price.
(3) Less than 1 percent.
12
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES (1)
The following table sets forth information with respect to the executive
officers named in the Summary Compensation Table concerning option exercises
during the last fiscal year and the number and value of options outstanding at
the end of the last fiscal year.
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS AT FY-END
AT FY-END (#) (1) ($)(2)
------------------------------ ------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
Thomas R. Trotter 769,891 30,509 751,521 44,753
Sherry A. Sturman 20,733 138,267 6,039 228,845
Shane P. Kelly 44,512 117,988 45,544 182,815
Donna L. Lucchesi 27,516 131,884 25,532 211,000
Ruben Chairez 100,360 72,540 20,724 77,610
James T. Ryaby 118,003 68,997 138,340 18,834
----------
(1) No SARs are outstanding.
(2) Value is based upon closing bid price of $4.89 as reported on the Nasdaq
National Market for December 31, 2001, minus the exercise price, multiplied
by the number of shares underlying the option.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT, AND
CHANGE-IN-CONTROL ARRANGEMENTS
The Company has entered into an employment agreement with Mr. Trotter
(effective October 20, 1997). The employment agreement provides that salary and
bonuses shall be determined annually by the Compensation Committee of the Board
of Directors. The Company may terminate the employee's employment with cause, in
which case the Company shall be obligated to pay such employee's salary through
the date of termination. If the Company terminates the employee's employment
without cause, Mr. Trotter is entitled to 12 months salary.
The Company has entered into employment agreements with each of Sherry
Sturman, Shane Kelly, Donna Lucchesi, Ruben Chairez and James Ryaby. Each of
these contracts provides for a one-year employment term which is automatically
renewed for another year. The Company may terminate the employee's salary with
cause, in which case the Company shall be obligated to pay such employee's
salary through the date of termination. If the Company terminates the employee's
employment without cause, the employee is entitled, upon executing a severance
agreement, to 12 months of salary.
Under the Company's stock option plans, upon the occurrence of a merger in
which the Company is not the surviving entity, a sale of substantially all of
the assets of the Company, an acquisition by a third party of 100% of the
Company's outstanding equity securities or a similar reorganization of the
Company, 75% of all unvested options will vest, with the balance vesting equally
over 12 months or according to the individual's vesting schedule, whichever is
earlier. Additionally, the Company's 1997 Stock Option Plan provides that, upon
a merger, consolidation or reorganization with another corporation in which the
Company is not the surviving corporation, outstanding options shall be
substituted on an equitable basis for options for appropriate shares of the
surviving corporation, or optionees shall receive cash in exchange for
cancellation of outstanding options.
In addition, the Board of Directors in October 2001 renewed and amended the
1999 Special Incentive/Contingent Bonus Program pursuant to which Mr. Trotter
will receive a bonus of up to $2 million upon a change of control of the
Company. Mr. Trotter abstained from voting on the proposal to renew and amend
the 1999 plan.
13
The Compensation Committee of the Board of Directors has approved a 2002
bonus plan for the Company's executive officers that provides for bonuses of up
to 40-50% of base salary, depending on Company and individual performance.
PERFORMANCE GRAPH
Set forth below is a graph comparing the cumulative total shareholder
return on the Company's Common Stock to the cumulative total return of (i) the
Standard & Poors Healthcare Medical Products and Supplies Index and (ii) the
Russell 2000 Index from the date that the Company's Common Stock was registered
under Section 12 of the Securities Exchange Act of 1934 through December 31,
2001. The graph is generated by assuming that $100 was invested on December 31,
1996 in each of the Company's Common Stock, the Standard & Poors Healthcare
Medical Products and Supplies Index and the Russell 2000 Index, and that all
dividends were reinvested.
[GRAPH]
12/31/96 12/31/97 12/31/98 12/31/99 12/31/00 12/31/01
-------- -------- -------- -------- -------- --------
OrthoLogic Corp. $100 $ 99 $ 59 $ 46 $ 51 $ 87
Peer Group $100 $126 $175 $180 $194 $200
Russell 2000 Index $100 $121 $116 $139 $137 $135
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the securities laws of the United States, the Company's directors,
its executive officers and any persons holding more than 10% of the Company's
Common Stock are required to report their initial ownership of the Company's
Common Stock and any subsequent changes in that ownership to the SEC. Specific
due dates for these reports have been established, and the Company is required
to disclose any failure to file by these dates. The Company believes that all of
these filing requirements were satisfied during the year ended December 31,
2001. In making these disclosures, the Company has relied solely on written
representations of those persons it knows to be subject to the reporting
requirements and copies of the reports that they have filed with the SEC.
14
PROPOSAL 2: APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed Deloitte & Touche LLP as independent
auditors to audit the financial statements of the Company for the fiscal year
ending December 31, 2001 and recommends that stockholders vote FOR ratification
of such appointment. In the event of a negative vote on such ratification, the
Board will reconsider its selection.
Deloitte & Touche LLP has audited the Company's financial statements
annually since 1987. Its representatives are expected to be present at the
Annual Meeting with the opportunity to make a statement if they desire to do so
and are expected to be available to respond to appropriate questions.
AUDIT FEES
The aggregate fees billed by Deloitte & Touche LLP for professional
services rendered for the audit of the Company's annual financial statements for
the fiscal year ended December 31, 2001 and for the reviews of the financial
statements included in the Company's quarterly reports on Form 10-Q for that
fiscal year were $90,100.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
There were no fees paid to Deloitte & Touche LLP for professional services
rendered for information technology services relating to financial information
systems design and implementation for the fiscal year ended December 31, 2001.
ALL OTHER FEES
The aggregate fees billed by Deloitte & Touche LLP for services rendered to
the Company, other than the services described above under "Audit Fees" and
"Financial Information Systems Design and Implementation Fees," for the fiscal
year ended December 31, 2001 were $268,430 for tax preparation and tax
consulting on various items.
OTHER MATTERS
The Company knows of no other matters to be submitted at the Annual
Meeting. If any other matter properly comes before the Annual Meeting, it is the
intention of the persons named in the enclosed proxy card to vote the shares
they represent as the Board of Directors may recommend.
STOCKHOLDER PROPOSALS
Proposals of stockholders of the Company which are intended to be presented
by such stockholders at the Company's Annual Meeting for the fiscal year ending
December 31, 2002 must be received by the Company no later than December 13,
2002 in order that they may be considered for inclusion in the proxy statement
and form of proxy relating to that meeting. Additionally, if a stockholder
wishes to present to the Company an item for consideration as an agenda item for
a meeting without inclusion in the proxy statement, he must timely give notice
to the Secretary and give a brief description of the business desired to be
discussed. To be timely for the 2003 Annual Meeting, our bylaws require that
such notice must have been delivered to or mailed to and received by the Company
between 60 and 90 days prior to the 2003 Annual Meeting. If we do not publicly
announce our meeting date or give notice of our meeting date at least 70 days
before our 2003 Annual Meeting, shareholders may submit items for consideration
as agenda items until 5:00 pm on the 15th day after the public disclosure or
notice.
April 15, 2002 THE BOARD OF DIRECTORS
15
ORTHOLOGIC CORP.
PROXY
2002 ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Thomas R. Trotter and Sherry A. Sturman,
and each or either of them, as Proxies, with full power of substitution, to
represent and to vote, as designated below, all shares of Stock which the
undersigned is entitled to vote at the Annual Meeting of Stockholders of
OrthoLogic Corp. to be held on May 17, 2002, or any adjournment thereof, hereby
revoking any proxy previously given.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR THE NOMINEES AND FOR PROPOSALS 1, 2 and 3.
(Continued and to be dated and signed on the reverse side.)
ORTHOLOGIC CORP.
P.O. BOX 11365
NEW YORK, N.Y. 10203-0365
--------------------------------------------------------------------------------
1. ELECTION OF CLASS II DIRECTORS for terms expiring in the year 2005
FOR all nominees listed below (except as marked to the contrary below) [ ]
WITHHOLD AUTHORITY to vote for all nominees listed below [ ]
Nominees: John M. Holliman III and Augustus A. White III, M.D., Ph.D.
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark
the "For" box and write the nominee's name on the exceptions line below.)
Exceptions _____________________________________________________________________
2. PROPOSAL TO RATIFY AND APPROVE THE APPOINTMENT OF DELOITTE & TOUCHE LLP
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment
thereof, all as set forth in the Notice and Proxy Statement relating to
this meeting, receipt of which is hereby acknowledged.
Change of Address and
or Comments Mark Here [ ]
Please sign exactly as name appears to the left. Where
shares are held by more than one owner, all should sign.
When signing as an attorney, executor, administrator,
trustee or guardian, please give full title as such. If a
corporation, please sign in corporate name by President or
authorized officer. If a partnership, please sign in
partnership name by authorized person.
Dated:__________________________________________, 2002
____________________________________________________________
Signature
Votes must be indicated in Black or Blue ink.
(Please sign, date and return this proxy in the enclosed postage prepaid
envelope.)
16