SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant __X__
Filed by a Party other than the Registrant ____
Check the appropriate box:
____ Preliminary proxy statement ____ Confidential, for use of
the Commission only (as
permitted by Rule 14a-6(e)(2))
_X__ Definitive proxy statement
____ Definitive additional materials
____ Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
PHARMAKINETICS LABORATORIES, INC.
(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box):
_X _ No fee required.
____ Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction
applies:___________________________________________________________
(2) Aggregate number of securities to which transaction
applies:___________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
___________________________________________________________________
(4) Proposed maximum aggregate value of transaction:___________________
(5) Total fee paid:____________________________________________________
_____ Fee paid previously with preliminary materials.
_____ Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:________________________________________
(2) Form, Schedule or Registration Statement No.:__________________
(3) Filing Party:__________________________________________________
(4) Date Filed:____________________________________________________
<PAGE>
[LOGO] PHARMAKINETICS LABORATORIES, INC.
302 WEST FAYETTE STREET
BALTIMORE, MARYLAND 21201
October 30, 1998
Dear Fellow Stockholder,
Enclosed you will find the proxy statement for the stockholders' meeting
to be held at our offices on Monday, November 30, 1998 at 2:00 p.m. At this
meeting, we will elect representatives to the Board of Directors and approve
the appointment of PricewaterhouseCoopers LLP (formerly Coopers & Lybrand) as
the Company's auditors. A representative of PricewaterhouseCoopers LLP will
be present at the meeting.
As you are aware, at the last stockholders' meeting, held on April 6,
1998, stockholders voted to approve a one for five reverse stock split and
this became effective with the close of business on April 17, 1998. One of
the major reasons we took this step was to permit the Company to apply for a
listing on the Nasdaq SmallCap Market. We applied for this listing on June 2,
1998, in the expectation that the approval process would take approximately 60
days. In fact, it took considerably longer and by the time Nasdaq had
examined all of the information they requested the stock market had begun its
decline and our stock had dropped to the point that the price was below the
required minimum bid price of $4.00 per share. As a result, on September 2,
1998, we elected to withdraw our application. I am very disappointed by this
result and very frustrated that we were unable to meet the objective we
established when we recommended the reverse split. The Company intends to
re-apply for listing as soon as the stock price meets the minimum bid price
requirement for a period of 30 days.
Our financial performance for the past fiscal year showed a significant
improvement over the prior year, primarily as a result of the overall growth
in revenues which increased by 28%. We saw strong growth in our Phase I
clinical trial business conducted for large pharmaceutical companies and
biotechnology firms. Our Phase III/IV Clinical Trials Management business
also grew significantly. Both of these results represented meaningful
progress towards our goal of broadening our business base.
As I have discussed in previous communications, in addition to improved
earnings and revenue performance, the most important event of the past fiscal
year was the initiation of a strategic partnership with Aster.Cephac S.A., a
French contract research organization (CRO), which is an important participant
in the European market. This relationship was established in conjunction with
a $5 million private placement which was completed on December 23, 1997. As
this relationship develops, I expect that we will see the benefits of the
partnership in terms of increased business opportunities on both sides of the
Atlantic.
</PAGE>
<PAGE>
We have taken advantage of the availability of new capital provided by
the private placement to make significant investments in new instruments and
systems. We now have four state-of-the-art LC/MS/MS analytical instruments.
These instruments will allow the Company to compete more effectively in both
the generic bioequivalence and bioanalytical businesses because of their
ability to measure extremely low concentrations of drug with high volume
throughput. We are in the process of installing and validating a new
Laboratory Information Management System (LIMS) which will enhance our ability
to manage laboratory data and dramatically reduce the time it takes to create
final study documents after completion of laboratory analysis. Given the
emphasis which our clients place on speed of study completion and meeting
their schedules, these investments will be very helpful in achieving both of
these requirements. In addition, we are in the process of installing and
validating a new data management system for our Clinical Trials Management
team. This system will permit us to compete for additional business in this
attractive market.
Each of these investments is an important part of moving the Company
forward towards the successful implementation of its strategic plan.
An additional use of these new funds was the February 5, 1998 repayment
of $1.6 million in outstanding bank debt to NationsBank N.A. As a result of
this elective payment, there is no bank debt on our balance sheet and our
financial position is the strongest it has been in many years.
While a great deal of work remains to be done to take maximum advantage
of these new investments in order to improve the Company's profitability, I am
pleased with the progress we have made both operationally and strategically
during the past fiscal year.
I would like to thank all of our stockholders, our directors and all our
employees for their support during the year.
Sincerely,
/s/ James K. Leslie
___________________
James K. Leslie
President and
Chief Executive Officer
</PAGE>
<PAGE>
[LOGO] PHARMAKINETICS LABORATORIES, INC.
302 WEST FAYETTE STREET
BALTIMORE, MARYLAND 21201
_________________________________________________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MONDAY, NOVEMBER 30, 1998, AT 2:00 P.M.
_________________________________________________________________
AT
PHARMAKINETICS LABORATORIES, INC.
302 WEST FAYETTE STREET
BALTIMORE, MARYLAND 21201
The Annual Meeting of Stockholders ("the Meeting") of PharmaKinetics
Laboratories, Inc., a Maryland corporation, will be held on November 30, 1998,
at 2:00 p.m., local prevailing time, at PharmaKinetics Laboratories, Inc., 302
West Fayette Street, Baltimore, Maryland 21201, to consider and vote upon:
1. The election of eight directors to serve until the next Annual Meeting of
Stockholders, and until their successors are duly elected and qualified.
2. A proposal to ratify the selection of PricewaterhouseCoopers LLP, as the
Company's independent auditors for the fiscal year ending June 30, 1999.
3. Any other matters that may properly come before the Meeting or any
adjournment thereof.
The Board of Directors has fixed the close of business on October 28,
1998, as the date for determining stockholders of record entitled to notice of
and to vote at the Meeting.
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU EXPECT TO BE PRESENT, PLEASE
SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT AS SOON AS POSSIBLE IN THE
ENVELOPE PROVIDED. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
The affirmative vote of at least a majority of all the shares voting at the
Meeting in person or by proxy is required for the approval of Proposals One
and Two. You are cordially invited to attend the Meeting in person. If you
attend the Meeting and wish to vote in person, your proxy can be revoked at
any time before it is voted.
By Order of the Board of Directors,
/s/ Taryn L. Kunkel
___________________
Taryn L. Kunkel
Secretary
October 30, 1998
</PAGE>
<PAGE>
[LOGO] PHARMAKINETICS LABORATORIES, INC.
302 West Fayette Street
Baltimore, Maryland 21201
PROXY STATEMENT
Annual Meeting of Stockholders to be held on
Monday, November 30, 1998 at 2:00 P.M.
SOLICITATION AND REVOCATION OF PROXIES
The enclosed proxy is solicited by the Board of Directors of
PharmaKinetics Laboratories, Inc. (the "Company") for use at the Annual
Meeting of Stockholders (the "Meeting") to be held on November 30, 1998, and
is revocable at any time prior to its exercise. In addition to solicitation
by mail, proxies may be solicited by officers, directors, and regular
employees of the Company personally or by telephone or facsimile transmission.
The cost of soliciting proxies will be borne by the Company and may include
reasonable out-of-pocket expenses in forwarding proxy materials to beneficial
owners. This proxy material is being sent to stockholders on or about October
30, 1998.
OUTSTANDING SHARES AND VOTING RIGHTS
Stockholders of record at the close of business on October 28, 1998, are
entitled to notice of and to vote at the Meeting. As of the close of business
on that date, there were outstanding and entitled to vote 2,476,129 shares of
Common Stock, $.005 par value ("Common Stock"), each of which is entitled to
one vote and 833,300 shares of Class A Convertible Preferred Stock ("Preferred
Stock"), each of which is entitled to two votes.
The presence, in person or by proxy, of stockholders entitled to cast a
majority of all votes entitled to be cast at the meeting shall constitute a
quorum. The affirmative vote of at least a majority of all votes cast at the
meeting is required for the election of directors and for the approval of
Proposal Two described herein. The members of the Board of Directors
intend to vote their shares "FOR" each director nominee and "FOR" Proposal Two
described herein. An abstention or broker non-vote is not included in
calculating votes cast for the election of directors or the approval of
Proposal Two, but is included for purposes of determining a quorum. The
Company designates an individual to serve as the Inspector of Elections for
purposes of tallying shares voted. The Inspector of Elections will be
present at the Meeting.
1
</PAGE>
<PAGE>
ITEM ONE
ELECTION OF DIRECTORS
Eight directors will be elected at the Meeting, each director to hold
office until the next Annual Meeting of Stockholders and until the election
and qualification of a successor. Four of these directors are elected by
holders of Common Stock and Preferred Stock, voting together. Four of these
directors are elected by the holders of Preferred Stock, voting as a separate
class. The persons named in the enclosed proxy will vote all properly
executed proxies FOR the election of the nominees named below unless authority
to vote is withheld. The Board of Directors has no reason to believe that
any nominee herein named will be unable to serve as a director.
The following table sets forth certain information concerning the
nominees for election by holders of Common Stock and Preferred Stock, voting
together. All nominees are currently directors of the Company.
NOMINEES FOR ELECTION
Name, Age, and Year
in which first
Elected a Director Business Experience
- ------------------ -------------------
James K. Leslie President and Chief Executive
54 (1995) Officer of PharmaKinetics
Laboratories, Inc. since July 1995;
Executive Vice President and Chief
Operating Officer of PharmaKinetics from
June 1995 to July 1995; President and
Chief Executive Officer of BioFin, Inc.,
a start up biotechnology company from
July 1993 to June 1995; President and
Chief Executive Officer of SICPA
Industries of America from 1991 to
1992; and President and Chief Operating
Officer of Ecogen, Inc. from 1988 to
1990.
Roger C. Thies Director of Hyman, Phelps and McNamara,
54 (1991) P.C., representing a broad range of
clients on legal issues concerning food,
drug, medical devices, and cosmetic law
and legislation since 1988; Vice
President and General Counsel of G.D.
Searle managing all of the company's
legal matters from 1986 to 1988.
2
</PAGE>
<PAGE>
Name, Age, and Year
in which first
Elected a Director Business Experience
- ------------------ -------------------
Thomas F. Kearns, Jr. Retired from Bear, Stearns & Co., Inc.
62 (1995) in 1987; Director of Biomet, Inc., and
Fibrogen, Inc.; Trustee of the
University of North Carolina Foundation
and Endowment Fund.
Grover C. Wrenn Chairman and CEO of Accent Health, Inc.,
56 (1997) a provider of consumer health
information to physician waiting rooms
in more than 100 media markets since
1996; President and CEO of Ensys
Environmental Products, Inc. from 1995
to 1996; President and CEO of Applied
Bioscience International from 1990 to
1995; Director of Strategic Diagnostics,
Inc. and Safety-Kleen, Inc.
The Board of Directors recommends a vote "FOR" the election
of each of these nominees.
In addition to the foregoing nominees, the following persons
have been nominated for election as directors by the holders of
Preferred Stock. All nominees are currently directors of the
Company.
Name, Age, and Year
in which first
Elected a Director Business Experience
- ------------------ -------------------
Leslie B. Daniels Principal of CAI Advisors & Co., an
51 (1998) investment company with offices in New
York, Montreal, London and Paris, since
1988; Director of IVAX Corporation from
December 1994 to December 1995; Chairman
of the Board of Directors of Zenith
Laboratories, Inc., a major generic drug
manufacturer from April 1990 to December
1994, and a Director from December 1989
to December 1994. Director of MIM, Inc.
and Aster.Cephac S.A.
3
</PAGE>
<PAGE>
Name, Age, and Year
in which first
Elected a Director Business Experience
- ------------------ -------------------
David von Kauffmann Partner of CAI Advisors & Co., an
39 (1998) investment company with offices in New
York, Montreal, London and Paris, since
1989; prior to joining CAI Advisors, he
was an Assistant Treasurer in the
Special Transaction Department of
American Express Bank, in Copenhagen,
New York and London, where he analyzed
and structured international merger and
acquisition transactions, as well as
large export finance and corporate
lending transactions. Director of
Aster.Cephac S.A., Radoux International,
Inc., and Paris Stock Exchange.
Kamal K. Midha, Director of Drug Metabolism, Drug
C.M., Ph.D., D.Sc. Disposition Group, University of
57(1998) Saskatchewan, Canada since 1979, and
Chief Scientific Officer of PharmaQuest
Limited, Bermuda, a newly established
Pharmaceutical Research Corporation.
He serves on the Editorial Boards of
Pharmaceutical Research, Journal of
Pharmaceutical Sciences, and Xenobiotica.
He is Vice President of the International
Pharmaceutical Federation and he is an
Adjunct Professor of Pharmacy and
Associate Member of Psychiatry, University
of Saskatchewan, Canada and Co-Chief of
the Psychopharmacology Unit, Clinical
Research Center for Study of
Schizophrenia & Rehabilitation,
University of California, Los Angeles.
John J. Thebault, M.D. Founder and Chief Executive Officer of
51 (1998) Aster.Cephac S.A., a CRO in France and
Europe specializing in providing
clinical pharmacology services (Phase I
and IIA studies) and bioanalytical
services to the international
pharmaceutical, biotechnology and
medical device industries, along with
cosmetic products testing services to
the international cosmetic and personal
care industries, since 1975.
4
</PAGE>
<PAGE>
INFORMATION CONCERNING THE BOARD OF DIRECTORS
The Board of Directors has an Audit Committee and a Compensation
Committee, each consisting of directors who are not employees of the Company.
The Board of Directors does not have a Nominating Committee.
The functions of the Audit Committee include: review of the scope of
audits and the results of such audits; review of accounting policies and
adequacy of internal controls; review of the fees paid to, and the scope of
services provided by, the independent auditors; and recommending selection of
the independent auditors. The members of this Committee are Messrs.
Kauffmann, Kearns, Thebault, and Wrenn.
The Compensation Committee considers and makes recommendations to the
Board of Directors with respect to matters relating to executive compensation,
and considers and recommends grants under the Company's stock option plans.
The members of this Committee are Messrs. Daniels, Kearns, Midha, Thies and
Wrenn.
During the fiscal year ended June 30, 1998, the Board of Directors met
eight times, the Audit Committee met one time, and the Compensation Committee
met six times.
In November 1996, the Board of Directors elected to discontinue cash
compensation for its non-employee directors and to adopt a Non-Employee
Directors Stock Option Plan (the "1996 Plan") effective November 25, 1996.
The 1996 Plan was amended by resolution of the Board of Directors on January
20, 1998, in order to increase the number of shares of Common Stock subject to
options available for grant under the 1996 Plan. The 1996 Plan, as amended,
shall be administered by the Board or the Compensation Committee established
by the Board and provides that the number of shares of Common Stock that may
be issued pursuant to options granted under the 1996 Plan shall not exceed in
the aggregate 200,000 shares. As of June 30, 1998, there were 160,500 options
granted and 148,500 options outstanding under the 1996 Plan. The 1996 Plan was
ratified by the Company's stockholders at the Company's Special Meeting in
lieu of Annual Meeting of Stockholders held April 6, 1998. Each non-employee
director shall be granted options to purchase 24,000 shares of the Company's
Common Stock, at the fair market value of the stock on the date of such
director's election or appointment to the Board. Directors serving as of
November 25, 1996 were granted their options as of such date. The options
shall vest in four equal installments over four years. The first installment
will be pro-rated for directors appointed to the Board after the date of an
annual meeting. The first installment shall vest on the effective date of the
grant. Thereafter, on the date of each of the next three annual meetings of
stockholders at which elections to the Board are conducted, an installment of
6,000 shares shall vest for each director who is reelected to the Board. In
addition, directors receive reimbursement of expenses for attendance at
meetings.
5
</PAGE>
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of August 31, 1998,
regarding stock ownership of management and owners of 5% or more of the
Company's Common Stock:
<TABLE>
<CAPTION>
Beneficial Ownership of
Beneficial Ownership of Class A Convertible
Common Stock Preferred Stock
-------------------------- --------------------------
Number of Percent of Number of Percent of
Shares Owned Shares Owned Shares Owned Shares Owned
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Allen & Company,
Incorporated 170,534 6.9% --- ---
Allen Holding Inc.
711 Fifth Avenue
New York, NY 10022
Aster S.A. 583,320(2)(3) 19.1% 166,660 20.0%
3 et 5 rue
Eugene Millon
75015 Paris France
Leslie B. Daniels 372,603(1)(2)(3)13.1% 103,885 12.5%
CAI Advisors & Co.
767 Fifth Avenue
5th Floor
New York, NY 10153
Peter M. Gottsegen 363,603(2)(3) 12.8% 103,885 12.5%
CAI Advisors & Co.
767 Fifth Avenue
5th Floor
New York, NY 10153
GES Investments, S.A. 58,332(2)(3)(4) 2.3% 16,666 2.0%
Avenue Delleur, 18
Brussels, Belgium 1170
Initiative & Finance
Investissement 233,328(2)(3) 8.6% 66,664 8.0%
16 rue Chauveau Lagarde
Paris, France 75008
6
</PAGE>
<PAGE>
Beneficial Ownership of
Beneficial Ownership of Class A Convertible
Common Stock Preferred Stock
-------------------------- --------------------------
Number of Percent of Number of Percent of
Shares Owned Shares Owned Shares Owned Shares Owned
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Robert A. Mackie, Jr. 179,676 7.3% --- ---
18 North Astor Street
Irvington, NY 10533
R.A. Mackie and Co., L.P. 34,718 1.4% --- ---
18 North Astor Street
Irvington, NY 10533
Michael F. Price 583,320(2)(3) 19.1% 166,660 20.0%
1180 Larger Cross Road
P.O. Box 434
Far Hills, NJ 07931
Richard J. Schmeelk 363,603(2)(3) 12.8% 103,885 12.5%
CAI Advisors & Co.
767 Fifth Avenue
5th Floor
New York, NY 10153
Melany S. Adamcio 750(1) (6) --- ---
David von Kauffmann 64,332(1)(2)(3) 2.5% 16,666 2.0%
Thomas F. Kearns, Jr. 58,702(2)(3) 2.3% 11,110 1.3%
Taryn L. Kunkel 18,500(1) (6) --- ---
Elizabeth A. Lane, Ph.D. 15,000(1) (6) --- ---
James K. Leslie 69,000(1) 2.7% --- ---
Kamal K. Midha,Ph.D.,D.Sc. 18,400(1)(5) (6) --- ---
John J. Thebault, M.D. 9,000(1) (6) --- ---
Roger C. Thies 14,920(1) (6) --- ---
James M. Wilkinson II, Ph.D. 7,000(1) (6) --- ---
Grover C. Wrenn 10,500(1) (6) --- ---
7
</PAGE>
<PAGE>
Beneficial Ownership of
Beneficial Ownership of Class A Convertible
Common Stock Preferred Stock
-------------------------- --------------------------
Number of Percent of Number of Percent of
Shares Owned Shares Owned Shares Owned Shares Owned
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
All directors and officers
as a group (12 persons) 658,707(1)(2)(3)21.4% 131,661 15.8%
</TABLE>
- --------------------------
(1) Includes shares of stock which directors and officers have exercisable
rights to acquire as of or within 60 days of August 31, 1998, through the
exercise of options, in the amount of 750 shares for Ms. Adamcio; 9,000
shares for Mr. Daniels; 6,000 shares for Mr. Kauffmann; 18,500 shares for
Mrs. Kunkel; 15,000 shares for Dr. Lane; 47,000 shares for Mr. Leslie;
6,000 shares for Dr. Midha; 9,000 shares for Dr. Thebault; 14,920 shares
for Mr. Thies; 7,000 shares for Dr. Wilkinson; 10,500 shares for Mr.
Wrenn; and 143,670 shares for all directors and officers as a group.
(2) Includes shares for which investors have rights to acquire upon conversion
of Class A Convertible Preferred Stock, in the amount of 333,320 shares
for Aster S.A.; 207,770 shares for Mr. Daniels; 207,770 for Mr. Gottsegen;
33,332 shares for GES Investments, S.A.; 133,328 shares for Initiative and
Finance Investissement; 333,320 for Mr. Price; 207,770 for Mr. Schmeelk;
33,332 shares for Mr. Kauffmann; 22,220 for Mr. Kearns; and 263,322 shares
for all directors and officers as a group.
(3) Includes shares for which investors have rights to acquire upon exercise
of warrants at $6.00 per share, in the amount of 250,000 shares for Aster
S.A.; 155,833 shares for Mr. Daniels; 155,833 shares for Mr. Gottsegen;
25,000 shares for GES Investments, S.A.; 100,000 shares for Initiative and
Finance Investissement; 250,000 shares for Mr. Price; 155,833 shares for
Mr. Schmeelk; 25,000 shares for Mr. Kauffmann; 16,667 shares for Mr.
Kearns; and 197,500 shares for all directors and officers as a group.
(4) Affiliate of Aster S.A. and John J. Thebault, M.D., Director.
(5) Includes 12,400 shares held by Dr. Midha's son.
(6) Less than 1%
On December 23, 1997, the Company issued 833,300 shares of a newly
created Class A Convertible Preferred Stock and warrants to purchase 1,250,000
shares of the Company's Common Stock, and entered into a Registration Rights
Agreement and Technology Sharing Agreement in connection therewith, to
investors including certain affiliates of Aster.Cephac S.A. and CAI Advisors &
Co. (collectively, the "Purchasers"). The securities were issued pursuant to
a Preferred Share and Warrant Purchase Agreement dated as of December 4, 1997.
Purchasers beneficially own approximately 41% of the Company's voting
8
</PAGE>
<PAGE>
securities without giving effect to the possible exercise of warrants, or
approximately 54% of the Company's voting securities if all the warrants are
exercised.
The Agreement provided for the sale to the Purchasers of a total of
833,300 shares of Class A Convertible Preferred Stock for $4,937,500 or $5.925
per share. The Preferred Stock is convertible at any time into shares of
Common Stock at a conversion ratio of one share of Preferred Stock for two
shares of Common Stock. The conversion ratio is subject to adjustment under
certain circumstances to prevent dilution. In the event of liquidation of the
Company, the holders of the shares of Preferred Stock who do not convert their
shares into Common Stock are entitled to receive $5.925 per share, prior to
any distributions being made to the holders of any other class or series of
the Company's capital stock.
In addition, the Agreement provided for the sale to the Purchasers, for
$62,500, of warrants to purchase 1,250,000 shares of Common Stock. The
warrants are fully exercisable at $6.00 per share and expire on December 23,
2000.
EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
Position with the Company Employed Officer
Name Age and Principal Occupation Since Since
- ---- --- ------------------------- -------- -------
<S> <C> <C> <C> <C>
Melany S. Adamcio 44 Vice President Business 1997 1998
Development since January
1998; Executive Director of
Clinical Trials Management
from June 1997 to January
1998; Director, Clinical
Trials Management of PPD
Pharmaco International, Inc.
from November 1990 to June
1997. Education- Golden Gate
University, San Francisco,
California; Marywood College,
Scranton, Pennsylvania.
9
</PAGE>
<PAGE>
Position with the Company Employed Officer
Name Age and Principal Occupation Since Since
- ---- --- ------------------------- -------- -------
<S> <C> <C> <C> <C>
Taryn L. Kunkel 37 Vice President, Chief Financial 1990 1991
Officer and Treasurer since
February 1991; Controller from
November 1990 to February 1991;
and Director of Financial
Analysis from July 1990 to
November 1990. Education -
M.A.S., Management, The Johns
Hopkins University, Baltimore,
Maryland 1989; B.S., Accounting
(Magna Cum Laude), Loyola
College, Baltimore, Maryland
1983. Certified Public
Accountant.
Elizabeth A. Lane, 53 Vice President Biopharmaceutics 1988 1992
Ph.D. and Regulatory Affairs since
May 1992; Director of
Pharmacokinetics and Regulatory
Affairs from September 1988 to
May 1992. Education - Ph.D.,
Pharmaceutical Sciences,
University of Washington,
Seattle, Washington, 1981; B.S.
Pharmacy, University of
Washington, Seattle,
Washington, 1973; B.Pharm.,
University of Sydney,
Australia, 1965.
James K. Leslie 54 President and Chief Executive 1995 1995
Officer since July 1995;
Executive Vice President and
Chief Operating Officer from
June 1995 to July 1995;
President and Chief Executive
Officer of BioFin, Inc. a
start up biotechnology company
from July 1993 to June 1995;
President and Chief Executive
Officer of SICPA Industries of
America from 1991 to 1992; and
President and Chief Operating
Officer of Ecogen, Inc. from
10
</PAGE>
<PAGE>
Position with the Company Employed Officer
Name Age and Principal Occupation Since Since
- ---- --- ------------------------- -------- -------
<S> <C> <C> <C> <C>
James K. Leslie 1988 - 1990. Education -
(continued) M.B.A. (with distinction),
Harvard Business School,
Boston, Massachusetts, 1969;
B.Sc., Chemical Engineering
(First Class Honors),
University of Edinburgh,
Edinburgh, Scotland, 1967.
Vernon D. Parker, 51 Vice President Clinical Services 1997 1997
Ph.D. since January 1997; Director, (1)
Clinical Pharmacology from 1995
to 1997 of Wyeth-Ayerst Research;
Associate Director, Clinical
Pharmacology from 1990 to 1995,
and Assistant Director, Clinical
Pharmacology from 1988 to 1990
also at Wyeth-Ayerst Research.
Education - Ph.D., Clinical
Pharmacy with a minor in
pharmacology, Purdue University
School of Pharmacy, West
Lafayette, Indiana, 1983; M.S.,
Pharmacology and Physiology,
Tuskeagee University School of
Veterinary Medicine, Tuskeagee,
Alabama, 1976; B.S. Pharm.,
Pharmacy with a minor in
chemistry, Florida A&M
University School of Pharmacy,
Tallahassee, Florida, 1970.
James M. Wilkinson 46 Vice President Analytical 1996 1996
II, Ph.D. Laboratory Services since
July 1996; Associate Director,
Pharmaco International, Inc.,
Analytical Laboratory Division
from December 1992 to June 1995.
Education - Postdoctoral Associate
University of Washington, Seattle,
Washington, 1979; Ph.D., Organic
Chemistry, Duke University, Durham,
North Carolina, 1978; B.S.,
Chemistry, Virginia Military Institute,
Lexington, Virginia, 1974.
11
</PAGE>
<PAGE>
______________________________________________________________________________
(1) Dr. Parker joined the Company on January 3, 1997 and resigned effective
January 30, 1998.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based on the Company's review of copies of reporting forms received by
it, the Company believes that during the fiscal year ended June 30, 1998, all
applicable filing requirements were complied with, except Forms 3 were filed
late by Ms. Adamcio, Mr. Daniels, Mrs. Duncan, Mr. Kauffmann, Mrs. Kunkel,
Mrs. Martini, Dr. Midha, Dr. Thebault, and Mr. Thies, and two reports on Form
4 were filed late by Mr. Kearns.
EXECUTIVE COMPENSATION
</TABLE>
<TABLE>
<CAPTION>
The following table sets forth, for the Company's last three fiscal
years, the cash compensation paid or accrued by the Company, as well as
certain other compensation paid or accrued for those years, to its Chief
Executive Officer and other most highly compensated executive officers whose
total annual salary and bonus exceeded $100,000 for the fiscal year ended June
30, 1998.
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term All Other
_______________________________ _________ _________
Compensation
____________
Securities All Other
Name and Fiscal Salary Bonus Other Annual Underlying Compensation
Principal Position Year ($) ($) Comp.($)(1) Options(#) ($)(2)
______________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
James K. Leslie 1998 156,000 7,500 6,000 46,000 -
President, CEO, 1997 150,000 - 6,000 20,000 -
and Director 1996 124,000 87,043 6,000 20,000 -
Melany S. Adamcio (3) 1998 96,500 2,250 5,000 24,000 -
Vice President 1997 - - - 3,000 -
Business Development 1996 - - - - -
Elizabeth A. Lane, Ph.D.1998 104,000 1,500 - 15,000 -
Vice President 1997 100,000 - - - -
Biopharmaceutics 1996 88,000 10,742 - - -
and Regulatory Affairs
12
</PAGE>
<PAGE>
Annual Compensation Long-Term All Other
_______________________________ _________ _________
Compensation
____________
Securities All Other
Name and Fiscal Salary Bonus Other Annual Underlying Compensation
Principal Position Year ($) ($) Comp.($)(1) Options(#) ($)(2)
______________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Vernon D. Parker, Ph.D. 1998 61,250 - 2,900 - -
Vice President (4) 1997 51,000 - 2,500 12,000 3,600
Clinical 1996 - - - - -
Evaluation Services
James M. Wilkinson II, 1998 110,240 7,000 6,000 15,000 -
Ph.D. 1997 106,000 - 6,000 14,000 7,000
Vice President 1996 - - - - -
Analytical
Laboratory Services
</TABLE>
______________________________________________________________________________
(1) Other Annual Compensation includes personal benefits provided by the
Company.
(2) Other compensation includes amounts paid for relocation and related
expenses.
(3) Ms. Adamcio joined the Company on June 23, 1997 as Executive Director of
Clinical Trials Management. She was promoted to Vice President Business
Development on January 2, 1998. Her annual salary as Vice President is
$98,000.
(4) Dr. Parker joined the Company on January 3, 1997 and resigned effective
January 30, 1998. Dr. Parker's annual salary was $105,000, plus other
compensation of $5,000.
Severance Agreements
The Company has severance agreements with Mr. Leslie and Mrs. Kunkel.
The Agreements, which are identical, provide for continuance of their
respective annual base salaries for a period of twelve (12) months from the
date of termination of employment if such termination occurs at any time
during a two (2) year period after a "Significant Transaction" or a "Change of
Board Composition" and is for reasons other than "Just Cause", such terms
being defined in the Agreements. Upon termination of employment, the
Agreements also provide for accelerated vesting of all stock options and the
option to extend the exercise period of such options. The Agreements were
effective April 22, 1997. As of June 30, 1998 benefits payable would be
approximately $156,000 for Mr. Leslie and approximately $90,500 for Mrs.
Kunkel.
13
</PAGE>
<PAGE>
Stock Option Grants
The following table sets forth information concerning the grant of stock
options under the Company's 1996 Incentive Stock Option Plan during fiscal
1998 to the executive officers named in the Summary Compensation Table.
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
% of Total
Options
Granted to Exercise or
Options Employees in Base Price Expiration
Name Granted (#)(1) Fiscal Year ($/share) Date
____ ______________ ____________ ___________ __________
<S> <C> <C> <C> <C>
James K. Leslie 16,000 10.5% $3.3375 10/27/07
30,000 19.7% $7.42 04/06/08
Melany S. Adamcio 9,000 5.9% $5.125 01/20/08
15,000 9.8% $7.42 04/06/08
Elizabeth A. Lane, Ph.D. 15,000 9.8% $7.42 04/06/08
James M. Wilkinson II, Ph.D. 15,000 9.8% $7.42 04/06/08
</TABLE>
_____________________________________________________________________________
(1) All options were granted under the 1996 Incentive Stock Option Plan.
All options vest over a four year period from the date of grant and all
options expire ten years from the date of grant, if not exercised
earlier. Material terms of the options are set forth under the caption
"Incentive Stock Option Plans."
Stock Option Exercises and Holdings
The following table sets forth information related to the number and
value of options held by four of the Company's executive officers. No options
were exercised by these individuals during the fiscal year ended June 30,
1998.
14
</PAGE>
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised In-the-Money
Shares ($) Options at Options at
Acquired Value FY-End(#) FY-End($)(1)
Name in Exercise Realized Exer. Unexer. Exer. Unexer.
____ ___________ ________ ______ _______ ______ ________
(2) (3) (2) (3)
<S> <C> <C> <C> <C> <C> <C>
James K. Leslie --- --- 33,000 77,000 $53,614 $58,289
Melany S. Adamcio --- --- 750 26,250 $1,603 $4,809
Elizabeth A. Lane,
Ph.D. --- --- 15,000 15,000 $7,875 ---
James M. Wilkinson II,
Ph.D. --- --- 3,500 25,500 $5,574 $16,721
</TABLE>
_____________________________________________________________________________
(1) Not all of the options granted and outstanding are in-the-money at June
30, 1998. At June 30, 1998, the fair market value of the shares
underlying the options was $3.9375.
(2) Exercisable
(3) Unexercisable
Incentive Stock Option Plans
The Company's Incentive Stock Option Plan (the "ISO Plan") was adopted by
the Board of Directors on September 9, 1985, and approved by stockholders on
November 14, 1985. The ISO Plan permits the Company to grant options to
purchase up to an aggregate of 340,000 shares of its Common Stock to key
employees of the Company. As of June 30, 1998, an aggregate of 96,600 shares
of Common Stock were subject to options granted under the ISO Plan. By its
terms, the ISO Plan expired in September 1995.
The ISO Plan had a ten-year term, subject to earlier termination by the
Board of Directors, and was administered by the Compensation Committee of the
Board of Directors. Under the ISO Plan, options were granted to selected key
employees of the Company. Approximately 100 employees were eligible for
option grants. Subject to the terms and conditions of the ISO Plan, the
Committee selected optionees and determined the number of shares to be
granted, the option prices, the term of each option, and the terms and
conditions of stock option agreements. Payment of the option price is made,
as specified in the option agreement, either in cash at the time of exercise
15
</PAGE>
<PAGE>
or, at the discretion of the Board of Directors or Committee, (i) by delivery
of shares of the Company's Common Stock, valued as of the option exercise
date, (ii) according to a deferred payment or other arrangement or (iii) in
any other form of payment acceptable to the Board of Directors or Committee in
its discretion, either at the time of grant or exercise of the option.
Options granted under the ISO Plan are intended to qualify as "incentive
stock options" within the meaning of Section 422A of the Internal Revenue
Code. The exercise price of options granted under the ISO Plan may not be
less than 100% of the fair market value of the Common Stock at the time of the
grant, or 110% of the fair market value of the Common Stock at the time of the
grant in the case of a key employee who holds more than 10% of the combined
voting power of the Common Stock as of the date of the grant. The term of any
option granted under the ISO Plan may not exceed ten years, or five years in
the case of a key employee who holds more than 10% of the combined voting
power of the Common Stock as of the date of grant.
Options granted under the ISO Plan are non-assignable and may be
exercised, except in the case of death, only by the option holder. Options
terminate ninety days after termination of employment, except by reason of
death or total and permanent disability.
The Board of Directors may alter, suspend or amend the ISO Plan at any
time. However, no such action by the Board of Directors shall affect any
option theretofore granted under the ISO Plan without the consent of the
option holder so affected. In addition, no such action by the Board of
Directors may, without stockholder approval (except pursuant to the
anti-dilution provisions of the ISO Plan), increase the number of shares
reserved for options under the ISO Plan, materially modify the requirements as
to eligibility for participation in the ISO Plan, or materially increase the
benefits accruing to participants under the ISO Plan.
An optionee recognizes no taxable income at the time a stock option is
granted or exercised under the ISO Plan. However, the excess of the fair
market value of the shares received on the date of exercise (or six months
after the date of exercise, in the case of an optionee subject to Section
16(b) of the Securities Exchange Act of 1934) over the exercise price is taken
into account in determining whether he is subject to the alternative minimum
tax. Assuming compliance with applicable holding period requirements, an
optionee realizes long-term capital gain or loss when he disposes of his
shares, measured by the difference between the exercise price and the amount
received for the shares at the time of disposition. If the optionee disposes
of shares acquired by the exercise of the option before the expiration of at
least one year from the date of exercise and two years from the date of grant
of the option, any amount realized from such disqualifying disposition is
generally taxable as ordinary income in the year of disposition to the extent
that the lesser of (i) fair market value on the date the option was exercised
or (ii) the amount realized upon such disposition, exceeds the exercise price.
16
</PAGE>
<PAGE>
Any amount realized in excess of fair market value on the date of exercise
will be treated as long or short-term capital gain, depending upon the holding
period of the shares. If the amount realized upon such disposition is less
than the exercise price, the loss is treated as long or short-term capital
loss, depending upon the holding period of the shares.
No deduction is allowed to the Company for federal income tax purposes at
the time of grant or exercise of an option under the ISO Plan. In the event
of a disqualifying disposition by an optionee, the Company is entitled to a
deduction for the amount taxable to the optionee as ordinary income.
The Company also has an 1996 Incentive Stock Option Plan effective as of
January 31, 1996 (the "1996 ISO Plan") which was adopted by the Board of
Directors on October 10, 1996 and approved by the stockholders on November 25,
1996. The provisions of the 1996 ISO Plan and the tax consequences thereunder
are virtually identical to those of the ISO Plan. The 1996 ISO Plan permits
the Company to grant options to purchase up to an aggregate of 300,000 shares
of its Common Stock to key employees of the Company. As of June 30, 1998,
217,605 shares of the Company's Common Stock were subject to options granted
under the 1996 ISO Plan.
ITEM TWO
RATIFICATION OF APPOINTMENT
OF INDEPENDENT AUDITORS
The Board of Directors desires to obtain from the stockholders their
approval of the Board of Directors' actions in appointing
PricewaterhouseCoopers LLP (formerly Coopers & Lybrand L.L.P.), Certified
Public Accountants, as independent auditors of the Company for the fiscal year
ending June 30, 1999.
PricewaterhouseCoopers has served the Company in such capacity since
January 1992. The Company has been informed that neither
PricewaterhouseCoopers nor any of its partners has any direct financial
interest or any material indirect financial interest in the Company and during
the past three years has had no connection therewith in the capacity of
promoter, underwriter, voting trustee, director, officer or employee.
A representative of PricewaterhouseCoopers is expected to be present at
the Meeting with the opportunity to make a statement, if such representative
so desires, and to be available to respond to appropriate questions.
The Board of Directors recommends a vote "FOR" the ratification of the
appointment of PricewaterhouseCoopers LLP.
17
</PAGE>
<PAGE>
DEADLINE FOR SUBMITTING
STOCKHOLDER PROPOSALS
Proposals of stockholders intended for inclusion in the proxy material
for the Annual Meeting of Stockholders to be held in 1999 must be received in
writing by the Company on or before July 1, 1999. The inclusion of any
proposal will be subject to applicable rules of the Securities and Exchange
Commission. After September 15, 1999, notice of a shareholder proposal
submitted outside the processes of Rule 14a-8 promulgated by the Securities
and Exchange Commission is considered untimely.
REPORT ON FORM 10-K
The Company's Annual Report on Form 10-K for the fiscal year ended June
30, 1998, as filed with the Securities and Exchange Commission is enclosed
herewith. Additional copies are available to shareholders without charge on
written request directed to Taryn L. Kunkel, Secretary, PharmaKinetics
Laboratories, Inc., 302 West Fayette Street, Baltimore, Maryland 21201.
OTHER MATTERS
Management knows of no other business to be presented for action at the
Meeting, but if any other business should properly come before the Meeting, it
is intended that the proxies will be voted in accordance with the best
judgment of the persons acting thereunder in their discretion.
By Order of the Board of Directors,
/s/ Taryn L. Kunkel
___________________
Taryn L. Kunkel
Secretary
October 30, 1998
18
</PAGE>
<PAGE>
PROXY
PHARMAKINETICS LABORATORIES, INC.
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 30, 1998
THIS PROXY IS SOLICITED BY AND ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints James K. Leslie and Taryn L. Kunkel, or
either of them as attorney or attorneys-in-fact of the undersigned, with full
power of substitution, in them and in each of them, to vote in the name, place
and stead of the undersigned, in the manner indicated herein, and with
discretionary authority as to any other matters that may properly come before
the meeting, all shares of common stock of PharmaKinetics Laboratories, Inc.
which the undersigned is entitled to vote at the Annual Meeting of
Stockholders of PharmaKinetics Laboratories, Inc. to be held on November 30,
1998 at 2:00 p.m., local time, at the offices of the Company located at 302
West Fayette Street, Baltimore, Maryland 21201, or at any adjournment thereof.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. If no direction is indicated, this
proxy will be voted FOR Proposal Two, and FOR all of the nominees for director
named on the reverse. The Board of Directors recommends a vote FOR all of the
nominees for director and FOR Proposal Two set forth on the reverse.
(Continued and to be signed on reverse side)
______________________________________________________________________________
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Stockholders
PHARMAKINETICS LABORATORIES, INC.
November 30, 1998
__X__ Please mark your votes as in this example.
ITEM 1
To elect directors (for all of the following nominees except as marked to the
contrary):
Thomas F. Kearns, Jr., James K. Leslie,
Roger C. Thies, and Grover C. Wrenn
____ FOR all nominees, except as indicated
____ Withhold authority for all nominees
To withhold authority for any individual nominee(s), write the nominee(s)
name(s) below:
______________________________________________________________________________
</PAGE>
<PAGE>
ITEM 2
To ratify the selection of PricewaterhouseCoopers LLP as independent auditors
for the fiscal year ending June 30, 1999.
____ FOR ____ AGAINST ____ ABSTAIN
ITEM 3
In their discretion, to act upon any other matter that may properly come
before the meeting or any adjournment thereof.
Receipt of notice of the meeting and proxy statement is hereby acknowledged,
and the terms of the notice and statement are hereby incorporated by reference
into this proxy. The undersigned hereby revokes all proxies heretofore given
for the meeting described in this proxy.
SIGNATURE(S): ___________________________ DATED: _________________ 1998
Note: Proxy must be signed exactly as the name appears herein. Please mark,
sign, date and return this proxy promptly using the enclosed envelope. If
signing for a trust, estate, corporation, or other entity, please state your
title or the capacity in which you are signing. If shares are held jointly,
each joint owner should personally sign.
</PAGE>
