Requested to post this from Yahoo in opposition to proxy statement.
MUST
READ......THIS
MUST STOP...
InvestorCG
Aug 18 1998
7:42PM EDT
Just as I am enthralled about TCLN's technology, I am appalled
over management's recent actions as set forth in the proxy. I
am writing these posts to gather all of your support. I intend to
write a letter indicate the shareholder's dissatisfaction with the
recent compensation packages. I will give you a thorough
analysis as it relates to all of the major players. If you agree
with my analysis, I am asking you for your commitment to join
in my quest to stop management's continued actions to get
themselves "fat" on options and salary. If you agree with my
analysis, I ask you to E-Mail me with your true name and the
number of shares, if you want, (all numbers will be held strictly
confidential), and I will join you in my letter and quest. It is time that the shareholders of Techniclone unite and confront
management with these very important issues. The problem has
been that no one has really stepped forward and challenged
their actions. While there has been continued threats,
management has not seen a true shareholder representative
present our dissatisfaction. Again, I plan on initially writing a
letter....I ask you to get all of your friends who own TCLN to
read these posts and if they agree with my sentiments, e-mail
me to join in the letter. Obviously, the letter will be approved by
everybody before I officially send it out with your names on it.
Let me preface this post by saying I am still very optimistic
about this company and its technology. I do not plan on selling
any stock in the near future. As you are aware, I have been
perhaps the biggest promoter of this stock in the past. I try to
view everything objectively and listen to the other side, and I
have concerning these issues. Enough with the preface, here it
goes.....
Today I read the compensation section of the proxy and to say
the least, was very disappointed with the Board's decision to
approve the financial packages for many of TCLN's officers
and Directors. I will take each individually..
First, it is important to take a look at what the "basic" director is supposed to receive as compensation for being a Board member.
Director's Compensation - Each non-employee director is
automatically granted an option to purchase 10,000 shares plus
an additional 5000 at the end of each fiscal year such employee
director has served at least six months during each fiscal year.
These option grants are granted at fair market value at the date
of grant and are exercisable six months after the date of grant.
People in before 1996 I believe are entitled to 2000 shares.
Part 2....
InvestorCG
Aug 18 1998
8:02PM EDT
Now that we know the base issuance, here is what they in fact receive:
Carm Santoro...received during 1997 250000 shares as a nonqualified option to purchase the stock at $4.00 a share. Options vest 25% percent per year. He GRACIOUSLY waived his participation to receive the 3000 package, the 10000 package, and the 5000 package. In March 1998, options repriced to $.60 as per report of compensation
committee. In effect, Mr. Santoro has been given 3.40 * 250000 = $850,000 when the stock gets back up to $4.00. I say when, not if.
Opinion as to Carm....NOT ACCEPTABLE. The rationale of this repricing is due to the current share value at the low of the S-3. The Company, as per my discussion today with Mr. Facktor, feels as though employees and Directors should be adequately compensated for their efforts as their base salaries are under market value. It was
indicated by me that the options are a main reason why alot of people continue to work at Techniclone. OK, let's examine Carm's package. First, he was present during the vote to approve the S-3 deal when in fact, there were plenty of other alternative financing
packages available. Carm receives 250000 options instead of the 18000 a year that is the regular distribution. Carm has benefitted from the S-3 debacle as his conversion price is now lower than the S-3 conversion price. What has Carm done to be deserving of 850,000 adjustment to the plus, I have no idea. While the shareholders were diluted by over 200% and our share value decreased from over $6 to $1 7/16, Mr. Santoro's compensation package was uneffected by the Board's own decision to accept the S-3 deal. Board makes a mistake, shareholders left to suffer. Board does not suffer.
Mr. Testman - 200,000 options at $1.59 per share vesting 25% annually. Waived his rights to receive the base 18000 year max. No adjustment as to these I don't believe. Was granted 50000 more options at .60 and 25000 outright shares.
MY ANALYSIS -- marginally unacceptable. If the company has a base package for Directors of 18000 max a year under both 93 and 96 plans, why does the Company grant 200000. I have no problem with compensation for Testman outside of the 200,000 options.
Mr. Hankin. 100000 and 150000 options at $3 and $1.59. The 100000 have been repriced at .60. Vest 25% annually. Waived participation in 93 and 96 plan.
ANALYSIS -- unacceptable. Repricing of shares for Board's error in accepting the S-3 deal not acceptable, even though I don't believe Rock was a Board member at the time.
Bymaster -- $250,000 base. Up to $250,000 bonus upon unstated incentives. 1,250,000 options at $1.41. Vest at 25% per year. Fringe benefits. Termination package of one year.
ANALYSIS --- unacceptable. Base is acceptable an in line for a CEO who remains relatively unproven. Bonus undetermined. Options granted in excess. 1.2 MILLION for an unproven entity. Termination package is unacceptable considering the past debacle with Lon. I had hoped that TCLN had learned about poor severance packages.
Frost --- base $175,000. Severance package of one year, plus
all options vest, plus we pay her income tax. Silent as to
options.
ANALYSIS -- UNACCEPTABLE. No severance packages,
especially we pay her income tax.
Moding -- Base $200,000. He GRACIOUSLY defers $25,000
of this until we get 10 mil in financing..then back to $200,000.
May be paid a bonus. Has 2 years left on an employment
agreement, set in Jan. 1997. Two year severance package, all
options vest, and we pay income tax.
ANALYSIS ---- ARE YOU KIDDING ME? GROSSLY,
WANTON NEGLIGENCE UPON THE BOARD'S PART.
PROTECTING OLD REGIME. WILL NOT BE
TOLERATED. Unless this is changed, I will go as far as I
need to in order to see that this is altered. This is our past
CFO who proved to be, in my opinion, grossly incompetent
with our funds. He allowed the burn rate to run rampant. He
failed to disclose his loan from the company initially.
Shareholders cannot tolerate to pay this man anything. He can
be fired for cause in my opinion. Salary way too high, what
does he do now? Severance package simply not acceptable.
Jan 1997 agreement must be rescinded and all those who
voted for it must be held accountable.
Jamie Oliver - salary $175,000. Signing bonus $10,000.
Severance package of one year. Received 30,000 additional
bonus. Silent as to options.
ANALYSIS --- ACCEPTABLE, MAYBE UNDERPAID IF
NOT ENOUGH OPTIONS. This is the man that should be
getting the credit here. If Carm gets 250000 options, this man
should be getting a decent amount.
Lon Stone -- Severance salary of $300000 a year for 3 years,
options vest 1/3 a year. We pay his income taxes. WE pay
him benefits. He works 25 hours a week (why we want this
who knows) and he doesn't compete, we forgive his loan of
350,000.
ANALYSIS --- EQUALLY AS UNACCEPTABLE AS
BIX. Again, this man, in my opinion, could have been fired for
cause. Lower the severance, do not vest all options, and
certainly do not forgive the loan. How can one justify taking a
$350,000 loan from a company that does not receive revenue.
How can one justify taking a loan from a company when he
drives a Mercedes Benz and owns a huge house. How can
one justify taking money when the Company is forced to
complete additional financing deals that dilute the company by
over 200%. This cannot be tolerated.
The rest of the people stated are insignificant to those that I
have stated here. Oh yeah, Legere received 500000 options
for the availablility of his credit line, even though we didn't use
it. Not acceptable.
In sum, I am very disappointed with current management's
scratching each other backs while we shareholders are the
only ones now feeling the effect of their decision to approve
the S-3. If they want an incentive, let them work on getting
the stock price above where it was before the S-3. Then they
will be very happy. Again, I ask for all of your support by
joining me in standing up to management in voicing our
disapproval over the compensation packages. If they want to
issue nominal options now at today's rate as part of their
current salary, I have no problem with that. Readjusting
options that were fairly priced at the time they were issued is
unacceptable, considering the sole reason for our downfall
and dilution was due to their decision.
Message 8835 of 8860
Reply
More.....
InvestorCG
Aug 18 1998
8:27PM EDT
Tustin, you can not make me believe you are being underpaid. You cannot justify the S-3 deal just because other companies fell into the same trap. Maybe you all were negligent in failing to see the pitfalls. In fact, since previous S-3 deals were done by other
companies and they got crushed, that in of itself should have given you more reason to
be made aware.
And no, Mr. Facktor, let me make one thing very very clear to you: I would still do this, despite your contentions otherwise, if the stock was at $3 or $4. The fact is, with the number of shares we have now we should be at $15-$20 in my opinion. If we had taken other financing deals and were at the 30-40 millino mark, the Company would be valued
at $35-$40 in my opinion. $3 - $4 is an insult, and its an insult to me to insinuate that my motives would be different if the stock was at $3 to $4. The Board's approval of these compensations are inexplicable and unacceptable. Its time we shareholders voiced our opinions. I will not stop at only a few shareholders. I will gather everyone I can, including institutions in joining me to stop the backscratching that continues.
My E-mail address is :WEOWNTCLN@aol.com. Again, if you agree with my analysis and would like to voice your opinion, please E-Mail me your information. If you do not agree, I welcome all points of view.
Management has done a great job in getting this company straightened out as it relates to trials and investor relations, it has alot of work to do to restore confidence in them as it relates to inner regime backscratching. I will have more on this later.
InvestorCG
NEW E-MAIL FOR JOINING
IN LETTER AND
OPPOSITION....
InvestorCG
Aug 18 1998
10:02PM EDT
I have created a new E-Mail for all responses:
If you agree with opposing the new compensation packages, please E-mail me at :
WEOWNTCLN@aol.com
Please include real name and number of shares, if you wish, all will be kept in strict
confidence. It is CRUCIAL that you contact everyone you know who is a TCLN
shareholder and have them read the post and join in if they feel that we have been
wronged.
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