SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934

(AMENDMENT NO.___)

Filed by the Registrant [X]

Filed by a Party other than the Registrant [   ]

Check the appropriate box:

[   ]	Preliminary Proxy Statement
[X]	Definitive Proxy Statement
[   ]	Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
[   ]	Definitive Additional Materials
[   ]	Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12

CHROMAVISION MEDICAL SYSTEMS, INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X]	Fee not required.
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33171 Paseo Cerveza
San Juan Capistrano, CA 92675-4824

Phone:	(949) 443-3355
Toll-Free:	(888) 443-3310
Fax:	(949) 443-3366

www.chromavision.com

April 26, 2004

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
AND PROXY STATEMENT

Dear Stockholder:

You are cordially invited to attend the 2004 ChromaVision Medical Systems, Inc. Annual Meeting of Stockholders.

When:	8:30 a.m. (local Pacific time) on Wednesday, June 9, 2004
Where:	ChromaVision Medical Systems, Inc. 33171 Paseo Cerveza San Juan Capistrano, CA 92675
	(Directions are included on the last page of this Proxy Statement)
Items of Business:	At the meeting, stockholders will be asked to vote on:
	•	the election of six directors; and
	•	any other business properly presented at the meeting.
	We also will report on our 2003 business results and other matters we believe will be of interest to our stockholders. You will have an opportunity at the meeting to ask questions, make comments, and meet our management team.
Record Date:	You are entitled to vote if you are a stockholder of record at the close of business on April 12, 2004.

We consider your vote important, no matter how many shares you hold, so please send in your signed proxy card as soon as possible so that your shares will be represented at the meeting.

Please contact Stephen Dixon, Executive Vice President and Chief Financial Officer of ChromaVision at (888) 443-3310 with any questions or concerns.

Sincerely,

Michael F. Cola
Chairman of the Board

TABLE OF CONTENTS

QUESTIONS AND ANSWERS
ELECTION OF DIRECTORS
	Nominees for Director
ELECTION OF DIRECTORS — ADDITIONAL INFORMATION
BOARD COMMITTEES
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
SECURITY OWNERSHIP OF DIRECTORS AND OFFICERS AND BENEFICIAL OWNERS OF MORE THAN 5% OF THE COMPANY’S ISSUED AND OUTSTANDING COMMON STOCK
EXECUTIVE COMPENSATION & OTHER ARRANGEMENTS
INDEPENDENT PUBLIC ACCOUNTANTS
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
STOCK PERFORMANCE GRAPH
APPENDIX A

QUESTIONS AND ANSWERS

Q:	Why am I receiving these materials?
A.	This Proxy Statement, proxy card, and our Annual Report for the year ended December 31, 2003 are being mailed to ChromaVision stockholders on or about May 3, 2004 in connection with the solicitation of proxies for the Company’s 2004 Annual Meeting of Stockholders, which will take place on June 9, 2004 (the “Annual Meeting”). As a ChromaVision stockholder, you are invited to attend the meeting and are entitled to and requested to vote on the items of business described in this Proxy Statement. Admission tickets are not required. This Proxy Statement contains detailed information relating to the proposal to be voted on at the Annual Meeting, the voting process, the compensation of directors and the most highly paid executive officers, and certain other required information.
Q:	Who is soliciting proxies for the annual meeting?
A.	Proxies are being solicited on behalf of the Board of Directors of ChromaVision.
Q:	What is being voted on?
A:	ChromaVision stockholders will vote on the following items at the meeting:

• the election of six directors who have been nominated to serve on our Board of Directors; and

• any other business that is properly presented at the meeting.

Q:	Who is entitled to vote?
A:	Only stockholders of record as of the close of business on the record date may vote at the Annual Meeting.
Q:	What is the record date for the meeting?
A:	The record date for determining the ChromaVision stockholders of record entitled to receive notice of, and to vote at, the Annual Meeting is April 12, 2004.
Q:	How many shares can vote?
A:	On April 12, 2004, there were 45,123,709 shares of ChromaVision common stock issued and outstanding. Every holder of common stock is entitled to cast one vote for each share of common stock held as of the record date.
Q:	How does the Board recommend I vote on these proposals?
A:	The Board recommends you vote FOR the election of each nominee for director. The Board is not aware of any other proposals to be brought before the meeting.
Q:	How do I vote?
A:	The enclosed proxy card describes three ways to vote, in addition to attending the meeting and voting your shares in person. You can vote:

• by telephone;

• via the Internet; or

• by completing, signing and returning a signed proxy card in the envelope provided.

Your vote by telephone or Internet will help us save money. If you vote by telephone or Internet, you do not need to return your proxy card.

Even if you plan to attend the Annual Meeting and vote in person, please complete, sign and return your proxy card or cast your vote by telephone or over the Internet as described on the enclosed proxy card. That way, if you plan to attend the meeting but are unable to do so for any reason, your shares will still be represented at the meeting.

If you later decide to attend the meeting and want to vote in person, you may do so. If your shares are registered in your name and you want to vote at the meeting, no additional forms will be

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QUESTIONS AND ANSWERS

	required. If your shares are held for you in the name of a bank, broker, or other nominee holder, you will have to obtain a legal proxy from the nominee holder to vote your shares at the meeting, as described below.
Q:	What if I hold my ChromaVision shares in a brokerage account?
A:	If you hold your shares through a bank, broker, or other nominee holder, you should receive a voting instruction form directly from your nominee describing how to vote your shares. In most cases, the form will offer you three ways to vote:

• by telephone;

• via the Internet; or

• by completing and returning the voting instruction form to your bank, broker or other nominee holder.

	You should carefully follow any instructions sent by your nominee holder to ensure that your instructions are received and your votes are cast as directed.
	Please note that if your shares are held for you by a nominee and you wish to vote in person at the meeting, you must obtain a legal proxy from that nominee authorizing you to vote at the meeting. We will be unable to accept a vote from you at the meeting without that form.
	If you and other residents at your mailing address own shares of ChromaVision stock in street name, your broker or bank may have notified you that your household will receive only one annual report and proxy statement for each company in which you hold stock through that broker or bank. This practice is known as “householding.” Unless you responded that you did not want to participate in householding, you were deemed to have consented to the process. Therefore, your broker or bank will send only one copy of our Annual Report and Proxy Statement to your address. Each stockholder in your household will continue to receive a separate voting instruction form and proxy card.
	If you would like to receive your own set of our Annual Report and Proxy Statement in the future, or if you share an address with another ChromaVision stockholder and together both of you would like to receive only a single set of ChromaVision annual disclosure documents, please contact ADP by telephone at 800-542-1061 or by mail to ADP, Attention: Householding Department, 51 Mercedes Way, Edgewood, NY 11717. Be sure to indicate your name, the name of your brokerage firm or bank, and your account number. The revocation of your consent to householding will be effective 30 days following its receipt.
	If you did not receive an individual copy of this year’s Annual Report or Proxy Statement, we will send a copy to you if you address a written request to ChromaVision Medical Systems, Inc., Attention: Investor Relations, 33171 Paseo Cerveza, San Juan Capistrano, CA 92675-4824 or call 888-443-3310 ext. 6.
Q:	What if I sign and return my proxy card or voting instruction form but don’t specify how I want my votes to be cast?
A:	If you sign and return your proxy card but do not mark any boxes showing how you wish to vote, the proxy designated on the card, Stephen Dixon, Executive Vice President and Chief Financial Officer of ChromaVision, will vote your shares “FOR” the election of each of the nominees for director named on the proxy card, and in his discretion on all other matters which might come before the meeting.

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QUESTIONS AND ANSWERS

Q:	What if I vote or return a proxy and later want to change my vote?
A:	If your shares are registered in your name, you may change your vote at any time before the meeting in one of three ways. You may:

• notify our Corporate Secretary in writing that you want to change your vote and specify the change;

• vote in person at the meeting;

• submit a proxy card dated later than your prior vote; or

• re-vote by telephone or via the Internet.

	You may send written notices to our Corporate Secretary at our offices at:
	33171 Paseo Cerveza San Juan Capistrano, CA 92675-4824 Attention: Stephen T. D. Dixon Fax: (949) 443-3366
	Please note that if you hold your shares through a bank, broker, or other nominee holder and you wish to change your vote, you must deliver your change to that nominee. Remember that if a nominee holds your shares for you and you wish to vote in person at the meeting, you must obtain a legal proxy from that nominee authorizing you to vote at the meeting. We will be unable to accept a vote from you at the meeting without that form.
Q:	Can I revoke my proxy after I return it?
A:	Yes. You can revoke your proxy at any time before the meeting by sending a written revocation or a later dated proxy to our Corporate Secretary at the address specified above.
Q:	What vote is required to elect directors?
A:	Assuming a quorum is present at the meeting, the top six nominees who receive the highest number of votes will be elected as directors. Abstentions and instructions withholding authority to vote for one or more nominees will result in those nominees receiving fewer votes, but will not count as votes against a nominee. Safeguard Scientifics, Inc. owned approximately 60.31% of our outstanding common stock on the record date. Safeguard has advised the Company that it intends to vote its shares of ChromaVision common stock for the election of each of the nominees. If Safeguard does in fact vote its shares for these nominees, they will receive the necessary number of votes to be elected.
Q:	What is a quorum?
A:	A quorum is the number of shares of capital stock of a corporation that must be represented in person or by proxy in order to transact business. In order to transact business at the meeting, Delaware law generally requires that a majority of the outstanding ChromaVision stock entitled to vote must be represented in person or by proxy.
Q:	Who will count the votes?
A:	A duly sworn representative of Mellon Investor Services will count the votes and act as the inspector of elections at the meeting.
Q:	What does it mean if I get more than one proxy card?
A:	Your shares may be registered under more than one name, address or account. If so, you will need to return each proxy card or voting instruction form you receive (or vote by telephone or over the Internet) by following the instructions on the card in order to ensure that all of your shares, however held, are voted. We encourage you to have all accounts registered in the exact same name and address (whenever possible). Registered stockholders may obtain information about how to do this

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QUESTIONS AND ANSWERS

	by contacting Mellon Investor Services, our transfer agent, at:
	ChromaVision Medical Systems, Inc. c/o Mellon Investor Services P.O. Box 3315 S. Hackensack, NJ 07606-1915 Toll-free telephone (800) 851-9677
	If you provide Mellon Investor Services with photocopies of the proxy cards that you receive or with the account numbers that appear on the proxy cards, combining your accounts and share holdings will be easier to accomplish.
	You also can find information on transferring shares and other useful stockholder information on our transfer agent’s website at www.melloninvestor.com.
Q:	What happens if I abstain from voting or don’t give voting instructions to my broker?
A:	If you submit a properly executed proxy, your shares will be counted in determining whether a quorum is present, even if you abstain from voting or withhold authority to vote on a particular proposal. If you abstain from voting or withhold authority to vote in the election of directors, doing so will have no effect on the election, because the six nominees who receive the greatest number of votes, regardless of the actual number of votes cast, will be elected as directors.
Q:	What is a “broker non-vote” and how are they counted?
A:	A so-called “broker non-vote” occurs when banks, brokers or other nominee holders return a valid proxy but do not vote on a particular proposal because they do not have discretionary authority to vote on the matter or have not received specific voting instructions from the stockholder for whom they are holding shares.
	On certain “routine” matters (such as the election of directors) a broker or other nominee holder has discretionary voting power to vote the shares on the stockholder’s behalf without receiving instructions. However, nominee holders do not have discretionary authority to vote on “non-routine” matters and therefore cannot vote without receiving specific voting instructions. The Nasdaq Stock Market has no published rules or standards that specify whether elections of directors are considered “routine,” although elections of directors generally are considered “routine.”
	If a broker fails to return a valid proxy, the votes represented by that proxy are not counted in determining whether a quorum is present, nor do those shares affect any proposals requiring a percentage of the votes cast or a specific percentage of the shares present and authorized to be cast. If the broker returns a valid proxy without marking a vote or abstaining, the votes represented by the proxy will be counted in determining whether a quorum is present and any designated proxies named in the card would be entitled to exercise discretionary voting power if the proxy card so provides. The proxy card for the Annual Meeting grants such discretionary voting power to Stephen Dixon. If the broker returns a proxy after crossing out a “non-routine” proposal as to which the broker cannot exercise discretionary voting power and has not received voting instructions, the shares represented by the proxy will be counted in determining whether a quorum is present but will not be counted as shares entitled to vote on the proposal. Therefore, broker-non-votes on any “non-routine” matters would have the effect of reducing the number of shares necessary to constitute a majority of the shares present and entitled to vote on the proposal, but otherwise would not be counted as votes either for or against the proposal.

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QUESTIONS AND ANSWERS

Q:	Are there any expenses associated with soliciting proxies for the Annual Meeting?
A:	Yes. The Company will bear the expense of soliciting proxies for the Annual Meeting and will reimburse brokerage firms and other custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses for forwarding proxy and other materials to our stockholders. We do not anticipate hiring an agency to solicit votes at this time. Officers and other employees of ChromaVision may solicit proxies in person or by telephone, although there are no contracts or arrangements to do so. Any such officers or other employees will receive no special compensation for soliciting proxies.
Q:	What is a stockholder proposal?
A:	A stockholder proposal is a recommendation or requirement from a stockholder that ChromaVision or our Board of Directors take action on a matter that the stockholder intends to present at a meeting of stockholders. However, under applicable Securities and Exchange Commission (“SEC”) rules we have the ability to exclude certain matters proposed, including those that deal with matters relating to our ordinary business operations.
Q:	Can anyone submit a stockholder proposal?
A:	To be eligible to submit a proposal, you must have continuously held at least $2,000 in market value, or 1% of our common stock, for at least one year by the date you submit your proposal. You also must continue to hold those securities through the date of the meeting.
Q:	If I wish to submit a stockholder proposal for the Annual Meeting in 2005, what action must I take?
A:	If you wish us to consider including a stockholder proposal in the Proxy Statement for the Annual Meeting in 2005, you must submit the proposal, in writing, so that our Corporate Secretary receives it no later than January 7, 2005. In addition, the proposal must meet the requirements for stockholder proposals established by the SEC.
	Send your proposal to: Stephen T. D. Dixon Executive VP, CFO and Secretary ChromaVision Medical Systems, Inc. 33171 Paseo Cerveza San Juan Capistrano, CA 92675-4824
	If you wish to present a proposal at the Annual Meeting in 2005 that has not been included in the 2005 proxy statement, the persons named as proxies in the proxies solicited by our Board of Directors will be allowed to use their discretionary authority to vote on your proposal unless notice of your proposal has been received by our Corporate Secretary at least 45 days before the date this year’s Proxy Statement is mailed to stockholders. We expect to mail the Proxy Statement on May 7, 2005, which would mean that notice of your proposal would have to be received by March 22, 2005.
Q:	Who are ChromaVision’s largest stockholders?
A:	Our largest stockholders and the percentage of shares held by each as of April 12, 2004 were as follows:

Safeguard Scientifics, Inc. beneficially owned a total of approximately 60.31% of outstanding ChromaVision common stock as of April 12, 2004.

Directors and executive officers beneficially owned a total of approximately 2.21% of outstanding ChromaVision common stock as of April 12, 2004.

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ELECTION OF DIRECTORS
Item 1 on Proxy Card

The Company’s Bylaws provide that the Board of Directors shall consist of one or more members, as determined from time to time by resolution of the Board of Directors. The Board has fixed the number of directors at eight. The Board presently consists of six directors, with two vacancies. Directors are elected annually and serve a one-year term. On the recommendation of the Corporate Governance Committee, the Board has nominated the Company’s six current directors, Michael F. Cola, Anthony L. Craig, Irwin Scher, M.D., Frank P. Slattery, Jr., Jon R. Wampler and G. Steve Hamm for re-election at the Annual Meeting. With the exception of Mr. Craig and Mr. Hamm, each of these directors was elected by the Company’s stockholders at the annual meeting held in 2003. The Chairman and Interim Chief Executive Officer of the Company identified Mr. Craig, who joined the Board in November 2003, and Mr. Hamm, who joined the Board in April 2004, for consideration as a director.

You will find detailed information on each nominee below. Each nominee has consented to act as a director if elected. If any director nominee is unable to stand for election at the Annual Meeting, the Board may reduce its size or designate a substitute. If the Board designates a substitute, proxies voted for the original director candidate will be cast for the substituted candidate. Proxies may not be voted for more than the six nominees named.

The Board recommends a vote FOR the election of each nominee. The six nominees who receive the highest number of affirmative votes will be elected as directors.

Nominees for Director

 
MICHAEL F. COLA
Age 44 Director since 2000

Mr. Cola has been ChromaVision’s Chairman of the Board since January 2004. In addition, Mr. Cola is currently serving as ChromaVision’s Interim Chief Executive Officer. Mr. Cola is Vice President of Operations and Management Services at Safeguard Scientifics, Inc., an operating company of businesses that provide business decision and life science software-based product and service solutions. From 1992 to 2000, Mr. Cola was Vice President, Global Clinical Operations, at AstraZeneca, then Astra/Merck, Inc. Prior to joining AstraZeneca, he worked at Campbell Soup Company in manufacturing and product development. Mr. Cola also spent four years in clinical and pre-clinical research at the University of Pennsylvania. He holds a Bachelor’s degree in Biology/Physics from Ursinus College and a Master’s of Science degree in Biomedical Engineering and Sciences from Drexel University.

 
ANTHONY L. CRAIG
Age 58 Director since November 2003

Mr. Craig became President and Chief Executive Officer of Safeguard in October 2001. Before joining Safeguard, Mr. Craig was Chief Executive Officer from December 1999 to October 2001 and remains Chairman of Arbinet-thexchange, a leading online trading exchange for the telecommunications industry. Before Arbinet, he served as President and Chief Executive Officer of Global Knowledge Network, a premier provider of technology learning services, from January 1997 to December 1999. Mr. Craig has also served as Corporate Vice President for Digital Equipment Corporation, Senior Vice President for Oracle Systems Corporation, and President and Chief Executive Officer of Prime Computer. Mr. Craig has also held the positions

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of Vice President of General Electric Company and President and Chief Executive Officer of GE Information Services, as well as a series of executive assignments internationally at IBM Corporation. Mr. Craig is also a director of CompuCom Systems, Inc.

 
IRWIN SCHER, M.D.
Age 64 Director since 2003

Since 2003, Dr. Scher has been Vice President, Global Clinical R&D of Merck KGaA Darmstadt, Germany, an international division of Merck, a global pharmaceutical products and services company. From 1999 to 2002, Dr. Scher was a full time business consultant to the chief executive officer of Merck KGaA. From 1992 until 1999, Dr. Scher served as Vice President and Senior Vice President, Drug Development and Medical Affairs at Merck, Astra Merck and Astra Zeneca. Dr. Scher has authored 98 peer reviewed publications, 39 book chapters and edited two books. He received a B.S. in chemistry from the New York State University at Albany and an M.D. from the Albert Einstein College of Medicine. He is board certified in internal medicine and rheumatology.

 
FRANK P. SLATTERY, JR.
Age 66 Director since 2003

Mr. Slattery has served as President of Quintus Corporation, an originator of new companies utilizing science from several universities, since June 1994. Prior to June 1994, Mr. Slattery served as a Director, President and Chief Executive Officer of LFC Financial Corporation, a diversified financial corporation. Mr. Slattery is a trustee of the Jefferson Health System and The Franklin Institute and the Chairman of the Board of the Main Line Health Systems. In addition, in connection with his service as President of Quintus Corporation, Mr. Slattery is a director of numerous private companies, primarily engaged in technology ventures. Mr. Slattery received an A.B. degree from Princeton University and a J.D. degree from the University of Pennsylvania Law School.

 
JON R. WAMPLER
Age 52 Director since 2000

Mr. Wampler served as President and Chief Executive Officer of PacifiCare of California and Vice President, Western Region of PacifiCare Health Systems, Inc. from 1995 until his retirement in 1997. From 1990 to 1995, Mr. Wampler was President and Chief Executive Officer of PacifiCare of Texas and Vice President, Southwest Region of PacifiCare Health Systems, Inc. PacifiCare Health Systems, Inc. is a publicly traded managed health care services company. Prior to joining PacifiCare, Mr. Wampler served as Executive Director of Humana HealthCare Plans of Colorado. Mr. Wampler obtained a Bachelor of Arts degree in History and Political Science at Indiana University. He currently is involved with a number of community service organizations and is very actively involved with the University of California, Irvine as Chairman of the College of Medicine Committee Health Science Partners and School of Humanities Dean’s Council. Mr. Wampler has been a guest lecturer at the University of the Pacific, University of Southern California and the University of California, Irvine and also has spoken at numerous state and national forums on healthcare as an expert in managed care.

 
G. STEVE HAMM
Age 56 Director since April 2004

Mr. Hamm was a Partner of PricewaterhouseCoopers until his retirement in 2004, serving most recently as National Partner-in-Charge of PricewaterhouseCoopers Middle Market Practice and as a member of the firm’s Audit Leadership Team. In 1985 Mr. Hamm was President of a Venture Backed Computer Software Company and a member of the Board of Directors of Community Bank. From 1980 to 1985, Mr. Hamm was a Partner at Peat Marwick Mitchell. Mr. Hamm is a Certified Public Accountant and holds a Bachelor of Science degree in Accounting from San Diego State University.

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The Corporate Governance Committee and the Board have been actively considering candidates to fill the two vacancies currently on the Board, and intend to fill such vacancies upon the identification of suitable candidates willing and able to serve. Any director appointed by the Board after the Annual Meeting to fill a vacancy on the Board will serve until the Annual Meeting to be held in 2005, at which time such director would be required to stand for re-election by the Company’s stockholders if selected as a nominee by the Corporate Governance Committee and the Board.

ELECTION OF DIRECTORS — ADDITIONAL INFORMATION

Qualifications of Director Nominees

The Corporate Governance Committee has established Board membership criteria as a guideline in considering nominations to the Company’s Board of Directors. The criteria to be considered include at a minimum: independence, experience, outside time commitments, expertise, accounting and finance knowledge, business judgment, leadership ability, knowledge of international markets, risk management skills and, for incumbent directors, past performance as a director. The criteria are not exhaustive and the Corporate Governance Committee and the Board of Directors may consider other qualifications and attributes that they believe are appropriate in evaluating the ability of an individual to serve as a member of the Board of Directors.

Manner by which Stockholders May Recommend Director Candidates

The Corporate Governance Committee will consider director candidates recommended by stockholders of the Company. All recommendations must be directed to the Corporate Governance Committee c/o Corporate Secretary at 33171 Paseo Cerveza, San Juan Capistrano, CA 92675-4824, not less than 60 days prior to the meeting at which directors are to be elected. Each recommendation must contain certain information about each proposed nominee, including age, business and residence addresses, principal occupation, the number of shares of common stock beneficially owned and such other information as would be required to be included in a proxy statement soliciting proxies for the election of such proposed nominee. For a description of the criteria used by the Corporate Governance Committee in selecting new nominees for the Board, see “Qualifications of Director Nominees” above and the Company’s Statement on Corporate Governance, which is available on the Company’s website (www.chromavision.com) under “Our Company.”

Corporate Governance Committee’s Process for Identifying and Evaluating Nominees for Director

Prior to each annual meeting of stockholders at which directors are to be elected, and whenever there is otherwise a vacancy on the Board of Directors, the Corporate Governance Committee will consider incumbent Board members and other well-qualified individuals as potential director nominees. Historically, the Corporate Governance Committee has not relied on third-party search firms to identify Board candidates, though it may in the future choose to do so in

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those situations where particular qualifications are required or where existing contacts are not sufficient to identify an appropriate candidate. The Corporate Governance Committee will review each potential candidate’s qualifications in light of the Company’s Board membership criteria, described above. The Corporate Governance Committee will select the candidate or candidates it believes are the most qualified to recommend to the Board for selection as a director nominee. Candidates recommended from a stockholder are evaluated in the same manner as candidates identified by a Committee member.

Stockholder Communications with the Board

Stockholders may send correspondence to the Board of Directors c/o Corporate Secretary at 33171 Paseo Cerveza, San Juan Capistrano, CA 92675-4824. The Corporate Secretary will review all correspondence addressed to the Board, or any individual Board member, for any inappropriate correspondence and correspondence more suitably directed to management. The Corporate Secretary will summarize all correspondence not forwarded to the Board and make the correspondence available to the Board for its review at the Board’s request. The Corporate Secretary will forward stockholder communications to the Board prior to the next regularly scheduled meeting of the Board of Directors following the receipt of the communication as appropriate.

Board and Board Committee Meetings and Attendance at Annual Meeting of Stockholders

The Board of Directors held eight meetings in 2003. Each director attended at least 75% of the total number of meetings of the Board and Committees of which he or she was a member during 2003. Directors are encouraged to attend the annual meetings of stockholders of the Company. All of the five then-sitting directors attended the 2003 Annual Meeting of Stockholders.

Board Compensation

Directors employed by ChromaVision or a wholly owned subsidiary receive no additional compensation, other than their normal salary, for serving on the Board or its Committees. Each director who is not an employee of the Company, its subsidiaries or Safeguard receives an annual cash retainer of $15,000. In addition, each director is paid a fee of $1,000 per meeting for attendance at Board meetings and each Committee meeting, except that if a director participates in a Board or Committee meeting via telephone, he or she is paid a fee of $500 for that meeting. An additional $5,000 annual fee is paid to each director who serves as a committee chairperson. All directors receive reimbursement of out-of-pocket expenses incurred in connection with attending meetings of the Board or Board Committees or with respect to other Company business.

Each director who is not an employee of the Company, its subsidiaries or Safeguard is eligible to receive stock option grants at the discretion of the Board. Directors’ initial option grants are generally to purchase 30,000 shares, have a seven-year term and are 20% vested on the grant date, with the remaining 80% vesting in 12 equal increments on the same day of each third month thereafter. Annual grants, generally to purchase 10,000 shares, vest 25% each three months following the grant date. Directors who serve as a Committee chairman may also receive additional annual grants, generally to purchase 5,000 shares, which vest 25% each three months following the grant date. The exercise price of these options is equal to the fair market value of a share of ChromaVision common stock on the grant date.

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2003 Stock Option Grants to Directors

On June 11, 2003, Dr. Scher was granted a stock option to purchase 30,000 shares of ChromaVision common stock upon being elected to the Board of Directors. This option has an exercise price of $1.57, equal to the fair market value on the grant date.

On June 11, 2003, Mr. Slattery was granted a stock option to purchase 30,000 shares of ChromaVision common stock upon being elected to the Board of Directors, plus an additional option to purchase 5,000 shares related to being the Chairman of the Corporate Governance Committee. Both of these option grants have an exercise price of $1.57, equal to the fair market value on the grant date.

On June 11, 2003, Mr. Wampler was granted a stock option to purchase 10,000 shares of ChromaVision common stock, plus an additional option to purchase 5,000 shares related to being the Chairman of the Compensation Committee. These options have an exercise price equal to $1.57, the fair market value on the grant date.

On June 11, 2003, Mr. Testman was granted a stock option to purchase 10,000 shares of ChromaVision common stock, plus an additional option to purchase 5,000 shares related to being the Chairman of the Audit Committee. These options have an exercise price equal to $1.57, the fair market value on the grant date. Mr. Testman resigned from the Board in February 2004 at which time the Company approved a one-time cash payment of $10,000 in recognition of Mr. Testman’s services as a director. The Company also approved immediate vesting of all of Mr. Testman’s 90,000 outstanding stock options and extension of the exercise period for these stock options to three years.

Compensation Committee Interlocks and Insider Participation

The Compensation Committee currently is comprised of Messrs. Wampler (Chairman), Cola and Craig, as described below. Mr. Cola is currently serving as ChromaVision’s Chief Executive Officer and Mr. Craig is currently the President and Chief Executive Officer of Safeguard. No other member of the Compensation Committee is a current or former officer or employee of the Company. In addition, there are no Compensation Committee interlocks between ChromaVision and other entities involving ChromaVision executive officers and ChromaVision Board members who serve as executive officers of such other entities.

10

BOARD COMMITTEES

The Board of Directors has designated three Standing Committees to perform certain functions with delegated authority from the full Board. The Committees are the Audit Committee, the Compensation Committee and the Corporate Governance Committee, which serves as a nominating committee.

The Audit Committee

The Audit Committee currently consists of Messrs. Slattery (Chairman), Wampler and Hamm, each of whom is financially literate. The Board of Directors has determined that Messrs. Slattery, Wampler and Hamm are “independent” within the meaning of Rule 4350(d)(2) of the rules of the Nasdaq Stock Market, including with respect to the enhanced independence standards applicable to audit committees pursuant to Rule 10A-3(b)(i) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Board has determined that Mr. Slattery and Mr. Hamm are “audit committee financial experts” as defined by applicable SEC rules.

The principal purposes of the Audit Committee are to:

• oversee the accounting and financial reporting processes of the Company and the audits of the financial statements of the Company;

• assist the Board in its oversight of the integrity of the Company’s financial statements; the Company’s internal controls and the performance of the Company’s internal audit function;

• interact directly with and evaluate the performance of the independent auditors, including to determine whether to engage or dismiss the independent auditors and to monitor the independent auditors’ qualifications and independence;

• prepare the report required by the rules of the SEC to be included in the Company’s Proxy Statement; and

• discharge such duties and responsibilities as may be required of the Committee by the provisions of applicable law or rule or regulation of the Nasdaq Stock Market.

The Audit Committee held four meetings in 2003.

The Audit Committee has adopted a Charter and reviews the contents of the Charter at least annually. The Audit Committee’s current Charter is included as Appendix A of this Proxy Statement and is also available on the Company’s website (www.chromavision.com) under “Our Company.”

Status as a “Controlled Company”

Safeguard Scientifics, Inc., a Pennsylvania corporation whose shares are listed on the New York Stock Exchange, owned beneficially approximately 60.31% of the outstanding shares of our Common Stock as of April 12, 2004. Accordingly, as a company of which more than 50% of the voting power is held by a group (a “controlled company”), ChromaVision is a “controlled

11

company” under the rules of the Nasdaq Stock Market, exempt from certain independence requirements with respect to the composition of its Board and Committees of the Board, including the requirement that the Compensation Committee be comprised solely of independent directors.

The Compensation Committee

As a controlled company, the Company is exempt from the Nasdaq Stock Market requirement to have compensation determinations with respect to the Company’s executive officers made by a majority of independent directors or a compensation committee comprised solely of independent directors. The Compensation Committee currently is comprised of Mr. Wampler (Chairman), who is independent in accordance with the listing standards of the Nasdaq Stock Market, and Messrs. Cola and Craig. The principal purposes of the Compensation Committee are to:

• review, consider, suggest and approve compensatory plans and pay levels for the Chief Executive Officer (“CEO”) and the Company’s other executive officers;

• recommend to the Corporate Governance Committee the annual retainer and meeting attendance fees for all non-employee directors of the Company for service on the Board and its Committees;

• review and administer, in conjunction with management, the employee long- and short-term compensation plans, employee performance-based incentive plans (which are cash and equity based) and other employee benefit plans in alignment with the Company’s business strategy and in a manner that reflects, in general, programs and practices within the high technology industry;

• issue annually a report on executive compensation in accordance with the applicable rules and regulations of the Securities and Exchange Commission for inclusion in the Company’s Proxy Statement; and

• discharge such duties and responsibilities as may be required of the Committee by the provisions of applicable law or rule or regulation of the Nasdaq Stock Market, Inc.

The Compensation Committee held five meetings in 2003.

The Compensation Committee has adopted a Charter and reviews the contents of the Charter at least annually. The Compensation Committee’s current Charter is available on the Company’s website (www.chromavision.com) under “Our Company.”

The Corporate Governance Committee

The Corporate Governance Committee, which serves as the nominating committee, currently is comprised of Mr. Slattery (Chairman) and Dr. Scher. The principal purposes of the Corporate Governance Committee are to:

• establish criteria for the selection of directors, to consider qualified board candidates recommended by stockholders, and to recommend to the Board the nominees for director in connection with the Company’s Annual Meeting of Stockholders;

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• take a leadership role in shaping the Company’s corporate governance policies and to develop and recommend to the Board the Company’s Statement on Corporate Governance and the Company’s Code of Business Conduct and Ethics;

• conduct annual evaluations of the Board, its Committees and its members; and

• discharge such duties and responsibilities as may be required of the Committee by the provisions of applicable law or rule or regulation of the Nasdaq Stock Market, Inc.

Each member of the Corporate Governance Committee meets the independence requirements of the Nasdaq Stock Market and Rule 10A-3 of the Securities Exchange Act of 1934, as amended.

The Corporate Governance Committee held two meetings in 2003.

The Corporate Governance Committee has adopted a Charter and reviews the contents of the Charter at least annually. The Corporate Governance Committee’s current Charter is available on the Company’s website (www.chromavision.com) under “Our Company.”

Other Board Committees; Executive Sessions of Independent Directors

The Board of Directors from time to time may form other Board committees for specific purposes and for specific time periods. For example, a Special Committee was formed in 2002 in connection with the Company’s capital restructuring and financing activities during 2002 and 2003. The Special Committee met four times during 2003. During the first half of 2003 the Special Committee members were Messrs. Wampler, Kentor and Testman. Mr. Kentor resigned from the Board in April 2003. Upon election to the Board in June 2003, Dr. Scher and Mr. Slattery became members of the Special Committee. Mr. Testman resigned from the Board in February 2004.

The Company’s independent directors have regularly scheduled executive sessions at which only independent directors are present. The presiding director at these executive sessions rotates among the independent directors.

Corporate Governance Guidelines and Code of Conduct

Our Board has adopted a Statement on Corporate Governance and a Code of Conduct applicable to all directors, officers and employees. Both documents are available on the Company’s website (www.chromavision.com) under “Our Company”. The Company will provide a copy of these documents to any person, without charge, upon request by writing to the Company at ChromaVision Medical Systems, Inc., Office of Investor Relations, 33171 Paseo Cerveza, San Juan Capistrano, CA 92675-4824.

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REPORT OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS

The Audit Committee of the Board of Directors is responsible for providing independent, objective oversight of the Company’s financial and operational matters involving corporate finance, accounting, internal and independent auditing, internal controls, financial reporting, compliance, and business ethics. The Audit Committee operates under a written Charter approved by the Board of Directors. A copy of the Audit Committee Charter is attached to this Proxy Statement as Appendix A.

Management is responsible for the preparation, presentation and integrity of the Company’s financial statements and the Company’s internal controls and financial reporting process. The independent auditors are responsible for performing an independent audit of the Company’s consolidated financial statements in accordance with auditing standards generally accepted in the United States of America and to issue a report thereon. The Audit Committee’s responsibility is to monitor and oversee these processes.

In connection with these responsibilities, the Audit Committee met with management and the independent auditors to review and discuss the consolidated financial statements, including a discussion of the quality and the acceptability of the Company’s financial reporting and controls. The Audit Committee also discussed with the independent auditors the matters required by Statement on Auditing Standards No. 61 (Communication with Audit Committees). The Audit Committee also received written disclosures from the independent auditors required by Independent Standards Board No. 1 (Independence Discussion with Audit Committees) and the Audit Committee discussed with the independence auditors that firm’s independence from the Company.

Based upon the Audit Committee’s discussions with management and the independent auditors, and the Audit Committee’s review of the representations of management and the independent auditors, the Audit Committee recommended that the Board of Directors include the audited consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2003, filed with the Securities and Exchange Commission on March 9, 2004. The Audit Committee also selected the Company’s independent auditors for fiscal 2004.

THE AUDIT COMMITTEE

Frank P. Slattery, Jr., Chairman
G. Steve Hamm*
Jon R. Wampler

* Mr. Hamm joined the Audit Committee in April 2004 and did not participate in the Audit Committee’s review of the audited consolidated financial statements of the Company for the year ended December 31, 2003.

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REPORT OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS

COMPENSATION PHILOSOPHY

We strive to structure executive compensation to support our goal of maximizing stockholder value. We seek to attract, retain, motivate and reward outstanding executives, who, through their dedication, loyalty and exceptional service, make contributions of unique importance to the success of our business.

COMPENSATION STRUCTURE

The compensation of our executives consists of:

• base pay;

• annual cash incentives; and

• stock options.

Base Pay

In evaluating and establishing rates of base, bonus and long-term incentive pay, the Compensation Committee has periodically sought the assistance of independent compensation consultants who have assembled information concerning compensation levels adopted by companies in the same market for executive talent.

Compensation levels are established on the basis of competitive market data for comparable organizations of similar stage and size. In particular, the Compensation Committee has compared compensation factors with those offered by other companies of comparable stage and size in the medical device, high technology and biotechnology businesses. Base compensation also reflects the individual’s level of responsibility at ChromaVision.

Base pay for CEO in 2003. Carl W. Apfelbach was the President and Chief Executive Officer of ChromaVision until his resignation from the Company in September 2003. At that time Michael F. Cola replaced Mr. Apfelbach as Chief Executive Officer on an interim basis. The salary paid to Mr. Apfelbach during 2003 was established pursuant to the terms of the employment agreement Mr. Apfelbach entered into when he joined ChromaVision in 2001. Mr. Cola is employed by Safeguard and does not receive any compensation from ChromaVision. Beginning in March 2004, the Company has agreed to pay Safeguard $40,000 per month for Mr. Cola’s time and activities as ChromaVision’s Interim Chief Executive Officer.

Base pay for other highly compensated executives in 2003. Increases in base pay are determined based on the achievement of overall corporate and departmental goals in addition to individual performance criteria.

Annual Cash Incentives

Cash incentives are intended to motivate executives to achieve and exceed individual objectives and annual performance targets. Cash incentives for officers are based 80% on the achievement of multiple corporate performance targets specified in ChromaVision’s annual strategic plan, which may include the achievement of specific commercial, financial and strategic milestones, expense control, revenue growth, and gross margins. The other 20% is

15

based on the achievement of personal and functional area objectives required by each individual’s job responsibilities.

Cash incentives for CEO in 2003. Neither Mr. Apfelbach nor Mr. Cola received cash incentives in 2003.

Cash incentives for other highly compensated executives in 2003. Michael G. Schneider, former Executive Vice President and Chief Operating Officer, received a cash incentive of $56,000 in 2003. Mr. Schneider resigned from the Company in February 2004. Stephen T. D. Dixon, the Company’s Executive Vice President and Chief Financial Officer, received a cash incentive of $90,000 in 2003. No other executive officers received cash incentives in 2003.

Stock Options

The 1996 Equity Compensation Plan is designed to attract, retain and reward employees who make significant contributions toward achievement of our long-term financial and operational objectives. Stock options reward recipients based on increases in share price, thereby aligning the interests of our executives and employees with those of our stockholders. Awards vest ratably over a number of years and, therefore, enhance employee retention. Grants are made periodically based on subjective assessment of a number of factors, including the achievement of our commercial, financial and strategic objectives, individual contributions, and competitive market levels for peer positions. Options are also granted to new hires to attract the highest caliber of employee in a highly competitive recruiting market.

Stock option awards for CEO in 2003. No stock options were granted to Mr. Apfelbach in 2003.

Stock option awards for other highly compensated executives in 2003. The committee granted stock options during 2003 to certain executives and employees. The number of options granted was based on each person’s responsibilities and the other subjective factors discussed above.

IRS Limits on Deductibility of Compensation

Internal Revenue Code section 162(m) provides that publicly held companies cannot deduct in any taxable year compensation in excess of one million dollars paid to any of the individuals named in the Summary Compensation Table that is not “performance-based” as defined in section 162(m). For incentive compensation to qualify as “performance-based” compensation, the committee’s discretion to grant awards must be strictly limited. We believe that the 1996 Equity Compensation Plan meets the performance-based exception under section 162(m). We believe that the benefit to ChromaVision of retaining the ability to exercise discretion under its bonus plan outweighs the limited risk of loss of tax deductions under section 162(m). Therefore, the committee does not currently intend to seek to qualify the bonus plan under section 162(m).

COMPENSATION COMMITTEE

Jon R. Wampler, Chairman
Michael F. Cola
Anthony L. Craig

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SECURITY OWNERSHIP OF DIRECTORS AND OFFICERS
AND BENEFICIAL OWNERS OF MORE THAN 5% OF THE COMPANY’S
ISSUED AND OUTSTANDING COMMON STOCK

The following table sets forth the number of shares of the Company’s common stock beneficially owned as of April 12, 2004 (the record date) by current directors of the Company, the named executive officers reported below in the “Executive Compensation & Other Arrangements – Summary Compensation Table”, all directors and officers as a group and any other person or entity who is the beneficial owner of more than 5% of the Company’s issued and outstanding common stock. Percentage of ownership is calculated using the number of outstanding shares for voting purposes on the record date.

			Options/		Shares
			Warrants		Beneficially
	Outstanding		Exercisable		Owned
	Shares		Within 60		Assuming
	Beneficially		Days of		Exercise of		Percent of
Name	Owned		Record Date		Options(1)		Shares
Safeguard Scientifics, Inc.(2)		26,909,279		762,611		27,671,890		60.31	%
800 The Safeguard Building
435 Devon Park Drive
Wayne, PA 19087-1945
Michael F. Cola		0		0		0		*
Anthony L. Craig		6,000		0		6,000		*
Irwin Scher, M.D.		50,000		14,000		64,000		*
Frank P. Slattery, Jr.		20,000		19,000		39,000		*
Jon R. Wampler (3)		500		70,000		70,500		*
G. Steve Hamm (4)		0		0		0		*
Carl W. Apfelbach		0		215,188		215,188		*
Kenneth D. Bauer, Ph.D.		0		177,740		177,740		*
Stephen T.D. Dixon		0		112,500		112,500		*
Michael G. Schneider (5)		23,973		75,301		99,274		*
Jose de la Torre-Bueno, Ph.D.(6)		26,435		177,736		204,171		*
Executive officers and directors		126,908		888,548		1,015,456		2.21	%
as a group (13 persons)

*	Less than 1% of the total outstanding shares of ChromaVision common stock
(1)	Each individual has the sole power to vote and to dispose of the shares (other than shares held jointly with spouse), except as noted.
(2)	Outstanding shares beneficially owned includes 23,893,407 shares beneficially owned by Safeguard Delaware, Inc., a wholly-owned subsidiary of Safeguard Scientifics, Inc. (“SDI”), and 3,438,721 shares beneficially owned by Safeguard Scientifics (Delaware), Inc., a wholly-owned subsidiary of Safeguard Scientifics, Inc. (“SSDI”). As described in “Relationships and Related Transactions with Management and Others” below, an additional 2,250,000 shares and 337,500 warrants exercisable within 60 days of the record date will be issued on or about April 27, 2004 to SDI, which will result in Safeguard Scientifics, Inc. beneficially owning, assuming the exercise of the warrants, 30,259,290 shares, or approximately 57.6% of our outstanding common stock, as of the date of that issuance. Safeguard Scientifics, Inc. and each of SDI and SSDI have reported that Safeguard together with each of SDI and SSDI, respectively, have both shared voting and dispositive power with respect to the shares held by each of SDI and SSDI, respectively, because Safeguard is the sole stockholder of each of SDI and SSDI.
(3)	Includes 500 shares held in a family trust.
(4)	Mr. Hamm joined the Board in April 2004 and has not yet received an initial grant of stock options.

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(5)	Includes 2,500 shares held in a 401(k) plan.
(6)	Includes 21,500 total shares held in two family trusts and 2,101 shares held in a 401(k) plan.

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EXECUTIVE COMPENSATION &
OTHER ARRANGEMENTS

The following table sets forth information, for the last three fiscal years, as to the Chief Executive Officer and the four highest paid executive officers (“Named Executive Officers”) of the Company in 2003:

Summary Compensation Table

										Long-Term
										Compensation
			Annual Compensation							Awards
										Securities
							Other Annual			Underlying		All Other
Name and Principal			Salary		Bonus		Compensation			Options/SARS		Compensation
Position	Year		($)		($)		($)			(#)		($)
Carl W. Apfelbach,		2003		163,462		—		4,800	(2)		—		80,361	(3)
President and Chief		2002		250,000		—		7,200			292,875		3,492
Executive Officer (1)		2001		144,339		—		73,889			275,000		3,201
Michael F. Cola,		2003		—		—		—			—		—
Interim Chief		2002		—		—		—			—		—
Executive Officer (1)		2001		—		—		—			—		—
Kenneth D. Bauer,		2003		180,166		—		4,200	(2)		200,000		4,340	(4)
Ph.D., Vice President		2002		178,200		—		—			95,324		4,036
and Chief Science Officer		2001		177,769		—		—			12,325		5,250
Stephen T.D. Dixon,		2003		245,000		90,000		7,200	(2)		150,000		4,954	(5)
Executive Vice President		2002		9,423		—		300			300,000		—
and Chief Financial Officer		2001		—		—		—			—		—
Michael G. Schneider,		2003		206,913		56,000		8,100	(2)		287,500		3,263	(6)
Executive Vice President		2002		175,983		—		800			119,474		157,048
and Chief Operating Officer		2001		162,583		—		11,638			30,750		5,250
Jose de la Torre-Bueno, Ph.D.,		2003		175,442		—		—			81,250		4,284	(7)
Vice President and		2002		171,510		—		—			100,888		4,108
Chief Technology Officer		2001		141,254		—		—			17,500		4,594

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Notes to Summary Compensation Table:

(1)	Carl W. Apfelbach was Chief Executive Officer until September 2003 at which time Michael Cola, on an interim basis, became Chief Executive Officer. Mr. Cola is employed by Safeguard and does not receive any compensation from ChromaVision.
(2)	During 2003 Mr. Apfelbach, Mr. Bauer, Mr. Dixon and Mr. Schneider each received automobile allowances in accordance with each of their respective employment agreements.
(3)	Mr. Apfelbach was awarded $250,000 in severance payments upon his resignation in September 2003. $76,923 was paid during the last four months of 2003; the remaining balance will be paid during 2004. During 2003 Mr. Apfelbach was also received $2,576 in matching contributions under a voluntary savings plan and $862 for premiums relating to group term life insurance.
(4)	During 2003 Mr. Bauer received $3,547 in matching contributions under a voluntary savings plan and $793 for premiums relating to group term life insurance.
(5)	During 2003 Mr. Dixon received $4,759 in matching contributions under a voluntary savings plan and $196 for premiums relating to group term life insurance.
(6)	During 2003 Mr. Schneider received $2,428 in matching contributions under a voluntary savings plan and $835 for premiums relating to group term life insurance.
(7)	During 2003 Dr. Torre-Bueno received $3,509 in matching contributions under a voluntary savings plan and $775 for premiums relating to group term life insurance.

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Fiscal Year Stock Option Grants

The following table sets forth the number of stock options granted and the estimated grant date present value for the Named Executive Officers during the fiscal year ended December 31, 2003.

Stock Options Granted in 2003

											Potential Realizable
											Value
											At Assumed Annual
											Rates of Stock Price
											Appreciation
Individual Grants (1)											for Option Term (2)
				% of Total
	Number of			Options
	Securities			Granted to			Exercise
	Underlying			Employees			or
	Options			in Fiscal			Base Price		Expiration		5%		10%
Name	Granted (#)			Year(3)			($/Sh)(4)		Date		($)		($)
Carl W. Apfelbach		—			—			—		—		—		—
Michael F. Cola		—			—			—		—		—		—
Kenneth D. Bauer, Ph.D.		200,000	(5)		7.45	%	$	1.20		10/21/10		97,704		227,692
Stephen T. D. Dixon		150,000	(5)		5.59	%	$	1.20		10/21/10		73,278		170,769
Michael G. Schneider		287,500	(5)		10.72	%	$	1.20		10/21/10		140,450		327,307
Jose de la Torre-Bueno, Ph.D.		81,250	(5)		3.03	%	$	1.20		10/21/10		39,692		92,500

(1)	Each option grant provides that the option exercise price may be paid in cash, by delivery of previously acquired shares, subject to certain conditions, or same-day sales (that is, a cashless exercise through a broker). Upon a change of control, all options become fully vested. The Board of Directors may modify the terms of outstanding options, including acceleration of the exercise date.
(2)	These values assume that the shares appreciate from the market price on the grant date (which may be significantly in excess of the current market price) at the compounded annual rate shown from the grant date until the end of the option term. These values are not estimates of our future stock price growth. Executives will not benefit unless the common stock price increases above the stock option exercise price.
(3)	The Company granted a total of 2,682,950 stock options during 2003, which includes 884,950 restricted stock grants.
(4)	All options have an exercise price equal to the fair market value of the shares subject to each option on the grant date.
(5)	One-third of these options vest as of the first anniversary of the grant date. The remaining two-thirds vest in equal monthly installments over two years commencing on the second anniversary of the grant date.

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Stock Option Exercises and Year-End Stock Option Values

The following table shows the number of stock options exercised during 2003 by the Named Executive Officers. It also sets forth each individual’s number of exercisable and unexercisable in-the-money stock options and their values at fiscal year-end. An option is in-the-money if the fair market value of the underlying securities exceeds the exercise price of the option.

Stock Options Exercised in 2003 and Year-End Stock Option Values

	Shares				Number of Securities
	Acquired				Underlying Unexercised				Value of Unexercised
	on		Value		Options				In-The-Money Options
	Exercise		Realized		at Fiscal Year-End (#)				at Fiscal Year-End ($) (1)
Name	(#)		($)		Exercisable		Unexercisable		Exercisable		Unexercisable
Carl W. Apfelbach		68,750		178,525		141,969		357,156		—		358,875
Michael F. Cola		—		—		—		—		—		—
Kenneth D. Bauer, Ph.D.		—		—		173,328		276,821		36,975		508,925
Stephen T.D. Dixon		—		—		75,000		375,000		116,250		647,250
Michael G. Schneider		—		—		117,745		384,979		62,663		715,675
Jose de la Torre-Bueno, Ph.D.		—		—		173,139		176,499		39,150		279,138

(1) Values were calculated by multiplying the closing market price of the Company’s common stock at December 31, 2003 ($3.19) by the respective number of shares relating to in-the-money options and subtracting the option price, without any adjustment for any vesting or termination contingencies or other variables.

Long Term Incentive Plan Awards; Defined Benefit or Actuarial Plan Disclosure

ChromaVision made no Long Term Incentive Plan or similar awards in fiscal year 2002. ChromaVision does not maintain any defined benefit or actuarial plans or similar pension plans or arrangements.

Employment Contracts with Named Executive Officers

Chief Executive Officer

During fiscal year 2003, Mr. Apfelbach served as the President and Chief Executive Officer of ChromaVision until his resignation from the Company in September 2003. Mr. Cola commenced service as the Interim Chief Executive Officer of ChromaVision in September 2003.

Mr. Apfelbach’s employment agreement provided for a base salary of $250,000 per year, eligibility for an annual performance-based bonus and eligibility to receive grants of stock options under the 1996 Equity Compensation Plan. Mr. Apfelbach’s employment agreement

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also provided for additional perquisites, such as an automobile allowance, matching contributions under a voluntary savings plan and other compensation as reported in the section entitled “Executive Compensation and Other Arrangements” above.

In connection with Mr. Apfelbach’s termination of employment in September 2003, Mr. Apfelbach and ChromaVision entered into a severance agreement, which superseded all prior employment and severance agreements and arrangements. Pursuant to this agreement, upon termination, Mr. Apfelbach became entitled to the following:

• $250,000 severance payment, payable over 12 months following the date of termination; and

• continued vesting of all stock options issued and outstanding as of the date of termination and the right to exercise such stock options for a period of 12 months following the date of termination.

Mr. Cola is employed by Safeguard Scientifics, Inc., the majority shareholder of ChromaVision. Mr. Cola has no employment contract with ChromaVision and receives no compensation from the Company. Beginning in March 2004, the Company has agreed to pay Safeguard $40,000 per month for Mr. Cola’s time and activities as ChromaVision’s Interim Chief Executive Officer.

Executive Vice President and Chief Financial Officer

Stephen T. D. Dixon serves as Executive Vice President and Chief Financial Officer. Mr. Dixon’s employment agreement provides for a base salary of $220,000 per year, eligibility for an annual performance-based bonus and eligibility to receive grants of stock options under the 1996 Equity Compensation Plan. Mr. Dixon’s employment agreement also provides for additional perquisites, such as an automobile allowance, matching contributions under a voluntary savings plan and other compensation as reported in the section entitled “Executive Compensation and Other Arrangements” above.

Executive Vice President and Chief Operating Officer

During 2003 Michael G. Schneider served as Executive Vice President and Chief Operating Officer. Mr. Schneider resigned from ChromaVision in February 2004. Mr. Schneider’s employment agreement provided for a base salary of $220,000 per year, eligibility for an annual performance-based bonus and eligibility to receive grants of stock options under the 1996 Equity Compensation Plan. Mr. Schneider’s employment agreement also provided for additional perquisites, such as an automobile allowance, matching contributions under a voluntary savings plan and other compensation as reported in the section entitled “Executive Compensation and Other Arrangements” above.

In connection with Mr. Schneider’s termination of employment in February 2004, Mr. Schneider and ChromaVision entered into an agreement whereby, upon delivery of an executed general release of claims and observance of certain non-compete and non-solicitation covenants, all of Mr. Schneider’s stock options issued and outstanding as of the date of termination will continue to vest and be exercisable for a period of 12 months following the date of termination.

Vice President and Chief Science Officer

Kenneth D. Bauer, Ph.D. serves as Vice President and Chief Science Officer. Dr. Bauer’s employment agreement provides for a base salary of $200,000 per year, eligibility for an annual performance-based bonus and eligibility to receive grants of stock options under the 1996 Equity Compensation Plan. Dr. Bauer’s employment agreement also provides for additional

23

perquisites, such as an automobile allowance, matching contributions under a voluntary savings plan and other compensation as reported in the section entitled “Executive Compensation and Other Arrangements” above.

Vice President and Chief Technology Officer

Jose de la Torre-Bueno, Ph.D. serves as Vice President and Chief Technology Officer. Dr. Torre-Bueno’s employment agreement provides for a base salary of $185,000 per year, eligibility for an annual performance-based bonus and eligibility to receive grants of stock options under the 1996 Equity Compensation Plan. Dr. Torre-Bueno’s employment agreement also provides for additional perquisites, such as an automobile allowance, matching contributions under a voluntary savings plan and other compensation as reported in the section entitled “Executive Compensation and Other Arrangements” above.

Severance and Change-in-Control Arrangements

Mr. Dixon, Dr. Bauer, Dr. Torre-Bueno and other executive officers of ChromaVision are each parties to a severance agreement which provides, in general and subject to certain modifications in the case of the specific executive, that in the event that the executive’s employment is terminated by the Company without cause or by him or her for specified reasons relating to changes in his or her responsibilities or the location of our principal executive office or a change-in-control of the Company, the executive will be entitled to:

• one year of salary continuation;

• acceleration of the vesting of certain stock options and an extension of the exercisability of certain stock options for various periods of time;

• continuation of health insurance benefits for the one-year severance period (subject to certain limitations);

• payment of a pro rata share of any bonus he or she would have received in the year of termination, as determined by the Board; and

• up to $15,000 for executive outplacement services.

Certain of the executive’s severance benefits are contingent upon the execution and delivery of a general release and his or her observance of certain non-competition and non-solicitation covenants.

Relationships and Related Transactions with Management and Others

On February 24, 2003 we announced that we entered into a $3 million revolving credit agreement with the Technology and Life Sciences Division of Comerica Bank-California. Borrowings under the line of credit bear interest at Comerica’s prime rate plus one-half percent and are guaranteed by Safeguard Scientifics, Inc. Under the agreement, we agreed to pay to Safeguard Scientifics, Inc. a one-time fee for the guarantee of $15,000 plus an amount equal to 4.5% of the daily-weighted average principal balance outstanding under the line of credit.

On February 26, 2003 we issued 4,646,408 shares of our common stock for an aggregate cash purchase price of $5 million ($1.0761 per share) in a private placement to Safeguard Delaware, Inc., a wholly-owned subsidiary of Safeguard Scientifics, Inc. Safeguard Scientifics, Inc. already beneficially owned a majority of the outstanding shares of our common stock prior to the transaction. As a result of the transaction its percentage of beneficial ownership increased from

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56% to 62%. We also entered into a registration rights agreement giving Safeguard Scientifics certain rights to have the purchased shares registered under the Securities Act of 1933, as amended.

On February 10, 2004, we completed a private placement of 2,295,230 shares of common stock and a warrant to purchase shares of common stock to Safeguard Delaware, Inc. for a purchase price of $5,000,000. The warrant issued to Safeguard Delaware, Inc. on February 10, 2004 was amended on March 25, 2004 and is exercisable until March 1, 2008, is currently exercisable to purchase 344,285 shares of common stock for an exercise price of $2.95 per share. As a result of this transaction Safeguard Scientifics’ percentage of beneficial ownership of our common stock increased from approximately 60% immediately preceding the transaction to approximately 63%. We also entered into a registration rights agreement giving Safeguard Scientifics certain rights to have the purchased shares registered under the Securities Act of 1933, as amended.

On March 25, 2004 we entered into a securities purchase agreement with a limited number of accredited investors pursuant to which we agreed to issue and the investors agreed to purchase 10,500,000 shares of common stock, together with warrants to purchase an additional 1,575,000 shares of common stock at an exercise price of $2.75 per share for an aggregate purchase price of $21,000,000 (we refer to this financing as the “March 2004 financing”). The warrants issued in this transaction are exercisable for a period of four years after the date they are issued. We structured this transaction so that a portion of the common stock and warrants issued (4,200,000 shares of common stock and warrants to purchase 630,000 shares of common stock for aggregate gross proceeds of $8,400,000) were issued at an initial closing that occurred on March 31, 2004. The remaining shares and warrants to be issued in the transaction will be issued at a subsequent closing which is expected to occur on or about April 27, 2004. Safeguard Delaware, Inc. was one of the purchasers in the March 2004 financing and acquired 3,750,000 shares of common stock and warrants to purchase 562,500 shares of common stock for an aggregate investment of $7,500,000. Following consummation of the subsequent closing of the financing, Safeguard Delaware, Inc. and its affiliate Safeguard Scientifics (Delaware), Inc. owned approximately 57.6% of our outstanding common stock.

Each of the purchasers in the March 2004 financing was granted a preemptive right to purchase its pro rata share of 49.9% of any new equity securities that we may issue on or prior to March 31, 2005. Safeguard Delaware, Inc. had previously been granted preemptive rights, which it waived in connection with the March 2004 financing (except to the extent that it purchased securities in the March 2004 transaction).

In connection with the March 2004 financing, we entered into a registration rights agreement with the purchasers in that financing.

Due to its ownership of approximately 60.31% of our outstanding common stock, Safeguard Scientifics has the power to elect all of the directors of our Company. We have also given Safeguard Scientifics contractual rights enabling it to exercise significant control over our Company.

Anthony Craig, who is one of our directors, is also a director and executive officer of Safeguard Scientifics, Inc., and Michael Cola, who is our interim chief executive officer and one of our directors, is also an executive officer of Safeguard Scientifics, Inc.

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INDEPENDENT PUBLIC ACCOUNTANTS

The Board of Directors has appointed the Audit Committee, whose members and functions are described above under “Board Committees.” The Audit Committee has appointed the firm of KPMG LLP as the Company’s independent accountants for the current year. KPMG LLP has served as the auditor of ChromaVision since the Company’s inception in 1996.

Representatives of KPMG LLP are expected to be present at the Annual Meeting, will have an opportunity to make a statement if they desire to do so, and will be available to respond to appropriate questions.

Audit and Non-Audit Fees

The following table presents fees for professional services rendered by KPMG LLP for the audit of Company’s annual financial statements for 2003 and 2002 respectively, and fees billed for other services rendered by KPMG LLP.

	2003		2002
Audit Fees (1)	$	148,625	$	113,500
Audit-Related fees		0		0
Tax Fees (2)		46,800		43,400
All Other Fees		0		0
Total	$	195,425	$	156,900

(1)	Audit fees included assistance with registration statement filings.
(2)	Tax fees consisted of services for U.S. federal, state and local and international tax planning, advise and compliance, tax valuation services, and assistance with tax audits and appeals.

The Audit Committee has a policy to review and approve in advance the retention of the independent auditors for the performance of all audit and lawfully permitted non-audit services and the fees for such services. The Audit Committee may delegate to one or more of its members the authority to grant pre-approvals for the performance of non-audit services, and any such Audit Committee member who pre-approves a non-audit service is required to report the pre-approval to the full Audit Committee at its next scheduled meeting. The Audit Committee periodically notifies the Board of their approvals.

The Audit Committee has considered whether the independent auditor’s provision of tax services to the Company is compatible with the auditor’s independence.

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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s officers and directors, and persons who own more than 10% of a registered class of the Company’s equity securities, to file reports of ownership and changes in ownership with the SEC and to submit copies to the Nasdaq Stock Market. Officers, directors and greater than 10% stockholders are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file. The rules of the SEC require that we disclose late filings of reports of stock ownership by our directors, executive officers and greater than 10% stockholders. Based solely on our review of such filings and written representations from these reporting persons, all requisite filings were timely made during 2003.

STOCK PERFORMANCE GRAPH

The following chart compares the yearly percentage change in the cumulative total stockholder return on ChromaVision common stock for the period from December 31, 1998 through December 31, 2003, with the cumulative total return on the Nasdaq Index and the peer group index for the same period. The peer group consists of SIC Code 3826—Laboratory Analytical Instruments. The comparison assumes that $100 was invested on December 31, 1998 in ChromaVision common stock at the then closing price of $5.00 per share, and in each of the comparison indices and assumes reinvestment of dividends. The yearly percentage change is measured by dividing: (i) the sum of (A) the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and (B) the difference between the share price at the end and the beginning of the five-year measurement period; by (ii) the share price at the beginning of the measurement period.

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APPENDIX A

CHROMAVISION MEDICAL SYSTEMS, INC.
AUDIT COMMITTEE CHARTER

I.	Purpose
	The Audit Committee (the “Committee”) of the Company is appointed by, and generally acts on behalf of, the Board of Directors (the “Board”) of ChromaVision Medical Systems, Inc. (the “Company”). The Board has determined to establish the governing principles of the Committee through the adoption of this Charter. The Committee’s principal purposes shall be:

(i)	overseeing the accounting and financial reporting processes of the Company and the audits of the financial statements of the Company;
(ii)	to assist the Board in its oversight of the integrity of the Company’s financial statements; the Company’s Internal Controls (as defined in Section II.C.1.) and the performance of the Company’s internal audit function;
(iii)	to interact directly with and evaluate the performance of the independent auditors, including to determine whether to engage or dismiss the independent auditors and to monitor the independent auditors’ qualifications and independence;
(iv)	to prepare the report required by the rules of the Securities and Exchange Commission (the “SEC”) to be included in the Company’s proxy statement; and
(v)	to discharge such duties and responsibilities as may be required of the Committee by the provisions of applicable law or rule or regulation of the Nasdaq Stock Market, Inc.

With respect to financial reporting, management is primarily responsible for the Company’s reporting process and the system of Internal Controls. Management is responsible for the completeness and accuracy of the Company’s financial statements and the fair presentation of the financial condition, results of operations and cash flows of the Company. Management is also primarily responsible for assuring compliance with applicable laws and regulations and with the Company’s Code of Business Ethics. The independent auditors are responsible for performing an independent audit of the Company’s consolidated financial statements in accordance with generally accepted auditing standards and expressing an opinion on the conformity of those audited financial statements in accordance with generally accepted accounting principles (“GAAP”). Consistent with the specific duties of the Committee listed below, it is the responsibility of the Committee, working in conjunction with management and the independent auditors, to oversee and monitor these policies and procedures in a manner that achieves their objectives.

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II. Responsibilities and Duties

A: Financial Reporting

1.	General
	The Committee shall review and discuss with management and the independent auditor, as appropriate, the following:

(i)	the Company’s policies and procedures regarding disclosures that may impact the financial statements;
(ii)	significant financial reporting issues and judgments;
(iii)	the establishment and adequacy of the Company’s Internal Controls and any actions taken to address reportable or material control deficiencies;
(iv)	financial statement presentation;
(v)	any regulatory and accounting initiatives;
(vi)	all alternative treatments of the Company’s financial information, including the use of “pro forma” or “adjusted” non-GAAP information, the ramifications of the use of such alternative disclosures and treatments and the treatment preferred by the independent auditor;
(vii)	any reports prepared by the independent auditors and provided to the Committee relating to significant financial reporting issues and judgments including, among other things, the Company’s selection, application and disclosure of critical accounting principles and practices, all alternative assumptions, estimates or methods used by the independent auditors and the effects, if any, such treatments have on the Company’s financial statements and the treatment preferred by the independent auditors;
(viii)	all “special-purpose” entities, off-balance sheet structures and all complex financing transactions;
(ix)	any disagreements that may have occurred between the independent auditor and management relating to the Company’s financial statements or disclosures;
(x)	any communications between the independent auditor’s team assigned to the Company’s audit and the independent auditor’s national office, and all other material written communications between the independent auditor, management and the internal auditor, including any “management” or “internal control” letters issued, or proposed to be issued, by the independent auditor to the Company;

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(xi)	any correspondence with regulators or published reports that raise material issues with respect to, or that could have a significant effect on, the Company’s financial statements; and
(xii)	any other matters required to be discussed by applicable auditing standards, laws or regulations.

2. Preparation and Release of Financial Information

a.	For annual information, the Committee shall review and obtain an understanding of the scope and timing of the annual audit as well as the results of the audit work performed by the independent auditors. For quarterly information, the Committee shall obtain an understanding of the extent to which the independent auditors review quarterly financial information.
b.	The Committee shall meet with the Company’s general counsel, and outside counsel when appropriate, to discuss legal matters that may have a significant impact on the Company’s financial information.
c.	The Committee shall review earnings press releases prior to their release, as well as the types of financial information and earnings guidance provided to analysts and ratings agencies.
d.	The Committee shall review and discuss with management and the independent auditors the annual audited financial statements to be included in the Company’s annual report on Form 10-K, the quarterly financial statements to be included in the Company’s Forms 10-Q, the Company’s disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and any other financial disclosures prior to their release to determine that the independent auditors are satisfied with the disclosure and content of the financial statements to be presented.
e.	The Committee shall recommend to the Board whether the audited financial statements should be included in the Company’s Form 10-K
f.	The Committee shall prepare the report required by the rules of the SEC to be included in the Company’s annual proxy statement.

3. Audit Committee Report

a. The Committee shall prepare annually a report in accordance with the applicable rules and regulations of the SEC for inclusion in the Company’s Proxy Statement.

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B.	Monitoring Compliance with Code of Ethics
	The Committee shall meet periodically with the senior members of the internal audit resource, the general counsel’s office and, where appropriate, the independent auditors, to review the Company’s policies and procedures regarding compliance with the Company’s Code of Business Ethics. Specifically, the Committee shall, among other actions as it deems appropriate, oversee the implementation of the Company’s Code of Business Ethics, including the Code of Ethics for Senior Financial Officers, and review significant cases of conflict of interest, misconduct, or fraud and the resolution of such cases.
C.	Oversight of Disclosure Controls and Procedures and Internal Controls and Procedures

1.	The Committee shall oversee the Company’s disclosure controls and procedures and internal controls and procedures for financial reporting (as defined by the SEC), as well as internal controls generally (collectively, “Internal Controls”). The Committee will review with the independent auditors, the Company’s internal auditor, and financial and accounting personnel, the adequacy and effectiveness of the internal controls of the Company. This review should elicit any recommendations for the improvement of such internal controls or particular areas where new or more detailed internal controls are desirable.
2.	The Committee shall evaluate whether management is setting the appropriate tone at the top by communicating the importance of strong internal controls.
3.	The Committee shall evaluate the adequacy of such internal controls to expose any payments, transactions, or procedures that might be deemed illegal or otherwise improper.

D. Oversight of Internal Audit

1.	The Committee shall oversee the Company’s establishment and maintenance of an appropriate control process for reviewing and approving its internal transactions and accounting, whether such process is implemented through an internal audit department of the Company, through outsourcing or otherwise (such process, the “internal audit resource”).
2.	When the internal audit resource is established, the Committee shall oversee the activities, organizational structure and qualifications of the internal audit resource. The internal audit resource shall report functionally to the Committee and administratively to the Company’s Chief Financial Officer.
3.	A representative from the internal audit resource shall attend Committee meetings at the Committee’s request from time to time, and report, at least semi-annually, to the Committee on audit results for the period and the status of the audit schedule. Reports may be made at more frequent intervals if deemed necessary by the Committee or as may be requested by the internal audit resource.

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4.	The Committee shall review and approve the annual internal audit plan, objectives, schedules and any special projects undertaken by the internal audit resource.
5.	The Committee shall discuss with the internal audit resource any changes to, and the implementation of, the internal audit plan and any special projects and discuss with the internal audit resource the results of the internal audits and special projects.
6.	The Committee shall review any significant reports to management prepared by the internal audit resource, management’s responses and the status of any recommended corrective action. Particular emphasis will be given by the Committee to significant control deficiencies and actions taken by management to correct them.
7.	The Committee shall discuss with the internal audit resource any audit problems or difficulties, including any restrictions on the scope of the internal audit resource’s activities or on access to requested information, and management’s response to same and any other matters required to be brought to its attention.
8.	The Committee may request, either directly, through the Chief Financial Officer or the corporate controller, that the internal audit resource perform special studies, investigations, or other services in matters of interest or concern to the Committee.
9.	The Committee shall review the effectiveness of the internal audit function.
10.	The Committee shall periodically review the charter of the internal audit resource to ensure that it provides for the independence, objectivity and authority of the internal audit function, and make recommendations thereto. The Committee shall ensure that the members of the internal audit resource shall have unrestricted access to all of the Company’s records, reports, personnel, and physical properties as may determined by the members of the internal audit resource to be relevant to the performance of their audits.
11.	The Committee shall review and approve the appointment and replacement of the senior member of the Company’s internal audit resource.

E. Oversee Relationship with Independent Auditors

1. Appointment and Authorization of Services

a.	The Committee shall have the sole authority to retain, set compensation and retention terms for, terminate and oversee the activities of the Company’s independent auditors.
b.	The independent auditors shall report directly to the Committee. The Company shall provide for appropriate funding, as determined by the Committee, for payment of compensation to the independent auditors.

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c.

The Committee shall review and approve in advance the retention of the independent auditors for the performance of all audit and lawfully permitted non-audit services and the fees for such services. The Committee may delegate to one or more of its members the authority to grant pre-approvals for the performance of non-audit services, and any such Committee member who pre-approves a non-audit service shall report the pre-approval to the full Committee at its next scheduled meeting. The Committee shall periodically notify the Board of their approvals.

d.

Prior to the audit, the Committee shall meet with the independent auditors to discuss the planning, staffing and fees related to the audit.

2. Oversight of Independence and Qualifications of Independent Auditors

a.	In order to assess the independence of the Independent Auditor, the Committee shall, at least annually, obtain and review a report by the independent auditors describing all relationships between the firm and the Company and all professional services provided to the Company. The Committee shall review with the independent auditors the nature and scope of all disclosed relationships or professional services and take, or recommend that the Board take, appropriate action to ensure the continuing independence of the auditors.
b.	The Committee shall, at least annually, obtain and review a report by the independent auditors describing: (a) the auditing firm’s internal quality-control procedures; and (b) any material issues raised by the most recent internal quality-control review, or peer review, of the firm, or by any inquiry or investigation by governmental or professional authorities or a private sector regulatory board, within the preceding five years, respecting one or more independent audits performed by the firm, and any steps taken to deal with any such issues.
c.	After reviewing the reports from the independent auditors and the independent auditors’ work throughout the audit period, the Committee will conduct an annual evaluation of the independent auditors’ performance and independence, including whether the independent auditors’ quality controls are adequate. In making its evaluation, the Committee shall take into account the opinions of management and the senior member of the Company’s internal audit resource. The Committee shall present its conclusions with respect to the evaluation of the independent auditors to the Board.
d.	The Committee shall ensure compliance by the independent auditor of all other independence requirements that the independent auditor may be subject to including ensuring that the audit firm has adhered to the five-year rotation requirement for the lead and reviewing audit partners.

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3. Other Oversight Responsibilities

a.

The Committee shall discuss with the independent auditors any audit problems or difficulties, including any restrictions on the scope of the auditor’s activities or on access to requested information, and management’s response to same and any other matters required to be brought to its attention under auditing standards.

b.

The Committee shall set clear policies for the hiring by the Company of employees or former employees of the independent auditors. Specifically, the Company shall not hire as its Chief Executive Officer, Controller, Chief Financial Officer, Chief Accounting Officer or any person serving in an equivalent position any partner, employee or former employee of the Company’s independent auditors who participated in any capacity in an audit of the Company during the one-year period preceding the date of initiation of the then-current audit.

III. Other Powers and Responsibilities

A:

Evaluations

With the assistance of the Corporate Governance Committee, the Committee shall annually review and assess its own performance and the performance of each Committee member and deliver a report to the Board setting forth the results of its evaluation. In conducting this review, the Committee shall address matters that it considers relevant to its performance, including at a minimum, the adequacy, appropriateness and quality of the information and recommendations presented to the Board, the manner in which they were discussed or debated, and whether the number and length of meetings of the Committee were adequate for the Committee to complete its work in a thorough and thoughtful manner.

B. Investigations; Retention of Professional Advisors

1.

The Committee shall have the power to conduct or authorize investigations into any matters within the Committee’s scope of responsibilities. The President, the Chief Financial Officer or the Corporate Secretary of the Company shall provide or arrange to provide such other information, data and services as the Committee may request. The Committee shall conduct such interviews or discussions as it deems appropriate with personnel of the Company, and/or others whose views would be considered helpful to the Committee.

2.

The Committee shall have the authority to obtain advice, counsel and assistance from internal and external legal, accounting and other advisors for any reason, including but not limited to in connection with any special investigations deemed necessary by the Committee. The Company shall provide appropriate funding for the Committee to retain such advisors without requiring the Committee to seek Board approval.

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C.	Risk Management
	The Committee shall discuss periodically with management the Company’s policies and guidelines regarding risk assessment and risk management, as well as the Company’s major financial risk exposures and steps management has taken to monitor and control such exposures. The Committee also shall review the Company’s existing processes and policies with respect to risk assessment and risk management.
D.	Whistleblowing Procedures
	The Committee shall establish procedures (i) for the receipt, retention, and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters, (ii) to ensure that such complaints are treated confidentially and anonymously, and (iii) for the confidential, anonymous submission by Company employees of concerns regarding questionable accounting or auditing matters.
E.	Disputes with Management
	The Committee shall resolve any significant disagreements between the independent auditors and management, and between the internal audit resource and management.
F.	Revision of Charter
	The Committee shall review and reassess the adequacy of this Charter annually and recommend any proposed changes to the Board for its approval.
G.	Reports

1.

The Committee shall make regular reports to the Board on its activities, including reviewing any issues that arise respecting the quality and integrity of the Company’s public reporting, the Company’s compliance with legal and regulatory requirements, the performance and independence of the Company’s independent auditors, the performance of the Company’s internal audit resource and the effectiveness of the Company’s internal controls.

2.

The Committee shall make an annual presentation to the Board within three months after the receipt of the independent auditor’s opinion on the Company’s financial statements. The presentation shall provide an overview of the Committee’s activities, findings of importance, conclusions, recommendations, and items that require follow-up or action by the Board.

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IV. Membership and Organization of Committee

A:	Size of Committee
	The Committee shall consist of at least three directors.
B.	Member Qualifications

1. Each of the members of the Committee shall meet the independence and experience requirements of the Nasdaq Stock Market, Inc. and applicable federal securities laws, including the rules and regulations of the SEC. In addition, each of the members of the Audit Committee must also satisfy the following additional requirements to be independent:

a.	no Committee member shall accept any consulting, advisory, or other fees from the Company, except for fees for services as a director and member of the Committee and any other Board committee;
b.	no Committee member or family member of the Committee member shall currently be, or have been within the past five years, employed as an executive officer of the Company or any of its affiliates;
c.	no Committee member shall be an executive officer of any entity, including a non-profit entity, that has received payments from the Company in excess of $200,000 or 5% of the entity’s gross revenues;
d.	no Committee member or immediate family member of such Committee member may be an affiliated person of the Company or any of its subsidiaries, which means that he or she does not, directly or indirectly as a partner, controlling shareholder or officer of another company, own or control more than 5% of the Company’s Common Stock;
e.	no Committee member shall currently be, or have been within the past five years, affiliated with or employed by a present or former auditor of the Company or any of its affiliates until the earlier of five years after the end of the affiliation or the auditing relationship; and
f.	each of the members of the Committee must be able to read and understand financial statements, including the Company’s balance sheet, income statement and cash flow statement at the time of his or her appointment to the Committee. At least one member shall be a financial expert with the education and past employment experience necessary for compliance with the audit committee composition requirements of the Nasdaq Stock Market, Inc. To the extent possible, at least one member shall be an “audit committee financial expert” as that term is defined by the SEC.

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2. Generally, no member of the Committee may serve simultaneously on the audit committees of more than three public companies without a specific Board determination that such simultaneous service will not impair the ability of such Committee member to serve on the Committee.

C.	Appointment
	The members of the Committee shall be appointed by the Board upon the recommendation of the Corporate Governance Committee. The Corporate Governance Committee shall recommend, and the Board shall designate, one member of the Committee to serve as Chairperson. If the Chairperson is absent from a meeting, another member of the Committee may act as Chairperson.
D.	Term
	Members of the Committee will be appointed for one-year terms and shall serve until their resignation, retirement, or removal by the Board or until their successors shall be appointed. The Board may fill vacancies on the Committee and remove a member of the Committee at any time with or without cause. No member of the Committee shall be removed except by majority vote of the independent directors of the Board then in office.

V. Conduct of Meetings

A:	Frequency
	The Committee shall meet when, where and as often as it may deem necessary and appropriate in its judgment, but in no event less than five (5) times per year, either in person or telephonically. A majority of the members of the Committee shall constitute a quorum. The Chairman of the Board or any Committee member shall have the right to call a special meeting of the Committee.
B.	Non-Committee Member Attendees

1.	The Committee may request that any directors, officers or employees of the Company, or other persons whose advice and counsel are sought by the Committee, attend any meeting to provide such information as the Committee requests.
2.	The Committee shall meet with the independent auditors, the senior member of the Company’s internal audit resource, and management in separate meetings as often as it deems necessary and appropriate in its judgment.

C.	Conduct of Meetings
	The Committee shall fix its own rules of procedure, which shall be consistent with the Bylaws of the Company and this Charter.

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D.	Minutes
	A member of the Committee, a designee of the Committee or the Corporate Secretary shall keep written minutes of Committee meetings, which minutes shall be maintained with the books and records of the Company.
E.	Delegation of Authority
	The Committee may delegate authority to one or more members of the Committee when appropriate, but no such delegation shall be permitted if the authority is required by law, regulation or listing standard to be exercised by the Committee as a whole.

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33171 Paseo Cerveza
San Juan Capistrano, CA 92675-4824

Phone:	(949) 443-3355
Toll-Free:	(888) 443-3310
Fax:	(949) 443-3366

www.chromavision.com

2004 ANNUAL MEETING OF STOCKHOLDERS

When:	8:30 a.m. (local Pacific time) on Wednesday, June 9, 2004
Where:	ChromaVision Medical Systems, Inc. 33171 Paseo Cerveza San Juan Capistrano, CA 92675-4824

Driving Directions

Traveling South from Los Angeles, Long Beach or Orange County

Take Interstate 5 Freeway South, exit at Camino Capistrano.
Turn left on Camino Capistrano.
Turn right on Avenida Aeropuerto.
Turn left on Paseo Cerveza.

Traveling North from San Diego County

Take Interstate 5 Freeway North, exit at Camino Capistrano.
Turn left on Camino Capistrano.
Turn right on Avenida Aeropuerto.
Turn left on Paseo Cerveza.

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The Board of Directors recommends a vote FOR the election of the named nominees for director.

1.	ELECTION OF DIRECTORS		FOR all nominees listed	WITHHOLD AUTHORITY	Consenting to receive all future annual meeting materials and stockholder communications electronically is simple and fast! Enroll today at www.melloninvestor.com/ISD for secure online access to your proxy materials, statements, tax documents and other important stockholder correspondence.
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	Nominees:		to the contrary)	nominees listed
	01	Michael F. Cola	o	o
	02	Anthony L. Craig
	03	Irwin Scher, M.D.
	04	Frank P. Slattery, Jr.
	05	Jon R. Wampler
	06	G. Steve Hamm

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CHROMAVISION MEDICAL SYSTEMS, INC.
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     Please mark, sign and date this proxy and indicate how you wish to vote on the back of this card. Please return this card promptly in the enclosed envelope. Your vote is important.

     When you sign and return this proxy card, you

• appoint Stephen T. D. Dixon (or any substitute he may appoint), as proxy to vote your shares, as you have instructed, at the annual meeting on June 9, 2004, including any adjournments or postponements of that meeting;

• authorize the proxy to vote, in his discretion, upon any other business properly presented at the meeting; and

• revoke any previous proxies you may have signed.

     IF YOU DO NOT INDICATE HOW YOU WISH TO VOTE, THE PROXY WILL VOTE “FOR” ALL NOMINEES TO THE BOARD OF DIRECTORS AND AS HE MAY DETERMINE, IN HIS DISCRETION, WITH REGARD TO ANY OTHER MATTER PROPERLY PRESENTED AT THE MEETING.

Address Change/Comments (Mark the corresponding box on the reverse side)

—  FOLD AND DETACH HERE  —

33171 Paseo Cerveza
San Juan Capistrano, CA 92675-4824

Phone: (949) 443-3355
Toll-Free: (888) 443-3310
Fax: (949) 443-3366

www.chromavision.com