<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. ___)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement [ ] Confidential, For Use of the
Commission Only
(as Permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11c or Rule 14a-12
CLINICOR, INC.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
Preliminary Copies
CLINICOR, INC.
1717 West Sixth Street, Suite 400, Austin, Texas 78703
Telephone: 512-344-3300
Fax: 512-477-0027
------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 19, 1998
-------------------------------
You are cordially invited to attend the Annual Meeting of Shareholders of
Clinicor, Inc. (the "Company") which will be held on Tuesday, May 19, 1998, at
9:00 a.m., Austin, Texas time, at the Company's headquarters at 1717 West Sixth
Street, Suite 400, Austin, Texas for the following purposes:
1. To elect five (5) directors of the Company (two (2) to be elected by
the Company's Common Shareholders, voting together; two (2) to be
elected by the Company's Class A Preferred Shareholders voting
together; and one (1) to be elected by the holder of the Company's
Class B Preferred Stock);
2. To consider and act upon a proposal to amend the Company's Articles of
Incorporation to authorize the Board of Directors of the Company,
subject to certain limitations described herein, without further
action by the holders of the Company's Common Stock, to issue shares
of Preferred Stock in one or more series and to fix the rights,
preferences, privileges and restrictions thereof;
3. To ratify the appointment of Price Waterhouse LLP, independent
accountants, as auditors for the fiscal year ending December 31, 1998;
and
4. To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
Shareholders of record at the close of business on April 7, 1998 are
entitled to notice of and to vote at the Annual Meeting and any and all
adjournments or postponements thereof.
TO INSURE YOUR REPRESENTATION AT THE MEETING, YOU ARE URGED TO SIGN AND RETURN
THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE, REGARDLESS OF WHETHER YOU PLAN
TO ATTEND THE MEETING IN PERSON. IF YOU ATTEND THE MEETING, YOU MAY REVOKE YOUR
PROXY AND VOTE IN PERSON. YOU MAY ALSO REVOKE YOUR PROXY AT ANY TIME BEFORE IT
HAS BEEN VOTED AT THE ANNUAL MEETING.
By Order of the Board of Directors,
Robert S. Sammis, President
Austin, Texas
April 17, 1998
<PAGE>
Preliminary Copies
CLINICOR, INC.
1717 West Sixth Street, Suite 400, Austin, Texas 78703
Telephone: 512-344-3300
Fax: 512-477-0027
PROXY STATEMENT
PROXY SOLICITATION
This Proxy Statement and the accompanying proxy card are being mailed to
shareholders on or about April 17, 1998, by the Board of Directors of Clinicor,
Inc. (the "Company") in connection with the solicitation of proxies for use at
the Annual Meeting of Shareholders (the "Annual Meeting") to be held at 1717
West Sixth Street, Suite 400, Austin, Texas on May 19, 1998 at 9:00 a.m.,
Austin, Texas time, and at all adjournments or postponements thereof. The
Company will pay all expenses incurred in connection with this solicitation,
including postage, printing, handling and the actual expenses incurred by
custodians, nominees and fiduciaries in forwarding proxy materials to beneficial
owners. In addition to solicitation by mail, certain officers, directors and
regular employees of the Company, who will receive no additional compensation
for their services, may solicit proxies by telephone, personal communication or
other means.
This Proxy Statement and enclosed proxy card were initially mailed or
delivered to stockholders on or about April 17, 1997. The Company's Annual
Report, including financial statements for the fiscal year ended December 31,
1997, was simultaneously mailed to shareholders.
PURPOSES OF MEETING
The principal purposes of the meeting are: (i) to elect five (5) directors
of the Company (two (2) to be elected by the Company's Common Shareholders,
voting together; two (2) to be elected by the Company's Class A Preferred
Shareholders voting together; and one (1) to be elected by the holder of the
Company's Class B Preferred Stock); (ii) to consider and approve an amendment
(the "Amendment") to the Company's Articles of Incorporation to authorize the
Board of Directors of the Company, subject to certain limitations described
herein, without further action by the holders of the Company's Common Stock, to
issue shares of Preferred Stock in one or more series and to fix the rights,
preferences, privileges and restrictions thereof; and (iii) to ratify the
appointment of Price Waterhouse LLP, independent accountants, as auditors for
the fiscal year ending December 31, 1998. The Board of Directors knows of no
other matters other than those stated above to be brought before the meeting.
VOTING RIGHTS
If the accompanying proxy card is properly signed and returned to the
Company and not revoked, it will be voted in accordance with the instructions
contained therein. If the proxy card is signed and returned, but voting
directions are not made, the proxy will be voted in favor of the proposals set
forth in the accompanying Notice of Annual Meeting of Shareholders and in such
manner as the proxy holders named on the enclosed proxy card in their discretion
determine upon such other business that may properly come before the meeting or
at any adjournment or postponement thereof. Any proxy given pursuant to this
solicitation may be revoked by the person giving it at any time before it is
voted by (i) filing written notice of revocation with the Secretary of the
<PAGE>
Company which is actually received prior to the vote of the shareholders, (ii)
filing a duly executed proxy bearing a later date with the Secretary of the
Company before the vote of the shareholders or (iii) attending the Annual
Meeting and voting in person.
The Board of Directors has fixed the close of business on April 7, 1998, as
the record date for the determination of shareholders entitled to receive notice
of and to vote at the Annual Meeting and all adjournments or postponements
thereof. As of the close of business on April 10, 1998, the Company had
outstanding 4,136,400 shares of Common Stock, 3,930 shares of Class A Preferred
Stock and 50,000 shares of Class B Preferred Stock.
With respect to those directors that the holders of Common Stock are
entitled to elect, each holder of Common Stock will be entitled to vote at the
Annual Meeting and will be entitled to one (1) vote for each share owned. With
respect to those directors that the holders of Class A Preferred Stock are
entitled to elect, each holder of Class A Preferred Stock will be entitled to
vote at the Annual Meeting and will be entitled to the number of votes equal to
the number of shares of Common Stock into which the shares of Class A Preferred
Stock held by such shareholder could be converted. With respect to the director
that the holders of Class B Preferred Stock are entitled to elect, each holder
of Class B Preferred Stock will be entitled to vote at the Annual Meeting and
will be entitled to one (1) vote for each share owned. As of April 10, 1998,
3,930 shares of Class A Preferred Stock were outstanding, and such shares of
Class A Preferred Stock were convertible into a total of 2,620,000 shares of
Common Stock. As of April 10, 1998, 50,000 shares of Class B Preferred Stock
were outstanding.
On other matters to come before the Annual Meeting, the holders of the
Common Stock and Class A Preferred Stock and Class B Preferred Stock shall vote
together, with each holder of Common Stock entitled to one (1) vote for each
share owned, each holder of Class A Preferred Stock entitled to 666-2/3 votes
for each share of Class A Preferred Stock owned, and each holder of Class B
Preferred Stock entitled to 33-1/3 votes for each share of Class B Preferred
Stock owned. Fractional votes shall not be permitted, and any fractional voting
rights of the holders of the Preferred Stock (after aggregating all shares into
which shares of Preferred Stock held by any holder may be converted) shall be
rounded to the nearest whole number.
In addition to the foregoing, each class of the Company's capital stock
(Common Stock, Class A Preferred Stock and Class B Preferred Stock) shall be
entitled to vote separately as a class on the proposal to amend the Company's
Articles of Incorporation. Approval of the Amendment requires the affirmative
vote of the holders of a majority of the Common Stock and a majority of the
Class B Preferred Stock and requires the affirmative vote of the holders of two-
thirds of the Class A Preferred Stock.
The representation in person or by proxy of at least a majority of the
issued and outstanding shares of capital stock of the Company entitled to vote
at the Annual Meeting is necessary to establish a quorum for the transaction of
business at the Annual Meeting. In addition, with respect to the election of
directors by the holders of Class A Preferred Stock, the representation in
person or by proxy of the holders of at least two-thirds of the Class A
Preferred Stock then outstanding shall be required to constitute a quorum. With
respect to the election of directors by the holders of Class B Preferred Stock,
the representation in person or by proxy of the holders of at least two-thirds
of the Class B Preferred Stock outstanding shall be required to constitute a
quorum. Directors to be elected by the holders of the Common Stock will be
elected by a plurality of the votes cast by the holders of the Common Stock.
Directors to be elected by the holders of the Class A Preferred Stock will be
elected by a vote of the holders of a majority of the shares of Class A
Preferred Stock then outstanding, and the director to be elected by the holders
of the Class B Preferred Stock will be elected by the vote of the holders of a
majority of the shares of the Class B Preferred Stock then outstanding. All
other matters to come before the
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<PAGE>
Annual Meeting require the affirmative vote of the holders of a majority of the
shares of capital stock of the Company entitled to vote and represented in
person or by proxy at the Annual Meeting. Abstentions and broker "non-votes"
are counted as represented for purposes of determining the presence or absence
of a quorum. A "non-vote" occurs when a broker holding shares for a beneficial
owner votes on one proposal, but does not vote on another proposal because the
broker does not have discretionary voting power and has not received
instructions from the beneficial owner. Abstentions are included in the number
of shares voting on each matter and, therefore, with respect to votes on
specific proposals, will have the effect of negative votes. Broker "non-votes"
are not so included.
I. ELECTION OF DIRECTORS
The Board presently consists of six (6) members. The Board has voted that,
effective as of the date of the Annual Meeting, the Board will consist of five
(5) members. All of the directors elected at the Annual Meeting will hold
office until the next succeeding annual meeting or until their successors shall
have been elected and qualify.
The management of the Company recommends the election to the Board of the
five (5) nominees whose names appear in the tables below. Unless a proxy
indicates otherwise, the persons designated as proxies will vote the shares of
the Company's Common Stock represented by properly executed and returned proxies
for the election of Robert S. Sammis and James W. Clark, Jr., will vote the
shares of Class A Preferred Stock represented by properly executed and returned
proxies for the election of Dr. Zola P. Horovitz and Mr. Joseph L. Dowling and
will vote the shares of Class B Preferred Stock represented by properly executed
and returned proxies for the election of Mr. Craig Macnab. In the event any of
the nominees is unable to serve (which is not anticipated), the persons
designated in proxies will cast votes for the remaining nominees and for such
other persons as the Board of Directors may select. All of the nominees
presently serve as directors.
The first table below sets forth information concerning the nominees for
the two (2) director positions to be elected by the holders of Common Stock; the
second table sets forth information concerning the nominees for the two (2)
director positions to be elected by the holders of Class A Preferred Stock; and
the third table sets forth information concerning the nominee for the one (1)
director position to be elected by the holders of Class B Preferred Stock.
Information about ownership of equity securities of the Company by the nominees
appears elsewhere in this Proxy Statement under the caption "Ownership of Common
Stock and Preferred Stock." References in the table and in the following
discussion to positions held in the Company are intended to include positions
held in the Company's predecessor, Clinicor, Inc., a Texas corporation.
NOMINEES FOR THE DIRECTOR POSITIONS TO
BE ELECTED BY THE HOLDERS OF COMMON STOCK
<TABLE>
<CAPTION>
First Year
Name Age Position with Company Elected Director
---- --- --------------------- ----------------
<S> <C> <C> <C>
Robert S. Sammis 45 President, Secretary, Director 1992
James W. Clark, Jr.(1) 45 Vice President of Finance, Chief 1997
Financial Officer, Treasurer,
Director
</TABLE>
- -------------------------
(1) Member of Compensation Committee
3
<PAGE>
NOMINEES FOR THE DIRECTOR POSITIONS TO
BE ELECTED BY THE HOLDERS OF CLASS A PREFERRED STOCK
First Year
Name Age Position with Company Elected Director
---- --- --------------------- ----------------
Zola P. Horovitz, Ph.D.(1) 63 Director 1996
Joseph L. Dowling(1)(2) 33 Director 1997
- -------------------------
(1) Member of Compensation Committee
(2) Member of Audit Committee
NOMINEE FOR THE DIRECTOR POSITION TO
BE ELECTED BY THE HOLDER OF CLASS B PREFERRED STOCK
First Year
Name Age Position with Company Elected Director
---- --- --------------------- ----------------
Craig Macnab(1)(2) 42 Director 1998
- -------------------------
(1) Member of Compensation Committee
(2) Member of Audit Committee
Robert S. Sammis has been the Company's President since June 1997. Prior to
June 1997, Mr. Sammis had served as the Company's Executive Vice President and
Chief Operating Officer since the Company's inception. He is also a director, a
position which he has held since the Company's inception. From March 1991 until
September 1992, Mr. Sammis served as Director of Barton Research, Inc., and from
August 1991 until September 1992, he served as Barton's Executive Vice President
and Chief Operating Officer. From 1986 until August 1992, Mr. Sammis was engaged
as a practicing CPA specializing in business consultation. Mr. Sammis spent five
(5) years with Arthur Andersen & Co. where he was an audit manager in the firm's
health care practice. Mr. Sammis holds an MBA degree from the University of
Texas.
James W. Clark, Jr. joined the Company as Vice President of Finance, Chief
Financial Officer, Treasurer and a director in May 1997. Prior to joining the
Company, Mr. Clark was Vice President of Finance, Treasurer and Chief Financial
Officer of Bay Resources, a Florida based computer leasing and consulting firm.
Mr. Clark was responsible for Bay Resources' financial management and developed
and implemented the business plan that enabled Bay Resources to increase its
revenues from $12 million to $80 million over his eight year tenure. Mr. Clark
had previously worked as a management consultant providing merchant banking
services and initiating venture capital investments on behalf of medium-sized
Florida companies. Mr. Clark holds a Bachelor of Arts degree from Butler
University and is a Certified Public Accountant.
Zola P. Horovitz, Ph.D. joined the Company as a director in November 1996.
Dr. Horovitz worked for the Bristol-Myers Squibb Corporation and one of its
predecessor entities, The Squibb Institute for Medical Research, for thirty-five
(35) years until his retirement in 1994. Since his retirement, Dr. Horovitz has
served as a consultant to the biotechnology and pharmaceutical industries. Dr.
Horovitz received an M.S. in Pharmacology in 1958 and his Ph.D. in Pharmacology
in 1960, both from the University of Pittsburgh. Dr. Horovitz serves as a
director of Diacrin Inc., Biocryst Pharmaceuticals Inc., Synaptic Pharmaceutical
Corp.,
4
<PAGE>
Procept Inc., Magainin Pharmaceuticals, Inc., AVIGEN Inc. and Roberts
Pharmaceuticals Co. and several privately-held companies.
Joseph L. Dowling joined the Company as a director in June 1997. Since
September 1995, Mr. Dowling has been a partner at Oracle Partners, L.P., a
private investment firm specializing in public securities investing and merchant
banking in health care, bioscience and related industries. From February 1994
to September 1995, Mr. Dowling was employed by Leo Capital, L.P., a partnership
formed by Richard Rainwater and Thomas Frist to make strategic equity
investments in public and late-stage private companies. From June 1993 to
February 1994, Mr. Dowling was employed by Tudor Investment Corporation. Mr.
Dowling earned his undergraduate degree from Harvard College. He received an
MBA from the Harvard Business School in June 1993. Mr. Dowling is a director of
SMV Acquisition Corp. and ThermatRx, both private companies.
Craig Macnab joined the Company as a Director in March 1998. Since January
1997, Mr. Macnab has been the President of Tandem Capital, which makes
investments in micro-cap public companies. From 1993 to 1996, Mr. Macnab served
as the general partner of MacNiel Advisors, Inc., the general partner of three
private funds that invested in the publicly traded securities of small public
companies. From 1987 to 1993, Mr. Macnab was a partner of J.C. Bradford & Co., a
regional brokerage firm, jointly responsible for a private mezzanine capital
fund. From 1981 to 1987, Mr. Macnab was employed by Lazard Freres & Co. Mr.
Macnab is also a director of Environmental Tectonics Corporation, JDN Realty
Corp., Smart Choice Automotive Group, Inc., Digital Transmission and Teltronics,
Inc.
BOARD AND COMMITTEE MEETINGS AND OTHER INFORMATION
The Board of Directors met nine (9) times during 1997. The Board also took
action on one (1) occasion by unanimous written consent. The Board has an Audit
Committee and a Compensation Committee. The Audit Committee and Compensation
Committee had no formal meetings during 1997, but each committee met informally
on several occasions. The Audit Committee reviews the results and scope of the
audit and other services provided by the Company's independent auditors. The
Audit Committee also recommends to the Board the appointment of independent
auditors. The Compensation Committee is responsible for the approval of
compensation arrangements for officers of the Company and for the review of the
Company's compensation plans and policies and of related party transactions.
The Company does not have a nominating or similar committee.
Each director attended 75% or more of the Board meetings held during the
period for which the director was in office.
MANAGEMENT
Unless otherwise specified by the Board, all executive officers are elected
for a term of one (1) year, commencing with the date of the annual meeting of
stockholders, provided that all officers hold office until their successors are
elected or appointed and qualify, or until their death, resignation or removal
from office. Any officer elected or appointed by the Board may be removed at
any time by the Board, subject to the contract rights, if any, of the person so
removed. Mr. Sammis, Mr. Clark and Ms. Krivacic have executed an employment
agreement with the Company. See "Executive Compensation--Employment
Agreements."
Each of the Company's executive officers, except for Dr. Robert M. Day,
Vice President of Scientific Affairs, and Ms. Susan Krivacic, Senior Vice
President of Marketing and Business Development, is also a
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director of the Company. Information concerning these individuals appears
elsewhere in this Proxy Statement under the caption "Election of Directors."
Information concerning Dr. Day and Ms. Krivacic is set out below.
Robert M. Day, Ph.D., Vice President of Scientific Affairs, joined the
Company in June 1995. Dr. Day's experience includes the establishment of
complete clinical development programs and extensive interaction with the FDA.
Prior to joining Clinicor, Dr. Day was a Vice President of Clinical Research at
Arcturus Pharmaceutical Corporation. From 1992 to 1994 he was Associate
Director of Clinical Affairs at Dermik Laboratories (Rhone-Poulenc Rorer). From
1988 to 1992, Dr. Day was with Glaxo, Inc. where he served as Associate Director
of Clinical Research for Glaxo Dermatology. From 1984 to 1988, Dr. Day was with
Allergan, Inc. serving in the clinical research and development departments of
both the eyecare and dermatology units. He received his Ph.D. in Biological
Science in 1983 from the University of California, Irvine. Dr. Day received a
Bachelor of Science degree from Brown University where he graduated with Honors
in 1976. He is a co-inventor in a patent covering an
antifungal/antiinflammatory drug delivery system. Dr. Day is a current member
of the Board of Trustees for the National Psoriasis Foundation. Dr. Day is 43.
Susan Krivacic, Senior Vice President, Marketing and Business Development,
joined the Company in March 1998. From 1996 through January 1998, Ms. Krivacic
was employed by Quintiles, Inc., a division of Quintiles Transnational
Corporation, where she served first as Director, Business Development and later
as Executive Director, Business Development Oncology Therapeutics. At Quintiles,
Ms. Krivacic implemented a marketing and business development strategy for that
entity's oncology therapeutics unit. Previously, from 1992 to 1996, Ms. Krivacic
was employed by Pharmaco International, Inc. and various predecessor companies,
including Applied Biosciences International, the parent company of Pharmaco
Dynamics, Inc. Among other positions, Ms. Krivacic served, from 1994 to 1995, as
Director, Clinical Development Account Services for Pharmaco International and
as Associate Director, Business Development for the toxicology division of
Pharmaco LSR, Inc. Ms. Krivacic is a former Fulbright Scholar. She received her
Masters degree in Public Affairs in 1983 from the Lyndon Baines Johnson School
of Public Affairs, Austin, Texas. She received her Bachelor of Arts degree from
the University of Texas, where she graduated with Honors in 1981. Ms. Krivacic
is 39.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information regarding compensation
for the years ended December 31, 1996 and 1997, earned by or paid to the
Company's Chief Executive Officer and the other persons who were executive
officers of the Company at December 31, 1997 and whose total salary and bonus
exceeded $100,000 individually during the year ended December 31, 1997 (the
"Named Executive Officers").
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<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
------------------------- -------------
Awards
------
Securities
Other Annual Underlying All Other
Salary Compensation Options Compensation
Name and Principal Position Year ($) ($) (#) ($)
- --------------------------- ---- -------- --------------- ------------- ---------------
<S> <C> <C> <C> <C> <C>
Thomas P. O'Donnell(1).............. 1997 150,000 0 0 2,235(2)
Chairman of the Board and 1996 124,749 0 0 1,934(2)
Chief Executive Officer 1995 90,000 0 150,000 1,523(2)
Robert S. Sammis.................... 1997 135,000 0 0 2,235(2)
President and Secretary 1996 108,260 0 0 1,934(2)
1995 90,000 0 150,000 1,523(2)
Robert M. Day, Ph.D................. 1997 129,375 0 20,000 0
Vice President of Scientific 1996 112,011 0 0 0
Affairs 1995 70,000 0 10,000 0
James W. Clark, Jr.................. 1997 80,693 25,000(3) 300,000 0
Vice President of Finance, Chief
Financial Officer and Treasurer
</TABLE>
- ----------------------------
(1) Mr. O'Donnell resigned as an officer and director of the Company effective
February 28, 1998.
(2) The Company paid insurance premiums totalling $8,940, $7,736 and $6,092 for
1997, 1996 and 1995, respectively, on term life insurance policies on Mr.
O'Donnell and Mr. Sammis. Each policy is in the amount of $2,000,000, with
$1,000,000 payable to the Company and $1,000,000 payable to a beneficiary
designated by the officer.
(3) Mr. Clark received a nonaccountable moving allowance in this amount in
connection with his retention by the Company.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information concerning individual grants of
stock options made during 1997 to each of the Named Executive Officers:
7
<PAGE>
OPTION GRANTS IN 1997
<TABLE>
<CAPTION>
Percent of Total
Number of Securities Options Granted
Underlying Options to Employees in Expiration
Name Granted Fiscal Year Exercise Price Date
- ---------------------- -------------------- --------------- -------------- ----------
<S> <C> <C> <C> <C>
Thomas P. O'Donnell... 0 N/A N/A N/A
Robert S. Sammis...... 0 N/A N/A N/A
James W. Clark, Jr.... 300,000 44% $4.675 May 2004
Robert M. Day, Ph.D... 20,000 3% $4.875 October 2004
</TABLE>
OPTIONS EXERCISED AND FISCAL YEAR-END VALUES
The following table sets forth information concerning the aggregate number
and value of unexercised options held by the Named Executive Officers at
December 31, 1997. No options were exercised by the Named Executive Officers
during the year ended December 31, 1997.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised Options At In-The-Money Options At
Fiscal Year-End (#) Fiscal Year-End ($)(1)
------------------------------------ --------------------------
Exercisable Unexercisable Exercisable Unexercisable
--------------- ------------------- ----------- -------------
<S> <C> <C> <C> <C>
Thomas P. O'Donnell... 33,334 116,666(2) $100,835 $337,915
Robert S. Sammis...... 33,334 116,666 100,835 337,915
Robert M. Day, Ph.D... 10,000 20,000 31,250 0
James W. Clark, Jr.... 0 300,000 0 0
</TABLE>
____________________________
(1) The value of unexercised, in-the-money options is the difference between
the exercise price of the options and the fair market value of the
Company's common stock at December 31, 1997 ($4.125, which was the closing
price of the Common Stock on the Over-the-Counter Bulletin Board at year
end).
(2) These options expired in March 1998.
DIRECTOR COMPENSATION
The Company reimburses directors for expenses incurred, if any, in
attending meetings of the Board of Directors. The Company does not pay director
fees to directors for their service on the Board. During 1997, the Board
adopted an informal option policy, pursuant to which directors are to receive
annual option grants of 5,000 shares each at then current market values.
Pursuant to this policy, the Board made the following option grants during 1997:
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<PAGE>
OPTION GRANTS IN 1997
Number of
Securities
Underlying Options
Name Granted Exercise Price Expiration Date
- -------------------------- ------------------ -------------- ---------------
Arthur P. Haag............ 5,000 $4.25 May 2002
Zola P. Horovitz, Ph.D.... 12,500 $4.25 May 2002
Joseph L. Dowling......... 5,000 $4.00 June 2002
Stuart T. Weisbrod, Ph.D.. 5,000 $4.00 June 2002
Also during 1997, the Board paid $18,000 to each of Dr. Zola Horovitz and Mr.
Arthur Haag in respect of consulting services rendered by Dr. Horovitz and Mr.
Haag.
EMPLOYMENT AGREEMENTS
During 1996 Messrs. O'Donnell and Sammis each became parties to five-year
employment contracts with the Company, pursuant to which they are entitled to
salaries of $150,000 and $135,000 per year, respectively. The Company may
terminate either such agreement with or without cause; provided, however, if
employment is terminated without cause, then the executive in question is
entitled to receive a severance payment equal to two (2) times the compensation
received from the Company in the twelve (12) months prior to the date of
termination. If employment is terminated either voluntarily by the executive or
by the Company for cause, then no severance is payable; provided, however, that
if the executive terminates his employment following a material reduction in his
level of responsibility, then such termination shall be deemed to be termination
without cause by the Company, and the executive shall be entitled to the
severance payment described above. In any event, the executive in question is
bound by a noncompetition covenant until the earlier of (i) June 30, 1999 or
(ii) two (2) years following termination of employment.
Effective February 28, 1998, Mr. O'Donnell and the Company entered into a
Confidential Agreement and Release, pursuant to which Mr. O'Donnell's employment
with the Company terminated. Pursuant to the Confidential Agreement and
Release, the Company will make total payments of approximately $300,000 to Mr.
O'Donnell over the course of a two-year period ending in February 2000. In the
Confidential Agreement and Release, Mr. O'Donnell reaffirmed that he is bound by
a noncompetition covenant and certain other obligations through February 2000.
Mr. O'Donnell and a related family limited partnership also affirmed that they
will continue to be bound by the Lock-Up Agreement entered into in connection
with issuance of the Class B Preferred Stock. Pursuant to the Lock-Up
Agreement, sale of a majority of the Company's Common Stock owned by Mr.
O'Donnell and the related partnership may not be sold until November 1999,
absent the prior occurrence of certain extraordinary events.
Mr. Clark and Ms. Krivacic are also parties to employment contracts. The
agreement applicable to Mr. Clark provides for a one-year term, commencing in
June 1997, with four automatic one-year renewal terms. The agreement provides
for base compensation of $120,000 per year. Ms. Krivacic's agreement, which
commenced in March 1998, also provides for an initial term of one year and for
four automatic one-year renewal terms. Her agreement provides for base
compensation of $130,000 per year and restricts the extent to which Ms. Krivacic
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may solicit sponsors for whom the Company does business for a period of six
months following the termination of her employment.
OWNERSHIP OF COMMON STOCK AND PREFERRED STOCK
The Company is authorized to issue 75,000,000 shares of Common Stock. As
of March 9, 1998, there were 4,136,400 shares of Common Stock issued and
outstanding. The Company is authorized to issue 5,181 shares of Class A
Preferred Stock and 50,000 shares of Class B Preferred Stock. As of March 9,
1998, there were 3,930 shares of Class A Preferred Stock and 50,000 shares of
Class B Preferred Stock issued and outstanding.
COMMON STOCK
The following table sets forth as of March 9, 1998, information with
respect to the beneficial ownership of the Company's outstanding Common Stock by
(i) each director of the Company, (ii) each of the Named Executive Officers,
(iii) all directors and executive officers of the Company as a group and (iv)
each shareholder known by the Company to be the beneficial owner of more than 5%
of the Company's outstanding Common Stock. Except as otherwise indicated, the
persons or entities listed below have sole voting and investment power with
respect to all shares of Common Stock owned by them. Pursuant to the beneficial
ownership rules under the Securities Exchange Act of 1934, as amended, each
named person and all directors and executive officers as a group are deemed to
be the beneficial owners of securities that may be acquired within sixty (60)
days of March 9, 1998 through the exercise of options or warrants. The number
of shares and percentages set forth opposite each shareholder's name in the
table below assumes the exercise of all such options and warrants. However, the
number of shares of Common Stock issuable upon exercise by any given shareholder
are not included in calculating the percentage of Common Stock beneficially
owned by any other shareholder.
Name and Address of Shares Beneficially Percent of
Beneficial Owner Owned Class
- ------------------- ------------------- -----------
The Oracle Group 2,839,700(1) 40.8%
712 Fifth Avenue, 45th Floor
New York, New York 10019
Sirrom Capital Corporation 1,666,667(2) 28.7%
500 Church Street, Suite 200
Nashville, Tennessee 37219
Robert S. Sammis 1,024,617(3) 24.6%
1717 West 6th St., #400
Austin, Texas 78703
O'Donnell Family Limited Partnership 787,536(4) 19.0%
7809 Brightman Lane
Austin, Texas 78733
10
<PAGE>
Name and Address of Shares Beneficially Percent of
Beneficial Owner Owned Class
- ------------------- ------------------- -----------
Robert K. Williams, III 469,506(5) 11.2%
153 Kingswood Circle
Danville, California 94506
Thomas P. O'Donnell 324,617(6) 7.8%
7809 Brightman Lane
Austin, Texas 78733
Soros Fund Management, LLC 261,335(7) 5.9%
888 Seventh Avenue, 33rd Floor
New York, New York 10106
Randolph J. Haag 246,231(8) 5.8%
359 Jacaranda
Danville, California 94506
Arthur P. Haag 172,200(9) 4.1%
11747 Quail Creek Drive
Houston, Texas 77070
Zola P. Horovitz, Ph.D. 12,500(10) .3%
30 Philip Drive
Princeton, New Jersey 08540
Robert M. Day, Ph.D. 10,000(11) .2%
1717 West 6th St., #400
Austin, Texas 78703
Joseph L. Dowling 5,000(12) .1%
712 Fifth Avenue, 45th Floor
New York, New York 10019
James W. Clark, Jr. 500 0%
1717 West 6th Street, #400
Austin, Texas 78703
Mr. Craig Macnab -0- 0%
500 Church Street, Suite 200
Nashville, Tennessee 37219
All Directors and Executive Officers as 1,224,817(13) 28.8%
a group (7 persons)
- ----------------------------
11
<PAGE>
(1) "The Oracle Group," as used herein, refers to the following funds: Oracle
Partners, L.P., Quasar International Partners C.V., Oracle Institutional
Partners, L.P. and GSAM Oracle Fund, Inc. The shares listed (the "Oracle
Shares") include 2,620,000 shares that are issuable to The Oracle Group
pursuant to The Oracle Group's option to convert 3,930 shares of Class A
Preferred Stock to the Company's Common Stock and 200,000 shares that are
issuable to Oracle Partners, L.P., upon exercise of immediately exercisable
warrants. The Oracle Group may be deemed to beneficially own such 200,000
shares. Larry N. Feinberg is the Managing General Partner of Oracle
Partners, L.P. and Oracle Institutional Partners, L.P. Oracle Investment
Management, Inc., which is owned by Mr. Feinberg, acts as the investment
manager to Quasar International Partners C.V. and GSAM Oracle Fund, Inc.
Mr. Feinberg may be deemed to beneficially own the shares owned by The
Oracle Group.
(2) Include 1,666,667 shares that are issuable pursuant to this entity's option
to convert 50,000 shares of Class B Preferred Stock to the Company's Common
Stock. Sirrom Capital Corporation does business as Tandem Capital
("Tandem").
(3) Mr. O'Donnell and Mr. Sammis have entered into agreements with each of Drs.
Dell, Ramsdell and Shulman, pursuant to which Messrs. Sammis and O'Donnell
are jointly entitled to direct the manner in which the aggregate 291,283
shares owned by Drs. Dell, Ramsdell and Shulman shall be voted. Mr. Sammis
may therefore be deemed to beneficially own these shares. Also includes
33,334 shares issuable to Mr. Sammis pursuant to immediately exercisable
options.
(4) Ms. Kristina Breen O'Donnell, a daughter of Thomas P. O'Donnell, is the
sole officer and director of the general partner of the O'Donnell Family
Limited Partnership and has voting and dispositive power with respect to
the 787,536 shares owned by the Partnership. Ms. O'Donnell may therefore
be deemed to beneficially own these shares.
(5) Includes (i) 109,400 shares held by Guarantee and Trust Co. FBO Robert K.
Williams III Sep/IRA, as to which Mr. Williams has voting and dispositive
power and (ii) 51,606 shares issuable to Mr. Williams pursuant to
immediately exercisable sales agent warrants.
(6) Mr. O'Donnell and Mr. Sammis have entered into agreements with each of Drs.
Dell, Ramsdell and Shulman, pursuant to which Messrs. Sammis and O'Donnell
are jointly entitled to direct the manner in which the aggregate 291,283
shares owned by Drs. Dell, Ramsdell and Shulman shall be voted. Mr.
O'Donnell may therefore be deemed to beneficially own these shares. Also
includes 33,334 shares issuable to Mr. O'Donnell pursuant to immediately
exercisable options.
(7) Comprised of 261,335 of the Oracle Shares that are issuable to Quasar
International Partners C.V. pursuant to its option to convert 392 shares of
Class A Preferred Stock to the Company's Common Stock. Soros Fund
Management, LLC acts as principal investment advisor to Quasar
International Partners, C.V. and may be deemed to beneficially own the
shares owned by Quasar International Partners, C.V. Mr. George Soros,
Chairman of Soros Fund Management, LLC, and Mr. Stanley F. Druckenmiller,
Lead Portfolio Manager of Soros Fund Management, LLC, may also be deemed to
beneficially own these shares.
(8) Includes (i) 50,000 shares issuable to Mr. Randolph J. Haag pursuant to
immediately exercisable options and (ii) 51,606 shares issuable to Mr. Haag
pursuant to immediately exercisable sales agent warrants.
(9) Includes 55,000 shares issuable to Mr. Arthur P. Haag pursuant to
immediately exercisable options.
(10) Includes 12,500 shares issuable to Dr. Horovitz pursuant to immediately
exercisable options.
(11) Includes 10,000 shares issuable to Dr. Day pursuant to immediately
exercisable options.
12
<PAGE>
(12) Includes 5,000 shares issuable to Mr. Dowling pursuant to immediately
exercisable options.
(13) Includes (i) 291,283 shares owned by Drs. Dell, Ramsdell and Shulman, as to
which Mr. Sammis has voting power; (ii) 33,334 shares issuable to Mr.
Sammis pursuant to immediately exercisable options; (iii) 55,000 shares
issuable to Mr. Arthur Haag pursuant to immediately exercisable options;
(iv) 10,000 shares issuable to Dr. Day pursuant to immediately exercisable
options; (v) 12,500 shares issuable to Dr. Horovitz pursuant to immediately
exercisable options; and (vi) 5,000 shares issuable to Mr. Dowling pursuant
to immediately exercisable options.
PREFERRED STOCK
All of the Company's Class A Preferred Stock is owned by The Oracle Group,
as described in footnote (1) to the preceding table. All of the Company's Class
B Preferred Stock is owned by Sirrom Capital Corporation d/b/a Tandem Capital
("Tandem"), as described in footnote 2 to the preceding table. None of the
Class A Preferred Stock or Class B Preferred Stock is owned by any director of
the Company or by any of the Named Executive Officers.
POTENTIAL CHANGE IN CONTROL
In any election of directors, the holders of Class A Preferred Stock,
voting separately as a class, are entitled to elect that number of directors
(the "Class A Directors") as is proportionate to their ownership interest in the
Company, determined on an as-converted basis. On an as-converted basis, the
holders of Class A Preferred Stock currently have an approximate 31% interest in
the Company, which interest may increase over time as mandatory in-kind
dividends are paid with respect to the Class A Preferred Stock. The holders of
the Class B Preferred Stock are entitled to vote as a class to elect one (1)
member of the Board of Directors (the "Class B Director").
Any default in the payment of dividends on the Class A Preferred Stock is
deemed to be a "Class A Dividend Default." The Company is in default with
respect to the Class B Preferred Stock if the Company fails to pay dividends on
the Class B Preferred Stock on six (6) consecutive payment dates or if the
aggregate unpaid dividends ever equal or exceed $18 per share ("Class B Dividend
Default"). If a Class A Dividend Default or a Class B Dividend Default occurs,
then the Class A Directors are entitled to cast two (2) votes on all matters,
the Class B Director is entitled to cast the same number of votes as may
collectively be cast by the Class A Directors, and the directors elected by the
holders of Common Stock continue to have the right to cast one (1) vote on all
such matters. Accordingly, the directors elected by the two (2) classes of
Preferred Stock would together control the Board. If a Class B Dividend Default
occurs and there are no Class A Directors, then the Class B Director would
immediately be entitled to that number of votes as would constitute a majority
of all votes cast by the Board of Directors.
CERTAIN TRANSACTIONS
Merger. On February 27, 1995, Clinicor, Inc., a Texas corporation
------
(referred to herein as the "Predecessor Company"), was merged into Pegasus Tax
and Financial Planning Services, Inc. In connection with the merger (the
"Merger"), the Predecessor Company ceased to exist and Pegasus, as the surviving
entity, changed its name to Clinicor, Inc. Immediately prior to the Merger, the
principal shareholders of Pegasus included Randolph J. Haag and Russell
Armstrong. The principal shareholders of the Predecessor Company were
13
<PAGE>
Patricia J. O'Donnell and Robert S. Sammis, who owned 48.0% and 37.5% of the
Predecessor Company, respectively. Patricia J. O'Donnell is the mother of
Thomas P. O'Donnell.
Of the shares of the Predecessor Company that were outstanding prior to the
Merger, 6,000 and 4,000 of such shares had been issued to Patricia J. O'Donnell
and Robert S. Sammis, respectively, in September 1992 for a per share purchase
price of $0.10. On November 11, 1994, the Predecessor Company issued 687.5
shares of its Common Stock to Robert S. Sammis in consideration of personal
guarantees rendered by Mr. Sammis with respect to the Predecessor Company's
lease of office space, computer systems, office equipment, furniture and medical
equipment.
Immediately prior to the Merger, Pegasus sold an aggregate of 750,000
shares of Common Stock at a purchase price of $1.00 per share to Randolph J.
Haag, Irawan Onggara and Russell Armstrong. Such individuals purchased 375,000,
187,500 and 187,500 shares of Common Stock of Pegasus, respectively.
In the Merger, each share of Pegasus common stock (a total of 1,421,000
shares) remained outstanding. Each of the Predecessor Company's 12,500 shares
of Common Stock was converted into 166.4 shares of the Company (a total of
2,080,000 shares), such that after the Merger the Company had a total of
3,501,000 shares outstanding.
Agreements Ancillary to Merger. In connection with the Merger, the parties
------------------------------
thereto entered into a Preemptive Rights Agreement, pursuant to which the
Company granted to Randolph J. Haag, Irawan Onggara and Russell Armstrong a
right of first refusal for a period of three (3) years to purchase a portion of
all new securities issued by the Company. Messrs. Haag, Onggara and Armstrong
subsequently relinquished all of their rights under the Preemptive Rights
Agreement, as more fully described below.
In March 1996, Randolph Haag relinquished all rights under any and all
agreements to which he and the Company are parties in exchange for a cash
payment of $25,000 and a contractual grant of options to purchase 50,000 shares
at an exercise price of $1.00 per share. The option expires on February 28,
2001.
For due diligence services performed in connection with the Merger, Mr.
Arthur P. Haag, currently a director of the Company, received options to
purchase up to 25,000 shares of the Company's Common Stock at a purchase price
of $0.10 per share. Such options were recently exercised.
In anticipation of the Merger, Messrs. Sammis and O'Donnell entered into a
Voting and Pre-Merger Agreement with each of Steven J. Dell, M.D., William M.
Ramsdell, M.D. and David G. Shulman, M.D., who were shareholders of the
Predecessor Company. Pursuant to such agreements, each of the named physicians
agreed to vote their shares of Common Stock of the Company in such manner as may
be determined by Messrs. O'Donnell and Sammis. These agreements terminate upon
the closing of an underwritten public offering of the Company which results in
aggregate net proceeds to the Company of at least $5.0 million.
Private Placement Offering. From September 1995 to February 1996, the
--------------------------
Company engaged in a private placement offering (the "Private Offering") of
Units consisting of Common Stock and Warrants to purchase Common Stock. The
Units were offered through SJ Capital, Inc. (the "Sales Agent"), which acted as
the Company's sales agent. Randolph J. Haag was affiliated with the Sales Agent
at the time of the Private Offering and received 103,212 Sales Agent Warrants
and consulting and commission fees of $76,478 from the Sales Agent in connection
with the Private Offering. See "Description of Securities--Warrants."
14
<PAGE>
Indemnified Lawsuit. In connection with their separation from a previous
-------------------
employer and the formation of the Predecessor Company, Thomas P. O'Donnell and
Robert S. Sammis became involved in certain disputes with the previous employer
and one of its shareholders and creditors. These disputes culminated in the
previous employer's filing of a lawsuit against Mr. Sammis and the Company in
which various causes of action were alleged. The Company agreed to indemnify
Mr. Sammis in connection with the lawsuit. In April 1997, the lawsuit was
settled. Pursuant to the settlement, the Company paid the plaintiffs $200,000.
Class A Preferred Stock Sale. In July 1996, the Company issued 3,500
----------------------------
shares of Class A Preferred Stock to Oracle Partners, L.P. and certain of its
affiliates (the "Oracle Group"). In connection with the original sale of the
Preferred Stock, the Company entered into a Settlement Agreement with Russell
Armstrong, Irawan Onggara and Century Financial Partners, Inc. ("CFP").
Pursuant to the Settlement Agreement, Messrs. Armstrong and Onggara and CFP
waived their preemptive rights and certain other claims in connection with the
issuance of the Preferred Stock and waived all other rights and claims arising
under the Preemptive Rights Agreement in exchange for aggregate cash
consideration of $100,000.
Loan from Oracle Partners, L.P. On July 1, 1997, the Company received a
-------------------------------
six-month term loan from a Class A Preferred stockholder, Oracle Partners, L.P.
The loan terms required the payment of interest at 10%. In connection with the
loan, the Company issued a warrant to purchase 200,000 shares of the Company's
Common Stock at $5.50 per share. (The warrant exercise price was adjusted to
$5.17 per share and the shares purchasable were adjusted to 212,766 in
connection with the issuance of Class B Preferred Stock later in 1997.) The
warrant is immediately exercisable and expires five years from the date of
issuance. Total interest expense recognized in 1997 related to this loan was
approximately $314,750. The loan was repaid on November 25, 1997.
II. ADOPTION OF AMENDMENT
The Board of Directors of the Company has approved adoption of the
Amendment, has found the Amendment to be in the best interests of the Company
and has recommended that the shareholders of the Company vote in favor of the
Amendment. If the Amendment is approved, the authorized capital stock of the
Company will include 100,000 shares of Class C Preferred Stock. The Board of
Directors will be authorized, subject to certain limitations prescribed by
Nevada law, without further action of the holders of the Company' Common Stock,
to issue shares of Class C Preferred Stock in one or more series and to fix the
rights, preferences, privileges and restrictions thereof, including dividend
rights, conversion rights, voting rights, terms of redemption, liquidation
preferences, sinking fund terms and the number of shares constituting any series
or the designation of such series. The resolutions of the Board of Directors
setting forth the rights of any series of Class C Preferred Stock may also
modify the rights associated with the Class A Preferred Stock or Class B
Preferred Stock.
The Company believes that the power to issue Class C Preferred Stock will
provide flexibility in connection with possible corporate transactions,
including possible acquisitions and financings. The issuance of Class C
Preferred Stock, however, could adversely affect the voting powers of holders of
Common Stock and could restrict their rights to receive payments upon
liquidation. It could also have the effect of delaying, deferring or preventing
a change of control of the Company. The Company has no present plans to issue
any shares of Class C Preferred Stock.
The holders of the Company's Class A Preferred Stock and Class B Preferred
Stock, each voting as a class, will have the right to approve the creation of
any new series of Preferred Stock.
15
<PAGE>
The foregoing description of the Class C Preferred Stock is qualified in
its entirety by reference to Exhibit A, which sets forth a complete statement of
---------
the Amendment.
The Board of Directors recommends that the shareholders vote FOR the
adoption of the amendment.
III. SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has appointed Price Waterhouse LLP to audit the
books and accounts of the Company for the year ending December 31, 1998, and
will offer a resolution at the meeting to ratify the appointment. Price
Waterhouse LLP has been the principal auditor of the Company since December
1996. Representatives of Price Waterhouse LLP will be present at the meeting to
respond to appropriate questions and will have an opportunity, if they desire,
to make a statement.
Prior to December 1996, BDO Seidman, LLP served as the Company's principal
auditor. On December 2, 1996, the Company dismissed BDO Seidman, LLP as its
independent public accountant and retained Price Waterhouse LLP. Neither of BDO
Seidman's reports on the Company's financial statements for the past two years
contained an adverse opinion or disclaimer of opinion, or was modified as to
uncertainty, audit scope or accounting principles. The decision to change
accountants was approved by the Company's Board of Directors. There were no
disagreements with BDO Seidman on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure,
which, if not resolved to BDO Seidman's satisfaction, would have caused it to
make reference to the subject matter of the disagreement in connection with its
report.
The Board of Directors recommends that the shareholders vote FOR
ratification of the appointment of Price Waterhouse LLP.
OTHER MATTERS
Management is not aware of any matters to come before the Annual Meeting
that will require the vote of shareholders other than those matters indicated in
the Notice of Meeting and this Proxy Statement. However, if any other matter
calling for shareholder action should properly come before the Annual Meeting or
any adjournment or postponement thereof, those persons designated in proxies
will vote thereon according to their best judgment.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
Based solely on its review of the copies of such forms received by it, the
Company believes that all of its officers, directors and greater-than-ten-
percent shareholders have complied with their Section 16(a) filing requirements,
except that Mr. Arthur Haag, a director, filed a Form 4 relating to the sale of
7,000 shares of Common Stock in December 1997 in February 1998, and except that
Dr. Robert Day, an officer, filed a Form 5 relating to an option to purchase
20,000 shares of Common Stock that was granted on October 10, 1997 in March
1998.
16
<PAGE>
ANNUAL REPORT AND FORM 10-KSB
The Annual Report to the Shareholders of the Company, which includes the
Company's Annual Report on Form 10-KSB for the fiscal year ended December 31,
1997, is mailed herewith to all shareholders.
THE COMPANY WILL FURNISH TO EACH PERSON BEING SOLICITED BY THIS PROXY
STATEMENT, ON THE WRITTEN REQUEST OF ANY SUCH PERSON, A COPY OF THE EXHIBITS TO
FORM 10-KSB, UPON RECEIPT OF $10.00 TO COVER THE COMPANY'S COSTS OF REPRODUCTION
AND MAILING OF SUCH EXHIBITS. ALL SUCH REQUESTS SHOULD BE DIRECTED TO ROBERT S.
SAMMIS, PRESIDENT, 1717 WEST SIXTH STREET, SUITE 400, AUSTIN, TEXAS 78703.
SHAREHOLDER PROPOSALS FOR
NEXT ANNUAL MEETING OF SHAREHOLDERS
Proposals of shareholders intended to be presented at the 1999 annual
meeting must be received by the Company not later than December 31, 1998 for
inclusion in its Proxy Statement and form of proxy card relating to that
meeting. Any such proposals, as well as any questions relating thereto, should
be directed to Robert S. Sammis, President, 1717 West Sixth Street, Suite 400,
Austin, Texas 78703.
By Order of the Board of Directors,
Robert S. Sammis, President
April 17, 1998
17
<PAGE>
EXHIBIT A
Section 1 and the first paragraph of Section 2 of Article VI of the
Articles of Incorporation of the Corporation shall be amended to read in their
entirety as follows:
Section 1. Authorized Shares. The aggregate number of shares which
-----------------
the Corporation shall have authority to issue is 75,155,181, of which (a)
75,000,000 shares shall be designated "Common Stock", par value $.001 per
share, (b) 5,181 shares shall be designated "Class A Convertible Preferred
Stock", without par value, (c) 50,000 shares shall be designated "Class B
Convertible Preferred Stock", without par value, and (d) 100,000 shares
shall be designated "Class C Serial Preferred Stock", without par value.
The "Class A Convertible Preferred Stock" is sometimes referred to as the
"Class A Preferred Stock", the "Class B Convertible Preferred Stock" is
sometimes referred to as the "Class B Preferred Stock", and both of such
classes of stock are sometimes referred to collectively as the "Convertible
Preferred Stock." The "Class C Serial Preferred Stock" is sometimes
referred to as the "Class C Preferred Stock." The "Convertible Preferred
Stock" and "Class C Preferred Stock" are sometimes referred to collectively
as the "Preferred Stock".
Section 2. Relative Rights. Subject to the rights of the holders of
---------------
the Preferred Stock, the Common Stock shall be entitled to dividends out of
funds legally available therefor, when, as and if declared and paid to the
holders of Common Stock, and upon liquidation, dissolution or winding up of
the Corporation, to share ratably in the assets of the Corporation
available for distribution to the holders of Common Stock. Except as
otherwise provided herein or by law, the holders of the Common Stock shall
have full voting rights and powers and each share of Common Stock shall be
entitled to one vote. The following is a statement of the initial
designations, preferences, limitations and relative rights in respect of
the shares of each class of Convertible Preferred Stock of the Corporation
and the rights of the Board of Directors to designate the voting powers,
designations, preferences, limitations, restrictions and relative or other
rights of each series of Class C Preferred Stock and to alter the voting
powers, designations, preferences, limitations, restrictions and relative
or other rights of the Convertible Preferred Stock. Unless otherwise
indicated, references to "Sections" contained herein shall refer to
subdivisions of this Section 2 of Article VI.
The last sentence of Section A(3)(a) and Section B(2)(a) of Section 2 of
Article VI of the Articles of Incorporation shall be amended to read in its
entirety as follows:
In any event, if the assets of the Corporation available for distribution
to the holders of Convertible Preferred Stock shall exceed the distribution
required to be made to the holders of Class A Preferred Stock and the Class
B Preferred Stock as herein described, such excess assets shall be
distributed pro-rata among the holders of Common Stock, subject to the
rights of the holders of any Class C Preferred Stock.
There shall be added a new Subsection C of Section 2 of Article VI of the
Articles of Incorporation, which shall read in its entirety as follows:
<PAGE>
C. Class C Preferred Stock.
-----------------------
The Board of Directors of the Corporation is authorized at any
time, and from time to time, to provide for the issuance of shares of Class
C Preferred Stock in one or more series. For each series, the Board of
Directors shall determine, by resolution or resolutions adopted prior to
the issuance of any shares thereof, the voting powers, designations,
preferences, limitations, restrictions and relative or other rights
thereof, including but not limited to the following relative rights and
preferences, as to which there may be variations among different series:
1. The rate and manner of payment of dividends, if any;
2. Whether shares may be redeemed and, if so, the redemption
price and the terms and conditions of redemption;
3. The amount payable for shares in the event of liquidation,
dissolution or other winding up of the Corporation;
4. Sinking fund provisions, if any, for the redemption or
purchase of shares;
5. The terms and conditions, if any, on which shares may be
converted or exchanged;
6. Voting rights, if any; and
7. Any other rights or preferences of such shares, to the full
extent now or hereafter permitted by the laws of the State of Nevada.
The Board of Directors shall have the authority to determine the
number of shares that will comprise each series.
Each series of Class C Preferred Stock may be subordinate or
senior to or pari passu with the Class A Preferred Stock and the Class B
Preferred Stock, as the Board of Directors may determine. The resolution
or resolutions of the Board of Directors setting forth the voting powers,
designations, preferences, limitations, restrictions and relative or other
rights of any series of Class C Preferred Stock may also modify the voting
powers, designations, preferences, limitations, restrictions and relative
or other rights of the Convertible Preferred Stock.
Prior to the issuance of any shares of a series, but after
adoption by the Board of Directors of the resolution establishing such
series, the appropriate officers of the Corporation shall file such
documents with the State of Nevada as may be required by law.
Notwithstanding anything herein to the contrary, no series of
Class C Preferred Stock may be established unless the resolutions setting
forth the voting powers, designations, preferences, limitations,
restrictions and relative or other rights of such series of Class C
Preferred Stock (including any modification of the voting powers,
designations, preferences, limitations, restrictions and relative or other
rights of the Convertible Preferred Stock) are approved, in the case of
each and every series of Class C Preferred Stock, by the affirmative vote
or consent of the holders of at least two-thirds of the shares of Class A
Preferred Stock at the
<PAGE>
time outstanding, voting separately as a class, and by the affirmative vote
or consent of the holders of at least a majority of the shares of Class B
Preferred Stock then outstanding, voting separately as a class.
<PAGE>
PRELIMINARY COPIES
PROXY
THIS PROXY IS SOLICITED BY THE
BOARD OF DIRECTORS OF CLINICOR, INC.
The undersigned stockholder of Clinicor, Inc. (the "Company") hereby appoints
Robert S. Sammis and James W. Clark, Jr., or either of them (with full power to
act alone and to designate substitutes), proxies of the undersigned, with
authority to vote and act with respect to all shares of common stock of the
Company that the undersigned would be entitled to vote at the Annual Meeting of
Stockholders to be held on Tuesday, May 19, 1998, at 9:00 A.M. (Austin Time) at
the offices of the Company, 1717 West Sixth Street, Suite 400, Austin, Texas,
and at any adjournment thereof, with all the powers the undersigned would
possess if personally present, upon matters noted below and upon such other
matters as may properly come before the meeting. The shares represented by the
Proxy shall be voted as follows:
1. (For holders of common stock only) To elect as directors the nominees listed
below:
Robert S. Sammis and James W. Clark, Jr.
[_] FOR THE FOREGOING NOMINEES [_] WITHHOLD AUTHORITY TO VOTE FOR THE FOREGOING
NOMINEES
NOTE: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A LINE
THROUGH THAT NOMINEE'S NAME. UNLESS AUTHORITY TO VOTE FOR ALL THE FOREGOING
NOMINEES IS WITHHELD, THIS PROXY WILL BE DEEMED TO CONFER AUTHORITY TO VOTE FOR
EVERY NOMINEE WHOSE NAME IS NOT STRUCK, AND IF ANY NOMINEE IS UNABLE TO SERVE,
FOR SUCH PERSON AS THE PROXIES MAY SELECT.
2. To amend the Company's Articles of Incorporation to authorize the Board of
Directors of the Company, subject to the specific terms and conditions
described in the Proxy Statement and set forth in Exhibit A thereto, without
further action by the holders of the Company's Common Stock, to issue shares of
Preferred Stock in one or more series and to fix the rights, preferences,
privileges and restrictions thereof.
[_] FOR [_] AGAINST [_] ABSTAIN
(CONTINUED ON BACK SIDE)
<PAGE>
PRELIMINARY COPIES
(CONTINUED FROM FRONT SIDE)
3. To ratify the appointment of Price Waterhouse LLP as auditors for the fiscal
year ending December 31, 1998.
[_] FOR [_] AGAINST [_] ABSTAIN
THIS PROXY CONFERS AUTHORITY TO VOTE "FOR" EACH PROPOSITION LISTED ABOVE
UNLESS OTHERWISE INDICATED.
If any other business is transacted at said meeting, this Proxy shall be
voted in accordance with the best judgment of the proxies. The Board of
Directors recommends a vote "FOR" each of the propositions. This Proxy is
solicited on behalf of the Board of Directors of Clinicor, Inc. and may be
revoked prior to exercise.
Dated: _____________________________, 1998.
___________________________________________
(Signature(s) of Stockholder(s))
___________________________________________
(Signature(s) of Stockholder(s))
NOTE: Signature(s) should follow exactly
the name(s) on the stock certificates.
An executor, administrator, trustee or
guardian should sign as such. If
more than one trustee, all should
sign. ALL JOINT OWNERS MUST SIGN.
