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 (Amendment No. )
Filed by the Registrant |X|
Filed by a Party other than the Registrant | |
Check the appropriate box:
|X| Preliminary Proxy Statement
| | Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
| | Definitive Proxy Statement
| | Definitive Additional Materials
| | Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
BIO-IMAGING TECHNOLOGIES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| 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>
BIO-IMAGING TECHNOLOGIES, INC.
830 Bear Tavern Road
West Trenton, New Jersey 08628
To Our Stockholders:
You are most cordially invited to attend the 1999 Annual Meeting of
Stockholders of Bio-Imaging Technologies, Inc. at 9:00 A.M., local time, on
Friday, February 26, 1999, at the Sheraton Bucks County Hotel, 400 Oxford Valley
Road, Langhorne, Pennsylvania.
The Notice of Meeting and Proxy Statement on the following pages describe
the matters to be presented to the meeting.
It is important that your shares be represented at this meeting to assure
the presence of a quorum. Whether or not you plan to attend the meeting, we hope
that you will have your stock represented by signing, dating and returning your
proxy in the enclosed envelope, which requires no postage if mailed in the
United States, as soon as possible. Your stock will be voted in accordance with
the instructions you have given in your proxy.
Thank you for your continued support.
Sincerely,
Mark L. Weinstein
President and Chief Executive Officer
<PAGE>
BIO-IMAGING TECHNOLOGIES, INC.
830 Bear Tavern Road
West Trenton, New Jersey 08628
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held February 26, 1999
The Annual Meeting of Stockholders (the "Meeting") of BIO-IMAGING
TECHNOLOGIES, INC., a Delaware corporation (the "Company"), will be held at the
Sheraton Bucks County Hotel, 400 Oxford Valley Road, Langhorne, Pennsylvania, on
Friday, February 26, 1999, at 9:00 A.M., local time, for the following purposes:
(1) To elect five directors to serve until the next Annual Meeting of
Stockholders and until their respective successors shall have been duly
elected and qualified;
(2) To approve a proposal to provide the Board of Directors the authority to
amend the Company's Certificate of Incorporation, as amended, to effect,
within 90 days following the 1999 Annual Meeting of Stockholders, a reverse
stock split, whereby the Company would issue one new share of Common Stock
in exchange for up to four outstanding shares of Common Stock;
(3) To ratify the appointment of Arthur Andersen LLP as independent auditors
for the year ending September 30, 1999; and
(4) To transact such other business as may properly come before the Meeting or
any adjournment or adjournments thereof.
Holders of Common Stock and Series A Preferred Stock, $0.00025 par value,
of record at the close of business on January 15, 1999 are entitled to notice of
and to vote at the Meeting, or any adjournment or adjournments thereof. A
complete list of such stockholders will be open to the examination of any
stockholder at the Company's principal executive offices at 830 Bear Tavern
Road, West Trenton, New Jersey 08628 and at the Sheraton Bucks County Hotel, 400
Oxford Valley Road, Langhorne, Pennsylvania for a period of 10 days prior to the
Meeting. The Meeting may be adjourned from time to time without notice other
than by announcement at the Meeting.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER OF
SHARES YOU MAY HOLD. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON,
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND MAIL IT PROMPTLY IN
THE ENCLOSED RETURN ENVELOPE. THE PROMPT RETURN OF PROXIES WILL ENSURE A QUORUM
AND SAVE THE COMPANY THE EXPENSE OF FURTHER SOLICITATION. EACH PROXY GRANTED MAY
BE REVOKED BY THE STOCKHOLDER APPOINTING SUCH PROXY AT ANY TIME BEFORE IT IS
VOTED. IF YOU RECEIVE MORE THAN ONE PROXY CARD BECAUSE YOUR SHARES ARE
REGISTERED IN DIFFERENT NAMES OR ADDRESSES, EACH SUCH PROXY CARD SHOULD BE
SIGNED AND RETURNED TO ENSURE THAT ALL OF YOUR SHARES WILL BE VOTED.
By Order of the Board of Directors
Robert J. Phillips
Assistant Secretary
West Trenton, New Jersey
January 28, 1999
THE COMPANY'S 1998 ANNUAL REPORT ACCOMPANIES THE PROXY STATEMENT.
<PAGE>
BIO-IMAGING TECHNOLOGIES, INC.
830 Bear Tavern Road
West Trenton, NJ 08628
-------------------------------------------------
PROXY STATEMENT
-------------------------------------------------
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Bio-Imaging Technologies, Inc. (the "Company") of
proxies to be voted at the Annual Meeting of Stockholders of the Company to be
held on Friday, February 26, 1999, (the "Meeting") at the Sheraton Bucks County
Hotel, 400 Oxford Valley Road, Langhorne, Pennsylvania, at 9:00 A.M., local
time, and at any adjournment or adjournments thereof. Holders of record of
Common Stock, $0.00025 par value ("Common Stock"), and Series A Preferred Stock,
$0.00025 par value ("Series A Stock"), as of the close of business on January
15, 1999 will be entitled to notice of and to vote at the Meeting and any
adjournment or adjournments thereof. As of that date, there were [7,773,878]
shares of Common Stock issued and outstanding and entitled to vote and 416,667
shares of Series A Stock issued and outstanding and entitled to vote. Each share
of Common Stock is entitled to one vote on any matter presented at the Meeting.
Each share of Series A Stock is entitled to one vote on any matter presented at
the Meeting. The aggregate number of votes entitled to be cast at the Meeting is
[8,190,545]. The holders of all classes of stock will vote as a single class,
for all proposals generally, except that the Series A Stock will also vote as a
separate class for the proposal to effect a reverse stock split.
If proxies in the accompanying form are properly executed and returned, the
shares of Common Stock and Series A Stock represented thereby will be voted in
the manner specified therein. If not otherwise specified, the shares of Common
Stock and Series A Stock represented by the proxies will be voted (i) FOR the
election of the five nominees named below as Directors, (ii) FOR the approval of
the granting to the Board of Directors the authority to amend the Company's
Certificate of Incorporation, as amended, to effect, within 90 days following
the 1999 Annual Meeting of Stockholders, a reverse stock split, whereby the
Company would issue one new share of Common Stock in exchange for up to four
outstanding shares of Common Stock, (iii) FOR the ratification of the
appointment of Arthur Andersen LLP, as independent auditors for the year ending
September 30, 1999, and (iv) in the discretion of the persons named in the
enclosed form of proxy, on any other proposals which may properly come before
the Meeting or any adjournment or adjournments thereof. Any Stockholder who has
submitted a proxy may revoke it at any time before it is voted, by written
notice addressed to and received by the Secretary of the Company, by submitting
a duly executed proxy bearing a later date or by electing to vote in person at
the Meeting. The mere presence at the Meeting of the person appointing a proxy
does not, however, revoke the appointment.
The presence, in person or by proxy, of holders of shares of Common Stock
and Series A Stock, in the aggregate, having a majority of the votes entitled to
be cast at the Meeting shall constitute a quorum. The affirmative vote by the
holders of a plurality of the shares of Common Stock and Series A Stock, in the
aggregate, represented at the Meeting is required for the election of directors,
provided a quorum is present in person or by proxy. Provided a quorum is present
in person or by proxy, all actions proposed herein, other than the election of
directors, may be taken upon the affirmative vote of Stockholders possessing a
majority of the voting power represented at the Meeting. The proposal to effect
a reverse stock split also shall require the affirmative vote of Stockholders
possessing a majority of the voting power of the Series A Stock.
Abstentions are included in the shares present at the Meeting for purposes
of determining whether a quorum is present, and are counted as a vote against
for purposes of determining whether a proposal is approved. Broker non-votes
(when shares are represented at the Meeting by a proxy specifically conferring
only limited authority to vote on certain matters and no authority to vote on
other matters) are included in the determination of the number of shares
represented at the Meeting for purposes of determining whether a quorum is
present but are not counted for purposes of determining whether a proposal has
been approved and thus have no effect on the outcome.
This Proxy Statement, together with the related proxy card, is being mailed
to the Stockholders of the Company on or about January 28, 1999. The Annual
Report to Stockholders of the Company for the fiscal year ended September 30,
1998 ("Fiscal 1998"), including financial statements (the "Annual Report"), is
being mailed together with this Proxy Statement to all Stockholders of record as
of January 15, 1999. In addition, the Company has provided brokers, dealers,
banks, voting trustees and their nominees, at the Company's expense, with
additional copies of the Annual Report so that such record holders could supply
such materials to beneficial owners as of January 15, 1999.
<PAGE>
ELECTION OF DIRECTORS
At the Meeting, five Directors are to be elected (which number shall
constitute the entire Board of Directors of the Company) to hold office until
the next Annual Meeting of Stockholders and until their successors shall have
been elected and qualified.
It is the intention of the persons named in the enclosed form of proxy to
vote the stock represented thereby, unless otherwise specified in the proxy, for
the election as Directors of the persons whose names and biographies appear
below. All of the persons whose names and biographies appear below are at
present Directors of the Company. In the event any of the nominees should become
unavailable or unable to serve as a director, it is intended that votes will be
cast for a substitute nominee designated by the Board of Directors. The Board of
Directors has no reason to believe that the nominees named will be unable to
serve if elected. Each of the nominees has consented to being named in this
Proxy Statement and to serve if elected.
The current Board of Directors and nominees for election to the Board are
as follows:
Served as a
Name Age Director Since
- ---- --- --------------
Mark L. Weinstein........ 45 1998
Jeffrey H. Berg, Ph.D.... 55 1994
Marc Berger.............. 51 1998
David E. Nowicki,D.M.D... 46 1998
James A. Taylor, Ph.D..... 59 1994
The principal occupations and business experience, for at least the past
five years, of each director and nominee is as follows(1):
Mr. Weinstein has been a Director of the Company since March 1998 and
currently serves as the President and Chief Executive Officer of the Company
since February 1998. Mr. Weinstein joined the Company in June 1997 as Senior
Vice President, Sales and Marketing and was appointed Interim Chief Executive
Officer in December 1997. Prior to joining the Company, from September 1996 to
May 1997, he was the Chief Operating Officer of Internet Tradeline, Inc., an
internet-based electronic solutions provider. From July 1991 to August 1996, Mr.
Weinstein worked for Medical Economics Company, an international health care
information company and wholly-owned division of The Thomson Corporation. He
held several senior management positions at Medical Economics Company with his
last position being President and Chief Operating Officer of the International
Group.
Dr. Berg has been a Director of the Company since January 1994, has been a
senior research analyst for MH Meyerson, a brokerage firm, since September 1994
and has been President of Health Care Insights, a healthcare research and
consulting firm, since March 1991. While President of Health Care Insights, from
January 1994 to June 1995, Dr. Berg also served as a financial analyst for GKN
Securities Corp. ("GKN"), an investment banking firm which served as the
underwriter in the Company's June 1992 public offering, and was a financial
analyst from March 1992 until December 1992 for The Chicago Corporation, a
brokerage firm. Dr. Berg also is a member of the Board of Directors of Allou
Health and Beauty Care, LifeQuestMedical, IMX Corporation and Biologix
International and is a member of the Compensation Committees of Life Quest
Medical and Allou Health and Beauty Care.
Mr. Berger has been a Director of the Company since September 1998 and
currently serves as Senior Vice President, Managing Director, of Aegis Capital,
a brokerage firm, since April 1995 and has been the President of MKB Associates
Inc., a financial consulting firm, since 1995. From June 1990 to April 1995, Mr.
Berger was Vice President of Seco West Ltd., also a brokerage firm.
- 2 -
<PAGE>
Dr. Nowicki has been a Director of the Company since July 1998 and
currently is a self-employed periodontist. Dr. Nowicki has been a sole
practitioner and owner of a dental office consisting of five individuals since
September 1981.
Dr. Taylor has been a Director of the Company since October 1994, has been
a partner at Merchant-Taylor International, Inc., a bio-pharmaceutical
consulting firm, since May 1995 and has been President of Taylor Associates, a
regulatory and product development consulting firm since October 1992. From 1987
to 1992, Dr. Taylor was Vice President and Chief Regulatory Officer of ImmunoGen
Inc., a pharmaceutical company. From 1983 to 1987, he was Vice President,
Regulatory Affairs of Carter-Wallace, Inc. Prior to that, Dr. Taylor was
employed in various capacities by ICI Pharmaceuticals for four years and Pfizer
Central Research for 12 years.
- -----------
(1) Jeffrey S. Hurwitz, Esq. served as a Director of the Company since November
1994 and resigned from that position on November 2, 1998. Mr. Hurwitz
stated in his letter of resignation that he had no disagreements with the
Company. Mr. Hurwitz currently serves as Corporate Senior Vice President,
General Counsel and Secretary of Covance Inc. ("Covance"), formerly Corning
Pharmaceutical Services Inc., where he has served in similar roles since
October 1993. From August 1991 to October 1993, Mr. Hurwitz was Assistant
Counsel of Corning Life Sciences Inc. From August 1991 to May 1992, Mr.
Hurwitz also was an Assistant Counsel of Corning Inc.
None of the Company's Directors are related to any other Director or to
any executive officer of the Company. The Company has agreed to take all actions
necessary to nominate and cause the election to the Board of Directors of three
designees of Covance, a substantial stockholder of the Company. Such obligation
terminates at such time as Covance owns less than 200,000 shares of Common
Stock. Jeffrey S. Hurwitz, Esq., Covance's sole designee during 1998, resigned
from his position as a Director of the Company on November 2, 1998. Covance has
informed the Company that it does not intend to designate any Directors for the
1999 fiscal year. However, Covance has reserved all rights under its agreement
with the Company for subsequent years.
In February 1998, members of a dissident shareholders group (the
"Shareholders Group"), which included Mr. Berger in his capacity as an owner of
capital stock in the Company, commenced a proxy contest in connection with the
Company's 1998 Annual Meeting of Shareholders (the "Proxy Contest"). In
connection with the Proxy Contest, certain members of the Shareholders Group
commenced a lawsuit against the Company in United States District Court for the
District of New Jersey ("District Court"), and the Company also commenced an
action in District Court against the Shareholders Group. The parties reached a
settlement on July 21, 1998 (the "Settlement Agreement"), whereby, in addition
to mutual releases and discharges, the Company agreed to appoint Dr. Nowicki and
two nominees of the Shareholders Group to the Company's Board of Directors. Mr.
Berger represents one of the two nominees from the Shareholders Group. Pursuant
to the Settlement Agreement, however, upon the resignation of Mr. Hurwitz, the
Covance designee, the Shareholders Group no longer has the right to appoint a
second nominee to the Board of Directors so long as Covance does not nominate a
designee to the Board of Directors. If and at such time as Covance nominates a
designee to the Board of Directors, the Shareholders Group will then have the
right to appoint a second nominee to the Board of Directors. See "SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT" and "CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS."
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR EACH OF THE
NOMINEES FOR THE BOARD OF DIRECTORS.
- 3 -
<PAGE>
COMMITTEES AND MEETINGS OF THE BOARD
The Board of Directors has a Compensation/ISO Committee which makes
recommendations concerning salaries and incentive compensation for management
and employees of the Company and which administers the Plan. The
Compensation/ISO Committee currently consists of Drs. Berg and Taylor. The
Compensation/ISO Committee was established in January 1993 and held one meeting
in Fiscal 1998. The Board of Directors also has an Audit Committee, currently
comprised of Dr. Nowicki and Mr. Berger as of October 1998, which reviews the
results and scope of the audit and other services provided by the Company's
independent auditors. The Audit Committee was established in January 1998,
consisting of Drs. Berg and Taylor, and held one meeting in Fiscal 1998. There
were 22 meetings of the Board of Directors during Fiscal 1998. During Fiscal
1998, each incumbent Director attended all meetings of the Board of Directors
held during the period for which he had been a Director and all meetings of the
committee on which he or she served.
COMPENSATION OF DIRECTORS
In the past, non-employee members of the Board of Directors received cash
Compensation of $1,500 per day for each regularly scheduled Board meeting and
members of the Compensation/ISO Committee and Audit Committee received cash
compensation of $1,000 per day for each regularly scheduled Committee meeting.
In addition, all Directors were and currently are reimbursed for their expenses
for each Board meeting and each Compensation/ISO Committee and Audit Committee
meeting attended.
However, on July 21, 1998, the Board of Directors adopted a new
compensation policy for non-employee Directors whereby each non-employee
Director shall receive annual compensation for serving on the Board of $15,000,
up to $7,500 of which is to be paid in equal quarterly cash installments, and
the balance of which is to be paid in the form of stock options, with an
exercise price based on the fair market value of the Company's Common Stock as
of the first day of the service period, to be granted pursuant to the Company's
1991 Stock Option Plan, as amended (the "Plan"), and such options shall vest
ratably over the period of service. Moreover, such options are subject to a
pro-rata reduction if a Director attends, with respect to the applicable year,
less than seventy-five (75%) of all Board meetings and all meetings of any
Committee on which he or she serves.
Pursuant to such non-employee Director compensation policy, the following
Directors were granted options under the Plan during Fiscal 1998:
Number of Shares Exercise Price
Director Underlying Options Granted Grant Date Per Share
-------- -------------------------- ---------- --------------
Jeffrey H. Berg, Ph.D.... 21,786 7/21/98 $0.88
Marc Berger.............. 10,000 9/24/98 $0.75
David E. Nowicki,D.M.D... 8,571 7/22/98 $0.88
James A. Taylor, Ph.D.... 15,893 7/21/98 $0.88
- 4 -
<PAGE>
EXECUTIVE OFFICERS
The following table identifies the current executive officers of the
Company:
Capacities in In Current
Name Age Which Served Position Since
- ---- --- ------------ --------------
Mark L. Weinstein.......... 45 President and Chief February 1998
Executive Officer
Robert J. Phillips(1)...... 36 Vice President and March 1995
Chief Financial Officer
Andrew Reiter(2)........... 44 Vice President and April 1997
Managing Director of
Bio-Imaging
Technologies B.V.
- -----------
(1) Mr. Phillips, a certified public accountant, joined the Company in July
1992 and was appointed Controller in May 1993. In March 1995, he was
elected to his current position. Prior to joining the Company, he was a
Senior Accountant with BDO Seidman, an international accounting and
consulting firm.
(2) Mr. Reiter joined the Company in July 1992 as Director of Clinical
Applications Development responsible for the Company's software and systems
development and was appointed Vice President and Managing Director of
Bio-Imaging Technologies, B.V., the Company's European facility in April
1997. Prior to joining the Company, he spent 18 years with various
pharmaceutical and bio-technology companies in the clinical research and
information systems development areas.
None of the Company's executive officers is related to any other executive
officer or to any Director of the Company. Executive officers of the Company are
elected annually by the Board of Directors and serve until their successors are
duly elected and qualified.
- 5 -
<PAGE>
EXECUTIVE COMPENSATION
Summary of Compensation in Fiscal 1998
The following Summary Compensation Table sets forth information concerning
compensation for services in all capacities awarded to, earned by or paid to
each person who served as the Company's Chief Executive Officer at any time
during Fiscal 1998 and each other executive officer of the Company whose
aggregate cash compensation exceeded $100,000 (collectively, the "Named
Executives") during the three years ended September 30, 1998.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
- -----------------------------------------------------------------------------------------------------------
Long-Term
Compensation
Annual ------------
Compensation Awards
------------------------------------------------
Securities
Other Annual Underlying All Other
Name and Principal Position Salary Bonus Compensation Options Compensation
Year ($) ($) ($) (#) ($)
(a) (b) (c) (d) (e) (g) (i)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Mark L. Weinstein (1)................ 1998 177,523 -- -- 150,000 --
President and Chief Executive 1997 58,333 -- -- 100,000 --
Officer 1996 -- -- -- -- --
Robert J. Phillips................... 1998 128,591 -- -- 15,000 --
Vice President and Chief 1997 109,769 15,000 -- 15,000 --
Financial Officer 1996 104,539 -- -- 10,000 --
Andrew Reiter (2).................... 1998 115,000 -- 36,024 10,000 --
Vice President and Managing 1997 103,942 -- 24,016 10,000 --
Director of Bio-Imaging 1996 93,322 -- -- 10,000 --
Technologies B.V.
Donald W. Lohin (3).................. 1998 14,583 -- -- 0 --
Former Chairman of the Board, 1997 175,000 -- -- 30,000 --
President and Chief Executive 1996 117,115 -- -- 250,000 --
Officer
James J. Conklin, M.D. (4)........... 1998 23,077 -- -- 0 127,000
Former Chairman Emeritus and 1997 180,577 -- -- 20,000 --
Chief Scientific Officer 1996 150,000 -- -- 20,000 --
Anthony P. Nowicki (5)............... 1998 31,154 -- -- 0 33,750
Former Senior Vice President 1997 128,769 -- -- 100,000 --
and General Manager of the 1996 -- -- -- -- --
Marketing Information
Services Division
- -----------------------------------------------------------------------------------------------------------
<FN>
- -----------
(1) Mr. Weinstein was appointed by the Board of Directors as Interim Chief
Executive Officer on December 19, 1997 and later appointed by the Board of
Directors as the President and Chief Executive Officer of the Company on
February 20, 1998.
(2) Mr. Reiter is currently working in the Netherlands as an ex-patriot. As
such, his other compensation represents goods and services and housing
differentials paid for cost of living differences between the United States
and the Netherlands.
(3) Mr. Lohin resigned as an officer and Director of the Company on December
19, 1997.
- 6 -
<PAGE>
(4) Dr. Conklin resigned as an officer and Director of the Company on December
19, 1997. On July 22, 1998, the Company executed a separation agreement
with Dr. Conklin (the "Separation Agreement"), whereby, among other things,
the Company agreed to pay and has paid Dr. Conklin $127,000.
(5) Mr. Nowicki's employment was terminated by the Company on December 19, 1997
in connection with the termination of the Marketing Information Services
Division.
</FN>
</TABLE>
- 7 -
<PAGE>
Option Grants in Fiscal 1998
The following table sets forth information concerning individual grants of
stock options made pursuant to the Plan during Fiscal 1998 to each of the Named
Executives and its Chief Executive Officer. The Company has never granted any
stock appreciation rights.
OPTION GRANTS IN LAST FISCAL YEAR
- --------------------------------------------------------------------------------
Individual Grants
- --------------------------------------------------------------------------------
Number of Percent of
Securities Total Options
Underlying Granted to
Options Employees in Exercise or
Granted Fiscal Year Base Price Expiration
Name (#) (%) ($/Sh) Date
(a) (1) (b)(2) (c)(3) (d) (e)
- --------------------------------------------------------------------------------
Mark L. Weinstein(4)..... 150,000 47.3 0.63 4/15/08
Robert J. Phillips(5).... 15,000 4.7 0.63 1/9/08
Andrew Reiter(5)......... 10,000 3.2 0.63 1/9/08
- --------------------------------------------------------------------------------
- -----------
(1) Mr. Lohin, Dr. Conklin and Mr. Nowicki were not granted any options in
Fiscal 1998. SEE "-- Summary Compensation Table" and "SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT" for information relating to
certain employment matters and exercisability of options.
(2) The options were granted as incentive stock options and terminate on the
expiration date, subject to earlier termination on the optionee's death,
disability or termination of employment with the Company. Options are not
assignable or otherwise transferable except by will or the laws of descent
and distribution.
(3) Based on an aggregate of 317,250 options granted to employees in Fiscal
1998.
(4) Such options become exercisable to the extent of 50,000 options on the date
of grant and 25,000 options on each of the first, second, third and fourth
anniversary of the date of grant.
(5) Subject to certain criteria, such options become exercisable to the extent
of 25% on the date of grant and 25% on each of the first, second and third
anniversaries of the date of grant.
- 8 -
<PAGE>
Aggregated Option Exercises in Fiscal 1998 and Fiscal Year-End Option Values
The following table sets forth information concerning each exercise of
options during Fiscal 1998 by each of the Named Executives and its Chief
Executive Officer and the fiscal year-end value of unexercised in-the-money
options.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
- -------------------------------------------------------------------------------------------
Number of Value of
Securities Unexercised
Underlying In-the-Money
Unexercised Options at
Options at Fiscal
Shares Fiscal Year-End Year-End
Acquired on Value (#) ($) (1)
Exercise Realized Exercisable/ Exercisable/
Name (#) ($) Unexercisable Unexercisable
(a) (b) (c) (d) (e)
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Mark L. Weinstein......... -- -- 75,000/175,000 $0/$0
Robert J. Phillips........ -- -- 65,000/20,500 $0/$0
Andrew Reiter............. -- -- 49,833/13,667 $0/$0
Donald W. Lohin........... -- -- --/-- --/--
James J. Conklin, M.D..... -- -- 280,667/0(2) $0/$0
Anthony P. Nowicki........ -- -- --/-- --/--
- -------------------------------------------------------------------------------------------
<FN>
- -----------
(1) Based on a fiscal year end fair market value of the underlying securities
equal to $0.63.
(2) In connection with Dr. Conklin's Separation Agreement, such options lapsed
on December 18, 1998 without being exercised.
</FN>
</TABLE>
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT, AND CHANGE-IN-CONTROL
ARRANGEMENTS
On May 21, 1997, the Company executed an Overseas Assignment Policy with
Mr. Reiter regarding his temporary transfer to the Netherlands for a two year
period whereby the Company agreed to provide a cost of living adjustment and
severance pay for Company initiated termination equal to one month of Mr.
Reiter's current annual salary for each year of service with the Company, not to
exceed six months. In addition, the Company executed an employment agreement
with Mr. Weinstein on April 15, 1998 (the "Employment Agreement"), whereby the
Company has agreed to pay Mr. Weinstein an annual base salary of $180,000.
Pursuant to the terms of the Employment Agreement, Mr. Weinstein is also
eligible to receive, in addition to certain benefits and perquisites, bonuses
and incentive compensation, the amount of which are to be determined by the
Board of Directors in its sole discretion. Moreover, the Company executed a
separation agreement with Dr. Conklin on July 22, 1998 (the "Separation
Agreement"), which contains severance terms, whereby the parties exchanged
mutual releases and entered covenants not to sue. The Separation Agreement also
provides for, among other things, certain confidentiality, non-competition,
non-solicitation and non-disparagement provisions. Pursuant to the terms of the
Separation Agreement, the Company paid Dr. Conklin $127,000.
- 9 -
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
COMMON STOCK
There are, as of January 15, 1999, approximately [113] holders of record of
the Company's Common Stock. The following table sets forth certain information,
as of January 15, 1999, with respect to holdings of the Company's Common Stock
by (i) each person known by the Company to be the beneficial owner of more than
5% of the total number of shares of Common Stock outstanding as of such date,
(ii) each of the Company's Directors (which includes all nominees), Named
Executives and Chief Executive Officer, and (iii) all Directors and executive
officers as a group.
Amount and Nature of Percent
Name and Address of Beneficial Owner(1) Beneficial Ownership(1) of Class(2)
- --------------------------------------- ----------------------- -----------
(i) Certain Beneficial Owners:
Covance Inc............................ 2,355,000 27.8
(formerly Corning Pharmaceutical
Services Inc.)
210 Carnegie Center
Princeton, New Jersey 08540
Daniel Posilovich...................... 548,000 6.5
1729 S. Douglass #C
Anaheim, CA 92806
Fairview Cemetery of Westfield Corp.... 491,596 (3) 5.8
1100 E. Broad Street, Box 850
Westfield, New Jersey 07090
Investment Partners of America, L.P.... 483,334 (4) 5.7
732 West Eighth Street
Plainfield, New Jersey 07060
(ii) Directors (which includes all
nominees), Named Executives and
Chief Executive Officer:
Mark L. Weinstein...................... 173,500 (5) 2.1
Robert J. Phillips..................... 70,250 (6) *
Andrew Reiter.......................... 65,333 (7) *
Jeffrey H. Berg, Ph.D.................. 26,703 (8) *
Marc Berger............................ 83,267 (9) *
David E. Nowicki, D.M.D. .............. 35,000 (10) *
James A. Taylor, Ph.D.................. 20,893 (11) *
Donald W. Lohin........................ 0 (12) *
James J. Conklin, M.D.................. 334,996 4.0
Anthony P. Nowicki..................... 0 (13) *
(iii) All Directors and executive
officers as a group (7 persons).. 474,946 (5)(6)(7)(8) 5.6
(9)(10)(11)
- 10 -
<PAGE>
- -----------
* Less than 1%
(1) Except as otherwise indicated, all shares are beneficially owned and sole
investment and voting power is held by the persons named.
(2) Applicable percentage of ownership is based on [7,773,878] shares of
Common Stock outstanding, plus any Common Stock equivalents and options or
warrants held by such holder which are presently or will become
exercisable within 60 days after January 15, 1999, or an aggregate of
8,456,724 shares of Common Stock.
(3) Dr. Nowicki is the trustee for the Fairview Cemetery of Westfield Corp.
and disclaims beneficial ownership of all of such shares.
(4) Includes 416,667 shares issuable upon conversion of the Series A Stock and
an aggregate of 66,667 shares issuable upon the exercise of outstanding
Class C warrants. SEE "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
--Transactions with IPA."
(5) Includes 85,000 shares issuable pursuant to presently exercisable options
or options which will become exercisable within 60 days after January 15,
1999. Excludes 165,000 shares underlying options which become exercisable
over time after such period.
(6) Represents 70,250 shares issuable pursuant to presently exercisable stock
options and stock options which will become exercisable within 60 days
after January 15, 1999. Excludes 15,250 shares underlying options which
become exercisable over time after such period.
(7) Includes 53,333 shares issuable pursuant to presently exercisable options
or options which will become exercisable within 60 days after January 15,
1999. Excludes 10,167 shares underlying options which become exercisable
over time after such period.
(8) Represents 26,703 shares issuable pursuant to presently exercisable
options or options which will be exercisable within 60 days after January
15, 1999. Excludes 83 shares underlying options which become exercisable
over time after such period.
(9) Represents 38,500 shares owned indirectly by Mr. Berger in the MKB
Associates Inc. Profit Sharing Account and 40,000 shares owned indirectly
by Mr. Berger in the MKB Associates Inc. Pension Fund Account, of which
Mr. Berger is the beneficial owner, and 600 shares owned directly by Mr.
Berger in his Individual Retirement Account. Includes 5,000 shares
issuable pursuant to presently exercisable options or options which will
become exercisable within 60 days after January 15, 1999. Excludes 5,000
shares underlying options which become exercisable over time after such
period.
(10) Includes 5,000 shares issuable pursuant to presently exercisable options
or options which will become exercisable within 60 days after January 15,
1999. Excludes 3,571 shares underlying options which become exercisable
over time after such period.
(11) Represents 20,893 shares issuable pursuant to presently exercisable
options or options which will be exercisable within 60 days after January
15, 1999.
(12) In connection with Mr. Lohin's resignation on December 19, 1997, 97,000
shares underlying options lapsed on March 19, 1998 without being
exercised.
(13) In connection with Mr. Nowicki's termination on December 19, 1997, 28,333
shares underlying options lapsed on March 19, 1998 without being
exercised.
- 11 -
<PAGE>
SERIES A STOCK
There is, as of January 15, 1999, one holder of record of the Company's
Series A Stock. The following table sets forth certain information, as of
January 15, 1999, with respect to holdings of the Company's Series A Stock by
(i) each person known by the Company to be the beneficial owner of more than 5%
of the total number of shares of Series A Stock outstanding as of such date,
(ii) each of the Company's Directors (which includes all nominees), Named
Executives and Chief Executive Officer, and (iii) all Directors and executive
officers as a group.
Amount and Nature of Percent
Name and Address of Beneficial Owner(1) Beneficial Ownership(1) of Class
- --------------------------------------- ----------------------- --------
(i) Certain Beneficial Owners:
Investment Partners of America, L.P.......... 416,667 100%
732 West Eighth Street
Plainfield, New Jersey 07060
(ii) Directors (which includes all nominees),
Named Executives and Interim Chief
Executive Officer:
Mark L. Weinstein............................ -- --
Robert J. Phillips........................... -- --
Andrew Reiter................................ -- --
Jeffrey H. Berg, Ph.D........................ -- --
Marc Berger.................................. -- --
David E. Nowicki, D.M.D...................... -- --
James A. Taylor, Ph.D........................ -- --
Donald W. Lohin.............................. -- --
James J. Conklin, M.D........................ -- --
Anthony P. Nowicki........................... -- --
(iii)All Directors and executive officers as
a group (7 persons)..................... -- --
- ----------------
(1) Except as otherwise indicated, all shares are beneficially owned and the
sole investment and voting power is held by the persons named.
- 12 -
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
TRANSACTIONS WITH IPA
The Company has 416,667 shares of Series A Preferred Stock (The "Preferred
Stock") outstanding. The Preferred Stock provides for (i) voting rights on an
as-converted to Common Stock basis, with standard protective provisions; (ii) a
liquidation preference of $1.20 per share; (iii) anti-dilution protection and
price protection provisions; (iv) cumulative dividends of $0.096 per share per
annum, payable out of funds legally available for the payment of dividends and
only upon declaration of dividends by the Board of Directors of the Company; and
(v) registration rights with respect to the shares of Common Stock issuable upon
conversion of the Preferred Stock. Dividends are payable in cash or in the
Company's Common Stock at the Company's discretion.
The Company has neither paid nor declared dividends on its Common Stock
since its inception and does not plan to pay dividends on its Common Stock in
the foreseeable future. The Company expects that any earnings which the Company
may realize and which are not paid as dividends to holders of Preferred Stock
will be retained to finance the growth of the Company.
The Class C Warrants contain certain maintenance rights pursuant to which,
subject to certain conditions, whenever the Company proposes to issue new
securities, it must first offer to IPA the right to purchase, on the same terms
as are offered to the other purchasers of the new securities, such number of new
securities as are required to ensure that IPA's percentage ownership of the
Company shall be the same after the proposed sale as it was prior to such sale.
In addition, the Company granted registration rights, subject to certain
conditions, with respect to the Class C Warrants, and the shares of Common Stock
underlying such securities.
On September 22, 1997, IPA exercised its Class A Warrants and Class B
Warrants (collectively, the "Warrants") to purchase 833,334 shares of Common
Stock of the Company. The Class A and Class B Warrants were issued to IPA
pursuant to the Purchase Agreement dated December 8, 1995. IPA exercised all of
the Warrants held of record by IPA on behalf of itself and certain of its
designees. IPA did not exercise the Class C Warrants held of record by IPA to
purchase 66,667 shares of the Company's Common Stock. The Warrants were
exercised at an exercise price of $0.63 per share. The Company received
approximately $525,000 in net proceeds from the exercise of the Warrants by IPA.
The Company has not and will not receive any of the proceeds from any sales of
such shares of Common Stock by IPA or its designees.
TRANSACTIONS WITH COVANCE
On October 13, 1994, the Company and Covance entered into an agreement
whereby Covance purchased; (i) 2,355,000 shares of the Company's Common Stock,
$0.00025 par value, (ii) a warrant to purchase 250,000 shares of Common Stock
with an initial exercise price of $1.25 per share and (iii) a warrant to
purchase 250,000 shares of Common Stock with an initial exercise price of $1.50
per share (the "Warrants"), for an aggregate purchase price of $1,819,500. The
Warrants expired on October 13, 1998 without being exercised.
TRANSACTIONS WITH GKN SECURITIES CORP.
On June 18, 1997, GKN Securities Corp. exercised underwriter's purchase
options ("UPO's") to purchase 630,000 shares of Common Stock at an exercise
price of $1.00 per share, after giving effect to certain anti-dilution
provisions of the UPOs. The Company received aggregate gross proceeds of
$630,000 as a result of such exercise of the UPOs.
- 13 -
<PAGE>
APPROVAL OF AMENDMENT AUTHORIZING REVERSE STOCK SPLIT
GENERAL
On December 24, 1998, the Board of Directors, having found it to be in the
best interests of Stockholders, authorized a proposal to be submitted to
Stockholders to amend the Company's Certificate of Incorporation, as amended, to
effect a recapitalization of the Company (the "Reverse Stock Split") pursuant to
which up to four outstanding shares of Common Stock (sometimes referred to
herein as the "Old Common Stock") will be automatically converted into one new
share of common stock, $0.001 par value (the "New Common Stock").
Specifically, the Company's Stockholders are being asked to authorize the
Board of Directors to amend the Company's Certificate of Incorporation, as
amended, to effect, within 90 days following the 1999 Annual Meeting of
Stockholders, a reverse stock split of the Company's Common Stock whereby the
Company would issue one new share of Common Stock in exchange for up to four
outstanding shares of Common Stock.
The Board of Directors strongly recommends that the Stockholders vote in
favor of this proposal. As discussed more fully below, approval of this proposal
may be necessary to maintain listing of the Company's Common Stock on the Nasdaq
SmallCap Market.
The complete text of the form of amendment to the Certificate of
Incorporation that would be filed with the office of the Secretary of State of
the State of Delaware to effect the Reverse Stock Split is set forth in Appendix
--------
A to this Proxy Statement; provided, however, that such text is subject to
- -
amendment to include such changes as may be required by the office of the
Secretary of State of the State of Delaware and as the Company's Board of
Directors deems necessary and advisable to effect the Reverse Stock Split in the
range described above.
REASONS FOR THE REVERSE STOCK SPLIT
The Company's Common Stock has been listed on the Nasdaq Stock Market, Inc.
("Nasdaq"), and has traded on the Nasdaq SmallCap Market since June 18, 1992,
when the Company completed its initial public offering. Effective February 23,
1998, Nasdaq implemented new continued listing requirements for SmallCap Market
issuers. Among the requirements adopted by Nasdaq, SmallCap Market issuers must
now maintain a minimum bid price of $1.00 per share. On August 25, 1998, Nasdaq
notified the Company that the Company's Common Stock was not in compliance with
this minimum bid requirement, and that its Common Stock will be delisted from
the Nasdaq SmallCap Market, unless the Company's Common Stock maintains the
minimum bid requirement for a specified number of days. Nasdaq has provided the
Company until [ ], 1999 to correct such deficiency.
The Board of Directors believes that the Reverse Stock Split may have the
effect of increasing the market price per share of the Common Stock by
decreasing the number of shares of Common Stock outstanding without, presumably,
affecting the market value of the Company as a whole, thereby increasing the
market price per share. Such increased market price per share may allow the
Company's Common Stock to remain listed on the Nasdaq SmallCap Market.
Stockholders should note that the effect of the Reverse Stock Split upon the
market price for the Company's Common Stock cannot be accurately predicted. In
particular, there can be no assurance that the price per share of the Common
Stock after the Reverse Stock Split will be greater than the price for shares of
the Common Stock immediately prior to the Reverse Stock Split. Furthermore,
there can be no assurance that the Reverse Stock Split will not adversely impact
the market price of the Common Stock or, alternatively, that any increased price
per share of the Common Stock immediately after the proposed Reverse Stock Split
will be sustained for any prolonged period of time. In addition, the Reverse
Stock Split may have the effect of creating odd lots of stock for some
Stockholders and such odd lots may be more difficult to sell or have higher
brokerage commissions associated with the sale of such odd lots.
The Board of Directors has determined that continued listing of the Common
Stock on the Nasdaq SmallCap Market is in the best interests of the
Stockholders. For instance, if the Company were removed from listing on the
Nasdaq SmallCap Market, trading, if any, in the Company's Common Stock would
thereafter most likely be conducted in the over-the-counter market on an
electronic bulletin board established for securities that do
- 14 -
<PAGE>
not meet the Nasdaq listing requirements or in what are commonly referred to as
the "pink sheets." As a result, Stockholders and investors would find it more
difficult to dispose of, or to obtain accurate quotations as to the price of,
the Common Stock. In addition, if the Common Stock was removed from listing on
the Nasdaq SmallCap Market, it would be subject to so-called "penny-stock" rules
that impose additional sales practice requirements on broker-dealers who sell
such securities. Consequently, removal from the Nasdaq SmallCap Market, if it
were to occur, could affect the ability or willingness of broker-dealers to sell
the Common Stock and the ability of purchasers to sell the Common Stock in the
secondary market, resulting in less liquidity for Stockholders. Moreover, the
Board of Directors has determined that the Reverse Stock Split may improve the
marketability and liquidity of the Company's Common Stock which may improve the
Company's ability to raise new capital. Finally, the Board believes that
Stockholder approval of a flexible exchange ratio (as opposed to approval of a
specified exchange ratio) in which the Reverse Stock Split may be effected will
provide the Board with maximum flexibility to seek to achieve the purposes of
the Reverse Stock Split and, therefore, is in the best interest of the Company
and its Stockholders.
BOARD DISCRETION TO IMPLEMENT REVERSE SPLIT
If the Reverse Stock Split is approved by the Stockholders of the Company
at the Annual Meeting, the Reverse Stock Split will be effected, if at all, only
upon a determination by the Board, after consultation with its financial and
legal advisors, that the Reverse Stock Split (in an exchange ratio determined by
the Board upon advice of its financial advisors but only within the limits set
forth in this Proposal) is in the best interests of the Company and its
Stockholders at that time. Such determination will be based upon certain
factors, including, but not limited to, the then-current price of the Company's
Common Stock, the availability of additional working capital, existing and
expected marketability and liquidity of the Common Stock, prevailing market
conditions, the likely effect on the market price of the Common Stock, the
determination by Nasdaq that the Common Stock will be delisted regardless of the
implementation of the Reverse Stock Split and that the Reverse Stock Split is
not required for the continued listing of the Common Stock on the Nasdaq
SmallCap Market. Notwithstanding approval of the Reverse Stock Split by the
Stockholders, the Board may, in its sole discretion, determine not to effect the
Reverse Split. If the Board fails to implement the Reverse Stock Split within 90
days following the Annual Meeting, Stockholder approval would again be required
prior to implementing any reverse split.
CHARTER AMENDMENT
If the Stockholders vote in favor of this proposal, the Reverse Stock Split
will become effective upon the filing of a Certificate of Amendment to the
Certificate of Incorporation with the Delaware Secretary of State. The Board of
Directors intends to cause the Certificate of Amendment to be filed as soon as
practicable after the date of the Annual Meeting.
In connection with the Reverse Stock Split, the Certificate of Designation
of the Series A Stock shall be amended to provide for that immediately after the
Reverse Stock Split, each share of Series A Stock shall be entitled to the
number of votes equal to the number of full shares of Common Stock into which
such share of Series A Stock is convertible as of the record date for the
actions proposed to be taken (calculated by rounding any fractional share down
to the nearest whole number.) The approval of such amendment to the voting
rights of the Series A Stock is a condition to the effectiveness of the Reverse
Stock Split.
EXCHANGE OF CERTIFICATES
Upon the effectiveness of the Certificate of Amendment, the Reverse Stock
Split will occur without any further action on the part of Stockholders of the
Company and without regard to the date or dates on which stock certificates
representing the Old Common Stock are physically surrendered in exchange for
certificates representing the New Common Stock. As soon as practicable after the
effectiveness of the Reverse Stock Split, transmittal letters will be mailed to
each record holder of the Company's Common Stock on the date of such
effectiveness to be used by the Stockholders in forwarding their certificates of
Old Common Stock for surrender and exchange for certificates representing the
number of shares of New Common Stock such shareholders are entitled to receive
as a result of the Reverse Stock Split. After receipt of such transmittal
letter, each shareholder should complete the transmittal letter and, as
instructed in the transmittal letter, forward the stock certificates
representing the Old
- 15 -
<PAGE>
Common Stock to the transfer agent. Each shareholder will receive in exchange
for the certificates representing Old Common Stock that whole number of shares
of New Common Stock to which he or she is entitled and any cash which may be
payable in lieu of any fractional share. Such transmittal letters will be
accompanied by instructions specifying other details of the exchange.
Shareholders should not send in their certificates until they receive a
transmittal letter.
Holders of the Company's Series A Stock will not be required to exchange
their Series A Stock certificates as a result of the Reverse Stock Split.
Instead, the Certificate of Designation for the Series A Stock, which sets out
the rights and privileges of the Series A Stock, provides for a proportionate
adjustment to the Conversion Price (as defined in the Certificate of
Designation) as a result of the Reverse Stock Split. Accordingly, that number of
shares of Series A Stock which were convertible into four shares of Old Common
Stock will, upon approval of this proposal, be convertible into one share of New
Common Stock.
After the effectiveness of the Reverse Stock Split, each certificate
representing shares of Old Common Stock will, until surrendered and exchanged as
provided above, be deemed, for all corporate purposes, to evidence ownership of
that whole number of shares of New Common Stock into which such share of Old
Common Stock is exchangeable. In the case of fractional shares, the holder shall
receive the next higher number of whole shares.
With the exception of the number of issued and outstanding shares, the
rights and preferences of the shares of Common Stock prior and subsequent to the
Reverse Stock Split will remain the same. After the effectiveness of the Reverse
Stock Split, it is not anticipated that the financial condition of the Company,
the percentage ownership of management, the number of the Company's
shareholders, or any aspect of the Company's business would materially change as
a result of the Reverse Stock Split.
The Company is presently authorized to issue a maximum of 18,000,000 shares
of Common Stock and 3,000,000 shares of Preferred Stock. As of January 15, 1999,
[7,773,878] shares of Common Stock and 416,667 shares of Series A Stock were
issued. As a result of the Reverse Stock Split, the authorized number of shares
will be adjusted to 4,500,000 shares (or such higher number of shares as
determined by the Board of Directors in proportion to the extent of the Reverse
Stock Split). The Company has reserved approximately 993,417 shares of Common
Stock for the exercise of outstanding options and warrants. The exercise price
and the number of shares the Company has reserved for issuance upon exercise of
these options and warrants will be adjusted proportionately upon the
effectiveness of the Reverse Stock Split. Holders of the Company's stock options
and warrants, upon approval of this proposal, will receive a notice from the
Company indicating the adjustments to the number of shares covered by their
stock options and warrants as well as the adjusted exercise price of such stock
options and warrants.
The conversion and reconstitution of the Old Common Stock into the New
Common Stock should have no material federal tax consequences to most
stockholders. Stockholders should consult their own tax advisors as to the
federal, state, local and foreign tax effects of the Reverse Stock Split in
light of their individual circumstances.
In order for the Stockholders of the Company to authorize the Reverse Stock
Split by adoption of the aforementioned amendment, a majority of the shares of
outstanding Common Stock and Series A Stock entitled to vote, voting together as
a single class, and a majority of the shares of outstanding Series A Stock
entitled to vote, as a separate class, in each case, present in person or by
proxy at the Meeting, must vote in favor of this proposal.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR THE APPROVAL TO
PROVIDE THE BOARD OF DIRECTORS THE AUTHORITY TO AMEND THE COMPANY'S CERTIFICATE
OF INCORPORATION AUTHORIZING A REVERSE STOCK SPLIT OF THE COMPANY'S COMMON
STOCK.
- 16 -
<PAGE>
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors of the Company has, subject to stockholder approval,
retained Arthur Andersen LLP as independent auditors of the Company for the
fiscal year ending September 30, 1999. Neither of the firms nor any of their
members has any direct or indirect financial interest in or any connection with
the Company in any capacity other than as auditors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
APPOINTMENT OF ARTHUR ANDERSEN LLP AS THE INDEPENDENT AUDITORS OF THE COMPANY
FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 1999.
One or more representatives of Arthur Andersen LLP is expected to attend
the Meeting and have an opportunity to make a statement and/or respond to
appropriate questions from stockholders.
On January 12, 1998, the Company selected Arthur Andersen LLP to act as
independent accountants for the Company and informed the prior auditors,
Goldstein Golub Kessler LLP, formerly, Goldstein, Golub, Kessler & Company,
P.C., of its decision. In connection with its audits for each of the two years
in the period ended September 30, 1997 and thereafter, there were no
disagreements with the prior auditors on any matters of accounting principles or
practices, financial statement disclosure, or auditing scope or procedures. The
prior auditors' report on the Company's financial statements for each of the two
years in the period ended September 30, 1997 contained no adverse opinion or
disclaimer of opinion and was not modified or qualified as to uncertainty, audit
scope, or accounting principles. The decision to change accountants was approved
by the Board of Directors of the Company. The prior auditors have furnished the
Company with a letter addressed to the SEC stating their agreement with the
above statements. Such letter appeared as Exhibit 16 to the Company's Current
Report on Form 8-K filed with the SEC on January 15, 1998. Prior to retaining
Arthur Andersen LLP, the Company had not consulted with Arthur Andersen LLP
regarding accounting principles or the type of opinion that would be rendered on
the Company's financial statements.
STOCKHOLDERS' PROPOSALS
Stockholders who wish to submit proposals for inclusion in the Company's
proxy statement and form of proxy relating to the 2000 Annual Meeting of
Stockholders must advise the Secretary of the Company of such proposals in
writing by September 30, 1999.
OTHER MATTERS
The Board of Directors is not aware of any matter to be presented for
action at the Meeting other than the matters referred to above and does not
intend to bring any other matters before the Meeting. However, if other matters
should come before the Meeting, it is intended that holders of the proxies will
vote thereon in their discretion.
GENERAL
The accompanying proxy is solicited by and on behalf of the Board of
Directors of the Company, whose notice of meeting is attached to this Proxy
Statement, and the entire cost of such solicitation will be borne by the
Company.
In addition to the use of the mails, proxies may be solicited by personal
interview, telephone and telegram by directors, officers and other employees of
the Company who will not be specially compensated for these services. The
Company will also request that brokers, nominees, custodians and other
fiduciaries forward soliciting materials to the beneficial owners of shares held
of record by such brokers, nominees, custodians and other fiduciaries. The
Company will reimburse such persons for their reasonable expenses in connection
therewith.
Certain information contained in this Proxy Statement relating to the
occupations and security holdings of directors and officers of the Company is
based upon information received from the individual directors and officers.
- 17 -
<PAGE>
BIO-IMAGING TECHNOLOGIES, INC. WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS
REPORT ON FORM 10-KSB FOR THE YEAR ENDED SEPTEMBER 30, 1998, INCLUDING FINANCIAL
STATEMENTS AND SCHEDULES THERETO BUT NOT INCLUDING EXHIBITS, TO EACH OF ITS
STOCKHOLDERS OF RECORD ON January 15, 1999 AND TO EACH BENEFICIAL STOCKHOLDER ON
THAT DATE UPON WRITTEN REQUEST MADE TO THE SECRETARY OF THE COMPANY. A
REASONABLE FEE WILL BE CHARGED FOR COPIES OF REQUESTED EXHIBITS.
PLEASE DATE, SIGN AND RETURN THE PROXY CARD AT YOUR EARLIEST CONVENIENCE IN
THE ENCLOSED RETURN ENVELOPE. A PROMPT RETURN OF YOUR PROXY CARD WILL BE
APPRECIATED AS IT WILL SAVE THE EXPENSE OF FURTHER MAILINGS.
By Order of the Board of Directors
Robert J. Phillips,
Assistant Secretary
West Trenton, New Jersey
January 28, 1999
- 18 -
<PAGE>
APPENDIX A
----------
CERTIFICATE OF AMENDMENT
TO THE
RESTATED CERTIFICATE OF INCORPORATION
OF
BIO-IMAGING TECHNOLOGIES, INC.
Pursuant to Section 242 of the Delaware General Corporation Law, the
undersigned corporation executes this Certificate of Amendment to its Restated
Certificate of Incorporation, as amended.
1. Article FOURTH of the Corporation's Restated Certificate of
Incorporation, as amended, is amended to provide in its entirety:
"FOURTH: The Corporation shall be authorized to issue the following
shares:
Class Number of Shares Par Value
----- ---------------- ---------
Common 4,500,000 $0.001
Preferred 3,000,000 $0.00025
Each four shares of Common Stock, $0.00025 par value, of the
Corporation, issued and outstanding or held in the treasury of the
Corporation is hereby reclassified and changed into one fully paid and
nonassessable share of Common Stock of the Corporation, $0.001 par
value, and each holder of record of a certificate of four or more
shares of Common Stock of the Corporation as of the close of business
on the date this amendment becomes effective shall be entitled to
receive, as soon as practicable, and upon surrender of such
certificate, a certificate or certificates representing one share of
Common Stock for each four shares of Common Stock represented by the
certificate of such holder with the next higher number of whole shares
being issued in lieu of fractional shares."
<PAGE>
2. Section II(4) of the Certificate of Designation of the Series A
Preferred Stock filed with the Secretary of State of the State of Delaware on
December 20, 1995 be amended to provide in its entirety as follows:
"4. Voting Rights.
Except as otherwise expressly provided herein or required by law,
the holder of each share of Series A Preferred Stock shall be entitled
to the number of votes equal to the number of full shares of Common
Stock into which such share of Series A Stock is convertible as of the
record date for the actions proposed to be taken (calculated by
rounding any fractional share down to the nearest whole number), and
with respect to such vote, such holder shall have full voting rights
and powers equal to the voting rights and powers of the holders of
Common Stock. The holders of the Series A Preferred Stock shall be
entitled, notwithstanding any provision hereof, to notice of any
stockholder's meeting in accordance with the By-laws of the
Corporation, and to vote on any matter submitted to the stockholders
for a vote. Except as expressly set forth herein or otherwise required
by law, the holders of Series A Preferred Stock and Common Stock shall
vote together as a single class."
3. The foregoing amendments have been duly adopted in accordance with the
provisions of Section 242 of the Delaware General Corporation Law.
*******
<PAGE>
IN WITNESS WHEREOF, this Certificate of Amendment is made this
--------
day of , 1999.
--------------
BIO-IMAGING TECHNOLOGIES, INC.
By:
-------------------------------
Mark L. Weinstein, President and
Chief Executive Officer
ATTEST:
By:
---------------------------------------
Robert J. Phillips, Assistant Secretary
<PAGE>
BIO-IMAGING TECHNOLOGIES, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF THE CORPORATION FOR THE ANNUAL MEETING OF STOCKHOLDERS
The undersigned hereby constitutes and appoints Mark L. Weinstein and
Robert J. Phillips, and each of them, his or her true and lawful agent and proxy
with full power of substitution in each, to represent and to vote on behalf of
the undersigned all of the shares of Bio-Imaging Technologies, Inc. (the
"Company") which the undersigned is entitled to vote at the Annual Meeting of
Stockholders of the Company to be held at the Sheraton Bucks County Hotel, 400
Oxford Valley Road, Langhorne, Pennsylvania at 9:00 A.M., local time, on Friday,
February 26, 1999, and at any adjournment or adjournments thereof, upon the
following proposals more fully described in the Notice of Annual Meeting of
Stockholders and Proxy Statement for the Meeting (receipt of which is hereby
acknowledged).
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR PROPOSALS 1, 2, 3 AND 4.
1. ELECTION OF DIRECTORS.
Nominees: Jeffrey H. Berg, Ph.D., Marc Berger,
David E. Nowicki, D.M.D., James A. Taylor, Ph.D.
Mark L. Weinstein.
(Mark one only)
VOTE FOR all the nominees listed above; except vote withheld from the following
nominees (if any). | |
- ------------------------------------------------------------------
VOTE WITHHELD from all nominees. | |
2. APPROVAL OF A PROPOSAL TO PROVIDE THE BOARD OF DIRECTORS THE AUTHORITY TO
AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION, AS AMENDED, TO EFFECT, WITHIN
90 DAYS FOLLOWING THE 1999 ANNUAL MEETING OF STOCKHOLDERS, A REVERSE STOCK
SPLIT, WHEREBY THE COMPANY WOULD ISSUE ONE NEW SHARE OF COMMON STOCK IN EXCHANGE
FOR UP TO FOUR OUTSTANDING SHARES OF COMMON STOCK.
FOR | | AGAINST | | ABSTAIN | |
(continued and to be signed on reverse side)
<PAGE>
3. APPROVAL OF PROPOSAL TO RATIFY THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS
THE INDEPENDENT AUDITORS OF THE COMPANY FOR THE FISCAL YEAR ENDING SEPTEMBER 30,
1999.
FOR | | AGAINST | | ABSTAIN | |
4. In his discretion, the proxy is authorized to vote upon other matters as
may properly come before the Meeting.
Dated:
--------------------------------- This proxy must be signed
exactly as the name appears
---------------------------------------- hereon. When shares are held
Signature of Stockholder by joint tenants, both should
sign. If the signer is a
---------------------------------------- corporation, please sign full
Signature of Stockholder if held jointly corporate name by duly
authorized officer, giving full
title as such. If a
partnership, please sign in
partnership name by authorized
I will | | will not | | attend the Meeting. person.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY, USING THE ENCLOSED
ENVELOPE.
