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 (Amendment No. )
Filed by the Registrant |X|
Filed by a Party other than the Registrant | |
Check the appropriate box:
| | Preliminary Proxy Statement
| | Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
| | Definitive Proxy Statement
|X| Definitive Additional Materials
| | Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Bio-Imaging Technologies, Inc.
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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
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.
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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:
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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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BIO-IMAGING TECHNOLOGIES, INC.
830 Bear Tavern Road
West Trenton, New Jersey 06828
REJECT THE DISSIDENT COMMITTEE
February 23, 1998
Dear Stockholder:
A committee of dissident stockholders has commenced what the Board believes
is an unnecessary and expensive proxy contest in an effort to elect the
Dissident Committee's slate of nominees to your Company's Board of Directors at
the Annual Meeting of Stockholders scheduled for February 27, 1998. The Board
believes that the Dissident Committee offers no substantive plans or suggestions
to improve your Company's operations and are interested only in furthering their
own individual agendas. The Dissident Committee includes, among others, a
stockholder, Frank J. Abella, Jr., who has a confrontational and disruptive
history with the Company, and the Company's former Chief Scientific Officer, Dr.
James J. Conklin, who resigned along with Donald W. Lohin, its former President
and Chief Executive Officer, as a director and officer of the Company on
December 19, 1997, rather than be terminated by the Company.
We believe that your interests are not aligned with those of the Dissident
Committee and that giving control of the Company to this group would be
disastrous. The Company's management and employees unanimously support the
Board's slate of nominees and do not want to return to the lack of focus and
direction by former management supported by the Dissident Committee. In your own
best interests, you are strongly urged to reject this dissident bid for control
of Bio-Imaging Technologies.
THE DISSIDENT COMMITTEE'S PROXY MATERIALS FAIL TO PROVIDE YOU WITH THE
FOLLOWING INFORMATION
1. INDEPENDENT MANAGEMENT CONSULTANT RECOMMENDED MANAGEMENT CHANGES. The
Dissident Committee's solicitation materials fail to disclose that an
organizational study, conducted by an independent consulting firm in November
1997, recommended to the Board that Dr. Conklin be terminated. The consulting
firm conducted organizational surveys with all employees and confidential
employee interviews with most employees of the Company. To quote from the
Recommendations of the Consulting Firm in the Organizational Study:
"It's very, very difficult to build a compelling defense for the
retention of Dr. Conklin. Don [Lohin] is quite possibly the only
member of the Company that feels Dr. Conklin adds value and needs
to be retained."
2. WE BELIEVE FORMER MANAGEMENT IS PRIMARILY RESPONSIBLE FOR THE RECENT DISMAL
FINANCIAL RESULTS. The Dissident Committee intentionally omitted from its proxy
materials that the Company's poor prospects for fiscal 1998, including the
dismal results for the first fiscal quarter ended December 31, 1997, occurred
under the management of Dr. Conklin and Mr. Lohin. Many employees and the Board
believe that the strategies implemented by former management were primarily
responsible for such results. We believe that the unfocused diversification
strategy which was trumpeted in the Dissident Committee's materials has already
failed. The funding of two new business divisions during fiscal 1997 resulted in
a reduction of resources available for the Company's core business. These new
divisions, which were a high priority of former management, failed to generate
any revenue despite significant expenditures. As a result of such failures, the
Company was forced to take a charge to earnings of $150,000 in the first quarter
of fiscal 1998. The current management team must now work to rebuild the
Company's core business pipeline. In addition, the Dissident Committee
conveniently fails to inform you that in January 1994, Dr. Conklin was replaced
as Chief Executive Officer by the Company's Board of Directors, prior to the
Covance investment.
3. DR. CONKLIN HAS LONG DIVERTED HIS FOCUS FROM THE COMPANY'S CORE BUSINESS.
Despite the Dissident Committee's plea for sympathy for Dr. Conklin, he has
sought to leave the Company for well over a year. In
particular, since at least January 30, 1997, the date of last year's annual
meeting, Dr. Conklin sought to establish a company that your Board felt would
compete against your Company. In fact, the Board was extremely disturbed when
Dr. Conklin proposed such venture and asked the Company, despite its limited
resources, to fund his new side business. As part of his proposal, Dr. Conklin
even sought to use the Company's equipment in his new venture and sought to
continue to be paid by the Company. The Board rejected this proposal. The Board
strongly believed that if the business which Dr. Conklin advocated for his new
company was a bona fide opportunity, the stockholders of Bio-Imaging
Technologies should receive the full benefit.
4. CERTAIN MEMBERS OF THE DISSIDENT COMMITTEE HAVE A HISTORY OF SELF-INTERESTED
ACTIONS. This is not the first time that Mr. Abella has attempted to exert
pressure on the Company. Mr. Abella's firm threatened to sue your Company in
June 1996 after his firm had failed to raise the agreed upon minimum equity
dollars for the Company. As a result of the threat of litigation and the
accompanying distractions, the Company settled and issued additional warrants to
Mr. Abella's firm. In addition, during 1997, without the authorization or
knowledge of the Board, Mr. Lohin and Dr. Conklin prepared an offering
memorandum which included confidential non-public information which the Board
believes they disclosed to Mr. Abella. The proposed deal included a substantial
warrant and debt burden for the Company.
5. THE DISSIDENT COMMITTEE DISTORTS THE ROLE OF COVANCE. The Board believes that
Covance, as the Company's largest single stockholder, has the most to gain from
the Company reaching its full potential. As a result, we believe your interests
as stockholders are aligned with those of Covance. We believe the Dissident
Committee has misstated to you that Covance exerts undue influence over the
Board of Directors. At no time, other than the brief period between December 19,
1997 and January 16, 1998, have Covance designees represented a majority of the
Board. Despite having contractual rights to three Board seats, two Covance
designees resigned on January 16, 1998 in order to preserve a majority of
non-Covance Board members. As stated in the Board's proxy statement, the current
Board consists of two independent directors and a Covance designee. The Covance
Common Stock investment in 1994 preserved liquidity for the Company's
stockholders and provided the Company with the additional capital to maintain
its operations. Furthermore, the Co-Marketing Agreement with Covance was
terminated by the Company in order to benefit the Company and was not terminated
by Covance as implied by the Dissident Committee. The Dissident Committee also
failed to inform you that the Company's largest client, which represented 44% of
the Company's project revenue in the quarter ended December 31, 1997 and 34% of
project revenue in fiscal 1997, was referred to the Company by Covance. Although
former management had contact with such client, the Company was able to engage
and continues to serve such client primarily by demonstrating the technical
expertise of its employees.
6. THE DISSIDENT COMMITTEE UNFAIRLY CHARACTERIZED ITS DISCUSSIONS WITH COVANCE.
The Board has always been willing to consider any candidate who could add real
value to the Company. In fact, the Board had agreed to interview a potential
candidate suggested by Mr. Abella. Such interview was scheduled to be held on
February 24, 1998, prior to the Annual Meeting. However, there was not any
agreement by the Board to nominate Mr. Abella's nominees. The Board, acting in
good faith and within the time limits imposed on the Company by Delaware law and
the Company's bylaws, determined that it was in the best interests of the
Company and its stockholders to proceed with the scheduled meeting on February
27, 1998. Mr. Abella then asked the Company to postpone the stockholders'
meeting after the Company had prepared, printed and filed its proxy materials.
Mr. Abella's response has resulted in this unpleasant contest. Interestingly,
Mr. Abella's investment firm had the opportunity to have Board representation at
the time it negotiated its Preferred Stock investment in December 1995. Mr.
Abella declined such opportunity.
7. MR. ABELLA'S FIRM VOTED TO REMOVE MR. LOHIN AS A DIRECTOR. The Dissident
Committee's criticism of the Board for the discharge of former management, Dr.
Conklin and Mr. Lohin, contradicts some of the actions of Mr. Abella's
investment firm. At the Company's January 1997 annual meeting of stockholders,
Mr. Abella's investment firm voted all of its shares of preferred stock against
the election of Mr. Lohin to the Board. The Dissident Committee's proxy
materials do not disclose this past act and fail to reconcile such prior vote
with their claim that Mr. Lohin "made substantial contributions to the growth
and success of the Company over the past two years."
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PROPOSAL TO REQUIRE A MINIMUM OF SIX DIRECTORS
The Board believes that the Dissident Committee's proposal to amend the
By-laws of the Company to require a minimum of six directors on the Board is NOT
in your best interests. The Board will consider increasing the size of the Board
when qualified candidates are interviewed and approved by the Board. The Board
believes that the Dissident Committee's proposal is designed to take control of
your company. The Board of Directors recommends that the stockholders vote
AGAINST this proposal to amend the By-laws. Unless you direct otherwise on the
enclosed proxy card, the Board of Directors' proxies intend to exercise the
discretion granted on any proxy you previously granted to them to vote AGAINST
this proposal to amend the By-laws.
YOUR CURRENT BOARD HAS A STRATEGY FOR GROWTH
The Board's primary strategy is for the Company to focus on its core
business by leveraging its technical capabilities and by continuing to develop
strategic alliances. Now is not the time to return to the misguided and
disgruntled leadership of Dr. Conklin and those who support him. We ask you to
judge us by our record and performance over time. We believe that revenue growth
is achievable by focusing on our core business without the distractions your
Company has had throughout its history. The Board believes that such
distractions are primarily attributable to certain members of the Dissident
Committee. We are committed to add real and sustainable value to investors. The
Company is more focused than ever and employee morale has never been better.
Please see the correspondence received by the Board from all of the Company's
employees set forth on Appendix A. We thank our stockholders for their support
of the Company, the Board and the employees.
PLEASE DISREGARD THE BLUE PROXY CARD SENT TO YOU BY THE DISSIDENT
COMMITTEE.
PLEASE SIGN, DATE AND MAIL THE ENCLOSED WHITE PROXY CARD TODAY TO SUPPORT
YOUR COMPANY'S BOARD OF DIRECTORS AND EMPLOYEES.
On behalf of the Board of Directors
/s/ Mark L. Weinstein /s/ Robert J. Phillips
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President and Assistant Secretary
Chief Executive Officer
IF YOU HAVE ANY QUESTIONS, PLEASE CONTACT THE COMPANY'S PROXY SOLICITOR
MORROW & CO., INC. (212) 754-8000/ 1-800-662-5200
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SOLICITATION; EXPENSES
In addition to the use of the mails, proxies may be solicited by personal
interview, telephone and telegram by directors, officers and other employees of
the Company who will not be specially compensated for these services. The
Company has engaged Morrow & Co., Inc. to serve as a proxy solicitor for the
Company. The entire expense of preparing, assembling, printing and mailing this
proxy solicitation and related materials and the cost of soliciting proxies will
be borne by the Company. Although no precise estimate can be made at the present
time, the Company currently estimates that the total expenditures relating to
the proxy solicitation incurred by the Company will be approximately $120,000,
of which $85,000 has been incurred to date.
The Company will also request that brokers, nominees, custodians and other
fiduciaries forward soliciting materials to the beneficial owners of shares held
of record by such brokers, nominees, custodians and other fiduciaries. The
Company will reimburse such persons for their reasonable expenses in connection
therewith.
SUPPLEMENTAL INFORMATION
Under applicable regulations of the Commission, the Company and each of the
directors of the Company is a participant in the solicitation. The business
addresses of each of Dr. Jeffrey H. Berg, Ph.D., Jeffrey S. Hurwitz, Esq. and
James A. Taylor, Ph.D. (the "Participants") is c/o Bio-Imaging Technologies,
Inc., 830 Bear Tavern Road, West Trenton, NJ 08628. Please refer to pages 2 and
3 of the Board of Directors' proxy statement dated January 30, 1998 for
information relating to each Participant's present principal occupation or
employment. Reference is made to pages 8 and 9 of the Board of Directors' proxy
statement dated January 30, 1998 for information relating to the amount of each
class of the Company's securities which each Participant owns beneficially,
directly or indirectly. None of the directors have purchased or sold any
securities of the Company during the past two years. Reference is made to page
10 of the Board of Directors' proxy statement dated January 30, 1998 for
securities sold by the Company. Other than as set forth below, no Participant
is, or was within the past year, a party to any contract, arrangement or
understanding with any person with respect to securities of the Company.
In October 1994, the Company, Covance and Dr. Conklin entered into a Voting
Agreement. Dr. Conklin agreed to vote his shares of Common Stock in favor of the
Covance designees and Covance agreed to vote its shares of Common Stock in favor
of Dr. Conklin in a stockholder election of the Board. Such obligations
terminated on December 31, 1997. Please refer to page 3 of the Board of
Directors' proxy statement for information relating to the Company's continuing
obligations to nominate Covance designees.
Reference is made to pages 8 and 9 of the Board of Directors' proxy
statement dated January 30, 1998 for information relating to the amount of the
Company's securities which each associate of each Participant owns beneficially,
directly or indirectly. Reference is made to page 10 of the Board of Directors'
proxy statement dated January 30, 1998 for certain relationships and related
transactions of each of the Participants. None of the Participants, or any
associate of such Participants, has an arrangement or understanding with any
person (A) with respect to any future employment by the Company or (B) with
respect to any future transaction to which the Company will or may be a party.
The current Board of Directors and nominees for election to the Board are
as follows: Jeffrey H. Berg, Ph.D., Jeffrey S. Hurwitz, Esq. and James A.
Taylor, Ph.D. Reference is made to pages 2 and 3 of the Board of Directors'
proxy statement dated January 30, 1998 for information relating to such
nominees. The Dissident Committee's nominees for election to the Board are as
follows: Dr. James J. Conklin, Frank J. Abella, Jr., J. A. Cole, Jr., Marc
Berger, Dr. David Nowicki and Richard Dumler. Reference is made to pages 5
through 8 of the Dissident Committee's proxy statement dated February 20, 1998
for information relating to such nominees.
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Appendix A
Bio-Imaging Technologies, Inc.
830 Bear Tavern Road
West Trenton, New Jersey 08628
February 19, 1998
To the Board of Directors:
We, the undersigned employees of Bio-Imaging Technologies, want all of the
shareholders of the Company to understand how strongly we support the current
management team and Board of Directors. ALL CURRENT EMPLOYEES OF THE COMPANY ARE
INCLUDED IN THIS LIST.
The management changes made by the Board of Directors last December were done
for a number of reasons including feedback they had received from an independent
organizational study. WE UNANIMOUSLY AGREE WITH THE DECISIONS THAT WERE MADE AND
FEEL THAT WE ARE FINALLY ON TRACK TO ACCOMPLISH OUR OBJECTIVE OF MAKING
BIO-IMAGING SUCCESSFUL. Since that time, we have seen focus, renewed spirit and
are on track to see growth in our core business. We are extremely confident that
the current management, including the current Board of Directors, is very
capable of providing the Company with the focus, leadership and management
required to succeed.
If the dissident shareholder committee is successful in their solicitation,
including the potential return of James J. Conklin to the Company, WE WOULD BE
FORCED TO REEVALUATE OUR FUTURES WITH THE COMPANY BECAUSE OUR CONFIDENCE LEVEL
WOULD AGAIN BE REDUCED TO ALL-TIME LOWS.
We greatly appreciate your efforts on the Company's behalf.
/s/ Brian Abell Brian Abell - Imaging Application Specialist
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/s/ Jeffrey Azzalina Jeffrey Azzalina - Senior Project Manager
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/s/ Anna Baratelle Anna Baratelle - Project Manager
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/s/ Kimberly Bialiy Kimberly Bialiy - Study Coordinator
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/s/ Brian Bzdak Brian Bzdak - Applications Technical Support
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/s/ Debra Carotenuto Debra Carotenuto - Asst. Mgr. Admin Svces
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/s/ Andrea Cichetti Andrea Cichetti - Manager Business Dvlpmnt.
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/s/ James Deng James Deng - Medical Image Analyst
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/s/ Deborah Dereberry Deborah Dereberry - CT Imaging Appl. Conslt.
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/s/ Steven Einstein Steven Einstein - Director Technical Client Svcs.
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/s/ Mark Endres Mark Endres - Assoc. Director Core Lab Svces
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/s/ Patricia Fogel Patricia Fogel - Nuclear Medicine Imaging Appl.
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/s/ Kathi J. Haston Kathi J. Haston - CT/MR Imaging Appl. Conslnt.
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/s/ Maria Kraus Maria Kraus - Controller
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/s/ Donna Letizia Donna Letizia - CT/MR Imaging Appl. Consltnt.
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/s/ Michael Manfredi Michael Manfredi - Software Applications Dvlpr.
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/s/ Thomas Marchant Thomas Marchant - Mngr. Clinical Trial Svces.
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/s/ Frank May Frank May - Applications Programmer
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/s/ Jeanne Metherall Jeanne Metherall - Assoc. Dir. Software Dvlpmnt
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/s/ James Myrtle, Ph.D. James Myrtle, Ph.D. - Dir. Clinical Trial Svces.
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/s/ Lenore Noonan Lenore Noonan - CT/MR Imaging Appl. Cnslt.
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/s/ Sarah Pearson Sarah Pearson - Sr. Applications Programmer
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/s/ Robert J. Phillips Robert J. Phillips - CFO and VP
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/s/ Andrew Reiter Andrew Reiter - VP & Managing Director
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/s/ Richard L. Sandy Richard L. Sandy - System Administrator
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/s/ Michael Silver, Ph.D. Michael Silver, Ph.D. - Mgr Tech. Client Svcs
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/s/ Mark L. Weinstein Mark L. Weinstein - Interim CEO
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/s/ Julie Wissinger Julie Wissinger - Ultrasound Imaging Conslts.
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/s/ Ding Wu Ding Wu - Senior Programmer
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BIO-IMAGING TECHNOLOGIES, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF THE CORPORATION FOR THE ANNUAL MEETING OF STOCKHOLDERS
The undersigned hereby constitutes and appoints Mark L. Weinstein and
Robert J. Phillips, and each of them, his or her true and lawful agent and proxy
with full power of substitution in each, to represent and to vote on behalf of
the undersigned all of the shares of Bio-Imaging Technologies, Inc. (the
"Company") which the undersigned is entitled to vote at the Annual Meeting of
Stockholders of the Company to be held at the Sheraton Bucks County Hotel, 400
Oxford Valley Road, Langhorne, Pennsylvania at 9:00 A.M., local time, on Friday,
February 27, 1998, and at any adjournment or adjournments thereof, upon the
following proposals more fully described in the Notice of Annual Meeting of
Stockholders and Proxy Statement for the Meeting (receipt of which is hereby
acknowledged).
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 PROPOSALS 1, 2 AND 4 AND VOTED AGAINST 3.
1. ELECTION OF DIRECTORS.
(Mark one only)
VOTE FOR all the nominees listed above; except vote withheld from the following
nominees (if any). | |
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VOTE WITHHELD from all nominees. | |
Nominees: Jeffrey H. Berg, Ph.D., Jeffrey S. Hurwitz, Esq.
and James A. Taylor, Ph.D.
2. Approval of Proposal to Ratify the appointment of Arthur Andersen LLP as the
independent auditors of the Company for the fiscal year ending September 30,
1998.
| | FOR | | AGAINST | | ABSTAIN
3. Approval of proposal to amend the By-laws to require a minimum of six
directors. THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE AGAINST
THIS PROPOSAL TO AMEND THE BY-LAWS.
| | FOR | | AGAINST | | ABSTAIN
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
(CONTINUED FROM OTHER SIDE)
4. In his discretion, the proxy is authorized to vote upon other matters as may
properly come before the Meeting.
| | FOR | | AGAINST | | ABSTAIN
I WILL | | WILL NOT | | ATTEND THE MEETING.
Dated: This proxy must be signed
-------------------------- EXACTLY as the name appears
hereon. When shares are held
-------------------------------- by joint tenants, both should
Signature of Stockholder sign. If the signer is a
corporation, please sign full
-------------------------------- corporate name by duly
Signature of Stockholder authorized officer, giving full
if held Jointly title as such. If a
partnership, please sign in
partnership name by authorized
person.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY, USING THE ENCLOSED
ENVELOPE.