0001140361-11-024845.txt : 20110504 0001140361-11-024845.hdr.sgml : 20110504 20110504145714 ACCESSION NUMBER: 0001140361-11-024845 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20110504 DATE AS OF CHANGE: 20110504 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: BIOCLINICA INC CENTRAL INDEX KEY: 0000822418 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-TESTING LABORATORIES [8734] IRS NUMBER: 112872047 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-52563 FILM NUMBER: 11809814 BUSINESS ADDRESS: STREET 1: 826 NEWTOWN-YARDLEY ROAD CITY: NEWTOWN STATE: PA ZIP: 18940-1721 BUSINESS PHONE: 2677573000 MAIL ADDRESS: STREET 1: 826 NEWTOWN-YARDLEY ROAD CITY: NEWTOWN STATE: PA ZIP: 18940-1721 FORMER COMPANY: FORMER CONFORMED NAME: BIO IMAGING TECHNOLOGIES INC DATE OF NAME CHANGE: 19960302 FORMER COMPANY: FORMER CONFORMED NAME: WISE VENTURES INC DATE OF NAME CHANGE: 19911023 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: NICUSA CAPITAL PARTNERS, L.P. CENTRAL INDEX KEY: 0001341534 IRS NUMBER: 651176893 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 20 EXCHANGE PLACE CITY: NEW YORK STATE: NY ZIP: 10005 BUSINESS PHONE: 2122933402 MAIL ADDRESS: STREET 1: 20 EXCHANGE PLACE CITY: NEW YORK STATE: NY ZIP: 10005 SC 13D/A 1 formsc13da.htm NICUSA CAPITAL PARTNERS SC 13DA 5-4-2011 formsc13da.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)

BioClinica Inc
(Name of Issuer)
 
Common Stock
(Title of Class of Securities)
 
09071B100
(CUSIP Number)
 
Paul Johnson
Nicusa Capital Partners, L.P.
17 State Street, Suite 1650
New York, NY 10004
(212) 293-3402
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
 
May 4, 2011
(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.
 
 
 
 

CUSIP No.  09071B100

1
NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only)
 
Nicusa Capital Partners, L.P.
EIN No 65-117893
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a)           o
(b)           o
3
SEC USE ONLY
 
4
SOURCE OF FUNDS (See Instructions)            
 
WC
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) o
 
6
CITIZENSHIP OR PLACE OF ORGANIZATION
 
Delaware
NUMBER OF
7
SOLE VOTING POWER
 
854,119
SHARES
BENEFICIALLY
OWNED BY
8
SHARED VOTING POWER
 
854,119
EACH
REPORTING
PERSON
9
SOLE DISPOSITIVE POWER
 
854,119
WITH
 
10
SHARED DISPOSITIVE POWER
 
854,119
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
 
12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)
 
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
 
5.5%
14
TYPE OF REPORTING PERSON (See Instructions)
 
PN

 
 
 

Item 1. Security and Issuer

Item 1(a). Name of Issuer:

BioClinica Inc.

Item 1(b). Address of Issuer’s Principal Executive Offices:
 
    826 Newtown-Yardley Road
    Newtown, Pennsylvania 18940
 
Item 1(c). Title of Class of Securities:  Common Stock

Item 1(d). CUSIP Number: 09071B100


Item 2. Identity and Background

Item 2(a). Name of Person Filing:

Nicusa Capital Partners, L.P. and Nicusa Investment Advisors, LLC
 
This statement is filed on behalf of Nicusa Capital Partners, L.P. (“Nicusa Capital”) and Nicusa Investment Advisors, LLC (“NIA”). NIA serves as the investment advisor to Nicusa Capital – and also serves as an advisor for the accounts of various third parties who are otherwise unaffiliated with Nicusa Capital. This statement pertains to all of the shares of the issuer held by both Nicusa Capital and the other accounts managed by NIA.
 
Item 2(b). Address of Principal Business Office or, if None, Residence:

17 State Street, Suite 1650, New York, New York 10004

Item 2(c) Background:
 
Nicusa Investment Advisors, LLC, a Delaware limited liability company, acts as an investment adviser to Nicusa Capital Partners, L.P. and other clients.
 
Nicusa Capital Partners, L.P., a Delaware limited partnership, is a private investment partnership.
During the last five years, neither Nicusa Investment Advisors, LLC, nor any of its respective officers or directors has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

Prior to founding Nicusa Capital Partners, L.P., Paul Johnson (the managing member of Nicusa Investment Advisors, LLC) was a managing director and senior research analyst at Robertson Stephens. On November 11, 2005, a jury returned a verdict in a civil enforcement action commenced by the Securities Exchange Commission (the “Civil Action”) finding that Mr. Johnson violated the federal securities laws in connection with Robertson Stephens’ research reports on three companies. Thereafter in August, 2006, the SEC instituted public administrative proceedings (the “Administrative Proceeding”) to determine what remedial action would be appropriate following the jury verdict in the Civil Action.

In lieu of an appeal of the jury verdict, Mr. Johnson entered into a settlement with the SEC, pursuant to which Mr. Johnson agreed to the entry of a final judgment in the Civil Action (i) enjoining him, for a period of five (5) years, from future violations of Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 17(a) of the Securities Act, (ii) requiring disgorgement of certain profits gained as a result of the conduct for which he was found liable by the jury and (iii) requiring payment of a civil penalty pursuant to Section 21(d)(3) of the Exchange Act.  With respect to the Administrative Proceeding, Mr. Johnson submitted an Offer of Settlement that was accepted by the SEC, pursuant to which he consented to a five-year bar from association with any broker or dealer, with the right to reapply for association after five years to an appropriate self-regulatory organization or to the Commission.

 
 
 

Item 3. Source and Amount of Funds or Other Consideration

All Shares were purchased in the open market using NIA's assets.  No leverage or loans were used in the acquisition.

Item 4. Purpose of Transaction:

The securities of the issuer were acquired by NIA for investment purposes in the ordinary course of business and not for the purpose of changing or influencing the control of the issuer. NIA now seeks to influence certain actions and decisions by the Board of Directors of the issuer, as reflected in the correspondence annexed as an exhibit to this filing.

Item 5.
(a)
Shares Outstanding:
15,649,164
(b)
Amount beneficially owned:
854,119
(c)
Percent of class:
5.5%
(d)
Number of shares as to which such person has:
  
 
(i)
Sole power to vote or to direct the vote:
854,119
 
(ii)
Shared power to vote or to direct the vote:
854,119
 
(iii)
Sole power to dispose or to direct the disposition of:
854,119
 
(iv)
Shared power to dispose or to direct the disposition of:
854,119

Item 5(e):Ownership of More than Five Percent on Behalf of Another Person:

Not Applicable

Item 5(f):  Identification and Classification of the Subsidiary Which Acquired the Security Being Reported on by the Parent Holding Company:  Not Appliable

Item 5(g):  Identification and Classification of Members of the Group:

Not Applicable

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer:

Except as otherwise set forth herein, no contract, arrangement, understanding or relationship with any person with respect to the securities of the Company between Nicusa Capital Partners, L.P., Nicusa Investment Advisors, LLC and any person or entity.

Item 7: MATERIAL TO BE FILED AS EXHIBITS:

Letter dated May 4, 2011 from Nicusa Capital Partners, L.P. to Board of Directors of the Company.

 
 
 

Signature

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct

May 4, 2011
Date

 /s/ Paul Johnson
Signature

 Paul Johnson, Managing Member
Name/Title
 
 EX-1 2 ex1.htm EXHIBIT 1 ex1.htm
Exhibit 1
Nicusa Capital
17 State Street
16TH Floor – Box 130
New York, NY  10004

212-293-3402

May 4, 2011

Dr. David E. Nowicki
Chairman of the Board
BioClinica, Inc.
826 Newtown-Yardley Rd.
Newtown, PA  18940

Dear Dr. Nowicki and the Board of Directors of BioClinica:

As of May 4, 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.

In September 2010 we wrote a letter to the Board outlining our concerns as a long-term shareholder, and gave a detailed presentation to the Board on November 17 in an attempt to constructively address the shortcomings in corporate governance at BioClinica.  We are more than willing to share our analysis and supporting materials with other concerned shareholders.

Unfortunately, after reviewing BioClinica's 2011 Proxy, the Board has not addressed our concerns sufficiently.  As a result, we will vote against, and ask other shareholders to vote against, Proposal 2 on the Proxy.  We will also withhold our vote, and ask other shareholders to do the same, from incumbent Directors Berg, Olukotun, Parker and Weinstein.

Our issues with the Company's corporate governance primarily lie in two areas: the Shareholder Rights Agreement, which we will refer to as the "Poison Pill," and management compensation.

Poison Pill
Our Company does not need a poison pill.  The Board imposed the Poison Pill on shareholders without input, and has yet to provide a convincing justification for keeping it.  Absent a compelling, public, specific and timely argument by the Board, we will vote against the Poison Pill and encourage other shareholders to do the same.
 
 
 

Whatever the ostensible purpose of poison pills, their practical effect is to deter potential acquirers.  We view the Poison Pill as a management entrenchment device, and BioClinica's 10-K supports our contention.  In language plainly hostile to shareholders, the 10-K 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."  Studies show that anti-takeover provisions such as poison pills are associated with both a lack of accountability in management teams1 and substandard operating performance.2  When used to thwart takeovers, poison pills have been shown to destroy shareholder value.3

Poison pills are justified when used to safeguard a vulnerable, temporarily underperforming company against opportunistic acquirers.  Such a circumstance, however, does not apply at BioClinica.  Your Poison Pill has been in place for almost two years, and the stock has underperformed for more than five.  Currently, institutional shareholders control nearly 40% of the Company, and insiders another 24%.  Surely a shareholder base consisting of nearly two-thirds institutions and insiders is sophisticated enough to determine for themselves the suitability of any potential offer for the Company.  Just whom is the Board trying to protect, anyway?

If other shareholders are not persuaded by us, perhaps they will listen to Glass, Lewis & Co., the respected corporate governance analytics and proxy voting firm.  According to Glass Lewis, "in general, poison pills are not conducive to good corporate governance" and "they can reduce management accountability."

Glass Lewis issued a report offering recommendations for shareholders to vote on the 2011 BioClinica Proxy in April.  Glass Lewis specifically recommends that shareholders vote against the BioClinica Poison Pill, saying that it "unreasonably prohibits shareholders from being allowed to vote on a potential offer" for the Company and that the Poison Pill "is not in shareholders' best interests."

We urge all shareholders to follow Glass Lewis's lead and join us in voting against management's Poison Pill.

Compensation
At BioClinica, shareholder returns have had no bearing on executive compensation.  Messrs. Berg, Olukotun and Parker may be fine directors otherwise, but as members of the Compensation Committee, they have not held management accountable for performance.  We had hoped to have a “say-on-pay” vote this year to voice our frustration with BioClinica’s overly generous and unaccountable executive pay structure. Absent a "say-on-pay", we have no choice but to withhold our vote from the incumbent members of the Compensation Committee, and urge all shareholders to join us in doing so.
 
1 "Is There Discretion in Wage Setting? A Test Using Takeover Legislation", Marianne Bertrand and Sendhil Mullinathan, Rand Journal of Economics (1999), page 535.
2 "Corporate Governance and Equity Prices", Paul Gompers, Joy Ishii and Andrew Metrick, NBER Working Paper No. 8449 (2001).
3 "The Wrong Prescription? Revisiting the Justification for Poison Pills", Scott Hirst, HLS Forum on Corporate Governance and Financial Regulation
 
 
 
 

Let us review a few facts regarding CEO Mark Weinstein’s compensation.  During the eight-year period from 2003 through 2010, BioClinica reported net income of $13.2 million and pre-tax income of $21.3 million.  During that same period, Mr. Weinstein took home total compensation of $4.9 million.  Put another way, Mr. Weinstein was paid $0.40 for every BioClinica share, while the Company only reported $1.07 per share in aggregate earnings.  Over the last eight years, Mr. Weinstein has personally received the equivalent of 37% of BioClinica's net income and 23% of its pre-tax income.

From December 31, 2003 to December 31, 2010, BioClinica’s stock price fell from $6.23 to $4.46, a total return to shareholders of -28% and a compound annual return of -4.7%.  In contrast, the average annual increase in compensation for Mr. Weinstein has been 14%, and his total compensation during this period has increased at a compound annual growth rate of 12%.  Mr. Weinstein is now paid more than twice as much as he was just 8 years ago, despite the fact that BioClinica shareholders have lost money in the interim. When will shareholder returns become important in this equation, and Mr. Weinstein's compensation reflect the Company's performance?  After all, his primary job is to generate returns for shareholders.

In 2010, BioClinica’s stock eked out a small gain of 5.4%, rising from $4.23 to $4.46.  That is hardly spectacular, but certainly preferable to some recent years.  What was the Compensation Committee’s response to this modest bit of success?  If Mr. Weinstein successfully meets his incentive compensation targets, you propose to pay him nearly $1.2 million for 2011, a staggering 72% raise over his 2010 total compensation of $685,800.  This is outrageous.

As long-term shareholders, we appreciate that strategic initiatives take a number of years to play out, which management compensation must reflect.  However, Mr. Weinstein has destroyed shareholder value over the last seven years and his most recent strategic initiative, the acquisition of PDS, has yet to bear fruit after 30 months.  Please do not misunderstand us.  We have no issue with large pay packages if they are deserved.  In fact, we love to see management teams get paid extremely well when they deliver returns to shareholders.  But in Mr. Weinstein’s case, he has failed to do this year in and year out, and that is why we object so strongly to his 2011 pay package.

The Compensation Committee is responsible for this largesse, which is why we will withhold our votes from Messrs. Berg, Olukotun and Parker as Directors of BioClinica.  We urge all shareholders to do likewise.

Finally, we must urge shareholders to withhold their vote from Mr. Weinstein as a Director.  The management-friendly corporate governance policies in place at BioClinica, exemplified by the Poison Pill, and Mr. Weinstein’s receipt of pay packages that are beyond all sense and reason, make it clear that he exercises too much influence at the Board level, to the detriment of shareholders.
 
 
 

Mr. Weinstein only received 67% of the vote on last year's Proxy.  We hope those shareholders who voted against Mr. Weinstein will note that nothing has changed substantively in BioClinica's governance since last year.  Management must be held accountable for BioClinica’s operating performance and shareholder returns, and this seems impossible with Mr. Weinstein serving on the Board.  We will withhold our vote from Mr. Weinstein as a Director of BioClinica, and we urge all shareholders to do the same.

Sincerely,



Paul Johnson