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SCHEDULE 14A
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
CAPSTONE PHARMACY SERVICES, 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):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transactions applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined)
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[X] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE> 2
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST 15, 1996
TO THE STOCKHOLDERS OF CAPSTONE PHARMACY SERVICES, INC.:
The Special Meeting of Stockholders of Capstone Pharmacy Services,
Inc. (the "Company") will be held at the Company's principal executive offices
at 2930 Washington Boulevard, Baltimore, Maryland 21230 on August 15, 1996, at
9:30 a.m. Eastern Daylight Time, for the purposes of considering and voting
upon the following matters:
1. To amend the Company's Certificate of Incorporation to increase the
number of shares of Common Stock authorized for issuance from
30,000,000 to 50,000,000;
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Stockholders of record at the close of business on July 17, 1996 will
be entitled to vote at the meeting.
The Company's Board of Directors urges all stockholders of record to
exercise their right to vote at the meeting personally or by proxy.
Accordingly, we are sending you the accompanying Proxy Statement and the
enclosed proxy card.
Your attention is directed to the Proxy Statement accompanying this
notice for a statement regarding matters to be acted upon at the meeting.
By Order of the Board of Directors,
Donald W. Hughes, Secretary
Baltimore, Maryland
July 20, 1996
YOUR REPRESENTATION AT THE SPECIAL MEETING OF STOCKHOLDERS IS
IMPORTANT. TO ENSURE YOUR REPRESENTATION, WHETHER OR NOT YOU PLAN TO ATTEND
THE MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD.
SHOULD YOU DESIRE TO REVOKE YOUR PROXY, YOU MAY DO SO AT ANY TIME BEFORE IT IS
VOTED IN THE MANNER PROVIDED IN THE ACCOMPANYING PROXY STATEMENT.
<PAGE> 3
CAPSTONE PHARMACY SERVICES, INC.
2930 WASHINGTON BOULEVARD
BALTIMORE, MARYLAND 21230
PROXY STATEMENT FOR SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST 15, 1996
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Capstone Pharmacy Services, Inc. (the
"Company") to be used at the Special Meeting of Stockholders, and at any
adjournment thereof, for the purposes set forth in the accompanying Notice of
Special Meeting of Stockholders. The Special Meeting will be held at the
Company's principal executive offices at 2930 Washington Boulevard, Baltimore,
Maryland 21230 on Thursday, August 15, 1996, at 9:30 a.m. Eastern Daylight
Time. This Proxy Statement and the accompanying form of proxy are being mailed
to stockholders on or about June 20, 1996.
A stockholder who executes and returns the accompanying form of proxy
may revoke it at any time before it is voted by giving written notice of
revocation to the Secretary of the Company, by executing a proxy bearing a
later date, or by attending the Special Meeting of Stockholders and voting in
person. Proxies will be voted in accordance with instructions noted on the
proxies. Unless otherwise specifically instructed in the proxies, it is the
intention of the persons named in the proxy to vote all proxies received by
them FOR THE AMENDMENT TO THE CERTIFICATE OF INCORPORATION TO INCREASE THE
NUMBER OF SHARES OF COMMON STOCK AUTHORIZED FOR ISSUANCE FROM 30,000,000 TO
50,000,000. Management does not know of any other matters which will be
presented for action at the Special Meeting of Stockholders. If any other
matter does come before the meeting, however, the persons appointed in the
proxy will vote in accordance with their best judgment on such matter.
The cost of this proxy solicitation will be borne by the Company. It
is contemplated that proxies will be solicited solely by mail. Banks, brokers
and other custodians will be requested to forward proxy soliciting materials to
their customers where appropriate, and the Company will reimburse such banks,
brokers and custodians for their reasonable out-of-pocket expenses in sending
the proxy materials to beneficial owners of the Company's shares.
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<PAGE> 4
SUMMARY OF MATTERS TO BE CONSIDERED
At the Special Meeting of Stockholders, the stockholders of the
Company will be asked to vote on the following matter: an amendment of the
Company's Certificate of Incorporation to increase the number of shares of
Common Stock authorized for issuance from 30,000,000 to 50,000,000.
VOTING
Stockholders of record as of July 17, 1996 will be entitled to vote at
the Special Meeting. At the close of business on that day, there were
outstanding 15,836,565 shares of the Company's Common Stock, par value $.01 per
share (the "Common Stock"). See "Stock Ownership of Directors, Executive
Officers and Principal Holders." Each share of Common Stock is entitled to one
vote, which may be given in person or by proxy authorized in writing.
To vote by proxy, a stockholder should complete, sign, date and return
the enclosed proxy to the Secretary of the Company. The Board of Directors
urges you to complete the proxy card whether or not you plan to attend the
meeting. If you attend the meeting in person, you may, if you wish, vote in
person on all matters brought before the meeting even if you have previously
delivered your proxy. Any stockholder who has given a proxy may revoke it at
any time prior to exercise by filing an instrument revoking it with the
Secretary of the Company, by duly executing a proxy bearing a later date, or by
attending the meeting and voting in person. The mere presence at the meeting
of a stockholder who has appointed a proxy will not revoke the appointment.
All matters submitted to the stockholders will be approved by the
affirmative vote of a majority of shares of Common Stock outstanding and
entitled to vote at the Special Meeting. Abstentions and broker non-votes will
not be counted as affirmative votes, but will be counted for purposes of
determining the presence or absence of a quorum. Accordingly, abstentions and
broker non-votes will have the effect of negative votes.
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STOCK OWNERSHIP OF DIRECTORS,
EXECUTIVE OFFICERS AND PRINCIPAL HOLDERS
The following table sets forth, as of June 24, 1996, the number and
percentage of shares of the Company's Common Stock owned by (i) all persons
known to the Company to be holders of 5% or more of such securities, (ii) each
director and nominee, (iii) each of the Company's Chief Executive Officer and
other executive officers, and (iv) all directors and executive officers of the
Company, as of June 24, 1996, as a group. Unless otherwise indicated, all
holdings are of record and beneficial.
<TABLE>
<CAPTION>
NUMBER OF
SHARES PERCENTAGE
BENEFICIALLY OF TOTAL
OWNED(1) OUTSTANDING(2)
------------ --------------
NAME
----
<S> <C> <C>
Counsel Corporation(3) . . . . . . . . . . . . . . . . . . . 6,244,325 34.4%
Exchange Tower
Two First Canadian Place, Suite 1300
Toronto, Ontario, Canada MX5 1E3
Dirk Allison(4) . . . . . . . . . . . . . . . . . . . . . . . 97,746 *
Donald W. Hughes(5) . . . . . . . . . . . . . . . . . . . . . 8,333 *
Allan C. Silber(6). . . . . . . . . . . . . . . . . . . . . . 387,500 2.4%
Morris A. Perlis(6) . . . . . . . . . . . . . . . . . . . . . 387,500 2.4%
Joseph F. Furlong, III(7,8) . . . . . . . . . . . . . . . . . 74,500 *
John Haronian(8,10) . . . . . . . . . . . . . . . . . . . . . 142,500 *
Edward Sonshine, Q.C.(7,8) . . . . . . . . . . . . . . . . . 74,500 *
Gail Wilensky, Ph.D.(9) . . . . . . . . . . . . . . . . . . . 15,000 *
Albert Reichmann(9) . . . . . . . . . . . . . . . . . . . . . 15,000 *
J. Brendan Ryan(9) . . . . . . . . . . . . . . . . . . . . . 15,000 *
John E. Zuccotti(9,11) . . . . . . . . . . . . . . . . . . . 24,500 *
All directors and executive officers
as a group(12)(11 persons) . . . . . . . . . . . . . . . . . 1,242,079 7.4%
</TABLE>
_________________
* Indicates less than 1%
(1) Unless otherwise indicated, the persons or entities identified in this
table have sole voting and investment power with respect to all shares
shown as beneficially owned by them, subject to community property
laws, where applicable.
(2) The percentages shown are based on 15,831,565 shares of Common Stock
outstanding on April 8, 1996, plus, as to each individual and group
listed, the number of shares of Common Stock deemed to be owned by
such holder pursuant to Rule 13d-3 under the Securities Exchange Act
of 1934 (the "Exchange Act"), which includes shares subject to stock
options and warrants held by such holder which are exercisable within
sixty (60) days of March 1, 1996. As of March 23, 1996, there were an
additional 1,075,000 shares outstanding as a result of option
exercises and
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completion of a private placement. None of such additional shares
were acquired by a party listed in this table.
(3) Includes 1,298,181 and 1,038,545 shares purchasable upon exercise of
warrants at $4.50 and $5.50 per share respectively. Counsel
Corporation ("Counsel") is a publicly traded Ontario, Canada
corporation primarily engaged in the health care industry. Directors
Silber, Sonshine and Perlis are directors of Counsel and director
Silber beneficially owns or controls approximately 25% of the common
stock of Counsel, a majority of which is pledged to a lender.
Directors Sonshine and Perlis own in the aggregate less than 5% of
Counsel's common stock. All of the directors listed in this footnote
(3) disclaim beneficial ownership of shares of Common Stock in their
capacity as directors of Counsel, and Mr. Silber disclaims beneficial
ownership of shares of Common Stock in his capacity as a significant
stockholder of Counsel.
(4) Includes 15,170 and 12,136 shares purchasable upon exercise of
warrants at $4.50 and $5.50 per share, respectively and 15,000 and
25,000 shares purchasable upon exercise of options at $4.44 and $8.50
per share, respectively.
(5) Includes 8,333 shares purchasable upon exercise of options at $8.50
per share.
(6) Includes 25,000 and 20,000 shares purchasable upon exercise of
warrants at $4.50 and $5.50 per share, respectively and 15,000, 2,500,
250,000 and 25,000 shares purchasable upon exercise of options at
$4.44, $7.50, $4.31 and $8.50 per share, respectively.
(7) Includes 15,000 and 12,000 shares purchasable upon exercise of
warrants at $4.50 and $5.50 per share, respectively.
(8) Includes 15,000 and 2,500 shares purchasable upon exercise of options
at $4.44 and $7.50 per share, respectively.
(9) Includes 15,000 shares purchasable upon exercise of options at $4.44
per share.
(10) Includes 15,000 and 15,000 shares purchasable upon exercise of options
at $2.85 and $3.50 per share, respectively, issued under the 1991
Option Plan and 25,000 and 20,000 shares purchasable upon exercise of
warrants at $4.50 per share, and $5.50 per share, respectively.
(11) Includes 2,500 and 2,000 shares purchasable upon exercise of warrants
at $4.50 and $5.50 per share, respectively.
(12) Includes 950,639 shares issuable under the Company's Option Plans and
upon exercise of warrants.
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<PAGE> 7
PROPOSAL 1:
AMENDMENT TO CERTIFICATE OF
INCORPORATION INCREASING SHARES
OF COMMON STOCK
On June 18, 1996, the Company's Board of Directors unanimously
approved the adoption of an amendment to the Company's Certificate of
Incorporation (the "Amendment") under which the number of authorized shares of
the Company's Common Stock would be increased from 30,000,000 to 50,000,000.
The Board of Directors determined that the Amendment is advisable and directed
that the Amendment be considered at the Special Meeting of Stockholders. A
copy of the proposed Amendment is attached hereto as Exhibit A.
The Company's Certificate of Incorporation currently authorizes
30,000,000 shares of $.01 par value Common Stock. The Certificate of
Incorporation does not provide for cumulative voting, and there are no
preemptive or other subscription rights, conversion rights, or redemption or
sinking fund provisions with respect to the Common Stock. If the Amendment is
adopted, the Board of Directors of the Company will be permitted to issue the
authorized shares of Common Stock without further stockholder approval, except
to the extent otherwise required by law or by a stock exchange or stock market
on which the Common Stock is listed or traded at the time. The Company's
Common Stock is presently quoted on the Nasdaq Stock Market. Additional shares
of Common Stock for which authorization is sought, when issued, would have the
same rights and privileges as the shares of Common Stock now outstanding.
As of June 24, 1996, there were 15,831,565 shares of Common Stock
issued and outstanding and an aggregate of 8,375,000 shares of Common Stock
reserved for issuance under the Company's stock option and stock purchase plans
and pursuant to various warrants exercisable for Common Stock. Pursuant to a
Registration Statement on Form S-3 dated May 13, 1996, the Company is
registering approximately 2,243,274 shares underlying warrants exercisable for
Common Stock and registering certain other securities. In addition, the
Company has agreed to issue pursuant to a private placement exemption $50
million of Common Stock at a price per share equal to the market rate over a
period of days in connection with its acquisition of substantially all of the
assets of Symphony Pharmacy Services, Inc., a division of Integrated Health
Services, Inc. (the "Symphony Acquisition"). Pursuant to a registration
statement on Form S-3 expected to be filed in July 1996, the Company intends to
issue and sell approximately 9,000,000 shares of Common Stock (and up to
1,350,000 additional shares to cover over-allotments pursuant to over-allotment
options granted to underwriters) (the "Offering").
The Board of Directors recommends the increase in authorized shares of
Common Stock in order to issue shares in the Offering and to enable the Company
to have greater flexibility to issue additional shares in connection with any
future stock splits; dividends; equity financings; business acquisitions; stock
option, stock purchase and other employee benefit plans; and general corporate
purposes.
The additional authorized shares of Common Stock will be available for
issuance at such times and for such proper corporate purposes as the Board of
Directors may approve. Depending upon the nature and terms thereof, such
transactions could enable the Board to render more difficult or discourage an
attempt by a third party to obtain control of the Company. For example, the
issuance of shares of Common Stock in a public or private sale would increase
the number of the Company's outstanding shares, thereby diluting the interest
of a party seeking to acquire control of the Company. Issuances of additional
shares or Common, depending upon their timing and circumstances, may dilute
earnings per share and decrease the book value per share of shares theretofore
outstanding, and each stockholder's percentage ownership of the Company may be
proportionately reduced.
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<PAGE> 8
A majority of the shares of Common Stock outstanding and entitled to
vote is required to amend the Company's Certificate of Incorporation. Counsel
Corporation has expressed its intention to vote all of its shares in favor of
the proposed amendment. THE BOARD OF DIRECTORS HAS APPROVED THE AMENDMENT TO
THE COMPANY'S CERTIFICATE OF INCORPORATION AND RECOMMENDS THAT ALL
STOCKHOLDERS VOTE IN FAVOR OF THE AMENDMENT.
OTHER MATTERS
The management of the Company knows of no other matters to be brought
before the Special Meeting of Stockholders. If any other matter is duly
presented for action, it is the intention of the persons named in the enclosed
proxy to vote on such matter in accordance with their best judgment.
A copy of the Company's 1996 Annual Report to Stockholders has
previously been mailed to stockholders.
EACH STOCKHOLDER IS URGED TO EXECUTE AND RETURN THE ENCLOSED PROXY
PROMPTLY. IN THE EVENT A STOCKHOLDER DECIDES TO ATTEND THE MEETING, IT MAY, IF
IT WISHES, REVOKE ITS PROXY AND VOTE SUCH SHARES IN PERSON. IN ADDITION, A
STOCKHOLDER MAY REVOKE ITS PROXY AT ANYTIME BEFORE SUCH PROXY IS VOTED.
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<PAGE> 9
EXHIBIT "A"
CERTIFICATE OF AMENDMENT TO
CERTIFICATE OF INCORPORATION
OF
CAPSTONE PHARMACY SERVICES, INC.
Capstone Pharmacy Services, Inc., a corporation organized and existing
under the General Corporation Law of the State of Delaware (the "Corporation"),
does hereby certify:
The amendment to the Corporation's Certificate of Incorporation set
forth in the following resolution approved by the Corporation's Board of
Directors and Stockholders was duly adopted in accordance with the provisions
of Section 242 of the General Corporation Law of the State of Delaware.
RESOLVED, that the Certificate of Incorporation of the Corporation be
amended by striking Section 1 of Article Fourth in its entirety and
replacing therefor the following:
1. The maximum number of shares of stock which the
Corporation shall have the authority to issue is fifty million
(50,000,000) shares of Common Stock having a par value of $0.01 per
share, which shares shall not be subject to any preemptive rights, and
five hundred thousand (500,000) shares of preferred stock having a par
value of $0.01 per share.
The foregoing amendment was adopted by the Corporation's Board of
Directors on June 18, 1996 and Stockholders on August 15, 1996.
This Certificate of Amendment is filed by authority of the duly
elected Board of Directors and Stockholders in accordance with Section 242 of
the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, this Certificate of Amendment has been executed by
the Corporation's authorized officers this _____ day of August, 1996.
CAPSTONE PHARMACY SERVICES, INC.
/s/
-----------------------------------------
R. Dirk Allison
President and Chief Executive Officer
ATTEST:
/s/
- -----------------------------
Donald W. Hughes, Secretary
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<PAGE> 10
APPENDIX A
PROXY CAPSTONE PHARMACY SERVICES, INC. PROXY
SPECIAL MEETING OF STOCKHOLDERS, AUGUST 15, 1996
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints R. Dirk Allison and Donald W. Hughes,
or either of them, as proxies, with power of substitution, to vote all shares
of the undersigned at the Special Meeting of the Stockholders of Capstone
Pharmacy Services, Inc. (the "Company"), to be held on August 15, 1996, at
9:30 a.m. Eastern Daylight Time, at the Company's principal executive offices
at 2930 Washington Boulevard, Baltimore, Maryland 21230, and at any
adjournments or postponements thereof, in accordance with the following
instructions:
(1) To approve an amendment to the Company's Certificate of Incorporation to
increase the number of shares of Common Stock authorized for issuance from
30,000,000 to 50,000,000.
|__| FOR |__| AGAINST |__| ABSTAIN
(2) In their discretion, on such other matters as may properly come before the
meeting.
|__| FOR DISCRETION |__| AGAINST DISCRETION |__| ABSTAIN
(CONTINUED ON REVERSE SIDE)
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(CONTINUED FROM OTHER SIDE)
THE SHARES REPRESENTED HEREBY WILL BE VOTED AS SPECIFIED. IF NO
SPECIFICATION IS MADE, THE SHARES WILL BE VOTED FOR THE AMENDMENT TO THE
CERTIFICATE OF INCORPORATION, AND, IN THE DISCRETION OF THE PROXIES, ON SUCH
OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.
PLEASE SIGN AND DATE BELOW AND RETURN PROMPTLY.
Dated:__________________, 1996
_______________________________________
Dated:__________________, 1996
_______________________________________
Signature(s) of stockholder(s)
should correspond exactly with the name(s)
printed hereon. Joint owners should
each sign personally. Executors,
administrators, trustees, etc., should
give full title and authority.
CAPSTONE PHARMACY SERVICES, INC.
2930 WASHINGTON BOULEVARD
BALTIMORE, MARYLAND 21230
