<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material under Section 240.14a-12
PMR CORPORATION
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box)
[X] No fee required.
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] 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:
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2. Aggregate number of securities to which transaction applies:
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3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing
fee is calculated and state how it was determined):
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4. Proposed maximum aggregate value of transaction:
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5. Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1. Amount Previously Paid:
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4. Date Filed:
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<PAGE> 2
PMR CORPORATION
501 WASHINGTON STREET, 5TH FLOOR
SAN DIEGO, CALIFORNIA 92103
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 19, 2000
TO THE STOCKHOLDERS OF PMR CORPORATION:
NOTICE IS HEREBY GIVEN that the 2000 Annual Meeting of Stockholders of
PMR Corporation, a Delaware corporation ("PMR"), will be held on Thursday,
October 19, 2000 at 10:00 o'clock a.m., local time, at PMR's offices at 501
Washington Street, 5th Floor, San Diego, California (the "Annual Meeting") for
the following purposes:
1. To elect two directors to hold office until the 2003 Annual
Meeting of Stockholders;
2. To ratify the appointment of Ernst & Young LLP as independent
auditors of PMR for the fiscal year ending April 30, 2001; and
3. To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
The Board of Directors has fixed the close of business on August 21,
2000, as the record date for the determination of stockholders entitled to
notice of, and to vote at, the Annual Meeting or any adjournment or postponement
thereof.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ MARK P. CLEIN
--------------------------------------
Mark P. Clein
Chief Executive Officer
San Diego, California
August 24, 2000
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN PERSON.
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, DATE,
SIGN AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN ORDER TO ENSURE
YOUR REPRESENTATION AT THE ANNUAL MEETING. A RETURN ENVELOPE (WHICH IS POSTAGE
PREPAID IF MAILED IN THE UNITED STATES) IS ENCLOSED FOR THAT PURPOSE. PLEASE
NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY A BROKER, BANK OR OTHER
NOMINEE AND YOU WISH TO VOTE AT THE ANNUAL MEETING, YOU MUST OBTAIN FROM THE
RECORD HOLDER A PROXY ISSUED IN YOUR NAME.
<PAGE> 3
PMR CORPORATION
501 WASHINGTON STREET, 5TH FLOOR
SAN DIEGO, CALIFORNIA 92103
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 19, 2000
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed proxy is solicited on behalf of the Board of Directors of
PMR Corporation, a Delaware corporation ("PMR" or the "Company"), for use at the
Annual Meeting of Stockholders to be held on October 19, 2000, at 10:00 a.m.,
local time (the "Annual Meeting"), or at any adjournment or postponement
thereof, for the purposes set forth herein and in the accompanying Notice of
Annual Meeting. The Annual Meeting will be held at the Company's offices at 501
Washington Street, 5th Floor, San Diego, California 92103. The Company intends
to mail this proxy statement and accompanying proxy card on or about October 2,
2000, to all stockholders entitled to vote at the Annual Meeting.
SOLICITATION
The Company will bear the entire cost of solicitation of proxies,
including preparation, assembly, printing and mailing of this proxy statement,
the proxy and any additional information furnished to stockholders. Copies of
solicitation materials will be furnished to banks, brokerage houses, fiduciaries
and custodians holding in their names shares of Common Stock beneficially owned
by others to forward to such beneficial owners. The Company may reimburse
persons representing beneficial owners of Common Stock for their costs of
forwarding solicitation materials to such beneficial owners. Original
solicitation of proxies by mail may be supplemented by personal solicitation,
telephone, telegram or other means of electronic communication by directors,
officers or other regular employees of the Company. No additional compensation
will be paid to directors, officers or other regular employees for such
services.
VOTING RIGHTS AND OUTSTANDING SHARES
Only holders of record of Common Stock at the close of business on
August 21, 2000 will be entitled to notice of and to vote at the Annual Meeting.
At the close of business August 21, 2000, the Company had outstanding and
entitled to vote 7,048,017 shares of Common Stock. Each holder of record of
Common Stock on such date will be entitled to one vote for each share held on
all matters to be voted upon at the Annual Meeting.
All votes will be tabulated by the inspector of election appointed for
the meeting, who will separately tabulate affirmative and negative votes,
abstentions and broker non-votes. Abstentions will be counted towards the
tabulation of votes cast on proposals presented to the stockholders and will
have the same effect as negative votes. Broker non-votes are counted towards a
quorum, but are not counted for any purpose in determining whether a matter has
been approved.
REVOCABILITY OF PROXIES
Any person giving a proxy pursuant to this solicitation has the power to
revoke it at any time before it is voted. It may be revoked by filing with the
Secretary of the Company at the Company's principal executive office at 501
Washington Street, 5th Floor, San Diego, California, a written notice of
revocation or a duly executed proxy bearing a later date, or it may be revoked
by attending the meeting and voting in person. Attendance at the meeting will
not, by itself, revoke a proxy.
<PAGE> 4
STOCKHOLDER PROPOSALS
The deadline for submitting a shareholder proposal for inclusion in the
Company's proxy statement and form of proxy for the Company's 2001 Annual
Meeting of Stockholders pursuant to Rule 14a-8 of the Securities and Exchange
Commission is April 26, 2001. Unless a stockholder who wishes to bring a matter
before the stockholders at the Company's 2001 Annual Meeting of Stockholders
notifies the Company of such matter prior to August 18, 2001, management of the
Company will have discretionary authority to vote all shares for which it has
proxies in opposition to such matter.
PROPOSAL 1
ELECTION OF DIRECTORS
PMR's Amended and Restated Certificate of Incorporation and PMR's
Amended and Restated Bylaws provide that the Board of Directors shall be divided
into three classes, each class consisting, as nearly as possible, of one-third
of the total number of directors, with each class having a three-year term.
Vacancies on the Board may be filled only by persons elected by a majority of
the remaining directors. A director elected by the Board to fill a vacancy
(including a vacancy created by an increase in the Board) shall serve for the
remainder of the full term of the class of directors in which the vacancy
occurred and until such director's successor is elected and qualified.
The Board is presently composed of seven members. There are two
directors in the class whose term of office expires in 2000. The nominees for
election to this class include Mr. Eugene D. Hill, III, currently a director of
PMR who was previously elected by the stockholders, and Mr. Satish K. Tyagi. If
elected at the Annual Meeting, each of the nominees would serve until the 2003
Annual Meeting of Stockholders and until his successor is elected and has
qualified, or until such director's earlier death, resignation or removal.
Directors are elected by a plurality of the votes present in person or
represented by proxy and entitled to vote at the meeting. Shares represented by
executed proxies will be voted, if authority to do so is not withheld, for the
election of the two nominees named below. In the event that any nominee should
be unavailable for election as a result of an unexpected occurrence, such shares
will be voted for the election of such substitute nominee as management may
propose. Each person nominated for election has agreed to serve if elected, and
management has no reason to believe that any nominee will be unable to serve.
Set forth below is biographical information for each person nominated
and each person whose term of office as a director will continue after the
Annual Meeting.
NOMINEES FOR ELECTION FOR A THREE-YEAR TERM EXPIRING AT THE 2003 ANNUAL MEETING
OF STOCKHOLDERS
EUGENE D. HILL, III
Mr. Hill, 48, has served as a director of PMR since 1995. Mr. Hill is a
Partner with Schroder Ventures Life Sciences, a venture capital firm, since
April 1999. Previously, Mr. Hill was with Accel Partners, a venture capital
firm, since 1994 and a General Partner of the firm since 1995, where he focused
on healthcare service investments. Prior to that time, he was President of
Behavioral Health at United HealthCare Corporation from 1992 to 1994. From 1988
to 1992, he served as President and CEO of U.S. Behavioral Health, a managed
behavioral healthcare company he built from a start-up to a national enterprise.
Previously Mr. Hill was the President and Chairman of Sierra Health and Life
Insurance Company. Prior to Sierra, he served as the Administrator of the
Southern Nevada Memorial Hospital and the Boston City Hospital. He has been a
managed healthcare consultant and venture capital advisor, and serves on the
Boards of Directors of Paidos Health Management, ForHealth, US Pathology Labs,
Cogent Healthcare, Navix Radiology Systems, Phase Forward, Easy Chem and Cadent.
He is a graduate of Middlebury College, received his M.B.A. in health care
administration from Boston University and has completed Harvard University's
Executive Program in Health Systems Management.
2.
<PAGE> 5
SATISH K. TYAGI
Mr. Tyagi, 44, is currently a Principal at Delta Capital & Resources, a
financial advisory and strategic consulting firm, since May 2000. From July 1997
to April 2000, Mr. Tyagi was a Managing Director, Institutional Research, at SG
Cowen Securities Corp. covering the HCIT/E-Health and Pharmacy Benefits
Management industry segments. Previously, Mr. Tyagi was Managing Director,
Equity Research, with Jefferies & Company, Inc. from July 1995 to June 1997. Mr.
Tyagi serves on the Board of Directors of Penchart Corporation. Mr. Tyagi holds
a Masters of Business Administration degree in Finance from the Stern School,
New York University and a Bachelors degree in Economics from the University of
Delhi, New Delhi.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
IN FAVOR OF EACH NAMED NOMINEE
DIRECTORS CONTINUING IN OFFICE UNTIL THE 2001 ANNUAL MEETING OF STOCKHOLDERS
SUSAN D. ERSKINE
Ms. Erskine, 47, was a co-founder of PMR in May 1988 and has been
Executive Vice President, Secretary and a director of PMR since October 31,
1989. Ms. Erskine previously served in several operational and marketing
management positions with acute care hospitals and health care management
organizations. She holds a Master's degree in Health Science and completed post
graduate work at Stanford University in Education and Psychology. She has
extensive experience in program development, marketing and management of
psychiatric programs, both inpatient and outpatient.
RICHARD A. NIGLIO
Mr. Niglio, 57, has been a director of PMR since 1992. In June 2000, Mr.
Niglio was appointed as President, Chief Executive Officer and a Director of
Chumbo Holdings, Inc. From June 1998 until August 1999, he was Chairman and
Chief Executive Officer of Equities Enterprises, Inc. From 1987 until May 1998,
he was Chairman and Chief Executive Officer of Children's Discovery Centers of
America, Inc. From 1982 until March 1987, he was President, Chief Executive
Officer and a director of Victoria Station Incorporated. Prior to that time he
held various executive positions with several major publicly held companies such
as International Multifoods and Kentucky Fried Chicken Corporation. Mr. Niglio
currently serves on the Boards of Directors of ShipExact.com, Inc., a private
company providing fulfillment and other outsourcing services to the the
e-commerce industry, and VCExperts.com, Inc., a venture capital infoportal and
services company.
3.
<PAGE> 6
DIRECTORS CONTINUING IN OFFICE UNTIL THE 2002 ANNUAL MEETING OF STOCKHOLDERS
ALLEN TEPPER
Mr. Tepper, 52, was a co-founder of PMR in May 1988 and has served as
Chairman of the Board of PMR since October 31, 1989. Mr. Tepper previously
served as Chief Executive Officer of PMR from October 1989 to May 1999, and as
President from October 1989 to April 1997. Mr. Tepper was a co-founder of
Consolidated Medical Corp. in 1979, which was engaged in outpatient clinic
management for acute care hospitals in the Philadelphia area. The company was
sold to the Berwind Corporation in 1984 and Mr. Tepper remained with the company
until December 1986 as Senior Vice President. Mr. Tepper serves as Chairman of
the Board of Paidos Health Management Services, Inc., a privately-held neo-natal
managed care company. Mr. Tepper holds a Masters of Business Administration
degree from Northwestern University and a Bachelors degree from Temple
University.
CHARLES C. MCGETTIGAN
Mr. McGettigan, 55, has been a director of PMR since 1992. Mr.
McGettigan was a co-founder in November 1988 and remains a Managing Director of
McGettigan, Wick & Co., Inc., an investment banking firm. He is a general
partner of Proactive Investment Managers, L.P., a limited partnership which,
through its holdings, is a principal stockholder of PMR. See "Security Ownership
of Certain Beneficial Owners and Management." Mr. McGettigan has previously
served as an investment banker with Blyth Eastman Dillon & Co. (1970-1980);
Dillon, Read & Co., Inc. (1980-1982); Woodman, Kirkpatrick & Gilbreath
(1983-1984); and Hambrecht & Quist (1984-1988). Mr. McGettigan serves on the
Boards of Directors of Cuisine Solutions, Inc., Modtech, Inc., Onsite Energy,
Sonex Research, Tanknology -- NDE, and Wray-Tech Instruments.
MARK P. CLEIN
Mark P. Clein, 41, has been a director of PMR since 1999. Mr. Clein has
served as Chief Executive Officer of PMR since May 14, 1999, and previously
served as Executive Vice President and Chief Financial Officer of PMR from May
1996 to May 1999. Prior to joining PMR, Mr. Clein was a Managing Director of
Health Care Investment Banking for Jefferies & Co., an investment banking firm,
from August 1995 to May 1996. Previously, Mr. Clein was a Managing Director of
the investment banking firms of Rodman & Renshaw, Inc.(March 1995 to August
1995) and Mabon Securities Corp.(March 1993 to March 1995) and served as a Vice
President with Sprout Group, an affiliate of Donaldson, Lufkin and Jenrette,
Inc. (May 1991 to March 1993), and a Vice President and partner with Merrill
Lynch Venture Capital, Inc. (1982 to February 1990 and August 1990 to February
1991). Mr. Clein holds a Masters of Business Administration degree from Columbia
University and a Bachelors degree from the University of North Carolina.
BOARD COMMITTEES AND MEETINGS
During the fiscal year ended April 30, 2000 the Board of Directors held
five (5) meetings. The Board has an Audit Committee, Compensation Committee, and
a Privacy and Compliance Committee.
The Audit Committee has primary responsibility to review accounting
procedures and methods employed in connection with audit programs and related
management policies. Its duties include (1) selecting the independent auditors
for PMR, (2) reviewing the scope of the audit to be conducted by the independent
auditors, (3) meeting with the independent auditors concerning the results of
their audit, and (4) overseeing the scope and accuracy of PMR's system of
internal accounting controls. The Audit Committee is the principal liaison
between the Board of Directors and the independent auditors for PMR. The members
of the Audit Committee during fiscal year 2000 were Messrs. Hill and McGettigan
(Chairman). The Audit Committee conducted two (2) meetings during fiscal year
2000.
The Compensation Committee is responsible for continually reviewing
PMR's compensation and benefit programs and making recommendations regarding
these programs to the Board from time to time. The Committee
4.
<PAGE> 7
consists of Messrs. Niglio (Chairman) and Hill. The Compensation Committee
conducted one (1) meeting during fiscal year 2000.
The Privacy and Compliance Committee has primary responsibility for
corporate compliance oversight of PMR and issues related to the Company's health
information business. The Committee consists of Messrs. Hill (Chairman),
McGettigan, Niglio, Fred D. Furman, President, and Ms. Vivianne Bonora,
Assistant General Counsel and Corporate Compliance Officer. The Privacy and
Compliance Committee conducted four (4) meetings during fiscal year 2000.
During the fiscal year ended April 30, 2000, each of the directors
attended at least 75% of the aggregate of (i) the total number of meetings of
the Board and (ii) the total number of meetings held by each of the committees
on which he or she served.
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed Ernst & Young LLP as PMR's
independent auditors for the fiscal year ending April 30, 2001 and has further
directed that management submit the appointment of independent auditors for
ratification by the stockholders at the Annual Meeting. Representatives of Ernst
& Young LLP are expected to be present at the Annual Meeting, will have an
opportunity to make a statement if they so desire and will be available to
respond to appropriate questions.
Stockholder ratification of the appointment of Ernst & Young LLP as
PMR's independent auditors is not required by PMR's Amended and Restated Bylaws
or otherwise. However, the Board is submitting the appointment of Ernst & Young
LLP to the PMR stockholders for ratification as a matter of good corporate
practice. If PMR's stockholders fail to ratify the appointment, the Board's
Audit Committee and the Board will reconsider whether or not to retain that
firm. Even if the appointment is ratified, the Audit Committee and the Board in
their discretion may direct the appointment of different independent auditors at
any time during the year if they determine that such a change would be in the
best interest of PMR and its stockholders.
The affirmative vote of the holders of a majority of the shares present
in person or represented by proxy and entitled to vote at the Annual Meeting
will be required to ratify the appointment of Ernst & Young LLP.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF PROPOSAL 2
5.
<PAGE> 8
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
ownership of PMR's Common Stock as of August 14, 2000, by: (i) each director and
nominee for director; (ii) each of the executive officers named in the Summary
Compensation Table; (iii) all executive officers and directors of PMR as a
group; and (iv) all those known by PMR to be beneficial owners of more than five
percent of PMR's Common Stock. This table is based upon information supplied by
officers, directors and principal stockholders and Schedules 13D and 13G (if
any) filed with the Securities and Exchange Commission (the "SEC"). Unless
otherwise indicated in the footnotes to this table and subject to community
property laws where applicable, PMR believes that each of the stockholders named
in this table has sole voting and investment power with respect to the shares
indicated as beneficially owned. Except as otherwise indicated, the address of
each holder identified below is in care of PMR, 501 Washington Street, 5th
Floor, San Diego, California 92103.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP(1)
------------------------
NUMBER OF PERCENT OF
BENEFICIAL OWNER SHARES TOTAL
--------------------------------------------------------------- --------- ----------
<S> <C> <C>
Persons and entities affiliated with Proactive Investment
Managers, L.P.(2)(3)(4) ....................................... 1,474,993 20.8
50 Osgood Place, Penthouse
San Francisco, CA 94133
Jon D. Gruber(2)(3) ........................................... 1,297,743 18.4
50 Osgood Place, Penthouse
San Francisco, CA 94133
J. Patterson McBaine(2)(4) .................................... 1,286,243 18.2
50 Osgood Place, Penthouse
San Francisco, CA 94133
Robert Fleming, Inc.(5) ....................................... 656,310 9.3
320 Park Avenue - 11th Floor
New York, NY 10022
Myron A. Wick III(2) .......................................... 571,946 8.1
50 Osgood Place, Penthouse
San Francisco, CA 94133
Dimensional Fund Advisors Inc.(6) ............................. 438,300 6.2
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
Paul H. O'Leary(7) ............................................ 373,500 5.3
One Penn Plaza, Suite 4720
New York, NY 10119
Allen Tepper(8) ............................................... 974,952 13.6
Charles C. McGettigan(2) ...................................... 630,121 8.9
50 Osgood Place, Penthouse
San Francisco, CA 94133
Mark P. Clein ................................................. 544,630 7.5
Fred D. Furman ................................................ 344,348 4.9
Susan D. Erskine(9) ........................................... 181,919 2.6
Richard A. Niglio ............................................. 87,088 1.2
Daniel L. Frank ............................................... 48,500 *
Eugene D. Hill, III ........................................... 64,500 *
Satish Tyagi .................................................. 0 *
All executive officers and directors as a group ............... 2,876,058 37.7
</TABLE>
----------
* Less than one percent.
(1) Applicable percentages of ownership are based on 7,048,017 shares of PMR
Common Stock outstanding on August 14, 2000, adjusted as required by
rules promulgated by the SEC. Under the rules, shares are
6.
<PAGE> 9
deemed to be "beneficially owned" by a person if he or she directly or
indirectly has or shares the power to vote or dispose of such shares,
whether or not he or she has any pecuniary interest in such shares, or
if he or she has the right to acquire the power to vote or dispose of
such shares within 60 days, including any right to acquire such power
through the exercise of any option, warrant or right. The shares
beneficially owned by Ms. Erskine and Messrs. Tepper, McGettigan, Clein,
Furman, Niglio and Hill include 54,450, 94,710, 45,000, 246,630, 43,586,
45,000 and 45,000 shares, respectively, that may be acquired by such
persons within 60 days through the exercise of stock options. The shares
owned by the executive officers and directors as a group include 574,376
shares that may be acquired by such persons within 60 days through the
exercise of stock options.
(2) Charles C. McGettigan, a director of PMR since 1992, Jon D. Gruber, J.
Patterson McBaine, and Myron A. Wick III are general partners of
Proactive Investment Managers, L.P. Proactive Investment Managers, L.P.
is the general partner of Proactive Partners, L.P. and Fremont Proactive
Partners, L.P. Shares beneficially owned include (i) 506,830 shares held
by Proactive Partners, L.P., (ii) 42,041 shares held by Fremont
Proactive Partners, L.P., (iii) with respect to Mr. McGettigan, 81,250
shares held by Mr. McGettigan, (iv) with respect to Messrs. Gruber and
McBaine, 664,447 shares held by entities controlled by Messrs. Gruber
and McBaine (which include (A) 424,747 shares held by Lagunitas Partners
L.P., a limited partnership of which an entity controlled by Messrs.
Gruber and McBaine is the controlling general partner and (B) 239,700
shares held by entities controlled by Messrs. Gruber and McBaine and in
various accounts managed by an investment advisor controlled by Messrs.
Gruber and McBaine), (v) with respect to Mr. Gruber, 84,425 shares held
by Mr. Gruber, (vi) with respect to Mr. McBaine, 72,925 shares held by
Mr. McBaine and (vii) with respect to Mr. Wick, 23,075 shares held by
Mr. Wick. Proactive Investment Managers, L.P. and its general partners,
Messrs. McGettigan, Gruber, McBaine and Wick, share voting and
investment power of the shares and may be deemed to be beneficial owners
of the shares held by Proactive Partners, L.P. and Fremont Proactive
Partners, L.P. Messrs. McGettigan, Gruber, McBaine and Wick disclaim
beneficial ownership of any shares held by Proactive Investment
Managers, L.P., Proactive Partners, L.P., Fremont Proactive Partners,
L.P. or other entities they control or for which they exercise voting
and investment power as described above, except to the extent of their
respective interests in such shares arising from their pecuniary
interest in such partnerships.
(3) Includes 64,625 shares over which Mr. Gruber shares ownership with his
wife, 6,200 shares over which Mr. Gruber has sole voting and investment
power as a trustee for a foundation, 4,000 shares over which Mr. Gruber
has sole voting and investment power as a trustee of accounts for the
benefit of his children and 2,000 shares held by Mr. Gruber's wife.
(4) Includes 5,500 shares over which Mr. McBaine has shared ownership with
his wife, 4,000 shares over which Mr. McBaine and his wife share voting
and investment power as trustees for a foundation, 2,000 shares held by
Mr. McBaine's child who lives with Mr. McBaine and 4,000 shares held by
Mr. McBaine's child, over which shares Mr. McBaine has voting and
investment power.
(5) Based solely on the Schedule 13G/A filed with the SEC on February 9,
2000, Robert Fleming, Inc. is the beneficial owner of 656,310 shares as
a result of acting as an investment advisor. Robert Fleming, Inc. has
shared dispositive power over, and shared power to vote or to direct
voting of, such shares.
(6) Based solely on the Schedule 13G filed with the SEC on February 3, 2000,
Dimensional Fund Advisors Inc. is the beneficial owner of 438,300 shares
as a result of acting as an investment advisor to certain investment
companies, commingled group trusts and separate accounts (together, the
"Funds"). Dimensional Fund Advisors Inc. possesses voting and/or
investment power over the shares, all of which are owned by the Funds.
Dimensional Fund Advisors Inc. disclaims beneficial ownership of such
shares.
(7) Based solely on the Schedule 13D filed with the SEC on March 2, 2000 by
Paul H. O'Leary, Raffles Associates, L.P. directly owns 351,900 shares
and Channel Partnership II, L.P. directly owns 21,600 shares. Mr.
O'Leary is a general partner of both Raffles Associates, L.P. and
Channel Partnership II, L.P. and may be deemed to have beneficial
ownership and control of the shares held by such entities. Mr. O'Leary
disclaims beneficial ownership of a portion of the shares held by
Raffles Associates, L.P. and Channel Partnership II, L.P.
7.
<PAGE> 10
(8) Includes 9,076 shares held by Mr. Tepper, 856,166 shares held by Mr.
Tepper as Trustee FBO Tepper Family Trust and 15,000 shares held by Mr.
Tepper and Ms. Tepper as Trustees FBO The Tepper 1996 Charitable
Remainder Trust UA DTD 11/19/96.
(9) Includes 120,469 shares held by the Erskine Family Trust and 7,000
shares held by Ms. Erskine's spouse, William N. Erskine, who has sole
voting and dispositive power over such shares and as to which Ms.
Erskine disclaims beneficial ownership.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires PMR's directors and executive
officers, and persons who beneficially own more than ten percent of a registered
class of PMR equity securities, to file with the SEC initial reports of
ownership and reports of changes in ownership of PMR Common Stock and other
equity securities of PMR. PMR officers, directors and greater than ten percent
beneficial owners are required by SEC regulation to furnish PMR with copies of
all Section 16(a) reports they file.
To PMR's knowledge, based solely on a review of the copies of such
reports furnished to PMR and written representations that no other reports were
required the following persons failed to file, on a timely basis, reports
required by Section 16(a) of the Exchange Act: (i) Mr. McGettigan, a director of
the Company, failed to file a required Form concerning the sale of 20,250 shares
of Common Stock in April 2000; (ii) Mr. Wick, who may be deemed a beneficial
owner of more than ten percent of the Company's Common Stock based on his
relationship as a general partner of Proactive Investment Managers, L.P. (see
"Security Ownership of Certain Beneficial Owners and Management"), failed to
file a required Form concerning the purchase of 20,250 shares of Common Stock in
April 2000; (iii) Mr. Hill, a director of the Company, failed to make a timely
filing on Form 5 for the fiscal year ended April 30, 1999 concerning the
repricing of certain stock options which had an exercise price above $8.00 per
share and were exchanged for stock options covering an equivalent number of
shares; (iv) Mr. McBaine, who may be deemed a beneficial owner of more than ten
percent of the Company's Common Stock based on his relationship as a general
partner of Proactive Investment Managers, L.P. (see "Security Ownership of
Certain Beneficial Owners and Management"), failed to file the required Forms
concerning (A) the purchase of 3,000 shares of Common Stock in May 1999, (B) the
purchase of 100 shares of Common Stock in June 1999, and (C) purchases of 1,500
shares of Common Stock and 500 shares of Common Stock in July 1999; (v) Mr.
Gruber, who may be deemed a beneficial owner of more than ten percent of the
Company's Common Stock based on his relationship as a general partner of
Proactive Investment Managers, L.P. (see "Security Ownership of Certain
Beneficial Owners and Management"), failed to file a required Form concerning
the purchase of 1,500 shares of Common Stock in July 1999; (vi) entities
controlled by Messrs. Gruber and McBaine and in various accounts managed by an
investment advisor controlled by Messrs. Gruber and McBaine failed to file the
required Forms concerning (X) the purchase of 400 shares of Common Stock in June
1999, (Y) purchases of 1,500 shares of Common Stock, 5,500 shares of Common
Stock and 4,500 shares of Common Stock in July 1999, and (Z) the sale of 1,500
shares of Common Stock in January 2000; and (vii) Lagunitas Partners L.P., a
limited partnership of which an entity controlled by Messrs. Gruber and McBaine
is the controlling general partner, failed to file a required Form concerning
the purchase of 1,500 shares of Common Stock in January 2000.
EXECUTIVE COMPENSATION
COMPENSATION OF DIRECTORS
The employee-directors of PMR receive no fees or other compensation in
connection with their services as directors. PMR has adopted an informal policy
to pay a fee of $500 to each non-employee director who attends a regularly
scheduled or special meeting of the Board and to pay expenses for attendance at
any such meeting. For the fiscal year ended April 2000, Messrs. Hill,
McGettigan, and Niglio each received such payments in an aggregate amount of
$2,500, and Mr. Frank received payment in an amount of $500, and PMR paid their
expenses in connection with attendance at meetings.
8.
<PAGE> 11
OUTSIDE DIRECTORS' NON-QUALIFIED STOCK OPTION PLAN OF 1992
Each non-employee director of PMR receives stock option grants under the
Outside Directors' Non-Qualified Stock Option Plan of 1992 (the "Outside
Directors' Plan"). Only non-employee directors of PMR are eligible to receive
options under the Outside Directors' Plan. Options granted under the Outside
Directors' Plan are intended by PMR not to qualify as incentive stock options
under the Internal Revenue Code of 1986, as amended (the "Code").
Option grants under the Outside Directors' Plan are non-discretionary.
As of the date of the regular meeting of the Board of Directors closest to
August 3rd of each year, each member of PMR's Board who is not an employee of
PMR is automatically granted under the Outside Directors' Plan, without further
action by PMR, the Board or the stockholders of PMR, an option to purchase
15,000 shares of Common Stock of PMR. The Board may also grant options at any
other time under the Outside Directors' Plan. The exercise price of options
granted under the Outside Directors' Plan must be at least 100% of the fair
market value of the PMR Common Stock subject to the option on the date of the
option grant. Options granted under the Outside Directors' Plan are immediately
exercisable as to 30% of the option shares and the remaining 70% of the option
shares become exercisable in equal installments on each of the first, second and
third anniversary of the option grant date in accordance with the terms of the
Outside Directors' Plan. In the event of certain mergers of PMR with or into
another corporation or certain other consolidation, acquisition of assets or
other change-in-control transactions involving PMR, the vesting period of each
option will accelerate.
On August 23, 2000, the Board granted options covering 15,000 shares of
Common Stock of PMR to each of Messrs. McGettigan, Niglio, Frank and Hill, at
the exercise price per share of $2.4375 (the fair market value based on the
closing sales price reported on the Nasdaq National Market on that date).
1997 EQUITY INCENTIVE PLAN
Option grants under the 1997 Equity Incentive Plan (the "Incentive
Plan") are discretionary by the Board of Directors. The exercise price of
options granted under the Incentive Plan must be at least 100% of the fair
market value of the Common Stock subject to the option on the grant date for
incentive stock options and at least 85% of the fair market value of the Common
Stock subject to the option on the grant date for nonstatutory stock options and
restricted stock purchases. Options granted under the Incentive Plan are
exercisable as determined by the Board. Options granted to an employee who is a
director of the Company become immediately exercisable upon certain change in
control transactions. Options granted to an employee who is not a director
become immediately exercisable following certain change in control transactions
if, within one year of the change in control of the Company, (i) the optionee's
employment is terminated other than for cause or (ii) the optionee's employment
is constructively terminated.
During the last fiscal year, the Company granted stock options to Named
Executive Officers (as defined below) and employee-directors of the Company. See
" -- Stock Option Grants and Exercises" and "Certain Relationships and Related
Transactions -- Grant of Options to Certain Directors and Executive Officers"
for a description of the terms of such stock options.
COMPENSATION PURSUANT TO PLANS
The Company maintains a tax-deferred retirement plan under Section
401(k) of the Code for the benefit of all employees meeting minimum eligibility
requirements (the "401(k) Plan"). Under the 401(k) Plan, each employee may defer
up to fifteen percent (15%) of pre-tax earnings, subject to certain limitations.
The Company will match fifty percent (50%) of an employee's deferral to a
maximum of three percent (3%) of an employee's gross salary. PMR's matching
contribution vests over a five (5) year period. For the years ended April 30,
2000, 1999 and 1998, the Company contributed $236,000, $272,000 and $265,000,
respectively, to match employee deferrals. Of these amounts, $23,987, $10,068
and $20,482, respectively, were contributed to match deferrals of the Named
Executive Officers (as defined below) of PMR.
9.
<PAGE> 12
SUMMARY OF COMPENSATION
The following table shows for the fiscal years ended April 30, 2000,
1999 and 1998, compensation awarded or paid to, or earned by, PMR's Chief
Executive Officer and its other four most highly compensated executive officers
at April 30, 2000 (the "Named Executive Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
------------------------ -------------
SECURITIES ALL OTHER
UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY ($)(1) BONUS($) OPTIONS(#) ($)(2)
--------------------------- ---- ------------- -------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Allen Tepper 2000 175,000 0 -- 4,800
Chairman of the Board 1999 175,000 0 -- 2,047
1998 175,000 0 0 4,750
Mark P. Clein 2000 200,000 200,000 425,000 5,113
Chief Executive Officer 1999 150,000 0 100,000 2,062
1998 150,000 0 0 6,423
Fred D. Furman 2000 192,000 192,000 200,000 4,914
President and General Counsel 1999 160,500 0 100,000 2,809
1998 160,500 0 0 4,559
Susan D. Erskine 2000 180,000 0 40,000 5,263
Executive Vice President - 1999 150,000 0 100,000 3,150
Development and Secretary 1998 130,000 0 0 4,750
Daniel L. Frank(3) 2000 149,894 0 -- 183,897
Executive Vice President 1999 150,000 0 250,000 --
1998 150,000 0 0 --
</TABLE>
(1) In accordance with the rules of the SEC, the compensation described in
this table does not include perquisites and other personal benefits
received by the Named Executive Officers which do not exceed the lesser
of $50,000 or 10% of any such officer's salary and bonus shown in the
table.
(2) With respect to the Named Executive Officers other than Mr. Frank,
represents matching contributions by PMR under the 401(k) Plan. With
respect to Mr. Frank, represents matching contributions by PMR under the
401(k) Plan and other compensation (see, footnote (3) below).
(3) As of January 31, 2000, Mr. Frank is no longer an executive officer or
employee of the Company. Pursuant to Mr. Frank's employment agreement
with the Company, Mr. Frank received a lump-sum payment equal to one (1)
year of his base salary, $180,000, at the time of termination.
10.
<PAGE> 13
STOCK OPTION GRANTS AND EXERCISES
The Company grants options to its executive officers under the Incentive
Plan. As of August 14, 2000, options to purchase 1,859,296 shares were
outstanding under the Incentive Plan and 749,624 shares remained available for
grant under the Incentive Plan.
The following tables show for the fiscal year ended April 30, 2000,
certain information regarding options granted to, exercised by, and held at year
end by, the Named Executive Officers.
OPTION GRANTS IN THE LAST FISCAL YEAR
INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
% of
Total POTENTIAL REALIZABLE
Options VALUE OF ASSUMED
Granted ANNUAL RATES OF STOCK
Number of to PRICE APPRECIATION IN
Securities Employees OPTION TERM
Underlying in Fiscal Exercise Expiration ----------------------
Name Options (#) Year Price($/SH) Date 5% ($) 10% ($)
---- ----------- ---------- ----------- ----------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Mr. Tepper -- -- -- -- -- --
Mr. Clein 111,498 10.86 3.1875 8/24/09 223,509 566,416
38,502 3.75 3.1875 8/24/09 77,181 195,592
275,000 26.78 1.70 11/23/09 428,392 959,058
Mr. Furman 200,00 19.47 1.70 11/23/09 311,558 697,497
Ms. Erskine 40,000 3.89 2.00 11/23/09 50,312 127,499
Mr. Frank -- -- -- -- -- --
</TABLE>
11.
<PAGE> 14
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR,
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
SHARES VALUE UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
ACQUIRED ON REALIZED AT FISCAL YEAR-END (#) AT FISCAL YEAR-END ($)(2)
NAME EXERCISE(#) ($)(1) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
----------- ----------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Mr. Tepper 0 0 94,710/0 0/0
Ms. Erskine 73,116 131,527 54,450/100,000 0/0
Mr. Furman 300,762 409,813 43,020/118,740 0/35
Mr. Clein 275,000 546,563 216,630/261,090 0/112,500
Mr. Frank 36,000 60,750 76,000/3,500 0/0
</TABLE>
(1) Based on the fair market value per share of PMR Common Stock (the
closing sales price reported by the Nasdaq National Market) at the date
of exercise, less the exercise price.
(2) Based on the fair market value per share of PMR Common Stock ($4.50) at
April 30, 2000, less the exercise price, multiplied by the number of
shares underlying the option.
EMPLOYMENT CONTRACTS
The Company and each of Messrs. Clein and Furman and Ms. Erskine entered
into agreements dated August 25, 1999 (the "Employment Agreements"), providing
for, among other things, the employment of such Named Executive Officer until
August 30, 2000. On August 30, 2000 and each year thereafter, the term of the
Employment Agreements will automatically be extended by one year unless notice
has been otherwise provided. The Employment Agreements provide for an annual
salary, subject to such increases as the Board of Directors of the Company may
from time to time determine, and permit the Board of Directors, in its sole
discretion, to provide a bonus to such Named Executive Officers. The Employment
Agreements provide that during the term of such Named Executive Officer's
employment thereunder and for a period of one year immediately following
termination of such employment, such Named Executive Officer will not solicit or
attempt to solicit any employee, consultant or independent contractor of the
Company to terminate his or her relationship with the Company. The Employment
Agreements provide that if such Named Executive Officer's employment is
terminated (i) by the Company without Cause (as defined in the Employment
Agreement), (ii) by such Named Executive Officer for Good Reason (as defined in
the Employment Agreement) or (iii) by the Company's notification of non-renewal
prior to the date of automatic renewal, such Named Executive Officer is entitled
to additional compensation upon termination in the form of a lump sum payment
and, if eligible, periodic payments for a specified period of time or until such
Named Executive Officer begins employment with another company or business.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD
ON EXECUTIVE COMPENSATION(1)
The Compensation Committee of the Board of Directors (the "Committee")
is responsible for developing and making recommendations to the Board with
respect to PMR's executive compensation policies. The Committee consists of
outside directors Messrs. Niglio and Hill.
EXECUTIVE OFFICER COMPENSATION PROGRAM
PMR's executive compensation program is based on the following four
objectives: (i) to link the interests of management with those of stockholders
by encouraging stock ownership in PMR; (ii) to attract and retain superior
----------
(1) The material in this report is not "soliciting material," is not deemed
"filed" with the SEC, and is not to be incorporated by reference into any filing
of PMR under the Securities Act or the Exchange Act, whether made before or
after the date hereof and irrespective of any general incorporation language
contained in such filing.
12.
<PAGE> 15
executives by providing them with the opportunity to earn total compensation
packages that are competitive with the industry; (iii) to reward individual
results by recognizing performance through salary, annual cash incentives and
long-term stock based incentives; and (iv) to manage compensation based on the
level of skill, knowledge, effort and responsibility needed to perform the job
successfully.
The components of PMR's compensation program for its executive officers
include (i) base salary, (ii) performance-based cash bonuses, (iii) incentive
compensation in the form of stock options, and (iv) participation in PMR's
401(k) Plan. An explanation of the 401(k) Plan appears at "Executive
Compensation -- Compensation Pursuant to Plans."
BASE SALARY. Base salary levels for the PMR's executive officers are
determined, in part, through comparisons with companies in the outpatient
service industry, other companies with which PMR competes for personnel, and
general geographic market conditions. Additionally, the Committee evaluates
individual experience and performance and the overall performance of PMR. The
Committee reviews each executive's salary on an annual basis and may increase
each executive's salary based on (i) the individual's increased contribution to
PMR over the preceding year; (ii) the individual's increased responsibilities
over the preceding year; and (iii) any increase in median competitive pay
levels.
ANNUAL CASH BONUSES. The Committee recommends the payment of bonuses
from time-to-time to PMR's employees, including its executive officers, to
provide an incentive to these persons to be productive over the course of each
fiscal year. These bonuses are awarded only if PMR achieves or exceeds certain
corporate performance objectives relating to net income and/or cash flow.
Accrued monthly, depending on the earnings of PMR, is a cash bonus pool to be
paid out after fiscal year end. The size of the cash bonus to each executive
officer is based on the individual executive's performance during the preceding
year.
STOCK OPTIONS. PMR believes that a key component to the compensation of
its executive officers should be through stock options. Stock options utilized
by PMR for this purpose have been designed to provide an incentive to these
employees by allowing them to directly participate in any increase in the
long-term value of PMR. This incentive is intended to reward, motivate and
retain the services of executive employees. PMR has historically rewarded its
executive employees through the grant of Incentive Stock Options and
Nonstatutory Stock Options.
Incentive Stock Options are allocated to both executive and
non-executive employees on an annual basis by either the Committee or the Board.
PMR's 1997 Equity Incentive Plan (the "Incentive Plan") provides for the grant
of up to an aggregate 3,000,000 Options, of which 2,235,156 had been granted as
of April 30, 2000. Incentive Stock Options are granted with exercise prices
equal to the prevailing market value of PMR's common stock on the date of grant,
have 10-year terms and are subject to vesting periods established from time to
time by the Committee. Incentive Stock Options granted to holders of 10% or more
of PMR's stock are granted with exercise prices equal to 110% of the prevailing
market value of PMR's common stock on the date of grant and have terms of 5
years.
PMR has also granted Nonstatutory Stock Options on occasion, generally,
in circumstances where the grant of the option may not satisfy certain of the
technical criteria for an Incentive Stock Option. Through April 30, 2000, PMR
had granted 475,000 Nonstatutory Stock Options to executive personnel under the
Incentive Plan. See "Executive Compensation -- 1997 Equity Incentive Plan."
The Committee employs no particular set of mechanical criteria in
awarding stock options. Rather, it evaluates a series of factors including: (i)
the overall performance of PMR for the fiscal year in question; (ii) the
performance of the individual in question; (iii) the anticipated contribution by
the individual to PMR on an overall basis; (iv) the historical level of
compensation of the individual; (v) the level of compensation of similarly
situated executives in PMR's industry; and (vi) that level of combination of
cash compensation and stock options that would be required from a competitive
point of view to retain the services of a valued executive officer.
13.
<PAGE> 16
CEO COMPENSATION
Mr. Clein's base salary has been and will continue to be adjusted from
time-to-time in accordance with the criteria for the determination of executive
officer compensation as described above in the section captioned "Base Salary."
In setting the compensation for Mr. Clein for fiscal year 2000, PMR sought to
retain a key executive officer while continuing to tie a significant percentage
of his compensation to company performance.
By the Compensation Committee
Richard A. Niglio
Eugene D. Hill, III
14.
<PAGE> 17
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
PMR's Compensation Committee consists of Messrs. Niglio and Hill, each
of whom is a non-employee director. There were no compensation committee
interlock relationships during the fiscal year ended April 30, 2000. All
directors of PMR, including Messrs. Niglio and Hill, have options to purchase
shares of PMR's Common Stock. See "Executive Compensation -- Outside Directors'
Non-Qualified Stock Option Plan of 1992" and "Executive Compensation -- 1997
Equity Incentive Plan."
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
GRANT OF OPTIONS TO CERTAIN DIRECTORS AND EXECUTIVE OFFICERS
Directors and members of management of PMR have been granted options to
purchase PMR Common Stock. See "Executive Compensation -- Outside Directors'
Non-Qualified Stock Option Plan of 1992," "Executive Compensation -- 1997 Equity
Incentive Plan" and "Executive Compensation -- Stock Option Grants and
Exercises." On August 25, 1999, the Board granted Mr. Clein a stock option to
purchase 150,000 shares of common stock at an exercise price of $3.1875 per
share (the closing price of PMR's common stock on the date of the grant) in
connection with his employment as Chief Executive Officer. The shares under the
option become exercisable upon the earlier of the achievement of certain
performance-based vesting criteria or seven years. On November 24, 1999, the
Board granted Messrs. Clein and Furman non-statutory stock options to purchase
275,000 and 200,000 shares, respectively, of PMR Common Stock under the
Incentive Plan, at an exercise price per share of $1.70. In addition, on
November 24, 1999, the Board granted Ms. Erskine an incentive stock option to
purchase 40,000 shares of PMR Common Stock at an exercise price of $2.00 per
share (the closing price of PMR's common stock on the date of grant) under the
Incentive Plan.
INDEBTEDNESS OF CERTAIN EXECUTIVE OFFICERS
In January 2000, the Company loaned Messrs. Clein and Furman $467,500
and$684,750, respectively, pursuant to promissory notes for the purchase of
stock from the exercise of stock options (the "Stock Notes"). The Stock Notes,
due December 31, 2004, bear interest at the rate of 6.21% per annum and are with
recourse in addition to being secured by stock under respective pledge
agreements. The Company also received promissory notes from Messrs. Clein and
Furman for up to $257,208 and $193,311, respectively, for tax liabilities
related to the purchase of such stock (the "Tax Notes"). The Tax Notes, due
December 31, 2004, bear interest at the rate of 6.21% and are secured by
respective stock pledges, but are otherwise without recourse. As of August 14,
2000, Messrs. Clein and Furman owed $55,000 and $237,000, respectively, under
the Stock Notes and $198,159 and $148,442, respectively, under the Tax Notes.
15.
<PAGE> 18
PERFORMANCE MEASUREMENT COMPARISON(1)
The following graph and table show the total stockholder return of an
investment of $100 in cash on April 30, 1995 for PMR's Common Stock, the Nasdaq
Stock Market (U.S.) Index and the Nasdaq Health Services Index. All values
assume reinvestment of the full amount of all dividends and are calculated as of
April 30, of each year:
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
Fiscal Year 4/95 4/96 4/97 4/98 4/99 4/2000
----------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
PMR Corporation $100.00 $256.00 $521.00 $393.00 $113.00 $131.00
Nasdaq Stock Market (U.S.) $100.00 $143.00 $151.00 $226.00 $309.00 $471.00
Nasdaq Health Services $100.00 $156.00 $121.00 $153.00 $112.00 $ 94.00
</TABLE>
----------
(1) This Section is not "soliciting material," is not deemed "filed" with
the SEC and is not to be incorporated by reference in any filing of PMR
under the Securities Act or the Exchange Act whether made before or
after the date hereof and irrespective of any general incorporation
language in any such filing.
16.
<PAGE> 19
OTHER MATTERS
The Board of Directors knows of no other matters that will be presented
for consideration at the Annual Meeting. If any other matters are properly
brought before the meeting, it is the intention of the persons named in the
accompanying proxy to vote on such matters in accordance with their best
judgment.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ MARK P. CLEIN
----------------------------------------
Mark P. Clein
Chief Executive Officer
August 24, 2000
A COPY OF THE COMPANY'S ANNUAL REPORT TO THE SECURITIES AND EXCHANGE COMMISSION
ON FORM 10-K FOR THE FISCAL YEAR ENDED APRIL 30, 2000, IS AVAILABLE WITHOUT
CHARGE UPON WRITTEN REQUEST TO: CHIEF EXECUTIVE OFFICER, PMR CORPORATION, 501
WASHINGTON STREET, 5TH FLOOR, SAN DIEGO, CALIFORNIA 92103.
17.
<PAGE> 20
PMR CORPORATION
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS -- TO BE HELD ON OCTOBER 19, 2000
The undersigned hereby appoints Mark P. Clein and Susan Erskine, and each of
them, as attorneys and proxies of the undersigned, with full power of
substitution, to vote all of the shares of stock of PMR Corporation which the
undersigned may be entitled to vote at the Annual Meeting of Stockholders of PMR
Corporation to be held at PMR's offices at 501 Washington Street, 5th Floor, San
Diego, California, on Thursday, October 19, 2000 at 10:00 o'clock a.m., local
time, and at any and all postponements, continuations and adjournments thereof,
with all powers that the undersigned would possess if personally present, upon
and in respect of the following matters and in accordance with the following
instructions, with discretionary authority as to any and all other matters that
may properly come before the meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. UNLESS A CONTRARY DIRECTION IS INDICATED,
THIS PROXY WILL BE VOTED, FOR ALL NOMINEES LISTED IN PROPOSAL 1, AND FOR
PROPOSAL 2, AS MORE SPECIFICALLY DESCRIBED IN THE PROXY STATEMENT. IF SPECIFIC
INSTRUCTIONS ARE INDICATED, THIS PROXY WILL BE VOTED IN ACCORDANCE THEREWITH.
MANAGEMENT RECOMMENDS A VOTE FOR THE NOMINEES FOR DIRECTOR LISTED BELOW.
PROPOSAL 1: To elect two directors to hold office until the 2003 Annual
Meeting of Stockholders.
<TABLE>
<S> <C>
[ ] FOR all nominees listed below (except as marked to [ ] WITHHOLD AUTHORITY to vote for all nominees listed
the contrary below) below.
</TABLE>
NOMINEES: Eugene D. Hill, III and Satish K. Tyagi.
TO WITHHOLD AUTHORITY TO VOTE FOR ABOVE-NAMED NOMINEE(S) WRITE NOMINEE(S)'
NAME(S) BELOW:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE> 21
MANAGEMENT RECOMMENDS A VOTE FOR PROPOSAL 2.
PROPOSAL 2: To ratify selection of Ernst & Young LLP as independent auditors
of PMR for its fiscal year ending April 30, 2001.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Dated
--------------------------------
--------------------------------
--------------------------------
Signatures
Please sign exactly as your name
appears hereon. If the stock is
registered in the names of two
or more persons, each should
sign. Executors, administrators,
trustees, guardians and
attorneys-in-fact should add
their titles. If signer is a
corporation, please give full
corporate name and have a duly
authorized officer sign, stating
title. If signer is a
partnership, please sign in
partnership name by authorized
person.
PLEASE VOTE, DATE AND PROMPTLY RETURN THIS PROXY IN THE ENCLOSED RETURN ENVELOPE
WHICH IS POSTAGE PREPAID IF MAILED IN THE UNITED STATES.
