<PAGE> 1
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, AS AMENDED.
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Oncor, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] 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 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:
- --------------------------------------------------------------------------------
(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:
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<PAGE> 2
ONCOR, INC.
209 Perry Parkway
Gaithersburg, Maryland 20877
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO THE HOLDERS OF COMMON STOCK OF ONCOR, INC.:
The annual meeting of stockholders of Oncor, Inc. will be held on June 25,
1997, at the Gaithersburg Hilton Hotel, 620 Perry Parkway, Gaithersburg,
Maryland, 20877, telephone number (301) 977-8900, at 10:00 a.m., for the
following purposes:
1. To elect seven (7) directors.
2. To ratify the selection of Arthur Andersen LLP as independent
public accountants of the Company for the year 1997.
3. To transact such other business as may properly come before the
meeting.
Holders of Common Stock of record at the close of business on May 21, 1997
will be entitled to vote at the meeting.
By order of the Board of Directors
/s/ JOHN L. COKER
John L. Coker
Secretary
Gaithersburg, Maryland
May 23, 1997
- --------------------------------------------------------------------------------
IMPORTANT NOTICE
To assure your representation at the meeting, please complete, date, sign,
and mail promptly the enclosed proxy for which a return envelope is provided.
- --------------------------------------------------------------------------------
<PAGE> 3
ONCOR, INC.
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
JUNE 25, 1997
GENERAL INFORMATION
The accompanying proxy is solicited by the Board of Directors of the
Company. Stockholders may revoke their proxies at any time prior to the time
they are voted at the meeting by filing with the Secretary of the Company a
written notice of revocation, by duly executing and delivering a subsequent
proxy bearing a later date or by attending the meeting and voting in person.
The record date for stockholders entitled to vote at the Annual Meeting is
May 21, 1997.
The Company has only one class of outstanding shares of capital stock,
Common Stock, par value $0.01 per share, of which, as of April 25, 1997, there
were 25,150,450 shares outstanding. Each share is entitled to one vote.
The shares represented by each valid proxy will be voted at the Annual
Meeting or any adjournment thereof, and, if a choice is specified in the proxy,
the shares will be voted in accordance with such specification. If no vote is
specified, the shares will be voted as set forth in the proxy.
Under Maryland law, there is a statutory presumption that a proposal passes
if it receives a majority of the votes cast at a meeting at which a quorum is
present. The Company's by-laws contain similar provisions. Abstentions and
"broker non-votes" count for quorum purposes, but have no effect on the outcome
of the vote on any of the matters to be considered at the Annual Meeting. A
"broker non-vote" occurs if a broker or other nominee does not have
discretionary authority and has not received instructions with respect to a
particular item. Stockholders may not cumulate their votes.
So far as the Directors of the Company are aware, no matters will be
presented to the meeting for action on the part of the stockholders other than
those stated in the notice. If any other matter is properly brought before the
meeting, it is the intention of the persons named in the accompanying proxy to
vote thereon the shares to which the proxy relates in accordance with their best
judgment.
The Company has engaged Morrow & Co., Inc. to aid in the solicitation,
which will be undertaken by mail, telephone, telegraph and personal contact and
which may include solicitation by officers and employees of the Company. Costs
of the solicitation are expected to be approximately $4,000 plus out of pocket
expenses and will be borne by the Company. This Proxy Statement, the
accompanying proxy, and a copy of the Company's Annual Report to Stockholders
are first being mailed to stockholders on or about May 23, 1997.
1
<PAGE> 4
VOTING SECURITIES AND PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of March 31, 1997 by each person
known by the Company to own beneficially more than 5% of the outstanding Common
Stock. In addition, this table includes the outstanding voting securities
beneficially owned by directors, director nominees and the Named Executive
Officers (as defined below) and the number of shares owned by directors and
executive officers as a group.
<TABLE>
<CAPTION>
DIRECTORS, OFFICERS AMOUNT AND NATURE OF PERCENT
AND 5% STOCKHOLDERS BENEFICIAL OWNERSHIP(1) OF CLASS(1)
------------------------------------------------------ ----------------------- -----------
<S> <C> <C>
Mellon Bank Corporation............................... 2,917,000 11.6%
One Mellon Bank Center
500 Grant Street
Pittsburgh, PA 15258
Stephen and Nancy H. Turner........................... 1,330,401(2) 5.3%
c/o Oncor, Inc.
209 Perry Parkway
Gaithersburg, MD 20877
Cecil Kost............................................ 140,000(3) *
Timothy J. Triche..................................... 120,000(4) *
William H. Taylor II.................................. 27,354(5) *
Philip S. Schein...................................... 25,000(6) *
Glenn W. Bartlett..................................... 12,500(7) *
Jose J. Coronas....................................... 62,500(8) *
Derace L. Schaffer.................................... 153,750(9) *
John L. Coker......................................... 106,666(10) *
Robert J. Hohman...................................... 49,750(11) *
John P. Kennealy...................................... 38,333(12) *
All Directors and Executive Officers of the Company as
a group (14 persons).................................. 2,139,588(13) 8.5%
</TABLE>
- ---------------
* Less than 1%.
(1) Based on 25,112,338 shares of Common Stock outstanding as of March 31,
1997. Gives effect to the shares of Common Stock issuable within 60 days
after March 31, 1997 upon the exercise of all options, unit purchase
options, warrants and other rights beneficially held by the indicated
stockholder on that date.
(2) Includes (i) 975,455 shares of Common Stock owned jointly by Stephen and
Nancy Turner, (ii) 300,000 shares of Common Stock issuable upon exercise of
two stock options held by Mr. Turner, individually, and (iii) 54,946 shares
of Common Stock issuable upon the exercise of unit purchase options held
jointly by Stephen and Nancy Turner to purchase 17,333 units, each unit
consisting of two shares of Common Stock and one warrant to purchase 1.17
additional shares of Common Stock, and upon the exercise of such warrant.
Stephen Turner and Nancy Turner are husband and wife.
(3) Includes 140,000 shares of Common Stock issuable upon exercise of two stock
options.
(4) Includes 75,000 shares of Common Stock issuable upon exercise of three
stock options.
(5) Includes 25,000 shares of Common Stock issuable upon exercise of a stock
option. Excludes 200 shares held by Dr. Taylor's wife as custodian of two
trusts established pursuant to the California Uniform Trust for Minors Act,
as to which Dr. Taylor disclaims beneficial ownership.
(6) Includes 25,000 shares of Common Stock issuable upon exercise of a stock
option.
(7) Includes 12,500 shares of Common Stock issuable upon exercise of a stock
option.
(8) Includes 62,500 shares of Common Stock issuable upon exercise of two stock
options.
2
<PAGE> 5
(9) Includes 93,750 shares of Common Stock issuable upon exercise of four stock
options. Excludes 3,000 shares held by Dr. Schaffer's wife as custodian of
trusts established for the benefit of Dr. Schaffer's children, as to which
Dr. Schaffer disclaims beneficial ownership.
(10) Includes 106,666 shares of Common Stock issuable upon exercise of three
stock options.
(11) Includes 48,750 shares of Common Stock issuable upon exercise three stock
options.
(12) Includes 33,333 shares of Common Stock issuable upon exercise of two stock
options.
(13) Includes 1,050,779 shares of Common Stock issuable upon exercise of various
stock options.
3
<PAGE> 6
ELECTION OF DIRECTORS
The Amended and Restated By-Laws of the Company provide that the Board of
Directors shall consist of no less than three, and no more than eight directors.
The Board of Directors has determined that the Board shall consist of seven (7)
directors. Directors elected at the 1997 Annual Meeting will continue in office
until the next annual meeting of stockholders or until their successors are duly
elected and qualified.
The persons named in the accompanying proxy will vote in favor of electing
the nominees, unless otherwise specified in the proxy. If any nominee shall
become unavailable for election, the proxies will be voted for the election of
such persons, if any, as shall be designated by the Board of Directors.
A plurality of the votes cast at the Annual Meeting is required to elect a
director.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THESE NOMINEES. Certain
information concerning such nominees is set forth below:
<TABLE>
<CAPTION>
FIRST BECAME
NAME AGE A DIRECTOR PRINCIPAL OCCUPATION OR EMPLOYMENT
- ---------------------------- --- ------------ -----------------------------------------------
<S> <C> <C> <C>
Stephen Turner.............. 51 1983 Mr. Turner has been Chairman of the Board of
Directors, Chief Executive Officer and a
director of the Company since its inception
in 1983. Mr. Turner has also been a director
of OncorMed, Inc. since July 1993 and of
OncorPharm, Inc. since 1994. Prior to
founding the Company, from 1976 to 1983, Mr.
Turner was the founder and Chairman of the
Board of Bethesda Research Laboratories, Inc.
("BRL"), now a division of Life Technologies,
Inc. BRL is a biotechnology company engaged
in the business of molecular biology. Prior
to BRL, Mr. Turner was employed by Becton
Dickinson and Company, a health care company.
Cecil Kost.................. 43 1996 Mr. Kost joined the Company as President and
Chief Operating Officer in March 1996 and was
elected to the Board of Directors in August
1996. Prior to joining the Company, Mr. Kost
was a Senior Vice- President with Curtin
Matheson Scientific, Inc. ("CMS"), a health
care/diagnostics company. At CMS, Mr. Kost
was responsible for the company's clinical,
industrial/research and international busi-
ness sectors as well as the company's
diagnostic manufacturing operations. In
addition to his duties at CMS, Mr. Kost
served as Chairman of the Laboratory Products
Association ("LPA"), a trade association of
businesses serving industrial and research
laboratories.
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
FIRST BECAME
NAME AGE A DIRECTOR PRINCIPAL OCCUPATION OR EMPLOYMENT
- ---------------------------- --- ------------ -----------------------------------------------
<S> <C> <C> <C>
Timothy J. Triche........... 51 1988 Dr. Triche became a director of the Company in
December 1988. In 1994, he became Chairman of
the Board and Chief Executive Officer of
OncorMed, Inc., a clinical services company.
He is currently Pathologist-in-Chief for the
Children's Hospital of Los Angeles in Los
Angeles, California and Professor of
Pathology and Pediatrics at, and Vice Chair-
man of, the University of Southern California
School of Medicine, Los Angeles, California.
Prior to June 1988, he was Chief of the
Ultrastructural Laboratory of the Division of
Pathology at the National Cancer Institute of
the National Institutes of Health in
Bethesda, Maryland.
William H. Taylor II........ 57 1990 Dr. Taylor became a director of the Company in
November 1990. He is currently the Managing
General Partner of Taylor & Company, an
investment company. He has been a principal
in several venture capital firms since 1968.
Since 1982, Dr. Taylor has been a general
partner of several affiliated venture capital
partnerships located in San Francisco,
including Taylor and Turner, L.P. and Rotan
Mosle Technology Partners Ltd. He serves as a
director of Sierra Growth Fund, Aura
Memories, Inc. and TPL, Inc. and is also
Chairman of the Business Advisors Board of
AMT Ventures, a materials science venture
capital fund.
Glenn W. Bartlett........... 64 1996 Dr. Bartlett became a director in September
1996. Since April 1995, Dr. Bartlett has worked
as independent consultant, specializing in
business development in the field of health
care. From 1983 to April 1995, Dr. Bartlett
served as Manager of Business Development for
Beckman Instruments, an international
manufacturer of laboratory equipment and
diagnostic reagents. From 1979 to 1983, Dr.
Bartlett was Vice President, Research of
SmithKline Instruments, a division of
SmithKline Corporation, and from 1966 to
1979, he served as Director of Scientific
Planning and later as Vice President,
Research and Technology. Dr. Bartlett
received the D.Phil. degree in Physical
Chemistry of Microorganisms at Oxford
University, England, in 1958. He taught
microbiology at Memorial University of New-
foundland and at McGill University Faculty of
Medicine, Montreal, Canada. Dr. Bartlett has
served as a Director of HemaCare Corporation
since February 1991, and as HemaCare's Board
Chairman since August 1996.
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
FIRST BECAME
NAME AGE A DIRECTOR PRINCIPAL OCCUPATION OR EMPLOYMENT
- ---------------------------- --- ------------ -----------------------------------------------
<S> <C> <C> <C>
Jose J. Coronas............. 55 1996 Mr. Coronas became a director in December 1996.
He is currently a Management Consultant. From
1994 to 1996 Mr. Coronas was President of
Johnson & Johnson Clinical Diagnostics, Inc.
Prior to his two years with Johnson &
Johnson, Mr. Coronas was Vice President and
General Manager of the Clinical Diagnostics
Division of Eastman Kodak Company
("Eastman"). While at Eastman, Mr. Coronas
served in a number of management positions in
the U.S. and Europe from 1966 to 1994. He
also served as President and CEO of Genencor
International, Inc., a joint venture of
Eastman and Cultor Ltd. of Finland. Mr.
Coronas is a past Director of the Industrial
Biotechnology Association and is currently on
the Board of Directors of the Ibero-American
Action League, Inc.; St. Mary's Hospital;
United Way of Greater Rochester, Inc.; and
the Visiting Nurse Service of Rochester and
Monroe County, Inc.
Derace L. Schaffer.......... 49 1996 Dr. Schaffer became a director of the Company
in December 1996. He is currently Clinical
Professor of Radiology at the University of
Rochester School of Medicine. Dr. Schaffer
has been Chief Executive Officer of the Ide
Group, P.C., a large multi-specialty group
medical practice in New York State since
1977, and is also President of the Lan Group,
a venture capital firm specializing in health
care investments. Dr. Schaffer is a Director
of Patient Infosystems, Inc.; NeuralTech,
Inc.; NeuralMed, Inc.; Preferred Oncology
Networks of America, Inc.; American Physician
Partners, Inc.; The Care Group, Inc.; and
Medifax, Inc.; as well as several not-for-
profit corporations. Dr. Schaffer is a board
certified radiologist. He was Chief Resident
at the Massachusetts General Hospital during
residency training and was a Clinical Fellow
at Harvard Medical School. Dr. Schaffer is a
member of Alpha Omega Alpha, the national
medical honor society.
</TABLE>
BOARD MEETINGS AND ATTENDANCE OF DIRECTORS
The Board of Directors met nine (9) times during 1996. During 1996, all
directors, with the exception of Dr. Timothy J. Triche and Dr. Philip S. Schein,
attended all of the meetings of the Board. Dr. Triche attended seven (7)
meetings and Dr. Schein attended eight (8) meetings.
COMMITTEES OF THE BOARD OF DIRECTORS
The Compensation and Stock Option Committee comprises Philip S. Schein,
William H. Taylor II and Glenn W. Bartlett, and administers the Company's
compensation and stock option plans. The Compensation and Stock Option Committee
acted by unanimous written consent eight (8) times during 1996.
The Audit Committee comprises William H. Taylor II and Glenn W. Bartlett,
and recommends the Company's independent public accountants annually to the
Board of Directors and consults with such
6
<PAGE> 9
accountants on the planning of the annual audit and periodic reviews, and on any
issues arising from audits and periodic reviews. The Audit Committee met six (6)
times in 1996. All incumbent members attended all of the meetings of the Audit
Committee.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1996, Philip S. Schein, William H. Taylor II, George W. Scherer and
Glenn W. Bartlett served as members of the Compensation and Stock Option
Committee. There were no compensation committee interlocks during 1996.
DIRECTOR COMPENSATION
Directors of the Company do not receive cash compensation for service as
directors despite the provision in the Company's By-Laws that the Board of
Directors by resolution may allow directors a fixed sum and expenses for
attendance at Board or Committee meetings. After he became a director in
September 1996, Dr. Bartlett received cash compensation for consulting of
$9,769. Directors are reimbursed for their expenses associated with their
participation on the Board.
EXECUTIVE COMPENSATION
The executive officers of the Company on March 31, 1997 were the following:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------------ --- ----------------------------------------------
<S> <C> <C>
Stephen Turner................ 52 Chairman of the Board of Directors and Chief
Executive Officer
Cecil Kost.................... 43 President and Chief Operating Officer
John L. Coker................. 50 Vice President -- Finance and Administration,
Chief Financial Officer, Secretary and
Treasurer
Barbara H. Keech.............. 48 Vice President -- Regulatory Affairs and
Quality Assurance
Robert J. Hohman.............. 43 Vice President -- Research and Development
John P. Kennealy.............. 56 Vice President -- Corporate Development
Ronald W. Deen................ 52 Vice President -- Operations and Manufacturing
Massimo A. Marchiori.......... 45 Corporate Controller
</TABLE>
7
<PAGE> 10
The following table sets forth the annual and long-term compensation for
the Company's Chief Executive Officer and the four highest paid executive
officers in 1996 (the "Named Executive Officers"), as well as the compensation
paid to each individual, for the Company's three previous fiscal years:
SUMMARY COMPENSATION TABLE*
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION ALL OTHER
COMPENSATION AWARDS COMPENSATION
----------------- ------------ ------------
SECURITIES
UNDERLYING
SALARY BONUS OPTIONS
NAME AND PRINCIPAL POSITION YEAR ($) ($) (#) ($)
---------------------------------- ---- ------- ------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Stephen Turner.................... 1996 240,000 0 0 0
Chairman and Chief 1995 240,000 0 0 10,000(b)
Executive Officer 1994 240,000 50,000(a) 0 908(b)
Cecil Kost........................ 1996 189,210(c) 52,083 350,000 66,184(d)
President and Chief
Operating Officer
John L Coker...................... 1996 150,000 0 65,000 0
Vice President -- 1995 147,500 0 20,000 0
Finance and Administration, 1994 112,500(e) 0 100,000 0
Secretary, Treasurer and
Chief Financial Officer
John P. Kennealy.................. 1996 155,000 0 0 0
Vice President -- 1995 63,863(f) 0 100,000 0
Corporate Development
Robert J. Hohman.................. 1996 134,000 0 0 0
Vice President -- 1995 122,040 0 55,000 0
Research and Development 1994 105,800(g) 0 0 2,716(b)
</TABLE>
- ---------------
* Columns for Other Annual Compensation, Stock Awards and Long-Term
Compensation Payouts are not included in the above table, since there were
no transactions to report.
(a) Reflects a special performance bonus paid to Mr. Turner.
(b) Miscellaneous cash reimbursements.
(c) Represents the portion of Mr. Kost's annual compensation subsequent to his
joining the Company on March 18, 1996.
(d) Relocation reimbursements.
(e) Represents the portion of Mr. Coker's annual compensation subsequent to his
joining the Company on March 1, 1994.
(f) Represents the portion of Dr. Kennealy's annual compensation subsequent to
his joining the Company on August 1, 1995.
(g) Dr. Hohman became an executive officer of the Company in March 1994.
8
<PAGE> 11
STOCK OPTION GRANTS
The following table contains information concerning the grant of stock
options under the Company's 1992 Stock Option Plan (the "Option Plan") to the
Named Executive Officers for the 1996 fiscal year:
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR POTENTIAL REALIZABLE
VALUE AT ASSUMED ANNUAL
RATES OF STOCK PRICE
APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM(3)
------------------------------------------------------------------ -----------------------
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS SARS MARKET
OPTIONS GRANTED TO EXERCISE OF PRICE ON
SARS GRANTED EMPLOYEES IN BASE PRICE DATE OF EXPIRATION
NAME (#)(1) FISCAL YEAR ($/SHARE)(2) GRANT DATE 5% 10%
- ----------------------- ------------ ------------ ------------ -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Stephen Turner......... 0 0 0 0 -- 0 0
Cecil Kost............. 350,000 29.6% $5.000 $5.000 3/18/2006 $1,100,566 $2,789,049
John L. Coker.......... 65,000 5.5% $4.750 $4.750 10/21/2006 $ 194,171 $ 492,068
John P. Kennealy....... 0 0 0 0 -- 0 0
Robert J. Hohman....... 0 0 0 0 -- 0 0
</TABLE>
- ---------------
(1) Each option has a maximum term of 10 years, subject to earlier termination
in the event of the optionee's cessation of service with the Company. Each
option is immediately exercisable for all the option shares, but any shares
purchased under such option will be subject to repurchase by the Company, at
the original exercise price per share, should the optionee leave the
Company's service prior to vesting in such shares.
(2) The exercise price may be paid in (i) cash, (ii) shares of Common Stock held
for the requisite period necessary to avoid a charge to the Company's
earnings for financial reporting purposes and valued at fair market value on
the exercise date, (iii) a combination of (i) and (ii), or (iv) through a
broker-dealer sale.
(3) Potential realizable value is based on assumption that the stock price of
the Common Stock appreciates at the annual rate shown (compounded annually)
from the date of grant until the end of the ten-year option term. These
numbers are calculated based on the requirements promulgated by the
Securities and Exchange Commission and do not reflect the Company's estimate
of future stock price growth. There is no assurance provided to any
executive officer or any other holder of the Company's securities that the
actual stock price appreciation, if any, over the 10-year option term will
be at the assumed 5% and 10% levels or at any other defined level. With
respect to options granted at fair market value, unless the market price of
the Common Stock does in fact appreciate over the option term, no value will
be realized from the option grants made to the named executive officers.
9
<PAGE> 12
STOCK OPTION EXERCISES AND FISCAL YEAR END VALUES
The following table sets forth information regarding the exercise of stock
options by each of the Named Executive Officers of the Corporation during the
fiscal year ended December 31, 1996 as well as the number and value of any
unexercised stock options held by the Named Executive Officers as of December
31, 1996:
AGGREGATED OPTION EXERCISES IN LAST
FISCAL YEAR AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
TOTAL NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
SHARES OPTIONS AT FISCAL YEAR END FISCAL YEAR END(A)
ACQUIRED VALUE ---------------------------- ----------------------------
ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
NAME # ($) (#) (#) ($) ($)
- ----------------------------- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Stephen Turner............... 0 0 300,000 0 100 0
Cecil Kost................... 0 0 35,000 315,000 0 0
John L. Coker................ 0 0 73,332 111,668 0 0
John P. Kennealy............. 0 0 33,333 66,667 0 0
Robert J. Hohman............. 0 0 55,415 39,585 0 0
</TABLE>
- ---------------
(a) At December 31, 1996, the closing bid stock price was $4.00 per share.
CERTAIN TRANSACTIONS
In April 1997, the Company agreed to guarantee certain loans made to Mr.
Turner in an aggregate principal amount equal to $960,000. Such loans are also
secured by certain of Mr. Turner's personal assets. Furthermore, the Company has
made advances to or paid expenses on behalf of Mr. Turner in an amount
outstanding at December 31, 1996 of $294,039.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Under the securities laws of the United States, the Company's directors,
executive officers and any persons holding more than ten percent of the
Company's Common Stock are required to report initial ownership of the Company's
Common Stock and any subsequent changes in ownership to the Securities and
Exchange Commission ("SEC"). Specific due dates have been established by the SEC
and the Company is required to disclose in this Proxy Statement any failure to
file by the appropriate dates. Officers, directors and greater than 10%
stockholders are required by SEC regulations to furnish the Company with copies
of all Section 16(a) forms they file.
To the Company's knowledge, based solely upon the copies of Section 16(a)
reports which the Company received from such persons for their 1996 fiscal year
transactions, the Company believes that all Section 16(a) filing requirements
applicable to such officers, directors and ten-percent beneficial owners were
complied with.
COMPENSATION AND STOCK OPTION COMMITTEE REPORT
To: The Board of Directors
It is the responsibility of the Company's Compensation and Stock Option
Committee (the "Committee") to exercise the authority of the Board of Directors
with respect to (i) evaluation of performance of management, (ii) compensation
of executive officers and (iii) administration of the Company's stock option
plan.
EXECUTIVE COMPENSATION POLICY
The Company's overall compensation philosophy is as follows:
- Attract and retain quality talent, which is critical to both the
short-term and long-term success of the Company.
- Reinforce financial and strategic performance objectives through
incentive stock option compensation that shares the rewards and risks
of strategic decision making.
To reflect this philosophy in determining executive compensation levels,
the Committee conducts annual reviews of all executives to evaluate the
performance of each individual employee, including each person's
10
<PAGE> 13
decision-making responsibilities and work-related accomplishments, and the
performance of the Company over the previous year.
In determining the level of executive compensation, including the executive
compensation level for 1996, the Board of Directors and the Committee weigh the
performance of the Company during the prior year and the contribution of the
executive officers of the Company to such performance. The performance of the
Company is determined by the Company's research developments, progress in its
clinical trials, sales performance and progress in its product approval process.
The compensation levels of the Company's executives are also compared to the
levels of executive compensation paid by other corporations in the health care
industry. In particular, comparisons are made by the Committee with respect to
salary levels, bonuses, and stock option awards. Such comparisons are made to
companies in the health care industry with which the members of the Committee
are familiar and to other companies which are similar in size and complexity of
research and operations. These companies are not chosen based on any published
index or the peer group index used in the stock performance graph below. The
Company strives to set its overall compensation level, as well as the individual
components of such compensation, near the median of such comparison companies.
BASE COMPENSATION
The Committee's approach to base compensation is to offer competitive
salaries in comparison to competitive market practices. The Committee uses
market compensation levels as a frame of reference for starting salary offers
and annual salary adjustments. Salary reviews are conducted annually with input
from the CEO and President. The Committee considers the decision-making
responsibilities for each position and the experience and work performance of
position incumbents. While it is the general policy of the Company not to award
performance-based cash bonuses, the Committee has from time to time authorized
cash bonuses if deemed to be in the best interest of the Company. The
circumstances for such awards vary but have included bonus payments pursuant to
the terms of negotiated employment agreements; arrangement of transactions,
acquisition and financing; and the development of certain technology.
STOCK OPTIONS
Historically, the Committee has awarded stock options to each of the
Company's executive officers (i) to attract new quality officers to join the
Company and (ii) to reward executive officers for accomplishing performance
objectives. Performance objectives are generally set based on the Company's
sales performance, research developments and progress in its clinical trials and
its product approval process, and are specifically set based on the measure
which corresponds to the position held by the executive officer. The Committee
considers market practices for similar positions in similar industries and the
amount and terms of prior awards to an individual in granting stock options.
There were 555,000 stock options granted to executive officers in 1996.
CEO COMPENSATION
The annual compensation package for Stephen Turner, the Company's Chairman
and Chief Executive Officer, is determined in the same manner as the other
executives of the Company. The annual base salary of Mr. Turner was set at
$150,000 in 1990 and was not increased in 1991. Mr. Turner's salary was
increased in 1992 to $200,000 per year and in 1993 to $240,000 per year and was
not increased in 1994, 1995 or 1996. Mr. Turner was granted stock options to
purchase 200,000 shares of Common Stock at an exercise price of $5.375 per share
in 1993, in recognition of the Company's increased revenues and research and
development accomplishments and to keep pace with options being granted to other
chief executive officers in the biotechnology industry. Mr. Turner was paid a
bonus of $50,000 in 1994 in recognition of his role in the two acquisitions the
Company made in 1994, the OncorMed, Inc. initial public offering and the
formation of Codon Pharmaceuticals, Inc. (formerly known as OncorPharm, Inc.).
Compensation and Stock Option
Committee
Philip S. Schein, Chairman
William H. Taylor II, Member
Glenn W. Bartlett, Member
11
<PAGE> 14
STOCK PERFORMANCE GRAPH
The following graph compares the yearly percentage change in the cumulative
total stockholder return on the Company's Common Stock during the five years
ended December 31, 1996 with the cumulative return on each of The Russell 2000
Index and the Biotechnology Index, as published by the American Stock Exchange
(the "Biotechnology Index"). In prior years, the Company used the Value-Line
Survey of Standard HealthCare Companies, as published by Value-Line in 1992 (the
"Healthcare Index"), as its peer group index. The Company's decision to change
from the Healthcare Index to the Biotechnology Index was based on a number of
factors, including a higher degree of comparability between (i) the Company's
business and the businesses conducted by the companies included in the
Biotechnology Index, and (ii) the Company's market capitalization and the market
capitalization of the companies included in the Biotechnology Index. The
Biotechnology Index comprises Amgen Inc., Biogen, Inc., Calgene, Inc., CellPro,
Inc., Centocor Inc., Cephalon, Inc., Chiron Corporation, COR Therapeutics, Inc.,
Genzyme Corporation, Gilead Sciences Inc., The Immune Response Corporation,
Liposome Company, Organogenesis, Inc., Protein Design Labs, Inc. and Vertex
Pharmaceuticals, Inc. The Healthcare Index comprises American Home Products
Corp., Amgen Inc., ALZA Corp. "A", Biogen, Inc., Bristol-Myers Squibb Company,
Chiron Corp., Forest Laboratories, Inc., Genentech, Inc., IVAX Corporation, Eli
Lilly and Company, Marion Merrell Dow Inc., Merck & Co., Inc., Mylan
Laboratories Inc., Pfizer Inc., Rhone-Poulene Rorer Inc., SmithKline Beecham
p.l.c., Schering-Plough Corp., Upjohn Co., and Warner-Lambert Company.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
ONCOR, INC., RUSSELL 2000 INDEX, PEER GROUP-OLD AND PEER GROUP-NEW
(PERFORMANCE RESULTS THROUGH 12/31/96)
<TABLE>
<CAPTION>
MEASUREMENT PERIOD RUSSELL 2000
(FISCAL YEAR COVERED) ONCOR, INC. INDEX PEER GROUP- OLD PEER GROUP- NEW
<S> <C> <C> <C> <C>
1991 100.00 100.00 100.00 100.00
1992 77.88 107.79 109.66 111.45
1993 52.88 118.66 171.39 188.79
1994 53.85 120.56 181.42 209.39
1995 36.54 165.78 229.09 270.36
1996 77.88 204.32 291.92 341.96
</TABLE>
Assumes $100 invested at the close of trading on December 31, 1991 in Oncor,
Inc. Common Stock, Russell 2000 Index, Peer Group-Old and Peer Group-New.
- ---------------
* Cumulative total return assumes reinvestment of dividends.
SOURCE: Value Line, Inc. Factual material is obtained from sources believed to
be reliable, but the publisher is not responsible for any errors or omissions
contained herein.
12
<PAGE> 15
DESIGNATION OF AUDITORS
Upon the recommendation of the Audit Committee, the Board of Directors
proposes that Arthur Andersen LLP, the independent public accountants of the
Company since the Company's inception, be re-elected as independent public
accountants of the Company to serve until the annual meeting of stockholders in
1998. A majority of the votes cast at the Annual Meeting is required to elect
the auditors. A representative of Arthur Andersen LLP will attend the annual
meeting of stockholders with the opportunity to make a statement if he or she so
desires and will also be available to answer reasonable inquiries.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
STOCKHOLDER PROPOSALS
The Company has not received any proposals for action at the meeting from
its stockholders. The Company anticipates that its 1998 annual meeting of
stockholders will be held during June 1998. Stockholder proposals intended to be
presented at such meeting and to be included in the Company's proxy statement
and form of proxy for that meeting must have been received at the Company not
later than February 1, 1998.
OTHER INFORMATION
Management knows of no other matters which may be presented at the meeting.
However, if any matters are properly brought before the meeting, the persons
named in the enclosed proxy will vote thereon in accordance with their judgment.
ADDITIONAL INFORMATION
THE COMPANY WILL FURNISH TO ANY STOCKHOLDER OF THE COMPANY, WITHOUT CHARGE,
A COPY OF ITS ANNUAL REPORT ON FORM 10-K, INCLUDING FINANCIAL STATEMENTS AND
FINANCIAL STATEMENT SCHEDULE, UPON RECEIPT OF A WRITTEN REQUEST FOR SUCH REPORT
DELIVERED TO JOHN L. COKER, VICE PRESIDENT OF FINANCE AND ADMINISTRATION, AT THE
COMPANY'S ADDRESS.
BY ORDER OF THE BOARD OF DIRECTORS
LOGO
John L. Coker
Secretary
Gaithersburg, Maryland
May 23, 1997
13
<PAGE> 16
ONCOR, INC.
209 PERRY PARKWAY
GAITHERSBURG, MARYLAND 20877
Stephen Turner, Cecil Kost, John L. Coker, or any of them, are hereby
authorized, with full power of substitution, to represent and to vote the stock
of the undersigned at the Annual Meeting of Stockholders of the Corporation to
be held on June 25, 1997, or at any adjournment of such meeting, upon such
business as may properly come before the meeting, including the following items
as set forth in the Proxy Statement:
<TABLE>
<S> <C> <C>
1. ELECTION OF SEVEN (7) DIRECTORS FOR ALL NOMINEES LISTED BELOW (EXCEPT AS WITHHOLD AUTHORITY TO VOTE FOR
MARKED TO THE CONTRARY BELOW) [ ] ALL NOMINEES LISTED BELOW [ ]
</TABLE>
Stephen Turner, Cecil Kost, Timothy J. Triche, William H. Taylor II, Glenn W.
Bartlett, Jose J. Coronas, Derace L. Schaffer
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE
(NOMINEES), WRITE THE NAME OF SUCH NOMINEE (NOMINEES) IN THE SPACE
BELOW:
- --------------------------------------------------------------------------------
2. RATIFICATION OF SELECTION OF ARTHUR ANDERSEN LLP AS INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS.
<TABLE>
<S> <C> <C>
[ ] FOR [ ] AGAINST [ ] ABSTAIN
</TABLE>
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS AND WILL BE VOTED AS
SPECIFIED. IF NO SPECIFICATION IS MADE, IT WILL BE VOTED FOR THE ELECTION OF
DIRECTORS AND FOR ITEM 2.
(Continued on other side)
<PAGE> 17
(Continued from other side)
PLEASE MARK, DATE, SIGN AND MAIL PROMPTLY
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS
AS MAY PROPERLY COME BEFORE THE MEETING.
<TABLE>
<S> <C>
Dated , 1997
---------------------------------------------
Print Name
---------------------------------------------
Signature(s)
PLEASE SIGN EXACTLY AS NAME APPEARS ABOVE. IF
SHARES ARE HELD JOINTLY, EACH STOCKHOLDER
SHOULD SIGN. EXECUTORS, ADMINISTRATORS,
TRUSTEES, ETC. SHOULD USE FULL TITLE AND, IF
MORE THAN ONE, ALL SHOULD SIGN. IF THE STOCK-
HOLDER IS A CORPORATION, PLEASE SIGN FULL
CORPORATE NAME BY AN AUTHORIZED OFFICER.
</TABLE>
