Nicusa Capital Reminds All BioClinica Shareholders to Vote Their 2011 Proxy and Urges a Vote AGAINST Proxy Proposal 2 and WITHHOLD Votes from Directors Berg, Olukotun, Parker and Weinstein

NEW YORK, May 9, 2011 /PRNewswire/ -- Nicusa Capital reminds all BioClinica (Nasdaq:BIOC) shareholders to vote their 2011 Proxy. We urge all shareholders to vote against Proxy Proposal 2, otherwise known as the Shareholder Rights Agreement, which we refer to as the "Poison Pill."  We also urge all shareholders to withhold their votes from incumbent Directors Berg, Olukotun, Parker and Weinstein, to bring accountability to management at BioClinica.

As of May 9, 2011, Nicusa owns 854,119 shares, or approximately 5.5%, of the outstanding shares of BioClinica.  We have been a shareholder since May 2007 and have been on file as a 5% holder since July 2007.  

There is a serious lack of accountability for performance by management at BioClinica.  We would like corporate governance standards at BioClinica to improve for the benefit of all shareholders.  Fortunately, the 2011 Proxy gives shareholders two ways to effect direct change that will bring accountability to management and benefit shareholders over the long term.  

We made our arguments in more detail in a May 4, 2011 press release, which we encourage all shareholders to read.  We are more than willing to share our analysis and supporting materials with other concerned shareholders.

Poison Pill

Our Company does not need a Poison Pill. Management and the Board claim that BioClinica ostensibly needs the Poison Pill to protect shareholders from opportunistic acquirers.  However, in practice, poison pills generally entrench underperforming management teams and shield them from accountability.

Studies have shown that poison pills are associated with:

• a lack of accountability in management teams;
• substandard operating performance at companies; and
• value destruction when used to thwart takeovers.

All of the above are generally good for management longevity and pay packages, but bad for shareholders.  In fact, the BioClinica 10-K even explicitly states that the Poison Pill would "make it more difficult to replace or remove our current management team in the event our stockholders believe this would be in the best interest of our company."

Glass, Lewis & Co., the respected corporate governance analytics and proxy voting firm, says in its proxy voting guidelines that it generally recommends voting against poison pills as they "are not conducive to good corporate governance" and "can reduce management accountability."

In the specific instance of BioClinica, Glass Lewis recommends that shareholders vote against the Poison Pill, saying that it "unreasonably prohibits shareholders from being allowed to vote on a potential offer" for BioClinica and that the Poison Pill "is not in shareholders' best interests."

Our Company has a committed, sophisticated shareholder base that is nearly two-thirds institutions and insiders.  We should be able to determine for ourselves the suitability of any offer for the Company.  The only group being protected at BioClinica by the Poison Pill is a consistently underperforming management team.  We urge all shareholders to join us in voting against management's Poison Pill.

Compensation

Management has been richly rewarded for at-best mediocre operating performance at BioClinica.  Our stock price has declined over seven years while CEO Mark Weinstein's pay has risen by an average of 12% yearly.  The Compensation Committee should better represent the interests of shareholders and must demand performance from management. As such, we urge all shareholders to withhold their votes from incumbent Compensation Committee members Messrs. Berg, Olukotun, and Parker.

The facts are as follows:

• Over the eight years from 2003 through 2010, Mr. Weinstein was paid 37 cents for every dollar of net income BioClinica reported.
• From December 31, 2003 to December 31, 2010, under Mr. Weinstein's stewardship, BioClinica's stock fell 28%, from $6.23 to $4.46.
• During that period, even though the stock price fell 4.7% per year, Mr. Weinstein's pay rose an average of 12% every year.
• In 2010, Mr. Weinstein was paid 2.3 times as much as he was paid in 2003, despite the fact that shareholders suffered a 28% loss in the interim.
• For 2011, the Board of Directors has proposed to give Mr. Weinstein a 72% raise, to $1.2 million.

Last week, management re-affirmed guidance for 2011 of $0.16 to $0.21 in earnings per diluted share.  To put this in perspective, at the mid-point of $0.185 in earnings per diluted share, that guidance would represent only a 7% increase over the $0.173 in earnings per diluted share reported in 2010.  So, while shareholders will see an increase in net income of only 7%, the Board proposes to pay Mr. Weinstein 72% more than in 2010.  In the Board's proposed pay package, Mr. Weinstein would take home $0.072 in pay per diluted share, or 39% of the $0.185 in total net income per diluted share the Company is projecting.  

Just what, exactly, in the projected 2011 performance merits such pay?  We would have hoped that if the Compensation Committee were going to hand out such large wheelbarrows full of shareholders' money to Mr. Weinstein, they might demand commensurately impressive performance.  Instead, according to management, this year shareholders can expect more of the same.  How does this make any sense at all?  

Mr. Weinstein has unequivocally failed to deliver returns to shareholders over the last eight years.  Yet, the Compensation Committee judges awards him greater and greater compensation, with his 2011 proposed pay package being just the most egregious example.  There is absolutely no sense of accountability at BioClinica, and as such, we urge all shareholders to withhold their votes from Directors Berg, Olukotun, and Parker as members of the Compensation Committee.  

It appears to us that Mr. Weinstein exercises undue influence over the Board, as evidenced by his receipt of pay packages that are beyond all sense and reason.  We urge shareholders to withhold their votes from Mr. Weinstein as Director.  Perhaps with a new Compensation Committee, and Mr. Weinstein removed from the Board, there will be some management accountability at BioClinica, and shareholders will finally be rewarded for their patience.

SOURCE Nicusa Capital