<PAGE>
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Check the appropriate box:
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[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
UROCOR, INC.
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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<PAGE>
May 16, 1997
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
UroCor, Inc. to be held at 2:00 p.m., C.D.T., on Friday, June 20, 1997, at
The Waterford Marriott Hotel, 6300 Waterford Boulevard, Oklahoma City,
Oklahoma.
This year you will be asked to vote in favor of three proposals. The
proposals relate to the election of two directors, the approval of an amended
stock option plan for management and other key employees and the approval of
a non-employee director stock option plan. These matters are more fully
explained in the attached proxy statement, which you are encouraged to read.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU APPROVE THESE PROPOSALS AND
URGES THAT YOU RETURN YOUR SIGNED PROXY CARD AT YOUR EARLIEST CONVENIENCE,
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING.
Thank you for your cooperation.
Sincerely,
/s/ William A. Hagstrom
William A. Hagstrom
Chairman of the Board, President and
Chief Executive Officer
<PAGE>
UROCOR, INC.
800 RESEARCH PARKWAY
OKLAHOMA CITY, OKLAHOMA 73104
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 20, 1997
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of UroCor,
Inc., a Delaware corporation (the "Company"), will be held on Friday, June
20, 1997, at 2:00 p.m., local time, at The Waterford Marriott Hotel, 6300
Waterford Boulevard, Oklahoma City, Oklahoma for the following purposes:
1. To elect two persons to serve as directors of the Company for
three-year terms or until their respective successors are duly elected
and qualified.
2. To consider and vote on a proposal to approve the UroCor, Inc. Second
Amended and Restated 1992 Stock Option Plan pursuant to which the
Company's Amended and Restated 1992 Stock Option Plan would be amended
to (i) increase the aggregate number of shares of Common Stock for
which options may be granted under the plan from 1,400,000 to
1,700,000 shares and (ii) amend certain provisions of the plan to
bring the plan into compliance with recently amended federal
securities and tax laws.
3. To consider and vote on a proposal to approve the UroCor, Inc. 1997
Non-Employee Director Stock Option Plan pursuant to which (i) an
aggregate of 100,000 shares of Common Stock would be available for the
issuance of options under the plan, (ii) options to purchase 10,000
shares of the Company's Common Stock would be granted to each existing
non-employee director who has served since January 1, 1989, (iii)
options to purchase 7,500 shares of the Company's Common Stock would
be granted to each existing non-employee director who has served only
since January 1, 1994, (iv) options to purchase 5,000 shares of the
Company's Common Stock would be granted to each existing non-employee
director who has served only since January 1, 1995, (v) options to
purchase 10,000 shares of Common Stock would be granted to any new
non-employee director on the date of his or her election and (vi)
options to purchase 5,000 shares of Common Stock would be granted
annually to each non-employee director on July 1 of each year,
beginning July 1, 1998.
4. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The holders of Common Stock of the Company of record at the close of
business on May 7, 1997, will be entitled to vote at the meeting.
All stockholders are cordially invited to attend the meeting in person.
However, to assure your representation at the meeting, you are urged to sign
and return the enclosed proxy card as promptly as possible in the
postage-prepaid envelope enclosed for that purpose. Any stockholder attending
the meeting may vote in person even if the stockholder has returned a proxy
card.
By Order of the Board of Directors
/s/ SOCRATES H. CHOUMBAKOS
-----------------------------------------
Socrates H. Choumbakos
Senior Vice President, Corporate Planning
and Development and Secretary
May 16, 1997
IMPORTANT
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. EVEN IF YOU
PLAN TO BE PRESENT, YOU ARE URGED TO SIGN, DATE AND MAIL THE ENCLOSED PROXY
CARD PROMPTLY. IF YOU ATTEND THE MEETING YOU CAN VOTE EITHER IN PERSON OR BY
YOUR PROXY.
<PAGE>
UROCOR, INC.
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 20, 1997
GENERAL INFORMATION
This proxy statement and the accompanying proxy card are being furnished
to holders of Common Stock of UroCor, Inc. ("UroCor" or the "Company"), 800
Research Parkway, Oklahoma City, Oklahoma 73104 (Tel. No. 405/290-4000), in
connection with the solicitation by the Board of Directors of the Company of
proxies to be used at the annual meeting of stockholders to be held Friday,
June 20, 1997, at 2:00 p.m. at The Waterford Marriott Hotel, 6300 Waterford
Boulevard, Oklahoma City, Oklahoma, or any adjournment thereof.
Proxies in the form enclosed, properly executed by stockholders and
received in time for the meeting, will be voted as specified therein. If a
stockholder does not specify otherwise, the shares represented by his or her
proxy will be voted for the director nominees listed herein, for the proposal
to approval the Second Amended and Restated 1992 Stock Option Plan (the
"Amended and Restated Stock Option Plan") and for the proposal to approval
the 1997 Non-Employee Director Stock Option Plan (the "Director Stock Option
Plan"). The giving of a proxy does not preclude the right to vote in person
should the person giving the proxy so desire, and the proxy may be revoked at
any time before it is exercised by written notice delivered to the Company at
or prior to the meeting. This Proxy Statement and accompanying proxy card
are being mailed on or about May 16, 1997, to shareholders of record on May
7, 1997 (the "Record Date").
At the close of business on the Record Date, there were outstanding and
entitled to vote 10,159,073 shares of common stock, $.01 par value per share,
of the Company (the "Common Stock") and only the holders of record on the
Record Date shall be entitled to vote at the meeting.
The holders of record of Common Stock on the Record Date will be
entitled to one vote per share on each matter presented to the stockholders
at the meeting. The presence at the meeting, in person or by proxy, of the
holders of a majority of the outstanding shares of Common Stock as of the
Record Date is necessary to constitute a quorum for the transaction of
business at the meeting.
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MATTERS TO COME BEFORE THE MEETING
PROPOSAL 1: ELECTION OF DIRECTORS
At the meeting two directors are to be elected, constituting all of the
Class I directors. The Company's Restated Certificate of Incorporation
provides for the classification of the Board of Directors into three classes
of directors (Class I, Class II and Class III), with the term of each class
expiring at successive annual stockholders' meetings. At and after this 1997
Annual Meeting of Stockholders, all nominees will be elected for three-year
terms. Each director will serve until the annual meeting of stockholders at
which his term expires, or until his respective successor is duly elected and
qualified or his earlier resignation or removal. The terms of office of
Herbert J. Conrad and Louis M. Sherwood, M.D. expire at the meeting, and they
are both proposed as nominees for terms expiring at the 2000 Annual Meeting
of Stockholders. It is the intention of the persons named in the proxies for
the holders of the Common Stock to vote the proxies for the election of the
nominees named below, unless otherwise specified in any particular proxy.
The management of the Company does not contemplate that any of the nominees
will become unavailable for any reason, but if that should occur before the
Meeting, proxies will be voted for another nominee, or other nominees, to be
selected by the Board of Directors. Any vacancies that may occur during the
year may be filled by an individual appointed by the Board of Directors to
serve for the remainder of the term of such director position. Two Class II
director positions currently are vacant as a result of director resignations
earlier in 1997. The Board of Directors is actively reviewing candidates,
and, in the event that qualified individuals are identified, the Board of
Directors plans to appoint directors to these vacant positions, the terms of
which will expire at the 1998 Annual Meeting of Stockholders. In accordance
with the Company's by-laws and Delaware law, a stockholder entitled to vote
for the election of directors may withhold authority to vote for certain
nominees for director or may withhold authority to vote for all nominees for
director. Each director nominee receiving a plurality of the votes cast in
person or by proxy at the meeting will be elected director. Abstentions and
broker non-votes will not be treated as a vote for or against any particular
director nominee, and will not affect the outcome of the election.
The following table sets forth certain information with respect to the
persons who have been nominated to serve three-year terms as director and for
the Company's other directors:
DIRECTOR
AGE POSITION WITH THE COMPANY SINCE
NOMINEES FOR ELECTION FOR TERMS
EXPIRING AT THE 2000 ANNUAL
MEETING OF STOCKHOLDERS
Herbert J. Conrad 64 Director 1993
Louis M. Sherwood, M.D. 60 Director 1993
DIRECTORS WHOSE TERMS EXPIRE AT
THE 1999 ANNUAL MEETING OF
STOCKHOLDERS
Paul A. Brown, M.D. 59 Director 1988
Michael E. Herbert 52 Director 1994
William A. Hagstrom 39 Chairman of the Board, President 1989
and Chief Executive Officer
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<PAGE>
BACKGROUND OF NOMINEES FOR DIRECTOR AND DIRECTORS
HERBERT J. CONRAD. Mr. Conrad has been a director since October 1993.
Until his retirement in August 1993, Mr. Conrad worked for 33 years at
Hoffmann-LaRoche, Inc., a pharmaceutical company. He held senior management
positions in marketing, business and strategic planning and public affairs.
For the last 16 years of his career at Hoffmann-LaRoche, he was President of
the United States Pharmaceuticals Division and Senior Vice President of
Hoffmann-LaRoche and a member of its Executive Committee and Board of
Directors. Mr. Conrad is also a director of several pharmaceutical and
biotechnology companies, including Dura Pharmaceuticals, Biotechnology
General, Gensia, and Gen-Vec.
LOUIS M. SHERWOOD, M.D. Dr. Sherwood has been a director since October
1993. Since 1992, Dr. Sherwood has been Senior Vice President, U.S. Medical
and Scientific Affairs, of Merck & Co., a pharmaceutical company which he
joined in 1987. His previous academic appointments include seven years as
Baumritter Professor and Chairman of the Department of Medicine at Albert
Einstein College of Medicine, Professor of Biochemistry and Physician in
Chief at Montefiore Medical Center, as well as, eight years as Chairman of
Medicine at the Michael Reese Medical Center and Professor of Medicine at
the University of Chicago. He also served as Chief of Endocrinology at Beth
Israel Hospital and Associate Professor of Medicine at Harvard Medical School.
PAUL A. BROWN, M.D. Dr. Brown has been a director since November 1988.
He has been Chairman of the Board and Chief Executive Officer of HEARx
Ltd., a hearing care organization, for the past six years. Prior to
founding HEARx, Dr. Brown was founder and Chairman of the Board of MetPath
Inc. Dr. Brown is an emeritus member of the Board of Trustees of Tufts
University, past Chairman of the Board of Overseers of the Tufts University
School of Medicine, a member of the visiting committee of Boston University
School of Medicine and a part-time member of the Columbia University College
of Physicians and Surgeons.
MICHAEL E. HERBERT. Mr. Herbert has been a director since July 1994.
Mr. Herbert was the founder of Physicians Health Services, Inc., an
individual practice association health maintenance organization ("IPA/HMO"),
and served as President and Chief Executive Officer through August 1996, at
which time he became Co-Chief Executive Officer and Vice Chairman. Mr.
Herbert has been associated with Physicians Health Services since 1976, prior
to which he was Vice President of InterStudy, a national health policy
research firm. Mr. Herbert is Chairman of the American Association of Health
Plans and is past Chairman of the American Managed Care and Review
Association.
WILLIAM A. HAGSTROM. Mr. Hagstrom has been a director of the Company
and served as President and Chief Executive Officer of the Company since
November 1989. Mr. Hagstrom was appointed Chairman of the Board of Directors
in September 1994. Before joining the Company, Mr. Hagstrom was Vice
President of the Scientific Products Division of Baxter-Travenol, a medical
products company, where he served in various marketing, sales, product
planning and general management positions from November 1985 to November
1989. Prior to joining Baxter-Travenol, he spent three years at American
Hospital Supply Corp. until it was acquired by Baxter-Travenol and three
years at Becton Dickinson & Co. in various management positions.
COMMITTEES OF THE BOARD OF DIRECTORS AND MEETING ATTENDANCE
The Board of Directors has established an Audit Committee, a
Compensation Committee and a Nominating Committee. During the fiscal year
ended December 31, 1996, the Board of Directors met seven times, the Audit
Committee met two times, the Compensation Committee met two times and the
Nominating Committee was formed but held no meetings. No director attended
less than 75% of the combined number of Board meetings and meetings of
committees of which he is a member.
AUDIT COMMITTEE. Dr. Brown and Mr. Conrad are the current members of
the Audit Committee. The Audit Committee recommends the independent public
accountants appointed by the Board of Directors to audit the financial
statements of the Company and reviews issues raised by such accountants as to
the scope of their audit and their report thereon, including any questions
and recommendations that may arise relating to such audit and report or the
Company's internal accounting and auditing procedures.
-5-
<PAGE>
COMPENSATION COMMITTEE. Dr. Brown, Mr. Conrad and Mr. Herbert, none of
whom is an employee of the Company, are the current members of the
Compensation Committee. The Compensation Committee reviews, approves and
makes recommendations to the Board of Directors on matters regarding the
compensation of the Company's directors, executive officers and key employees.
STOCK PLAN COMMITTEE. In May 1997, the Board of Directors created the
Stock Plan Committee. Mr. Conrad and Mr. Herbert are the current members of
the Stock Plan Committee. The Stock Plan Committee acts as the
administrative committee for the stock plans of the Company, including the
Amended and Restated Stock Option Plan and the Director Stock Option Plan.
NOMINATING COMMITTEE. Dr. Brown, Mr. Conrad and Mr. Herbert are the
current members of the Nominating Committee. The Nominating Committee
recommends nominees for election as directors and persons to fill director
vacancies and newly created directorships, selects the individuals to vote
solicited proxies at stockholder meetings, reviews proxy comments received
from stockholders relating to the Board of Directors, reviews stockholders'
suggestions of nominees for director that are submitted in accordance with
the provisions of the by-laws of the Company and reviews and makes
recommendations to the Board of Directors regarding the organization and
structure of the Board.
PROPOSAL 2: APPROVAL OF THE AMENDED AND RESTATED STOCK OPTION PLAN
GENERAL
At the meeting, the stockholders of the Company will be asked to vote
upon a proposal to approve the Amended and Restated Stock Option Plan.
Approval of the Amended and Restated Stock Option Plan requires the
affirmative vote of the holders of a majority of the votes of the shares of
Common Stock that are outstanding as of the Record Date. The text of the
proposed Amended and Restated Stock Option Plan is set forth in full in ANNEX
A to this proxy statement. The Amended and Restated Stock Option Plan amends
the UroCor, Inc. Amended and Restated 1992 Stock Option Plan (the "1992 Stock
Option Plan") to (i) increase the aggregate number of shares of Common Stock
for which options may be granted under the plan from 1,400,000 to 1,700,000
and (ii) amend certain provisions of the plan to bring the plan into
compliance with recently amended federal securities and tax laws.
REASONS FOR THE AMENDED AND RESTATED STOCK OPTION PLAN
The Board of Directors believes that it is in the best interest of the
Company to encourage ownership of the Company's stock by its employees,
directors and consultants. Providing an opportunity to hold an equity
interest in the Company assists the Company in attracting and retaining key
management and consulting personnel, which is critical to the Company's
long-term success. The number of shares of Common Stock available under the
1992 Stock Option Plan will be depleted by December 1997, and the Board of
Directors of the Company has determined that, to continue to provide
performance-based incentive to the Company's management and key employees, it
is in the best interest of the Company to increase the number of shares of
Common Stock available for grant of options under the 1992 Stock Option Plan.
To provide additional shares of Common Stock for which options may be
granted under the 1992 Stock Option Plan and to amend certain provisions of
the plan to bring the plan into compliance with recently amended federal
securities and tax laws, the Board of Directors has approved the Amended and
Restated Stock Option Plan and has directed that the same be presented to the
stockholders for their approval.
CERTAIN CONSIDERATIONS
Stockholders should note that certain disadvantages may result from
approval of the Amended and Restated Stock Option Plan, including a reduction
in their interest of the Company with respect to earnings per share, voting,
liquidation value and book and market value per share if options to acquire
shares of Common Stock are granted and subsequently exercised.
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<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE AMENDED
AND RESTATED STOCK OPTION PLAN. Approval of the Amended and Restated Stock
Option Plan requires the affirmative vote of the holders of a majority of the
votes of the shares of Common Stock that are outstanding as of the Record
Date. If not otherwise provided, proxies will be voted "FOR" approval of the
Amended and Restated Stock Option Plan. Abstentions and broker non-votes
will be counted as shares entitled to vote on the proposal, but will not be
treated as either a vote for or against the proposal. Therefore, an
abstention or broker non-vote will have the same effect as a vote against the
proposal.
PROPOSAL 3: APPROVAL OF THE DIRECTOR STOCK OPTION PLAN
GENERAL
At the meeting, the stockholders of the Company will be asked to vote
upon a proposal to approve the Director Stock Option Plan . Approval of the
Director Stock Option Plan requires the affirmative vote of the holders of a
majority of the shares of Common Stock that are outstanding as of the Record
Date and entitled to vote thereon. The text of the proposed Director Stock
Option Plan is set forth in full in ANNEX B to this proxy statement. The
Director Stock Option Plan will (i) provide for the grant of options to
purchase 10,000 shares of Common Stock to each existing non-employee director
who has served since January 1, 1989, (ii) provide for the grant of options
to purchase 7,500 shares of Common Stock to each existing non-employee
director who has served only since January 1, 1994, (iii) provide for the
grant of options to purchase 5,000 shares of Common Stock to each existing
non-employee director who has served only since January 1, 1995, (iv) provide
for the grant of options to purchase 10,000 shares of Common Stock to any new
non-employee director on the date of his or her election and (v) provide for
the grant of options annually to purchase 5,000 shares of Common Stock to
each non-employee director on July 1 of each year, beginning July 1, 1998.
REASONS FOR THE DIRECTOR STOCK OPTION PLAN
The Board of Directors believes that it is in the best interest of the
Company to attract and retain the services of experienced and knowledgeable
non-employee directors of the Company and to provide an incentive for such
directors to increase their proprietary interests in the Company's long-term
success and progress. In furtherance thereof, the Board of Directors has
adopted the Director Stock Option Plan and has directed that the same be
presented to the stockholders for their approval.
CERTAIN CONSIDERATIONS
Stockholders should note that certain disadvantages may result from the
adoption of the Director Stock Option Plan, including a reduction in their
interest of the Company with respect to earnings per share, voting,
liquidation value and book and market value per share if options to acquire
shares of Common Stock are granted and subsequently exercised.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE DIRECTOR
STOCK OPTION PLAN. Approval of the Director Stock Option Plan requires the
affirmative vote of the holders of a majority of the shares of Common Stock
that are outstanding as of the Record Date. If not otherwise provided,
proxies will be voted "FOR" approval of the Director Stock Option Plan.
Abstentions and broker non-votes will be counted as shares entitled to vote
on the proposal, but will not be treated as either a vote for or against the
proposal. Therefore, an abstention or broker non-vote has the same effect as
a vote against the proposal.
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<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of May 1, 1997 with
respect to (i) persons known to the Company to be beneficial holders of five
percent or more of the outstanding shares of Common Stock, (ii) the executive
officers named in the Summary Compensation Table and the directors of the
Company and (iii) all executive officers and directors of the Company as a
group.
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP (2)
---------------------------------------------
BENEFICIAL OWNER(1) SHARES %
- ------------------- ------ -----
Concord Partners II, L.P. and related entities(3) 1,717,708 16.7
535 Madison Avenue
New York, NY 10022
The Capital Group Companies, Inc.(4) 775,000 7.6
333 South Hope Street
Los Angeles, CA 90071
Kummell Investments Limited(5) 530,698 5.2
Suite 922C
Europort, Gibraltar (via London) 509,174 5.0
ML Oklahoma Venture Partners, Limited Partnership(6)
5100 East Skelly Drive, Suite 1060
Tulsa, OK 74135
Paul A. Brown, M.D. -- --
Director
Herbert J. Conrad 18,375 *
Director(7)
Michael E. Herbert 9,375 *
Director(8)
Louis M. Sherwood, M.D. 12,375 *
Director(9)
William A. Hagstrom(10) 338,358 3.3
Chairman of the Board, President and Chief
Executive Officer
Socrates H. Choumbakos(11) 123,120 1.2
Vice President, Corporate Development, Chief
Financial Officer and Secretary
Mark G. Dimitroff(12) 116,631 1.1
Vice President and General Manager
UroDiagnostics Group
Robert W. Veltri, Ph.D.(13) 119,274 1.2
Vice President and General Manager UroSciences
Group
Kathryn L.W. Ingerly(14) 8,000 *
Vice President Disease Management Information
Systems
All executive officers, directors and nominees as a 776,841 7.4
group (10 persons)(15)
- ------------------
* Less than 1%.
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<PAGE>
(l) Each beneficial owner's percentage ownership is determined by assuming that
options, warrants and other convertible securities that are held by such
person (but not those held by any other person) and that are exercisable or
convertible within 60 days have been exercised or converted.
(2) Unless otherwise noted, the Company believes that all persons named in the
above table have sole voting and investment power with respect to all
shares of Common Stock beneficially owned by them.
(3) Includes 1,124,028 shares held by Concord Partners II, L.P., which include
86,527 shares issuable upon the exercise of certain stock purchase
warrants, and 256,700 shares held by Concord Partners Japan, Limited, which
include 5,170 shares issuable upon the exercise of certain stock purchase
warrants, each of which is a private venture capital fund managed by
Dillon, Read & Co., Inc. ("Dillon Read"). Also includes 28,290 shares held
by Lexington Partners III, L.P., and 13,143 shares held by Lexington
Partners IV, L.P., of which 800 shares are issuable upon the exercise of
certain stock purchase warrants. Each of Lexington Partners III, L.P. and
Lexington Partners IV, L.P. is a private investment fund for certain
Dillon Read affiliated persons, managed by Dillon Read. Also includes
295,547 shares held by Dillon Read as agent for certain affiliated persons
of which 13,226 shares are issuable upon the exercise of certain stock
purchase warrants. Information with respect to such beneficial owners was
obtained from their report on Schedule 13G dated February 13, 1997, as
received by the Company, and from the Company's stock records.
(4) Information with respect to the ownership of such beneficial owner was
obtained from its report on Schedule 13G dated February 12, 1997, as
received by the Company.
(5) The beneficial owner's shares set forth in the table include 40,000 shares
of Common Stock issuable upon exercise of certain stock purchase warrants.
Information with respect to the ownership of such stockholder was obtained
from its report on Schedule 13G dated February 14, 1997, as received by the
Company.
(6) The beneficial owner's shares set forth in the table include 12,539
shares of Common Stock issuable upon the exercise of certain stock
purchase warrants. Joe D. Tippens, who served as a director of the Company
from May 1991 through February 17, 1997, is a limited partner of the
general partner of ML Oklahoma Venture Partners, Limited Partnership ("ML
Oklahoma"), and a consultant to MLVC Inc., the management company to ML
Oklahoma, and may be deemed to be the beneficial owner of the 509,174
shares held by ML Oklahoma set forth in the table. Mr. Tippens disclaims
beneficial ownership of such shares. Information with respect to such
stockholder was obtained from its report on Schedule 13G dated February 13,
1997, as received by the Company.
(7) The beneficial owner's shares set forth in the table include 9,375
shares of Common Stock issuable upon the exercise of certain stock options.
(8) The beneficial owner's shares set forth in the table include 9,375
shares of Common Stock issuable upon the exercise of certain stock options.
(9) The beneficial owner's shares set forth in the table include 9,375 shares
of Common Stock issuable upon the exercise of certain stock options.
(10) The beneficial owner's shares set forth in the table include 105,316
shares of Common Stock issuable upon the exercise of certain stock options.
(11) The beneficial owner's shares set forth in the table include 89,120 shares
of Common Stock issuable upon the exercise of certain stock options.
(12) The beneficial owner's shares set forth in the table include 39,587 shares
of Common Stock issuable upon the exercise of certain stock options.
(13) The beneficial owner's shares set forth in the table include 45,440 shares
of Common Stock issuable upon the exercise of certain stock options.
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<PAGE>
(14) The beneficial owner's shares set forth in the table include 8,000 shares
of Common Stock issuable upon the exercise of certain stock options.
(15) See notes (7) through (14) to this table. The beneficial owners' shares set
forth in this table include an aggregate of 336,921 shares of Common Stock
issuable upon the exercise of certain stock options and warrants.
EXECUTIVE OFFICERS AND COMPENSATION
The following section sets forth the names and background of the
Company's executive officers and certain key employees.
BACKGROUND OF EXECUTIVE OFFICERS AND KEY EMPLOYEES
DATE OF
NAME OFFICES HELD FIRST ELECTION AGE
William A. Hagstrom Chairman of the Board, President and November 1989 39
Chief Executive Officer
Socrates H. Choumbakos Senior Vice President, June 1992 52
Corporate Planning
and Development and Secretary
Mark G. Dimitroff Vice President and General Manager April 1990 50
UroDiagnostics Group
Robert W. Veltri, Ph. D. Vice President and General Manager October 1990 55
UroSciences Group
Kathryn L.W. Ingerly Vice President Disease Management April 1996 37
Information Systems
Michael N. McDonald Vice President, Chief Financial June 1992 39
Officer, Treasurer and Assistant
Secretary
Gerard J. O'Dowd, M.D. Medical Director August 1990 46
For further information regarding Mr. Hagstrom's background, see
"Background of Nominees for Director and Directors".
SOCRATES H. CHOUMBAKOS. Mr. Choumbakos joined the Company in June 1992
as Vice President, Corporate Development, Chief Financial Officer and
Secretary, and became Senior Vice President, Corporate Planning and
Development in May 1997. Before joining the Company, Mr. Choumbakos was
President of Venture Development Group, a corporate and business development
consulting firm, from March 1988 to June 1992. From March 1988 to December
1990, Mr. Choumbakos was also Vice President and Chief Financial Officer of
Creative Business Strategies, Inc., a business development consulting firm.
From August 1979 to March 1988, Mr. Choumbakos was Director of Corporate
Development at Becton Dickinson & Co., a medical products company. Prior to
1979, he was a Senior Manager with Price Waterhouse & Co. where he worked
for 13 years.
MARK G. DIMITROFF. Mr. Dimitroff joined the Company in April 1990 as
Vice President, Marketing and Sales and became Vice President and General
Manager UroDiagnostics Group in October 1994. Before joining the Company,
Mr. Dimitroff served as Vice President, Marketing and Sales for Dianon
Systems, Inc., an oncology specialty reference laboratory, from 1984 to April
1990. Prior to 1984, he held senior marketing and sales management positions
with MetPath Inc., a large general reference laboratory, and American
Hospital Supply Corp.
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<PAGE>
ROBERT W. VELTRI, PH.D. Dr. Veltri joined the Company in October 1990
as Vice President, Product Planning and Technology Development and Chief
Scientific Officer, and became Vice President and General Manager UroSciences
Group in October 1994. Before joining the Company, Dr. Veltri was the
Executive Vice President and Chief Technical Officer at Theracel, Inc., a
therapeutics development company, from 1988 to October 1990. From 1984 to
1988, he was a founder and President and Chief Executive Officer of American
Biotechnology Company, the predecessor to Theracel, Inc. Prior to 1984, Dr.
Veltri held various positions with Cooper Biomedical Inc., a diagnostic
products company, and West Virginia University Medical School.
KATHRYN L. W. INGERLY. Ms. Ingerly joined the Company in April 1996 as
Vice President Disease Management Information Systems. Before joining the
Company, Ms. Ingerly was the President and Chief Executive Officer of
Ingerly Alliance Partners, L.L.C., an information technology consulting
company since January 1995. From September 1988 through December 1994, Ms.
Ingerly held various positions with Market Investment Solutions, a software
development and services company, most recently as President and Chief
Executive Officer. Prior to 1988, Ms. Ingerly was the Financial and Systems
Manager of the Cleo Wallace Center, a regional health care provider in
Denver, Colorado.
MICHAEL N. MCDONALD. Mr. McDonald joined the Company in June 1992 as
Controller and Assistant Secretary, was promoted to Director of Finance and
Administration and Treasurer in October 1994 and assumed his current role as
Vice President and Chief Financial Officer in May 1997. Before joining the
Company, Mr. McDonald was a Manager in the Accounting and Audit Division at
Arthur Andersen LLP where he served in various capacities from December 1980
to June 1992.
GERARD J. O'DOWD, M.D. Dr. O'Dowd joined the Company in August 1990
as Medical Director. Before joining the Company, Dr. O'Dowd was in private
practice specializing in fine needle aspiration cytology and served as a
pathologist for a regional reference laboratory in the Washington, D.C. area
from January 1988 to August 1990. From 1983 to December 1987, Dr. O'Dowd
served on the staff of George Washington Medical Center where he was Chief
Pathologist for the Division of Cytopathology and Hematopathology. He
received his medical degree from Georgetown University School of Medicine,
completed a pathology residency at the University of Utah and was a
Cytopathology Fellow at the Medical College of Virginia.
All officers of the Company hold office until the regular meeting of
directors following the annual meeting of stockholders or until their
respective successors are duly elected and qualified or their earlier
resignation or removal.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of The Board of Directors (the "Committee"),
which is composed of non-employee Directors and performs the duties described
on page 6 of this Proxy Statement, has furnished the following report on
executive compensation.
OVERALL OBJECTIVES AND PHILOSOPHY OF EXECUTIVE COMPENSATION PROGRAM
The Committee's philosophy is to ensure that the compensation of senior
management and executive officers is linked directly to improvements in
financial performance and an increase in stockholder value. To effect this
philosophy, the Committee follows the objectives of (i) providing a
competitive total compensation package that allows the Company to attract,
retain and motivate key executives, (ii) providing compensation opportunities
that are linked directly to the financial performance of the Company and that
align executive remuneration with the interest of the stockholders and (iii)
integrating executive compensation with the Company's annual and long-term
business objectives and performance goals.
EXECUTIVE COMPENSATION PROGRAM COMPONENTS
The Committee reviews on a periodic basis the Company's compensation
program to ensure that pay levels and incentive opportunities reflect the
performance of the Company while providing a compensation package that is
competitive with companies of similar size as the Company.
-11-
<PAGE>
BASE SALARY. Each year the Committee makes a recommendation to the
Board establishing base salaries for all senior management and executive
officers. Base salary levels are largely determined through comparisons with
companies of similar size and complexity as the Company. Merit increases are
based on individual performance over the previous year.
The Committee evaluated the base salary of the Chairman of the Board,
Chief Executive Officer and President of the Company in June 1996 and
recommended that his annual compensation level be increased by 15% in order
to maintain a level comparable with that of chief executive officers of
companies of similar size and complexity. In reaching this conclusion, the
Committee reviewed multiple surveys on executive compensation levels for
emerging growth companies in various industries.
ANNUAL INCENTIVE COMPENSATION. The Company's senior management and
executive officers are eligible to receive annual cash bonus awards which are
linked directly to the Company's revenue and operating income and achievement
of individual goals and nonfinancial corporate goals. The Committee's
objective with respect to this plan is to deliver a minimum targeted annual
incentive of 20% of base salary upon the attainment of a certain threshold
level of revenue and operating income and achievement of other goals. Actual
awards are subject to decrease or increase based on level of attainment and
are completely at the discretion of the Committee. The Committee has made
awards to the executive officers named in the compensation table under this
plan during the past three years, with the exception of Ms. Ingerly who has
only received an award for 1996, her first year with the Company.
The Committee met in January 1997 to review the Company's 1996
performance and to approve incentive compensation awards, contingent upon
issuance of audited financial statements. Based upon performance during the
year ended December 31, 1996, the Chairman of the Board, Chief Executive
Officer and President received a bonus representing 40% of his base salary.
STOCK OPTION PROGRAM. The Committee strongly believes that compensation
in the form of stock provides incentive for management to increase
stockholder value by closely aligning management compensation with the
performance of the Common Stock. The Company has adopted the Amended and
Restated 1992 Stock Option Plan, pursuant to which the Committee may
authorize the grants of stock options.
The Committee has authorized grants of stock options, from time to time,
to executive officers and management of the Company. The only issuance
during the year ended December 31, 1996 to executive officers named in the
compensation table was to Ms. Ingerly, in conjunction with the start of her
employment with the Company. Subsequent to December 31, 1996, the Committee
authorized the issuance of options to purchase 85,000 shares of Common Stock
at $10.00 per share, the fair market value of the Common Stock at such date,
to the executive officers named in the compensation table. These options
will vest over three years, subject to acceleration to full vesting in one
year if certain financial goals are attained in 1997.
FUTURE CONSIDERATIONS AND CONCLUSION
With the Company's recent entry into the public market and revenue and
earnings growth over the past few years, the Committee is considering
retaining an outside consultant or firm to review the Company's executive
compensation program and make recommendations to the Committee to ensure that
its objectives are being met. The Committee believes that the total
compensation program for executives of the Company is competitive with the
compensation programs provided by other comparable companies. The Committee
also believes that any amounts paid under the annual incentive plan
appropriately relate to corporate and individual performance, yielding awards
that are directly related to the annual financial and operational results of
the Company. Finally, the Committee believes that the Company's stock option
plans provide opportunities to participants that are consistent with the
returns that are generated on behalf of the Company's stockholders.
COMPENSATION COMMITTEE OF THE
BOARD OF DIRECTORS
Paul A. Brown, M.D.
Herbert J. Conrad
Michael E. Herbert
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<PAGE>
SUMMARY OF COMPENSATION
The following table summarizes compensation information concerning the
Chief Executive Officer and each of the Company's most highly compensated
executive officers as to whom the total annual salary and bonus for the
fiscal year ended December 31, 1996, exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
----------------------------- ------------
OTHER SECURITIES
ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL SALARY BONUS COMPENSATION OPTIONS COMPENSATION
POSITION YEAR ($) ($) ($) (#) (1) ($)
- --------------------- ---- ------- ------ ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
William A. Hagstrom, 1996 181,774 38,532 -- -- --
Chairman of the 1995 160,202 31,522 -- 60,000 --
Board, President 1994 151,550 46,648 -- 106,646 --
and Chief Executive
Officer
Socrates H. Choumbakos 1996 134,820 24,851 -- -- --
Vice President Corporate 1995 129,585 15,700 -- 30,000 --
Development, Chief 1994 125,816 23,250 -- 20,200 --
Financial Officer and
Secretary
Mark G. Dimitroff, 1996 144,116 23,451 -- -- --
Vice President and 1995 129,909 18,435 -- 40,000 --
General Manager 1994 120,495 26,195 -- 32,818 --
UroDiagnostics Group
Robert W. Veltri, Ph.D. 1996 139,258 19,324 -- -- --
Vice President and 1995 126,404 15,431 -- 30,000 --
General Manager 1994 118,700 23,446 -- 44,300 --
UroSciences Group
Kathryn L. W. Ingerly 1996 84,923 (2) -- -- 40,000 --
Vice President Disease 1995 -- -- -- -- --
Management Information 1994 -- -- -- -- --
Systems
</TABLE>
- ---------------------------
(1) Represents shares issuable pursuant to stock options granted under a stock
option plan.
(2) Employment began March 31, 1996. Current base salary is $120,000 per year.
-13-
<PAGE>
OPTION GRANTS AND EXERCISES
The following table sets forth information concerning individual grants
of stock options made during the year ended December 31, 1996, to each of the
executive officers named in the Summary Compensation Table.
OPTION GRANTS IN FISCAL YEAR ENDED DECEMBER 31, 1996
<TABLE>
INDIVIDUAL GRANTS (1)
- ------------------------------------------------------------------------
POTENTIAL REALIZED
NUMBER OF % OF TOTAL VALUE AT ASSUMED
SECURITIES OPTIONS EXERCISE ANNUAL RATES OF
UNDERLYING GRANTED TO OR BASE STOCK PRICE
OPTIONS EMPLOYEES IN PRICE EXPIRATION APPRECIATION FOR
NAME GRANTED (#) (2) FISCAL YEAR ($/SHARE) DATE OPTION TERM
- ------------------- --------------- ------------ --------- ---------- ----------------
<S> <C> <C> <C> <C> <C> <C>
5% ($) 10% ($)
------- -------
Kathryn L.W. Ingerly 40,000 26.8 9.00 May 1, 2006 226,402 573,747
- -------------------
</TABLE>
(1) No options were granted to the Chief Executive Officer and the Company's
most highly compensated officers during the fiscal year ended December 31,
1996, except for options granted to Ms. Ingerly.
(2) Represents shares of Common Stock issuable pursuant to an incentive stock
option granted under a stock option plan. Options vest in 20% annual
increments beginning May 1, 1997.
The following table sets forth information concerning the value of
unexercised options held by each of the executive officers named in the
Summary Compensation Table at December 31, 1996. None of such executive
officers exercised any stock options during the year ended December 31, 1996.
OPTION VALUES AT DECEMBER 31, 1996
NUMBER OF
SECURITIES UNDERLYING
UNEXERCISED OPTIONS VALUE OF UNEXERCISED
AT DECEMBER 31, 1996 IN-THE-MONEY OPTIONS AT
(# SHARES) DECEMBER 31, 1996 ($) (1)
-------------------------- --------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------- ----------- ------------- ----------- -------------
William A. Hagstrom 105,316 61,330 908,097 500,471
Socrates H. Choumbakos 89,120 28,080 802,170 227,455
Mark G. Dimitroff 39,587 33,231 335,527 266,181
Robert W. Veltri, Ph.D. 45,440 28,860 390,440 234,329
Kathryn L.W. Ingerly -- 40,000 -- 22,500
- ---------------------
(1) Based on a price of $99/16, the closing price of the Common Stock on
December 31, 1996, as reported by the Nasdaq Stock Market.
-14-
<PAGE>
PERFORMANCE PRESENTATION
The following performance graph compares the performance of the Common
Stock on an indexed basis to Center for Research in Security Prices ("CRSP")
Index for The Nasdaq Stock Market - US Companies ("Nasdaq US Companies") and
a CRSP index of Nasdaq Stock Market health services companies for Nasdaq
companies with SIC codes beginning with 80 ("Nasdaq Health Services
Companies"). Information with respect to the Common Stock, the Nasdaq US
Companies and the Nasdaq Health Services Companies is from May 16, 1996, the
effective date of the Company's initial public offering. The graph assumes
that the value of the investment in the Common Stock and each index was $100
at May 16, 1996, and that all dividends were reinvested. The Company will
provide the names of the companies included in the Nasdaq Health Services
Companies upon written request to the Investor Relations Department of the
Company.
CHART
5/16/96 6/28/96 9/30/96 12/31/96
------- ------- ------- --------
UroCor, Inc. 100.0 111.4 114.8 86.9
Nasdaq US Companies 100.0 95.9 99.3 104.2
Nasdaq Health Services Companies 100.0 96.2 95.9 84.8
Note: The indices are reweighed daily, using the market capitalization on
the previous trading day.
COMPENSATION OF DIRECTORS
Each director receives reimbursement for expenses related to attendance
at Board meetings. Mr. Conrad, Mr. Herbert and Dr. Sherwood each receive
$1,500 for each meeting of the Board of Directors attended.
-15-
<PAGE>
EMPLOYMENT AGREEMENTS
Mr. Hagstrom entered into an employment agreement with the Company in
January 1990. Under the terms of such agreement, Mr. Hagstrom serves as
President and Chief Executive Officer. The term of the agreement is for one
year, with automatic renewals indefinitely for further successive one-year
periods unless terminated by either party. The Company may terminate the
agreement upon Mr. Hagstrom's death or disability or for cause (as that term
is defined therein). The Company may terminate the agreement at any time
without cause, provided that the Company continues to pay Mr. Hagstrom at his
then current base salary rate, on a monthly basis, for six months following
the effective date of termination. Pursuant to the terms of the agreement,
the Company may pay Mr. Hagstrom bonuses in such amounts as the Board of
Directors in its sole discretion may determine.
Messrs. Choumbakos and Dimitroff, Dr. Veltri and Ms. Ingerly each have
entered into agreements with the Company regarding the respective terms of
their employment. None of such agreements provide for fixed periods of
employment. The agreement with Mr. Choumbakos provides for a current base
salary of $146,954, subject to annual review, a bonus of up to 25% of his
annual base salary and a severance obligation of six months upon termination
without cause. The agreement with Mr. Dimitroff provides for a current base
salary of $148,480, subject to annual review, and a bonus of up to 30% of
his annual base salary. In April 1996, the Company's Board of Directors
approved a severance obligation for Mr. Dimitroff of six months upon
termination of employment without cause. The agreement with Dr. Veltri
provides for a current base salary of $144,155, subject to annual review, a
bonus of up to 25% of his annual base salary and a severance obligation of
three months upon termination without cause. In April 1996, the Company's
Board of Directors approved an increase in Dr. Veltri's bonus to up to 30% of
his annual base salary and an increase in his severance obligation to six
months upon termination of employment without cause. The agreement with Ms.
Ingerly provides for a current base salary of $120,000, subject to annual
review, a bonus of up to 30% of her annual base salary and a severance
obligation of three months upon termination without cause.
TRANSACTIONS
The Company paid consulting fees to Dr. Paul A. Brown, a director of the
Company, for consultation on business and scientific matters totaling $36,000
for 1996.
DESCRIPTION OF COMPANY STOCK PLANS
Pursuant to applicable federal securities laws, the Company is required
to furnish to its stockholders in this proxy statement certain information
with respect to the Amended and Restated Stock Option Plan and the Director
Stock Option Plan. For information concerning these plans, see "Proposal 2:
Approval of the UroCor, Inc. Second Amended and Restated 1992 Stock Option
Plan", "Proposal 3: Approval of the UroCor, Inc. 1997 Non-Employee Director
Stock Option Plan" and the summaries set forth below.
The following summaries do not purport to be complete summaries of the
Company's stock option plans and are qualified in their entirety by reference
to the plans.
SUMMARY OF THE AMENDED AND RESTATED STOCK OPTION PLAN
The Board of Directors adopted the Amended and Restated Stock Option
Plan on May 5, 1997, subject to the approval by the stockholders of the
Company. The Amended and Restated Stock Option Plan authorizes a committee
of the Board of Directors to issue options intended to qualify as incentive
stock options ("ISOs"), as defined in Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"), and stock options that are not
intended to conform to the requirements of the Code Section ("Non-ISOs").
Under the terms of the Amended and Restated Stock Option Plan, the exercise
price of each ISO cannot be less than 100% of the fair market value of the
Common Stock at the time of grant, and, in the case of a grant to a 10%
stockholder, the exercise price may not be less than 110% of the fair market
value on the date of grant. The exercise price of each Non-ISO may not be
less than the fair market value of the Common Stock on the date of grant.
Options granted under the Amended and Restated Stock Option Plan may not be
exercised after the tenth anniversary (or the fifth anniversary in the case
of an option granted to a 10% stockholder) of their grant. Payments by
option holders upon exercise of an option may be made by delivering cash.
The Amended and Restated Stock Option Plan authorizes: (i) options to
acquire up to an aggregate of 1,700,000 shares of Common Stock to be granted;
(ii) grants of ISOs to eligible employees and grants of Non-ISOs to any
individual with substantial
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<PAGE>
responsibility for the Company's management and growth, as determined by a
committee of the Board of Directors; (iii) adjustments to the number and
class of shares outstanding pursuant to granted options and reserved under
the Amended and Restated Stock Option Plan in the event of a capital
adjustment; (iv) an opportunity for outstanding options to be exercised
subsequent to a merger or disposition of all of the Company's assets and for
the optionee to receive shares to which he would have been entitled prior to
such merger or disposition; and (v) grant of options in substitution for
options held by employees of other corporations who are about to become
Company employees or whose employer is about to become a parent or subsidiary
of the Company. The Company currently has approximately 260 full-time
employees, including 6 executive officers, each of whom may be eligible to
receive grants under the Amended and Restated Stock Option Plan. Other
persons with substantial responsibility for the Company's management and
growth may be eligible to receive grants under the Amended and Restated Stock
Option Plan at the discretion of a committee of the Board of Directors. A
complete copy of the Amended and Restated Stock Option Plan is attached to
this proxy statement as ANNEX A. The foregoing description of the Amended
and Restated Stock Option Plan is qualified in its entirety by reference to
ANNEX A, which is incorporated herein by reference as if fully set forth
herein.
The Amended and Restated Stock Option Plan supersedes the 1992 Stock
Option Plan, under which an aggregate of 1,400,000 shares of Common Stock
were reserved for issuance.
SUMMARY OF THE DIRECTOR STOCK OPTION PLAN
The Board of Directors adopted the Director Stock Option Plan on May 5,
1997, subject to the approval by the stockholders of the Company. The
Director Stock Option Plan provides for the automatic grant of stock options
to non-employee directors. The Company currently has four non-employee
directors, each of whom is eligible to receive grants under the Director
Stock Option Plan. The purposes of the Director Stock Option Plan are to
attract and retain the services of experienced and knowledgeable non-employee
directors of the Company and to provide an incentive for such directors to
increase their proprietary interests in the Company's long-term success and
progress. A committee designated by the Board of Directors shall be the
administrator of the Director Stock Option Plan. A complete copy of the
Director Stock Option Plan is attached to this proxy statement as ANNEX B.
The following description of the Director Stock Option Plan is qualified in
its entirety by reference to ANNEX B, which is incorporated herein by
reference as if fully set forth herein.
Under the Director Stock Option Plan, an aggregate of 100,000 shares of
Common Stock have been authorized and reserved for issuance to non-employee
directors. The aggregate number of shares of Common Stock for which options
may be granted under the Director Stock Option Plan may be adjusted based on
certain anti-dilution provisions contained in the Director Stock Option Plan.
On May 5, 1997, each existing non-employee director was granted an option to
purchase shares of Common Stock based upon their period of service as
directors at $9.25 per share, the fair market value of such stock on that
date. On such date, existing non-employees directors serving (i) since
January 1, 1989 were granted an option to purchase 10,000 shares of Common
Stock, (ii) only since January 1, 1994 were granted an option to purchase
7,500 shares of Common Stock and (iii) only since January 1, 1995 were
granted an option to purchase 5,000 shares of Common Stock. On the date of
election of any new non-employee director, such new non-employee director
will be granted an option to purchase 10,000 shares of Common Stock at the
fair market value of such stock on the date of the grant. Additionally, on
July 1 of each year, beginning July 1, 1998, each non-employee director who
is a non-employee director on such date will be granted an option to purchase
5,000 shares of Common Stock at the fair market value of such stock on the
date that the option is granted. Each stock option granted to a non-employee
director will have a ten year term and will be fully vested and exercisable
on the first anniversary of the date of the grant, assuming continued service
on the Board of Directors.
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<PAGE>
The following table sets forth information concerning the determinable
benefits and amounts that have been received by or allocated to the
individuals and groups identified below under the Amended and Restated Stock
Option Plan and the Director Stock Option Plan.
NEW PLAN BENEFITS (1)
<TABLE>
DOLLAR NUMBER OF
NAMES AND POSITION PLAN NAME VALUE $ SHARES (2)
------------------ --------- ------- ----------
<S> <C> <C> <C>
William A. Hagstrom,
Chairman of the Board, President and Chief Executive Officer.. (3) (4) 191,646
Socrates H. Choumbakos,
Senior Vice President, Corporate Planning and Development..... (3) (4) 132,200
Mark G. Dimitroff,
Vice President and General Manager
UroDiagnostics Group.......................................... (3) (4) 87,818
Robert W. Veltri, Ph.D.
Vice President and General Manager
UroSciences Group............................................. (3) (4) 89,300
Kathryn L. W. Ingerly
Vice President Disease Management
Information Systems........................................... (3) (4) 55,000
Executive Officers as a Group (6 persons, including
the executive officers named above).......................... (3) (4) 630,964
Non-Executive Director Group.................................. (3) (4) 37,500
(5) (4) 30,000
Non-Executive Officer Employee Group.......................... (3) (4) 474,330
</TABLE>
(1) Includes benefits granted pursuant to the 1992 Stock Option Plan, the
Amended and Restated Stock Option Plan and the Director Stock Option Plan.
(2) Includes options granted to Mr. Hagstrom to purchase 106,646, 60,000
and 25,000 shares of Common Stock on January 26, 1994, December
15, 1995 and March 20, 1997, respectively; options granted to Mr.
Choumbakos to purchase 67,000, 20,200, 30,000 and 15,000 shares of
Common Stock on February 26, 1993, January 26, 1994, December 15, 1995
and March 20, 1997, respectively; options granted to Mr. Dimitroff to
purchase 32,818, 40,000 and 15,000 shares of Common Stock on January 26,
1994, December 15, 1995 and March 20, 1997, respectively; options
granted to Dr. Veltri to purchase 44,300, 30,000 and 15,000 shares of
Common Stock on January 26, 1994, December 15, 1995 and March 20, 1997,
respectively; options granted to Ms. Ingerly to purchase 40,000 and
15,000 shares of Common Stock on May 1, 1996 and March 20, 1997,
respectively; options granted to other members of the Executive Officer
Group to purchase 25,000, 5,000, 10,000, 15,000 and 20,000 shares of
Common Stock on February 26, 1993, January 26, 1994, December 15, 1995,
March 20, 1997 and May 5, 1997, respectively; options granted to members
of the Non-Executive Director Group to purchase 12,500, 12,500, 12,500
and 12,500 shares of Common Stock on October 1, 1993, October 29, 1993,
July 12, 1994 and September 30, 1994, respectively; and options granted
to members of the Non-Executive Officer Employee Group to purchase an
aggregate of 474,330 shares of Common Stock on various dates between
June 1, 1992 and April 15, 1997.
(3) 1992 Stock Option Plan and Amended and Restated Stock Option Plan.
(4) The actual dollar value, if any, a person may realize will depend on the
excess of the per share price of the Common Stock over the per share
exercise price on the date the option is exercised. All options granted
under the 1992 Stock Option Plan on February 26, 1993, October 1, 1993,
October 29, 1993, January 26, 1994, July 12, 1994, September 30, 1994,
December 15, 1995, May 1, 1996, March 20, 1997 and May 5, 1997 have
exercise prices of $.35, $.75, $.75, $.75, $1.00, $1.00, $3.25 $9.00,
$10.00 and $9.25 per share, respectively. All options granted on May 5,
1997, under the Director Stock Option Plan have an exercise price of
$9.25 per share. Options granted to members of the Non-Executive
Officer Employee Group under the 1992 Stock Option Plan have exercise
prices ranging from $.35 to $12.625 The closing price of the Common
Stock on the Record Date was $9.00.
(5) Director Stock Option Plan.
-18-
<PAGE>
FEDERAL TAX CONSEQUENCES
AMENDED AND RESTATED STOCK OPTION PLAN. Options granted under the
Amended and Restated Stock Option Plan may be either ISOs which satisfy the
requirements of Section 422 of the Code or Non-ISOs which are not intended to
meet these requirements. The federal income tax treatment for the two types
of options differs as follows.
In general, no tax consequences should result from the grant to or
exercise by an employee of an ISO under the Amended and Restated Stock Option
Plan. The optionee will, however, recognize taxable income in the year in
which the purchased shares are sold or otherwise made the subject of a
disposition.
For federal tax purposes, dispositions are either qualifying or
disqualifying. An optionee makes a qualifying disposition of the purchased
shares if he sells or otherwise disposes of the shares after holding them for
more than two years after the date the option was granted and more than one
year after the exercise date. If the optionee fails to satisfy either of
these two holding periods prior to the sale or other disposition, a
disqualifying disposition will result.
Upon a qualifying disposition of the shares, the optionee will recognize
long-term capital gain in an amount equal to the excess of (i) the amount
realized upon the sale or other disposition of the purchased shares over (ii)
the exercise price paid for such shares. If there is a disqualifying
disposition of the shares, the excess of (i) the fair market value of those
shares on the date the option was exercised over (ii) the exercise price paid
for the shares generally will be taxable as ordinary income. Any additional
gain recognized upon the disposition will be a capital gain. If, however,
the disqualifying disposition is a sale or exchange with respect to which a
loss (if sustained) would be recognized, the amount of ordinary income
realized by the optionee cannot exceed the amount realized on the sale or
exchange over the exercise price paid for the shares.
If the optionee makes a disqualifying disposition of the purchased
shares, the Company will be entitled to an income tax deduction for the
taxable years in which the disposition occurs, equal to the excess of (i) the
fair market value of such shares on the date the option was exercised over
(ii) the exercise price paid for the shares. In no other instance will the
Company be allowed a deduction with respect to the optionee's disposition of
the purchased shares.
No taxable income is recognized by an optionee upon the grant of a
Non-ISO. The optionee will in general recognize ordinary income, in the year
in which the option is exercised, equal to the excess of the fair market
value of the purchased shares on the date of exercise over the exercise price
paid for the shares. The Company is entitled to a deduction in the same
amount as the income recognized by the optionee, provided that the Company
withholds income tax with respect to that amount if the optionee is an
employee.
DIRECTOR STOCK OPTION PLAN. The grant of non-qualified stock options
under the Director Stock Option Plan will not result in the recognition of
any taxable income by the director. A director will recognize ordinary
income in the year in which the option is exercised equal to the fair market
value of the purchased shares on the date of exercise over the exercise price
paid for the shares. The Company is entitled to a deduction equal to the
amount recognized as income by the director on the exercise of a
non-qualified stock option.
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
Arthur Andersen LLP served as the Company's principal independent public
accountants for the year ended December 31, 1996 and has been recommended by
the Audit Committee to so serve for the current year. Representatives of
Arthur Andersen LLP are expected to be present at the annual meeting of
stockholders, will have the opportunity to make a statement if they so desire
and will be available to respond to appropriate questions.
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<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 ("Section 16(a)")
requires the Company's officers, directors and persons who own more than 10%
of a registered class of the Company's equity securities to file statements
on Form 3, Form 4 and Form 5 of ownership and change in ownership with the
Securities and Exchange Commission. Officers, directors and greater than 10%
stockholders are required to furnish the Company with copies of all Section
16(a) reports which they file.
Based solely on a review of reports on Forms 3 and 4 and amendments
thereto furnished to the Company during its most recent fiscal year, reports
on Form 5 and amendments thereto furnished to the Company with respect to its
most recent fiscal year and written representations from reporting persons
that no report on Form 5 was required, the Company believes that, except as
set forth below, no person who, at any time during 1996, was subject to the
reporting requirements of Section 16(a) with respect to the Company failed to
meet such requirements on a timely basis. Mr. Conrad, a director of the
Company, purchased shares of Common Stock on May 17, 1996, and was required
to file a Form 4 on or before June 10, 1996. The Form 4 was filed on July
10, 1996. Dr. O'Dowd, the Company's Medical Director, purchased shares of
Common Stock on May 16, 1996, and was required to file a Form 4 on or before
June 10, 1996. A Form 4 was filed on June 5, 1996, that described other
transactions but omitted this purchase. An amended Form 4 was filed on
December 10, 1996 describing this transaction.
PROPOSALS FOR NEXT ANNUAL MEETING
Any proposals of holders of Common Stock intended to be presented at the
annual meeting of stockholders of the Company to be held in 1998 must be
received by the Company at its principal executive offices, 800 Research
Parkway, Oklahoma City, Oklahoma 73104, no later than January 16, 1998, in
order to be included in the proxy statement and form of proxy relating to
that meeting.
OTHER MATTERS
The management of the Company knows of no other matters that may come
before the meeting. However, if any matters other than those referred to
above should properly come before the meeting, it is the intention of the
persons named in the enclosed proxy to vote such proxy in accordance with
their best judgment.
The cost of solicitation of proxies in the accompanying form will
be paid by the Company. In addition to solicitation by use of the mails,
certain directors, officers or employees of the Company may solicit the
return of proxies by telephone, telegram or personal interview.
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ANNEX A
UROCOR, INC.
SECOND AMENDED AND RESTATED 1992 STOCK OPTION PLAN
MAY 5, 1997
1. PURPOSE. This Second Amended and Restated 1992 Stock Option Plan
(the "Plan") of UroCor, Inc. (the "Company"), for certain employees,
officers, directors and independent contractors performing services for the
Company is intended to advance the best interest of the Company by providing
those persons who have substantial responsibility for its management and
growth with additional incentive and by increasing their proprietary interest
in the success of the Company -- thereby encouraging them to continue their
employment or affiliation.
2. ADMINISTRATION. The Plan shall be administered by a committee to
be appointed by the Board of Directors of the Company (the "Committee"),
which Committee shall consist of not less than two members of the Board of
Directors and shall be comprised solely of members of the Board of Directors
who qualify as both non-employee directors as defined in Rule 16b-3(b)(3) of
the Securities Exchange Act of 1934, as amended (the "Securities Exchange
Act") and outside directors within the meaning of Department of Treasury
Regulations issued under Section 162(m) of the Internal Revenue Code of 1986,
as amended (the "Code"). The Board of Directors of the Company shall have the
power to add or remove members of the Committee, from time to time, and to
fill vacancies arising for any reason. The Committee shall designate a
chairman from among its members, who shall preside at all of its meetings,
and shall designate a secretary, without regard to whether that person is a
member of the Committee, who shall keep the minutes of the proceedings and
all records, documents, and data pertaining to its administration of the
Plan. Meetings shall be held at any time and place as it shall choose. A
majority of the members of the Committee shall constitute a quorum for the
transaction of business. The vote of a majority of those members present at
any meeting shall decide any question brought before that meeting. In
addition, the Committee may take any action otherwise proper under the Plan
by the affirmative vote, taken without a meeting, of a majority of its
members. No member of the Committee shall be liable for any act or omission
of any other member of the Committee or for any act or omission on his own
part, including but not limited to the exercise of any power or discretion
given to him under the Plan, except those resulting from his own gross
negligence or willful misconduct. All questions of interpretation and
application of the Plan, or as to options granted under it (the "Options"),
shall be subject to the determination of a majority of the Committee. In
carrying out its authority under this Plan, the Committee shall have full and
final authority and discretion, including but not limited to the rights,
powers and authorities, to: (a) determine the persons to whom and the time
or times at which Options will be made, (b) determine the number of shares
and the purchase price of stock covered in each Option, subject to the terms
of this Plan, (c) determine the terms, provisions and conditions of each
Option, which need not be identical, (d) accelerate the time at which any
outstanding Option may be exercised, (e) define the effect, if any, on an
Option of the death, disability, retirement, or other termination of
employment of the Optionee, (f) prescribe, amend and rescind rules and
regulations relating to administration of this Plan, and (g) make all other
determinations and take all other actions deemed necessary, appropriate, or
advisable for the proper administration of this Plan. The actions of the
Committee in exercising all of the rights, powers, and authorities set out in
this Article and all other Articles of this Plan, when performed in good
faith and in its sole judgment, shall be final, conclusive and binding on all
parties. When appropriate the Plan shall be administered in order to qualify
certain of the Options granted under it as "incentive stock options"
described in Section 422 of the Code ("Incentive Stock Options").
3. DEDICATED SHARES. The stock subject to the Options and other
provisions of the Plan shall be shares of the Company's Common Stock, $.01
par value (the "Stock"). The total number of shares of Stock with respect to
which Incentive Stock Options may be granted shall be 1,700,000 shares. The
maximum number of shares subject to Options which may be issued to any
Optionee under this Plan during any period of three consecutive years is
500,000 shares. The class and aggregate number of shares which may be
subject to the Options granted hereunder shall be subject to adjustment in
accordance with the provisions of Paragraph 17 hereof.
In the event that an outstanding Option expires or is surrendered for
any reason or terminates by reason of the death or other severance of
employment of the Optionee, the shares of Stock allocable to the unexercised
portion of that Option may again be subject to an Option under the Plan.
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4. AUTHORITY TO GRANT OPTIONS. The Committee may grant the following
Options at any time during the term of this Plan to any eligible individual
that it chooses:
"Incentive Stock Options". The Committee may grant to an eligible
employee an Option, or Options, to buy a stated number of shares of Stock
under the terms and conditions of the Plan, which Option or Options would
be an "incentive stock option" within the meaning of Section 422 of the
Code.
"Nonqualified Stock Options". The Committee may grant to an eligible
individual an Option, or Options, to buy a stated number of shares of Stock
under the terms and conditions of the Plan, which Option or Options would
not constitute an "incentive stock option" within the meaning of Section
422 of the Code.
Each Option granted shall be approved by the Committee. Subject only to
any applicable limitations set forth in this Plan, the number of shares of
Stock to be covered by an Option shall be as determined by the Committee.
5. ELIGIBILITY. The individuals who shall be eligible to receive
Incentive Stock Options shall be those full-time key employees, including
officers and directors if they are employees, of the Company, or of any
parent or subsidiary corporation, as the Committee shall determine during the
term of this Plan. However, no employee who owns stock possessing more than
10% of the total combined voting power of all classes of stock of the
corporation employing the employee or of its parent or subsidiary corporation
shall be eligible to receive an Incentive Stock Option unless at the time
that the Option is granted the option price is at least 110% of the fair
market value (as defined in this Section 5) of the Stock at the time the
Option is granted and the Option by its own terms is not exercisable after
the expiration of five years from the date the Option is granted.
An employee will be considered as owning the stock owned, directly or
indirectly, by or for his brothers and sisters (whether by the whole or half
blood), spouse, ancestors, and lineal descendants. Stock owned, directly or
indirectly, by or for a corporation, partnership, estate or trust will be
considered as being owned proportionately by or for its shareholders,
partners or beneficiaries. For all purposes of this Plan, a parent
corporation is any corporation (other than the Company) in an unbroken chain
of corporations ending with the Company if, on the date of grant of the
Option in question, each of the corporations other than the Company owns
stock possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in that chain; and a
subsidiary corporation is any corporation in an unbroken chain of
corporations beginning with the Company if, on the date of grant of the
Option in question, each of the corporations, other than the last corporation
in the chain, owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in that chain.
The individuals who shall be eligible to receive Nonqualified Stock
Options shall be such individuals as the Committee shall determine during the
term of this Plan.
No individual shall be eligible to receive an Option under the Plan
while that individual is a member of the Committee.
As used in this Plan, "fair market value" of the Stock as of any date
means (a) the closing price on that date on the principal securities exchange
on which the Stock is listed; or (b) if the Stock is not listed on a
securities exchange, the closing price of the Stock on that date as reported
on The National Association of Securities Dealers (the "NASD") Automated
Quotation System ("Nasdaq") Stock Market's National Market; or (c) if the
Stock is not listed on The Nasdaq Stock Market's National Market, the average
of the high and low bid quotations for the Stock on that date as reported by
the National Quotation Bureau Incorporated; or (d) if none of the foregoing
is applicable, an amount, at the election of the Committee equal to (x) the
average between the closing bid and ask prices per share of Stock on the last
preceding date on which those prices were reported or (y) the value of the
Stock as determined in good faith by the Committee in its sole discretion.
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6. OPTION PRICE. The price at which shares may be purchased pursuant
to an Incentive Stock Option shall be not less than the fair market value of
the shares of Stock on the date the Option is granted. The price at which
shares may be purchased pursuant to a Nonqualified Stock Option shall be not
less than the fair market value of the shares of Stock on the date the Option
is granted. The Committee in its discretion may provide that the price at
which shares may be purchased shall be more than the minimum price required.
If an employee owns stock possessing more than 10% of the total combined
voting power of all classes of stock of the corporation employing the
employee or of its parent or subsidiary corporation, the option price at
which shares may be purchased under an Incentive Stock Option shall be not
less than 110% of the fair market value of the Stock on the date the Option
is granted.
7. DURATION OF OPTIONS. No Incentive Stock Option shall be
exercisable after the expiration of ten years from the date such Option is
granted. The Committee in its discretion may provide that the Option shall
be exercisable throughout the ten-year period or during any lesser period of
time commencing on or after the date of grant of the Option and ending upon
or before the expiration of the ten-year period. If an employee owns stock
possessing more than 10% of the total combined voting power of all classes of
stock of the corporation employing the employee or of its parent or
subsidiary corporation, no Incentive Stock Option shall be exercisable after
the expiration of five years from the date such Option is granted. No
Nonqualified Stock Option shall be exercisable after the expiration of ten
years from the date such Option is granted. The Committee in its discretion
may provide that the Option shall be exercisable throughout the ten-year
period or during any lesser period of time commencing on or after the date of
grant of the Option and ending upon or before the expiration of the ten-year
period.
8. $100,000 LIMITATION ON INCENTIVE STOCK OPTIONS. To the extent that
the aggregate fair market value (determined as of the time an Incentive
Option is granted) of the Stock with respect to which Incentive Options first
become exercisable by the Optionee during any calendar year (under this Plan
and any other incentive stock option plan(s) of the Company or any parent
corporation or subsidiary corporation) exceeds $100,000, the Incentive
Options shall be treated as Nonqualified Options. In making this
determination, Incentive Options shall be taken into account in the order in
which they were granted.
9. AMOUNT EXERCISABLE. Each Option may be exercised, so long as it is
valid and outstanding, from time to time in part or as a whole, in the manner
and subject to the conditions that the Committee in its discretion may
provide in the Option agreement. However, the Committee in its absolute
discretion may accelerate the time at which any outstanding Option may be
exercised. Notwithstanding any provision of this Plan or an Option agreement
to the contrary, no Option awarded under this Plan after May 5, 1997, may be
exercised before this amendment and restatement of this Plan is approved by
the stockholders of the Company.
10. EXERCISE OF OPTIONS. Each Option shall be exercised by the
delivery of written notice to the Company setting forth the number of shares
of Stock with respect to which the Option is to be exercised, together with
cash, certified check, bank draft or postal or express money order payable to
the order of the Company for an amount equal to the exercise price of such
shares, and specifying the address to which the certificates for such shares
are to be mailed. As promptly as practicable after receipt of written
notification and payment, the Company shall deliver to the Optionee
certificates for the number of shares with respect to which the Option has
been exercised, issued in the Optionee's name. Delivery of the shares shall
be deemed effected for all purposes when a stock transfer agent of the
Company shall have deposited the certificates in the United States mail,
addressed to the Optionee, at the address specified by the Optionee in his
notice of exercise.
11. TRANSFERABILITY OF OPTIONS. Options shall not be transferable by
the Optionee except by will or under the laws of descent and distribution,
and shall be exercisable, during his lifetime, only by him.
12. TERMINATION OF EMPLOYMENT OR AFFILIATION OF OPTIONEE. Except as
otherwise expressly provided herein or in the Option agreement, Incentive
Stock Options shall terminate at 5:00 p.m., Oklahoma City time, on the 60th
day immediately following the date of severance of employment of the Optionee
from the Company for any reason, with or without cause, other than death or
retirement for age or disability under the then established rules of the
Company, and Nonqualified Stock Options shall terminate at 5:00 p.m.,
Oklahoma City time, on the 60th day immediately following the date of the
severance of the employment or affiliation relationship between the Company
and the Optionee for any reason with or without cause other than death or
retirement for age or disability under the then established rules of the
Company. Whether authorized leave of absence or absence on military or
government service shall constitute severance of the employment or
affiliation relationship between the Company and the Optionee shall be
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determined by the Committee at that time. After such severance of an
Optionee holding either an Incentive Stock Option or Nonqualified Stock
Option, such Optionee shall have the right, at any time prior to such
termination, to exercise the Option to the extent to which he was entitled to
exercise it immediately prior to his severance.
If, before the expiration of an Incentive Stock Option or a Nonqualified
Stock Option held by an employee of the Company, the Optionee shall be
retired from the employ of the Company because of his age or disability under
the then established rules of the Company, such Incentive Stock Option or
Non-incentive Stock Option, as the case may be, shall terminate on the
earlier of such date of expiration or one day less than three months after
his retirement. If, before the expiration of a Nonqualified Stock Option
held by an Optionee who is not an employee of the Company, the Optionee's
affiliation with the Company shall be severed for age or disability under the
then established rules of the Company, such Nonqualified Stock Option shall
terminate on the earlier of such date of expiration or one day less than
three months after his severance of affiliation. In the event of retirement
for age or disability, or severance of affiliation for age or disability, as
the case may be, the Optionee shall have the right prior to the termination
of the Option to exercise the Option to the extent to which he was entitled
to exercise it immediately prior to such retirement or severance of
affiliation for age or disability, as the case may be.
In the event of the death of a holder of an Incentive Stock Option while
in the employ of the Company or during the period after the retirement of the
employee for age or disability and before the date of expiration of the
Option, such Option will terminate on the earlier of such date of expiration
or one year following the date of his death. In the event of the death of a
holder of a Nonqualified Stock Option while in the employ of, or affiliated
with, the Company or during the period after the retirement of the holder for
age or disability or after the severance of his affiliation with the Company
for age or disability, as the case may be, and before the date of expiration
of the Option, the Option will terminate on the earlier of such date of
expiration or one year following the date of his death. After the death of
an Optionee holding either an Incentive Stock Option or a Nonqualified Stock
Option, his executors, administrators or any persons to whom his Option may
be transferred by will or by the laws of descent and distribution shall have
the right, at any time prior to such termination, to exercise the Option to
the extent to which he was entitled to exercise it immediately prior to his
death.
An employment relationship between the Company and the Optionee shall be
deemed to exist during any period in which the Optionee is employed by the
Company, by any parent or subsidiary corporation, by a corporation issuing or
assuming a stock option in a transaction to which Section 424(a) of the Code
applies, or by a parent or subsidiary corporation of the corporation issuing
or assuming a stock option. For this purpose, the phrase "corporation
issuing or assuming a stock option" shall be substituted for the word
"Company" in the definitions of parent and subsidiary corporations in Section
5 and the parent-subsidiary relationship shall be determined at the time of
the corporate action described in Section 424(a) of the Code.
13. FORFEITURES. Notwithstanding any other provision of this Plan, if
the Committee finds by a majority vote, that the Optionee, before or after
termination of his employment or affiliation with the Company or any parent
or subsidiary corporation (as used in this Section, the "Employer"),
committed fraud, embezzlement, theft, commission of felony, or proven
dishonesty in the course of his employment by or affiliation with the
Employer which conduct damaged the Employer, or for disclosing trade secrets
of the Employer, then any outstanding options which have not been exercised
by the Optionee will be forfeited. The decision of the Committee as to the
cause of an Optionee's discharge, the damage done to the Employer and the
extent of the Optionee's competitive activity will be final. No decision of
the Committee, however, will affect the finality of the discharge of the
Optionee by the Employer.
14. REQUIREMENTS OF LAW. The Company shall not be required to sell or
issue any shares under any Option if issuing the shares shall constitute a
violation by the Optionee or the Company of any provisions of any law or
regulation of any governmental authority. Each Option granted under this
Plan shall be subject to the requirements that, if at any time the Board of
Directors of the Company or the Committee shall determine that the listing,
registration or qualification of the shares upon any securities exchange or
under any state or federal law of the United states or of any other country
or governmental subdivision, or the consent or approval of any governmental
regulatory body, or investment or other representations, are necessary or
desirable in connection with the issue or purchase of shares subject to an
Option, that Option shall not be exercised in whole or in part unless the
listing, registration, qualification, consent, approval or representations
shall have been effected or obtained free of any conditions not acceptable to
the Committee. In connection with any applicable statute or regulation
relating to the registration of securities, upon exercise of any Option, the
Company shall not be required to issue any Stock unless the Committee has
received evidence satisfactory
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to it to the effect that the holder of that Option will not transfer the
Stock except in accordance with applicable law, including receipt of an
opinion of counsel satisfactory to the Company to the effect that any
proposed transfer complies with applicable law. Any determination by the
Committee on these matters shall be final, binding and conclusive. In the
event the shares issuable on exercise of an Option are not registered under
applicable securities laws of any country or any political subdivision the
Company may imprint on the certificate for such shares the following legend
or any other legend which counsel for the Company considers necessary or
advisable to comply with applicable law:
"The shares of stock represented by this certificate have not been
registered under the Securities Act of 1933 or under the securities laws of
any state and may not be sold or transferred except upon registration or
upon receipt by the Company of an opinion of counsel satisfactory to the
Company, in form and substance satisfactory to the Company, that
registration is not required for a sale or transfer."
The Company may, but shall in no event be obligated to, register any
securities covered by this Plan under applicable securities laws of any
country or political subdivision (as now in effect or as later amended) and,
in the event any shares are registered, the Company may remove any legend on
certificates representing those shares. The Company shall not be obligated
to take any other affirmative action in order to cause the exercise of an
Option or the issuance of shares under the Option to comply with any law or
regulation or any governmental authority.
15. NO RIGHTS AS STOCKHOLDER. No Optionee shall have rights as a
stockholder with respect to shares covered by his Option until the date a
stock certificate is issued for the shares. Except as provided in Section
17, no adjustment for dividends, or other matters shall be made if the record
date is prior to the date the certificate is issued.
16. EMPLOYMENT OR AFFILIATION OBLIGATION. The granting of any Option
shall not impose upon the Company any obligation to employ or become
affiliated with or continue to employ or be affiliated with any Optionee.
The right of the Company to terminate the employment or affiliation of any
person shall not be diminished or affected by reason of the fact that an
Option has been granted to him.
17. CHANGES IN THE COMPANY'S CAPITAL STRUCTURE. The existence of
outstanding Options shall not affect in any way the right or power of the
Company or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company, or
any issue of bonds, debentures, preferred or prior preference stock ahead of
or affecting the Stock or the rights of the Stock, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.
If the Company shall effect a subdivision or consolidation of shares or
other capital readjustment, the payment of a stock dividend, or other
increase or reduction of the number of shares of the Stock outstanding,
without receiving compensation for it in money, services or property, then
(a) the number, class and per share price of shares of stock subject to
outstanding Options under this Plan shall be appropriately adjusted in a
manner as to entitle an Optionee to receive upon exercise of an Option, for
the same aggregate cash consideration, the same total number and class or
classes of shares as he would have received had he exercised his Option in
full immediately prior to the event requiring the adjustment; and (b) the
number and class of shares then reserved for issuance under the Plan shall be
adjusted by substituting for the total number and class of shares of stock
then reserved for the number and class or classes of shares of stock that
would have been received by the owner of an equal number of outstanding
shares of Stock as the result of the event requiring the adjustment.
If the Company merges or consolidates with another corporation, whether
or not the Company is a surviving corporation, or if the Company is
liquidated or sells or otherwise disposes of substantially all its assets
while unexercised Options remain outstanding under the Plan, or if any
"person" (as that term is used in Section 13(d) and 14(d)(2) of the
Securities Exchange Act) is or becomes the beneficial owner, directly or
indirectly, of securities of the Company representing greater than 50% of the
combined voting power of the Company's then outstanding securities, after the
effective date of the merger, consolidation, liquidation, sale or other
disposition, or change in beneficial ownership, as the case may be, each
holder of an outstanding Option shall be entitled, upon exercise of an
Option, to receive, in lieu of shares of Stock, the number and class or
classes of shares of stock or other securities or property to which the
holder would have been entitled if, immediately prior to the merger,
consolidation, liquidation, sale or other
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disposition, or change in beneficial ownership, the holder had been the
holder of record of the number of shares of Stock equal to the entire number
of shares as to which the Option may be exercised regardless of and without
giving effect to any limitations set out in or imposed pursuant to this Plan
or any Option granted hereunder.
Except as expressly provided before in this Plan, the issue by the
Company of shares of stock of any class, or securities convertible into
shares of stock of any class, for cash or property, or for labor or services
either upon direct sale or upon the exercise of rights or warrants to
subscribe for shares, or upon conversion of shares or obligations of the
Company convertible into shares or other securities, shall not affect, and no
adjustment by reason of it shall be made with respect to, the number or price
of shares of Stock then subject to outstanding Options.
18. SUBSTITUTION OPTIONS. Options may be granted under this Plan from
time to time in substitution for stock options held by employees of other
corporations who are about to become employees of the Company, or whose
employer is about to become a parent or subsidiary corporation, conditioned
in the case of an Incentive Stock Option upon the employee becoming an
employee as the result of a merger or consolidation of the Company with
another corporation, or the acquisition by the Company of substantially all
the assets of another corporation, or the acquisition by the Company of at
least 50% of the issued and outstanding stock of another corporation as the
result of which it becomes a subsidiary of the Company. The terms and
conditions of the substitute Options granted may vary from the terms and
conditions of this Plan to the extent the Board of Directors of the Company
at the time of grant may deem appropriate to conform, in whole or in part, to
the provisions of the stock options in substitution for which they are
granted. But with respect to Incentive Stock Options, no variation shall be
made which will affect the status of any substitute option as an "incentive
stock option" under Section 422 of the Code.
19. AMENDMENT OR TERMINATION OF PLAN. The Board of Directors may
modify, revise or terminate this Plan at any time and from time to time.
However, without the further approval of the holders of at least a majority
of the outstanding shares of voting stock, or if the provisions of the
corporate charter, by-laws or applicable state law prescribe a greater degree
of stockholder approval for this action, without the degree of stockholder
approval thus required, the Board of Directors may not (a) change the
aggregate number of shares which may be issued under Options pursuant to the
provisions of this Plan; (b) reduce the Option price permitted for Incentive
Stock Options; (c) extend the term during which an Incentive Stock Option may
be exercised or the termination date of this Plan; (d) change the class of
employees eligible to receive Incentive Stock Options; or (e) (i) materially
increase the benefits accruing to participants under the Plan, (ii)
materially increase the number of securities which may be issued under the
Plan or (iii) materially modify the requirements as to eligibility for
participation in the Plan. The Board of Directors, however, shall have the
power to make all changes in the Plan and in the regulations and
administrative provisions under the Plan or in any outstanding Option as in
the opinion of counsel for the Company may be necessary or appropriate from
time to time to enable any Option granted pursuant to the Plan to qualify as
an incentive stock option under Section 422 of the Code and the regulations
which may be issued under that Section as in existence from time to time.
All Options granted under this Plan shall be subject to the terms and
provisions of this Plan and any amendment, modification or revision of this
Plan shall be deemed to amend, modify or revise all Options outstanding under
this Plan at the time of the amendment, modification or revision. In the
event this Plan is terminated by action of the Board of Directors, all
Options outstanding under this Plan may be terminated.
20. WRITTEN AGREEMENT. Each Option granted under this Plan shall be
embodied in a written agreement, which shall be subject to the terms and
conditions prescribed above, and shall be signed by the Optionee and by an
officer of the Company on behalf of the Committee and the Company. Each
Option agreement shall contain any other provisions that the Committee in its
discretion shall deem advisable which are not inconsistent with the terms of
this Plan.
21. INDEMNIFICATION OF THE COMMITTEE AND THE BOARD OF DIRECTORS. The
Company will, to the fullest extent permitted by law, indemnify, defend and
hold harmless any person who at any time is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or
proceeding (whether civil, criminal, administrative or investigative) in any
way relating to or arising out of this Plan or any Option or Options granted
under it by reason of the fact that that person is or was at any time a
director of the Company or a member of the Committee against judgments,
fines, penalties, settlements and reasonable expenses (including attorneys'
fees) actually incurred by that person in connection with the action, suit or
proceeding. This right of indemnification will inure to the benefit of the
heirs, executors and administrators of each person to be protected and is in
addition to all other rights to which that person may be entitled by virtue
of the by-laws of the Company or as a matter of law, contract or otherwise.
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22. TAX WITHHOLDING. The Company shall be entitled to deduct from
other compensation payable to each employee any sums required by federal,
state or local tax law to be withheld with respect to the grant or exercise
of an Option. In the alternative, the Company may require the employee (or
other individual exercising the Option) to pay the sum directly to the
Company. If the employee (or other individual exercising the Option) is
required to pay the sum directly, payment in cash or by check of such sums
for taxes shall be delivered within ten days after the date of exercise. The
Company shall have no obligation upon exercise of any Option until payment
has been received, unless withholding (or offset against a cash payment) as
of or prior to the date of exercise is sufficient to cover all sums due with
respect to that exercise. The Company shall not be obligated to advise an
employee of the existence of the tax or the amount which the employer
corporation will be required to withhold.
23. GENDER. If the context requires, words of one gender when used in
this Plan shall include the others and words used in the singular or plural
shall include the other.
24. HEADINGS. Headings of Sections are included for convenience of
reference only and do not constitute part of this Plan and shall not be used
in construing the terms of this Plan.
25. OTHER OPTIONS. The grant of an Option shall not confer upon an
Optionee the right to receive any future or other Options under this Plan,
whether or not Options may be granted to similarly situated Optionees, or the
right to receive future Options upon the same terms or conditions as
previously granted.
26. ARBITRATION OF DISPUTES. Any controversy arising out of or
relating to this Plan or an Option Agreement shall be resolved by arbitration
conducted pursuant to the arbitration rules of the American Arbitration
Association. The arbitration shall be final and binding on the parties.
27. GOVERNING LAW. The provisions of this Plan shall be construed,
administered, and governed under the laws of the State of Delaware.
28. EFFECTIVE DATE OF PLAN. This Plan restates and integrates,
and also amends, the UroCor, Inc. 1992 Amended and Restated Stock Option Plan
adopted effective March 15, 1996.
The Plan shall become effective and shall be deemed to have been adopted
on May 5, 1997, if within one year of that date it has been approved by the
holders of at least a majority of the outstanding shares of voting stock of
the Company voting in person or by proxy at a duly held stockholders'
meeting, or if the provisions of the corporate charter, by-laws or applicable
state law prescribe a greater degree of stockholder approval for this action,
the approval by the holders of that percentage, at a duly held meeting of
stockholders.
No Options shall be granted pursuant to the Plan after September 24,
2002.
A-7
<PAGE>
ANNEX B
UROCOR, INC.
1997 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
MAY 5, 1997
1. PURPOSE. This 1997 Non-Employee Director Stock Option Plan (this
"Plan") of UroCor, Inc., a Delaware corporation (the "Company"), is adopted,
subject to stockholder approval, for the benefit of the directors of the
Company who at the time of their service are not employees of the Company or
any of its subsidiaries ("Non-Employee Directors"), and is intended to
advance the interests of the Company by providing the Non-Employee Directors
with additional incentive to serve the Company by increasing their
proprietary interest in the success of the Company.
2. ADMINISTRATION. This Plan shall be administered by a committee to
be appointed by the Board of Directors of the Company (the "Committee"),
which Committee shall consist of not less than two members of the Board of
Directors and shall be comprised solely of members of the Board of Directors
who qualify as non-employee directors as defined in Rule 16b-3(b)(3) of the
Securities Exchange Act of 1934, as amended (the "Securities Exchange Act").
For the purposes of this Plan, a majority of the members of the Committee
shall constitute a quorum for the transaction of business, and the vote of a
majority of those members present at any meeting shall decide any question
brought before that meeting. No member of the Committee shall be liable for
any act or omission of any other member of the Committee or for any act or
omission on his own part, including (without limitation) the exercise of any
power or discretion given to him under this Plan, except those resulting from
his own gross negligence or willful misconduct. All questions of
interpretation and application of this Plan, or as to options granted
hereunder (the "Options"), shall be subject to the determination, which shall
be final and binding, of a majority of the whole Committee. Notwithstanding
the above, the selection of Non-Employee Directors to whom Options are to be
granted, the number of shares subject to any Option, the exercise price of
any Option and the term of any Option shall be as hereinafter provided and
the Committee shall have no discretion as to such matters.
3. OPTION SHARES. The stock subject to the Options and other
provisions of this Plan shall be shares of the Company's Common Stock, $.01
par value per share (or such other par value as may be designated by act of
the Company's stockholders, the "Common Stock"). The total amount of Common
Stock with respect to which Options may be granted shall not exceed 100,000
shares in the aggregate; PROVIDED, that the class and aggregate number of
shares which may be subject to the Options granted hereunder shall be subject
to adjustment in accordance with the provisions of Section 12 of this Plan.
Such shares may be treasury shares or authorized but unissued shares.
If any outstanding Option for any reason shall expire or terminate by
reason of the death of the optionee or the fact that the optionee ceases to
be a director, the surrender of any such Option, or any other cause, the
shares of Common Stock allocable to the unexercised portion of such Option
may again be subject to an Option under this Plan.
B-1
<PAGE>
4. GRANT OF OPTIONS.
(a) DIRECTORS ON THE EFFECTIVE DATE OF THIS PLAN.
(i) Subject to the provisions of Section 16 hereof, there shall be
granted, immediately following the close of business on the effective date
of this Plan, at a per share Option Price equal to the fair market value
(as defined in Subsection 4(c) below) of a share of Common Stock on the
effective date of this Plan, (A) to each person who was a Non-Employee
Director on January 1, 1989, and is a Non-Employee Director on the
effective date of this Plan, an Option to purchase 10,000 shares of Common
Stock, (B) to each person who was a Non-Employee Director on January 1,
1994, is a Non-Employee Director on the effective date of this Plan and is
not eligible to receive an option under clause (A) of this Subsection
4(a)(i), an option to purchase 7,500 shares of Common Stock and (C) to each
person who was a Non-Employee Director on January 1, 1995, is a Non-
Employee Director on the effective date of this Plan and who is not
eligible to receive an option under clauses (A) or (B) of this Subsection
4(a)(i), an option to purchase 5,000 shares of Common Stock.
(ii) For so long as this Plan is in effect and shares are available
for the grant of Options hereunder, on July 1 of each year beginning July
1, 1998, there shall be granted to each person who is a Non-Employee
Director on the effective date of this Plan and on such July 1 an Option
to purchase 5,000 shares of Common Stock at a per share Option Price equal
to the fair market value of a share of the Company's Common Stock on such
date (such number of shares being subject to the adjustments provided in
Section 12 of this Plan).
(b) DIRECTORS ELECTED AFTER THE EFFECTIVE DATE OF THIS PLAN.
(i) Subject to the provisions of Section 16, for so long as this Plan
is in effect and shares are available for the grant of Options hereunder,
each person who shall become a Non-Employee Director after the effective
date of this Plan shall be granted, on the date of his election, whether by
the Stockholders or the Board of Directors in accordance with applicable
law, an Option to purchase 10,000 shares of Common Stock at a per share
Option Price equal to the fair market value of a share of Common Stock on
such date (such number of shares being subject to the adjustments provided
in Section 12 of this Plan).
(ii) For so long as this Plan is in effect and shares are available
for the grant of Options hereunder, on July 1 of each year beginning July
1, 1998, there shall be granted to each person who shall become a Non-
Employee Director after the effective date of this Plan and is a Non-
Employee Director on such July 1 an Option to purchase 5,000 shares of
Common Stock at a per share Option Price equal to the fair market value of
a share of Common Stock on such date (such number of shares being subject
to the adjustments provided in Section 12 of this Plan).
(c) FAIR MARKET VALUE. For purposes of this Section 4, the "fair market
value" of a share of Common Stock as of any particular date shall mean (i) if
the Common Stock is listed or admitted to trading on any securities exchange
or on The National Association of Securities Dealers (the "NASD") Automated
Quotation System ("Nasdaq") Stock Market's National Market, the closing price
on such day on the principal securities exchange or on The Nasdaq Stock
Market's National Market on which the Common Stock is traded or quoted, or if
such day is not a trading day for such securities exchange or The Nasdaq
Stock Market's National Market, the closing price on the first preceding day
that was a trading day, (ii) if the Common Stock is not then listed or
admitted to trading on any securities exchange or on The Nasdaq Stock
Market's National Market, the closing bid price on such day as reported by
the NASD, or if no such price is reported by the NASD for such day, the
closing bid price as reported by the NASD on the first preceding day for
which such price is available, and (iii) if the Common Stock is not then
listed or admitted to trading on any securities exchange or on The Nasdaq
Stock Market's National Market and no such closing bid price is reported by
the NASD, as determined by another reputable quotation source selected by the
Committee in good faith.
B-2
<PAGE>
5. DURATION OF OPTIONS. Each Option granted under this Plan shall be
exercisable for a term of nine years from the date such Option first becomes
exercisable pursuant to Section 6 hereof, subject to earlier termination as
provided in Section 9 of this Plan.
6. AMOUNT EXERCISABLE. Each Option granted under this Plan may be
exercised in whole or in part at any time commencing one year after the grant
thereof.
7. EXERCISE OF OPTIONS. An optionee may exercise his Option by
delivering to the Company a written notice stating (a) that such optionee
wishes to exercise such Option on the date such notice is so delivered, (b)
the number of shares of stock with respect to which such Option is to be
exercised and (c) the address to which the certificate representing such
shares of stock should be mailed. To be effective, such written notice shall
be accompanied by payment of the Option Price of each of such shares of
stock. Each such payment shall be made by cash, cashier's check or bank
draft drawn on a national banking association or postal or express money
order, payable to the order of the Company in United States dollars.
As promptly as practicable after the receipt by the Company of (a) such
written notice from the optionee and (b) payment, in the form required by the
foregoing provisions of this Section 7, of the Option Price of the shares of
stock with respect to which such Option is to be exercised, a certificate
representing the number of shares of stock with respect to which such Option
has been so exercised registered in the name of such optionee, shall be
delivered to such optionee, provided that such delivery shall be considered
to have been made when such certificate shall have been mailed, postage
prepaid, to such optionee at the address specified for such purpose in such
written notice from the optionee to the Company.
8. TRANSFERABILITY OF OPTIONS. Options shall not be transferable by
the optionee otherwise than by will or under the laws of descent and
distribution.
9. TERMINATION. Except as may be otherwise expressly provided in this
Plan, each Option, to the extent it shall not have been exercised previously,
shall terminate on the earlier of the following:
(a) At 5:00 p.m., Oklahoma City time, on the last day of the 60-day
period commencing on the date on which the optionee ceases to be a member
of the Company's Board of Directors, for any reason other than the death or
permanent disability of the optionee, during which period the optionee
shall be entitled to exercise all Options held by the optionee on the date
on which the optionee ceased to be a member of the Company's Board of
Directors which could have been exercised on such date;
(b) On the last day of the one-year period commencing on the date of
the optionee's death while serving as a member of the Company's Board of
Directors, during which period the executor or administrator of the
optionee's estate or the person or persons to whom the optionee's Option
shall have been transferred by will or the laws of descent or distribution,
shall be entitled to exercise all Options in respect of the number of
shares that the optionee would have been entitled to purchase had the
optionee exercised such Options on the date of his death; or
(c) Ten years after the date of grant of such Option.
10. REQUIREMENTS OF LAW. The Company shall not be required to sell or
issue any shares under any Option if the issuance of such shares shall
constitute a violation by the optionee or the Company of any provisions of
any law or regulation of any governmental authority. Each Option granted
under this Plan shall be subject to the requirements that, if at any time the
Board of Directors of the Company or the Committee shall determine that the
listing, registration or qualification of the shares subject thereto upon any
securities exchange or under any state or federal law of the United States or
of any other country or governmental subdivision thereof, or the consent or
approval of any governmental regulatory body, or investment or other
representations, are necessary or desirable in connection with the issue or
purchase of shares subject thereto, no such Option may be exercised in whole
or in part unless such listing, registration, qualification, consent,
approval or representation shall have been effected or obtained free of any
conditions
B-3
<PAGE>
not acceptable to the Board of Directors. Any determination in this
connection by the Committee shall be final, binding and conclusive. If the
shares issuable on exercise of an Option are not registered under the
Securities Act of 1933, as amended (the "Securities Act"), the Company may
imprint on the certificate for such shares the following legend or any other
legend which counsel for the Company considers necessary or advisable to
comply with the Securities Act:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR UNDER THE SECURITIES LAWS OF
ANY STATE AND MAY NOT BE SOLD OR TRANSFERRED EXCEPT UPON SUCH REGISTRATION
OR UPON RECEIPT BY THE CORPORATION OF AN OPINION OF COUNSEL SATISFACTORY TO
THE CORPORATION, IN FORM AND SUBSTANCE SATISFACTORY TO THE CORPORATION,
THAT REGISTRATION IS NOT REQUIRED FOR SUCH SALE OR TRANSFER.
The Company may, but shall in no event be obligated to, register any
securities covered hereby pursuant to the Securities Act (as now in effect or
as hereafter amended) and, if any shares are so registered, the Company may
remove any legend on certificates representing such shares. The Company
shall not be obligated to take any other affirmative action to cause the
exercise of an Option or the issuance of shares pursuant thereto to comply
with any law or regulation of any governmental authority.
11. NO RIGHTS AS STOCKHOLDER. No optionee shall have rights as a
stockholder with respect to shares covered by his Option until the date of
issuance of a stock certificate for such shares; and, except as otherwise
provided in Section 12 hereof, no adjustment for dividends, or otherwise,
shall be made if the record date therefor is prior to the date of issuance of
such certificate.
12. CHANGES IN THE COMPANY'S CAPITAL STRUCTURE. The existence of
outstanding Options shall not affect in any way the right or power of the
Company or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company, or
any issue of bonds, debentures, preferred or prior preference stock ahead of
or affecting the Common Stock or the rights thereof, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.
If the Company shall effect a subdivision or consolidation of shares or
other capital readjustment, the payment of a stock dividend or other increase
or reduction of the number of shares of Common Stock outstanding, without
receiving compensation therefor in money, services or property, then (a) the
number, class and per share price of shares of stock subject to outstanding
Options hereunder shall be appropriately adjusted in such a manner as to
entitle an optionee to receive upon exercise of an Option, for the same
aggregate cash consideration, the same total number and class or classes of
shares as he would have received had he exercised his Option in full
immediately prior to the event requiring the adjustment; and (b) the number
and class of shares then reserved for issuance under this Plan and the number
of shares to be subject to the grants to be made pursuant to Subsections
4(a)(ii), 4(b)(i) and 4(b)(ii) shall be adjusted by substituting for the
total number and class of shares of stock then reserved or subject to grant
the number and class or classes of shares of stock that would have been
received by the owner of an equal number of outstanding shares of Common
Stock as the result of the event requiring the adjustment, disregarding any
fractional shares.
If the Company merges or consolidates with another corporation, whether
or not the Company is a surviving corporation, or if the Company is
liquidated or sells or otherwise disposes of substantially all its assets
while unexercised Options remain outstanding under this Plan, or if any
"person" (as that term is used in Section 13(d) and 14(d)(2) of the
Securities Exchange Act) is or becomes the beneficial owner, directly or
indirectly, of securities of the Company representing greater than 50% of the
combined voting power of the Company's then outstanding securities, after the
effective date of such merger, consolidation, liquidation, sale or other
disposition, as the case may be, each holder of an outstanding Option shall
be entitled, upon exercise of such Option, to receive, in lieu of shares of
Common Stock, the number and class or classes of shares of such stock or
other securities or property to which such holder would have been entitled
if, immediately prior to such merger, consolidation, liquidation, sale or
other disposition, such holder had been the holder of record of a number of
shares of Common Stock equal to the number of shares as to which such Option
may be exercised.
B-4
<PAGE>
Except as otherwise expressly provided in this Plan, the issue by the
Company of shares of stock of any class, or securities convertible into
shares of stock of any class, for cash or property, or for labor or services
either upon direct sale or upon the exercise of rights or warrants to
subscribe therefor, or upon conversion of shares or obligations of the
Company convertible into such shares or other securities, shall not affect,
and no adjustment by reason thereof shall be made with respect to, the number
or price of shares of Common Stock then subject to outstanding Options.
13. AMENDMENT OR TERMINATION OF PLAN. The Board of Directors may
modify, revise or terminate this Plan at any time and from time to time;
PROVIDED, HOWEVER, that without the further approval of the holders of at
least a majority of the outstanding shares of voting stock, or if the
provisions of the corporate charter, bylaws or applicable state law
prescribes a greater degree of stockholder approval for this action, without
the degree of stockholder approval thus required, the Board of Directors may
not (a) materially increase the benefits accruing to participants under this
Plan; (b) materially increase the number of shares of Common Stock which may
be issued under this Plan; or (c) materially modify the requirements as to
eligibility for participation in this Plan, unless, in each such case, the
Board of Directors of the Company shall have obtained an opinion of legal
counsel to the effect that stockholder approval of the amendment is not
required (x) by law, (y) by the rules and regulations of, or any agreement
with, the National Association of Securities Dealers, Inc. or (z) to make
available to the optionee with respect to any option granted under this Plan,
the benefits of Rule 16b-3 of the Rules and Regulations under the Securities
Exchange Act, or any similar or successor rule. In addition, the provisions
of this Plan may not be amended more than once every six months other than to
comport with changes in the Internal Revenue Code of 1986, as amended, the
Employee Retirement Income Security Act of 1974, as amended, or the rules
thereunder. All Options granted under this Plan shall be subject to the
terms and provisions of this Plan and any amendment, modification or revision
of this Plan shall be deemed to amend, modify or revise all Options
outstanding under this Plan at the time of such amendment, modification or
revision. If this Plan is terminated by action of the Board of Directors,
all outstanding Options may be terminated.
14. WRITTEN AGREEMENT. Each Option granted hereunder shall be embodied
in a written option agreement, which shall be subject to the terms and
conditions prescribed above, and shall be signed by the optionee and by the
appropriate officer of the Company for and in the name and on behalf of the
Company. Such an option agreement shall contain such other provisions as the
Committee in its discretion shall deem advisable.
15. INDEMNIFICATION OF COMMITTEE AND BOARD OF DIRECTORS. The Company
shall, to the fullest extent permitted by law, indemnify, defend and hold
harmless any person who at any time is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding
(whether civil, criminal, administrative or investigative) in any way
relating to or arising out of this Plan or any Option or Options granted
hereunder by reason of the fact that such person is or was at any time a
director of the Company or a member of the Committee against judgments,
fines, penalties, settlements and reasonable expenses (including attorneys'
fees) actually incurred by such person in connection with such action, suit
or proceeding. This right of indemnification shall inure to the benefit of
the heirs, executors and administrators of each such person and is in
addition to all other rights to which such person may be entitled by virtue
of the by-laws of the Company or as a matter of law, contract or otherwise.
16. EFFECTIVE DATE OF PLAN. This Plan shall become effective, subject
to stockholder approval, on May 5, 1997. This Plan, and all Options granted
under this Plan on or after May 5, 1997, and prior to stockholder approval,
shall be void and of no further force and effect unless this Plan shall have
been approved by the requisite vote of the stockholders entitled to vote at a
meeting of the stockholders of the Company called for such purpose prior to
May 5, 1998.
No Option shall be granted pursuant to this Plan on or after May 5, 2007.
B-5
<PAGE>
PROXY
UROCOR, INC.
THIS PROXY FOR HOLDERS OF COMMON STOCK IS SOLICITED BY THE
BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 20, 1997
The undersigned stockholder of UroCor, Inc. (the "Company") hereby
appoints William A. Hagstrom and Socrates H. Choumbakos as Proxies, each with
power to act without the other and with full power of substitution, for the
undersigned to vote all shares of Common Stock of the Company of the
undersigned at the Annual Meeting of Stockholders of the Company to be held
at the Waterford Marriott Hotel, 6300 Waterford Boulevard, Oklahoma City,
Oklahoma at 2:00 p.m., C.D.T., Friday, June 20, 1997, or at any
adjournment(s) thereof, on the following matters more particularly described
in the Proxy Statement dated May 16, 1997.
1. ELECTION OF DIRECTORS: [ ] FOR all the nominees listed [ ] WITHHOLD AUTHORITY
(except as indicated to the to vote for
contrary below) election of
directors
NOMINEES: Herbert J. Conrad and Louis M. Sherwood, M.D.
(Instruction: To withhold authority to vote for any individual nominee, write
that nominee's name in the space below.)
- --------------------------------------------------------------------------------
2. Proposal to approve the UroCor, Inc. Second Amended and Restated 1992
Stock Option Plan, which amends the Company's existing option plan to
increase the number of shares for which options may be granted under such
plan and amend certain provisions of the plan to bring the plan into
compliance with recently amended federal securities and tax laws.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Proposal to approve the UroCor, Inc. 1997 Non-Employee Director Stock
Option Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. In their discretion, the above named proxies are authorized to vote upon
such other business as may properly come before the meeting or any
adjournment thereof and upon matters incident to the conduct of the meeting.
This proxy, when properly executed, will be voted as directed. If not
otherwise specified, this proxy will be voted FOR the election of the
director nominees named in Item 1, or if any one or more of the nominees
becomes unavailable, FOR another nominee or other nominees to be selected by
the Board of Directors, FOR the Second Amended and Restated 1992 Stock Option
Plan set forth in Item 2 and FOR the 1997 Non-Employee Director Stock Option
Plan set forth in Item 3.
Dated:___________________________, 1997
---------------------------------------
---------------------------------------
(Signature of Stockholder(s))
Please sign exactly as name appears
hereon. Joint owners should each sign.
When signing as attorney, executor,
administrator, trustee or guardian,
please give full title as it appears
hereon.
PLEASE MARK, SIGN, DATE AND
RETURN IMMEDIATELY USING THE
ENCLOSED ENVELOPE.
