<PAGE> 1
================================================================================
SCHEDULE 14A
(RULE 14a)
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:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
COLLABORATIVE CLINICAL RESEARCH, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
JEFFREY A. GREEN, PHARM.D. FCP
PRESIDENT AND CHIEF EXECUTIVE OFFICER
(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> 2
LOGO
Collaborative
Clinical Research, Inc.
April 24, 1998
Dear Shareholder:
You are cordially invited to attend the 1998 Annual Meeting of Shareholders
of Collaborative Clinical Research, Inc. to be held on May 28, 1998 at 10:00
a.m. at The National City Bank Auditorium, Fourth Floor, Atrium Building, 1900
East Ninth Street, Cleveland, Ohio.
At this year's Annual Meeting, shareholders will be asked to elect two
Directors. Detailed information about this election is set forth in the
accompanying Proxy Statement, which shareholders are encouraged to read
carefully.
Whether or not you plan to attend the Annual Meeting in person, it is
important that your shares are represented. Therefore, please complete, sign,
date and promptly return the enclosed Proxy card in the accompanying envelope.
If you do attend the Annual Meeting, you may, of course, withdraw your Proxy
should you wish to vote in person even if you have previously returned your
Proxy card.
On behalf of the Board of Directors and management of Collaborative
Clinical Research, Inc., we would like to thank you for your continued support
and confidence.
Sincerely yours,
/s/ Dr. Jeffrey A. Green
Dr. Jeffrey A. Green
President and Chief Executive Officer
<PAGE> 3
COLLABORATIVE CLINICAL RESEARCH, INC.
20600 Chagrin Boulevard, Suite 1050
Cleveland, Ohio 44122
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 28, 1998
The 1998 Annual Meeting of Shareholders of Collaborative Clinical Research,
Inc. (the "Company") will be held on May 28, 1998 at 10:00 a.m., Cleveland, Ohio
local time at The National City Bank Auditorium, Fourth Floor, Atrium Building,
1900 East Ninth Street, Cleveland, Ohio, for the following purposes:
1. To nominate and elect two individuals as Directors of the Company for
a three-year term ending at the Annual Meeting of Shareholders in
2001; and
2. To transact such other business as may properly come before the
Annual Meeting and such adjournments or postponements thereof.
Only shareholders of record at the close of business on April 9, 1998 will
be entitled to receive notice of and to vote at the meeting or any adjournments
or postponements thereof.
By Order of the Board of Directors,
Thomas F. McKee
Secretary
Cleveland, Ohio
April 24, 1998
EACH SHAREHOLDER IS REQUESTED TO EXECUTE AND PROMPTLY RETURN THE
ENCLOSED PROXY CARD IN THE ENCLOSED PREPAID ENVELOPE
<PAGE> 4
COLLABORATIVE CLINICAL RESEARCH, INC.
------------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
Mailed on or about April 24, 1998
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
Proxies by the Board of Directors of Collaborative Clinical Research, Inc. (the
"Company") to be used at the Annual Meeting of Shareholders of the Company on
May 28, 1998 at 10:00 a.m., local time, and any adjournments or postponements
thereof. The time, place and purposes of the Annual Meeting are stated in the
Notice of Annual Meeting of Shareholders accompanying this Proxy Statement.
The accompanying Proxy is solicited by the Board of Directors of the
Company. All validly executed Proxies received by the Board of Directors of the
Company pursuant to this solicitation will be voted at the Annual Meeting, and
the instructions contained in such Proxies will be followed in each instance. If
no instructions are given, the Proxy will be voted FOR the election of the two
nominees listed on the Proxy. A shareholder may revoke a Proxy at any time
before it is exercised by delivery of written notice to the Secretary of the
Company or by a duly executed Proxy bearing a later date.
The record date for determination of shareholders entitled to vote at the
Annual Meeting was the close of business on April 9, 1998. On that date, the
Company had 6,422,372 Common Shares outstanding and entitled to vote at the
Annual Meeting. Each Common Share is entitled to one vote.
The expense of soliciting Proxies, including the cost of preparing,
assembling and mailing the Notice, Proxy Statement and Proxy, will be borne by
the Company. The Company may pay persons holding shares for others their
expenses for sending proxy materials to their principals. In addition to
solicitation of Proxies by mail, the Company's Directors, officers and
employees, without additional compensation, may solicit Proxies by telephone,
telegraph and personal interview. The Company also may retain a third party to
aid in the solicitation of Proxies.
At the Annual Meeting, in accordance with the General Corporation Law of
Ohio and the Company's Code of Regulations, the inspectors of election appointed
by the Board of Directors for the Annual Meeting will determine the presence of
a quorum and will tabulate the results of shareholder voting. As provided by the
General Corporation Law of Ohio and the Company's Code of Regulations, holders
of shares entitling them to exercise a majority of the voting power of the
Company, present in person or by Proxy at the Annual Meeting, will constitute a
quorum for such meeting. The inspectors of election intend to treat properly
executed proxies marked "abstain" as present for these purposes. Such inspectors
also will treat as "present" shares held in "street name" by brokers that are
voted on at least one proposal to come before the Annual Meeting.
Nominees for election as Directors receiving the greatest number of votes
will be elected. Votes that are withheld or broker non-votes in respect of the
election of Directors will not be counted in determining the outcome of the
election. Pursuant to the Company's Code of Regulations, the outcome of all
other questions and matters brought before the Annual Meeting will be, unless
otherwise provided by law or the Company's Articles of Incorporation, decided by
the vote of a majority of the Common Shares present in person or by Proxy and
entitled to vote on the matter in question. In voting for such other proposals,
votes may be cast in
1
<PAGE> 5
favor, against or abstained. For purposes of determining whether a proposal,
other than a proposal to elect an individual or Director, has received a
majority vote, abstentions will be included in the vote totals with the result
that an abstention will have the same effect as a negative vote. In instances
where brokers are prohibited from exercising discretionary authority for
shareholders who have not returned a Proxy, such broker non-votes will not be
included in the vote totals and, therefore, will have no effect on the outcome
of the vote.
SECURITY OWNERSHIP OF PRINCIPAL HOLDERS AND MANAGEMENT
The following table sets forth, as of April 9, 1998, the beneficial
ownership of the Company's Common Shares of (i) each person who is known to the
Company to own beneficially more than 5% of the Company's outstanding Common
Shares, (ii) each Director and nominee for election as a Director of the
Company, (iii) each of the executive officers named in the Executive
Compensation tables below and (iv) all Directors and executive officers as a
group. Unless otherwise indicated below, all information with respect to
beneficial ownership has been furnished by the respective Director, nominee for
election as a Director, or executive officer, as the case may be.
<TABLE>
<CAPTION>
COMMON SHARES
BENEFICIALLY OWNED (1)
NAME OF BENEFICIAL OWNER, DIRECTOR, EXECUTIVE -----------------------
OFFICER OR NUMBER OF PERSONS IN GROUP NUMBER PERCENT
--------------------------------------------- ---------- --------
<S> <C> <C>
Dr. Jeffrey A. Green (2).................................... 405,146 6.3%
Timothy G. Biro (3)......................................... 1,700 *
Seth B. Harris (4).......................................... 81,034 1.3%
Dr. Robert M. Stote......................................... 32,474 *
Herbert L. Hugill........................................... 50,000 *
Gregory A. Folz............................................. 2,525 *
Dr. Alan G. Walton (5)...................................... 610,752 9.5%
Dr. Roger G. Stoll.......................................... 0 *
Dr. Mark J. Ratain.......................................... 30,000 *
Axiom Venture Partners Limited Partnership.................. 577,586 9.0%
City Place II
185 Asylum Street
Hartford, Connecticut 06103
Brantley Venture Partners II, L.P........................... 746,052 11.6%
20600 Chagrin Boulevard, Suite 1150
Cleveland, Ohio 44122
Oxford BioScience Funds (5) (6)............................. 610,752 9.5%
315 Post Road West
Westport, Connecticut 06880
Wellington Management Company (7)........................... 469,800 7.3%
75 State Street
Boston, Massachusetts 02109
State of Wisconsin Investment Board (8)..................... 370,000 5.8%
P.O. Box 7842
Madison, Wisconsin 53707
Heartland Advisors, Incorporated (9)........................ 1,023,100 15.9%
790 North Milwaukee Street
Milwaukee, Wisconsin 53202
All directors and executive officers as a group (13
persons).................................................. 1,395,593 21.0%
</TABLE>
2
<PAGE> 6
- ---------------
* Less than one percent
(1) The number of Common Shares deemed outstanding includes (i) 6,422,372 Common
Shares outstanding as of April 9, 1998 and (ii) with respect to each of the
following individuals and group the following number of Common Shares which
may be purchased pursuant to option exercises within 60 days after April 9,
1998: Dr. Green (18,750 shares); Mr. Biro (1,500 shares); Mr. Harris (28,000
shares); Dr. Stote (28,000 shares); Mr. Folz (2,525 shares); Dr. Walton
(3,000 shares); Dr. Ratain (30,000 shares); Brantley Venture Partners II,
L.P. ("Brantley") (5,166 shares); Oxford BioScience Management Partners
("OBM") (3,167 shares); all directors and executive officers as a group
(228,317 shares).
(2) Includes 150,000 Common Shares held by Dr. Green's wife, as to which he
disclaims beneficial ownership.
(3) Includes 200 Common Shares held by Mr. Biro's wife.
(4) Includes 400 Common Shares held by Mr. Harris' wife and 44,634 shares held
in trust for Mr. Harris.
(5) Includes 408,690 and 82,517 Common Shares owned by Oxford BioScience
Partners, L.P. ("Oxford") and Oxford BioScience Partners (Adjunct), L.P.
("Oxford Adjunct"), respectively, of which OBP Management, L.P. ("OBP") is
the general partner, and 113,378 Common Shares owned by Oxford BioScience
Partners (Bermuda) Limited Partnership ("Oxford Bermuda"), of which OBP
Management (Bermuda) Limited Partnership ("OBP Bermuda") is the general
partner. OBP may be deemed to be the beneficial owner of shares owned by
Oxford Bermuda. Also includes 3,167 and 3,000 Common Shares issuable upon
exercise of options owned by OBM and Dr. Walton, respectively, that are
currently exercisable. Dr. Walton, a Director of the Company, is a general
partner of OBP, OBP Bermuda and OBM and may be deemed to be a beneficial
owner of the shares held by such entities.
(6) The information provided herein with respect to the beneficial ownership of
the Company's Common Shares by the Oxford BioScience Funds was obtained
solely from a Schedule 13G filed with the Securities and Exchange Commission
(the "Commission") on February 13, 1998 by the Oxford BioScience Funds.
(7) The Common Shares listed are held by Wellington Management Company in its
capacity as investment advisor. Various persons other than Wellington
Management Company have the right to receive or the power to direct the
receipt of dividends from, or the proceeds from the sale of, the shares
held. The interests of one such account, Global Health Care Opportunity,
relates to more than 5% of the outstanding Common Shares. The information
provided herein with respect to Wellington Management Company's beneficial
ownership of the Company's Common Shares was obtained solely from a Schedule
13G filed with the Commission on February 11, 1998 by Wellington Management
Company.
(8) The information provided herein with respect to the beneficial ownership of
the Company's Common Shares by the State of Wisconsin Investment Board was
obtained solely from a Schedule 13G filed with the Commission on January 26,
1998 by the State of Wisconsin Investment Board.
(9) The Common Shares listed are held by Heartland Advisors, Incorporated in its
capacity as investment advisor. Various persons other than Heartland
Advisors, Incorporated have the right to receive or the power to direct the
receipt of dividends from, or the proceeds from the sale of, the shares
held. The interests of one such account, Heartland Value Fund, a series of
Heartland Group, Incorporated, a registered investment company, relates to
more than 5% of the outstanding Common Shares. The information provided
herein with respect to Heartland Advisors, Incorporated's beneficial
ownership of the Company's Common Shares was obtained solely from the
Schedule 13G filed with the Commission on January 12, 1998 by Heartland
Advisors, Incorporated.
3
<PAGE> 7
ELECTION OF DIRECTORS
The authorized number of Directors of the Company is presently fixed at
eight, with members of the Company's Board of Directors divided into three
classes and with the term of office of one class expiring each year. On March
19, 1998, in accordance with the Company's Third Amended and Restated Code of
Regulations, the Company's Board of Directors elected, effective April 1, 1998,
Herbert L. Hugill and Dr. Mark J. Ratain to fill vacancies in the class of
Directors whose term of office will expire at the Annual Meeting of Shareholders
to be held in the year 2000. On April 21, 1998, the Company's Board of Directors
elected, effective April 21, 1998, Dr. Roger G. Stoll, also to fill a vacancy in
the class of Directors whose term of office will expire at the Annual Meeting of
Shareholders to be held in the year 2000. At the Annual Meeting, two Directors
are to be elected to serve until the Annual Meeting of Shareholders to be held
in the year 2001 and until their successors are duly elected and qualified. At
its March 19, 1998 meeting, the Board of Directors nominated Seth B. Harris and
Dr. Alan G. Walton to stand for election as Directors at the Annual Meeting. Mr.
Harris and Dr. Walton are presently Directors of the Company.
Unless otherwise directed, the persons named in the accompanying Proxy will
vote for the election of the two nominees set forth below as Directors of the
Company for a three-year term. In the event of the death of or inability to act
of any of the nominees, the Proxies will be voted for the election of such other
persons as the Board of Directors may recommend. The Board of Directors has no
reason, however, to anticipate that this will occur. In no event will the
accompanying Proxy be voted for more than two nominees or for persons other than
those persons named below or any such substitute nominees for any of them.
Set forth below is certain information concerning the nominees for election
at the Annual Meeting as well as those Directors who will continue in office
subsequent to the Annual Meeting.
NOMINEES FOR ELECTION AT THE 1998 ANNUAL MEETING
Seth B. Harris. Mr. Harris has been a Director of the Company since 1992
and has been the Chairman of Freider the Source, a distributor of consumer
products, since 1993. Mr. Harris is the Retired Chairman of the Board and
President of Harris Wholesale, Inc., a wholesale pharmaceutical distribution
company. Mr. Harris is also a Director of Bindley Western Industries, Inc., one
of the largest distributors of pharmaceuticals in the United States. Mr. Harris
is 58 years of age.
Alan G. Walton, Ph.D. Dr. Walton has been a Director of the Company since
1994 and, since 1987, has served as a General Partner of Oxford Partners III,
Limited Partnership and Oxford Partners III-A, Limited Partnership, the General
Partners of Oxford Venture Fund III, Limited Partnership and Oxford Venture Fund
III-A Limited Partnership. Since 1992, Dr. Walton has been a General Partner of
OBP Management L.P., the General Partner of Oxford BioScience Partners, L.P. and
Oxford BioScience (Adjunct), L.P. Dr. Walton has also been a General Partner of
OBP Management (Bermuda) Limited Partnership, the General Partner of Oxford
BioScience Partners (Bermuda) Limited Partnership. Prior to joining Oxford, Dr.
Walton was the President of University Genetics, Co., a publicly traded
biotechnology company and, until 1981, was Professor of Macromolecular Science
and Director of the Laboratory for Biological Macromolecules at Case Western
Reserve University. Dr. Walton is the author of numerous publications and serves
as a Director of Coelacanth Chemical Corp, NetGenics Inc., Gene Logic Inc.,
Physiome Sciences, and CardioPulmonary Corp. Dr. Walton is 62 years of age.
4
<PAGE> 8
DIRECTORS CONTINUING IN OFFICE UNTIL THE 1999 ANNUAL MEETING
Jeffrey A. Green, Pharm.D., FCP. Dr. Green has served as the President and
Chief Executive Officer and a Director of the Company since 1992. Dr. Green
founded the Company in 1992. From 1984 to 1992, Dr. Green served as an Assistant
Professor of Medicine and Radiology at Case Western Reserve University,
Cleveland, Ohio. During his tenure at Case Western Reserve University, Dr. Green
established and directed the Cardiovascular Clinical Pharmacology Research
Program at University Hospitals of Cleveland. In addition, Dr. Green was an
established investigator in clinical cardiology and PET scanning and was
responsible for directing over 90 individual investigations during his tenure.
Dr. Green has authored over 90 publications and has been an invited speaker at
more than 125 national meetings. He was the recipient of the McKeen Cattell
Distinguished Achievement Award from the American College of Clinical
Pharmacology in 1988. Dr. Green is a graduate of Purdue University (B.S.) and
the University of Texas (Pharm.D.). Dr. Green is 42 years of age.
Timothy G. Biro. Mr. Biro has been a Director of the Company since 1992.
Mr. Biro is the General Partner of Ohio Innovation Fund I, L.P., a venture
capital firm. Prior to starting Ohio Innovation Fund in 1997, Mr. Biro was a
consultant with Cleveland Tomorrow, an economic development corporation. From
1991 to 1996, Mr. Biro was a General Partner of Brantley Venture Partners II,
L.P. and Brantley Venture Partners III, L.P. Prior to joining Brantley Venture
Partners in 1991, Mr. Biro was Superintendent of Pharmaceutical Manufacturing at
Merck & Co., Inc. Mr. Biro has a B.S. Degree in Microbiology from Pennsylvania
State University and in Pharmacy from Temple University and an MBA from The
Wharton School of Business at the University of Pennsylvania. He is a Director
of OXIS International, Inc., a developer of pharmaceuticals to treat diseases of
oxidative stress. Mr. Biro is 44 years of age.
Robert M. Stote, M.D. Dr. Stote has been a Director of the Company since
1993 and has served as the Senior Vice President and Chief Science Officer and a
Director of Bentley Pharmaceuticals, Inc., a pharmaceutical company, since 1992.
Prior to that time, Dr. Stote was employed for 20 years by SmithKline Beecham
Corporation, serving as Senior Vice President and Medical Director, Worldwide
Medical Affairs, from 1989 to 1992 and Vice President -- Clinical
Pharmacology -- Worldwide from 1987 to 1989. Dr. Stote was Chief of Nephrology
at Presbyterian Medical Center in Philadelphia from 1972 to 1989 and served as
Clinical Professor of Medicine at the University of Pennsylvania. Dr. Stote is
58 years of age.
DIRECTORS CONTINUING IN OFFICE UNTIL THE 2000 ANNUAL MEETING
Herbert L. Hugill. Mr. Hugill has been a Director of the Company since
April 1998. Mr. Hugill has served as the Company's Chief Operating Officer since
December 1997 and is responsible for leading and managing implementation of the
Company's clinical business strategy on a worldwide basis. From 1996 to 1997,
Mr. Hugill was President and Chief Executive Officer and a member of the Board
of Directors of Mediscience Technology Corp., a development stage, biomedical
technology company. Mr. Hugill continued to serve on the Board of Directors of
Mediscience Technology Corp. until March 1998. From 1985 through 1995, he was
employed in various senior management capacities at R.P. Scherer Corporation
where, from 1991 through 1995, he was president of R.P. Scherer North America,
that firm's largest operating unit. Mr. Hugill is 50 years of age.
Mark J. Ratain, M.D. Dr. Ratain is a hematologist/oncologist and a
clinical pharmacologist. He is a Professor of Medicine and Chairman of the
Committee on Clinical Pharmacology at the University of Chicago. Dr. Ratain has
been associated with the Department of Medicine at the University of Chicago
since 1983. He has authored and co-authored more than 150 articles and book
chapters principally relating to the
5
<PAGE> 9
treatment of cancer. Prior to becoming a Director, Dr. Ratain served as Chairman
of Collaborative's Scientific Advisory Board for four years. He received his
A.B. Degree in Biochemical Sciences from Harvard University and his M.D. from
the Yale University School of Medicine. Dr. Ratain is 43 years of age.
Roger G. Stoll, Ph.D. Dr. Stoll serves on the Board of Directors of St.
Jude Medical, Inc. in St. Paul, Minnesota, and is a Trustee of St. Barnabus
Medical Center in Livingston, New Jersey. He was President and Chief Executive
Officer of Ohmeda Inc., a wholly-owned subsidiary of The BOC Group, plc. Dr.
Stoll had held this position since 1991, and had been a member of the Board of
Directors of The BOC Group, plc since 1994. Throughout his career in the
pharmaceutical industry, Dr. Stoll has served as an executive with Bayer A.G.,
Inc., and with Baxter Travenol. He received his B.S., Pharmacy from Ferris State
University, and his Ph.D., Biopharmaceutics from the University of Connecticut.
Dr. Stoll is 55 years of age.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has an Audit Committee and a Compensation Committee.
The Company does not have a standing nominating committee or a committee
performing similar functions. Set forth below is the current membership of each
of the above-described Committees:
<TABLE>
<CAPTION>
AUDIT COMPENSATION
COMMITTEE COMMITTEE
--------- ------------
<S> <C>
Dr. Robert M. Stote Timothy G. Biro
Dr. Alan G. Walton Seth B. Harris
Dr. Robert M. Stote
</TABLE>
The Audit Committee recommends the annual appointment of the Company's
auditors, with whom the Audit Committee members review the scope of audit and
non-audit assignments and related fees, the accounting principles used by the
Company in financial reporting, internal financial auditing procedures and the
adequacy of the Company's internal control procedures. The Audit Committee met
twice during the 1997 fiscal year.
The Compensation Committee has the authority to administer the Company's
stock option plans, including the selection of optionees and the timing of
option grants, and to review and monitor key employee compensation and benefits
policies and administer the Company's management compensation plans. The
Compensation Committee met twice during the 1997 fiscal year.
During the last fiscal year, the Board met 11 times. No Director attended
fewer than 75% of the aggregate number of meetings of the Board of Directors and
the committees on which each served during the period for which each was a
member of the Board.
COMPENSATION OF DIRECTORS
Directors of the Company do not receive cash compensation for their service
on the Company's Board. However, they do receive reimbursement for reasonable
expenses incurred in attending Board meetings. Directors of the Company who are
not also employees receive options to purchase Common Shares under the Company's
Amended and Restated 1996 Outside Directors' Stock Option Plan. Under the terms
of this plan, each non-employee Director of the Company receives an annual
option grant to purchase 1,500 Common Shares at an exercise price equal to the
fair market value of a share on the date of grant. As of April 1, 1998, options
to purchase an aggregate of 19,500 Common Shares had been awarded and were
outstanding under
6
<PAGE> 10
this plan at exercise prices ranging from $4.19 to $9.60. Options awarded under
this plan vest six months after the date of grant and expire ten years from the
date of grant. Prior to the Company's initial public offering in June 1996,
Directors received options under other option plans maintained by the Company,
as described below.
Non-employee Directors received options to purchase Common Shares under the
Company's Amended and Restated 1992 Share Incentive Plan (the "1992 Plan").
Options to purchase an aggregate of 80,000 Common Shares were awarded to
non-employee Directors under the 1992 Plan at an exercise price of $0.15 per
share. Each Director who is not an executive officer named in the Executive
Compensation tables below received options to purchase the following numbers of
shares under the 1992 Plan: Mr. Harris, 25,000 shares; Dr. Stote, 25,000 shares;
and Dr. Ratain, 30,000 shares. Dr. Ratain was awarded stock options for his
service as a consultant to the Company prior to his current service on the
Company's Board of Directors. In addition, prior to the Company's initial public
offering in June 1996, members of the Board who were designated to serve as such
by one of the Investors (as defined) received, in lieu of Directors' fees,
options to purchase Common Shares having a value equal to $1,000 for each
meeting attended ($500 for each meeting attended by telephone). These awards
were made under the Company's Amended and Restated 1994 Directors' Share Option
Plan (the "1994 Plan"). An aggregate of 6,833 Common Shares were awarded and are
outstanding under the 1994 Plan at exercise prices ranging from $0.80 to $9.60
per share.
EXECUTIVE OFFICER COMPENSATION
The table below sets forth certain information concerning the annual or
long-term compensation for services in all capacities to the Company during the
fiscal years ended December 31, 1995, 1996 and 1997 to the Company's Chief
Executive Officer and the other executive officer of the Company whose annual
salary and bonus exceeded $100,000 (the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
------------
SECURITIES
ANNUAL COMPENSATION(1) UNDERLYING
FISCAL ---------------------- LONG-TERM ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS(#) COMPENSATION($)(2)
--------------------------- ------ ---------- --------- ------------ ------------------
<S> <C> <C> <C> <C> <C>
Dr. Jeffrey A. Green................ 1997 $160,984 $ -- 25,000(3) $ --
President and Chief Executive
Officer........................... 1996 150,000 -- --
1995 120,000 -- 25,000(3) --
Gregory A. Folz (4)................. 1997 101,904 -- -- --
Vice President of Marketing and
Sales............................. 1996 53,653 22,107 10,100(5) --
</TABLE>
- ---------------
(1) No Named Executive Officer received perquisites or other personal benefits
in excess of the lesser of $50,000 or 10% of such individual's salary plus
annual bonus. No long-term incentive plan payouts or restricted stock awards
have been made to any of the Named Executive Officers.
(2) No other compensation was received by either of the Named Executive
Officers.
(3) Dr. Green's options were granted as follows: (i) 25,000 on July 1, 1995 at
an exercise price of $4.15 per share, 25% of which are exercisable on each
of July 1, 1996, July 1, 1997, July 1, 1998 and July 1, 1999;
7
<PAGE> 11
and (ii) 25,000 on January 2, 1997, at an exercise price of $10.75 per
share, 25% of which are exercisable on each of January 2, 1998, January 2,
1999, January 2, 2000 and January 2, 2001.
(4) Mr. Folz was not an employee of the Company at any time during 1995.
(5) Mr. Folz' options were granted on July 29, 1996, at an exercise price of
$10.75 per share, 25% of which are exercisable on each of July 29, 1997,
July 29, 1998, July 29, 1999 and July 29, 2000.
OPTION GRANTS
The table below sets forth certain information concerning grants of stock
options made during the year ended December 31, 1997 to the Named Executive
Officers. Such grants are reflected in the Summary Compensation Table above.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE VALUE
------------------------------------------------------ AT ASSUMED ANNUAL RATES
NUMBER OF % OF TOTAL OF STOCK PRICE
SECURITIES OPTIONS EXERCISE APPRECIATION
UNDERLYING GRANTED TO OR BASE FOR OPTION TERM(3)
OPTIONS EMPLOYEES IN PRICE EXPIRATION --------------------------
NAME GRANTED(1) FISCAL YEAR(2) ($/SH) DATE 5%($) 10%($)
---- ---------- -------------- -------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Dr. Jeffrey A. Green.... 25,000 9.0% $10.75 1/2/2007 $437,765 $697,068
Gregory A. Folz......... -- -- -- -- -- --
</TABLE>
- ---------------
(1) All options reflected in the table were awarded at an exercise price equal
to the fair market value of the Common Shares on the date of grant.
(2) Based on an aggregate of 278,500 options granted to employees under the
Company's Amended and Restated 1996 Key Employees and Consultants Stock
Option Plan, including the Named Executive Officers.
(3) Potential realizable value is based upon certain assumed rates of
appreciation pursuant to rules prescribed by the Commission. Actual gains,
if any, on stock option exercises are dependent on the future performance of
the Common Shares. There can be no assurance that the amounts reflected in
this table will be achieved. These numbers are calculated based on rules
promulgated by the Commission and do not represent an estimate by the
Company of its future stock price growth.
OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES
The table below sets forth certain information with respect to the exercise
of options to purchase the Company's Common Shares by the Named Executive
Officers and unexercised options to purchase the Company's Common Shares for the
Named Executive Officers as of December 31, 1997.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR
AND DECEMBER 31, 1997 OPTION VALUE
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT DECEMBER 31, IN-THE-MONEY OPTIONS AT
STOCK 1997(#) DECEMBER 31, 1997(%)(1)
ACQUIRED ON VALUE --------------------------- ------------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE(2) UNEXERCISABLE
---- ----------- ----------- ----------- ------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Dr. Jeffrey A. Green... -- $-- 12,500 37,500 $11,375 $11,375
Gregory A. Folz........ -- -- 2,525 7,575 -- --
</TABLE>
8
<PAGE> 12
- ---------------
(1) Options are in-the-money if the market value of the Common Shares exceeds
the exercise price.
(2) Represents the total gain which would be realized if all in-the-money
options beneficially held at December 31, 1997 were exercised, determined by
multiplying the number of shares underlying the options by the difference
between the per share option exercise price and $5.06, the closing price for
the Company's Common Shares as reported on The Nasdaq Stock Market, Inc. on
December 31, 1997.
EMPLOYMENT AGREEMENTS
In 1994, the Company entered into an employment agreement with Dr. Green
providing for an initial term of four years. This agreement will automatically
renew for successive one-year periods thereafter unless certain prior notice
requirements are satisfied. The base salary provided for in this agreement may
be changed from time to time as determined by the Compensation Committee and so
long as evidenced by a written memorandum executed by the parties. Bonuses may
be paid to Dr. Green at the discretion of the Compensation Committee. The
agreement also provides Dr. Green with the right to participate in all benefit
plans made available to the Company's executives and/or employees. Dr. Green's
employment with the Company may be terminated with or without cause or upon his
death or disability. Additionally, under this agreement, Dr. Green is entitled
to terminate his employment for "good reason." "Good reason" for such
termination will exist if at any time, except in connection with the termination
of Dr. Green's employment in strict compliance with the terms of the agreement,
the Board of Directors fails to elect Dr. Green to his current position with the
Company or significantly diminishes his responsibilities, duties, power or
authority. If Dr. Green terminates his employment with the Company for good
reason, he will be entitled to continue to receive his base salary for two years
following the date of such termination. If Dr. Green's employment with the
Company is terminated in connection with the sale of the Company, he will be
entitled to continue to receive his base salary for one year following the date
of such termination. If his employment is terminated without cause, he will be
entitled to continue to receive his base salary for a period of two years
subsequent to the date of termination. If Dr. Green terminates his employment
with the Company without good reason, or if he is terminated by the Company for
"cause," then he will be entitled to receive his base salary through the date of
termination. For purposes of Dr. Green's agreement, "cause" is defined as a
determination by the Board of Directors that the employee was engaged in (i)
fraud, (ii) a breach of the material provisions of the employment agreement or
(iii) a willful failure to perform his duties as required under the agreement.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
GENERAL
The Compensation Committee of the Board of Directors administers the
Company's stock option plans, including the selection of optionees and the
timing of option grants, and reviews and monitors key employee compensation and
benefits policies and administers the Company's management compensation plans.
The current members of the Compensation Committee are Messrs. Biro and Harris
and Dr. Stote, all of whom are non-employee Directors of the Company.
Set forth below is a discussion of the Company's compensation philosophy,
together with a discussion of the factors considered by the Committee in
determining the compensation of the Company's President and Chief Executive
Officer and the executive officer named in the Executive Compensation tables
above.
9
<PAGE> 13
COMPENSATION PHILOSOPHY
The Company's compensation philosophy is that compensation paid to
executive officers and other management personnel should consist of four
elements: (1) salary, (2) annual incentive bonus, (3) stock options and (4)
welfare, retirement and other benefits. The compensation package is designed to
attract and retain top quality management employees. In the opinion of the
Committee, it reflects competitive conditions of peer group companies. To some
extent, elements of compensation are designed to vary as Company performance
varies. In general, the elements of compensation that most typically have a
significant relationship to Company performance are awards under its stock
option and bonus plans. The Committee's decisions concerning compensation make
use of independent surveys of executive compensation of similarly situated
companies.
The Company has entered into employment agreements with all but one of its
executive officers at the time these individuals joined the Company. In general,
the Committee believes that employment agreements are a useful tool in
attracting and retaining qualified executives.
Section 162(m) of the Internal Revenue Code limits the ability of public
companies to deduct compensation in excess of $1,000,000 paid to certain
executive officers, unless such compensation is "performance based" within the
meaning of Section 162(m). In light of the current compensation levels of the
Company's executive officers, the Committee has not recommended modifications to
the Company's compensation plans in response to Section 162(m). The Committee
anticipates that it will evaluate the implications of Section 162(m) on the
Company's compensation arrangements from time to time in the future.
Set forth below is a discussion of the various components of the
compensation arrangements provided to the executive officers, as well as a
discussion of the compensation arrangements provided to the Company's President
and Chief Executive Officer.
1997 COMPENSATION DECISIONS
Base Salary and Benefits. Salaries of executive officers are subject to
minimum levels set by the terms of each executive's employment arrangement with
the Company. The primary factor in setting salary levels pursuant to these
arrangements was the Company's desire to provide compensation in amounts
sufficient to induce these individuals to either join or continue with the
Company. Salary levels for executive officers reflect the Committee's judgments
on appropriate salaries in light of the duties and responsibilities inherent in
the executives' respective positions. The particular qualifications of an
individual holding the position and his or her level of experience, as well as
information concerning compensation paid by other companies in the industry, are
considered in establishing salary levels. The Committee's assessment of the
individual's performance and contribution to the Company's performance are the
primary criteria influencing decisions regarding salary. For those executives
who joined the Company during the year, the primary factor in setting salary
levels was the Company's desire to provide compensation in amounts sufficient to
induce these individuals to join the Company.
Stock Options. The Company uses stock options as a long-term incentive
program for executive officers. Stock options are used because they directly
relate the amounts earned by the executive officers to the amount of
appreciation realized by the Company's shareholders over comparable periods.
Stock options also provide executive officers with the opportunity to acquire
and build a meaningful ownership interest in the Company The Committee considers
stock option awards throughout the year. In determining the number of options
10
<PAGE> 14
awarded to an individual executive officer, the Committee generally establishes
a level of award based upon the position of the individual and his or her level
of responsibility and upon recommendations made by the Company's President and
Chief Executive Officer. The Committee's decisions concerning individual option
awards are based on its judgment concerning the appropriate amount of long-term
compensation that should be paid to the executive in question.
In 1997, the Company awarded options to purchase an aggregate of 46,500
Common Shares to the executive officers with respect to their performance during
the 1996 fiscal year. All of these options are subject to a four-year vesting
schedule commencing on the first anniversary of the date of grant. Of these
options, only options to purchase 25,000 Common Shares are reflected in the
Executive Compensation tables above. The Company awarded options in January 1998
to purchase an aggregate of 15,000 Common Shares to the executive officers of
the Company with respect to their performance during the 1997 fiscal year. All
of these options are subject to a four-year vesting schedule commencing on the
first anniversary of the date of grant. None of these options are reflected in
the Executive Compensation tables above.
Bonuses. Pursuant to the terms of its employment agreements with the
executive officers of the Company, the Company may pay additional compensation
in the form of discretionary bonuses. In general, the bonus structure is
open-ended and the bonus amount in any given year is determined by the
Committee. Bonuses may be provided either in the form of cash, Common Shares or
a combination of the two, as the Committee determines. The Company did not pay
bonuses to its executive officers with respect to performance during the 1997
fiscal year.
PRESIDENT AND CHIEF EXECUTIVE OFFICER COMPENSATION
Dr. Green's employment contract with the Company contemplates compensation
in two broad areas, a base salary, and stock options under a long-term
compensation plan. His employment agreement provided for a base salary of
$180,000 for 1997. When the Company failed to meet certain objectives with
regard to financial performance during 1997, Dr. Green elected to defer a
portion of his 1997 salary. As a result, Dr. Green was paid $160,984 in salary
for 1997.
In November 1996, the Compensation Committee evaluated Dr. Green's role in
managing and finalizing the Company's initial public offering of Common Stock in
1996. The Committee also evaluated his role in bringing about the Company's most
financially successful year, in 1996, since its formation. In January 1997,
based on this evaluation, Dr. Green was awarded options to purchase 25,000
Common Shares at an exercise price of $10.75 per share. These options vest over
four years, and expire in ten years.
THE COMPENSATION COMMITTEE
Timothy G. Biro
Seth B. Harris
Dr. Robert M. Stote
11
<PAGE> 15
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company has engaged in various private transactions with the members of
its Compensation Committee or entities with which they are affiliated. The
Company believes that these transactions have been on terms no less favorable to
the Company that could have been obtained from unaffiliated third parties.
The Company engaged in various private equity financing transactions with
Brantley, Mr. Harris, Dr. Stote and other shareholders in 1992, 1993 and 1994.
As a result of those transactions, Brantley, Mr. Harris and Dr. Stote are among
the parties to a registration rights agreement with the Company under which they
have been provided certain rights to have their Common Shares registered under
the Securities Act of 1933 (the "Securities Act"). Mr. Biro was at that time a
general partner of Brantley. See "Certain Transactions."
PERFORMANCE CHART
The following line graph compares the percentage change in the cumulative
total shareholder return on the Company's Common Shares against the cumulative
total return of The Nasdaq Stock Market -- U.S. Index and the Nasdaq Health
Services Index for the period commencing June 11, 1996 (the initial trading date
for the Company's Common Shares) and ending December 31, 1997. The graph assumes
that the value of the investment in the Company's Common Shares and each index
was $100 on June 11, 1996, and that all dividends, if any, were reinvested.
<TABLE>
<CAPTION>
COLLABORATIVE NASDAQ
CLINICAL STOCK NASDAQ
Measurement Period RESEARCH, MARKET- HEALTH
(Fiscal Year Covered) INC. US SERVICES
<S> <C> <C> <C>
06/11/96 100 100 100
12/96 80 104 83
12/97 38 127 85
</TABLE>
12
<PAGE> 16
CERTAIN TRANSACTIONS
In connection with various financing transactions, the Company entered into
certain agreements with certain of its Directors, executive officers and
shareholders who beneficially own more than five percent of the Company's Common
Shares. Since these arrangements were the result of arm's length negotiation
among the Company and these shareholders prior to their acquisition of an
interest in the Company, the Company believes that the agreements are on terms
no less favorable to it than could have been obtained from unaffiliated third
parties. Relationships between the Company and those investors who are
affiliated with members of the Compensation Committee of the Board of Directors
are described under the caption "Compensation Committee Interlocks and Insider
Participation."
As a result of various financing transactions, the Company is a party to a
registration rights agreement with Brantley, Oxford, Oxford Bermuda, Oxford
Adjunct, Axiom Venture Partners Limited Partnership, Drs. Green, Kasmer,
Stigelman and Stote and Mr. Harris, each of whom is either a Director, executive
officer or beneficial owner of greater than 5% or more of the Company's Common
Shares. Under the terms of this agreement, the holders of an aggregate of
1,990,332 Common Shares (the "Registrable Shares") have the right to demand, no
more than once every six months, registration under the Securities Act of Common
Shares having a market value of at least $5,000,000 (in the case of a
registration on Form S-1) or $1,000,000 (in the case of a registration on Form
S-2 or S-3). Such demand right may be exercised by the holders of at least 40%
of the Registrable Shares. The holders of Registrable Shares may exercise their
right to demand registration of the Registrable Shares on Form S-1 up to two
times at the Company's expense, and any demand registrations on Form S-2 or S-3
an unlimited number of times at the Company's expense. Although the holders of
Registrable Shares have the right to demand additional registrations on Form
S-1, they will be required to pay their share of the expenses associated with
such registrations. The agreement also provides the holders of an aggregate of
633,741 Common Shares (the "Related Shares"), with the limited right to
participate, at their own expense, in a registration statement demanded by the
holders of Registrable Shares. In addition, under certain conditions, the
holders of Registrable Shares and Related Shares have the limited right to
include some or all of such shares in any registration statement filed by the
Company with respect to the sale of its Common Shares.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's Directors and certain of its executive officers and
persons who beneficially own more than 10% of the Company's Common Shares to
file reports of ownership and changes in ownership on Forms 3, 4 and 5 with the
Commission and The Nasdaq Stock Market. Such persons are further required to
furnish the Company with copies of all such forms filed by them. Based solely on
the Company's review of the copies of such forms it has received, the Company
believes that all of the Section 16(a) filing requirements were satisfied by the
Company's Directors, executive officers and beneficial owners of more than 10%
of the Company's Common Shares, except for reports relating to the following:
(i) Dr. Stigelman's March 24, 1997 exercise of options to purchase 4,000 Common
Shares at $0.15 per share; and (ii) Mr. Chassaigne's July 6, 1997 receipt of an
option to purchase 30,000 Common Shares, exercisable in three equal yearly
increments each of 10,000 Common Shares beginning on July 6, 1998 and continuing
through July 6, 2000 at $7.13 per share under the Company's Amended and Restated
1996 Key Employees and Consultants Stock Option Plan.
13
<PAGE> 17
SHAREHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
Any shareholder who meets the requirements of the proxy rules under the
Exchange Act may submit to the Board of Directors proposals to be considered for
submission to the Annual Meeting of Shareholders to be held in 1999. Any such
proposal should be submitted in writing by notice delivered or mailed by
first-class United States mail, postage prepaid, to Collaborative Clinical
Research, Inc., 20600 Chagrin Boulevard, Suite 1050, Cleveland, Ohio 44122,
Attention: Investor Relations and must be received no later than December 20,
1998. Any such notice shall set forth: (a) the name and address of the
shareholder and the text of the proposal to be introduced, (b) the number of
Common Shares held of record, owned beneficially and represented by proxy by
such shareholder as of the date of such notice and (c) a representation that the
shareholder intends to appear in person or by proxy at the meeting to introduce
the proposal specified in the notice. The Chairman of the meeting may refuse to
acknowledge the introduction of any shareholder proposal not made in compliance
with the foregoing procedures.
INDEPENDENT AUDITORS
The Board of Directors has selected the firm of Ernst & Young LLP,
independent auditors, to audit the consolidated financial statements of the
Company and its subsidiaries for fiscal 1997. Representatives of Ernst & Young
LLP will be present at the Annual Meeting and will have an opportunity to make a
statement should they so desire. The representatives will also be available to
respond to appropriate questions from shareholders.
OTHER MATTERS
The Board of Directors is not aware of any matter to come before the Annual
Meeting other than those mentioned in the accompanying Notice. However, if other
matters shall properly come before the Annual Meeting, it is the intention of
the persons named in the accompanying Proxy to vote in accordance with their
best judgment on such matters.
Upon the receipt of a written request from any shareholder entitled to vote
at the Annual Meeting, the Company will mail, at no charge to the shareholder, a
copy of the Company's Annual Report on Form 10-K, including the financial
statements and schedules required to be filed with the Commission pursuant to
Rule 13a-1 under the Exchange Act, for the Company's most recent fiscal year.
Requests from beneficial owners of the Company's Common Shares must set forth a
good-faith representation that, as of the Annual Meeting Record Date, the person
making the request was the beneficial owner of securities entitled to vote at
such Annual Meeting. Written requests for the Annual Report on Form 10-K should
be directed to: Investor Relations, Collaborative Clinical Research, Inc., 20600
Chagrin Boulevard, Suite 1050, Cleveland, Ohio 44122.
You are urged to sign and return your Proxy promptly in order to make
certain your shares will be voted at the Annual Meeting. For your convenience, a
return envelope is enclosed requiring no additional postage if mailed in the
United States.
By Order of the Board of Directors,
Thomas F. McKee
Secretary
April 24, 1998
14
<PAGE> 18
COLLABORATIVE CLINICAL RESEARCH, INC.
PROXY FOR COMMON SHARES
P
R PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
O THE COMPANY FOR THE ANNUAL MEETING OF SHAREHOLDERS ON MAY 28, 1998.
X
Y The undersigned hereby (i) appoints Dr. Jeffrey A. Green and Terry
C. Black, and each of them, his true and lawful agents and Proxy
holders with full power of substitution in each to appear and vote
all of the Common Shares of Collaborative Clinical Research, Inc.
that the undersigned will be entitled to vote at the Annual Meeting
of Shareholders of Collaborative Clinical Research, Inc. to be held
at The National City Auditorium, Fourth Floor, Atrium Building,
1900 East Ninth Street, Cleveland, Ohio on Thursday, May 28, 1998,
and at any adjournments thereof, hereby revoking any and all
proxies heretofore given, and (ii) authorizes and directs said
Proxy holders to vote all of the Common Shares of the Company
represented by this Proxy as follows, WITH THE UNDERSTANDING THAT
IF NO DIRECTIONS ARE GIVEN BELOW, SAID SHARES WILL BE VOTED "FOR"
THE ELECTION OF THE TWO DIRECTORS NOMINATED BY THE BOARD OF
DIRECTORS.
<TABLE>
<S> <C>
(1)ELECTION OF DIRECTORS
[ ] FOR both nominees listed [ ]WITHHOLD AUTHORITY
(except as marked to the contrary below) to vote for all nominees listed
</TABLE>
SETH B. HARRIS and ALAN G. WALTON, Ph.D.
(INSTRUCTION: To withhold authority to vote for any individual
nominee, write that nominee's name on the following line.)
----------------------------------
(To be signed on other side)
PROXY NO. SHARES
(Continued from other side.)
(2) In their discretion to act on any other matters that may
properly come before the meeting.
You are encouraged to specify your choices by marking the
appropriate boxes, SEE REVERSE SIDE, but you need not mark any
boxes if you wish to vote in accordance with the Board of
Directors' recommendations. The Proxies cannot vote your shares
unless you sign and return this card.
Please date, sign and return
promptly in the accompanying
envelope.
DATE
-----------------------------
SIGNATURE(S)
----------------------
SIGNATURE(S)
----------------------
NOTE: Please sign exactly as
name appears hereon.
Joint owners should each
sign. When signing as
attorney, executor,
administrator, trustee or
guardian, please give
full title as such.
