SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
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 Under Rule 14a-12
Neoprobe Corporation
------------------------------------------------
(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:
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(5) Total fee paid:
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|_| Fee paid previously with preliminary materials:
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|_| 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:
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(4) Date Filed:
- --------------------------------------------------------------------------------
2000 ANNUAL MEETING OF STOCKHOLDERS
May 26, 2000
Dear Stockholder:
You are cordially invited to attend the 2000 Annual Meeting of Stockholders
of Neoprobe Corporation which will be held at 9:30 a.m., Eastern Daylight Time,
on June 22, 2000 at the Columbus Marriott Northwest, 5805 Blazer Parkway,
Dublin, Ohio 43017. The matters on the meeting agenda are described in the
Notice of 2000 Annual Meeting of Stockholders and Proxy Statement which
accompany this letter.
We hope you will be able to attend the meeting, but whatever your plans, we
ask that you please complete, execute, and date the enclosed proxy card and
return it in the envelope provided so that your shares will be represented at
the meeting.
Very truly yours,
David C. Bupp
Chief Executive Officer and President
NEOPROBE CORPORATION
NOTICE OF 2000 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 22, 2000
TO THE STOCKHOLDERS OF
NEOPROBE CORPORATION:
The Annual Meeting of the Stockholders of Neoprobe Corporation, a Delaware
corporation (the "Company"), will be held at the Columbus Marriott Northwest,
5805 Blazer Parkway, Dublin, Ohio 43017, at 9:30 a.m., Eastern Daylight Time,
for the following purposes:
1. To elect two directors, each to serve for a term of three years or
until his successor is duly elected and qualified; and
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on May 19, 2000 as
the record date for the determination of stockholders entitled to notice of and
to vote at the Annual Meeting and any adjournment thereof. A list of
stockholders will be available for examination by any stockholder at the Annual
Meeting and for a period of 10 days before the Annual Meeting at the executive
offices of the Company.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE SIGN, DATE,
AND RETURN THE ENCLOSED PROXY CARD IN THE ENVELOPE PROVIDED.
By Order of the Board of Directors
David C. Bupp
Chief Executive Officer and President
Dublin, Ohio
May 26, 2000
NEOPROBE CORPORATION
----------------------------------
2000 ANNUAL MEETING OF STOCKHOLDERS
JUNE 22, 2000
----------------------------------
PROXY STATEMENT
DATED MAY 26, 2000
----------------------------------
GENERAL INFORMATION
Solicitation. This Proxy Statement is furnished to the stockholders of
Neoprobe Corporation, a Delaware corporation (the "Company" or "Neoprobe"), in
connection with the solicitation by the Board of Directors of the Company (the
"Board of Directors") of proxies to be voted at the 2000 Annual Meeting of
Stockholders of the Company (the "Annual Meeting") to be held on June 22, 2000
and any adjournment thereof. This Proxy Statement and the accompanying proxy
card are first being mailed to stockholders on or about May 26, 2000.
Company Address. The mailing address of the Company's principal executive
offices is 425 Metro Place North, Suite 300, Dublin, Ohio 43017.
Voting Rights. Stockholders of record at the close of business on May 19,
2000 are entitled to notice of and to vote at the Annual Meeting. As of that
date, there were 26,071,777 shares of common stock of the Company, par value
$.001 per share ("Common Stock"), outstanding. Each holder of Common Stock of
record on May 19, 2000 is entitled to one vote per share held with respect to
all matters which may be brought before the Annual Meeting.
Authorization. All shares represented by properly executed proxies received
by the Company pursuant to this solicitation will be voted in accordance with
the stockholder's directions specified on the proxy card. If no directions have
been specified by marking the appropriate squares on the accompanying proxy
card, the shares represented by such proxy will be voted in accordance with the
recommendation of the Board of Directors, which is FOR the election of John S.
Christie and J. Frank Whitley, Jr. as directors to serve for terms of three
years. The proxy will also be voted at the discretion of the persons acting
under the proxy to transact such other business as may properly come before the
Annual Meeting and any adjournment thereof.
Revocation. Any stockholder returning the accompanying proxy has the power
to revoke it at any time before its exercise by giving notice of revocation to
the Company, by duly executing and delivering to the Company a proxy card
bearing a later date, or by voting in person at the Annual Meeting.
Tabulation. Under Section 216 of the General Corporation Law of the State
of Delaware ("GCL") and the By-laws of the Company, a quorum must be present at
the Annual Meeting in order for any valid action, including the election of
directors and voting on the other matters presented to the meeting, other than
adjournment, to be taken thereat. Section 216 of the GCL and the By-laws of the
Company provide that a quorum consists of a majority of the shares entitled to
vote at the Annual Meeting present in person or represented by proxy. Shares
represented by signed proxies that are returned to the Company will be counted
toward the quorum in all matters even though they are marked as "Abstain,"
"Against" or "Withhold Authority" on one or more or all matters or they are not
marked at all (see "General Information-Authorization"). Broker/dealers, who
hold their customers' shares in street name, may, under the applicable rules of
the exchanges and other self-regulatory organizations of which such
broker/dealers are members, sign and submit proxies for such shares and may vote
such shares on routine matters, which, under such rules, typically include
the election of directors, but broker/dealers may not vote such shares on other
matters without specific instructions from the customer who owns such shares.
Proxies signed and submitted by broker/dealers which have not been voted on
certain matters as described in the previous sentence are referred to as broker
non-votes. Such proxies count toward the establishment of a quorum.
Under Section 216 of the GCL and the By-laws of the Company, directors are
elected by a plurality of the votes for the respective nominees. Therefore,
proxies that are marked "Withhold Authority" and broker non-votes, if any, will
not affect the election of the directors.
ELECTION OF DIRECTORS
NOMINEES FOR ELECTION AS DIRECTORS
The Company presently has seven directors on its Board of Directors,
comprised of three directors in each of two classes and one director in a third
class, with terms expiring at the Annual Meeting in 2000, 2001 and 2002,
respectively. Effective upon the adjournment of the Annual Meeting, the Company
will have six directors on its Board of Directors, comprised of three directors
in one class, one director in a second class and two directors in a third class,
with terms expiring at the Annual Meeting in 2001, 2002 and 2003, respectively.
At the Annual Meeting, the nominees to the Board of Directors receiving the
highest number of votes will be elected as directors to terms of three years
expiring in 2003. John S. Christie and J. Frank Whitley, Jr. have been nominated
as directors to serve for terms of three years.
The Company has no reason to believe that any nominee will not stand for
election or serve as a director. In the event that a nominee fails to stand for
election, the proxies will be voted for the election of another person
designated by the persons named in the proxy. See "General
Information-Tabulation."
THE BOARD OF DIRECTORS HAS NOMINATED THE FOLLOWING PERSONS TO SERVE AS DIRECTORS
OF THE COMPANY UNTIL THE 2003 ANNUAL MEETING:
JOHN S. CHRISTIE, age 50, has served as a director of the Registrant since May
1997. Mr. Christie has served as President and Chief Operating Officer of
Worthington Industries, Inc. since June 1999. Mr. Christie served as President
of JMAC, Inc., an investment holding company, from September 1995 to June 1999.
From August 1988 until September 1995, he was a Senior Vice President of
Battelle Memorial Institute. Mr. Christie also serves as a director of
Worthington Industries, Inc. Mr. Christie has a B.S. degree in Business
Administration from Miami University and an MBA from Emory University.
J. FRANK WHITLEY, JR., age 57, has served as a director of the Registrant since
May 1994. Mr. Whitley was Director of Mergers, Acquisitions and Licensing at The
Dow Chemical Company ("Dow"), a multinational chemical company, from June 1993
until his retirement in June 1997. After joining Dow in 1965, Mr. Whitley served
in a variety of marketing, financial, and business management functions. Mr.
Whitley has a B.S. degree in Mathematics from Lamar State University.
DIRECTOR WHOSE TERM CONTINUES UNTIL THE 2002 ANNUAL MEETING:
MICHAEL P. MOORE, M.D., PH.D., age 49, has served as a director of the
Registrant since May 1994. Dr. Moore has been Attending Physician, Breast
Surgery, Columbia Presbyterian Medical Center since June 1986. Dr. Moore has a
B.S. degree from Boston College, a Ph.D. degree from Loyola University of
Chicago, and a M.D. degree from The Loyola Stritch School of Medicine.
2
DIRECTORS WHOSE TERMS CONTINUE UNTIL THE 2001 ANNUAL MEETING:
DAVID C. BUPP, age 50, has served as President and a director of the Registrant
since August 1992 and as Chief Executive Officer since February 1998. From
August 1992 to May 1993, Mr. Bupp served as Treasurer of the Registrant. In
addition to the foregoing positions, from December 1991 to August 1992, he was
Acting President, Executive Vice President, Chief Operating Officer and
Treasurer, and from December 1989 to December 1991, he was Vice President,
Finance and Chief Financial Officer. From 1982 to December 1989, Mr. Bupp was
Senior Vice President, Regional Manager for AmeriTrust Company National
Association, a nationally chartered bank holding company, where he was in charge
of commercial banking operations throughout Central Ohio. Mr. Bupp has a B.A.
degree in Economics from Ohio Wesleyan University. Mr. Bupp completed a course
of study at Stonier Graduate School of Banking.
JULIUS R. KREVANS, M.D., age 75, has served as a director of the Registrant
since May 1994 and as Chairman of the Registrant since February 1999. Dr.
Krevans served as Chancellor of the University of California, San Francisco from
July 1982 until May 1993, and now serves on the faculty of that institution's
School of Medicine. Prior to his appointment as Chancellor, Dr. Krevans served
as a Professor of Medicine and Dean of the School of Medicine at the University
of California, San Francisco from 1971 to 1982. Dr. Krevans is a member of the
Institute of Medicine, National Academy of Sciences, and led its committee for
the National Research Agenda on Aging until 1991. He is Chairman of the Bay Area
Economic Forum, a member of the Medical Panel of A.P. Giannini Foundation, and a
member of the Board of Directors of the Bay Area BioScience Center. Dr. Krevans
has a B.S. degree and a M.D. degree, both from New York University.
JAMES F. ZID, age 66, has served as a director of the Registrant since November
1993. Mr. Zid also serves as a director of the Net Med Corporation. Now retired,
Mr. Zid was a partner from September 1981 until September 1993 (and served as
managing partner of the Columbus, Ohio office from September 1981 to September
1992) of Ernst & Young and its predecessors. Mr. Zid has a B.S. degree in
Accounting from St. Joseph's College.
BOARD OF DIRECTORS MEETINGS
The Board of Directors held ten meetings in fiscal 1999 and each of the
directors attended at least 75 percent of the aggregate number of meetings of
the Board of Directors and committees (if any) on which he served.
COMMITTEES
The Company has a standing Audit Committee and a standing Compensation
Committee. The Company does not have a standing committee whose functions
include nominating directors.
The Audit Committee recommends the firm to be employed by the Company as
its independent auditors; consults with the firm so chosen to be the independent
auditors with regard to the plan of audit; reviews, in consultation with the
independent auditors, their report of audit, or proposed report of audit and the
accompanying management letter, if any; and consults with the independent
auditors with regard to the adequacy of the internal accounting controls. The
Board of Directors has not adopted a written charter for the Audit Committee.
The Audit Committee held seven meetings in fiscal 1999.
The Audit Committee has reviewed and discussed with management the
Registrant's audited financial statements; discussed with the independent
auditors the matters required to be discussed by Codification of Statements on
Auditing Standards, AU Section 380; received the written disclosures and the
letter from the independent auditors required by Independence Standards Board
Standard No. 1; discussed with the independent accountants the independent
accountant's independence; and recommended to the Board of Directors that the
Registrant's audited financial statements be included in the Registrant's Annual
Report on Form 10-K for the fiscal year ended December 31, 1999 for filing with
the Commission.
3
The Audit Committee is comprised of James F. Zid, John S. Christie and J.
Frank Whitley, Jr., each of whom is an independent director.
The Compensation Committee is comprised of Melvin D. Booth, Julius R.
Krevans and Michael P. Moore, each of whom is an independent director. The
Compensation Committee establishes the compensation of all employees and
consultants of the Company, administers and interprets the Company's Amended and
Restated Stock Option and Restricted Stock Purchase Plan and the 1996 Stock
Incentive Plan and takes any action that is permitted to be taken by a committee
of the Board of Directors under the terms of such plan, including the granting
of options. The Compensation Committee held three meetings in fiscal 1999.
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS,
DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS
The following table sets forth, as of April 30, 2000, certain information
with respect to the beneficial ownership of shares of Common Stock by (i) each
person known to the Company to be the beneficial owner of more than 5 percent of
the outstanding shares of Common Stock, (ii) each Director or nominee for
Director of the Company, (iii) each of the Named Executives (see "Compensation
of Management--Summary Compensation Table"), and (iv) the Company's Directors
and executive officers as a group.
NUMBER OF
SHARES
BENEFICIALLY PERCENT
BENEFICIAL OWNER OWNED(*) OF CLASS
- ---------------------------------------- ------------- --------
Melvin D. Booth 19,166(a) (n)
David C. Bupp 573,662(b) 2.1%
John S. Christie 19,866(c) (n)
Julius R. Krevans 34,766(d) (n)
Brent L. Larson 110,750(e) (n)
Michael P. Moore 33,766(f) (n)
J. Frank Whitley, Jr. 23,766(g) (n)
James F. Zid 35,866(h) (n)
All directors and officers as a group
(9 persons) 931,897(i) 3.1%
Matthew F. Bowman 205,896(j) (n)
Patricia A. Coburn 22,625(k) (n)
Kenneth R. McGuire 1,567,100(l) 5.4%
Paramount Capital Asset Management, Inc. 6,000,000(m) 20.6%
(*) Unless otherwise indicated, the beneficial owner has sole voting and
investment power over these shares subject to the spousal rights, if any,
of the spouses of those beneficial owners who have spouses.
(a) This amount consists of shares issuable upon exercise of options which are
exercisable within 60 days, but does not include 50,834 shares issuable
upon exercise of options which are not exercisable within 60 days.
(b) This amount includes 210,000 shares of restricted stock which vest on a
change in control of the Company, 345,600 shares issuable upon exercise of
options which are exercisable within 60 days, 4,362 shares in Mr. Bupp's
account in the Neoprobe Corporation 401(k) Plan (the "401(k) Plan") and
2,200 shares held by Mr. Bupp's wife and daughters, as to which latter
shares he disclaims beneficial ownership, but it does not include 295,000
shares issuable upon exercise of options which are not exercisable within
60 days. Mr. Bupp is one of three trustees of the 401(k) Plan and may, as
such, share investment power over Common Stock held in such plan. The
401(k) Plan holds an aggregate total of 47,665 shares of Common Stock. Mr.
Bupp disclaims any beneficial ownership of shares held by the 401(k) Plan
that are not allocated to his personal account.
4
(c) This amount includes 19,166 shares issuable upon exercise of options which
are exercisable within 60 days, but does not include 50,834 shares issuable
upon exercise of options which are not exercisable within 60 days.
(d) This amount includes 32,766 shares issuable upon exercise of options which
are exercisable within 60 days, but does not include 90,834 shares issuable
upon exercise of options which are not exercisable within 60 days.
(e) This amount includes 70,000 shares of restricted stock which vest on a
change in control of the Company, 38,133 shares issuable upon exercise of
options which are exercisable within 60 days and 1,972 shares in Mr.
Larson's account in the 40l(k) Plan, but it does not include 86,567 shares
issuable upon exercise of options which are not exercisable within 60 days.
Mr. Larson is one of three trustees of the 40l(k) Plan and may, as such,
share investment power over Common Stock held in such plan. The 40l(k) Plan
holds an aggregate total of 47,665 shares of Common Stock. Mr. Larson
disclaims any beneficial ownership of shares held by the 40l(k) Plan that
are not allocated to his personal account.
(f) This amount includes 27,766 shares issuable upon exercise of options which
are exercisable within 60 days, but does not include 50,834 shares issuable
upon exercise of options which are not exercisable within 60 days.
(g) This amount includes 22,766 shares issuable upon exercise of options which
are exercisable within 60 days, but does not include 50,834 shares issuable
upon exercise of options which are not exercisable within 60 days.
(h) This amount includes 30,266 shares issuable upon exercise of options which
are exercisable within 60 days and 1,600 shares held in Mr. Zid's IRA, but
does not include 50,834 shares issuable upon exercise of options which are
not exercisable within 60 days.
(i) This amount includes 310,000 shares of restricted stock which vest upon a
change in control of the Company, 549,448 shares issuable upon exercise of
options which are exercisable within 60 days and 7,949 shares held in the
Company's 401(k) Plan. This amount does not include 787,752 shares issuable
upon the exercise of options which are not exercisable within 60 days.
Certain executive officers of the Company are the trustees of the 401(k)
Plan and may, as such, share investment power over Common Stock held in
such plan. Each trustee disclaims any beneficial ownership of shares held
by the 401(k) Plan that are not allocated to his personal account. The
401(k) Plan holds an aggregate total of 47,665 shares of Common Stock.
(j) This amount includes 60,000 shares of restricted stock which vest on
certain changes in control of the Company as defined in Mr. Bowman's
severance agreement, 143,207 shares issuable upon exercise of options which
are exercisable within 60 days and 2,689 shares in Mr. Bowman's account in
the 401(k) Plan.
(k) This amount includes 2,625 shares in Ms. Coburn's account in the 401(k)
Plan.
(l) Mr. McGuire's address is 3000 North Clybourn, Hangar 34, Burbank,
California 91505. This amount includes 17,600 shares held by Mr. McGuire as
custodian under the Uniform Transfer to Minors Act of California for his
four children.
(m) This amount consists of 900,000 shares owned by the Aries Domestic Fund,
L.P. ("Aries Domestic"), 900,000 shares issuable upon the exercise of
warrants owned by Aries Domestic, 2,100,000 shares owned by The Aries
Master Fund, a Cayman Island Exempted Company ("Aries Master"), and
2,100,000 shares issuable upon the exercise of warrants owned by Aries
Master. Paramount Capital Management, Inc., a Delaware corporation
("Paramount Capital") has shared voting and dispositive power over the
shares of Aries Master and Aries Domestic because Paramount Capital is the
investment manager of Aries Master and the general partner of Aries
Domestic. Lindsay A. Rosenwald, M.D. ("Dr. Roswenwald") has shared voting
and dispositive power over the shares of Aries Master and Aries Domestic
because he is the sole shareholder of Paramount Capital. The address of
Paramount Capital, Aries Domestic and Dr. Rosenwald is 787 Seventh Avenue,
48th Floor, New York, New York 10019. The address of Aries Master is c/o
Mees Pierson (Cayman) Limited, Post Office Box 2003, American Center, Phase
3, Dr. Roy's Drive, George Town, Grand Cayman. The disclosure contained in
this footnote is derived from a Schedule 13D filed by Paramount Capital,
Aries Master, Aries Domestic and Dr. Rosenwald with the SEC on February 4,
2000.
(n) Less than 1 percent.
5
COMPENSATION OF MANAGEMENT
SUMMARY COMPENSATION TABLE
The following table sets forth certain information concerning the annual
and long-term compensation of the chief executive officer of the Company and the
Company's other three executive officers having annual compensation in excess of
$100,000 during the last fiscal year (the "Named Executives") for the Company's
last three fiscal years.
LONG TERM
COMPENSATION
AWARDS
------------------------
SECURITIES
ANNUAL RESTRICTED UNDER-
COMPENSATION STOCK LYING
NAME AND PRINCIPAL ---------------------- AWARDS OPTIONS ALL OTHER
POSITION YEAR SALARY BONUS ($) (#) COMPENSATION
- ----------------------- ------ ---------------------- ----------- ---------- ------------
David C. Bupp, 1999 $306,731 $58,000 $ 21,875(a) 0 $ 1,600(b)
President and Chief 1998 297,222 0 270,000(a) 30,000 1,600(b)
Executive Officer 1997 248,115 0 0 25,600 1,600(b)
Matthew F. Bowman 1999 $232,389 $10,259 $ 12,500(c) 30,000 $ 1,600(b)
Senior Vice President 1998 204,690 0 27,250(c) 136,900 1,600(b)
Marketing and 1997 161,163 28,000 0 7,200 1,600(b)
Operations
Brent L. Larson, Vice 1999 $109,375 $23,104 $ 6,250(d) 25,000 $ 1,325(b)
President, Finance 1998 83,385 0 13,760(d) 32,200 888(b)
and Chief Financial 1997 70,065 5,368 0 7,500 787(b)
Officer
Patricia A. Coburn, Vice 1999 $118,167 $19,604 0 20,000 $106,600(g)
President, 1998 127,662 0 $ 13,760(f) 33,400 1,421(b)
General Counsel(e) 1997 117,832 14,394 0 8,400 588(b)
(a) The aggregate number of Mr. Bupp's restricted stock holdings at December
31, 1999 was 110,000 shares with an aggregate value of $48,125. Mr. Bupp
has the right to receive dividends other than dividends on or distributions
of shares of any class of stock issued by Neoprobe which dividends or
distributions will be delivered to Neoprobe under the same restrictions on
transfer and possibility of forfeitures as the shares of restricted stock
from which they derive.
(b) These amounts consist of matching contribution under the Company's 401(k)
Plan. Eligible employees may make voluntary contributions and the Company
may, but is not obligated to, make matching contributions based on 20
percent of the employee's contribution, up to five percent of the
employee's salary. Contributions by employees are invested by an
independent plan administrator in mutual funds and contributions, if any,
by the Company are made in the form of shares of Common Stock. The 401(k)
Plan is intended to qualify under section 401 of the Code, which provides
that employee and Company contributions and income earned on contributions
are not taxable to the employee until withdrawn from the plan, and that
Company contributions will be deductible by the Company when made.
(c) The aggregate number of Mr. Bowman's restricted stock holdings at December
31, 1999 was 60,000 shares with an aggregate value of $26,250. Mr. Bowman
has the right to receive dividends other than dividends on or distributions
of shares of any class of stock issued by Neoprobe which dividends or
distributions will be delivered to Neoprobe under the same restrictions on
transfer and possibility of forfeitures as the shares of restricted stock
from which they derive.
6
(d) The aggregate number of Mr. Larson's restricted stock holdings at December
31, 1999 was 30,000 shares with an aggregate value of $13,125. Mr. Larson
has the right to receive dividends other than dividends on or distributions
of shares of any class of stock issued by Neoprobe which dividends or
distributions will be delivered to Neoprobe under the same restrictions on
transfer and possibility of forfeitures as the shares of restricted stock
from which they derive.
(e) Ms. Coburn began her employment with the Company in August, 1996, and ended
her employment with the Company in November, 1999.
(f) The aggregate number of Ms. Coburn's restricted stock holdings at December
31, 1999 was 20,000 shares with an aggregate value of $8,750. Ms. Coburn
has the right to receive dividends other than dividends on or distributions
of shares of any class of stock issued by Neoprobe which dividends or
distributions will be delivered to Neoprobe under the same restrictions on
transfer and possibility of forfeitures as the shares of Restricted Stock
from which they derive.
(g) This amount includes payments to Ms. Coburn relating to her separation from
the Company of $105,000 for severance; see "Compensation of
Management-Compensation Agreements With Other Named Executive Officers;
Severance Agreements." The remaining $1,600 was a matching contribution to
Ms. Coburn's 401(k) account; see footnote (b) to this table.
OPTION GRANTS IN LAST FISCAL YEAR
The following table presents certain information concerning stock options
granted to the Named Executives during the last fiscal year (1999).
GRANT
DATE
INDIVIDUAL GRANTS VALUE
- --------------------------------------------------------------------------------- ---------
PERCENT OF
TOTAL
NUMBER OF OPTIONS
SECURITIES GRANTED GRANT
UNDERLYING TO EMPLOYEES EXERCISE DATE
OPTIONS GRANTED IN PRICE PER EXPIRATION PRESENT
NAME (SHARES) FISCAL YEAR SHARE DATE VALUE $
- ------------------ --------------- ------------ --------- --------------- ----------
David C. Bupp 0 0% n/a n/a n/a
Matthew F. Bowman 30,000(a) 5.5 % $1.25 02/11/09(b) $1.00 (c)
Brent L. Larson 25,000(a) 4.6 % $1.25 02/11/09(b) $1.00 (c)
Patricia A. Coburn 20,000(d) 3.7% $1.25 02/11/09(b)(d) $1.00 (c)
(a) Vests as to one-third of these shares on each of the first three
anniversaries of the date of grant.
(b) The options terminate on the earlier of the Expiration Date, nine months
after death or disability, 90 days after termination of employment without
cause or by resignation or immediately upon termination of employment for
cause.
(c) The per share weighted average fair value of these stock options during
1999 was $1.00 on the date of grant using the Black Scholes option pricing
model with the following assumptions: an expected life of 4 years, an
average risk-free interest rate of 4.83%, volatility of 123% and no
expected dividend rate.
(d) Ms. Coburn resigned effective November 30, 1999 and these options were
canceled without vesting.
7
FISCAL YEAR END OPTION NUMBERS AND VALUES
The following table sets forth certain information concerning the number
and value of unexercised options held by the Named Executives at the end of the
last fiscal year (December 31, 1999).
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FISCAL YEAR-END: AT FISCAL YEAR-END:
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ------------------ --------------------------- -------------------------
David C. Bupp 329,567/131,033 0 / 0
Matthew F. Bowman 98,752/115,348 0 / 0
Brent L. Larson 19,901/44,799 0 / 0
Patricia A. Coburn 29,370/0 0 / 0
LONG-TERM INCENTIVE PLANS-AWARDS IN LAST FISCAL YEAR
The following table sets forth certain information concerning restricted
stock awards to Named Executives during fiscal year 1999.
PERFORMANCE OR OTHER
NUMBER OF SHARES PERIOD UNTIL MATURATION OR
NAME UNITS OR OTHER RIGHTS PAYOUT
- --------------------- --------------------- --------------------------
David C. Bupp (a) 35,000 04/30/09
Matthew F. Bowman (a) 20,000 04/30/09
Brent L. Larson (a) 10,000 04/30/09
Patricia A. Coburn 0 n/a
(a) These awards are shares of restricted stock which the grantees purchased
for $.001 per share. Grantees may not transfer or sell their shares unless
and until such shares vest. Each grantee forfeits his unvested shares on
the earliest of the termination of his employment for any reason unless the
Company is, at the time of termination for death or disability, actively
engaged in negotiations that could reasonably be expected to lead to a
change in control of the Company, or the tenth anniversary of the date of
grant. The restricted shares that have not been previously forfeited will
vest if and when there is a change in control of the Company. Except for
these restrictions on transfer and possibilities of forfeiture, the
grantees have all other rights with respect to their restricted shares,
including the right to vote such shares and receive cash dividends.
COMPENSATION OF MR. BUPP
Employment Agreement. David C. Bupp is employed under a one-year employment
agreement effective July 1, 1999. The employment agreement provides for an
annual base salary of $290,000.
The Compensation Committee of the Board of Directors will, on an annual
basis, review the performance of the Company and of Mr. Bupp and will pay a
bonus to Mr. Bupp as it deems appropriate, in its discretion. Such review and
bonus will be consistent with any bonus plan adopted by the Compensation
Committee which covers the executive officers of the Company generally. The
Company paid a $58,000 bonus to Mr. Bupp relating to fiscal year 1999.
If a change in control occurs with respect to the Company and the
employment of Mr. Bupp is concurrently or subsequently terminated (i) without
cause (cause is defined as any willful breach of a material duty by Bupp in the
course of his employment or willful and continued neglect of his duty as an
employee), (ii) the term of Mr. Bupp's employment agreement expires or (iii) Mr.
Bupp resigns because his authority, responsibilities or compensation have
8
materially diminished, a material change occurs in his working conditions or the
Company breaches the agreement, Mr. Bupp will be paid a severance payment equal
to twice his annual base salary (less amounts paid as Mr. Bupp's salary and
benefits that continue for the remaining term of the agreement if his employment
is terminated without cause). A change in control includes (a) the acquisition,
directly or indirectly, by a person (other than the Company or an employee
benefit plan established by the Board of Directors) of beneficial ownership of
15 percent or more of the Company's securities with voting power in the next
meeting of holders of voting securities to elect the Directors; (b) a majority
of the Directors elected at any meeting of the holders of the Company's voting
securities are persons who were not nominated by the Company's then current
Board of Directors or an authorized committee thereof; (c) the stockholders of
the Company approve a merger or consolidation of the Company with another
person, other than a merger or consolidation in which the holders of the
Company's voting securities outstanding immediately before such merger or
consolidation continue to hold voting securities in the surviving or resulting
corporation (in the same relative proportions to each other as existed before
such event) comprising eighty percent (80%) or more of the voting power for all
purposes of the surviving or resulting corporation; or (d) the stockholders of
the Company approve a transfer of substantially all of the assets of the Company
to another person other than a transfer to a transferee, eighty percent (80%) or
more of the voting power of which is owned or controlled by the Company or by
the holders of the Company's voting securities outstanding immediately before
such transfer in the same relative proportions to each other as existed before
such event.
Mr. Bupp's compensation will continue for the full term of the agreement if
his employment is terminated without cause.
Restricted Stock. On April 30, 1999 and March 22, 2000, the Company and Mr.
Bupp entered into restricted stock purchase agreements under which Mr. Bupp
purchased 35,000 and 100,000 shares of Common Stock, respectively, for a
purchase price of $0.001 per share. Mr. Bupp may not transfer or sell any of the
restricted shares unless and until they vest. Mr. Bupp will forfeit any portion
of the restricted shares that has not vested (and the Company will refund the
purchase price paid) on the earlier of the date of the termination of his
employment under his employment agreement with the Company for any reason unless
the Company is, at the time of termination for death or disability, actively
engaged in negotiations that could reasonably be expected to lead to a change in
control, and ten years after the date of grant. Restricted shares that have not
previously been forfeited will vest if and when there is a change in control of
the Company. Except for these restrictions on transfer and possibilities of
forfeiture, Mr. Bupp has all other rights with respect to the restricted shares,
including the right to vote such shares and receive cash dividends.
The term "change in control" has the same meaning under Mr. Bupp's
restricted stock agreement as it does under Mr. Bupp's employment agreement; see
the definition of "change in control" under the heading "Compensation of Mr.
Bupp; Employment Agreement."
The Company has not recognized any expense under the restricted stock
agreement due to the contingent nature of the vesting provisions and the risk of
forfeiture.
COMPENSATION OF NON-EMPLOYEE DIRECTORS
Non-employee Directors who are not affiliated with a principal stockholder
of the Company elected to receive options to purchase Common Stock in lieu of
cash compensation for service during 1999. The Chairman received 30,000 options
and other non-employee Directors received 15,000 options each in lieu of cash
compensation. The Company's non-employee directors have also elected to receive
options in lieu of cash compensation for services rendered during 2000. The
Company reimbursed non-employee Directors for travel expenses for meetings
attended during 1999. In addition, each non-employee Director received 15,000
options to purchase Common Stock as a part of the Company's annual stock
incentive grants. Options granted to purchase Common Stock vest either on a
monthly or annual basis over a three-year period and have an exercise price
equal to no less than the market price of Common Stock at the date of grant.
9
Directors who are also officers or employees of the Company do not receive
any compensation for their services as Directors.
COMPENSATION AGREEMENTS WITH OTHER NAMED EXECUTIVE OFFICERS
Severance Agreements. Patricia A. Coburn received $105,000 in 1999 related
to her resignation on November 30, 1999. Ms. Coburn is entitled to receive
additional payments in the event a qualifying change in control transaction
occurs within certain time frames from the effective date of her resignation
pursuant to the terms of a Change in Control Severance Agreement dated October
23, 1998 between the Company and Ms. Coburn.
Pursuant to an Agreement, Release and Waiver dated March 2, 2000 between
the Company and Matthew F. Bowman, the Company paid to Mr. Bowman $200,417 as
severance in connection with the termination of his employment as of March 31,
2000. The Company also agreed to pay $564 per month of Mr. Bowman's health care
coverage through December 31, 2000. If a change in control of the Company occurs
on or before November 30, 2000, the Company will pay to Mr. Bowman an additional
$92,500 in severance.
The term "change in control" has the same meaning under this heading as it
does under Mr. Bupp's employment agreement except that the change in beneficial
ownership is defined at 30% as compared to 15% in Mr. Bupp's agreement; see the
definition of "change in control" under the heading "Compensation of
Management-Compensation of Mr. Bupp; Employment Agreement."
Restricted Stock. On April 30, 1999 and March 22, 2000, the Company and Mr.
Larson entered into restricted stock purchase agreements under which Mr. Larson
purchased 10,000 and 40,000 shares of Common Stock, respectively, for a purchase
price of $0.001 per share. Mr. Larson may not transfer or sell any of the
restricted shares unless and until they vest. Mr. Larson will forfeit any
portion of the restricted shares that has not vested (and the Company will
refund the purchase price paid) on the earlier of the date of the termination of
his employment under his employment agreement with the Company for any reason
unless the Company is, at the time of termination for death or disability,
actively engaged in negotiations that could reasonably be expected to lead to a
change in control, and ten years after the date of grant. Restricted shares that
have not previously been forfeited will vest if and when there is a change in
control of the Company. Except for these restrictions on transfer and
possibilities of forfeiture, Mr. Larson has all other rights with respect to the
restricted shares, including the right to vote such shares and receive cash
dividends.
On April 30, 1999, the Company and Mr. Bowman entered into a restricted
stock purchase agreement under which Mr. Bowman purchased 20,000 shares of
Common Stock for a purchase price of $0.001 per share. The terms of Mr. Bowman's
restricted stock purchase agreement are identical to those contained in Mr.
Larson's restricted stock purchase agreement discussed above regarding vesting,
forfeiture and rights of ownership. On March 2, 2000, the date of his
resignation, Mr. Bowman owned a total of 60,000 restricted shares (including the
20,000 issued on April 30, 1999) on terms similar to those discussed above. As
of May 26, 2000, these shares have neither vested nor been forfeited under the
terms of Mr. Bowman's Agreement, Release and Waiver.
On November 30, 1999, the date of her resignation, Ms. Coburn owned 20,000
restricted shares on terms similar to those discussed above regarding Mr.
Bowman's and Mr. Larson's restricted shares. As of May 26, 2000, these shares
have neither vested nor been forfeited under the terms of Ms. Coburn's Severance
Agreement.
Employment Agreement with Mr. Larson. Brent L. Larson is employed under an
eighteen-month employment agreement which commenced on April 1, 2000 and will
terminate on September 30, 2001. The employment agreement provides for an annual
base salary of $130,000. The Compensation Committee of the Board of Directors
will, on an annual basis, review the performance of the Company and of Mr.
Larson and will pay a bonus to Mr. Larson as it deems appropriate, in its
discretion. Such review and bonus will be consistent with any bonus plan adopted
by the Compensation Committee which covers the executive officers of the Company
generally.
10
If a change in control occurs with respect to the Company and the
employment of Mr. Larson is concurrently or subsequently terminated as discussed
above under the heading "Compensation of Management - Compensation of Mr. Bupp;
Employment Agreement" regarding Mr. Bupp's employment, the Company shall pay to
Mr. Larson, (i) $195,000 as severance, (ii) the value of any accrued but unused
vacation time, (iii) all of Mr. Larson's accrued but unpaid salary and (iv) if
the termination occurs in connection with the liquidation of the Company's
assets, and additional $32,500 in severance.
If Mr. Larson's employment is terminated by the Company without cause and
not in connection with a change in control of the Company, the Company shall pay
to Mr. Larson severance of $140,833 and, if such termination occurs in
connection with the liquidation of the Company's assets, the Company shall pay
to Mr. Larson an additional $32,500 in severance.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company does not know of any failures to make filings required by
Section 16 on a timely basis by any of its directors, executive officers or
beneficial owners of 10% or more of its equity securities.
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers ("PWC") was the Company's principal accountant and
audited the Company's financial statements for the fiscal year ended December
31, 1997. On December 1, 1998, after discussions between the Company and PWC,
the parties agreed that PWC would not conduct the Company's 1998 fiscal year-end
audit. Discussions between the parties were initiated by PWC; however, during
the Company's two most recent fiscal years and subsequent interim periods, no
reports or financial statements issued by PWC contained an adverse opinion or
disclaimer of opinion or were qualified or modified as to uncertainty, audit
scope or accounting principles. Further, during the Company's two most recent
fiscal years and subsequent interim periods there were no disagreements between
the Company's management and PWC on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure which
disagreements, if not resolved to the satisfaction of PWC, would have caused PWC
to make reference to the subject matter of the disagreements in connection with
PWC's reports.
KPMG LLP was engaged as the Company's principal accountant on December 7,
1998 and has audited the Company's financial statements for the fiscal years
ended December 31, 1998 and December 31, 1999. At the suggestion of management,
the Audit Committee has recommended the retention of KPMG LLP as the Company's
independent accountant for the 2000 fiscal year.
A representative of KPMG LLP is expected to be present at the Annual
Meeting. The representative will have an opportunity to make a statement if he
so desires and is expected to be available to respond to appropriate questions
of stockholders.
OTHER BUSINESS
The Board of Directors does not intend to present, and has no knowledge
that others will present, any other business at the Annual Meeting. If, however,
any other matters are properly brought before the Annual Meeting, it is intended
that the persons named in the enclosed proxy will vote the shares represented
thereby in accordance with their best judgment.
COST OF SOLICITATION OF PROXIES
The cost of this solicitation will be paid by the Company. The Company may
request persons holding shares in their names for others to forward soliciting
materials to their principals to obtain authorization for the execution of
proxies, and the Company will reimburse such persons for their expenses in so
doing.
11
STOCKHOLDER PROPOSALS
A stockholder proposal intended for inclusion in the proxy statement and
form of proxy for the Annual Meeting of Stockholders of the Company to be held
in 2001 must be received by the Company before January 26, 2001, at its
executive offices, Attention: Brent Larson.
A stockholder who wishes to nominate a candidate for election to the Board
of Directors must follow the procedures set forth in Article III, Section 2 of
the Company's By-Laws. A copy of these procedures is available upon request from
the Company at 425 Metro Place North, Suite 300, Dublin, Ohio 43017-1367,
Attention: Brent Larson. In order for a stockholder to nominate a candidate for
the Board of Directors election at the 2001 Annual Meeting, notice of the
nomination must be delivered to the Company's executive offices, Attention:
Brent Larson, before January 26, 2001.
12
NEOPROBE CORPORATION THIS PROXY IS SOLICITED BY THE BOARD OF
DIRECTORS
P The undersigned hereby appoints DAVID C. BUPP and BRENT L. LARSON, and
R each of them, severally, with full power of substitution, as proxies
O for the undersigned, and hereby authorizes them to represent and to
X vote, as designated below, all of the shares of Common Stock, par
Y value $.001 per share, of NEOPROBE CORPORATION held of record by the
undersigned on May 19, 2000, at the Annual Meeting of Stockholders to
be held on June 22, 2000, or any adjournment thereof, with all the
power the undersigned would possess if present in person.
THE BOARD OF DIRECTORS RECOMMENDS THE ELECTION OF ALL NOMINEES.
1. To elect as directors the nominees named below for terms of three
years and until their respective successors are duly elected and
qualified.
NOMINEES: JOHN S. CHRISTIE J. FRANK WHITLEY, JR.
[ ]FOR all nominees listed above [ ]WITHHOLD AUTHORITY
(except as marked to the contrary) to vote for all nominees listed above
THE UNDERSIGNED MAY WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE
BY LINING THROUGH OR OTHERWISE STRIKING OUT THE NAME OF ANY NOMINEE.
(Continued, to be dated and signed, on the other side.)
(Continued from the other side.)
In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the Annual Meeting of
Stockholders or any adjournment thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES LISTED
ABOVE.
The undersigned hereby acknowledges receipt with this Proxy of a
copy of the Notice of Annual Meeting and Proxy Statement dated May 26,
2000, and a copy of the Company's 2000 Annual Report to Stockholders.
Date: , 2000
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Signature
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Signature (if held jointly)
IMPORTANT: Please sign
exactly as name or names
appear to the left. When
shares are held by joint
tenants, both should sign.
When signing as attorney,
executor, administrator,
trustee or guardian, please
give full title as such.
Corporations should sign in
their full corporate name by
their president or other
authorized officer. If a
partnership, please sign in
partnership name by an
authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
Proxy Card