<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
PREMIER RESEARCH WORLDWIDE, LTD.
- -----------------------------------------------------------------------------
(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):
/ / No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
----------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------
5) Total fee paid:
----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
___________________________________________________________________________
2) Form, Schedule or Registration Statement No.:
___________________________________________________________________________
3) Filing Party:
___________________________________________________________________________
4) Date Filed:
___________________________________________________________________________
<PAGE>
Premier Research Worldwide, Ltd.
124 S. 15th Street
Philadelphia, PA 19102-3010
March 31, 1998
Dear Premier Research Worldwide Stockholders:
You are cordially invited to the Annual Meeting of Stockholders to be held
at 2:00 P.M. on April 30, 1998 at The Union League of Philadelphia, 140 S.
Broad Street, Philadelphia, PA 19102.
Details with respect to the meeting are set forth in the attached Notice of
Annual Meeting and Proxy Statement.
Your vote is important. Whether or not you plan to attend the meeting, you
are urged to complete, date, sign and return your proxy. If you attend the
meeting and would prefer to vote in person you may still do so.
Very truly yours,
/s/ Joan Carter
---------------------------------
JOAN CARTER
Chairman of the Board
Premier Research Worldwide, Ltd.
<PAGE>
Premier Research Worldwide, Ltd.
------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held April 30, 1998
------------------------------------------
To the Stockholders:
The Annual Meeting of Stockholders of Premier Research Worldwide, Ltd.
will be held at The Union League of Philadelphia, 140 S. Broad Street,
Philadelphia, PA 19102, at 2:00 P.M. on April 30, 1998, for the following
purposes:
(1) To elect two directors to serve three-year terms.
(2) To ratify the selection by the Board of Directors of the firm of
Arthur Andersen LLP as independent auditors for 1998.
(3) To transact any other business that may properly come before the
meeting or any adjournment or postponement thereof.
Stockholders of record as of the close of business on March 19, 1998 are
entitled to notice of and to vote at the meeting.
Whether or not you plan to attend the meeting, please complete, date and
sign the enclosed proxy card and return it in the enclosed envelope. Your proxy
may be revoked at any time prior to the time it is voted.
By Order of the Board of Directors,
/s/ Arthur W. Hicks, Jr.
-------------------------------
ARTHUR W. HICKS, JR.
Secretary
Philadelphia, PA
March 31, 1998
<PAGE>
Premier Research Worldwide, Ltd.
124 S. 15th Street
Philadelphia, PA 19102-3010
------------------------------------------
PROXY STATEMENT
------------------------------------------
These proxy materials are furnished in connection with solicitation of
proxies by the Board of Directors of Premier Research Worldwide, Ltd., a
Delaware corporation (the "Company"), for the Annual Meeting of Stockholders of
Premier Research Worldwide to be held at 2:00 P.M. on April 30, 1998, at The
Union League of Philadelphia, 140 S. Broad Street, Philadelphia, PA 19102, and
any adjournments or postponements of such meeting. These proxy materials were
first mailed to stockholders on or about March 31, 1998. The address of the
principal executive office of Premier Research Worldwide is 124 S. 15th Street,
Philadelphia, Pennsylvania 19102-3010. Sending a signed proxy will not affect
the shareholder's right to attend the Annual Meeting and vote in person. Every
stockholder has the power to revoke his proxy at any time before it is voted.
The proxy, before it is exercised at the meeting, may be revoked by filing with
the Secretary of the Company a notice in writing revoking it, by delivering a
duly executed proxy bearing a later date, or by attending the meeting and voting
in person.
Stockholders Entitled to Vote
The close of business of March 19, 1998 was the record date for
stockholders entitled to notice of and to vote at the Annual Meeting. As of the
record date, there were 7,173,500 outstanding shares of the common stock, $.01
par value, of Premier Research Worldwide (the "Common Stock").
Voting of Proxies
A form of proxy is enclosed. All properly executed proxies received by the
Board of Directors, and not revoked, will be voted as indicated in accordance
with the instructions thereon. In the absence of contrary instructions, shares
represented by such proxies will be voted for the election of the directors as
described herein; in favor of the ratification of the selection of the
independent auditors; and in the discretion of the proxy holders on such other
matters as may properly come before the meeting.
The presence, in person or by proxy, of stockholders entitled to cast at
least a majority of the votes that all stockholders are entitled to cast on a
particular issue constitutes a quorum for the purpose of considering such
matter. Each share of Common Stock outstanding as of the record date is entitled
to one vote on each matter that may be brought before the Annual Meeting.
Election of directors will be by plurality of the votes cast. Any other proposal
will require the affirmative vote of a majority of the votes cast on such
proposal. Broker nonvotes and abstentions are counted for the purposes of
determining the presence or absence of a quorum for the transaction of business
at the meeting. Abstentions are counted in the tabulations of the votes cast on
proposals presented to the stockholders, whereas broker nonvotes are not counted
for purposes of determining the election of directors or whether a proposal has
been approved.
Costs Of Solicitation
The entire cost of soliciting proxies will be borne by Premier Research
Worldwide. Arrangements may be made with brokerage houses and other custodians,
nominees and fiduciaries to send proxies and proxy materials to the beneficial
owners of stock, and reimbursement for expenses may be made. Proxies may be
solicited in person or by telephone or telegraph by directors, officers or
regular employees of Premier Research Worldwide, none of whom will receive
additional compensation therefor.
ELECTION OF DIRECTORS
The Board of Directors consists of nine directors divided into three
classes. Two directors are to be elected at the Annual Meeting to serve until
the 2001 Annual Meeting. Management's nominees for election as directors are
John Aglialoro and Arthur Hull Hayes, Jr., M.D. Both Mr. Aglialoro and Dr.
Hayes currently serve on the Board.
1
<PAGE>
The proxy holders intend to vote all proxies received by them in the
accompanying form for such nominees unless otherwise directed. In the event any
nominee is unable or declines to serve as a director at the time of the Annual
Meeting, the proxies will be voted for any nominee who shall be designated by
the present Board of Directors to fill the vacancy, or, in lieu thereof, the
Board of Directors may reduce the number of directors. As of the date of this
Proxy Statement, Management is not aware of any nominee who is unable or will
decline to serve as a director.
The following table lists the name and age of both of the two nominees and
the seven continuing directors of the Company whose terms of office will
continue after the Annual Meeting, and the year in which each director's term of
office will expire (assuming, in the case of each of the nominees, such nominees
are elected at the Annual Meeting).
Year of
Age As Expiration of
Name of 3/31/98 Term as Director
---- ---------- ----------------
Nominees for Election
John Aglialoro ....................... 54 2001
Arthur Hull Hayes, Jr., M.D. ......... 64 2001
Directors Continuing in Office
Joan Carter .......................... 54 2000
Arthur W. Hicks, Jr. ................. 39 1999
Charles L. Jacobson, M.D. ............ 57 2000
Jerry D. Lee ......................... 61 1999
Joel Morganroth, M.D. ................ 52 1999
Philip J. Whitcome, Ph.D. ............ 49 2000
Connie Woodburn ...................... 43 2000
Mr. Aglialoro has served on the Board of Directors of Premier Research
Worldwide or its predecessors since their founding. Mr. Aglialoro is Chairman
and Chief Executive Officer of UM Holdings, Ltd. ("UM"), which he co-founded in
1973. Mr. Aglialoro has held the position of Chairman of UM since 1982. Mr.
Aglialoro is also a director of CYBEX International, Inc. ("Cybex").
Dr. Hayes has served on Premier Research Worldwide's Board of Directors
since 1996. Since 1991, Dr. Hayes has served as President and Chief Operating
Officer of MediScience Associates, Inc., a consulting firm. Dr. Hayes is an
advisor to Premier Research Worldwide and others in health care product
development and regulation, clinical pharmacology, and medical and pharmacy
practice, and is internationally recognized as a medical researcher and
clinician. Dr. Hayes served as Commissioner of the FDA from 1981 to 1983. He is
also a member of the Board of Directors of Celgene, Inc., Myriad Genetics and
NaPro Biopharmaceuticals, Inc.
Ms. Carter has served as Chairman of the Company's Board of Directors
since 1996, and as a member of the Board of Directors of the Company or its
predecessors since their founding. Ms. Carter is President and Chief Operating
Officer of UM, which she co-founded in 1973. She has served as President of UM
since 1986. Ms. Carter is also a member of the Board of Directors of Cybex, and
is Chairman of the Board of Directors of the Federal Reserve Bank of
Philadelphia.
Mr. Hicks has served on the Company's Board of Directors since 1995. Mr.
Hicks is UM's Vice President and Chief Financial Officer, in which capacity he
has served since 1988. He is a certified public accountant, and prior to
joining UM, was employed by Ernst & Young LLP, a public accounting firm. Mr.
Hicks is also a member of the Board of Directors of Cybex.
Dr. Jacobson has served on the Company's Board of Directors since 1997.
Dr. Jacobson has been Executive Vice President of PREMIER, Inc. since 1996. Dr.
Jacobson served as Executive Vice President for clinical services of one of
PREMIER, Inc.'s predecessors, SunHealth Alliance, Inc., from 1995 to 1996. From
1992 to 1995, Dr. Jacobson served as President and Chief Executive Officer of
Park Nicollet Medical Center in St. Louis Park, Minnesota.
Mr. Lee has served on the Company's Board of Directors since 1996. Mr. Lee
was a partner in the accounting firm of Ernst & Young LLP from 1969 until his
retirement in 1995. He was managing partner of its Philadelphia office from
1979 to 1989 and a member of the firm's world-wide multi-national partner group
from 1989 to 1995. Mr. Lee is also a member of the Board of Directors of Cybex.
2
<PAGE>
Dr. Morganroth has served as the Chief Executive Officer of the Company
since 1993 and as a Director of the Company since 1997. In addition, Dr.
Morganroth has consulted for the Company since 1976. Dr. Morganroth was a
Professor of Medicine and Pharmacology at Hahnemann University from 1982 to
1992, and served as a Director of Cardiac Research and Development at the
Graduate Hospital of Philadelphia from 1987 until 1992. Currently, Dr.
Morganroth is an Adjunct Professor of Medicine (Pharmacology) at Jefferson
Medical College of Thomas Jefferson University and Clinical Professor of
Medicine at the University of Pennsylvania School of Medicine. Dr. Morganroth
is an internationally recognized cardiologist and clinical researcher. He has
served for over ten years as a Medical Review Officer/Expert for the FDA and
since 1995 has served in a similar capacity for the Health Protection Branch of
Canada.
Dr. Whitcome has served on the Company's Board of Directors since January
1997. Since 1995, Dr. Whitcome has served as Chairman of the Board of Directors
of Avigen, a biotechnology company, for which he also acted as Chief Financial
Officer from March 1996 to September 1996. From 1988 to 1994, Dr. Whitcome was
President and Chief Executive Officer of Neurogen Corporation, a
biopharmaceutical company. From 1981 to 1988, Dr. Whitcome was employed at Amgen
Inc., a biopharmaceutical company, serving most recently as Director of
Strategic Planning. Prior to joining Amgen, he served as Manager of Corporate
Development for Medical Products at Bristol-Myers Squibb Co. and held research
and marketing management positions with the Diagnostics Division of Abbott
Laboratories.
Ms. Woodburn has served on the Company's Board of Directors since 1996.
Ms. Woodburn is Executive Vice President for Corporate Sales of Cardinal
Health, Inc., a national drug wholesaler. Prior to joining Cardinal Health,
Inc. in 1997, Ms. Woodburn was Executive Vice President of PREMIER, Inc., where
she had been employed in a variety of management capacities since 1987.
Mr. Aglialoro and Ms. Carter are married. There are no other family
relationships among the directors and the executive officers.
Meetings of the Board of Directors and Committees
The Board of Directors of the Company held a total of six meetings during
1997. Each director attended more than 75% of the meetings of the Board of
Directors and any committee of which he is a member.
The Board of Directors has an Executive Committee, an Audit Committee, a
Compensation and Personnel Committee, a Scientific Oversight Committee and a
Stock Option Committee.
The Executive Committee has, with certain exceptions, all the authority of
the Board of Directors, and has specifically been delegated the authority to
make recommendations to the board with respect to management nominees to the
board and review and make recommendations with respect to such shareholder
nominees to the board as may be submitted to the Company. A shareholder desiring
to propose a candidate to the Executive Committee should submit a written
recommendation, together with sufficient biographical information concerning the
individual, to the secretary of the Company. While letters of recommendation may
be submitted for consideration at any time, recommendations should be received
prior to November 15 in any year for consideration in connection with the
nomination and election of directors at the Company's next Annual Meeting. This
committee, which currently consists of Ms. Carter and Mr.
Aglialoro, held one meeting during 1997.
The Audit Committee is primarily responsible for approving the services
performed by the Company's independent auditors and reviewing and evaluating the
Company's accounting principles and reporting practices and its system of
internal accounting controls. This committee, which currently consists of Mr.
Hicks and Mr. Lee, held four meetings during 1997.
The Compensation and Personnel Committee is primarily responsible for
determining the compensation payable to the officers and key employees of the
Company and to recommend to the Board additions, deletions and alterations with
respect to the various employee benefit plans and other fringe benefits provided
by the Company, except that no member of the Committee shall take part in any
decision pertaining to his compensation or benefits in his capacity as a
director of the Company. This committee, which currently consists of Dr.
Whitcome and Ms. Woodburn, held three meetings during 1997.
3
<PAGE>
The Scientific Oversight Committee is primarily responsible for reviewing
and evaluating the Company's plans and policies in the areas of science,
technology and study methodology. The committee, which currently consists of Dr.
Hayes, held one meeting during 1997.
The Stock Option Committee is primarily responsible for administering the
Company's stock option plan, awarding stock options to key employees and
non-employee directors of the Company and determining the terms and conditions
on which the options are granted. This committee, which currently consists of
Dr. Whitcome and Ms. Woodburn, held three meetings during 1997.
Compensation of Directors
Directors who are not employees of the Company receive a fee of $1,000 for
each directors meeting attended and $500 for each committee meeting attended.
Non-employee directors also receive an annual retainer of $2,000. Each director
is reimbursed for out-of-pocket expenses incurred in connection with attending
meetings and other services as a director. At the time of their initial
election to the Board, Mr. Lee, Dr. Hayes, Ms. Woodburn, Dr. Jacobson and Dr.
Whitcome were each granted options to acquire 4,402 shares of Common Stock of
the Company.
Certain Relationships and Related Party Transactions
The Company or its predecessors were the direct or indirect subsidiaries or
divisions of UM from 1977 to 1997. Currently, UM indirectly owns approximately
39.4% of the Company's Common Stock. John Aglialoro and Joan Carter are
executive officers, directors and the principal stockholders of UM. Ms. Carter
is the Chairman and Mr. Aglialoro is a director of the Company.
UM has had the following arrangements with the Company:
The Company's principal executive and operations facility is owned by UM
and leased to the Company. The current annual rent under this lease is $349,200.
The Company believes that the terms of this lease are as favorable to the
Company as would have been obtained through arms-length negotiations with an
unrelated party.
UM historically provided various administrative services to the Company,
including accounting, human resources and computer services. In 1996, however,
UM decentralized most of these functions, and now provides primarily 401(k)
administrative services, for which it charged the Company $24,300 in 1997. For a
portion of 1997, the Company also participated in UM's deferred savings program
for employees pursuant to Section 401(k) of the Internal Revenue Code. The
Company was charged $46,957 in 1997 for profit sharing plan contributions made
pursuant to this program on behalf of its employees. During 1997, the Company
adopted its own Section 401(k) program, which is substantively identical to the
UM program.
The Company was included in the consolidated federal income tax filings of
UM for the periods prior to February 3, 1997, under a tax sharing agreement
pursuant to which the Company would pay to UM amounts equal to the income taxes
which the Company would otherwise have paid had it filed separate federal income
tax returns. In 1997, the Company paid UM $485,000 for 1996 taxes payable and
$90,000 for estimated 1997 taxes due under the tax sharing agreement. The 1997
estimated payment will be refunded by UM in 1998.
Certain of the Company's diagnostic testing and clinical research contracts
require that specified medical professional services be provided by Dr.
Morganroth, the Company's President and Chief Executive Officer. The Company has
retained Joel Morganroth, M.D., PC, a professional corporation owned by Dr.
Morganroth, to provide these and other services, which include serving as
Medical Director to the Company, acting as principal investigator for various
studies, and providing medical interpretation for diagnostic tests from time to
time as required. These arrangements resulted in payments to the professional
corporation of $1,955,000 in 1996. Effective January 1997, the professional
corporation entered into a new contract with the Company pursuant to which it
received in 1997 a fixed annual fee of $144,000 for these services.
During 1995, the Company and PREMIER, Inc. formed a limited liability
company, owned 65% by the Company and 35% by PREMIER, Inc. In accordance with
the agreement, PREMIER, Inc.'s interest in the limited liability company
converted into 330,150 shares of the Company's Common Stock concurrent with the
Company's initial public offering in February 1997. Charles Jacobson, M.D., a
director of the Company, serves as Executive Vice President of PREMIER, Inc.
4
<PAGE>
Executive Compensation
Compensation Committee Report on Executive Compensation
The Compensation and Personnel Committee of the Board of Directors consists
entirely of non-management directors, and its primary function is to make
recommendations to the Board of Directors concerning executive compensation and
benefit policies for the Company.
The Committee believes that the most effective compensation program is one
that provides executives with incentives to achieve strategic business goals of
the Company, with the ultimate objective of aligning compensation with enhanced
shareholder value.
The Company's executive compensation programs are designed to:
-- Motivate and challenge executive officers to achieve both annual and
long-term strategic business goals.
-- Align the interest of executive officers with the long-term interest of
shareholders.
-- Support an environment that rewards executive officers based upon
corporate and individual performance and results.
-- Attract and retain executive officers critical to the long-term success
of the Company.
In 1997, the basic components of executive officer compensation consisted
of base salary and long-term incentives in the form of stock options. In 1998,
these components will be augmented by annual incentive compensation tied to
measurements based on Company performance. The executive officers also
participate in employee benefit plans available generally to the Company's
employees.
Base Salary. Clinical research organizations face intense competition for
qualified employees, and the Committee believes that it is important that
Company executive officer compensation levels be competitive with other CRO's.
Following the Company's initial public offering in February 1997, the Committee
reviewed the existing compensation levels of its executive officers in
comparison with compensation levels at other publicly-traded CRO's. The
Committee found that the existing executive officer base salary levels were
consistent with compensation at comparable positions at these companies.
Accordingly, it did not make any material changes from the pre-existing
compensation arrangements.
Long-Term Incentive in Form of Stock Options. The Committee believes that
significant management ownership of the Company's stock effectively motivates
the building of shareholder wealth and aligns the interests of management with
those of the Company's shareholders. The Company's executive officers who were
employees of the Company prior to the Company's initial public offering hold
options to acquire Company common stock granted during the period the Company
was a private entity. In order to provide a further incentive to the Company's
executives, each executive officer received an additional stock option grant
during 1997. All of the 1997 options were granted under the terms of the
Company's 1996 Stock Option Plan at a per share exercise price equal to market
price on the date of grant. The options become exercisable over five years in
annual increments of 20% beginning one year after the date of grant, contingent
upon the officer's continued employment with the Company. The table appearing
under the heading "Option Grants in 1997" provides further information about the
options granted to the Named Executive Officers.
1998 Annual Incentive Compensation Program. While the Company did not
provide an annual incentive compensation program during 1997, the Committee
intends to institute for 1998 a program which will permit officers to earn
contingent cash bonuses based principally on Company performance measured, among
other things, by earnings per share. The Committee has studied the competitive
environment in which the Company functions, which includes intense competition
for qualified employees, and believes that the ability to attract and
5
<PAGE>
retain highly qualified personnel is key to the Company's success. The Committee
believes that an annual incentive compensation program can be an important tool
in ensuring that the Company's overall levels of compensation remain
competitive. In addition, the Committee believes that such an annual incentive
compensation program will benefit the Company in that an additional portion of
the compensation of executive officers will be in the form of variable incentive
pay and will further align the interests of the executive officers with the
interests of the Company's shareholders.
Chief Executive Officer Compensation. The compensation plan for Dr.
Morganroth, except as indicated, contains the same elements and operates in the
same manner as the compensation plan described above for the other executive
officers. Prior to 1997, the Company renegotiated Dr. Morganroth's employment
agreement, as well as the agreement pursuant to which a professional corporation
owned by Dr. Morganroth provides specified medical professional services to the
Company. The new agreements, which became effective January 1, 1997, resulted in
significantly lower fees to the professional corporation, aggregating $144,000
in 1997. Under the new employment agreement, Dr. Morganroth's 1997 salary was
increased to $201,000. The Committee believes that Dr. Morganroth's total
compensation is appropriate in light of Dr. Morganroth's reputation as a medical
doctor in the research area and his importance to achievement of the Company's
goals, and is necessary for competitive purposes.
Dr. Morganroth was granted in 1995 options to acquire 220,100 shares of the
Company's Common Stock, at an exercise price equal to the stock's fair market
value at the date of grant. In order to provide Dr. Morganroth with an
additional stake in the Company's success, he was granted during 1997 options to
acquire 10,000 shares of the Company's Common Stock. The 1997 options will
become exercisable (contingent upon continued employment) in five annual
installments. The Committee believes that Dr. Morganroth's stock options provide
a significant incentive and align his interests directly with the Company's
shareholders. The options also place a significant portion of Dr. Morganroth's
total compensation at risk, since the options' value depends upon the Company's
common stock performance over the option term. In addition, Dr. Morganroth is a
significant shareholder in the Company (see "Security Ownership of Certain
Beneficial Owners and Management"), and to the extent his performance as CEO
translates into an increased value of the Company's stock, all shareholders,
including Dr Morganroth, will share the benefits.
Compliance with Internal Revenue Code Section 162(m). Section 162(m) of the
Internal Revenue Code disallows a tax deduction to publicly-held companies for
compensation paid to certain of their executive officers, to the extent that
compensation exceeds $1,000,000 per covered officer in any fiscal year. The
limitation applies only to compensation which is not considered to be
performance-based. Non-performance-based compensation paid to the Company's
executive officers for 1997 did not exceed the $1,000,000 limit per officer, and
the Committee does not anticipate that the non-performance-based compensation to
be paid the Company's executive officers in the foreseeable future will exceed
that limit.
Members of the Compensation and Personnel Committee
Philip Whitcome (Chair)
Connie Woodburn
Compensation Committee Interlocks and Insider Participation
At the end of 1997, the Compensation and Personnel Committee consisted of
Dr. Whitcome and Ms. Woodburn. During the year, the members of the Committee
also incuded Mr. Lee. Neither Dr. Whitcome, Ms. Woodburn, nor Mr. Lee is a
current or former officer or employee of the Company.
6
<PAGE>
Summary Compensation Table
The following table sets forth information in respect of the compensation
paid for the years ended December 31, 1996 and 1997 to the persons who were, at
any time during 1997, the Chief Executive Officer, and at the end of 1997, the
other four most highly compensated executive officers of the Company (sometimes
collectively referred to as the "Named Executive Officers") whose salary and
bonus exceeded $100,000 in such year:
<TABLE>
<CAPTION>
Long-term
Annual Compensation
Compensation (1) -------------
------------------------- Number of All Other
Name and Principal Position Year Salary Bonus Options Compensation
- -------------------------------------------------- ------ ----------- ----------- ------------- ---------------------
<S> <C> <C> <C> <C> <C>
Joel Morganroth, MD .............................. 1997 $201,000 -- 10,000 $ 3,222(2)(3)
President and Chief Executive Officer ........... 1996 $170,299 -- -- $ 1,920(2)(3)
Christopher C. Gallen, MD, PhD ................... 1997 $171,104 -- 7,500 $ 1,864(4)
President, Clinical Research Services ........... 1996 $156,182 -- 44,020 --
Carol Miller ..................................... 1997 $145,807 -- 4,000 --
Sr. Vice President(5) ........................... 1996 $ 16,731 -- -- $ 20,473(6)
David A. Evans ................................... 1997 $133,334 --(7) 7,500 $ 6,644(4)
Sr. Vice President, Chief Technical Officer ..... 1996 $128,639 -- -- $ 6,414(4)
Glenn Cousins .................................... 1997 $125,429 --(7) 7,500 $ 7,500(4)
President, Diagnostic Services .................. 1996 $120,336 -- -- $ 7,200(4)
</TABLE>
- ------------
(1) In accordance with the rules of the Securities and Exchange Commission,
other compensation in the form of perquisites and other personal benefits
has been omitted in those instances where the aggregate amount of such
perquisites and other personal benefits constituted less than the lesser of
$50,000 or 10% of the total of annual salary and bonuses for the officer for
such year.
(2) Excludes consulting fees of $1,955,000 and $144,000 paid in 1996 and 1997,
respectively, to a professional corporation owned by Dr. Morganroth. See
"Certain Relationships and Related Party Transactions."
(3) Represents the dollar value of the insurance premium paid by the Company
with respect to term life insurance for Dr. Morganroth.
(4) Represents the Company's 401(k) plan contributions.
(5) Ms. Miller became employed by the Company on November 11, 1996.
(6) Represents amount paid to Ms. Miller upon hire by the Company in
compensation for the value of options forfeited upon leaving her former
position.
(7) Does not include a $5,000 bonus paid by UM Holdings, Ltd.
Employment Contracts
The Company has entered into employment agreements with each of the Named
Executive Officers. Under these agreements, the employment may be terminated
with or without cause at any time. In the event that the Company terminates an
officer's employment other than "for cause", the Company is obligated to
continue normal salary payment for up to six months (one year in the case of Dr.
Morganroth). Pursuant to the agreement, each officer has agreed not to compete
with the Company during his employment and for a period of two years thereafter.
Dr. Morganroth entered into a new employment agreement that became effective
January 1, 1997, and continues, unless terminated, through December 31, 2001.
Under the terms of this agreement, Dr. Morganroth received for 1997 a base
annual salary of $201,000. A professional corporation of which Dr. Morganroth is
the sole stockholder and employee has separately agreed to provide services to
the Company, including serving as medical director and providing medical
interpretation for diagnostic tests, with an annual fee of $144,000 for 1997.
7
<PAGE>
1997 Stock Option Grants
The following tables contain certain information concerning the grant of
stock options under the Company's 1996 Non-Qualified Stock Option Plan during
the year ended December 31, 1997, and the number and value of options held at
December 31, 1997 by each of the Named Executive Officers.
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates
of Stock Price
Appreciation for
Individual Grants (1) Option Term (2)
----------------------------------------------- ------------------------
Number of
Securities % of Total
Underlying Options Granted Exercise or
Options to Employees in Base Price Expiration
Name Granted 1997 ($/Sh) Date 5% 10%
- ------------------------------------ ------------ ----------------- ------------ ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Joel Morganroth, M.D. .............. 10,000 3.1% $ 13.13 3/17/07 $82,540 $209,180
Christopher C. Gallen, MD, PhD ..... 7,500 2.3% $ 13.13 3/17/07 61,905 156,885
Carol Miller ....................... 4,000 1.2% $ 13.13 3/17/07 33,016 83,672
David A. Evans ..................... 7,500 2.3% $ 13.13 3/17/07 61,905 156,885
Glenn Cousins ...................... 7,500 2.3% $ 13.13 3/17/07 61,905 156,885
</TABLE>
- ------------
(1) The options were granted under the terms of the Corporation's stock option
plan at a per share exercise price equal to the market price of a Common
Share on the date of grant. The options become exercisable over five years
in annual increments of 20% beginning one year after the date of grant. The
Option Committee has the right to accelerate the exercisability of any of
the options.
(2) The potential realizable value is the product of (a) the difference between:
(i) the product of the per-share market price at the time of the grant and
the sum of 1 plus the adjusted stock price appreciation rate (i.e., the
assumed rate of appreciation compounded annually over the term of the
option) and (ii) the per-share exercise price of the option; and (b) the
number of securities underlying the grant at fiscal year-end. The dollar
amounts under these columns are the result of calculations at the 5% and 10%
assumed rates of appreciation prescribed by the Securities and Exchange
Commission, and therefore are not intended to forecast possible future
appreciation, if any, of the market price of the Corporation's Common
Shares. The actual value that any Named Executive Officer may realize, if
any, will depend on the amount by which the market price of the Common
Shares at the time of exercise exceeds the exercise price.
1997 Option Exercises and Fiscal Year-End Values
The following tables contain certain information concerning the number and
value of any unexercised stock options as of December 31, 1997. No Named
Executive Officers exercised stock options during the year ended December 31,
1997.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised in-the-Money Options at
Options at FY-End 1997 FY-End 1997(1)
Name Exercisable/Unexer. Exercisable/Unexer.
----------------------------------------- ------------------------ ------------------------
<S> <C> <C>
Joel Morganroth, MD .................... 220,100 / 10,000 $2,114,061 / 0
Christopher C. Gallen, MD, PhD ......... 44,020 / 7,500 422,812 / 0
Carol Miller ........................... 0 / 4,000 0 / 0
David A. Evans ......................... 33,015 / 7,500 317,109 / 0
Glenn Cousins .......................... 66,030 / 7,500 634,218 / 0
</TABLE>
- ------------
(1) Value of unexercised "in-the-money" options is the difference between the
market price of a Common Share on December 31, 1997 and the exercise price
of the option, multiplied by the number of Common Shares underlying the
option.
8
<PAGE>
Stockholder Return Performance Graph
The following graph compares the cumulative total stockholder return on the
Company's Common Stock against the cumulative total return on the Nasdaq Stock
Market (U.S.) Index and Nasdaq Health Service Index for the period commencing
February 3, 1997 and ending December 31, 1997. The graph assumes that at the
beginning of the period indicated, $100 was invested in the Company's Common
Stock and the stock of the companies comprising the Nasdaq Stock Market (U.S.)
Index and the Nasdaq Health Services Index, and that all dividends, if any, were
reinvested.
COMPARATIVE CUMULATIVE TOTAL RETURN
AMONG PREMIER RESEARCH WORLDWIDE, LTD.,
NASDAQ MARKET INDEX AND NASDAQ HEALTH INDEX
<TABLE>
<CAPTION>
Company Base 03/31/97 06/30/97 09/30/97 12/31/97
------- ------ ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Premier Research Worldwide 100 71.74 47.28 52.17 51.63
NASDAQ Health Services Index 100 93.12 103.94 113.09 101.64
NASDAQ Market Index 100 88.47 104.67 122.03 114.34
</TABLE>
9
<PAGE>
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information, as of March 30, 1998,
with respect to the beneficial ownership of the Common Stock of the Company by
(i) the Company's directors and Named Executive Officers, (ii) the Company's
directors and executive officers as a group, and (iii) each person known to the
Company to own beneficially more than 5% of the Common Stock.
<TABLE>
<CAPTION>
Shares
Beneficially Percentage
Owned Owned
-------------- -----------
<S> <C> <C>
Name of Beneficial Owner
- ------------------------
UM Holdings, Ltd. (1) .......................... 2,825,450 39.4%
Joel Morganroth, M.D. (2) ...................... 902,000 12.6%
PREMIER, Inc. (3) .............................. 334,552 4.7%
Glenn Cousins (4) .............................. 67,530 *
Christopher C. Gallen, M.D., Ph.D. (4) ......... 45,520 *
Carol Miller (4) ............................... 800 *
David A. Evans (4) ............................. 34,515 *
John J. Aglialoro (5) .......................... 2,825,450 39.4%
Joan Carter (5) ................................ 2,825,450 39.4%
Arthur Hull Hayes, Jr., M.D. (4) ............... 4,402 *
Arthur W. Hicks, Jr. (4) ....................... 44,020 *
Charles Jacobson, M.D. (6) ..................... 4,402 *
Jerry D. Lee (4) ............................... 4,402 *
Philip J. Whitcome, Ph.D. (4) .................. 4,402 *
Connie Woodburn (4) ............................ 4,402 *
All directors and executive officers as a Group
(15 persons)(7) ............................... 3,964,855 53.5%
</TABLE>
- ------------
* Less than 1.0%
(1) Represents shares owned by its wholly-owned subsidiaries, UM Equity Corp.
and UM Investment Corp. These shares have been pledged to a financial
institution to secure a loan to UM in the normal course of its business,
which pledge could result in a change of control of the Company. UM's
address is 56 Haddon Avenue, Haddonfield, NJ 08033.
(2) Includes (i) 365,175 shares directly owned by Dr. Morganroth, as to which he
has sole voting and dispositive power, (ii) 2,000 shares issuable with
respect to options granted pursuant to the Company's 1996 Stock Option Plan,
which are currently exercisable or exercisable within the next sixty (60)
days, (iii) 495,225 shares held in a trust, the trustee of which is Dr.
Morganroth's wife and the beneficiaries of which are Dr. Morganroth's
children, as to which Dr. Morganroth disclaims beneficial ownership, (iv)
9,600 shares owned by a pension plan, as to which Dr. Morganroth has shared
voting and dispositive power, and (v) 30,000 shares (A) of which Dr.
Morganroth may be deemed to be the beneficial owner due to the fact that Dr.
Morganroth is entitled to a credit against the principal and interest owing
on a promissory note payable to a third party, equal to the market value of
30,000 shares of common stock on or in certain cases before the note's
maturity date, and (B) as to which Dr. Morganroth disclaims beneficial
ownership. Dr. Morganroth's address is 124 S. 15th Street, Philadelphia, PA
19102.
(3) Includes options granted to Charles Jacobson, a director of the Company and
an executive officer of PREMIER, Inc., which in accordance with his
employment arrangement are held for the benefit of PREMIER, Inc. PREMIER,
Inc.'s address is 3 Westbrook Corporate Center, Westchester, Illinois
60154.
(4) Represents shares issuable with respect to options granted pursuant to the
Company's 1993 Non-Qualified Stock Option Plan and/or the 1996 Stock Option
Plan, which are currently exercisable or exercisable within the
next sixty (60) days.
10
<PAGE>
(5) Represents shares owned by UM, of which Mr. Aglialoro and Ms. Carter are the
principal stockholders and act as executive officers and directors. Mr.
Aglialoro and Ms. Carter's address is the same as UM's.
(6) Represents shares issuable under a stock option which, due to Dr. Jacobson's
employment relationship with PREMIER, Inc., are held for the benefit of such
company. Excludes shares owned by PREMIER, Inc., for which Dr. Jacobson is
an executive officer.
(7) Includes 239,405 shares issuable upon exercise of stock options, which are
currently exercisable or exercisable within the next sixty (60) days.
Compliance with Section 16(a) of the Securities Exchange Act
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than 10% of its Common Stock,
to file reports of ownership and changes in ownership of the Common Stock with
the Securities and Exchange Commission ("SEC") and The Nasdaq Stock Market.
Based upon a review of the forms and written representations that it received,
the Company believes that all other filing requirements applicable to its
officers, directors and greater than 10% beneficial owners have been timely
satisfied, except that the report for one transaction by UM Equity Corp.
was filed late by UM, Mr. Aglialoro and Ms. Carter.
INDEPENDENT AUDITORS
Upon the recommendation of its Audit Committee, the Board of Directors has
designated Arthur Andersen to be the independent auditors for the year ending
December 31, 1998. The Board of Directors will offer a resolution at the Annual
Meeting to ratify this designation. Approval of the proposal will require the
favorable vote of a majority of the stockholders present in person or by proxy
and voting at the Annual Meeting. It is anticipated that representatives of
Arthur Andersen LLP will be present at the meeting to respond to appropriate
questions and, if they desire, to make a statement.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be considered at the 1999 Annual Meeting
of Stockholders must be received by Premier Research no later than December 1,
1998. Such proposals may be included in next year's proxy statement if they
comply with certain rules and regulations promulgated by the Securities and
Exchange Commission.
The Board knows of no other matters which may be presented for action at
the meeting. However, if any other matter properly comes before the meeting, the
proxy holders will vote in accordance with their judgment on such matter.
Stockholders are urged to vote, sign and return the enclosed form of proxy
promptly in the enclosed envelope.
By Order of the Board of Directors,
/s/ Arthur W. Hicks, Jr.
--------------------------
ARTHUR W. HICKS, JR.
March 31, 1998 Secretary
11
