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SCHEDULE 14A
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 Pursuant to Rule 14a-12
Neoprobe Corporation
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(Name of Registrant as Specified In Its Charter)
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(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:
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2) Aggregate number of securities to which transaction applies:
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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):
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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.
[ ] 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:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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2001 ANNUAL MEETING OF STOCKHOLDERS
May 9, 2001
Dear Stockholder:
You are cordially invited to attend the 2001 Annual Meeting of
Stockholders of Neoprobe Corporation which will be held at 9:00 a.m., Eastern
Daylight Time, on June 20, 2001 at the Embassy Suites Hotel, 5100 Upper Metro
Place, Dublin, Ohio 43017 (phone: 614.790.9000). The matters on the meeting
agenda are described in the Notice of 2001 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,
/s/ DAVID C. BUPP
David C. Bupp
Chief Executive Officer and President
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NEOPROBE CORPORATION
NOTICE OF 2001 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 20, 2001
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 Embassy Suites Hotel, 5100 Upper
Metro Place, Dublin, Ohio 43017 (phone: 614.790.9000), at 9:00 a.m., Eastern
Daylight Time, for the following purposes:
1. To elect three 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 April 30, 2001 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
/s/ DAVID C. BUPP
David C. Bupp
Chief Executive Officer and President
Dublin, Ohio
May 9, 2001
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NEOPROBE CORPORATION
-------------------------------
2001 ANNUAL MEETING OF STOCKHOLDERS
JUNE 20, 2001
-------------------------------
PROXY STATEMENT
DATED MAY 9, 2001
-------------------------------
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 2001 Annual Meeting of
Stockholders of the Company (the Annual Meeting) to be held on June 20, 2001 and
any adjournment thereof. This Proxy Statement and the accompanying proxy card
are first being mailed to stockholders on or about May 9, 2001.
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 April 30,
2001 are entitled to notice of and to vote at the Annual Meeting. As of that
date, there were 26,266,770 shares of common stock of the Company, par value
$.001 per share, outstanding. Each holder of common stock of record on April
30, 2001 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 David C.
Bupp, Julius R. Krevans, M.D. and James F. Zid 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-
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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 one class and two directors in each of two
additional classes, with terms expiring at the Annual Meeting in 2001, 2002 and
2003, respectively. Effective upon the adjournment of the Annual Meeting, the
Company will have seven directors on its Board of Directors, comprised of two
directors in each of two classes and three directors in a third class, with
terms expiring at the Annual Meeting in 2002, 2003 and 2004, 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
2004. David C. Bupp, Julius R. Krevans, M.D. and James F. Zid 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 2004 ANNUAL MEETING:
DAVID C. BUPP, age 51, has served as President and a director of the Company
since August 1992 and as Chief Executive Officer since February 1998. From
August 1992 to May 1993, Mr. Bupp served as Treasurer of the Company. 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 at Rutgers University.
JULIUS R. KREVANS, M.D., age 76, has served as a director of the Company since
May 1994 and as Chairman of the Company 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.
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JAMES F. ZID, age 67, has served as a director of the Company since November
1993. Mr. Zid also serves as a director of Net Med, Inc. 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.
DIRECTORS WHOSE TERMS CONTINUE UNTIL THE 2003 ANNUAL MEETING:
JOHN S. CHRISTIE, age 51, has served as a director of the Company since May
1997. Mr. Christie has served as President and Chief Operating Officer and a
director 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 has a B.S. degree in Business
Administration from Miami University and an MBA from Emory University.
J. FRANK WHITLEY, JR., age 58, has served as a director of the Company 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.
DIRECTORS WHOSE TERMS CONTINUE UNTIL THE 2002 ANNUAL MEETING:
NANCY E. KATZ, age 41, has served as a director of the Company since January
2001. Ms. Katz currently serves as President, Chief Executive Officer, Chief
Financial Officer and a director of Calypte Biomedical Corporation. Ms. Katz
joined Calypte in October 1999 as President, Chief Operating Officer and Chief
Financial Officer. Prior to joining Calypte, Ms. Katz served as President of
Zila Pharm Inc. From 1997 to 1998, Ms. Katz served as Vice President of Sales &
Marketing of LifeScan (the diabetes testing division of Johnson & Johnson) and
Vice President of U.S. Marketing, directing LifeScan's marketing and customer
call center departments from 1995 to 1997. During her seven-year career at
Schering-Plough Healthcare Products from 1987 to 1994, she held numerous
positions including Senior Director & General Manager, Marketing Director for
Footcare New Products, and Product Director of OTC New Products. Ms. Katz also
held various product management positions at American Home Products from 1981 to
1987. Ms. Katz received her B.A. in Business Administration from the University
of South Florida.
MICHAEL P. MOORE, M.D., PH.D., age 50, has served as a director of the Company
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.
BOARD OF DIRECTORS MEETINGS
The Board of Directors held four meetings in fiscal 2000 and, with the sole
exception of Mr. Christie, 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 or she 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.
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Report of Audit Committee
The Audit Committee consults with 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 adopted
a written charter for the Audit Committee which is attached as an exhibit to
this Proxy Statement (See Exhibit A). The Audit Committee held four meetings in
fiscal 2000.
The Audit Committee has reviewed and discussed with management and the
independent auditors the Company's audited financial statements; discussed with
the independent auditors the matters required to be discussed by Codification of
Statements on Auditing Standards No. 61; received the written disclosures and
the letter from the independent auditors required by Independence Standards
Board Standard No. 1; and, discussed with the independent accountants their
independence from the Company.
The following table sets forth certain information concerning auditor fees
incurred during the fiscal year ended December 31, 2000.
Audit Services $ 70,300
Financial Information Systems Design
and Implementation Services -
All Other Services:
SEC Filing Services $ 17,400
Tax Services 8,265
---------------
Total All Other Services 25,665
---------------
$ 95,965
===============
The Audit Committee has considered whether the provision of the above
services other than audit services is compatible with maintaining KPMG LLP's
independence and has concluded that it is.
The Audit Committee is comprised of James F. Zid, John S. Christie and J.
Frank Whitley, Jr., each of whom is "independent" under the standards set forth
in Rule 4200(a)(14) of the NASD's listing standards.
Submitted by the Audit Committee of the Board of Directors:
James F. Zid
John S. Christie
J. Frank Whitley, Jr.
Compensation Committee
The Compensation Committee is comprised of 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 2000.
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SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS,
DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS
The following table sets forth, as of March 31, 2001, 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
---------------------------------------------- ------------------- -------------
Carl M. Bosch 82,255(a) (m)
Rodger A. Brown 36,168(b) (m)
David C. Bupp 618,692(c) 2.2%
John S. Christie 40,700(d) (m)
Nancy E. Katz -(e) (m)
Julius R. Krevans 70,600(f) (m)
Brent L. Larson 155,975(g) (m)
Michael P. Moore 54,600(h) (m)
J. Frank Whitley, Jr. 44,600(i) (m)
James F. Zid 52,700(j) (m)
All directors and officers as a group 1,156,290(k) 3.8%
(10 persons)
Paramount Capital Asset Management, Inc. 4,867,500(l) 16.6%
(*) 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 includes 38,334 shares issuable upon exercise of options which
are exercisable within 60 days, 30,000 shares of restricted stock that vest
on a qualifying change in control of the Company and 3,921 shares in Mr.
Bosch's account in the 401(k) Plan, but does not include 81,666 shares
issuable upon exercise of options which are not exercisable within 60 days.
Mr. Bosch 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 66,787 shares of common stock. Mr. Bosch
disclaims any beneficial ownership of shares held by the 401(k) Plan that
are not allocated to his personal account.
(b) This amount includes 36,168 shares issuable upon exercise of options which
are exercisable within 60 days, 30,000 shares of restricted stock that vest
on a qualifying change in control of the Company, but does not include
78,332 shares issuable upon exercise of options which are not exercisable
within 60 days.
(c) This amount includes 388,100 shares issuable upon exercise of options which
are exercisable within 60 days, 210,000 shares of restricted stock that
vest on a qualifying change in control of the Company, 6,892 shares in Mr.
Bupp's account in 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 407,500 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 66,787
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.
(d) This amount includes 40,000 shares issuable upon exercise of options which
are exercisable within 60 days, but does not include 60,000 shares issuable
upon exercise of options which are not exercisable within 60 days.
(e) This amount excludes 30,000 shares issuable upon the exercise of options
which are not exercisable within 60 days.
(f) This amount includes 68,600 shares issuable upon exercise of options which
are exercisable within 60 days, but does not include 115,000 shares
issuable upon exercise of options which are not exercisable within 60 days.
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(g) This amount includes 76,367 shares issuable upon exercise of options which
are exercisable within 60 days, 70,000 shares of restricted stock that vest
on a qualifying change in control of the Company and 4,108 shares in Mr.
Larson's account in the 401(k) Plan, but it does not include 108,333 shares
issuable upon exercise of options which are not exercisable within 60 days.
Mr. Larson 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 66,787 shares of common stock. Mr. Larson
disclaims any beneficial ownership of shares held by the 401(k) Plan that
are not allocated to his personal account.
(h) This amount includes 48,600 shares issuable upon exercise of options which
are exercisable within 60 days, but does not include 60,000 shares issuable
upon exercise of options which are not exercisable within 60 days.
(i) This amount includes 43,600 shares issuable upon exercise of options which
are exercisable within 60 days, but does not include 60,000 shares issuable
upon exercise of options which are not exercisable within 60 days.
(j) This amount includes 51,100 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 60,000 shares issuable upon exercise of options which are
not exercisable within 60 days.
(k) This amount includes 760,869 shares issuable upon exercise of options which
are exercisable within 60 days 310,000 shares of restricted stock that vest
on a qualifying change in control of the Company and 14,921 shares held in
the Company's 401(k) Plan, but it does not include 1,090,831 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 66,787 shares of common stock.
(l) This amount consists of 562,853 shares owned by the Aries Domestic Fund,
L.P. (Aries Domestic), 900,000 shares issuable upon the exercise of
warrants owned by Aries Domestic, 1,304,647 shares owned by The Aries
Master Fund II, 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. Rosenwald) 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 based on a Form 4/A filed by Paramount Capital, Aries
Master, Aries Domestic and Dr. Rosenwald with the SEC on April 27, 2001.
(m) Less than 1 percent.
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
$100,000 during the last fiscal year (the Named Executives) for the Company's
last three fiscal years.
LONG TERM
COMPENSATION
AWARDS
SECURITIES
RESTRICTED UNDER-
STOCK LYING
ANNUAL COMPENSATION AWARDS OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS ($) (#) COMPENSATION
--------------------------- ---- ------- ----- --- --- ------------
Carl M. Bosch, 2000 $125,625 $ 68,325 $ 42,180(f) 45,000 $ 1,643(b)
Vice President 1999 116,250 23,104 - 20,000 1,163(b)
Instrument Development(h) 1998 69,000 10,000 - 10,000 12,000(j)
Matthew F. Bowman, 2000 $ 51,603 $ - $ - - $202,117(g)
Senior Vice President 1999 232,389 10,259 12,500(c) 30,000 1,600(b)
Marketing and Operations(e) 1998 204,690 - 27,250(c) 136,900 1,600(b)
Rodger A. Brown, 2000 $ 83,534 $ 33,240 $ - 35,000 $ -
Vice President, Regulatory Affairs/ 1999 77,431 16,055 - 20,000 -
Quality Assurance(i) 1998 35,215 - - 14,500 -
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David C. Bupp, 2000 $304,769 $106,300 $140,600(a) 180,000 $ 1,700(b)
President and Chief 1999 306,731 - 21,875(a) - 1,600(b)
Executive Officer 1998 297,222 - 270,000(a) 30,000 1,600(b)
Brent L. Larson, 2000 $126,250 $ 44,900 $ 56,240(d) 60,000 $ 1,313(b)
Vice President, Finance 1999 109,375 23,104 6,250(d) 25,000 1,325(b)
and Chief Financial Officer 1998 83,385 - 13,760(d) 32,200 888(b)
(a) The aggregate number of Mr. Bupp's restricted stock holdings at December
31, 2000 was 210,000 shares with an aggregate value of $88,599. 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) Amounts of matching contribution under the Neoprobe Corporation 401(k) Plan
(the 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 Internal Revenue 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, 2000 was 60,000 shares with an aggregate value of $25,314. 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. Mr. Bowman's restricted stock will be forfeited
effective March 31, 2001 absent a qualifying change in control of the
Company.
(d) The aggregate number of Mr. Larson's restricted stock holdings at December
31, 2000 was 70,000 shares with an aggregate value of $29,533. 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) Mr. Bowman began his employment with the Company in June 1996, and ended
his employment with the Company in March 2000.
(f) The aggregate number of Mr. Bosch's restricted stock holdings at December
31, 2000 was 30,000 shares with an aggregate value of $12,657. Mr. Bosch
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 Mr. Bowman relating to his separation from
the Company of $200,417 for severance; see Compensation Agreements With
Other Named Executive Officers--Severance Agreements. The remaining $1,700
was a matching contribution to Mr. Bowman's 401(k) account; see footnote
(b) to this table.
(h) Mr. Bosch began his employment with the Company in May 1998 and was
promoted to Vice President in March 2000.
(i) Mr. Brown began his employment with the Company in July 1998 and was
promoted to Vice President in November 2000.
(j) This amount represents the reimbursement of moving expenses related to Mr.
Bosch's relocation to Columbus, Ohio.
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 (2000).
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INDIVIDUAL GRANTS
--------------------------------------------------------------------------------
PERCENT OF TOTAL
NUMBER OF SECURITIES OPTIONS GRANTED EXERCISE
UNDERLYING OPTIONS TO EMPLOYEES IN PRICE EXPIRATION
NAME GRANTED (SHARES) FISCAL YEAR PER SHARE DATE
---- --------------- ----------- --------- ----
Carl M. Bosch 45,000(a) 6% $0.50 01/04/10(b)
Rodger A. Brown 35,000(a) 5% $0.50 01/04/10(b)
David C. Bupp 180,000(a) 24% $0.50 01/04/10(b)
Brent L. Larson 25,000(a) 8% $0.50 01/04/10(b)
(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.
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, 2000). There were no stock options exercised by
the named executives during the fiscal year ended December 31, 2000.
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
---- ------------------------- -------------------------
Carl M. Bosch 15,528/59,472 0 / 0
Rodger A. Brown 17,234/52,266 0 / 0
David C. Bupp 320,600/295,000 0 / 0
Brent L. Larson 43,133/81,567 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 2000.
NUMBER OF SHARES PERFORMANCE OR OTHER
UNITS OR OTHER PERIOD UNTIL MATURATION
NAME RIGHTS OR PAYOUT
------------------------------------------ ------------------------- ------------------------------
Carl M. Bosch 30,000(a) 03/22/00
David C. Bupp 100,000(a) 03/22/00
Brent L. Larson 40,000(a) 03/22/00
(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
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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 an eighteen-month
employment agreement effective July 1, 2000. The employment agreement provides
for an annual base salary of $310,000.
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 $106,300 bonus to Mr. Bupp relating to fiscal year 2000.
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
materially diminished, a material change occurs in his working conditions or the
Company breaches the agreement, Mr. Bupp will be paid a severance payment of
$697,500 (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). If any such termination occurs after the substantial completion of the
liquidation of the assets of the Company, the severance payment shall be
increased by $77,500. 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 March 22, 2000, the Company and Mr. Bupp entered into
a restricted stock purchase agreement under which Mr. Bupp purchased 100,000
shares of Common Stock 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
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termination for death or disability, actively engaged in negotiations that could
reasonably be expected to lead to a change in control, or March 22, 2010.
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. Mr. Bupp also holds 35,000, 45,000 shares and 30,000
shares of restricted stock granted under similar terms on April 30, 1999, May
20, 1998 and June 1, 1996, respectively.
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.
The Company has not recognized any expense under the restricted stock
agreements 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 2000. The Chairman received 45,000 options
and other non-employee Directors received 15,000 options each in lieu of cash
compensation. The Company reimbursed non-employee Directors for travel expenses
for meetings attended during 2000. 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 on
an 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.
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
Bosch Employment Agreement. Carl Bosch is employed under an eighteen-month
employment agreement effective April 1, 2000. The employment agreement provides
for an annual base salary of $127,000.
Mr. Bupp will, on an annual basis, review the performance of the Company
and of Mr. Bosch and the Company will pay a bonus to Mr. Bosch 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 $68,325 bonus to Mr. Bosch
relating to fiscal year 2000.
If a change in control occurs with respect to the Company and the
employment of Mr. Bosch is concurrently or subsequently terminated (i) without
cause (cause is defined as any willful breach of a material duty by Bosch in the
course of his employment or willful and continued neglect of his duty as an
employee), (ii) the term of Mr. Bosch's employment agreement expires or (iii)
Mr. Bosch resigns because his authority, responsibilities or compensation have
materially diminished, a material change occurs in his working conditions or the
Company breaches the agreement, Mr. Bosch will be paid a severance payment of
$191,250 (less amounts paid as Mr. Bosch's salary and benefits that continue for
the remaining term of the agreement if his employment is terminated without
cause). If any such termination occurs after the substantial completion of the
liquidation of the assets of the Company, the severance payment shall be
increased by $31,875. 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
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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. Bosch's compensation will continue for the full term of the agreement
if his employment is terminated without cause.
Larson Employment Agreement. Brent Larson is employed under an
eighteen-month employment agreement effective July 1, 2000. The employment
agreement provides for an annual base salary of $130,000.
Mr. Bupp will, on an annual basis, review the performance of the Company
and of Mr. Larson and the Company 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. The Company paid a $44,900 bonus to Mr.
Larson relating to fiscal year 2000.
If a change in control occurs with respect to the Company and the
employment of Mr. Larson is concurrently or subsequently terminated (i) without
cause (cause is defined as any willful breach of a material duty by Larson in
the course of his employment or willful and continued neglect of his duty as an
employee), (ii) the term of Mr. Larson's employment agreement expires or (iii)
Mr. Larson resigns because his authority, responsibilities or compensation have
materially diminished, a material change occurs in his working conditions or the
Company breaches the agreement, Mr. Larson will be paid a severance payment of
$195,000 (less amounts paid as Mr. Larson's salary and benefits that continue
for the remaining term of the agreement if his employment is terminated without
cause). If any such termination occurs after the substantial completion of the
liquidation of the assets of the Company, the severance payment shall be
increased by $32,500. 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.
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Mr. Larson's compensation will continue for the full term of the agreement
if his employment is terminated without cause.
Severance Agreements. Mr. Bowman ended his employment with the Company on
March 31, 2000. Under the terms of a general release and waiver executed in
connection with the end of his term of employment, Mr. Bowman received $200,417
in 2000 related to his separation from the Company.
Restricted Stock. On March 22, 2000, the Company and Mr. Larson entered
into a restricted stock purchase agreement under which Mr. Larson purchased
40,000 shares of common stock 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, or March 22, 2010.
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. Mr. Larson also holds 20,000 shares and 10,000 shares of
restricted stock granted under similar terms on April 30, 1999 and October 23,
1998, respectively.
On March 22, 2000, the Company and Mr. Bosch entered into a restricted
stock purchase agreement under which Mr. Bosch purchased 30,000 shares of common
stock for a purchase price of $0.001 per share. The terms of Mr. Bosch'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.
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
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, December 31, 1999 and December 31, 2000. At the
suggestion of management, the Audit Committee has recommended the retention of
KPMG LLP as the Company's independent accountant for the 2001 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.
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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.
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 2002 must be received by the Company before January 20, 2002, 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 2002 Annual Meeting, notice of the
nomination must be delivered to the Company's executive offices, Attention:
Brent Larson, before January 20, 2002.
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EXHIBIT A
NEOPROBE CORPORATION
AUDIT COMMITTEE CHARTER
The Audit Committee is appointed by the Board of Directors to assist the Board
in fulfilling its oversight responsibilities. The Audit Committee's primary
responsibilities are to:
Monitor the integrity of the Company's financial reporting process and systems
of internal control regarding finance, accounting and legal compliance.
Monitor the independence and performance of the Company's independent auditors.
Provide an avenue of communication among the Board of Directors, management and
the independent auditors.
Audit Committee members shall meet the requirements of the NASD. The Audit
Committee shall be comprised of three or more independent non-executive
directors, free from any relationship that would interfere with the exercise of
their independent judgement. All members of the Audit Committee shall have a
basic understanding of finance and accounting and be able to read and understand
fundamental financial statements, and at least one member of the Committee shall
have accounting or related finance experience.
The Audit Committee shall meet at least two times annually. The Committee shall
meet privately in executive session with management and with the independent
auditors. In addition, the Committee should communicate with management and the
independent auditors quarterly to review the Company's financial statements and
significant findings based on the auditor's limited review procedures.
AUDIT COMMITTEE RESPONSIBILITIES AND DUTIES:
1. Review and reassess the adequacy of this Charter at least annually.
2. Review the Company's annual audited financial statements with the
independent auditors and management prior to filing or distribution.
3. Review significant findings submitted by the independent auditors regarding
the Company's financial reporting process and system of financial internal
controls.
4. Review the independence and performance of the independent auditors.
5. Review the independent auditors audit plan.
6. Maintain minutes of meetings and report significant matters to the Board of
Directors.
7. Annually prepare a report to shareholders as required by the Securities and
Exchange Commission. The report should be included in the Company's annual
proxy statement.
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NEOPROBE CORPORATION THIS PROXY IS SOLICITED BY THE BOARD OF
DIRECTORS
The undersigned hereby appoints DAVID C. BUPP and BRENT L. LARSON, and
each of them, severally, with full power of substitution, as proxies
for the undersigned, and hereby authorizes them to represent and to
vote, as designated below, all of the shares of Common Stock, par
value $.001 per share, of NEOPROBE CORPORATION held of record by the
undersigned on April 30, 2001, at the Annual Meeting of Stockholders
to be held on June 20, 2001, 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: DAVID C. BUPP JULIUS R. KREVANS, M.D. JAMES F. ZID
[ ]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.)
P
R
O
X
Y
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(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 9,
2001, and a copy of the Company's 2000 Annual Report to Stockholders.
Date: ________________, 2001
------------------------------
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.