<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
UroCor, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
[LETTERHEAD]
April 26, 2000
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 Tuesday, June 20, 2000, at
the Westin Hotel, One North Broadway, 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 amendment
to an employee stock option plan and approval of an amendment to 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/ Michael W. George
Michael W. George
President and Chief Executive Officer
<PAGE>
UROCOR, INC.
840 RESEARCH PARKWAY
OKLAHOMA CITY, OKLAHOMA 73104
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 20, 2000
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 Tuesday,
June 20, 2000, at 2:00 p.m., C.D.T., at the Westin Hotel, One North Broadway,
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 an amendment to the
UroCor, Inc. Second Amended and Restated 1992 Stock Option Plan, as
amended, to increase the aggregate number of shares of Common Stock
for which options may be granted under the plan from 2,300,000 to
2,700,000 shares.
3. To consider and vote on a proposal to approve an amendment to the
UroCor, Inc. 1997 Non-Employee Director Stock Option Plan, as
amended, increasing the number of shares granted annually from
5,000 to 7,500 and adding an additional grant of 2,500 shares
annually to the Chairman of the Board of Directors.
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 April 18, 2000, 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/ Bruce C. Hayden
Bruce C. Hayden
Senior Vice President, Chief Financial
Officer, Secretary and Treasurer
April 26, 2000
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, 2000
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"), 840 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 Tuesday, June 20, 2000, at 2:00 p.m. at the Westin Hotel, One North
Broadway, 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
approve an amendment (the "1992 Plan Amendment") to the UroCor, Inc. Second
Amended and Restated 1992 Stock Option Plan, as amended (the "1992 Plan"), and
for the proposal to approve an amendment (the "Director Plan Amendment") to the
UroCor, Inc. 1997 Non-Employee Director Stock Option Plan, as amended (the
"Director 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 April 26, 2000 to shareholders of record on
April 18, 2000 (the "Record Date").
At the close of business on the Record Date, there were outstanding and
entitled to vote 9,881,054 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.
-3-
<PAGE>
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, as
amended, 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. All nominees are
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, MD expire at the meeting, and
they are each proposed as nominees for terms expiring at the 2003 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. 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
director nominees and the Company's other directors:
<TABLE>
<CAPTION>
DIRECTOR
AGE POSITION WITH THE COMPANY SINCE
<S> <C> <C> <C>
NOMINEES FOR ELECTION FOR TERMS
EXPIRING AT THE 2003 ANNUAL
MEETING OF STOCKHOLDERS (CLASS I)
Herbert J. Conrad 67 Director and 1993
Chairman of the Board
Louis M. Sherwood, M.D. 63 Director 1993
DIRECTORS WHOSE TERMS EXPIRE AT
THE 2001 ANNUAL MEETING OF
STOCKHOLDERS (CLASS II)
Aaron Beam, Jr. 56 Director 1997
Thomas C. Ramey 56 Director 1997
DIRECTORS WHOSE TERMS EXPIRE AT
THE 2002 ANNUAL MEETING OF
STOCKHOLDERS (CLASS III)
Michael W. George 51 President, Chief Executive 1998
Officer and Director
Michael R. Miller 49 Director 2000
Michael E. Herbert 55 Director 1994
</TABLE>
-4-
<PAGE>
BACKGROUND OF NOMINEES FOR DIRECTOR
HERBERT J. CONRAD. Mr. Conrad has been a director since October 1993
and was appointed Chairman of the Board in April 2000. 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 11 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 Corporation, Sicor, Inc., 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.
BACKGROUND OF DIRECTORS
AARON BEAM, JR. Mr. Beam has been a director since December 1997. From
January 1984 until his retirement in October 1997, Mr. Beam was the Executive
Vice President and Chief Financial Officer of HEALTHSOUTH Corporation, a
provider of outpatient surgery and rehabilitative healthcare services, which he
co-founded. From May 1980 to December 1983, Mr. Beam served as Controller of the
Shared Services Division of Lifemark Corporation, a healthcare company. Mr. Beam
is also a director of Ramsay Youth Services, Inc. and Wall Street Deli, Inc.
MICHAEL W. GEORGE. Mr. George joined the Company in August 1998 as a
director, President and Chief Operating Officer. In October 1999 he was
appointed Chief Executive Officer. Before joining the Company, from August 1989
to August 1998, Mr. George held several senior management positions at DuPont
Merck Pharmaceuticals Company, including President - International and President
- - North America. From June 1997 through August 1998 he served as Senior Vice
President, Cardiovasculars. Prior to joining DuPont Merck, he spent four years
at Bristol-Myers Squibb and twelve years at Sandoz Pharmaceuticals in various
sales and marketing management positions. Mr. George is also a director of
Avanir Pharmaceuticals.
MICHAEL E. HERBERT. Mr. Herbert has been a director since July 1994.
Mr. Herbert has been the President and Chief Executive Officer of the Bridgeport
Bluefish Professional Ball Club, an independent minor league baseball team in
the Atlantic Professional Baseball League since January 1999. Mr. Herbert was
the founding Chief Executive Officer of Physicians Health Services, Inc.
("PHS"), an individual practice association health maintenance organization
("IPA/HMO"), and served in that capacity from November 1976 through August 1996,
at which time he became Co-Chief Executive Officer. PHS was acquired in January
1998 by Foundation Health Systems, Inc. and Mr. Herbert continued in his role as
Co-Chief Executive Officer until July 1998. From January 1971 to November 1976,
Mr. Herbert was Vice President of InterStudy, a national health policy research
firm. Mr. Herbert is past Chairman of the American Association of Health Plans
and is past Chairman of the American Managed Care and Review Association.
MICHAEL R. MILLER. Mr. Miller has been a director since his appointment
in April 2000. Until his retirement in June 1999, Mr. Miller worked a combined
26 years at E.I. DuPont de Nemours & Company and The DuPont Merck Pharmaceutical
Company, most recently serving as Sr. Vice President & Chief Financial Officer,
DuPont Pharmaceuticals. He played a key role in the formation and implementation
of the DuPont Merck Pharmaceutical Company, a 50/50 joint venture between Merck
and DuPont. At DuPont Merck, he held the position of Controller and Executive
Director from January 1991 until he was appointed Sr. Vice President and Chief
Financial Officer in February 1995. Prior to 1991, Mr. Miller held numerous
finance staff and management positions including a five-year assignment in
Europe handling DuPont's merger and acquisition activities and also served as
financial manager for DuPont's operations in Latin America.
-5-
<PAGE>
THOMAS C. RAMEY. Mr. Ramey has been a director since December 1997. Mr.
Ramey has been Executive Vice President of Liberty Mutual Group, a diversified
financial services company, since March 1995. Additionally, he has been
President of Liberty International, responsible for the international business
of Liberty Mutual, since December 1997. Mr. Ramey assumed his current positions
with Liberty Mutual after having served as Senior Vice President, responsible
for Liberty Mutual's workers compensation and managed healthcare products and
services from July 1992. From March 1986 to June 1991, Mr. Ramey was the
President and Chief Executive Officer of American International Healthcare, a
subsidiary of American International Group, a managed healthcare company.
COMMITTEES OF THE BOARD OF DIRECTORS AND MEETING ATTENDANCE
The Board of Directors has established an Audit Committee, a
Compensation Committee, a Stock Plan Committee and a Nominating Committee.
During the fiscal year ended December 31, 2000, the Board of Directors met
eleven times, the Audit Committee met twice and the Compensation Committee met
three times. All actions of the Nominating Committee and Stock Plan Committee
were by unanimous consent. 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. Mr. Conrad, Mr. Beam and Mr. Miller 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.
COMPENSATION COMMITTEE. Mr. Conrad and Mr. Herbert, neither 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. 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 1992
Plan, the Director Plan and the Company's Employee Stock Purchase Plan.
NOMINATING COMMITTEE. 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 1992 PLAN AMENDMENT
GENERAL
At the meeting, the stockholders of the Company will be asked to vote
upon a proposal to approve the 1992 Plan Amendment. Approval of the 1992 Plan
Amendment 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 1992 Plan Amendment is set forth in full in ANNEX A to
this proxy statement. The 1992 Plan Amendment increases the aggregate number of
shares of Common Stock for which options may be granted under the 1992 Plan from
2,300,000 to 2,700,000.
-6-
<PAGE>
REASONS FOR THE 1992 PLAN AMENDMENT
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 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 Company
anticipates that the number of shares of Common Stock available under the 1992
Plan will be depleted by June 2001, 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 Plan.
To provide additional shares of Common Stock for which options may be
granted under the 1992 Plan, the Board of Directors has approved the 1992 Plan
Amendment 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 1992 Plan Amendment, 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 1992
PLAN AMENDMENT. Approval of the 1992 Plan Amendment 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 1992 Plan Amendment. 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 PLAN AMENDMENT
GENERAL
At the meeting, the stockholders of the Company will be asked to vote
upon a proposal to approve the Director Plan Amendment. Approval of the Director
Plan Amendment 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 Director Plan Amendment is set forth in full in ANNEX B
to this proxy statement. The Director Plan Amendment increases the number of
shares granted annually from 5,000 to 7,500 and adds an additional grant of
2,500 shares annually to the Chairman of the Board of Directors.
REASONS FOR THE DIRECTOR PLAN AMENDMENT
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. The Company anticipates that the additional duties and
responsibilities of the Chairman of the Board of Directors will result in extra
time involved in the matters coming before the Board of Directors, and the Board
of Directors of the Company has determined that, to continue to provide
performance-based incentive to the Company's directors, it is in the best
interest of the Company to, under the Director Plan, increase the annual grant
of options and create and an additional grant to the Chairman of the Board of
Directors.
To provide additional grant of options under the Director Plan to the
Chairman of the Board of Directors, the Board of Directors has approved the
Director Plan Amendment and has directed that the same be presented to the
stockholders for their approval.
-7-
<PAGE>
CERTAIN CONSIDERATIONS
Stockholders should note that certain disadvantages may result
from approval of the Director Plan Amendment, 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
PLAN AMENDMENT. Approval of the Director Plan Amendment 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 Plan Amendment. 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.
-8-
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of April 18, 2000 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 appearing elsewhere in this
Proxy Statement and the directors of the Company and (iii) all executive
officers and directors of the Company as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP (2)
---------------------------------------------
BENEFICIAL OWNER(1) SHARES %
- ------------------- --------------- ---------
<S> <C> <C>
Heartland Advisors, Inc.(3) 1,161,800 11.8
789 North Water Street
Milwaukee, WI 53202
Wellington Management Company, LLP(4) 1,024,700 10.4
75 State Street
Boston, MA 02109
Dimensional Fund Advisors, Inc.(5) 667,900 6.8
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
Wellington Trust Company, NA (6) 600,000 6.1
75 State Street
Boston, MA 02109
Capital Research & Management Co. and 600,000 6.1
SMALLCAP World Fund, Inc.(7)
333 South Hope Street
Los Angeles, CA 90071
Kennedy Capital Management, Inc.(8) 502,250 5.1
10829 Olive Blvd.
St. Louis, MO 63141
Aaron Beam, Jr. 17,000 *
Director(9)
Herbert J. Conrad 34,000 *
Director(10)
Michael E. Herbert 22,500 *
Director(11)
Michael R. Miller - *
Director
Thomas C. Ramey 15,000 *
Director(12)
Louis M. Sherwood, M.D. 28,000 *
Director(13)
William A. Hagstrom 338,688 3.4
Former Chairman of the Board and Chief Executive
Officer
Michael W. George(14) 35,793 *
President and Chief Executive Officer, Director
Bruce C. Hayden(15) 21,250 *
Senior Vice President, Chief Financial Officer,
Secretary and Treasurer
Karl K. Nigg(16) 58,627 *
Senior Vice President, Operations
Lou Rye Carmichael(17) 53,000 *
Vice President, Chief Compliance Officer
-9-
<PAGE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP (2)
---------------------------------------------
BENEFICIAL OWNER(1) SHARES %
- ------------------- --------------- ---------
<S> <C> <C>
Robert W. Veltri, Ph.D.(18) 168,134 1.7
Vice President, Research and Development
All executive officers, directors and nominees as a 791,992 7.8
group (13 persons)(19)
- ------------------
</TABLE>
* Less than 1%.
(1) 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) Information with respect to the ownership of such beneficial owner was
obtained from its report on Amendment No. 1 to Schedule 13G dated January
10, 2000, as received by the Company.
(4) Information with respect to the ownership of such beneficial owner was
obtained from its report on Amendment No. 3 to Schedule 13G dated February
11, 2000, as received by the Company.
(5) Information with respect to the ownership of such beneficial owner was
obtained from its report on Schedule 13G dated February 3, 2000, as
received by the Company. Dimensional Fund Advisors, Inc. disclaims
beneficial ownership of these shares.
(6) Information with respect to the ownership of such beneficial owner was
obtained from its report on Schedule 13G dated February 11, 2000, as
received by the Company.
(7) Information with respect to the ownership of such beneficial owner was
obtained from its report on Schedule 13G dated February 11, 2000, as
received by the Company.
(8) Information with respect to the ownership of such beneficial owner was
obtained from its report on Schedule 13G dated February 10, 2000, as
received by the Company.
(9) The beneficial owner's shares set forth in the table include 15,000 shares
of Common Stock issuable upon the exercise of certain stock options.
(10) The beneficial owner's shares set forth in the table include 25,000 shares
of Common Stock issuable upon the exercise of certain stock options.
(11) The beneficial owner's shares set forth in the table include 22,500 shares
of Common Stock issuable upon the exercise of certain stock options.
(12) The beneficial owner's shares set forth in the table include 15,000 shares
of Common Stock issuable upon the exercise of certain stock options.
(13) The beneficial owner's shares set forth in the table include 25,000 shares
of Common Stock issuable upon the exercise of certain stock options.
(14) The beneficial owner's shares set forth in the table include 33,334 shares
of Common Stock issuable upon the exercise of certain stock options.
(15) The beneficial owner's shares set forth in the table include 18,750 shares
of Common Stock issuable upon the exercise of certain stock options.
-10-
<PAGE>
(16) The beneficial owner's shares set forth in the table include 50,625 shares
of Common Stock issuable upon the exercise of certain stock options.
(17) The beneficial owner's shares set forth in the table include 35,000 shares
of Common Stock issuable upon the exercise of certain stock options.
(18) The beneficial owner's shares set forth in the table include 94,300 shares
of Common Stock issuable upon the exercise of certain stock options.
(19) See notes (7) through (17) to this table. The beneficial owners' shares set
forth in this table include an aggregate of 334,509 shares of Common Stock
issuable upon the exercise of certain stock options and warrants.
-11-
<PAGE>
EXECUTIVE OFFICERS AND COMPENSATION
The following section sets forth the names and backgrounds of the
Company's executive officers and certain key employees.
EXECUTIVE OFFICERS AND KEY EMPLOYEES
<TABLE>
<CAPTION>
DATE OF
NAME OFFICES HELD FIRST ELECTION AGE
<S> <C> <C> <C>
William A. Hagstrom Former Chairman of the Board and November 1989 42
Chief Executive Officer
Michael W. George President, Chief Executive Officer August 1998 51
and Director
Bruce C. Hayden Senior Vice President, Chief Financial April 1999 39
Officer, Secretary and Treasurer
Karl K. Nigg Senior Vice President, Operations February 1998 42
John L. Armstrong, Jr. Vice President, Business December 1999 56
Development
Robert W. Veltri, Ph. D. Vice President, Research and October 1990 58
Development
Lou Rye Carmichael Vice President, Chief Compliance February 1998 43
Officer
Ronald J. Morris Chief Information Officer April 2000 58
Gerard J. O'Dowd, M.D. Medical Director August 1990 49
</TABLE>
For further information regarding Mr. George's background, see
"Background of Directors".
WILLIAM A. HAGSTROM. Mr. Hagstrom served as Chief Executive Officer of
the Company from November 1989 until his resignation in October 1999. Mr.
Hagstrom was also a director of the Company and served as Chairman of the Board
of Directors from September 1994 through December 1999. 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.
BRUCE C. HAYDEN. Mr. Hayden joined the Company in April 1999 as Senior
Vice President, Chief Financial Officer, Treasurer and Secretary. Before joining
the Company, Mr. Hayden was Executive Vice President, Financial Operations of
MedShares, Inc., a privately held home healthcare management company from July
1994 to February 1996 and from August 1996 to December 1998. From February to
August 1996, Mr. Hayden served as Group Chief Financial Officer of Columbia
Homecare Group, a home healthcare company. From September 1992 to June 1994, he
held the position of Chief Internal Audit Director with First American Homecare,
also a home healthcare company. Prior to moving into the private healthcare
industry, Mr. Hayden served in various Audit Manager positions with the public
accounting firms of BDO Seidman and Adams & Akin, PC for 9 years.
-12-
<PAGE>
KARL K. NIGG. Mr. Nigg joined the Company in February 1998 as Vice
President, for therapeutic business development, became Vice President, Sales
and General Manager, for the Company's therapeutic business in December 1998
and, since December 1999, has served as Senior Vice President , Operations. Mr.
Nigg had senior management responsibilities for operations, marketing, sales and
sourcing for Amersham Healthcare, a pharmaceutical, medical equipment and
consumer health care products company, from June 1990 to October 1993, at which
time he was promoted to the position of Vice President, Pharmacy Operations. In
January 1996, Mr. Nigg was promoted to Vice President Sales/Pharmacy Operations
covering 26 states, a position he held until August 1997.
JOHN L. ARMSTRONG, JR. Mr. Armstrong joined the Company in December
1999 as Vice President, Business Development. Before joining the Company, Mr.
Armstrong served as President and Chief Operating Officer of Oread, Inc., a drug
development and commercialization company, from February 1998 to August 1999.
From July 1991 to January 1998, he was President, Worldwide
Manufacturing/Quality, Senior Vice President of Administration and President of
Endo Laboratories at DuPont Merck Pharmaceutical Company. Prior to 1991, Mr.
Armstrong served in senior manager positions with Marion Merrell Dow and ICI
Pharma (now Astra Zeneca).
ROBERT W. VELTRI, PH.D. Dr. Veltri joined the Company in October 1990
as Vice President, Product Planning and Technology Development, and, since
October 1994, has served as Vice President of research and development. 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.
LOU RYE CARMICHAEL. Ms. Carmichael joined the Company in April 1990 as
Manager, Telemarketing and was promoted to Marketing Manager in April 1992. Ms.
Carmichael assumed the position of Director, Human Resources from July 1995 to
September 1996, Director, Sales and Client Relations from September 1996 to
February 1998. She was promoted to Vice President, Sales and Client Relations in
February 1998. In December 1998, she assumed her current position of Vice
President, Chief Compliance Officer. Ms. Carmichael managed the Eveready
Telephone Sales Center for Ralston Purina prior to joining UroCor.
RONALD J. MORRIS. Mr. Morris joined the Company in April 2000 as Chief
Information Officer. Before joining the Company, Mr. Morris served as Vice
President and Chief Information Officer for Pathology Partners, Inc., a
pathology practice management company since December 1996. From October 1994 to
November 1996, he held the position of Vice President and Chief Information
Officer at Pathcor, Inc., a pathology practice management company. Prior to
1994, Mr. Morris held various information services positions with Corning
Clinical Laboratories and Damon Clinical Laboratories and formerly served as a
systems engineer for IBM.
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 biopsy and served as a consultant for a
regional reference laboratory in the Washington, D.C. area from January 1988 to
August 1990. Prior to 1988, Dr. O'Dowd served as an attending pathologist and
chief of cytopathology at Washington Hospital Center and as an instructor in
pathology at George Washington University Hospital in Washington, D.C. after
completing a four-year pathology residency at the University of Utah Medical
Center and a fifth year fellowship at the Medical College of Virginia, Richmond.
He received his medical degree from Georgetown University School of Medicine.
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.
-13-
<PAGE>
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 Company's basic philosophy is to align executive compensation with
increases in stockholder value through growth in operating profits. Primarily,
this is accomplished through the use of stock options, which provide
compensation in direct proportion to increases in stockholder value. This focus
on financial performance is accomplished through providing options to
essentially all full-time, exempt employees, and through cash incentives,
through which both executives and most employees are eligible for cash bonuses
based on achievement of Company-wide financial goals. The Company also provides
a stock purchase plan to all employees to further encourage ownership of the
Company's stock.
EXECUTIVE COMPENSATION PROGRAMS
The Company's compensation programs consist of three principal
elements: base salary, performance bonus and stock options. Together these
elements establish total compensation value. The total compensation paid to the
Company's executive officers is influenced significantly by the need to attract
management employees with a high level of expertise and to motivate and retain
key executives for the long-term success of the Company and its stockholders.
BASE SALARY. The Company utilizes industry surveys and benchmarking to
maintain base compensation levels comparable to its competitors and other
companies in similar stages of development. The Committee then establishes
annual base salary levels for executives based on position, responsibility,
level of experience and individual and Company performance.
The Committee evaluated the base salary of Mr. Hagstrom, Chairman of
the Board and Chief Executive Officer, in January 1999 and recommended that his
annual compensation level be maintained at $248,500. In setting Mr. Hagstrom's
1999 compensation, the Committee considered strategic results for 1998, as well
as Mr. Hagstrom's individual performance and contributions. Also, Mr. Hagstrom
requested that the Committee not consider a salary adjustment for his position
given that his duties had changed during the year with the hiring of a Chief
Operating Officer in August 1998, who also assumed the responsibilities of
President from Mr. Hagstrom. The Committee also reviewed multiple surveys on
executive compensation levels for emerging growth companies in various
industries to ensure that such salary level was competitive with comparable
companies.
In October 1999, Mr. Hagstrom approached the Compensation Committee
with a request to prepare for his resignation, as he desired to pursue other
business opportunities, specifically start-up ventures. The Compensation
Committee recommended and the Board accepted Mr. Hagstrom's resignation as Chief
Executive Officer, while retaining his service as an employee and as Chairman of
the Board through the end of 1999. The Committee also recommended and the Board
approved the promotion of Mr. George to the position of President and Chief
Executive Officer immediately upon Mr. Hagstrom's resignation. Such promotion
was based on the knowledge of the business Mr. George has obtained and his
performance in the position of President and Chief Operating Officer since
August 1998. Considering such performance, increased responsibilities and
compensation levels for executives at comparable levels at comparable companies,
the Compensation Committee recommended an annual salary of $265,000 for Mr.
George.
During 1999, the Compensation Committee also recommended compensation
packages for two new executives to the Company. Bruce C. Hayden joined the
Company as Senior Vice President and Chief Financial Officer in April, and John
L. Armstrong, Jr. joined the Company as Vice President Business Development in
December.
ANNUAL INCENTIVE COMPENSATION. Annual incentive compensation for
executive officers is intended to reflect the Committee's belief that a
significant portion of the annual compensation of each executive officer should
be contingent upon the financial performance of the Company. Actual awards are
subject to increase or decrease based on level of attainment and are completely
at the discretion of the Committee. Since the 1999 financial goals established
by the Board of Directors in late 1998 were not achieved, the Committee
determined that no incentive compensation should
-14-
<PAGE>
be paid for 1999. For 2000, the Company's senior management and executive
officers are eligible to receive annual cash bonus awards which are linked
directly to the Company's achieving its operating income targets. As the
Company's focus is on profitable growth and stockholder returns, most of the
weighting will be placed on actual operating income performance. The
Committee made awards to the executive officers named in the Summary
Compensation Table under the incentive compensation plan in 1997 for 1996
financial performance.
STOCK OPTION PROGRAM. Total compensation for executive officers and
selected management also includes long-term incentives in the form of stock
options, which are generally provided through initial stock option grants at the
date of hire and periodic additional stock option grants. Stock options are
instrumental in promoting the alignment of long-term interests between the
Company's management and stockholders because an option holder realizes gains
only if the stock price increases over the fair market value at the date of
grant and the option holder exercises their option. In determining the amount of
such grants, the Stock Plan Committee of the Company's Board of Directors, which
is comprised of the same members as the Compensation Committee, evaluates the
job level of the employee, responsibilities of the employee and competitive
practices in the industry. All options are granted with an exercise price equal
to fair market value of the Common Stock on the date of grant. Options generally
vest over a period of one to five years. The long-term value realized by
management through option exercises can be directly linked to the enhancement of
stockholder value.
For the year ended December 31, 1999, the Stock Plan Committee awarded
additional stock options to the executive officers named in the Summary
Compensation Table for the purchase of a total of 277,500 shares of Common Stock
at exercise prices ranging from $3.50 to $5.875 per share, the fair market value
of the Common Stock on the date of grant. These options were granted to vest
over three years. Included in these grants are 100,000 shares of Common Stock at
$3.375 to Mr. George upon his promotion to President and Chief Executive Officer
in October 1999.
During 1999, the Stock Plan Committee also awarded additional stock
options to purchase an aggregate of 101,500 shares of Common Stock at $4.625 per
share, the fair market value of the Common Stock on the date of such grant, to
mid-management, marketing, sales and other select employees of the Company.
These awards were intended to provide an incentive to individuals who can drive
the Company's performance through their daily efforts. These options will be
fully vested in one year.
FUTURE CONSIDERATIONS AND CONCLUSION
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 and stock purchase 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
Herbert J. Conrad
Michael E. Herbert
-15-
<PAGE>
SUMMARY OF COMPENSATION
The following table summarizes compensation information concerning the
Chief Executive Officer and each of the Company's other four most highly
compensated executive officers as to whom the total annual salary and bonus for
the fiscal year ended December 31, 1999, exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------------------ -------------
OTHER SECURITIES
ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL SALARY BONUS COMPENSATION OPTIONS COMPENSATION
POSITION YEAR ($) ($) ($) (1) (#) (2) ($)
- ---------------------- --------- ---------- ---------- ----------------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
William A. Hagstrom, 1999 248,500 -- -- -- --
Former Chairman of the 1998 253,940 -- -- 12,500 --
Board and Chief 1997 194,979 72,905 -- 25,000 --
Executive Officer(3)
Michael W. George, 1999 236,269 33,000 -- 140,000 1,350
President and Chief 1998 83,769 -- -- 160,000 73,336
Executive Officer(4)
Bruce C. Hayden, 1999 135,192 -- -- 90,000 5,960
Senior Vice President,
Chief Financial Officer,
Secretary and Treasurer (5)
Karl K Nigg, 1999 171,385 -- -- 47,500 270
Senior Vice President, 1998 132,692 -- -- 67,500 9,742
Operations(6)
Lou Rye Carmichael, 1999 157,500 -- -- -- --
Vice President, Chief 1998 121,780 -- -- 7,500 --
Compliance Officer 1997 93,536 12,700 -- 15,000 --
Robert W. Veltri, Ph.D. 1999 168,380 -- -- -- --
Vice President, Research 1998 164,262 -- -- 7,500 --
and Development 1997 144,154 30,328 -- 15,000 --
</TABLE>
- --------------
(1) Company contributions to the UroCor 401(k) Profit Sharing Plan; the
difference between the price paid for Common Stock and the fair market
value of the Common stock on the date of purchase due to participation in
the Employee Stock Purchase Plan; group term life insurance premiums;
earnings from the UroCor, Inc. Deferred Compensation Plan and other
personal benefits paid to the Named Executive Officer are less than the
minimum reporting threshold of $50,000 or 10% of the total annual salary
plus bonuses for the Named Executive Officer , and such amounts paid, if
any, are represented in the table by "--".
(2) Represents shares issuable pursuant to stock options granted under a stock
option plan.
(3) Resigned as Chairman of the Board effective December 31, 1999 and as Chief
Executive Officer October 26, 1999.
(4) Employment began August 18, 1998. All other compensation represents
reimbursed relocation costs.
(5) Employment began February 16, 1998. All other compensation represents
reimbursed relocation costs.
(6) Employment began April 12, 1999. All other compensation represents
reimbursed relocation costs.
-16-
<PAGE>
OPTION GRANTS AND EXERCISES
The following table sets forth information concerning individual grants of
stock options made during the year ended December 31, 1999, to each of the
executive officers named in the Summary Compensation Table.
OPTION GRANTS IN FISCAL YEAR ENDED DECEMBER 31, 1999
INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
POTENTIAL REALIZED
NUMBER OF % OF TOTAL VALUE AT ASSUMED
SECURITIES OPTIONS EXERCISE ANNUAL RATES OF
UNDERLYING GRANTED TO OR BASE STOCK PRICE
OPTIONS EMPLOYEES IN PRICE EXPIRATION APPRECIATION FOR
NAME GRANTED (#) FISCAL YEAR ($/SHARE) DATE OPTION TERM
- -------------------- --------------- -------------- ----------- ----------- ---------------------
5% ($) 10% ($)
---------- ---------
<S> <C> <C> <C> <C> <C> <C>
William A. Hagstrom -- -- -- -- -- --
Michael W. George 40,000(1) 5.7 4.50 August 27, 2009 113,201 286,874
100,000(2) 14.1 3.375 October 22, 2009 212,252 537,888
Bruce C. Hayden 75,000(3) 10.6 4.00 April 12, 2009 188,668 478,123
15,000(4) 2.1 4.50 August 27, 2009 42,450 107,578
Karl K. Nigg 20,000(5) 2.0 5.875 January 7, 2009 73,895 187,265
5,000(6) .7 4.625 April 1, 2009 14,543 36,855
22,500(7) 3.2 4.50 August 27, 2009 63,676 161,366
Lou Rye Carmichael -- -- -- -- -- --
Robert W. Veltri, Ph.D. -- -- -- -- -- --
</TABLE>
- --------------------
(1) Represents shares of Common Stock issuable pursuant to an incentive stock
option granted under a stock option plan. These options shall vest 25% on
each of August 27, 2000, August 27, 2001, August 27, 2002 and August 27,
2003.
(2) Represents shares of Common Stock issuable pursuant to an incentive stock
option granted under a stock option plan. These options shall vest 25% on
each of October 22, 2000, October 22, 2001, October 22, 2002 and October
22, 2003.
(3) Represents shares of Common Stock issuable pursuant to an incentive stock
option granted under a stock option plan. These options shall vest 25% on
each of April 12, 2000, April 12, 2001, April 12, 2002 and April 12, 2003.
(4) Represents shares of Common Stock issuable pursuant to an incentive stock
option granted under a stock option plan. These options shall vest 25% on
each of August 27, 2000, August 27, 2001, August 27, 2002 and August 27,
2003.
(5) Represents shares of Common Stock issuable pursuant to an incentive stock
option granted under a stock option plan. These options shall vest 25% on
each of January 7, 2000, January 7, 2001, January 7, 2002 and January 7,
2003.
(6) Represents shares of Common Stock issuable pursuant to an incentive stock
option granted under a stock option plan. These options shall vest 100% on
each of April 1, 2000.
(7) Represents shares of Common Stock issuable pursuant to an incentive stock
option granted under a stock option plan. These options shall vest 25% on
each of August 27, 2000, August 27, 2001, August 27, 2002.
-17-
<PAGE>
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, 1999. None of such executive officers
exercised any stock options during the year ended December 31, 1999.
<TABLE>
<CAPTION>
OPTION VALUES AT DECEMBER 31, 1999
NUMBER OF
SECURITIES UNDERLYING
UNEXERCISED OPTIONS VALUE OF UNEXERCISED
AT DECEMBER 31, 1999 IN-THE-MONEY OPTIONS AT
(# SHARES) DECEMBER 31, 1999 ($) (1)
------------------------------------- --------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------ ------------------- ----------------- --------------- ----------------
<S> <C> <C> <C> <C>
William A. Hagstrom 80,834 - 146,250 -
Michael W. George 33,334 266,666 - 81,250
Bruce C. Hayden - 90,000 - 14,063
Karl K. Nigg 23,125 91,875 - -
Lou Rye Carmichael 27,500 10,000 38,163 -
Robert W. Veltri, Ph.D. 86,800 10,000 225,406 -
</TABLE>
- --------------------
(1) Based on a price of $4.1875, the closing price of the Common Stock on
December 31, 1999, as reported by The Nasdaq Stock Market-Registered
Trademark-.
-18-
<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-Registered Trademark- - US Companies ("Nasdaq
US Companies") and a CRSP index of The Nasdaq Stock Market-Registered Trademark-
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.
COMPARISON OF 43 MONTH CUMULATIVE TOTAL RETURN
[GRAPH]
<TABLE>
<CAPTION>
5/16/96 12/31/96 12/31/97 12/31/98 12/31/99
------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
UroCor, Inc. 100.0 86.9 56.3 58.0 38.1
Nasdaq US Companies 100.0 104.2 127.7 179.9 325.0
Nasdaq Health Services Companies 100.0 84.8 86.4 73.2 60.5
</TABLE>
Note: The indices are reweighed daily, using the market capitalization on the
previous trading day.
COMPENSATION OF DIRECTORS
Each director receives a monthly retainer of $1,000, a $500 fee for
each meeting attended in person and reimbursement for expenses related to
attendance at Board meetings. Committee members receive an additional $2,000
annually for each committee served. The Chairman of each Committee of the Board
of Directors receives an additional $1,125 annually.
-19-
<PAGE>
EMPLOYMENT AGREEMENTS
Mr. George entered into an employment agreement with the Company in
August 1998. Under the terms of such agreement, Mr. George serves as President.
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. George's death or disability or for
cause (as that term is defined therein). The agreement with Mr. George provides
for a current base salary of $265,000, subject to annual review, a bonus of up
to 50% of his annual base salary and a severance obligation of twelve months
upon termination without cause in the first year of employment and six months
after the first year of employment.
Messrs. Hayden and Nigg and Dr. Veltri 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. Hayden provides for a current base salary of $197,025, subject to
annual review, a bonus of up to 30% of his annual base salary and a severance
obligation of nine months upon termination without cause. The agreement with Mr.
Nigg provides for a current base salary of $209,000, subject to annual review,
and a bonus of up to 25% of his annual base salary. In April 1999, the Company's
Board of Directors approved an increase in Mr. Nigg's bonus up to 40% of his
annual base salary. The agreement with Dr. Veltri provides for a current base
salary of $159,300, 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.
CHANGE IN CONTROL AGREEMENTS
The Company has entered into Change in Control Agreements with various
key employees, including each of the executive officers named in the Summary
Compensation Table. These agreements are intended to assure the continued
availability of these executives in the event of certain transactions
culminating in a "change in control" of the Company. Under the agreements, in
the event the executive officer is terminated at any time after a change in
control transaction has occurred, and termination is not voluntary or the result
of death, permanent disability, retirement or certain other defined
circumstances, the executive officer would be entitled to receive (i) payment of
base salary and earned but unused vacation time through the date of termination,
(ii) a bonus equal to the aggregate annual bonus paid to the executive officer
since the effective date of the agreement, pro-rated through the date of
termination, (iii) a lump sum cash payment equal to one and one-half times the
sum of the annual base salary of the executive officer during the year in which
the termination occurred plus the amount of the highest annual bonus received by
the executive officer at any time after the effective date of the agreement and
(iv) the continuation of life, disability and health insurance coverages for 18
months.
CONSULTING AGREEMENT
Mr. Hagstrom resigned as Chief Executive Officer effective October 26,
1999 and as Chairman of the Board effective December 31, 1999. In connection
with his resignation, the Company and Mr. Hagstrom entered into an agreement
pursuant to which Mr. Hagstrom will serve as a consultant to the Company until
December 31, 2001, subject to termination under certain circumstances. Pursuant
to the agreement, the Company agreed to pay Mr. Hagstrom consulting fees in the
aggregate amount of $300,000, of which $150,000 was paid in January 2000 and the
balance of which is payable in installments throughout 2000.
-20-
<PAGE>
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 1992 Plan Amendment and the Director Plan Amendment. For
information concerning these plans, see "Proposal 2: Approval of the 1992 Plan
Amendment ", "Proposal 3: Approval of the Director Plan Amendment" 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 1992 PLAN
The Board of Directors adopted and the stockholders approved the 1992
Plan in June 1997 and an amendment thereto in June 1998. The 1992 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 1992 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 1992 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
1992 Plan currently authorizes: (i) options to acquire up to an aggregate of
2,300,000 shares of Common Stock to be granted; (ii) grants of ISOs to eligible
employees and grants of Non-ISOs to any individual with substantial
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 1992
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 332 full-time
employees, including eight executive officers, each of whom may be eligible to
receive grants under the 1992 Plan. Other persons with substantial
responsibility for the Company's management and growth may be eligible to
receive grants under the 1992 Plan at the discretion of a committee of the Board
of Directors. The proposed 1992 Plan Amendment, the text of which is set forth
in full in ANNEX A to this proxy statement, would increase the aggregate number
of shares for which options may be granted under the plan from 2,300,000 to
2,700,000.
-21-
<PAGE>
NEW PLAN BENEFITS
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 1992 Plan.
<TABLE>
<CAPTION>
DOLLAR NUMBER OF
NAMES AND POSITION PLAN NAME VALUE $ SHARES (1)
------------------ --------- ------- ----------
<S> <C> <C> <C>
William A. Hagstrom,
Former Chairman of the Board and Chief Executive Officer.... (2) (3) 204,146
Michael W. George,
President and Chief Executive Officer....................... (2) (3) 300,000
Bruce C. Hayden,
Senior Vice President, Secretary, Treasurer and Chief (2) (3) 90,000
Operating Officer...........................................
Karl K. Nigg,
Senior Vice President, Operations........................... (2) (3) 115,000
Lou Rye Carmichael,
Vice President, Chief Compliance Officer.................... (2) (3) 52,500
Robert W. Veltri, Ph.D.
Vice President, Research and Development.................... (2) (3) 96,800
Executive Officers as a Group (9 persons, including
the executive officers named above)......................... (2) (3) 1,012,976
Non-Executive Director Group................................ (2) (3) 37,500
Non-Executive Officer Employee Group........................ (2) (3) 565,917
</TABLE>
(1) Includes options granted to Mr. Hagstrom to purchase 106,646, 60,000,
25,000 and 12,500 shares of Common Stock on January 26, 1994, December 15,
1995, March 20, 1997 and April 16, 1998, respectively; options granted to
Mr. George to purchase 150,000, 10,000, 40,000 and 100,000 shares of Common
Stock on August 18, 1998, September 15, 1998, August 27, 1999 and October
22, 1999 respectively; options granted to Mr. Hayden to purchase 75,000 and
15,000 shares of Common Stock on April 12, 1999 and August 27, 1999,
respectively; options granted to Mr. Nigg to purchase 60,000, 7,500,
20,000, 5,000 and 22,500 shares of Common Stock on February 17, 1998, April
16, 1998, January 7, 1999, April 1, 1999 and August 27, 1999, respectively;
options granted to Ms. Carmichael to purchase 6,000, 4,000 20,000, 15,000
and 7,500 shares of common stock on March 5, 1993, February 21, 1994,
December 15, 1995, March 20, 1997 and April 16, 1998, respectively; options
granted to Dr. Veltri to purchase 44,300, 30,000, 15,000 and 7,500 shares
of Common Stock on January 26, 1994, December 15, 1995, March 20, 1997 and
April 16, 1998, respectively; options granted to other members of the
Executive Officer Group to purchase 29,530, 10,000, 90,000 and 25,000
shares of Common Stock on January 26, 1994, December 15, 1995, December 22,
1999 and April 10, 2000, respectively; options granted to members of the
Non-Executive Director Group to purchase 12,500, 12,500, and 12,500 shares
of Common Stock on October 1, 1993 and October 29, 1993, and July 12, 1994,
respectively; and options granted to members of the Non-Executive Officer
Employee Group to purchase an aggregate of 565,917 shares of Common Stock
on various dates between June 1, 1992 and April 15, 2000.
(2) 1992 Plan Amendment and 1992 Plan, as amended by the 1992 Plan Amendment.
(3) 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 Plan on February 26, 1993, October 1, 1993, October 29,
1993, January 26, 1994, February 21, 1994, July 12, 1994, September 30,
1994, December 15, 1995, May 1, 1996, March 20, 1997, May 5, 1997, February
17, 1998, April 16, 1998, August 18, 1998, September 15, 1998, January 7,
1999, April 1, 1999, April 12, 1999, August 27, 1999, October 22, 1999,
December 22, 1999 and April 10, 2000 have exercise prices of $.35, $.75,
$.75, $.75, $.75, $1.00, $1.00, $1.75, $9.00, $10.00, $9.25, $6.125,
$7.0625, $4.75, $4.875, $5.875, $4.625, $4.00, $4.50, $3.375, $3.50 and
$4.875 per share, respectively. Options granted to members of the
Non-Executive Officer Employee Group under the 1992 Plan have exercise
prices ranging from $.35 to $12.625 The closing price of the Common Stock
on the Record Date was $4.00.
-22-
<PAGE>
FEDERAL TAX CONSEQUENCES
Options granted under the 1992 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.
ISOS. In general, no tax consequences should result from the grant to
or exercise by an employee of an ISO under the 1992 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.
NON-ISOS. 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.
SUMMARY OF THE DIRECTOR PLAN
The Board of Directors adopted the Director Plan in May 1997 and the
stockholders of the Company approved the plan in June 1997. The Director Plan
provides for the automatic grant of stock options to non-employee directors. The
Company currently has five non-employee directors, each of whom is eligible to
receive grants under the Director Plan. The purposes of the Director 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 (currently the Stock
Plan Committee) is the administrator of the Director Plan.
-23-
<PAGE>
Under the Director Plan, an aggregate of 200,000 shares of Common Stock
are 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 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.
Proposal 3 would approve an amendment to the UroCor, Inc. 1997
Non-Employee Director Stock Option Plan increasing the number of shares granted
annually from 5,000 to 7,500 and adding an additional grant of 2,500 shares
annually to the Chairman of the Board of Directors.
NEW PLAN BENEFITS
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 Director Plan.
<TABLE>
<CAPTION>
DOLLAR NUMBER OF
NAMES AND POSITION PLAN NAME VALUE $ SHARES (1)
------------------ --------- ------- ----------
<S> <C> <C> <C>
Michael R. Miller........................................... (2) (3) 10,000
Herbert J. Conrad........................................... (2) (3) 17,500
Louis M. Sherwood, MD....................................... (2) (3) 17,500
Michael E. Herbert.......................................... (2) (3) 15,000
Aaron Beam.................................................. (2) (3) 20,000
Thomas C. Ramey............................................. (2) (3) 20,000
</TABLE>
(1) Includes options granted to Mr. Miller to purchase 10,000 shares of Common
Stock on April 18, 2000; options granted to Mr. Conrad to purchase 7,500,
5,000 and 5,000 shares of Common Stock on May 5, 1997, July 1, 1998 and
July 1, 1999, respectively; options granted to Dr. Sherwood to purchase
7,500, 5,000 and 5,000 shares of Common Stock on May 5, 1997, July 1, 1998
and July 1, 1999, respectively; options granted to Mr. Herbert to purchase
5,000, 5,000 and 5,000 shares of Common Stock on May 5, 1997, July 1, 1998
and July 1, 1999, respectively; options granted to Mr. Beam to purchase
10,000, 5,000 and 5,000 shares of Common Stock on December 16, 1997, July
1, 1998 and July 1, 1999, respectively; and options granted to Mr. Ramey to
purchase 10,000, 5,000 and 5,000 shares of Common Stock on December 16,
1997, July 1,1998 and July 1, 1999, respectively.
(2) Director Plan, as amended by the Director Plan Amendment.
(3) 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 Director Plan on May 5, 1997, December 16, 1997, July 1, 1998,
July 1, 1999 and April 18, 2000 have exercise prices of $9.25, $6.50,
$7.00, $5.00 and $4.00 per share, respectively. The closing price of the
Common Stock on the Record Date was $4.00.
FEDERAL TAX CONSEQUENCES
Options granted under the Director Plan are classifed as Non-ISO's.
-24-
<PAGE>
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.
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
Arthur Andersen LLP served as the Company's principal independent
public accountants for the year ended December 31, 1999 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.
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, the
Company believes that, except as set forth below, no person who, at any time
during 1999, 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.
Armstrong was required to file Form 3 on or before January 1, 2000 in order to
report his initial reporting relations to the Company. Mr. Armstrong filed Form
3 on January 6, 2000.
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 2001 must be
received by the Company at its principal executive offices, 840 Research
Parkway, Oklahoma City, Oklahoma 73104, no later than January 1, 2001, in order
to be included in the proxy statement and form of proxy relating to that
meeting.
According to the bylaws of the Company, at the Annual Meeting of
Stockholders, only such business shall be conducted as shall have been properly
brought before the meeting. For business to be properly brought before the 2001
Annual Meeting of Stockholders by a stockholder, the stockholder must have given
timely notice thereof in writing to the Secretary of the Company. To be timely,
a stockholder's notice must be delivered to or mailed and received at the
principal executive offices of the Company not less than 120 days nor more than
180 days prior to the meeting date.
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.
-25-
<PAGE>
ANNEX A
AMENDMENT
TO
UROCOR, INC.
SECOND AMENDED AND RESTATED 1992 STOCK OPTION PLAN, AS AMENDED
ADOPTED BY THE BOARD OF DIRECTORS APRIL 18, 2000
AND
BY THE STOCKHOLDERS JUNE 20, 2000
1. Paragraph 3 of the UroCor, Inc. Second Amended and Restated 1992
Stock Option Plan, as amended, is hereby deleted in its entirety and replaced
by the following:
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
2,700,000 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.
2. Except as expressly amended by this Amendment, the UroCor, Inc. Second
Amended and Restated 1992 Stock Option Plan, as amended, shall continue in full
force and effect in accordance with its terms.
A-1
<PAGE>
ANNEX B
AMENDMENT
TO
UROCOR, INC.
1997 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN, AS AMENDED
ADOPTED BY THE BOARD OF DIRECTORS APRIL 18, 2000
AND
BY THE STOCKHOLDERS JUNE 20, 2000
1. Section 4 of the UroCor, Inc. 1997 Non-Employee Director Stock Option
Plan (the "Plan") hereby is deleted in its entirety and replaced by the
following:
4. GRANT OF OPTIONS.
(a) CURRENT DIRECTORS. Subject to the provision of Section 16,
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, 2000, there shall be granted to each person who is a
Non-Employee Director on such July 1 an Option to purchase 7,500
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) NEW DIRECTORS. 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).
(c) CHAIRMAN OF THE BOARD OF DIRECTORS. Subject to the
provision of Section 16, 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, 2000, there shall be granted to the
person, if any, who is both a Non-Employee Director and the Chairman
of the Board of Directors on such July 1, an Option to purchase
2,500 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).
(d) 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-1
<PAGE>
2. The second paragraph of Section 12 of the Plan hereby is deleted in
its entirety and replaced by the following:
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 Section 4 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.
3. Except as expressly amended by this Amendment, the Plan shall continue
in full force and effect in accordance with its terms.
B-2
<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, 2000
The undersigned stockholder of UroCor, Inc. (the "Company") hereby
appoints Michael W. George and Bruce C. Hayden 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 Westin Hotel,
One North Broadway, Oklahoma City, Oklahoma at 2:00 p.m., C.D.T., Tuesday, June
20, 2000, or at any adjournment(s) thereof, on the following matters more
particularly described in the Proxy Statement dated April 26, 2000.
1. ELECTION OF DIRECTORS: [ ] FOR all the nominees [ ] WITHHOLD AUTHORITY
listed (except as to vote for
indicated to the election of
contrary below) directors
NOMINEES: Herbert J. Conrad and Louis M. Sherwood, MD. (Instruction: To
withhold authority to vote for any individual nominee, write that nominee's name
in the space below.)
________________________________________________________________________________
2. Proposal to approve an amendment to the UroCor, Inc. Second Amended and
Restated 1992 Stock Option Plan, as amended, to increase the number of
shares for which options may be granted under such plan from 2,300,000 to
2,700,000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Proposal to approve an amendment to the UroCor, Inc. 1997 Non-Employee
Director Stock Option Plan, as amended, to increase the number of shares to
be granted annually under such plan from 5,000 to 7,500 and adding an
additional grant of 2,500 shares annually to the Chairman of the Board of
Directors.
[ ] 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 amendment to the Second Amended and Restated 1992 Stock
Option Plan, as amended, set forth in Item 2 and FOR the amendment to the 1997
Non-Employee Director Stock Option Plan, as amended, set forth in Item 3.
Dated: ______________________, 2000
___________________________________
___________________________________
(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.
