<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:
[ ] 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 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>
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 13, 1999
------------------
You are cordially invited to attend the Annual Meeting of Shareholders of
Clinicor, Inc. (the "Company") which will be held on Thursday, May 13, 1999, 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 (three (3) to be elected by
the Company's Common Shareholders and two (2) to be elected by the
Company's Class A Preferred Shareholders).
2. To ratify the appointment of PricewaterhouseCoopers LLP, independent
accountants, as auditors for the fiscal year ending December 31, 1999;
and
3. 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 March 31, 1999 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 8, 1999
<PAGE>
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 8, 1999, 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 13, 1999 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 8, 1999. The Company's Annual
Report, including financial statements for the fiscal year ended December 31,
1998, was simultaneously mailed to shareholders.
Purposes of Meeting
The principal purposes of the meeting are: (i) to elect five (5) directors
of the Company (three (3) to be elected by the Company's Common Shareholders and
two (2) to be elected by the Company's Class A Preferred Shareholders), and (ii)
to ratify the appointment of PricewaterhouseCoopers LLP, independent
accountants, as auditors for the fiscal year ending December 31, 1999. 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
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.
<PAGE>
The Board of Directors has fixed the close of business on March 31, 1999,
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 March 31, 1999, the
Company had outstanding 4,169,734 shares of Common Stock, 4,253 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 one (1) vote
for each share owned. As of March 31, 1999, 4,169,734 shares of Common Stock
were outstanding. 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 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. As of March 31, 1999, 4,253 shares of Class A Preferred
Stock were outstanding.
The holder of the Company's Class B Preferred Stock is entitled to vote on
an as-converted basis with the holders of the Common Stock in the election of
directors or, at its option, to vote separately to elect one (1) member of the
Board. The holder of the Class B Preferred Stock has advised the Company (i)
that it will not vote with the holders of the Common Stock in the election of
directors at the Annual Meeting and (ii) that it reserves its right to designate
a director at a future date. If the holder of the Class B Preferred Stock were
to exercise this right, the Board would be expanded to accommodate the Class B
director.
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 36.36 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.
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.
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. All other matters to come before the 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.
2
<PAGE>
I. ELECTION OF DIRECTORS
The Board presently consists 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 Dr. Rosina Maar, and Messrs. Robert S. Sammis and James W.
Clark, Jr., and 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. Joel D. Liffmann. 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 three (3) 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.
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
AND CLASS B PREFERRED STOCK
First Year
Name Age Position with Company Elected Director
---- --- --------------------- ----------------
Robert S. Sammis 46 President, Director 1992
James W. Clark, Jr. 46 Vice President of Finance, Chief 1997
Financial Officer, Treasurer,
Secretary, Director
Rosina Maar, M.D. 36 Vice President of Operations, 1999
Chief Operating Officer,
Director
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)(2) 64 Director 1996
Joel D. Liffmann(1)(2) 38 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, Secretary and a director in May 1997. From
February 1989 until April 1997, 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 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.
Rosina Maar, M.D., Chief Operating Officer, joined the Company in February
1999. Dr. Maar was employed by Quintiles, Inc. and Quintiles Transnational
Corporation from 1993 through February 1999. She served in various positions as
Worldwide Program Director, Director of Medical Services, Vice President of
Clinical Operations, and Senior Vice President, Strategic Planning and Business
Implementation. Prior to joining Quintiles, Dr. Maar was the Corporate Medical
Director of Cellcor, a biotechnology company that specialized in immunotherapy
for the treatment of cancers. She is Board-certified in Internal Medicine, and
completed her residency at Emory University School of Medicine. She obtained
her M.D. from the Morehouse School of Medicine, and holds a Bachelor of Science
degree in Health Systems Industrial Engineering from the Georgia Institute of
Technology, where she graduated with honors.
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., Procept Inc., Magainin Pharmaceuticals, Inc., AVIGEN Inc. and Roberts
Pharmaceuticals Co. and several privately-held companies.
4
<PAGE>
Joel D. Liffmann joined the Company as a director in November 1998. Since
September 1996, Mr. Liffmann 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 January 1993 to
April 1996, Mr. Liffmann was the Senior Vice President of Business Development
at Merck-Medco, Inc. From March 1990 to December 1992, Mr. Liffmann served as
Vice President/Business Development at Medco Containment Services. From August
1987 to February 1990, Mr. Liffmann served as Vice President of Corporate
Finance and from August 1982 to July 1987 as Vice President of Equity Research
at Drexel Burnham Lambert. Mr. Liffmann holds a degree from Boston University.
Mr. Liffmann is also a director of several privately-held companies.
BOARD AND COMMITTEE MEETINGS AND OTHER INFORMATION
The Board of Directors met eight (8) times during 1998. The Board also
took action on three (3) occasions 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 1998, 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, Ms. Susan Krivacic and Dr. Maar have executed
employment agreements with the Company. See "Executive Compensation--Employment
Agreements."
Information concerning executive officers of the Company who are also
directors appears elsewhere in this Proxy Statement under the caption "Election
of Directors." Information concerning Ms. Susan Krivacic, Senior Vice President
of Marketing and Business Development, is set out below.
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.
5
<PAGE>
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 40.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth certain information regarding compensation
for the years ended December 31, 1996, 1997 and 1998, earned by or paid to (i)
Robert Sammis, the Chief Executive Officer, (ii) the other persons who were
executive officers of the Company at December 31, 1998 and whose total salary
and bonus exceeded $100,000 individually during the year ended December 31, 1998
and (iii) Thomas P. O'Donnell, who was the Company's Chief Executive Officer
prior to his resignation on February 28, 1998 (collectively, the "Named
Executive Officers").
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
------------------------- -----------------------------
Awards Payouts
------------ --------------
Securities
Other Annual Underlying All Other
Salary Compensation Options Compensation
Name and Principal Position Year ($) ($) (#) ($)
- --------------------------- ---- -------- --------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
Thomas P. O'Donnell(1) ............ 1998 25,000 0 0 212,500(7)
1997 150,000 2,235(3) 0 0
1996 124,749 1,934(3) 0 0
Robert S. Sammis .................. 1998 135,000 1,350(3) 0 954(8)
Chief Executive Officer 1997 135,000 2,235(3) 0 0
1996 108,260 1,934(3) 0 0
Robert M. Day, Ph.D. .............. 1998 132,500 22,000(4) 20,000(5) 939(8)
Vice President of Scientific 1997 129,375 0 20,000(5) 0
Affairs(2) 1996 112,011 0 0 0
James W. Clark, Jr. ............... 1998 120,000 22,000(4) 300,000(5) 860(8)
Vice President of Finance, Chief 1997 80,693 25,000(4) 300,000(5) 0
Financial Officer and Treasurer
Susan Krivacic...................... 1998 86,668 0 150,000(6) 917(8)
Senior Vice President of
Marketing and Business
Development
</TABLE>
- ----------------------------
(1) Mr. O'Donnell resigned as an officer and director of the Company effective
February 28, 1998. Prior to such date, he served as Chairman of the Board
and Chief Executive Officer of the Company.
(2) Dr. Day resigned effective February 11, 1999.
6
<PAGE>
(3) The Company paid insurance premiums in the designated amounts on term life
insurance policies on the lives of Mr. O'Donnell and Sammis. Mr. Sammis's
policy is currently in the amount of $2,500,000, with $1,500,000 payable to
the Company and $1,000,000 payable to a beneficiary designated by the
officer. The policy on Mr. O'Donnell's life has been assigned to Mr.
O'Donnell.
(4) Mr. Clark and Dr. Day received nonaccountable relocation allowances in the
amounts shown.
(5) The table treats the "reset" of option exercise prices as grants of new
options. The indicated options were originally granted in 1997 to Dr. Day
and Mr. Clark at exercise prices of $4.875 per share and $4.675 per share,
respectively. The exercise prices were adjusted to $2.75 in 1998. The
total number of securities underlying options granted during 1997 and 1998
to Dr. Day and Mr. Clark were 20,000 and 300,000, respectively. Dr. Day's
options have since expired.
(6) An option to purchase the indicated number of securities at an exercise
price of $3.125 per share was granted to Ms. Krivacic in March 1998. The
exercise price was reset at $2.75 in May 1998.
(7) Mr. O'Donnell received severance payments during 1998 in the indicated
amount.
(8) The indicated amounts represent matching contributions, both vested and
unvested, to the Company's 401(k) Plan.
Option Grants in Last Fiscal Year
The following table sets forth information concerning individual grants of
stock options made during 1998 to each of the Named Executive Officers:
OPTION GRANTS IN 1998
<TABLE>
<CAPTION>
Percent of Total
Number of Securities Options Granted
Underlying Options to Employees in Expiration
Name Granted(1) Fiscal Year(1) 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 33% $2.75 May 2004
Robert M. Day, Ph.D. ..... 20,000 2% $2.75 expired(2)
Susan Krivacic............ 150,000 16% $2.75 March 2005
</TABLE>
- ----------------------
(1) The table treats the reset of option exercise prices as the grant of new
options. However, in those cases where options were granted and prices
were reset in the same year, the table treats the options as having been
granted only once.
(2) Dr. Day resigned as an officer of the Company effective February 11, 1999.
The option granted to Dr. Day in 1998 had not vested on his resignation
date and has therefore expired.
7
<PAGE>
Options Exercised and Fiscal Year-End Values
The following table sets forth information concerning each exercise of
stock options by the Named Executive Officers during fiscal 1998 and the
aggregate number and value of unexercised options held by the Named Executive
Officers at December 31, 1998.
<TABLE>
<CAPTION>
Shares Number of Securities Value of Unexercised
Aquired on Value Underlying Unexercised Options In-The-Money Options At
Exercise Realized At Fiscal Year-End (#) Fiscal Year-End ($)(1)
---------- -------- ------------------------------ ------------------------------
# ($) Exercisable Unexercisable Exercisable Unexercisable
------------- --------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Thomas P. O'Donnell....... 33,334 $34,167 0 0 0 0
Robert S. Sammis.......... 0 0 50,000 100,000 0 0
Robert M. Day, Ph.D....... 0 0 10,000 20,000 0 0
James W. Clark, Jr........ 0 0 60,000 240,000 0 0
Susan Krivacic............ 0 0 0 150,000 0 0
</TABLE>
- ----------------------------
(1) The value of unexercised, in-the-money options is the difference between
the exercise price of the options and the fair market value of the
Company's common stock at December 31, 1998 ($.50, which was the closing
price of the Common Stock on the Over-the-Counter Bulletin Board at year
end).
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 1998:
OPTION GRANTS IN 1998
<TABLE>
<CAPTION>
Number of
Securities
Underlying Options
Name Granted Exercise Price Expiration Date
- --------------------------- -------------------- -------------- ---------------
<S> <C> <C> <C>
Arthur P. Haag .............. 5,000 $2.00 May 2003
Zola P. Horovitz, Ph.D. ..... 5.000 $2.00 May 2003
Joseph L. Dowling ........... 5,000 $2.00 May 2003
Stuart T. Weisbrod, Ph.D. ... 2,500 $2.00 May 2003
Craig Macnab ................ 7,500 $2.00 May 2003
</TABLE>
8
<PAGE>
Also during 1998, the Board paid $18,000 to Zola Horovitz and $6,000 to Arthur
Haag in respect of consulting services rendered.
Employment Agreements
During 1996 Messrs. Thomas P. O'Donnell and Robert S. Sammis each became
parties to five-year employment contracts with the Company, pursuant to which
they became entitled to minimum base compensation of $150,000 and $135,000 per
year, respectively. The Company had the right to terminate either such
agreement with or without cause; provided, however, if employment was terminated
without cause, then the executive in question was 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 was terminated either voluntarily by the executive or by the Company
for cause, then no severance was payable; provided, however, that if the
executive terminated his employment following a material reduction in his level
of responsibility, then such termination was deemed to be termination without
cause by the Company, and the executive was 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 is obligated to 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, 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. Sammis's employment contract, as described above, continues in effect.
Dr. Maar, Mr. Clark and Ms. Krivacic are also parties to employment
contracts. The agreement applicable to Dr. Maar provides for a two-year term
commencing in February 1999, with three automatic one-year renewal terms. The
agreement provides for minimum base compensation of $225,000 per year. 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 minimum 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 minimum
base compensation of $130,000 per year.
OWNERSHIP OF COMMON STOCK AND PREFERRED STOCK
The Company is authorized to issue 75,000,000 shares of Common Stock. As
of March 31, 1999, there were 4,169,734 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 31,
1999, there were 4,253 shares of Class A Preferred Stock and 50,000 shares of
Class B Preferred Stock issued and outstanding.
9
<PAGE>
Common Stock
The following table sets forth as of March 31, 1999, 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 31, 1999 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.
<TABLE>
<CAPTION>
Name and Address of Shares Beneficially Percent of
Beneficial Owner Owned Class
- ------------------- ----------------------- -----------
<S> <C> <C>
The Oracle Group 3,072,424(1) 42.5%
712 Fifth Avenue, 45th Floor
New York, New York 10019
Sirrom Capital Corporation 1,818,182(2) 30.4%
500 Church Street, Suite 200
Nashville, Tennessee 37219
Robert S. Sammis 1,041,283(3) 24.7%
1717 West 6th St., #400
Austin, Texas 78703
O'Donnell Family Limited Partnership 662,778(4) 15.9%
7809 Brightman Lane
Austin, Texas 78733
Robert K. Williams, III 474,206(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 283,333(7) 6.4%
888 Seventh Avenue, 33rd Floor
New York, New York 10106
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Shares Beneficially Percent of
Beneficial Owner Owned Class
- ------------------- ----------------------- -----------
<S> <C> <C>
Randolph J. Haag 246,231(8) 5.8%
359 Jacaranda
Danville, California 94506
A. H. Rogers 226,916(9) 5.4%
17 South Briar Hollow Lane, Suite 304
Houston, Texas 77027
James W. Clark, Jr. 134,000(10) 3.1%
1717 West 6th Street, #400
Austin, Texas 78703
Rosina Maar, M.D. 60,000(11) 1.4%
1717 West 6th Street, #400
Austin, Texas 78703
Susan Krivacic 44,000(12) 1.0%
1717 West 6th Street, #400
Austin, Texas 78703
Zola P. Horovitz, Ph.D. 17,500(13) .4%
30 Philip Drive
Princeton, New Jersey 08540
Robert M. Day, Ph.D. 10,000(14) .2%
1717 West 6th Street, #400
Austin, Texas 78703
Joel D. Liffmann -0- 0%
712 Fifth Avenue, 45th Floor
New York, New York 10019
All Directors and Executive Officers as a 1,340,117(15) 29.9%
group (8 persons)
</TABLE>
- ----------------------------
(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 2,835,333 shares that are issuable to The Oracle Group
pursuant to The Oracle Group's option to convert 4,253 shares of Class A
Preferred Stock to the Company's Common Stock and 217,391 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 217,391
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.
11
<PAGE>
(2) Include 1,818,182 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"). Effective March 22, 1999, Sirrom Capital Corporation was
merged into a subsidiary of The Finova Group, Inc. ("Finova"). Finova may
therefore be deemed to beneficially own these shares.
(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
50,000 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 662,778 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.
(7) Comprised of 283,333 of the Oracle Shares that are issuable to Quasar
International Partners C.V. pursuant to its option to convert 425 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 (i) 48,902 shares held by The Tennant Co. MPP Plan FBO A. H.
Rogers, (ii) 30,568 shares held by The Tennant Co. PSP Plan FBO A. H.
Rogers and (iii) 26,175 shares held by A. H. Rogers IRA, all as to which
Mr. Rogers has voting and dispositive power.
(10) Includes (i) 64,000 shares issuable to Mr. Clark pursuant to immediately
exercisable options and (ii) 60,000 shares issuable to Mr. Clark pursuant
to options that may be exercised within sixty (60) days.
(11) Includes 60,000 shares issuable to Dr. Maar pursuant to immediately
exercisable options.
(12) Includes 44,000 shares issuable to Ms. Krivacic pursuant to immediately
exercisable options.
(13) Includes 17,500 shares issuable to Dr. Horovitz pursuant to immediately
exercisable options.
(14) Includes 10,000 shares issuable to Dr. Day pursuant to immediately
exercisable options. These options expire in May 1999.
12
<PAGE>
(15) Includes (i) 291,283 shares owned by Drs. Dell, Ramsdell and Shulman, as to
which Mr. Sammis has voting power; (ii) 50,000 shares issuable to Mr.
Sammis pursuant to immediately exercisable options; (iii) 64,000 shares
issuable to Mr. Clark pursuant to immediately exercisable options, (iv)
60,000 shares issuable to Mr. Clark pursuant to options that may be
exercised within sixty (60) days, (v) 60,000 shares issuable to Dr. Maar
pursuant to immediately exercisable options, (vi) 44,000 shares issuable to
Ms. Krivacic pursuant to immediately exercisable options, (vii) 17,500
shares issuable to Dr. Horovitz pursuant to immediately exercisable
options, and (viii) 10,000 shares issuable to Dr. Day 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 (giving effect to the conversion of
both the Class A Preferred Stock and the Class B Preferred Stock). On an as-
converted basis, the holders of Class A Preferred Stock currently have an
approximate 32% 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 holder of the Class B Preferred Stock may, at its option, 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
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.
13
<PAGE>
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.
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 subsequently
adjusted to $5.06 per share and the shares purchasable were adjusted to 217,391
in connection with the issuance of Class B Preferred Stock.) 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. SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has appointed PricewaterhouseCoopers LLP to audit
the books and accounts of the Company for the year ending December 31, 1999, and
will offer a resolution at the meeting to ratify the appointment.
PricewaterhouseCoopers LLP has been the principal auditor of the Company since
December 1996. Representatives of PricewaterhouseCoopers LLP will be present at
the meeting to respond to appropriate questions and will have an opportunity, if
they desire, to make a statement.
The Board of Directors recommends that the shareholders vote FOR
ratification of the appointment of PricewaterhouseCoopers 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 as hereinafter set forth. O'Donnell Family Limited Partnership and
controlling parties failed to file Form 4s relating to the sale by the
partnership of 41,364 shares of Common Stock in May 1998, 41,697 shares of
Common Stock in September 1998 and 41,697 shares of Common Stock in December
1998. Mr. Robert K. Williams III failed to file Form 4s in connection with
purchases of 2,600 shares of Common Stock in April 1998, 500 shares of Common
Stock in May 1998, 1,500 shares of Common Stock in July 1998 and 100 shares of
Common Stock in August 1998. Mr. Williams filed a Form 5 relating to such
purchases on February 11, 1999.
14
<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,
1998, 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 year 2000 annual
meeting must be received by the Company not later than December 31, 1999 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 8, 1999
15
<PAGE>
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, James W. Clark, Jr., and Rosina Maar, M.D., or any 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 Thursday, May 13, 1999, 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, James W. Clark, Jr. and Rosina Maar, M.D.
[_] 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 ratify the appointment of PricewaterhouseCoopers LLP as auditors for the
fiscal year ending December 31, 1999.
[_] FOR [_] AGAINST [_] ABSTAIN
THIS PROXY CONFERS AUTHORITY TO VOTE "FOR" EACH PROPOSITION LISTED ABOVE
UNLESS OTHERWISE INDICATED.
(Continued on back side)
<PAGE>
(Continued from front side)
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: _____________________________, 1999.
___________________________________________
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.
